United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: ~~January~~April 3130, 2021

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

For the transition period from: ________________ to _______________

Commission File No. 000-25169

Generex Biotechnology Corporation

(Exact name of registrant as specified in its charter)

Delaware	98-0178636
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

10102 USA Today Way, Miramar, Florida 33025

(Address of principal executive office)

Registrant's telephone number: (416) 364-2551

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ YES ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒ YES ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ YES ☒ NO

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		GNBT		OTCQB

As of ~~March~~June 1518, 2021, the registrant had ~~114~~118,~~940~~446,~~165~~ 347 shares of common stock, $0.001 par value per share, outstanding.

GENEREX BIOTECHNOLOGY CORPORATION

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets - January 31, 2021 and July 31, 2020	3
Condensed Consolidated Balance Sheets - April 30, 2021 and July 31, 2020	3
Condensed Consolidated Statements of Operations and Comprehensive Loss – Three and Six Months Ended January 31, 2021 and 2020	4
Condensed Consolidated Statements of Operations and Comprehensive Income and Loss – Three and Nine Months Ended April 30, 2021 and 2020	4
Condensed Consolidated Statements of Changes in Stockholders’ Deficiency – Three and Six Months Ended January 31, 2021 and 2020	5
Condensed Consolidated Statements of Changes in Stockholders’ Deficiency – Three and Nine Months Ended April 30, 2021 and 2020	5
Condensed Consolidated Statements of Cash Flows – Six Months Ended January 31, 2021 and 2020	6
Condensed Consolidated Statements of Cash Flows – Nine Months Ended April 30, 2021 and 2020	6
Notes to Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	3029
Item 3. Quantitative and Qualitative Disclosures About Market Risk	5756
Item 4. Controls and Procedures	5756
PART II: OTHER INFORMATION
Item 1. Legal Proceedings	5857
Item 1A. Risk Factors	6160
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	6160
Item 3. Defaults Upon Senior Securities	6160
[Item 4. Removed and Reserved.]
Item 5. Other Information	6160
Item 6. Exhibits	6261
Signatures	6362

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
		January 31, 2021			July 31, 2020
	April 30, 2021			July 31, 2020
ASSETS
Current Assets
Cash and cash equivalents	$	~~596~~1,~~032~~675,027		$	15,452
Accounts receivable, net		~~169~~52,~~491~~303			164,871
Inventory, net		~~617~~232,~~881~~115			742,256
Other current assets		~~389~~509,~~188~~381			332,268
Total current assets		12,~~772~~468,~~592~~826			1,254,847
Property and equipment		~~145~~115,~~330~~746			213,668
Goodwill		34,489,342			34,489,342
Intangible assets		8,~~902~~672,~~841~~951			9,365,526
Operating lease right-of-use assets, net		~~178~~157,~~425~~492			38,140
Other assets		21,421			21,421
Other assets, net		18,821			21,421
TOTAL ASSETS	$	45,~~509~~923,~~951~~178		$	45,382,944
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	3940,~~317~~961,~~453~~397		$	23,907,718
Notes payable – current, net of discount		108,~~057~~563,~~281~~199			10,666,703
Payable to foundation for services		1,315,817			1,315,817
Interest payable to foundation		4,~~399~~660,~~565~~634			3,911,141
Loans from related parties		2914,700			29,700
Operating lease liabilities - current		6356,~~475~~466			38,253
Contract liabilities		37,000,000			—
Deferred tax liability		1,502,122			1,502,122
Total current liabilities		5964,~~685~~074,~~413~~335			41,371,454
Notes payable - noncurrent		~~499~~551,~~473~~573			499,656
Operating lease liabilities - noncurrent		~~115~~102,~~699~~480			—
Derivative liability		3116,~~749~~774,~~573~~000			1,316,757
Common stock payable		8,~~572~~504,~~399~~241			10,079,449
Total liabilities		~~100~~90,~~622~~006,~~557~~629			53,267,316
Redeemable non-controlling interest (Note 10)		4,073,898			4,073,898
Commitments and contingencies (Note 3)
Stockholders’ deficiency
Stockholders’ equity (deficiency)
Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share; 1,000,000 authorized and no shares issued and outstanding as of both January 31, 2021 and July 31, 2020		—			—
Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share; 1,000,000 authorized and no shares issued and outstanding as of both April 30, 2021 and July 31, 2020		—			—
Common stock, $0.001 par value; authorized 750,000,000 shares; 112,572,514 and 82,251,801 issued and outstanding as of January 31, 2021 and July 31, 2020, respectively		112,572			82,251
Common stock, $0.001 par value; authorized 750,000,000 shares; 116,278,690 and 82,251,801 issued and outstanding as of both April 30, 2021 and July 31, 2020, respectively		116,277			82,251
Subscription receivable		(275,324	)		—
Additional paid-in capital		422,298,124			429,744,379
Additional paid-in capital		420,021,103			429,744,379
Accumulated deficit		(479,501,629	)		(452,062,905	)
Accumulated deficit		(488,724,179	)		(452,062,905	)
Accumulated other comprehensive income		753,809			780,296
Accumulated other comprehensive income		766,038			780,296
Non-controlling interest		8,176,070			9,497,709
Non-controlling interest		8,913,286			9,497,709
Total stockholders’ equity (deficiency)		(48,157,349	)		(11,958,270	)
Total stockholders’ deficiency		(59,186,504	)		(11,958,270	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)	$	45,923,178		$	45,382,944
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	45,509,951		$	45,382,944
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
	Three Months Ended January 31,						Six Months Ended January 31,
	Three Months Ended April 30,						Nine Months Ended April 30,
	2021			2020			2021			2020
Revenue, net	$	—20,695		$	~~857~~498,~~427~~676		$	88109,~~435~~130		$	12,~~579~~077,~~088~~764
Cost of goods sold		~~104~~65,~~984~~995			~~165~~116,~~659~~292			~~128~~194,~~317~~312			~~299~~415,~~277~~569
Gross profit		(~~104~~45,~~984~~300	)		~~691~~382,~~768~~384			(3985,~~882~~182	)		1,~~279~~662,~~811~~195
Operating expenses
Research and development		1,~~558~~202,~~299~~835			~~599~~332,~~837~~029			23,~~728~~931,~~307~~142			~~938~~1,~~571~~270,600
Bad debt expense		—			~~3,165~~—			—			14,146
General and administrative		65,~~913~~115,~~295~~320			43,~~647~~624,~~065~~709			1925,~~921~~036,~~467~~787			913,~~434~~058,~~104~~813
Total operating expenses		86,~~471~~318,~~594~~155			53,~~250~~956,~~067~~738			2228,~~649~~967,~~774~~929			1014,~~386~~343,~~821~~559
Operating loss		(86,~~576~~363,~~578~~455	)		(43,~~558~~574,~~299~~354	)		(2229,~~689~~053,~~656~~111	)		(912,~~107~~681,~~010~~364	)
Other income (expense):
Interest expense		(~~587~~1,~~489~~051,624	)		(1,~~431~~506,~~052~~103	)		(12,~~606~~658,~~569~~740	)		(35,~~947~~453,~~165~~268	)
Interest income		—			~~635~~5			—			1,~~087~~092
Change in fair value of derivative liability		(15,257,066	)		(1,406,569	)		(11,237,214	)		(3,645,991	)
Changes in fair value of contingent purchase consideration		—			(119,630	)		—			(119,630	)
Change in fair value of common stock payable		(89,006	)		115,054			34,224			115,054
Change in fair value of derivative liability		15,388,602			(466,217	)		4,151,388			(4,112,208	)
Other income, net		103,518			201			103,518			(8,552	)
Change in fair value of common stock payable		68,158			(96,183	)		102,382			18,871
Net loss		(24,406,621	)		(7,280,030	)		(35,395,697	)		(16,592,577	)
Gain on settlement of accrued interest		370,553			—			370,553			—
Net loss attributable to noncontrolling interests		(326,039	)		(370,527	)		(584,423	)		(557,129	)
Gain on forgiveness of PPP loan		73,100						73,100
Net loss available to common stockholders	$	(24,080,582	)	$	(6,909,503	)	$	(34,811,274	)	$	(16,035,448	)
Other income (loss), net		—			1,665			104,065			(6,887	)
Net loss per common share
Net income (loss)		8,485,334			(5,760,817	)		(26,910,363	)		(22,353,394	)
Basic	$	(0.22	)	$	(0.11	)	$	(0.34	)	$	(0.24	)
Net loss attributable to noncontrolling interests		(737,216	)		(134,355	)		(1,321,639	)		(691,484	)
Diluted	$	(0.22	)	$	(0.11	)	$	(0.34	)	$	(0.24	)
Net income (loss) available to common stockholders	$	9,222,550		$	(5,626,462	)	$	(25,588,724	)	$	(21,661,910	)
Shares used to compute loss per share
Net income (loss) per common share
Basic	$	~~110,123,178~~0.08		$	~~65,603,002~~(0.07	)	$	~~103,504,440~~(0.24	)	$	~~67,765,862~~(0.31	)
Diluted	$	~~110,123,178~~(0.04	)	$	~~65,603,002~~(0.07	)	$	~~103,504,440~~(0.24	)	$	~~67,765,862~~(0.31	)
Comprehensive loss
Shares used to compute income (loss) per share
Net loss	$	(24,080,582	)	$	(6,909,503	)	$	(34,811,274	)	$	(16,035,448	)
Basic		114,605,060			76,976,925			106,460,699			70,702,570
Change in foreign currency translation adjustments		(12,056	)		(21,731	)		(14,258	)		(294	)
Diluted		140,407,179			76,976,925			106,460,699			70,702,570
Comprehensive loss available to common stockholders	$	(24,092,638	)	$	(6,931,234	)	$	(34,825,532	)	$	(16,057,473	)
Comprehensive income (loss)
Net income (loss)	$	9,222,550		$	(5,626,462	)	$	(25,588,724	)	$	(21,661,910	)
Change in foreign currency translation adjustments		(12,229	)		17,042			(26,487	)		(4,983	)
Comprehensive income (loss) available to common stockholders	$	9,210,321		$	(5,609,420	)	$	(25,615,211	)	$	(21,666,893	)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
		Preferred Stock				Common Stock
																				Accumulated
		Shares		Amount		Shares			Amount			Subscription Receivable			Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income			Sub Total			Non-controlling Interest			Total Stockholders’ Equity
														Additional						Other									Total
Balance at October 31, 2019		—		—		61,225,895			61,226			—			417,064,612			(427,853,820	)		796,922			(9,931,060	)		14,800,447			4,869,387
	Preferred Stock				Common Stock						Subscription			Paid-in			Accumulated			Comprehensive						Non-controlling			Stockholders’
	Shares		Amount		Shares			Amount			Receivable			Capital			Deficit			Income			Sub Total			Interest			Deficiency
Balance at January 31, 2020		—	$	—		69,129,001		$	69,127		$	(767,690	)	$	420,206,242		$	(434,763,323	)	$	775,191		$	(14,480,453	)	$	14,429,920		$	(50,533	)
Stock compensation expense		—		—		—			—			—			393,414			—			—			393,414			—			393,414
Shares issued for services		—		—		109,803			110			—			49,890			—			—			50,000			—			50,000
Conversion of debt to equity		—		—		4,713,192			4,715			—			1,580,437			—			—			1,585,152			—			1,585,152
Reduction of derivative liabilities		—		—		—			—			—			765,424			—			—			765,424			—			765,424
Purchase of shares in subsidiary		—		—		5,950,000			5,950			—			4,586,327			—			—			4,592,277			(4,592,277	)		—
Shares issued as debt issuance cost		—		—		35,000			35			—			9,205			—			—			9,240			—			9,240
Settlement of subsidiary's debt with stock		—		—		—			—			—			32,212			—			—			32,212			—			32,212
Currency translation adjustment		—		—		—			—			—			—			—			17,042			17,042			—			17,042
Net Income (Loss)		—		—		—			—			—			—			(5,626,462	)		—			(5,626,462	)		(134,355	)		(5,760,817	)
Balance at April 30, 2020		—	$	—		79,936,996		$	79,937		$	(767,690	)	$	427,623,151		$	(440,389,785	)	$	792,233		$	(12,662,155	)	$	9,703,288		$	(2,958,866	)
Balance at July 31, 2019		—	$	—		78,608,419		$	78,608		$	—		$	408,550,211		$	(418,727,875	)	$	797,216		$	(9,301,840	)	$	16,974,439		$	7,672,599
Stock compensation expense		—		—		—			—			—			1,630,111			—			—			1,630,111			—			1,630,111
Shares issued for services		—		—		669,803			670			—			292,930			—			—			293,600			—			293,600
Shares issued for deferred offering		—		—		1,719,901			1,720			(767,690	)		765,970			—			—			—			—			—
Shares issued for services		—		—		560,000			560			—			243,040			—			—			243,600			—			243,600
Issuance of common stock payable		—		—		32,611			33			—			14,468			—			—			14,501			—			14,501
Conversion of debt to equity		—		—		3,376,682			3,374			—			1,164,546			—			—			1,167,920			—			1,167,920
Issuance of common stock for acquisitions		—		—		—			—			—			—			—			—			—			—			—
Reduction of derivative liabilities		—		—		—			—			—			364,591			—			—			364,591			—			364,591
Purchase of shares in subsidiary		—		—		1,905,912			1,906			—			(1,906	)		—			—			—			—			—
Shares issued as debt issuance cost		—		—		308,000			308			—			141,682			—			—			141,990			—			141,990
Currency translation adjustment		—		—		—			—			—			—			—			(21,731			(21,731	)		—			(21,731	)
Net Income (Loss)		—		—		—			—			—			—			(6,909,503	)		—			(6,909,503	)		(370,527	)		(7,280,030	)
Balance at January 31, 2020		—		—		69,129,001			69,127			(767,690	)		420,206,242			(434,763,323	)		775,191			(14,480,453	)		14,429,920			(50,533	)
Balance at July 31, 2019		—		—		78,608,419			78,608			—			408,550,211			(418,727,875	)		797,216			(9,301,840	)		16,974,439			7,672,599
Stock compensation expense		—		—		—			—			—			1,236,697			—			—			1,236,697			—			1,236,697
Shares issued for deferred offering		—		—		1,719,901			1,720			(767,690	)		765,970			—			—			—			—			—
Shares issued for services		—		—		560,000			560			—			243,040			—			—			243,600						243,600
Issuance of common stock payable		—		—		436,121			436			—			935,959			—			—			936,395			—			936,395
Conversion of debt to equity		—		—		59,~~006~~719,~~548~~740			59,~~005~~720			—			24,~~899~~480,~~753~~190			—			—			24,~~904~~489,~~758~~910			—			24,~~904~~489,~~758~~910
Issuance of common stock for acquisitions		—		—		960,000			960			—			1,150,992			—			—			1,151,952			—			1,151,952
Reduction of derivative liabilities		—		—		—			—			—			23,~~276~~041,~~078~~502			—			—			23,~~276~~041,~~078~~502			—			23,~~276~~041,~~078~~502
Cancellation of shares		—		—		(20,375,900	)		(20,376	)		—			20,376			—			—			—			—			—
Purchase of shares in subsidiary		—		—		17,~~905~~855,912			17,~~906~~856			—			16,~~985~~571,~~484~~811			—			—			16,~~987~~579,~~390~~667			(16,~~987~~579,~~390~~667	)		—
Shares issued as debt issuance cost		—		—		~~308~~343,000			~~308~~343			—			~~141~~150,~~682~~887			—			—			~~141~~151,~~990~~230			—			~~141~~151,~~990~~230
Currency translation adjustment		—		—		—			—			—			—			—			(224,~~025~~983	)		(224,~~025~~983	)		—			(224,~~025~~983	)
Net loss		—		—		—			—			—			—			(16,035,448	)		—			(16,035,448	)		(557,129	)		(16,592,577	)
Settlement of subsidiary's liability with stock		—		—		—			—			—			32,212			—			—			32,212			—			32,212
Balance at January 31, 2020		—		—		69,129,001			69,127			(767,690	)		420,206,242			(434,763,323	)		775,191			(14,480,453	)		14,429,920			(50,533	)
Net Income (Loss)		—		—		—			—			—			—			(21,661,910	)		—			(21,661,910	)		(691,484	)		(22,353,394	)
Balance at October 31, 2020		—		—		108,037,614			108,037			—			418,411,365			(464,643,597	)		778,094			(45,346,101	)		9,239,325			(36,106,776	)
Balance at April 30, 2020		—	$	—		79,936,996		$	79,937		$	(767,690	)	$	427,623,151		$	(440,389,785	)	$	792,233		$	(12,662,155	)	$	9,703,288		$	(2,958,866	)
Stock compensation expense		—		—		—			—			—			531,043			—			—			531,043			—			531,043
Balance at January 31, 2021		—	$	—		112,572,514		$	112,572		$	(275,324	)	$	420,021,103		$	(488,724,179	)	$	766,038		$	(68,099,790	)	$	8,913,286			(59,186,504	)
Issuance of common stock as offering costs		—		—		284,900			285			—			(285	)		—			—			—			—			—
Stock compensation expense		—		—		—			—			—			418,738			—			—			418,738			—			418,738
Issuance of common stock, net of fees of $20,376		—		—		3,500,000			3,500			—			804,406			—			—			807,906			—			807,906
Issuance of common stock		—		—		1,350,000			1,350			—			412,967			—			—			414,317			—			414,317
Subscription receivable		—		—		750,000			750			(275,324	)		274,574			—			—			—			—			—
Shares issued as debt issuance cost		—		—		551,072			551			—			178,280			—			—			178,831			—			178,831
Currency translation adjustment		—		—		—			—			—			—			—			(12,056	)		(12,056	)		—			(12,056	)
Subscription receivable						—			—			275,324			—			—			—			275,324						275,324
Net loss		—		—		—			—			—			—			(24,080,582	)		—			(24,080,582	)		(326,039	)		(24,406,621	)
Reduction of derivative liabilities						—			—			—			38,051			—			—			38,051						38,051
Balance at January 31, 2021		—		—		112,572,514			112,572			(275,324	)		420,021,103			(488,724,179	)		766,038			(68,099,790	)		8,913,286			(59,186,504	)
Conversion of debt to equity		—		—		1,805,104			1,804			—			488,957			—			—			490,761			—			490,761
Balance at July 31, 2020		—		—		82,251,801			82,251			—			429,744,379			(452,062,905	)		780,296			(21,455,979	)		9,497,709			(11,958,270	)
Warrants granted with notes payable		—		—		—			—			—			740,028			—			—			740,028			—			740,028
Stock compensation expense		—		—		—			—			—			1,742,050			—			—			1,742,050			—			1,742,050
Currency translation adjustment		—		—		—			—			—			—			—			(12,229	)		(12,229	)		—			(12,229	)
Net income (loss)		—		—		—			—			—			—			9,222,550			—			9,222,550			(737,216	)		8,485,335
Balance at April 30, 2021		—	$	—		116,278,690		$	116,277		$	—		$	422,298,124		$	(479,501,629	)	$	753,809		$	(56,333,419	)	$	8,176,070			(48,157,349	)
Balance at July 31, 2020		—	$	—		82,251,801		$	82,251		$	—		$	429,744,379		$	(452,062,905	)	$	780,296		$	(21,455,979	)	$	9,497,709		$	(11,958,270	)
Stock compensation expense		—		—		—			—			—			2,160,788			—			—			2,160,788			—			2,160,788
Shares issued for services		—		—		51,130			51			—			10,942			—			—			10,993			—			10,993
Issuance of common stock payable		—		—		3,529,415			3,529			—			1,469,297			—			—			1,472,826			—			1,472,826
Conversion of debt to equity		—		—		57,~~860~~665,~~255~~359			57,~~860~~665			—			1,~~121~~610,~~982~~939			—			—			1,~~127~~618,~~842~~604			—			1,~~127~~618,~~842~~604
Reduction of derivative liabilities		—		—		—			—			—			537,936			—			—			537,936			—			537,936
Shares issued as debt issuance cost		—		—		551,072			551			—			178,280			—			—			178,831			—			178,831
Reduction of derivative liabilities		—		—		—			—			—			575,987			—			—			575,987			—			575,987
Issuance of common stock and warrants with attributed derivative liability from PIPE offering		—		—		5,102,040			5,102			—			(19,729,318	)		—			—			(19,724,216	)		—			(19,724,216	)
Deemed dividend related to issuance of warrants containing derivative liabilities		—		—		—			—			—			1,850,000			(1,850,000	)		—			—			—			—
Settlement of derivative liability from exercise of warrants		—		—		—			—			—			1,840,530			—			—			1,840,530			—			1,840,530
Issuance of common stock, net of fees of $20,376		—		—		5,600,000			5,600			—			1,159,016			—			—			1,164,616			—			1,164,616
Issuance of common stock, net of fees of $22,405		—		—		7,700,000			7,700			—			1,846,557			—			—			1,854,257			—			1,854,257
Subscription receivable		—		—		750,000			750			(275,324	)		274,574			—			—			—			—			—
Exercise of warrants		—		—		9,142,973			9,143			—			—			—			—			9,143			—			9,143
Exercise of warrants		—		—		9,142,973			9,144			—			—			—			—			9,144			—			9,144
Warrants granted with notes payable		—		—		—			—			—			740,028			—			—			740,028			—			740,028
Issuance of common stock as offering costs		—		—		284,900			285			—			(285	)		—			—			—			—			—
Currency translation adjustment		—		—		—			—			—			—			—			(1426,~~258~~487	)		(1426,~~258~~487	)		—			(1426,~~258~~487	)
Net loss		—		—		—			—			—			—			(3425,~~811~~588,~~274~~724	)		—			(3425,~~811~~588,~~274~~724	)		(~~584~~1,~~423~~321,639	)		(3526,~~395~~910,~~697~~363	)
Balance at January 31, 2021		—		—		112,572,514			112,572			(275,324	)		420,021,103			(488,724,179	)		766,038			(68,099,790	)		8,913,286			(59,186,504	)
Balance at April 30, 2021		—	$	—		116,278,690		$	116,277		$	—		$	422,298,124		$	(479,501,629	)	$	753,809		$	(56,333,419	)	$	8,176,070			(48,157,349	)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Six Months Ended January 31,
	Nine Months Ended April 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3526,~~395~~910,~~697~~363	)	$	(1622,~~592~~353,~~577~~394	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		~~523~~783,~~699~~173			~~407~~609,~~141~~007
Amortization of operating lease right-of-use assets		3657,~~581~~514			4571,~~128~~987
Stock compensation expense		12,~~742~~160,~~050~~788			1,~~236~~630,~~697~~111
Shares issued for services		10,993			~~243~~293,600
Loss of disposal of fixed assets		7,324			—189,366
Amortization of debt discount		~~340~~975,~~226~~835			23,~~955~~795,~~576~~606
Change in fair value of derivative liabilities - convertible notes		100,177			(1,406,799	)
Gain on settlement of accrued interest		(370,553	)		—
Change in fair value of derivative liabilities - convertible warrants		11,137,037			51,823
Gain on forgiveness of PPP loan		(73,100	)		—
Change in fair value of derivative liabilities - downside protection		—			5,000,966
Change in fair value of derivative liabilities - convertible notes		(432,653	)		(642,221	)
Change in fair value of derivative liabilities - warrants		(3,718,735	)		(9,913	)
Change in fair value of derivative liabilities - downside protection		—			4,764,341
Bad debt expense		—			10,981
Increase in notes payable due to default		255,080			—94,214
Change in fair value of common stock payable		(34102,~~224~~382	)		(~~115~~18,~~054~~871	)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(4112,~~620~~568	)		~~(81~~16,~~320~~599	)
Inventory		~~124~~510,~~375~~141			(~~232~~281,~~015~~905	)
Accounts payable and accrued expenses		1517,~~445~~476,~~719~~534			46,~~114~~057,~~241~~005
Interest payable to foundation		~~488~~749,~~424~~493			—626,867
Contract liabilities		37,000,000			—
Operating lease liabilities		(3556,~~945~~173	)		(4470,~~338~~685	)
Other current assets		(56174,~~920~~513	)		(~~216~~286,~~352~~096	)
Other assets		—			211,~~183~~383
Net cash used in operating activities		(21,~~315~~739,~~721~~029	)		(45,~~620~~487,~~119~~035	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(4,616	)
Cash received in acquisition of a business, net of cash paid		—			49,305
Net cash provided by investing activities		—			44,689
CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds from related party		—			10,000
Loan (repayments to) and proceeds from related party		(15,000	)		10,000
Payment of notes payable		(~~127~~2,~~459~~349,996	)		(935,731	)
Proceeds from note payable		—2,050,200			56,~~361~~381,~~975~~448
Proceeds from issuance of common stock, net of fees of $20,376 and $0, respectively		1,164,616			109,770
Proceeds from issuance of common stock		1,854,257			109,770
Issuance of common stock in a private placement (PIPE), net of fees of $150,000		1,850,000			—
Issuance of common stock in a private placement (PIPE), net of fees		1,850,000			—
Proceeds from exercise of warrants		9,~~144~~143			—
Net cash provided by financing activities		23,~~896~~398,~~301~~604			45,~~546~~565,~~014~~487
Net increase in cash and cash equivalents		~~580~~1,~~580~~659,575			~~(29~~118,~~416~~158	)
Cash and cash equivalents, beginning of period		15,452			298,485
Cash and cash equivalents, end of period	$	~~596~~1,~~032~~675,027		$	~~269~~416,~~069~~643
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	50,000		$	25,000
Cash paid for taxes	$	—		$	—
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Reduction of derivative liabilities	$	~~537~~575,~~936~~987		$	23,~~276~~041,~~078~~502
Issuance of shares--common stock payable	$	1,472,826		$	~~921~~936,~~895~~395
Issuance of common stock for conversion of debt	$	1,~~127~~618,~~842~~604		$	24,~~904~~489,~~695~~910
Subscription receivable	$	—		$	765,970
Shares issued as debt issuance cost	$	—178,831		$	~~141~~151,~~990~~230
Discount on Derivative liability upon issuance of debt	$	—		$	1,574,685
Warrants granted with notes payable	$	740,028		$	—
Issuance of warrants from PIPE offering	$	21,574,216		$	—
Discount on Derivative liability upon issuance of debt	$	—		$	1,834,607
Settlement of subsidiary's debt with issuance of stock	$	—		$	32,212
Issuance of common stock and warrants from PIPE offering	$	21,574,216		$	—
Elimination of derivative liability from exercise of warrants	$	1,840,530		$	—
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Note 1 – Organization of Business and Going Concern

Generex Biotechnology Corporation (“Generex”, “Company”, “GNBT”, "we", "us" or "our"), was formed in the State of Delaware on September 4, 1997 and its year-end is July 31. As of ~~January~~April 3130, 2021, the active wholly-owned subsidiaries of the Company are Generex Pharmaceuticals, Inc.; 1097346 Ontario, Inc.; Nugenerex Diagnostics, Inc.; Rapid Medical Diagnostics Corporation; GNBTELC, LLC; Olaregen Therapeutix, Inc.; Nugenerex Management Services, Inc.; Nugenerex Distribution Solutions 2, LLC; DMEiq, LLC (d/b/a DME-IQ); Rapport Services, LLC; NMSIELC, LLC; High Desert Diagnostic Laboratory, Inc.; NuGenerex Distribution Solutions, LLC; Pantheon F & A, LLC; Nugenerex Surgical Holdings, LLC; NuGenerex Health, LLC; NuGenerex HMO, LLC; and its majority controlled subsidiaries: NuGenerex MSO, LLC .; NuGenerex Immuno-Oncology, Inc.; Regentys Corporation; and NuGenHealth, LLC ~~are majority controlled subsidiaries~~.

Generex is an integrated healthcare holding company with end-to-end solutions for patient centric care from rapid diagnosis through delivery of personalized therapies. In addition to advancing a legacy portfolio of immune-oncology assets, medical devices, and diagnostics, the Company is focused on an acquisition strategy of strategic businesses that complement existing assets and provide immediate sources of revenue and working capital.

On October 3, 2018, the Company entered into an Asset Purchase Agreement with Veneto Holdings, L.L.C. (“Veneto”) to purchase certain assets of Veneto and its subsidiaries to formulate Nugenerex Distribution Solutions 2, LLC (“NDS 2”). The Agreement bifurcated the closing. On October 3, 2018 (the “First Closing”), the Company purchased substantially all the operating assets of Veneto including (a) system of dispensing pharmacies, (b) one central adjudicating pharmacy, (c) a wholesale pharmaceutical purchasing company, and (d) an in-network laboratory. On November 1, 2018, the Company consummated the acquisition of the Second Closing Assets, consisting primarily of Veneto’s management services organization business and two additional ancillary services.

In March 2019, the Company changed its business model to no longer utilize the existing pharmacies. Going forward Veneto will conduct business exclusively through its management services organization (“MSO”) and by entering into more ancillary provider service agreements with third party pharmacies as an effort to reduce fixed costs and salaries. This was made practicable due to the decrease in overall script volume coupled with delays in the Company being able to receive operating licenses from various government agencies.

On January 7, 2019, the Company closed two separate Acquisition Agreements pursuant to which the Company acquired a 51% interest in both Regentys Corporation (“Regentys”) and Olaregen Therapeutix Inc. (“Olaregen”). Regentys is a regenerative medicine company focused on developing novel treatments for patients with gastrointestinal (GI) disorders. Olaregen is a New York based regenerative medicine company that is preparing to launch its proprietary, patented, wound conforming gel matrix, Excellagen, an FDA 510K cleared wound healing product. In the first quarter of 2020 the Company acquired increased its ownership of Olaregen to 77%. In the third quarter of 2020 the Company acquired the remaining interest in Olaregen in exchange for its shares of common stock and became a wholly owned subsidiary of the Company.

MediSource contracts with vendors (including Pantheon) for nationwide distribution of implants and devices for spine, hips, knees, foot, ankle, hand, and wrist surgeries. Additional product lines include biologics (blood, bone, tissue, and stem cells), durable medical equipment, and soft goods. MediSource also supplies kits to process bone marrow aspirates and platelet rich plasma biologics at the time of surgery.

Pantheon sells a physician friendly, “all-in-one,” integrated kit that includes plates, screws, and tools required for orthopedic surgeons and podiatrists conducting foot and ankle surgeries. Over the next three years, Pantheon expects to develop and submit several new product lines to the FDA, which will include cannulated surgical screws and surgical staples, as well as a proprietary Hammertoe System.

Since July 20, 2020, the termination of the Travis Brid consulting agreement and the COVID-19 pandemic have curtailed the operations of MediSource and Pantheon and as result, the goodwill and intangibles were fully impaired.

On August 25, 2020, Generex Biotechnology Corporation’s wholly owned subsidiary NuGenerex Health LLC, (“NuGenerex Health”), entered into a strategic joint venture with Worldwide Digitech, LLC (“WWDT”) by signing an Operating Agreement to form NuGenHealth LLC (“NuGenHealth”). Under the agreement profits shall be distributed equally; 50% to NuGenerex Health LLC and 50% to WWDT.

WWDT will provide the software powered by the HealthKOS framework and back-end support for the NuGenHealth SaaS system, while NuGenerex Health LLC shall be responsible for the day-to-day management and oversight of business operations along with operating capital totaling approximately $1,500,000.

On September 24, 2020, NuGenHealth, LLC, a subsidiary of Generex Biotechnology Corporation, signed a services agreement with Paradise Valley Family Medicine, P.C. an Arizona professional corporation (“PVFM”) to provide a software and services solution for patient engagement, Remote Patient Monitoring (RPM) and Chronic Care Management (CCM) services that are recommended and reimbursed by the Centers of Medicare and Medicaid Services (CMS).

Going Concern

The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern. The Company has experienced recurring net losses and negative cash flows from operations since inception and has an accumulated deficit of $~~488~~479,~~724~~501,~~179~~629 and a working capital deficiency of $5761,~~912~~605,~~821~~509 on ~~January~~April 3130, 2021. The Company has funded its activities to date almost exclusively from debt and equity financings.

The Company will continue to require substantial funds to implement its new investment acquisition plans. 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, and issuances of debt and convertible debt instruments. Management is also actively pursuing financial and strategic alternatives, including strategic investments and divestitures, industry collaboration activities and strategic partners.

The recent, widespread outbreak of a novel infectious disease called Coronavirus Disease 2019, or COVID-19, has created a dynamic and uncertain situation in the national economy. Regarding the Company, sales of Olaregen's Excellagen have been significantly impacted by the COVID-19 pandemic. Surgeries and outpatient procedures were delayed and rescheduled, severely limiting sales of wound care and surgical products. Going forward, as the VA and other hospital systems re-open, the re-scheduled surgeries and procedures are expected to start up and create a backlog of cases, which should accelerate product sales to pre-COVID levels in due course .

As a result of the termination of the Travis Bird Consulting Agreement and the ongoing COVID-19 pandemic, the operations of MediSource and Pantheon have been significantly curtailed resulting inno ~~$0 of~~ sales ~~for~~ during the ~~six~~nine months ending ~~January~~April 3130, 2021, compared to $1,253,763 for the same period in the prior fiscal year with no expectation that such sales will resume in the near future.

Because of the COVID-19 pandemic Generex and its subsidiaries are currently pursuing the development of a SARS-CoV-2 vaccine using the company's patented Ii-Key peptide vaccine technology. To this end, the Company applied for funding to BARDA in the U.S., Health Canada, and the Malaysian Ministry of Health as well as with CEPI, the international public/private consortium focused on the development of vaccines for the global market. To date, Generex has identified viral epitopes through computer vaccinology algorithms, and manufactured those peptide sequences with the Ii-Key moiety for testing in immunological screening program using convalescent blood samples from patients who have recovered from COVID-19. The immunological blood screening program is in progress. Manufacturing partners have been identified and contracted for clinical and commercial supply. Completion of the Ii-Key-SARS-CoV-2 peptide vaccine program is being funded through a partnership with international partners, including Bintai Kinden.

The Company continues to closely monitor the latest information to make timely, informed business decisions and public disclosures regarding the potential impact of pandemic on its operations and financial condition. The scope of pandemic is unprecedented and its long-term impact on the Company’s operations and financial condition cannot be reasonably estimated at this time.

There is always uncertainty and risk associated with the development of any vaccine, medical treatment or therapy, but the continued development depends upon the completing the trials under various collaboration agreements and associated potential commercialization of the product, FDA approval and/or licensing agreements. Any collaborator with whom we may enter into such collaboration agreements may not support fully our research and commercial interests since our program may compete for time, attention and resources with such collaborator's internal programs. Therefore, these collaborators may not commit sufficient resources to our program to move it forward effectively, or that the program will advance as rapidly as it might if we had retained complete control of all research, development, regulatory and commercialization decisions. During the pandemic COVID-19, it is anticipated that delays will occur, but the full impact of any slow down due to COVID-19 has not been determined.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the filing of this document. There are no assurances that such additional funding will be achieved and that the Company will succeed in its future operations. The unaudited condensed interim consolidated 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 as a going concern. The Company’s inability to obtain required funding in the near future or its inability to obtain funding on favorable terms will have a material adverse effect on its operations and strategic development plan for future growth. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition, and business prospects will be materially and adversely affected, and the Company may have to cease operations.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included.

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated.

Operating results for the ~~six~~nine months ended ~~January~~April 3130, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021. The balance sheet on ~~January~~April 3130, 2021 does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2020 as filed with the U.S. Securities and Exchange Commission (“SEC”).

Use of Estimates

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

Business Combinations

Business combinations are accounted for using the acquisition method of accounting. Acquisition cost is measured as the aggregate of the fair value at the date of acquisition of the assets given, equity instruments issued, or liabilities incurred or assumed. Acquisition related costs are expensed as incurred (except for those costs arising on the issue of equity instruments which are recognized directly in equity). Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value on the acquisition date. Goodwill is measured as the excess of the acquisition cost and the amount of any non-controlling interest, over the fair value of the identifiable net assets acquired.

Revenue Recognition

It is the Company’s policy that revenues from product sales is recognized in accordance with ASC 606 “Revenue Recognition.” Five basic steps must be followed before revenue can be recognized; (1) Identifying the contract(s) with a customer that creates enforceable rights and obligations; (2) Identifying the performance obligations in the contract, such as promising to transfer goods or services to a customer; (3) Determining the transaction price, meaning the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer; (4) Allocating the transaction price to the performance obligations in the contract, which requires the company to allocate the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract; and (5) Recognizing revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to a customer. The amount of revenue recognized is the amount allocated to the satisfied performance obligation. Revenue from NGDx is recognized upon payment at the time the product(s) is released (shipment delivered using a common carrier), and the control is transferred which is simultaneous to when payment received and accepted.

Revenue from ~~NGDx~~product issales ~~recognized~~of ~~upon~~Olaregen’s Excellagen® ~~payment~~is recorded at the ~~time~~net ~~the~~sales price, or “transaction price,” which includes estimates of variable consideration that result from coupons, discounts, chargebacks and distributor fees, processing fees, as well as allowances for returns and government rebates. Revenue from product~~(s)~~ sales of Pantheon medical surgical kits used in surgical procedures is ~~released~~recorded ~~(shipment~~all ~~delivered~~revenue is ~~using~~recognized at a ~~common~~point ~~carrier)~~in time, ~~and~~generally when title of the product and control is transferred to the client which isoccurs ~~simultaneous~~upon the tocompletion of surgical procedure when ~~payment~~the ~~received~~product utilized, and ~~accepted~~the medical facility provides a final list of products consumed. The Company constrains revenue by considering factors that could otherwise lead to a probable reversal of revenue. Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as the Company’s historical experience, contractual arrangement and specific known market events and trends. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers.

Revenue from product sales of Olaregen’s Excellagen® is recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from coupons, discounts, chargebacks and distributor fees, processing fees, as well as allowances for returns and government rebates. Revenue from product sales of Pantheon medical surgical kits used in surgical procedures is recorded all revenue is recognized at a point in time, generally when title of the product and control is transferred to the client which occurs upon the completion of surgical procedure when the product utilized and the medical facility provides a final list of products consumed. The Company constrains revenue by considering factors that could otherwise lead to a probable reversal of revenue. Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as the Company’s historical experience, contractual arrangement and specific known market events and trends. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers.

Revenue from the provision of management services is recognized in accordance with the contractual terms of the relationship (item i); however, the current agreements in place typically specify that a percentage of the gross margin associated with the third-parties’ sales that the Company facilitates is to be remitted (iii), and as such, the revenue is considered earned upon completion of the third parties’ sales of such products (iv).

	Three months ended January 31,				Six months ended January 31,
	Three months ended April 30,				Nine months ended April 30,
Revenue Source	2021		2020		2021		2020
Product sales	$	—20,695	$	~~848~~497,~~805~~386	$	88109,~~435~~130	$	12,~~562~~059,~~210~~596
Management services		—		81,~~622~~290		—		1618,~~878~~168
Total revenue	$	—20,695	$	~~857~~498,~~427~~676	$	88109,~~435~~130	$	12,~~579~~077,~~088~~764

Provisions for estimated sales returns and uncollectible accounts are recorded in the period in which the related sales are recognized based on historical and anticipated rates.

Recently Issued Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company has not yet adopted this guidance and is determining the impact on its financial statements.

Note 3 - Commitments and Contingencies

Pending Litigation

The Company is a defendant in one legal proceeding relating to alleged breach of contract and claims against certain of the Company’s original buccal delivery patents. The Company is also a defendant in two legal proceedings brought by a former executive officer and her affiliate. These legal proceedings have been reported in the Company’s prior periodic reports. No activity has occurred in these cases in several years, and the Company now considers them dormant.

In December 2011, a vendor of the Company commenced an action against the Company and its subsidiary, Generex Pharmaceuticals, Inc., in the Ontario Superior Court of Justice claiming damages for unpaid invoices including interest in the amount of $429,000, in addition to costs and further interest. The Company responded to this statement of claim and also asserted a counterclaim in the proceeding for $200,000 arising from the vendor’s breach of contract and detinue, together with interest and costs. On November 16, 2012, the parties agreed to settle this action and the Company has agreed to pay the plaintiff $125,000, following the spinout of its subsidiary NGIO, from the proceeds of any public or private financing related to NGIO subsequent to such spinout. Each party agreed to execute mutual releases to the claim and counterclaim to be held in trust by each party’s counsel until payment of the settlement amount. Following payment to the plaintiff, the parties agree that a Consent Dismissal Order without costs will be filed with the court. If the Company fails to make the payment following completion of any post-spinout financing related to NGIO or any other subsidiaries, the Plaintiffs may take out a judgment in the amount of the claim plus interest of 3% per annum and costs fixed at $ 25,000 which has been accrued as of ~~January~~April 3130, 2021.

On August 22, 2017, Generex received a letter from counsel for Three Brothers Trading LLC, d/b/a Alternative Execution Group (“AEXG”), claiming breach of a Memorandum of Understanding (“MOU”) between Generex and AEXG. The MOU related to AEXG referring potential financing candidate to Generex. The letter from AEXG counsel claimed that Generex’s acceptance of $3,000,000 in financing from Pharma Trials, LLC, in March 2017, violated the provisions of the MOU prohibiting Generex from seeking other financing, with certain exceptions, for a period of 60 days after execution of the MOU. AEXG has demanded at least $210,000 in cash and 84,000 warrants for Generex stock convertible at $2.50 per share, for attorney’s fees and costs. AEXG filed a demand for arbitration and on September 25, 2018, an arbitration hearing was held with an arbitrator from the American Arbitration Association’s International Centre for Dispute Resolution. On December 3, 2018, an arbitrator awarded AEXG an aggregate of $315,695 in damages, costs and fees as well as warrants exercisable for 84,000 shares of Generex Common Stock at an exercise price of $2.50 per share. AEXG filed a petition to confirm the arbitrator’s award in the United States District Court for the Southern District of New York. The petition includes a demand of $3,300,360 as the value of the warrants. The arbitrator did not award the specific amount of $3.5 million, but only liquidated damages in the amount of $210,000 and the value of 84,000 warrants “as of today” (the date of the award) plus attorney’s fees, certain costs, prejudgment and post-judgment interest (which continues to run on a daily basis) and arbitration fees. Generex has responded that the value of the warrants on the date of the award is $0, or some figure far less than the value calculated by AEXG. The petition to confirm the arbitrator’s award and Generex’s opposition were remanded by the Court to the arbitrator and returned for clarification. The arbitrator ~~stated~~ stated that he was unable to add any clarification, as he did not take evidence on the issue of warrant valuation. AEXG filed a a petition and on April 24, 2020, the Court issued an Opinion and Order in the Litigation confirming the portions of the ~~Arbitration~~ Arbitration Award regarding liquidated damages, pre-judgment interest, legal fees, and costs, but remanding to the Arbitrator for further proceedings the portion of the Arbitration Award relating to “the economic value today of 84,000 warrants convertible to Generex’s stock exercisable at $2.50 per share as of September 24, 2018” (the “Remanded Arbitration”). On September 18, 2020, the Court issued that AEXG recover from Generex the total sum of $384,771, which sum consists of $210,000 in liquidated damages, $93,304 in legal fees, $12,393 in arbitration fees, $3,313 in arbitration expenses, $65,762 in pre-judgment interest, and post-judgment interest at a rate established by 28 U.S.C § 1961 from September 18, 2020, until the judgment is satisfied, this judgement dealt only with the dollar fees portion, leaving still open the value of the warrants (the “Partial Judgement”). The parties settled and agreed to the terms of the Partial Judgment that included a payment schedule to which Generex has paid $200,000 in cash to date with the remaining balance being paid and retired in 30 days. The settlement terms do not apply, settle, or resolve in any manner the Remanded Arbitration or the issues pending therein, including, but not limited to, the economic value of the 84,000 warrants, Generex’s right to contest AEXG’s attorneys’ fees, or Generex’s right to contest the issue of who is the prevailing party for fees other than those fees awarded in the Arbitration Award. ~~Generex continues to vigorously defend the open matters.~~ On January 29, 2021, the Remanded Arbitration order was issued by the Arbitrator; AEXG was awarded (i) $3,300,000 as the economic value of the warrants plus accrued simple interest at 9% from December 3, 2018 and (ii) $550,320 in legal fees;. ~~Generex~~On ~~does~~April ~~not~~7, ~~agree~~2021, ~~with~~Generex ~~this~~entered ~~award~~into a Settlement Agreement and ~~shall~~Release ~~contest~~with AEXG (the ~~arbitration~~“Settlement”); ~~award in~~under ~~court.~~the Interms ~~this~~of ~~quarter~~the Settlement, ~~the~~Generex agreed ~~Company~~to ~~accrued~~pay an$41,730 ~~additional~~in legal fees and $3,~~748~~300,~~177~~000 tofor ~~recognize~~ the ~~conclusion~~warrants ofplus ~~the~~accrued ~~arbitration~~simple ~~award~~interest at 9% from December 3, 2018. As of ~~January~~April 3130, 2021, the Company ~~has~~accrued ~~made~~$4,595,899 ~~partial~~related ~~payments~~to this matter. The April 7, 2021 Settlement also included interest awarded to AEXG of approximately $~~350~~790,~~140~~000 that was accrued during the quarter ended April 30, ~~leaving~~2021. aThe ~~balance~~payment under ofthe $3Settlement was due June 15,~~850~~ 2021,~~320~~ ~~accrued~~but ~~related~~not paid by Generex; Generex is working with AEXG to ~~this~~ ~~matter~~make such payment.

On ~~June~~October 2826, 2018, ~~the~~Generex ~~Company~~entered into a securities purchase agreement with Alpha Capital Anstalt (“Alpha”) pursuant to which a note due on October 26, 2019 was ~~named~~called for repayment in ~~respect~~the principal amount of $682,000. On January 25, 2019, Generex received a ~~claim~~letter byfrom ~~Burrard~~Alpha’s ~~Pharmaceutical~~counsel ~~Enterprises~~stating ~~Ltd.~~that ~~and~~the ~~Moa~~note was in default because Generex’~~yeri~~ ~~Kayhan~~common ~~for~~stock ~~unspecified~~was ~~damages~~not ~~and~~listed ~~other~~on ~~remedies~~NASDAQ ~~issued~~within by90 ~~the~~days ~~Supreme~~after ~~Court~~the issuance of ~~British~~the ~~Columbia~~note. The ~~claim~~letter isdemanded ~~made~~repayment in ~~connection~~full. ~~with~~On ~~one~~February ~~advanced~~12, ~~against~~2019, ~~Burrard~~Alpha ~~and~~filed ~~Kayhan~~a bylawsuit ~~Middle~~in ~~East~~the ~~Pharmaceutical~~Supreme ~~Factory~~Court ~~L.L.C.~~of New York, ademanding ~~foreign~~the ~~corporation,~~aggregate ~~for~~principal ~~fraudulent~~amount, ordefault interest ~~negligent~~and ~~misrepresentation~~costs. ~~Middle~~Generex ~~East~~does ~~alleges~~not ~~that~~agree itwith ~~was~~Alpha’s ~~misled~~legal bydemands ~~Burrard~~ and ~~Kayhan~~continues ~~into~~to ~~believing~~defend ~~that~~the ~~Burrard~~lawsuit. ~~had~~On ~~rights to~~March ~~distribute~~25, 2021, Generex entered ~~product~~into ina ~~the~~Settlement ~~Middle~~Agreement ~~East.~~and ~~Burrard~~Mutual ~~and~~Release ~~Kayhan~~with ~~allege~~Alpha ~~that~~(the ~~they~~“Settlement”); ~~did~~under ~~have~~the ~~rights~~terms inof ~~that~~the ~~regard~~Settlement, Generex ~~which~~agreed ~~the Company~~to ~~denies~~pay Alpha $750,000. ~~The~~There ~~matter~~was ~~remains~~an atadditional ~~the~~$370,553 ~~pleadings~~of ~~stage~~accrued ~~and~~interest related to this note that the Company recognized isas ~~investigating~~a ~~the~~gain ~~facts~~on settlement of debt. On May 17, 2021, Generex paid $750,000 to Alpha.

On ~~October~~March 2621, ~~2018~~2019, ~~Generex~~Compass ~~entered~~Bank ~~into~~filed asuit ~~securities~~against ~~purchase~~NuGenerex ~~agreement~~Distributions ~~with~~Solutions ~~Alpha~~2, ~~Capital~~L.L.C. ~~Anstalt~~ (“~~Alpha~~NDS”) ~~pursuant to~~in ~~which~~the aDistrict Court ~~note~~of ~~due~~Dallas ~~on October 26~~County, ~~2019~~Texas ~~was~~requesting ~~called~~damages ~~for repayment in the principal amount~~ of $~~682~~3,413,000. On ~~January 25,~~This ~~2019,~~lawsuit ~~Generex~~is ~~received~~directly aconnected ~~letter~~to ~~from~~assets ~~Alpha’s~~that ~~counsel~~were ~~stating~~supposed to ~~that~~be ~~the~~transferred ~~note~~to ~~was~~NDS infrom ~~default~~a ~~because~~third ~~Generex’s~~party, ~~common stock~~but ~~was~~never ~~not~~were ~~listed~~transferred. onCompass ~~NASDAQ~~Bank ~~within~~had 90a ~~days~~lien ~~after~~on ~~the~~those ~~issuance~~certain ofassets ~~the~~that were ~~note. The~~supposed ~~letter~~to ~~demanded~~be ~~repayment~~transferred ininto ~~full.~~the ~~On February~~ownership ~~12,~~of ~~2019~~NDS, ~~Alpha filed~~ a ~~lawsuit~~subsidiary ~~in the Supreme Court~~ of ~~New~~Generex. ~~York,~~NDS ~~demanding~~and ~~the~~Generex ~~aggregate~~shall ~~principal~~continue ~~amount,~~to ~~default~~defend ~~interest~~this ~~and~~legal ~~costs~~matter. ~~Generex~~As ~~does~~of ~~not~~April ~~agree~~30, ~~with~~2021, ~~Alpha’s~~the ~~legal~~Company ~~demands~~has ~~and~~accrued ~~continues~~$3,416,695 related to ~~defend~~this ~~the lawsuit~~matter.

On March 21, 2019 Compass Bank filed suit against NuGenerex Distributions Solutions 2, L.L.C. (“NDS”) in the District Court of Dallas County, Texas requesting damages of $3,413,000. This lawsuit is directly connected to assets that were supposed to be transferred to NDS from a third party, but never were transferred. Compass Bank had a lien on those certain assets that were supposed to be transferred into the ownership of NDS, a subsidiary of Generex. NDS and Generex shall continue to defend this legal matter. As of January 31, 2021, the Company has accrued $3,416,695 related to this matter.

In May 2019 Brooks Houghton threatened litigation by way of a FINRA Dispute Resolution. Brooks Houghton, who the managing representative is Mr. Centonfanti a prior board member, was under contract to perform due diligence on the Veneto transaction, as well as other unrelated items. The Veneto transaction closed three times, each time with a reduction in price due to material negative circumstances. Brook Houghton, who was under contract to perform due diligence, claims their fee should be paid on the initial closing price not the ultimate resolution of the matter. The company offered to compensate Brooks Houghton pursuant to agreement, 3% on the most recent closing price for Veneto for which Brooks Houghton may have performed some level of work on, payable in kind, and Brooks Houghton declined the offer. Brooks Houghton is claiming $450,000 for the first closing of Veneto, $714,000 for the second closing of Veneto, $882,353 for the Regentys acquisition, and $705,882 for Olaregen. The Company shall continue to defend this legal matter. As of ~~January~~April 3130, 2021, the Company has accrued for the full $2,752,235 balance. On May 11, 2021, the parties agreed to temporarily postpone arbitration in hopes of an amicable settlement.

On September 9, 2019 Generex and its subsidiary NuGenerex Distribution Solutions, LLC, and NuGenerex Distributions Solutions 2, LLC (jointly “NDS”) filed a litigation against Veneto, and the constituent entities, for fraud, breach of contract, and a motion for a temporary restraining order restraining the shares contemplated in the Asset Purchase Agreement (“APA”) (supra) for hiding their involvement in a massive healthcare fraud scheme, which is currently being prosecuted civilly by the federal government and filing to transfer assets specified in the APA. ~~Our~~The Company’s motion for a temporary restraining order on transfer of shares weGenerex issued in connection with the acquisition of Veneto assets was denied by the Court of Chancery. Generex has continued to pursue claims against Veneto and its principals in a separate arbitration. In a related action, ~~our~~the Company’s transfer agent ~~for our common stock~~ was sued for failure to process a transfer of the shares issued pursuant to the APA. This suit was brought in the United States District Court for the Eastern District of New York. Generex was not named in the suit, but ~~our~~the transfer agent notified us the Company of ~~our~~its obligation to indemnify them pursuant to ~~our~~its agreement with the transfer agent. The action against the transfer agent was dismissed with prejudice and on consent on November 25, 2019. As of this filing, Generex’ arbitration against Veneto and its principals is still active.

On December 2, 2019, the Company was named as a respondent in an arbitration brought by KSKZ Management, LLC before the American Arbitration Association in Texas. The Claimant alleges that the Company breached a consulting agreement that purportedly obligated the Company to pay claimant a monthly consulting fee for three years. ~~Kevin Kuykendall is the manager and a member of~~ Claimant~~. Claimant~~ is seeking approximately $3,450,000 in unpaid consulting fees allegedly due. The Company is vigorously defending itself and has filed counterclaims against Claimant. The Company believes that the likelihood of an unfavorable outcome is remote and as result has not accrued anything for this claim.

On February 18, 2020, the Company was named as a defendant in an action brought by Discover Growth Fund, LLC (“Discover”) in the United States District Court for the District of Delaware. The plaintiff alleges that the Company breached a Purchase Agreement and Promissory Note and seeks $2,475,000 in damages. The plaintiff also filed a confession of judgment in support of its claim. On May 4, 2020 the District Court entered judgment against the Company in the amount of $2,200,000. Counsel for Generex and Discover have engaged in settlement discussions. In addition, on August 20, 2020 the Company was named as a defendant in an action brought by Discover in the Court of Chancery of the State of Delaware. The complaint alleges that the Company breached a Purchase Agreement, ~~Promissory~~ Promissory Note and Transfer Agent Instructions and seeks to compel the Company to honor notices of conversion from Discover and issue it shares pursuant to the Purchase Agreement and Promissory Note. ~~Discover has since dropped the Delaware case without prejudice~~ . The Company ~~has~~ accrued approximately $2,500,000 related asto ofthis ~~January 31, 2021~~claim. ~~Several~~In ~~months~~December ~~ago~~2020, Discover was awarded $2,200,000 via a confession of judgment award, along with legal fees of $53,312 against Generex and personally, its CEO, Joseph Moscato. On February 19, 2021, Generex paid $2,253,312 to Discover to fully satisfy the judgement; no stock was exchanged to satisfy this judgment.

On May 6, 2020, the Company was named as a defendant in an action brought by Iliad Research and Trading LP in Salt Lake City, Utah. The plaintiff alleged that the Company breached a Securities Purchase Agreement and Convertible Promissory Note. Arbitration commenced on this matter on or about July 1, 2020 and was settled on July 31, 2020. In settlement of the matter (including any amounts outstanding under the Convertible Promissory Note), the Company has issued Iliad 3,499,415 shares of the Company’s common stock. The arbitration was dismissed on August 14, 2020.

On October 2, 2020, the Company and its subsidiary, NuGenerex Distribution Solutions, LLC, was named as a defendant in an action brought by AVEM Medical, LLC, formerly known as MediSource Partners, LLC and Pantheon Medical – Foot & Ankle, LLC in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida, Civil Division. The complaint alleges that the Company breached an Asset Purchase Agreement by issuing fewer shares to the seller than what the agreements contemplated. AVEM claims entitlement to an additional $312,000 in Company stock, and Pantheon claims entitlement to an additional $576,800 in Company stock. The Company has filed a motion to dismiss the case for lack of subject matter jurisdiction, and it intends to vigorously defend the case wherever it is ultimately litigated. The Company intends to vigorously defend the case,. ~~has~~The ~~not~~Company accrued ~~any~~ ~~amounts~~$790,558 ~~for~~of ~~this~~interest ~~matter~~as of April 30, 2021.

On April 20, 2021, the Company was named as a defendant in an action brought by Quantum Media Group, LLC (“Quantum”) in the Supreme Court of the State of New York County of New York. The complaint alleges that the Company breached a service contract. Quantum claims entitlement to $102,260 in service payments. The Company has filed a motion to dismiss the case for failure to state a cause of action, and it intends to vigorously defend the case. The Company has accrued the total amount of the claim.

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.

Commitments

Intellectual Property

In connection with the Company’s acquisition of Olaregen, the intellectual property ~~was~~owned ~~acquired~~by ~~that~~Olaregen ~~had~~was ~~a valuation of $650,000 prior to being~~ acquired ~~and~~with ~~revalued.~~an ~~This~~ initial ~~$650,000 valuation represented the initial~~ payment remitted by Olaregen in ~~accordance~~ accordance with the $4 million signed commitment agreement entered into with Activation Therapeutics, Inc. The remaining $3.35 million balance is to be paid in quarterly installments equal to 10% of quarterly net sales generated by Activation Therapeutics assuming the Exellagen average selling price per unit exceeds $800. In the event that the average selling price per unit is less than $800 per unit, cost of goods sold shall be excluded from the computation of net sales.

Acquisitions

ALTuCELL

On November 22, 2019, the Company entered into a Stock Purchase Agreement (“SPA”) for the purchase of 51% of the outstanding capital stock of GH Care, Inc. DBA ALTuCELL, Inc.(“ALTuCELL”).

Under the SPA, in exchange for the ALTuCELL Stock, Generex will issue to ALTuCELL 2,240,000 shares of Generex common stock with an attributed value of $4 million to be issued at the market price of the day at closing, but no less than $0.89 per share. The Company will also pay $2.5 million in cash of which $212,000 has already been paid. In addition to stock and cash at closing, Generex has agreed to pay up to an aggregate of $3,500,000 to ALTuCELL upon ALTuCELL’s attainment of certain milestones.

On January 27, 2020, Generex and ALTuCELL executed an Amendment Agreement to the SPA (the “Amendment”). Under the Amendment, closing will occur within 30 days of the full execution of the Amendment, subject to the conditions to closing under the SPA. The parties agreed that Generex will pay the $2.5 million closing payment from certain specifically identified sources. If ALTuCELL chooses to cancel the transaction as a result of delays due to forces beyond the control of Generex, including government regulatory delays or extended reviews by regulators that delay approvals of corporate actions, or by natural disasters or other unforeseen events beyond the control of Generex, ALTuCELL, agrees to return all payments made by Generex. As of ~~January~~April 3130, 2021, Generex has advanced $212,000 to ALTuCELL. As of the date of this filing, the acquisition did not close, however, both companies are negotiating the terms of the extension.

Olaregen

On November 24, 2019, the Company amended the Stock Purchase Agreement with Olaregen. The Company was obligated to pay in full $11,600,000 to Olaregen by November 30, 2019, in connection with the purchase of Olaregen capital stock ~~(the “Olaregen Note”)~~. ~~Effective~~ ~~November 24, 2019, the deadline was extended to January 31, 2020.~~ On February 14, 2020, the Company agreed to exchange 4,250,000 shares of Generex Common Stock and 1,065,000 shares of NGIO for the remaining outstanding shares of Olaregen with a waiver of any penalties and accrued interest on the outstanding Olaregen Note. As a result, Olaregen is wholly owned by the Company.

Regentys

On November 25, 2019, the Company amended the Stock Purchase Agreement with Regentys originally on January 7, 2019. Effective November 25, 2019, the remaining three payments of $2,039,001, $2,000,000, and $3,000,000 were all payable on or before December 30, 2019. The Company is negotiating the terms of a new extension and there has been no demand for payment ~~at this time~~currently.

MediSource – Pantheon

On August 1, 2019, the Company, through its wholly owned subsidiary NDS, closed on Asset Purchase Agreements (the “APAs”) for the purchase of substantially all the operating assets of MediSource and Pantheon which provided the Pantheon Earn-out and MediSource Earn-out based about the EDITDA achieved by Patheon and MediSource. Neither earn-out was achieved nor anticipated for the remainder of the earn-out period and therefore the liability for contingent consideration was relieved.

On July 20, 2020, Travis Bird terminated his consulting agreement with the Company and Travis Bird caused the operations of MediSource and Pantheon to curtail. As of this filing, no resolution and/or settlement has been reached and there is no guarantee that these operations will resume. This event has led to the full impairment of goodwill and intangibles of MediSource and Pantheon for the fiscal year ended July 31, 2020.

Agreements

Research and Development Agreements

On November 20, 2018, the Company entered into a clinical trial agreement with NSABP Foundation, Inc. (“NSABP”) under which NSABP will conduct clinical research using the Company’s AE37 peptide immunotherapeutic vaccine in combination with pembrolizumab (Keytruda®) for the treatment of metastatic triple negative breast cancer. The Company has agreed to pay NSABP an amount not to exceed $2,118,461 based on NSABP achieving various milestones. The Company recognized $80,000 and $251,459 as research and development related to the clinical trial agreement with NSABP for the ~~six~~nine months ending ~~January~~April 3130, 2021 and 2020, respectively.

The Clinical Trial Agreement terminates upon the completion of the obligations under such agreement. The Clinical Trial Agreement may be terminated by (i) any party if the authorization to conduct the Phase II clinical trial is revoked by the FDA; if the human and/or toxicology results support termination; safety concerns; if the manufacture of a drug used in the Phase II clinical trial has been exhausted or (ii) by NSABP if NGIO fails to pay NSABP an undisputed amount under the Clinical Trial Agreement.

On June 2, 2020, the Company entered into a Laboratory Services Agreement and Statement of Work Agreement with Cellular Technology Limited (“CTL”). The Agreement calls for CTL to provide certain laboratory testing and analysis. These services provided by CTL to Generex are part of the development of a potential vaccine for COVID-19 based upon NGIO Ii-Key vaccine technology. NGIO is a majority owned subsidiary of Generex. Generex/NGIO will own the intellectual property generated by CTL’s work.

Pursuant to this agreement, Generex will pay to CTL a fee for work plan completion an amount not to exceed $1,~~194~~296,~~442~~854. During the three and ~~six~~nine months ended ~~January~~April 3130, 2021, the Company has incurred $~~562~~149,~~063~~895 and $1,~~115~~265,~~940~~835 of expenses, respectively,. ~~leaving~~There awas ~~balance~~a balance of $1,~~120~~020,~~637~~225 accrued ~~under~~at ~~this~~April ~~agreement~~30, 2021.

COVID-19 Collaboration Agreement

On October 5, 2020, the Company and its subsidiary NGIO entered into a Distribution and Licensing Agreement (the “Bintai Agreement”) with Bintai Healthcare SDN BHD, a subsidiary of Bintai Kinden Corporation Berhad of Malaysia (“Bintai”) for the exclusive rights to distribute, sell, develop and commercialize the Ii-Key-SARS-CoV-2 coronavirus vaccine (the “Malaysia Vaccine”) in Malaysia and South East Asia countries, with right of first refusal to commercialize the Vaccine within New Zealand, Australia and the Global Halal markets. The Bintai Agreement, among other things, consists of Bintai providing 100% funding for U.S. clinical development, manufacturing and commercial registration of the Malaysia Vaccine for the Territory.

As of ~~January~~April 3130, 2021, Generex, has received $2,000,000 in cash to pursue the commercialization of the Vaccine.

On November 13, 2020, Generex and the China Partners entered into the Ii-Key Innovative Vaccine Development Agreement (the “~~Covid~~COVID Agreement”) to set up a joint research team and a joint entity in China (the “Joint Entity”) that shall jointly develop and industrialize the Vaccine in China. The ~~Covid~~COVID Agreement provides that Generex will provide the Joint Entity with (i) Ii-Key-SARS-CoV-2 technology; (ii) technical know-how; (iii) preclinical and clinical data and (iv) background material on the Ii-Key platform pertaining to its Ii-Key peptide vaccine technology (collectively, the “~~Covid~~COVID Vaccine Technology”). Pursuant to the ~~Covid~~COVID Agreement, Generex provided the Joint Entity with a perpetual sole and exclusive license to use the ~~Covid~~COVID Vaccine Technology in China. Generex shall negotiate separately with the Joint Entity with respect to the sale of such technology in other countries outside of China. Under the ~~Covid~~COVID Agreement Guoxin will provide the funding for the clinical development, manufacturing and commercial registration of the Vaccine for China and the Joint Entity will provide Generex with the following:

1. Licensing Fee: $5,000,000 upfront non-refundable fee due upon the execution of the Agreement.

2. Royalty Fee: Once the Vaccine comes on to market for the first commercial sale, then the Joint Entity shall:

Offer Generex 20% of the equity interests in the Joint Entity; NGIO shall be the 100% owner of any equity consideration provided to Generex pursuant to the February 19, 2021 “Work, Cost and Fee Sharing Agreement,” disclosed below; or

Cash payments to Generex in a price equal to $2 per dose for the COVID-19 vaccine.

3. Equity Distributions: the net profits of the Joint Entity shall ~~paid~~pay ~~first~~ to Generex first until Generex receives $20 million, then the China Partners will receive the next $80 million in net profits from the Joint Entity and thereafter Generex and the China Partners will receive net profits from the Joint Entity in accordance with their pro rate equity interests.

If the Vaccine fails in its clinical trials, Generex will compensate the Joint Entity through one of two methods:

1. Generex will grant the Joint Entity sole and exclusive use of its technology and related intellectual property in Excellagen for a license fee of $10 million less the $5 million paid to Generex pursuant to the ~~Covid~~COVID Agreement and the remaining $5 million will be paid to Generex following NMPA approval; or

2. Generex will grant the Joint Entity with a sole and exclusive license for the whole Ii-Key platform which includes infectious diseases and cancer for a $50 million license fee less the $5 million license fee paid to Generex pursuant to the ~~Covid~~COVID Agreement.

The ~~Covid~~COVID Agreement also provides for the Joint Entity having a right of first refusal for the Ii-Key vaccine technology for oncology, infectious disease, and autoimmune diseases for an upfront license fee of $50 million.

OnAs ~~November~~of 13April 30, ~~2020~~2021, Generex, ~~and~~has ~~the~~received ~~China~~approximately ~~Partners~~4,500,000, ~~entered~~net ~~into~~of ~~the~~taxes, ~~Ii-Key~~from ~~Innovative Flu Vaccine Development Agreement (~~the ~~“Swine Flu~~COVID Agreement~~”).~~ ~~Pursuant~~in cash to ~~the~~pursue ~~Swine Flu Agreement,~~ the ~~parties agreed that upon the successful development of the flu~~ ~~vaccine~~commercialization ~~and receipt~~ of ~~approval from NMPA for~~ the ~~product launch, the Joint Entity shall have a sole and exclusive world-wide license for swine flu and shall pay Generex a license fee of $2~~Vaccine.~~5 million less certain costs estimated at $500,000~~

On November 13, 2020, Generex and the China Partners entered into the Ii-Key Innovative Flu Vaccine Development Agreement (the “Swine Flu Agreement”). Pursuant to the Swine Flu Agreement, the parties agreed that upon the successful development of the flu vaccine and receipt of approval from NMPA for the product launch, the Joint Entity shall have a sole and exclusive world-wide license for swine flu and shall pay Generex a license fee of $2.5 million less certain costs estimated at $500,000.

Employee Compensation and Settlement Agreements

During the ~~six~~nine months ended ~~January~~April 3130, 2021, the Company awarded executives and employees bonus compensation of $7,060,417 to be paid in approximately $1 million in cash and $6 million in stock.

Payable to Foundation

On February 1, 2007, the Company entered into a clinical study agreement (the “CSA”) with a Henry J. Jackson Foundation (“Foundation”) for two Phase II clinical trials to determine if a vaccine containing AE37 plus GM-CSF or another peptide vaccine compound (GP2) plus GM-CSF improved patient outcomes. The Foundation conducted the study, under the sponsorship of an institute affiliated with the United States Military until the IND #12229 was transferred to NGIO (then Antigen Express), after which HJF continued trial management on behalf of NGIO. In consideration for the study the Company agreed to total compensation of $2,700,000 at various intervals over the term of the agreement.

On September 1, 2013, the Foundation and the Company entered into a forbearance agreement (the “Forbearance Agreement”) under which the Company acknowledged they were $1,315,817 in arrears in its payment and interest obligations to the Foundation under the CSA (the “Original Forbearance Amount”). Pursuant to the Forbearance Agreement, the Company and the Foundation in exchange for the Foundations deferring the Company’s overdue payments, future payments and interest, the Company agreed, among other things to pay the Foundation certain royalties and accelerated payments (“Forbearance Payments”). Effective August 1, 2015, the Company capitalized all outstanding unpaid interest on the outstanding balance. For the ~~period~~three ~~ended~~and ~~January~~nine months 31ended April 30, 2021, the Company recorded interest expense in the amount of $261,069 and $749,493, respectively, in the statements of operations. For the three and nine months ended April 30, 2020, the Company recorded interest expense in the amount of and $~~488~~218,~~424~~350 and $~~408~~626,~~512~~867, respectively, in the statements of operations. As of ~~January~~April 3130, 2021 and July 31, 2020, the Company has recorded accrued interest of $4,~~399~~660,~~565~~634 and $3,911,141, respectively.

Note 4 – Inventory

Inventory consists of the following components:

	January 31, 2021		July 31, 2020
	April 30,		July 31,
	2021		2020
Raw materials	$	182,722	$	182,722
Finished goods		~~435~~49,~~159~~393		559,534
Total Inventory	$	~~617~~232,~~881~~115	$	742,256

Note 5 – Property and Equipment

Property and equipment, net consisted of the following:

	January 31, 2021			July 31, 2020
	April 30, 2021			July 31, 2020
Computers and technological assets	$	50,205		$	53,314
Machinery and equipment		317,751			329,977
Furniture and fixtures		18,725			18,725
Leasehold Improvements		—			16,596
		386,681			418,612
Less accumulated depreciation		(~~241~~270,~~351~~935	)		(204,944	)
Property and equipment, net	$	145,330		$	213,668
	$	115,746		$	213,668

Depreciation expense related to property and equipment for the ~~three~~nine ~~and six~~ months ended ~~January~~April 3130, 2021 ~~was $30,183~~ and ~~$61,014, respectively. Depreciation expense for the three and six months ended January 31,~~ 2020 was $4890,~~932~~598 and $97146,~~779~~712, respectively. Additionally, the Company disposed of fixed assets with a book value of $7,324 during the ~~six~~nine months ended ~~January~~April 3130, 2021.

Note 6 – Goodwill and Intangible Assets

Goodwill was recognized as a result of the acquisitions of Veneto, Regentys and Olaregen in fiscal year 2019. Goodwill was $34,489,342 as of ~~January~~April 3130, 2021 and July 31, 2020.

Intangible assets consist of the following at:

		January 31,			July 31,
		April 30,			July 31,
	Estimated Useful Lives	2021			2020
In-Process Research & Development		$	6,302,427		$	6,302,427
Non-compete agreements	3 years		1,210,000			1,210,000
Developed Software/Technology	5 years		131,000			131,000
Intellectual property	5 years		2,459,000			2,459,000
Patents	20 years		51,274			51,274
			10,153,701			10,153,701
Less accumulated amortization			(1,~~250~~480,~~860~~750	)		(788,175	)
		$	8,~~902~~672,~~841~~951		$	9,365,526

Intangible assets are amortized on a straight-line basis over the useful lives of the assets. The Company is currently not amortizing the in-process research and development until it becomes commercially viable and placed in service. At the time when the intangible assets are placed in service the Company will determine a useful life. As of ~~January~~April 3130, 2021, the in-process research and development (“IPR&D”) of $6,302,427 in the aggregate was a combination of $2,911,377 obtained through the acquisition of HDS and $3,391,050 obtained through the acquisition of Regentys. None of the research and development of the underlying IPR&D have been abandoned, nor was it determined to be impaired by management as a result of COVID-19. On March 20, 2020, during the height of the pandemic, the Company was recently awarded a Blanket Purchase Agreement (BPA) contract from the National Strategic Acquisition Center (SAC). The VA’s National Contract and National BPA programs are used by VA medical centers, related facilities, specific State Veterans Homes, and other Federal facilities to procure select products based on clinical evidence, patient outcomes, and economic cost to the VA hospitals. The SAC awarded Olaregen’s Excellagen will expedite the purchasing of Excellagen at over 165 VA medical centers across the U.S. and Puerto Rico. This approval process was critical to the Company’s ability to determine that IPR&D associated with Olaregen, valued at $2,459,000, no longer has an indefinite life and going forward is subject to amortization. The Company determined Olaregen’s IPR&D useful life to be 5 years.

Amortization expense amounted to $~~462~~692,~~685~~575 and $~~309~~462,~~362~~295 for the ~~six~~nine months ended ~~January~~April 3130, 2021 and 2020, respectively.

The estimated amortization expense for the remainder of the current fiscal year and for the next five years and thereafter is as follows:

Year Ending July 31,	Amount
	Amount
For the six months ended July 31, 2021	$	461,212
Remainder of fiscal year ended July 31, 2022		295,185
2022		654,190
July 31, 2023		597,523
2023		520,564
July 31, 2024		520,564
2024		500,914
July 31, 2025		494,364
2025		458,202
July 31, 2026		458,202
Thereafter		54,~~332~~686
Total	$	2,600,414
	$	2,370,524

Note 7 – Notes Payable

As of ~~January~~April 3130, 2021, and July 31, 2020, the Company had notes payable with aggregate principal balances of $10,~~641~~248,~~832~~680 and $11,591,479 and debt discounts of $851,~~078~~133,907 and $425,120, respectively. The notes bear interest between 1% and 16% per annum. During the ~~six~~ nine months ended ~~January~~April 3130, 2021, the Company made payments on principal of $~~127~~2,~~459~~349,996 and converted $1,~~077~~538,~~452~~016 of principal into ~~common~~ common stock. As of ~~January~~April 3130, 2021, there ~~were~~was ~~two~~one ~~notes~~note in default with ana ~~aggregate~~ principal balance of $2682,~~882,~~000 and ~~are~~is accruing at a default rate ~~rates~~ of interest of ~~22% and~~ 24% per annum.

	Amount
Balance of notes payable, net on July 31, 2020	$	11,166,359
Issuances of debt		2,239,500
Issuance of PPP loans		125,200
Additions to debt due to default		255,080
Amortization of debt discount		~~340~~975,~~226~~834
Conversions		(1,077,452	)
Forgiveness of PPP loan		(73,100	)
Payments		(127,459	)
Debt discount		(1,613,166	)
Balance of notes payable, net on January 31, 2021	$	10,556,754
Conversions		(1,610,939	)
Payments		(2,349,996	)
Balance of notes payable, net on April 30, 2021	$	9,114,772

	As of January 31,			As of July 31,
	As of April 30,			As of July 31,
	2021			2020
Notes payable	$	10,~~641~~248,~~832~~680		$	11,591,479
Less: debt discount		(851,~~078~~133,908	)		(425,120	)
Total debt, net of discount		109,~~556~~114,~~754~~772			11,166,359
Notes payable, net - noncurrent		~~499~~551,~~473~~573			499,656
Notes payable, net - current	$	108,~~057~~563,~~281~~199		$	10,666,703

Convertible debt

In December 2019, the Company entered into Securities Purchase Agreements with an investor pursuant to which the Company sold a convertible note bearing interest of 12% per annum in the principal amount of $2,200,000 and due in 18 months. The purchase price of the note was $2,000,000 and the remaining $200,000 of principal amount represents original issue discount. Subject to certain ownership limitations, the note is convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion price of 95% of the lowest stock five trading days prior to conversion less. During the 2020 fiscal year, the Company defaulted on the note for not filing the S-1 within a required period. Thereafter the interest increased to 22% per annum and the conversion price decreased to 85% of the lowest stock five trading days prior to conversion. The embedded beneficial conversion feature in the note meets the definition of a derivative and requires bifurcation and liability classification, at fair value. The fair value of the derivative liability as of the date of issuance was $111,508 and was recorded as a discount of the note. On February 18, 2020, the investor has filed suit and in February 2021, Generex fully satisfied the judgment with cash payments totaling $2,253,312.

On June 25, 2020, the Company entered into a Securities Purchase Agreements pursuant to which the Company sold a convertible note bearing interest at 12% per year in the principal amount of $150,000. The purchase price of the note was $145,000 and the remaining $5,000 of principal represents original issue discount. Subject to certain ownership limitations, the notes will be convertible at the option of the holder at any time into shares of our common stock at an effective conversion price equal 80% of the lowest closing price for the ten trading days prior to the day of the notice. The embedded beneficial conversion feature of these Notes meets the definition of a derivative and requires bifurcation and liability classification, at fair value. The fair value of the derivative liability as of the date of issuance was $59,985 and was recorded as a discount of the note. During September 2020 and October 2020, the entire note was converted into common stock.

During the third quarter of 2021, the Company issued an aggregate of $2,239,500 of convertible notes payable to two investors. The notes are due within one year and bear 8% interest per annum. Subject to certain ownership limitations, the notes will be convertible at the option of the holder after 180 days, or in the event of a default. The embedded beneficial conversion feature of these Notes meets the definition of a derivative and requires bifurcation and liability classification, at fair value. The fair value of the derivative liability as of the date of issuance was $451,080 and was recorded as a discount of the note. The Company also issued 551,072 shares of common stock and granted warrants to purchase 2,007,917 shares of common stock at $0.60 per share. The value of the common stock and warrants were recorded as a discount of the note at fair value.

Paycheck Protection Program Loans

In April 2020, Regentys, Olaregen, NDS 2 and MediSource (collectively “the Subsidiaries”) were granted loans (the “PPP Loans”) in the aggregate amount of $499,473, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Subsidiaries to consider its current business activity and its ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Subsidiaries having initially qualified for the loan and qualifying for the forgiveness of such loan based on its future adherence to the forgiveness criteria. On February 28, 2021, Regentys’ PPP loan was forgiven in the amount of $73,100 of principal and $601 of interest which is recognized as other income on the Statement of Operations.

to these funds, is dependent on the Subsidiaries having initially qualified for the loan and qualifying for the forgiveness of such loan based on its future adherence to the forgiveness criteria.

The PPP Loans, which were in the form of a notes with dates ranging between April 17 and April 24, 2020 and mature between two and five years and bear interest at a rate of 1.00% per annum, payable in monthly payments commencing six months after loan disbursements. The notes may be prepaid by the Subsidiaries at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs and any payments of certain covered interest, lease and utility payments. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The Company is currently applying for forgiveness, but no assurance can be provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.

On March 17, 2021, Olaregen received an additional $125,200 of PPP loan under the same terms.

Compass Bank

Pursuant to the second closing of the acquisition of certain operating assets of Veneto Holdings, L.L.C. and its affiliates, Generex’s wholly owned subsidiary agreed to assume outstanding debt of Veneto subsidiaries to Compass Bank, including obligations under a term loan and a revolving line of credit. Claiming three separate types of default, Compass Bank has demanded payment in full of amounts due under the term loan and revolving line of credit, in an aggregate amount of approximately $3,413,000. Generex believes it has defenses to such demand, including that the bank was not an intended beneficiary of the subsidiary’s agreement to assume the debt.

Note 8 – Derivative Liability

The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted, and all additional convertible debentures and warrants are included in the value of the derivative liabilities. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period.

Based on the various convertible notes described in Note 7, and the sale of common stock in a private investment in public equity (“PIPE”) described in Note 9, the fair value of applicable derivative liabilities on notes, warrants and change in fair value of derivative liability are as follows as of ~~January~~April 3130, 2021:

	Derivative Liability - Convertible Notes			Derivative Liability - Warrants			Derivative Liability PIPE Warrants			Total
Balance as of July 31, 2020	$	742,391		$	574,366		$	—		$	1,316,757
Change Due to Issuances		—451,080			—			21,574,216			2122,~~574~~025,~~216~~296
Change due to exercise/redemptions		(538,084	)		—			(1,840,530	)		(2,378,614	)
Change due to exercise / redemptions		(576,135	)		—			(1,840,530	)		(2,416,665	)
Change in fair value		~~100~~(432,~~177~~653	)		~~493~~(574,~~985~~366	)		10(3,~~643~~144,~~052~~369	)		11(4,~~237~~151,~~214~~388	)
Balance as of January 31, 2021	$	304,484		$	1,068,351		$	30,376,738		$	31,749,573
Balance as of April 30, 2021	$	184,683		$	—		$	16,589,317		$	16,774,000

Note 9 - Stockholders’ Equity

Common Stock

Stock compensation expense

During the ~~six~~nine months ended ~~January~~April 3130, 2021, the Company recognized $12,~~742~~160,~~050~~788 of expense related to the vesting of stock options. Inand ~~January 2021, the Company~~ issued 51,130 shares of common stock to vendors for services valued at $0.215 per share, or $10,993.

Issuance of common stock ~~and subscription receivable~~

On November 25, 2019, the Company entered an Equity Purchase Agreement with Oasis Capital, LLC (“Oasis”) to purchase up to $40,000,000 of the Company’s stock at 92% of the market price for the period of five (5) consecutive trading days immediately subject to a put notice on such date on which the Purchase Price is calculated in accordance with the terms and conditions of the agreement (subject to certain limitations) from time to time over a 36-month period. During the ~~six~~nine months ended ~~January~~April 3130, 2021, the Company issued 67,~~350~~700,000 shares of common stock in ~~three~~ tranches for an aggregate price of $1,~~439~~854,~~940~~257, net of transaction costs of $2022,~~376~~405. Of the shares issued, 750,000 shares of common stock are classified as subscription receivable since the Company has not received payment on this issuance as of January 31, 2021. In February 2021, the Company received $275,324 related to the subscription receivable.

Issuance of common stock in a PIPE deal, net of fees and exercise of warrants

On August 4, 2020, the Company and three institutional accredited investors (each a “Buyer” and, collectively, the “Buyers”) entered into a securities purchase agreement pursuant to which the Company sold and issued to the Buyers an aggregate of 5,102,040 shares of the Company’s common stock, par value $0.001 per share, and received net proceeds of $1,850,000 after deducting commissions and attorney’s fees of $150,000. In November 2020, the Company issued 284,900 shares of common stock to consultants in connection with the offering.

Pursuant to the Securities Purchase Agreement, the Company issued to the Buyers (i) Series A Warrants to purchase 5,102,040 shares of Common Stock in the aggregate (the “Series A Warrants”) with an initial exercise price equal to $0.392 per share (the “Series A/B Exercise Price”), (ii) Series B Warrants to purchase 15,306,122 shares of Common Stock in the aggregate (the “Series B Warrants”) with an initial exercise price equal to the Series A/B Exercise Price; (iii) Series C Warrants to purchase the number of shares of Common Stock equal to Maximum Eligibility Number (as defined therein) (the “Series C Warrants”) at an initial exercise price equal to $0.539 per share; and (iv) Series D Warrants to purchase the number of shares Common Stock equal to the Maximum Eligibility Number (as defined therein) (the “Series D Warrants” and together with the Series A Warrants, the Series B Warrants and the Series C Warrants, the “Warrants” and the Warrants together with the Common Shares and the shares of Common Stock underlying the Warrants, the “Securities”) at an exercise price equal to $0.001 per share, in each case, subject to adjustment and beneficial ownership limitations set forth therein. Subject to the satisfaction or waiver of certain conditions set forth in the Series A Warrants, the Company may force the Buyers to exercise the Series A Warrants in full on the twenty second (22nd) trading day (the “Forced Exercise Date”) after the effectiveness of the Company’s registration statement that registers all of the Common Shares and shares underlying the Warrants. The exercise price set forth in each of the Series A Warrants, the Series B Warrants and Series C Warrants is subject to adjustment on certain trigger dates as provided in each such Warrant. The holders of the Series A Warrants, Series B Warrants and Series C Warrants shall be allowed a cashless exercise if a registration statement registering the Securities is not effective within 180 days following the issuance of such Warrants. On certain interim reset dates (“Interim Reset Date(s)” and second trigger dates (“Second Trigger Date(s)”) as set forth in the Series D Warrants, the Series D Warrants will become exercisable into a number of shares of Common Stock that would have been issued on the issuance date and upon exercise of the Series A Warrants and Series B Warrants had the purchase price per share and exercise price of the Series A Warrants and Series B Warrants been equal to the applicable reset price as set forth in the Series D Warrant; or the right to use the applicable exercise price, or adjustment right (as the case may be) calculated using the Black-Scholes Option Pricing Model pursuant to the Securities Purchase Agreement. The Buyers have the potential right to have these Warrants settled in cash equal to the Black Scholes value of any remaining unexercised warrant.

As a result, of an Interim Reset Date on September 28, 2020, and Second Trigger Date on October 12, 2020, the additional warrants were issued and the exercise price adjusted as follows: (i) 5,112,463 additional Series A Warrants were issued to purchase 10,214,503 in the aggregate shares of Common Stock with a “reset” exercise price equal to $0.1958 per share (the “Series A/B Reset Exercise Price”), (ii) 15,337,389 additional Series B Warrants to purchase 30,643,509 shares of Common Stock in the aggregate with a reset exercise price equal to the Series A/B Exercise Price; (iii) 9,142,973 additional Series C Warrants to purchase the number of shares of Common Stock to purchase 19,347,053 shares of Common Stock in the aggregate at a reset exercise price equal to $0.28149 per share; and (iv) the Buyers exercised 9,142,973 Series D Warrants and purchased 9,142,973 shares of Common Stock at $0.001 per share (See Note 12 – Warrants).

Deemed dividend related to issuance of warrants containing derivative liabilities

As a result of the excess warrant liability for the warrants granted relative to total proceeds received in connection with pursuant to the Securities Purchase Agreement (see Note 9) it was determined to be immediately beneficial upon initial closing date and, as a result, the Company recorded a deemed dividend of $1,850,000 increasing Additional Paid-in Capital and reducing the Accumulated Deficit by $1,850,000.

~~During~~Issuance ~~the six months ended January 31, 2021 and 2020, 3,529,415 and 436,121 shares~~ of common stock payable were issued to settle outstanding obligations, valued at $1,472,826 and $936,395, respectively. As of January 31, 2021 and July 31, 2020, the value of the remaining shares to be issued was $8,572,399 and $10,079,449, respectively.

	Common Stock Payable
Balance as of July 31, 2020	$	10,079,449
Issuance of common stock payable		(1,472,826	)
Change in fair value of common stock payable		(34,224	)
Balance as of January 31, 2021	$	8,572,399

During the nine months ended April 30, 2021 and 2020, 3,529,415 and 436,121 shares of common stock payable were issued to settle outstanding obligations, valued at $1,472,826 and $936,395, respectively. As of April 30, 2021 and July 31, 2020, the value of the remaining shares to be issued was $8,504,241 and $10,079,449, respectively.

Conversion of debt to equity

	Common Stock Payable
Balance as of July 31, 2020	$	10,079,449
Issuance of common stock payable		(1,472,826	)
Change in fair value of common stock payable		(102,382	)
Balance as of April 30, 2021	$	8,504,241

~~During~~Conversion ~~the six months ended January 31, 2021 and 2020, the Company issued 5,860,255 and 5,006,548 shares~~ of ~~common stock for the conversion of $1,127,843 and $2,904,758 of~~ debt, ~~respectively.~~to Asequity ~~a result of the debt conversions during the six months ended January 31, 2021~~ and ~~2020,~~reduction ~~$537,936~~in ~~and $2,276,078 of~~ derivative liabilities ~~were reduced, respectively.~~

During the nine months ended April 30, 2021 and 2020, the Company issued 7,665,359 and 9,719,740 shares of common stock for the conversion of $1,618,604 and $4,489,910 of debt, respectively. As a result of the debt conversions, during the nine months ended April 30, 2021 and 2020, $575,987 and $3,041,502 of derivative liabilities were reduced, respectively.

Issuance of common stock for acquisitions

In August 2019, the Company issued 400,000 and 560,000 shares of common stock valued at $2.50 per share for the acquisition of MediSource and Pantheon, respectively.

Cancellation of shares

On September 12, 2019, 20,375,900 outstanding shares of common stock were cancelled by the Company held by Joe Moscato TTEE Friends of Generex Biotechnology Investment Trust U/A/D 4/2/2019, a trust formed for the benefit the Company and any 80% controlled subsidiary of the Company by several shareholders contributing in the aggregate 33,175,900 shares of the Company’s Common Stock and 8,293,975 shares of NGIO commons shares (the “Friends of Generex Trust”), similar to the Stock Control Agreement previously entered into by the same shareholders on December 1, 2018 filed in an 8-K filed on December 3, 2019, incorporated herein by reference.

Non-controlling Interest

Regentys

Pursuant to the Company’s acquisition of Regentys on January 7, 2019 to acquire a 51% interest, the Company was issued 12,048,161 shares of Regentys common stock. As of ~~January~~April 3130, 2021 , Regentys had a total of 18,623,278 shares of common stock and 2,793,192 Series A voting preferred stock for a total of 21,416,470 total voting shares outstanding. As such, there are 9,368,309 of shares that belong to non-controlling interest shareholders which represents a 43.74% non-controlling interest.

Olaregen

Pursuant to the Company’s acquisition of Olaregen on January 7, 2019 to acquire a 51% interest, the Company was issued 3,282,632 shares of Olaregen common stock from Olaregen shareholders. In May 2019, the Company issued 4,000,000 shares of common stock contributed and provided by the Friends of Generex Trust and a $2 million note payable for the acquisition of 592,683 shares of Series A Preferred Stock of Olaregen pursuant to a Stock Purchase Agreement entered into January 14, 2019 subject to the approval of the Board of Directors of Olaregen and consummated on May 10, 2019. The provided shares by the Friends of Generex Trust were already issued and outstanding and did not result in any expense of the Company. Since these shares were transferred, to the shareholders of Olaregen, by an existing shareholder to settle an obligation of the Company, the value of the shares provided by the Friends of the Generex Trust to settle the debt was reflected in the financial statements as an addition to contributed (paid-in) capital.

On February 14, 2020, the remaining stockholders of Olaregen exchanged all of its outstanding shares for 5,950,000 shares of Generex common stock and 2,765,000 shares of NGIO. After this transaction Olaregen became a 100% owned subsidiary.

Veneto

On November 1, 2018, the Company completed its second closing of Veneto Holdings, L.L.C. (“Veneto”) which granted the Company Rapport Services, LLC (“Rapport”) through the ownership of the units of Class B membership interests providing control of Rapport as only the Class B Member is entitled to elect the nominees to the Board of Managers, which constitute a one percent (1%) ownership in Rapport. The remaining interests represent a 99% non-controlling interest.

NuGenerex Immuno-Oncology, Inc.

On July 14, 2020, NGIO entered into a purchase agreement with an investor Oasis Capital, LLC (“Oasis”) pursuant to which Oasis has agreed to purchase from the Company up to $50,000,000 of common stock at 92% of the market price for the period of five (5) consecutive trading days immediately subject to a put notice on such date on which the purchase price is calculated in accordance with the terms and conditions of the agreement (subject to certain limitations) from time to time over a 36-month period. NGIO also issued to Oasis 300,000 shares of its common stock under the Oasis Capital Agreement as a commitment fee in connection with a registration statement. This transfer has been accounted through common stock and additional paid in capital which has no net effect on equity.

On January 20, 2021, NGIO designated 100,000 shares of preferred stock as “Series A Super Voting Preferred Stock.” The holders of the Series A Super Voting Preferred Stock shall not be entitled to dividends or liquidation preference and shall have the right to vote in an amount equal to 3,000 votes per share. On February 2, 2021, NGIO issued 100,000 shares of the Company’s Series A Super Voting Preferred Stock (the “Super Voting Preferred Stock”) to Generex in exchange for 300,000,000 shares of the Company’s common stock, which were immediately cancelled upon such exchange. The NGIO Preferred Stock entitles the holder thereof to 3,000 votes per share, which vote along with the common stockholders on all matters put before the NGIO common stockholders.

Note 10 – Redeemable Non-Controlling Interest

Pursuant to the Company’s acquisition of 51% of the outstanding capital stock of Regentys, Regentys had authorized 7,500,000 shares of redeemable Series A Convertible Preferred Stock (“Preferred Stock A”), with a par value of $0.0001 and redemption value of $0.65 per share of which 2,793,192 Preferred Stock A was outstanding as of the date of acquisition ~~and as of January 31, 2020~~. Preferred Stock may be converted into common stock at the initial conversion ratio of 1:1 which ratio shall be adjusted in accordance with stock dividends, splits, combinations and other similar events, including the sale of additional shares of common or preferred stock and the holders of Preferred Stock A are entitled to vote, together with the holders of Regentys common stock, on all matters submitted to stockholders of Regentys for a vote. At any time after November 1, 2026, the holders of the Company’s Series A Preferred Stock will have the right to require the Company to redeem all or a portion of their shares for cash at a redemption price equal to its liquidation value. Accordingly, this Preferred Stock A was valued to be $4,073,898 at the time of acquisition of Regentys and reclassified as Redeemable Non-Controlling Interest outside of stockholders’ deficit on the consolidated balance sheets.

Note 11 - Stock-Based Compensation

Stock Option Plans

The Company has two stockholder-approved stock incentive plans under which shares and options exercisable, with a range of vesting between 0 and 48 months, for shares of common stock have been or may be granted to employees, directors, consultants and advisors. All remaining options under the 2006 Stock Plan have expired and no shares of common stock are reserved for issuance under the 2006 Stock Plan as amended (the 2006 Plan) and a total of 240,000,000 shares of common stock reserved for issuance under the 2017 Stock Option Plan (the 2017 Plan). As of ~~January~~April 3130, 2021, there were 0 and 227,~~057~~394,~~640~~140 shares available under the 2006 Plan and 2017 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.

During 2019, the Company established a Direct Stock Purchase Plan (“2019 Plan”) pursuant to which eligible participants may acquire shares of common stock in lieu of certain cash obligations otherwise owed to participants during the 2019 calendar year. The 2019 Plan automatically terminated on December 31, 2019. There was a total of 1,680,000 shares of common stock reserved under the plan of which no shares have been issued.

The 2017 Plan (the Plan) is 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 Plan. Generally, the interpretation and construction of any provision of the Plan 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.

The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model 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.

During August and September 2020, the Company granted 6,242,210 stock options to buy common stock, at $0.45 per share and $0.31 per share, to various officers, board members, employees and consultants.

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

	Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value		Non-vested Awards
Outstanding - July 31, 2020		8,847,025		$	0.90		5.96	$	508,206	$	—
Granted		6,242,210		$	0.35		9.5732		—		—
Forfeited or expired		(2,~~146~~483,~~875~~375	)	$	0.8288		6.5010		—		—
Outstanding – January 31, 2021		12,942,360		$	0.65		7.26	$	916,842	$	3,895,463
Outstanding – April 30, 2021		12,605,860		$	0.63		7.07	$	195,507		6,198,273

The intrinsic value is calculated as the difference between the market value and the exercise price of the shares on ~~January~~the ~~31, 2021~~quarter-end. The market value was $0.4326 based on the closing bid price as of ~~January~~April 3130, 2021.

A summary of the status of the Company’s non-vested stock options the ~~six~~ nine months ended ~~January~~April 3130, 2021 is as follows:

Non-vested Options	Options			Weighted Average Grant Date Fair Value
Non-vested on July 31, 2020		4,082,767		$	1.06
Granted		6,242,210			0.35
Expired		—			—
Canceled/forfeited		(571,001	)		0.96
Canceled		(366,667	)		0.79
Vested		(3,555,703	)		0.56
Vested		(2,947,803	)		0.59
Non-vested on April 30, 2021		6,198,273		$	0.65
Non-vested on January 31, 2021		7,010,507		$	0.64

There were 56,~~931~~407,~~853~~587 vested common stock options under the Plan as of ~~January~~April 3130, 2021. The compensation expense was $~~531~~418,~~043~~738 and $12,~~742~~160,~~050~~788 for the three and ~~six~~ nine months ended ~~January~~April 3130, 2021. The Company had $32,~~936~~397,~~129~~139 of unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Plan on ~~January~~April 3130, 2021 to be recognized over an average of 21.0963 years.

The Company estimated the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models requires the Company to make predictive assumptions regarding future stock price volatility, recipient exercise behavior, and dividend yield. The Company estimated the future stock price volatility using the historical volatility over the expected term of the option. The following assumptions were used in the Black-Scholes option-pricing model:

			Six Months Ended January 31, 2021
			Nine Months Ended April 30, 2021
Exercise price			$0.31 – $0.45
Time to expiration			10 years
Risk-free interest rate			0.16% - 0.18%
Estimated volatility			148.3% - 148.8%
Expected dividend			—
Stock price at valuation date			$0.31 – $0.45

Note 12 - Warrants

As of July 31, 2020, the Company had 567,553 warrants outstanding. On August 4, 2020, the Company initially issued 30,612,240 warrants in the aggregate pursuant to the Private Placement (see Note 9 - Stockholders’ Equity, Sale of common stock in a private placement (PIPE), net of fees and exercise of warrants); and 29,592,825 additional warrants as a result, of an Interim Reset Date on September 28, 2020, and Second Trigger Date on October 12, 2020, and the additional warrants were issued, and the exercise price was adjusted. The fair value of the PIPE warrants is presented as a derivative liability and marked to market at each reporting period (see Note 8 – Derivative Liabilities).

The following is a table of outstanding warrants issued in connection with the PIPE deal during the ~~six~~nine months ended ~~January~~April 3130, 2021:

	Initial Exercise Price		Initial Warrants Issued		Additional Warrants Issued		Reset Exercise Price		Outstanding Warrants as of ~~January~~April 3130, 2021
Series A Warrants	$	0.392		5,102,040		5,112,463	$	0.196		10,214,503
Series B Warrants	$	0.392		15,306,120		15,337,389	$	0.196		30,643,509
Series C Warrants	$	0.539		10,204,080		9,142,973	$	0.281		19,347,053
Total Warrants from PIPE deal				30,612,240		29,592,825				60,205,065

On September 28, 2020, the Interim Reset Date, 5,662,190 Series D Warrants were issued and exercised at $0.001 per share; and on October 12, 2020, the Second Trigger Date on October 12, 2020, 3,480,783 Series D Warrants were issued and exercised at $0.001 per share, for an aggregate of 9,142,973 warrants issued and exercised.

On November 17, 2020, the Company issued shares of common stock at a price of $0.18 (see Note 9) which triggered a reset provision on certain warrant holders’ previously granted warrants whereby their exercise price was reduced to $0.18 and the agreement entitled them to an additional 4,183,575 shares of common stock upon exercise.

In connection with the issuance of convertible notes payable, the Company granted warrants to purchase 2,007,917 shares of common stock at $0.60 per share. The value of the warrants was recorded at fair value as a discount to the note.

A summary of the Company’s warrant activities is as follows:

	Number of Warrants			Weighted Average Exercise Price per Share		Weighted Average Remaining Life (Years)		Aggregate Intrinsic Value
Outstanding - July 31, 2020		567,553		$	2.50		2.20	$	—
Issued		6971,~~348~~355,~~038~~955			0.1921		5		—
Exercised		(9,142,973	)		0.001		5		—
Expired		—			—		—		—
Outstanding – January 31, 2021		60,772,618		$	0.23		4.99	$	12,541,446
Outstanding – April 30, 2021		62,780,535		$	0.24		4.68	$	2,665,819

Note 13 – Leases

The Company has various operating lease agreements for leases of office spaces. Some leases include purchase, termination or extension options for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The Company adopted ASC 842 effective August 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update:

•

The option to not reassess prior conclusions related to the identification, classification and accounting for initial direct costs for leases that commenced prior to August 1, 2019.

•

Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and

•

The option to not separate lease and non-lease components for certain equipment lease asset categories such as freight car, vehicles and work equipment.

•

The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, the Company uses a discount rate based on its incremental borrowing rate, which is determined using the average of borrowing rates explicitly stated in the Company’s convertible debt.

The Company’s weighted-average remaining lease term relating to its operating leases is 2.48 years, with a discount rate of 10%.

The Company incurred lease expense for its operating leases of ~~$15~~25,~~122~~213 and $4065,~~336~~549 for three and ~~six~~ nine months ended ~~January 31~~April 30, 2021, respectively.

On ~~January~~April 3130, 2021, the Company renewed its lease for office space in Miramar, Florida. The lease extends until September 30, 2023. The payments will be made as follows in the future fiscal years: $5016,~~643~~881 in 2021; $69,775 in 2022; $72,566 2023; $12,172 in 2024.

NuGenerex Health, LLC has entered into lease agreement in Phoenix, Arizona on January 13, 2021 for two premises of 892 sq ft. and 3,247 sq ft, respectively. The spaces are for the implementation of our clinic strategy beginning with our roll out of RPM CCM and then our specialty practices of Podiatry and Ophthalmology. The lease term is for 77 ~~Months~~months and the expected payments start at $1,933 and $5,888 per month for each premise respectively. Although executed in January 2021, the lease is not expected to commence until the ~~third or~~ fourth quarter of fiscal year 2021.

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases as of ~~January~~April 3130, 2021:

Maturity of operating lease liabilities for the remainder of the current fiscal year and the following fiscal years:

2021	$	~~49,049~~$	24,525
2022		~~69,775~~	69,775
2023		~~72,566~~	72,566
2024		~~12,172~~	12,172
Total undiscounted operating lease payments		~~203,562~~$	179,038
Less: Imputed interest		~~24,388~~	20,091
Present value of operating lease liabilities	$	~~179,174~~$	158,946

Note 14 - Net Income Per Share (“EPS”)

Basic net income or loss per share is calculated using the weighted average number of common shares outstanding during the period. Diluted ~~earnings~~net income per ~~common~~ share is ~~the~~calculated ~~same~~by asdividing ~~basic~~income ~~earnings~~available ~~per~~to common ~~share~~shareholders ~~because,~~by as the ~~Company~~weighted ~~incurred~~average anumber ~~net~~of ~~loss~~common shares ~~during~~outstanding ~~each~~ for the period ~~presented~~and, ~~the~~when ~~potentially~~ dilutive, ~~securities~~potential shares from stock options and warrants to purchase common stock. Common stock equivalents are included in the ~~assumed~~diluted income per share calculation only when option exercise prices are lower than the average market price of ~~all~~the ~~outstanding~~common ~~stock~~shares ~~options,~~for ~~warrants~~the ~~and~~period presented. Diluted earnings per share is the same as basic earnings ~~conversion~~per ~~notes~~share ~~payables,~~in ~~would~~periods ~~have~~showing ana ~~anti-dilutive~~net ~~effect~~loss.

The following ~~outstanding~~table ~~shares~~shows ~~of potentially dilutive securities were excluded from~~ the computation of ~~diluted~~basic ~~net~~and ~~loss~~diluted earnings per share ~~attributable~~ tofor ~~common~~the ~~shareholders~~three- ~~because~~and ~~including them would have been anti~~nine-~~dilutive~~month ~~for~~periods ~~the years~~ ended ~~January 31~~April 30, 2021 and 2020, respectively.;

	Six Months Ended January 31,
	Three Months Ended April 30,						Nine Months Ended April 30,
	2021			2020			2021			2020
Convertible debt		6,771,804			34,374,900
Numerator:
Stock options		12,942,360			9,123,195
Net income (loss), basic calculation	$	9,222,550		$	(5,626,462	)	$	(25,588,724	)	$	(21,661,910	)
Warrants		64,956,192			567,553
Less: mark to market derivatives		(15,362,558	)		—			—			—
Total		84,670,356			44,065,648
Net loss, diluted calculation		(6,140,008	)		—			—			—
Denominator:
Weighted-average basic shares outstanding		114,605,060			76,976,925			106,460,699			70,702,570
Effect of dilutive securities		25,802,119			—			—			—
Weighted-average diluted shares		140,407,179			76,976,925			106,460,699			70,702,570
Basic earnings (loss) per share	$	0.08		$	(0.07	)	$	(0.24	)	$	(0.31	)
Diluted loss per share	$	(0.04	)	$	(0.07	)	$	(0.24	)	$	(0.31	)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common shareholders because including them would have been anti-dilutive for the nine months ended April 30, 2021 and 2020, respectively:

	Nine Months Ended April 30,
	2021		2020
Convertible debt		—		34,374,900
Stock options		12,605,860		9,123,195
Warrants		62,780,535		567,553
Total		75,386,395		44,065,648

Note 15 – Income Taxes

The Company has incurred losses since inception, which have generated net operating loss (“NOL”) carryforwards. The NOL carryforwards arise from both United States and Canadian sources. Pre-tax ~~gain or (~~loss) arising from domestic operations (United States) were ($3526,~~887~~903,~~596~~655) and ($34,291,142) for the ~~six~~nine months ended ~~January~~April 3130, 2021 and the year ended July 31, 2020, respectively. Pre-tax (~~losses~~loss)/income arising from foreign operations (Canada) were ($6,~~419~~708) and $59,049 for the ~~six~~nine months ended ~~January~~April 3130, ~~2021~~ 2021 and the year ended July 31, 2020, respectively.

As of ~~January~~April 3130, 2021, the Company has NOL carryforwards in Generex Biotechnology Corporation of approximately $~~224~~230.34 million, of which $189.54 million will expire in 2021 through 2038, and $3441.90 million will not expire. Generex Pharmaceuticals Inc. has NOL carryforwards of approximately $34.4 million, which expire in 2026 through 2041. NGIO has NOL carryforwards of approximately $35.7 which will expire in 2021 through 2038. Regentys Corporation has NOL carryforwards of approximately $6.8 million, of which $5.0 million will expire in 2033 through 2038 and $1.8 million will not expire. Olaregen Therapeutics, Inc. has NOL carryforwards of $4.58 million which will not expire. Veneto has NOL carryforwards of $11.04 million which will not expire. Some of these loss carryforwards are subject to limitation due to the acquisition of Regentys, Olaregen and NGIO 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.

As of ~~January~~April 3130, 2021, the Company had no tax benefits which have not been fully allowed for, and no adjustment to its financial position, results of operations or cash flows was required. The Company has deferred tax assets of ~~over~~ $7678 million with a full allowance equal to the to the amount of the deferred tax asset. 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 years presented. Generally, tax years 2017 to 2020 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 2012 to 2020 remain open to examination by the Canada Revenue Agency or other tax jurisdictions to which the Company is subject.

On March 27, 2020, the CARES Act was enacted and signed into law in the U.S. in response to the COVID-19 pandemic. One of the provisions of this law is the temporary suspension of the 80% limitation on the utilization of net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021. Additionally, the CARES Act allows The Company to carryback net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021 to the five previous periods if the company has taxable income in the carryback years. Neither of these modifications are expected to apply to the Company due to the sustained history of losses.

Note 16 - Subsequent Events

On ~~February~~May 24, 2021, ~~NGIO issued 100,000 shares of~~ the Company’s ~~Series~~issued ~~A Super Voting Preferred Stock (the “Super Voting Preferred Stock”) to Generex in exchange for~~ 300,000~~,000~~ shares of ~~the Company’s~~ common stock, ~~which were immediately cancelled upon such exchange. The NGIO Preferred Stock entitles the holder thereof~~ to ~~3,000~~Oasis ~~votes~~for ~~per~~net ~~share,~~proceeds ~~which~~of ~~vote along with the common stockholders on all matters put before the NGIO common stockholders. The NGIO Preferred stock have no dividend~~$71, ~~liquidation or conversion rights and are not subject to redemption~~387.

On May 10, 2021, the Company entered into a Securities Purchase Agreements pursuant to which the Company sold a convertible note bearing interest at 12% per year in the principal amount of $1,085,000. The purchase price of the note was $1,000,000 and the remaining $85,000 of principal represents original issue discount. Additionally, the Company issued 700,000 shares of common stock which was recorded as debt discount.

On May 13, 2021, the Company issued 400,000 shares of common stock to Oasis for net proceeds of $91,323.

On May 20, 2021, Generex executed a Project Addendum (“Addendum”) to an existing agreement on with PPD Development, L.P. for its compensation performance of services under this Addendum, PPD shall receive a total sum anticipated not to exceed $8,901,715 of which $3,168,646 shall be direct fees, and of which $5,733,069 shall be handled as pass through costs. The pass-through costs are estimated and may vary as circumstances require.

On June 1, 2021, the Company issued 400,000 shares of common stock to Oasis for net proceeds of $83,964.

On June 3, 2021, the Company entered into a Securities Purchase Agreements pursuant to which the Company sold a convertible note bearing interest at 6% per year in the principal amount of $324,000. The purchase price of the note was $300,000 and the remaining $24,000 of principal represents original issue discount. In conjunction, the Company issued 206,182 shares of common stock which was recorded as debt discount. In conjunction the Company granted warrants to purchase 353,455 shares of common stock at $0.60 per share.

On June 14, 2021, the company issued 250,000 shares of common stock to oasis for net proceeds of $52,477.

On February 1, 2020, the company fully converted a promissory note with a balance of $90,000 of principal and $9,490 of interest into 255,104 shares of common stock.

On February 8, 2021, Generex and NGIO, received a wire transfer of Two Million Dollars ($2,000,000) towards its COVID-19 vaccine development initiatives from its China Partners (as defined below) pursuant to the Ii-Key Innovative Vaccine Development Agreement signed November 13, 2020, as amended by the extension terms signed December 15, 2020 (collectively the “Agreement”), with Beijing Youfeng International Consulting Co., Ltd (“BYIC”), National Institute for Viral Disease Control and Prevention, Chinese Centre for Disease Control and Prevention (“NIVDC”) and Beijing Guoxin Haixiang Equity Investment Partnership (“BGHEIP” and together with BYIC and NIVDC, the “China Partners”).

To date Generex has received a total of $3,100,000 from the China Partners, broken down as follows:

1. $100,000 “Performance Guarantee Fee” payment.

2. $3,000,000 towards its COVID-19 vaccine development initiatives.

On February 17, 2021, the Company entered into a Securities Purchase Agreement with an investor pursuant to which the Company sold a convertible promissory note bearing interest at 8% per annum with a 12-month maturity date in the aggregate principal amount of $1,689,500. The purchase price of the Note was $1,425,000 and the remaining $264,500 of principal amount represented original issue discount, along with the issuance of 201,072 shares of the Company’s common stock, as inducement shares. Pursuant to the Securities Purchase Agreement, the Company also sold to the Investor warrants to purchase up to an aggregate 1,407,917 shares of common stock.

On February 19, 2021, the Company fully satisfied a judgment related to the creditor Discover Growth Fund, LLC (“Discover”) with a cash payment totaling $2,253,312; no stock was exchanged to satisfy this judgment.

On February 24, 2021, the Company issued 750,000 shares of common stock to Oasis for net proceeds of $271,874.

On March 4, 2021, the Company issued 750,000 shares of common stock to Oasis for net proceeds of $175,964 which went directly towards repaying an outstanding note with Oasis.

On March 9, 2021, the Company issued 500,000 shares of common stock to Oasis $144,224 which went directly towards repaying an outstanding note with Oasis.

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

As used herein, the terms the “Company,” “Generex,” “we,” “us,” or “our” refer to Generex Biotechnology Corporation, a Delaware corporation. The following discussion and analysis by management provides information with respect to our financial condition and results of operations for the ~~six~~nine-month period ended ~~January~~April 3130, 2021 ~~and~~ and 2020.

This discussion should be read in conjunction with the information contained in Part I, Item 1A - Risk Factors and Part II, Item 8 - Financial Statements and Supplementary Data in our Annual Report on Form 10-K for the year ended July 31, 2020, and the information contained in Part I, Item 1 - Financial Statements in this Quarterly Report on Form 10-Q for the ~~six~~nine months ended ~~January~~April 3130, 2021.

Forward-Looking Statements

We have made statements in this Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report on Form 10-Q of Generex Biotechnology Corporation for the fiscal quarter ended ~~January~~April 3130, ~~2021~~ 2021 that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform ~~Act~~ Act of 1995 (the "Act"). The Act limits our liability in any lawsuit based on forward-looking statements that we have made. All statements, other than statements of historical facts, included in this Quarterly Report that address activities, events or or developments that we expect or anticipate will or may occur in the future, including such matters as our projections, future ~~capital~~ capital expenditures, business strategy, competitive strengths, goals, expansion, market and industry developments and the growth of our businesses and operations, are forward-looking statements. These statements are based on currently available operating, ~~financial~~ financial and competitive information. These statements can be identified by introductory words such as “may,” "expects," “anticipates,” "plans," "intends," "believes," "will," "estimates" or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Our forward-looking statements address, among other things:

•

the risks associated with international operations; (including pandemics and public health problems, such as the outbreak of novel coronavirus (“COVID-19”);

•

our expectations concerning product candidates for our technologies;

•

our expectations concerning funding of obligations related to potential acquisitions and generally completing acquisitions;

•

our expectations concerning existing or potential development and license agreements for third-party collaborations, acquisitions and joint ventures;

•

our expectations concerning product candidates for our technologies;

•

our expectations regarding the cost of raw materials and labor, consumer preferences, the effect of government regulations on the Company’s business, the Company’s ability to compete in its industry, as well as future economic and other conditions both generally and in the Company’s specific geographic markets;

•

our expectations of when regulatory submissions may be filed or when regulatory approvals may be received; and

•

our expectations of when commercial sales of our products in development may commence and when actual revenue from the product sales may be received.

Any or all of our forward-looking statements may turn out to be wrong. They may be affected by inaccurate assumptions that we might make or by known or unknown risks and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in our forward-looking statements. Among the factors that could affect future results are:

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•

the inherent uncertainties of product development based on our new and as yet not fully proven technologies;

•

the risks and uncertainties regarding the actual effect on humans of seemingly safe and efficacious formulations and treatments when tested clinically;

•

the inherent uncertainties associated with clinical trials of product candidates;

•

the inherent uncertainties associated with the process of obtaining regulatory approval to market product candidates;

•

the inherent uncertainties associated with commercialization of products that have received regulatory approval;

•

the decline in our stock price; and

•

our current lack of financing for operations and our ability to obtain the necessary financing to fund our operations and effect our strategic development plan.

Additional factors that could affect future results of our historical business are set forth in Part I, Item 1A Risk Factors of our Annual Report on Form 10-K for the year ended July 31, 2020. We caution investors that the forward-looking statements contained in this Quarterly Report must be interpreted and understood in light of conditions and circumstances that exist as of the date of this Quarterly Report. We expressly disclaim any obligation or undertaking to update or revise forward-looking statements to reflect any changes in management's expectations resulting from future events or changes in the conditions or circumstances upon which such expectations are based.

Executive Summary

Overview of Business

Corporate History

Generex Biotechnology Corporation (the “Company,” “Generex,” “we,” “us” or “our”) is based in Miramar, Florida, with offices in Toronto, Canada, Wellesley, Massachusetts and Phoenix, Arizona. The Company was originally incorporated in the state of Delaware on September 4, 1997, for the purpose of acquiring Generex Pharmaceuticals Inc., a Canadian (Province of Ontario) corporation formed in November 1995 to engage in pharmaceutical and biotechnological research and development and other activities. The Company’s acquisition of Generex Pharmaceuticals Inc. was completed in October 1997 in a transaction in which the holders of all outstanding shares of Generex Pharmaceuticals Inc. exchanged their shares for shares of Generex common stock.

In January 1998, Generex participated in a “reverse acquisition” with Green Mt. P.S., Inc, (“Green Mt.”), an inactive Idaho corporation formed in 1983. As a result of this transaction, the shareholders of Generex (the former shareholders of Generex Pharmaceuticals Inc.) acquired a majority (approximately 90%) of the outstanding capital stock of Green Mt., and Generex became a wholly-owned subsidiary of Green Mt.; Green Mt. changed its corporate name to Generex Biotechnology Corporation ("Generex Idaho"), and Generex changed its corporate name to GBC - Delaware, Inc. Because the reverse acquisition resulted in GBC - Delaware, Inc. shareholders (formally Generex shareholders) becoming the majority holders of Generex Idaho, GBC Delaware, Inc. was treated as the acquiring corporation in the transaction for accounting purposes. Thus, our, GBC - Delaware, Inc. (formally Generex), historical financial statements, which essentially represented the historical financial statements of Generex Pharmaceuticals Inc., were deemed to be the historical financial statements of Generex Idaho.

In April 1999, we completed a reorganization in which GBC - Delaware, Inc. merged with Generex Idaho. In this transaction, all outstanding shares of Generex Idaho were converted into shares of GBC - Delaware, Inc.; Generex Idaho ceased to exist as a separate entity, and we, GBC - Delaware, Inc., changed our corporate name back to "Generex Biotechnology Corporation." This reorganization did not result in any material change in our historical financial statements or current financial reporting.

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Following our reorganization in 1999, Generex Pharmaceuticals Inc., which was incorporated in Ontario, Canada, remained as our wholly owned subsidiary. All of our Canadian operations are performed by Generex Pharmaceuticals Inc.; Generex Pharmaceuticals Inc. is the 100% owner of 1097346 Ontario Inc., which was also incorporated in Ontario, Canada. In August 2003, we acquired NuGenerex Immuno-Oncology, Inc. (formerly Antigen Express, Inc.) (“NGIO”), a Delaware incorporated company. NGIO is engaged in the research and development of technologies that regulate the immune system for the treatment of malignant, infectious, autoimmune and allergic diseases. On February 28, 2019 Generex issued a dividend of NGIO to Generex shareholders in the amount of 1 share of NGIO for every 4 shares of Generex common stock. Generex still maintains majority control of NGIO.

We formed Generex (Bermuda), Inc., which is organized in Bermuda, in January 2001 in connection with a joint venture with Elan International Services, Ltd., a wholly-owned subsidiary of Elan Corporation, plc, (“Elan”) to pursue the application of certain of our and Elan's drug delivery technologies, including our platform technology for the buccal delivery of pharmaceutical products. In December 2004, we and Elan agreed to terminate the joint venture. Under the termination agreement, we retained all of our intellectual property rights and obtained full ownership of Generex (Bermuda), Inc.; Generex (Bermuda), Inc. does not currently conduct any business activities. We have additional subsidiaries incorporated in the U.S. and Canada which are dormant and do not carry on any business activities.

On January 18, 2017, we acquired a majority of the equity interests in Hema Diagnostic Systems, LLC (“HDS”). In December 2018, we acquired the remaining interest in HDS. The company, now a wholly owned subsidiary of Generex, has been renamed NuGenerex Diagnostics, LLC (NGDx).

On October 3, 2018, our wholly owned subsidiary, NuGenerex Distribution Solutions, LLC (“NuGenerex”), entered into an asset purchase agreement (the “Veneto Asset Purchase Agreement”) with Veneto Holdings, L.L.C. (“Veneto”), pursuant to which NuGenerex purchased certain assets of Veneto and its subsidiaries (the “Assets”). The Veneto Asset Purchase Agreement contains provisions regarding payment terms, confidentiality and indemnification, as well as other customary provisions.

Effective October 3, 2018, NuGenerex assigned the Veneto Asset Purchase Agreement to NuGenerex Distribution Solutions 2, LLC. The sole member of NuGenerex Distribution Solutions 2, LLC is NuGenerex Management Services, Inc., a wholly owned subsidiary of Generex Biotechnology Corporation.

Also, on October 3, 2018, we acquired certain assets from Veneto (the “First Closing Assets”), primarily consisting of the operating assets of (a) system dispensing pharmacies, (b) a central adjudicating pharmacy, (c) a wholesale pharmaceutical purchasing company, and (d) an in-network laboratory.

On November 1, 2018, we consummated the acquisition of Veneto assets (the “Second Closing Assets”), consisting primarily of Veneto’s management services organization business and other assets. The aggregate price for the First Closing Assets and the Second Closing Assets was $30,000,000. We issued a promissory note in the principal amount of $35,000,000 (the “New Note”) consisting of the $30,000,000 purchase price and a $5,000,000 original issue discount, as the sole consideration payable on the Second Closing Date. On January 15, 2019, the parties entered into an amendment to the Asset Purchase Agreement (the “Amendment”) restructuring payment of the New Note.

On March 28, 2019, the Company entered into an amendment, a “Restructuring Agreement” with Veneto and the equity owners of Veneto to restructure the payment of the New Note that provided, in lieu of any cash payments, the Company delivered on May 23, 2019 11,760,000 shares of our common stock; plus an aggregate 5,500,000 shares of the common stock of our subsidiary, NGIO. The Veneto assets acquired by Generex included management services operations, systems, facilities, and other services.

On January 7, 2019, we acquired a majority interest in Regentys Corporation (“Regentys”) for an aggregate of $15,000,000, among which $400,000 was paid in cash and the remainder was paid by the issuance of a promissory note with a fair value of $14,342,414 for a total net purchase price of $14,742,414. The total fair value of the assets acquired totaled $907,883 and goodwill of $13,834,581. Installments payable under the note were tied to specific business development objectives and dates. During the ~~six~~nine months ended ~~January~~April 3130, 2021, an additional $~~719~~819,525 was paid for a total of $1,~~887~~987,790 against the note. Regentys is developing a non-surgical treatment for inflammatory bowel diseases such as ulcerative colitis and Crohn’s disease.

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On January 7, 2019, we acquired a majority interest in Olaregen Therapeutix Inc. (“Olaregen”) for an aggregate of $12,000,000, among which $400,000 was paid in cash and the remainder was paid by the issuance of a promissory note with a fair value of $11,472,334 for a total net purchase price of $11,872,663. The total fair value of the assets acquired totaled $2,461,439 and goodwill of $9,411,224. During the ~~six~~nine months ended ~~January~~April 3130, 2021, an additional $94134,~~227~~090 was paid for a total of $1,~~858~~992,~~027~~117 of principal payments in addition to the $400,000 initial payment. Olaregen is launching an FDA-510(k) cleared wound care product.

On May 10, 2019, we acquired from a third party the outstanding Series A Preferred Stock in Olaregen in exchange for 4 million shares of the Company’s common stock, plus the issuance of a $2 million promissory note increasing our interest in Olaregen to approximately 62% of Olaregen’s outstanding voting shares, and an additional 900,000 shares. On August 16, 2019 further increased our interest in Olaregen to approximately 76% and on February 14, 2020 acquired the remaining interests in Olaregen and Generex owns 100% of the outstanding shares of Olaregen.

On August 1, 2019, as amended on October 10, 2019, the Company, through its wholly owned subsidiary NDS, closed on Asset Purchase Agreements (the “APAs”) for the purchase of substantially all the operating assets of MediSource Partners, LLC (“MediSource”) and Pantheon Medical – Foot & Ankle, LLC (“Pantheon”). Pantheon Medical is a manufacturer of orthopedic foot & ankle surgery kits that offer physician friendly “all-in-one,” integrated surgical kits that include plates, screws, and tools required for orthopedic surgeons and podiatrists conducting foot and ankle surgeries. Generex will issue 400,000 shares of common stock in exchange for the Pantheon assets, and 560,000 shares of common stock in exchange for the MediSource assets, plus additional amounts paid as an earn-out based upon Pantheon and MediSource exceeding specified EBIDTA earnings. At closing, the Company also entered into an 18-month consulting agreement with NDS (the “Travis Bird Consulting Agreement”). As compensation, Travis Bird was to receive $250,000 of Generex common stock, as well as monthly payments equaling $97,222. The monthly payments were to be paid from any available cash from the operations of Pantheon and MediSource. Any remaining balance of such monthly payments was to consist of common stock. The agreement specified the shares are to be freely tradeable. In addition, Travis Bird will agree to fully assign and exchange any ownership rights in any new technology he develops with the Company, in exchange for a payment of $500,000 in value of common stock for each completed item submitted to the FDA.

On July 20, 2020, Travis Bird terminated the Consulting Agreement and Travis Bird is no longer entitled to commissions from future net sales. In total, Mr. Bird earned $1,404,915 under this agreement and has been paid $773,366, leaving a balance of $631,549 as of ~~January~~April 3130, 2021. As a result, the operations have been curtailed and goodwill and intangibles were fully impaired. As a ~~result~~ result of the termination of the Travis Bird Consulting Agreement and the ongoing COVID-19 pandemic, the operations of MediSource ~~and~~ and Pantheon have been significantly curtailed resulting in no sales for during the current quarter ending ~~January~~April 3130, 2021 with no no expectation that such sales will resume in the near future.

On August 16, 2019, the Company entered into a Share Exchange Agreement to purchase an additional 900,000 shares of common stock in Olaregen from other shareholders of Olaregen in exchange for 1,905,912 shares of Generex common stock and 476,478 shares of NGIO common stock which increased our interest in Olaregen to approximately 77% of the Olaregen’s outstanding voting shares. In September 2019, the Company converted all of the Series A Preferred Stock of Olaregen into common stock of Olaregen.

On February 14, 2020, Olaregen exchanged all of its outstanding shares for 5,950,000 shares of Generex common stock and 2,765,000 shares of NGIO. After this transaction, Generex owns 100% of the outstanding shares of Olaregen.

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On October 5, 2020, the Company and its parent Generex Biotechnology Corporation, (collectively “Generex”) entered into a Distribution and Licensing Agreement with Bintai Healthcare SDN BHD, a subsidiary of Bintai Kinden Corporation Berhad of Malaysia (“Bintai”) for the exclusive rights to distribute, sell, develop and commercialize the Generex Ii-Key-SARS-CoV-2 coronavirus vaccine (the “Vaccine”) in Malaysia and South East Asia countries, with right of first refusal to commercialize the Vaccine within New Zealand, Australia and the Global Halal markets (the “Territory”). The agreement, among other things, consists of Bintai providing 100% funding for U.S. clinical development, manufacturing and commercial registration of the Vaccine for the Territory.

On October 30, 2020, Generex Biotechnology Corporation and its majority owned public company NuGenerex Immuno- Oncology, Inc., (collectively “Generex”) signed a Framework Agreement on Cooperative Development of Coronavirus Peptide Vaccine with Beijing Youfeng International Consulting Co., Ltd, Chinese Centre for Disease Control and Prevention National Institute for Viral Disease Control and Prevention (NIVDC) and Beijing Guoxin Haixiang Equity Investment Partnership (Limited Partnership) (collectively referred to as “China Partners”) to jointly develop and commercialize the Generex Ii-Key-SARS-CoV-2 coronavirus peptide vaccine (the “Vaccine”) in the People’s Republic of China (“China”). The agreement, among other things, consists of the China Partners providing 100% funding for the clinical development, manufacturing and commercial registration of the Vaccine for China and paying Generex fees that shall be negotiated and agreed upon in subsequent agreements.

1. Licensing Fee: $5,000,000 upfront fee due upon the execution of the Agreement.

2. Royalty Fee: Once the Vaccine comes on to market for the first commercial sale, then the Joint Entity shall:

b. Cash payments to Generex in a price equal to $2 per dose for the COVID-19 vaccine of which, Generex shall pay NGIO 90% of all fees derived from the ~~Covid~~COVID Agreement, as a result of using NGIO technology.

3. Equity Distributions: the net profits of the Joint Entity shall ~~paid~~pay first to Generex until Generex receives $20 million, then the China Partners will receive the next $80 million in net profits from the Joint Entity and thereafter Generex and the China Partners will receive net profits from the Joint Entity in accordance with their pro rate equity interests.

If the Vaccine fails in its clinical trials, Generex will compensate the Joint Entity through one of two methods:

34As of April 30, 2021, Generex, has received approximately $4,500,000, net of taxes, from the COVID Agreement in cash to pursue the commercialization of the Vaccine.

Historical Business

Historically, we have been a research and development company focused on the commercialization of Oral-lyn buccal insulin spray for diabetes. Additionally, through NGIO, we have a deep intellectual property portfolio of immunotherapy assets relating to the “Ii-Key” technology that activates the immune response for the treatment of cancer and infectious diseases. We completed a Phase IIb clinical trial of AE37 immunotherapeutic peptide vaccine with the Ii-Key technology in over 300 women with breast cancer on November 15, 2019.

In 2017, we acquired HDS (now NuGenerex Diagnostics) and their diagnostic product portfolio of rapid point-of-care EXPRESS test kits and cassettes for infectious disease testing.

Treatment of Legacy Assets

Generex and its subsidiary companies have extensive patent portfolios, with intellectual property for composition of matter, formulation, design, and use in a number of therapeutic areas, across multiple indications. As described, we plan to build our legacy assets with the ultimate goal to spin-out such assets at the appropriate time, which have been incorporated into NuGenerex subsidiary companies in an effort to unlock the potential unrealized value of the intellectual property and commercial opportunities for these development companies in major markets for immuno-oncology, diabetes, and infectious disease testing:

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NuGenerex Therapeutics: Oral-lyn (Buccal Insulin) and RapidMist Buccal delivery technology

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NuGenerex Immuno-Oncology: Phase II AE37 + Keytruda in TNBC; NGIO (Ii-Key), Licensing, Partnerships, investor dividend paid (1:4) for spin-out

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NuGenerex Diagnostics: NGDx Express II rapid diagnostic tests for infectious disease.

We believe that these legacy diagnostics, diabetes and cancer assets ~~are~~ may have significant value which is not being recognized due to missteps in the clinical development process by previous management, resulting inability to raise capital necessary to fund further development. We think the products and IP portfolio retain significant value. A recently signed co-development deal with a major pharmaceutical company for AE37 in triple negative breast cancer, and a licensing deal in China for AE37 in prostate cancer illustrate the potential for AE37 immunotherapeutic vaccine. Additionally, Oral-lyn has been reformulated to enter clinical trials for Type II diabetes. The NGDx EXPRESS diagnostic technology has been expanded with the new, patent pending EXPRESS II technology and a new product pipeline. We filled our first international commercial order for 40,000 units of its NGDx -Malaria PF/PV Cassette Test Kit to Imres, BV, a Netherlands-based medical distribution company, and were recently granted a CE Mark Certification under the European Medical Devices Directive (MDD) for its The Express II Syphilis Treponemal Assay, a rapid point-of-care diagnostic assay for the detection of syphilis antibodies in primary and secondary syphilis. As part of the reorganization plan, we placed our legacy assets into separate subsidiaries under the NuGenerex family of companies, including NuGenerex Diagnostics, NGIO, and NuGenerex Therapeutics (Oral-Lyn and RapidMist buccal delivery technology). Our strategy is to reignite the Oral-Lyn development program with a reformulated buccal insulin spray, and to build out the diagnostics business, as detailed in the following paragraphs, however there are no assurances that we will be able to accomplish our strategic objectives.

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NuGenerex Therapeutics

NuGenerex Therapeutics houses the legacy diabetes assets, Oral-Lyn and RapidMist buccal delivery technology. We believe that our buccal delivery technology is a platform technology that has application to many large molecule drugs and designed to provide a convenient, non-invasive, accurate and cost-effective way to administer such drugs.

Buccal Delivery Technology and Products

Our buccal delivery technology involves the preparation of proprietary formulations in which an active pharmaceutical agent is placed in a solution with a combination of absorption enhancers and other excipients classified “generally recognized as safe” ("GRAS") by the U.S. Food and Drug Administration (“FDA”) when used in accordance with specified quantities and other limitations. The resulting formulations are aerosolized with a pharmaceutical grade chemical propellant and are administered to patients using our proprietary RapidMist™ brand metered dose inhaler. The device is a small, lightweight, hand-held, easy-to-use aerosol applicator comprised of a container for the formulation, a metered dose valve, an actuator and dust cap. Using the device, patients self-administer the formulations by spraying them into the mouth. The device contains multiple applications, the number being dependent, among other things, on the concentration of the formulation. Absorption of the pharmaceutical agent occurs in the buccal cavity, principally through the inner cheek walls. In clinical studies of our flagship oral insulin product Generex Oral-lyn™, insulin absorption in the buccal cavity has been shown to be efficacious and safe.

Buccal Insulin Product – Generex Oral-Lyn™

Insulin is a hormone that is naturally secreted by the pancreas to regulate the level of glucose, a type of sugar, in the bloodstream. The term “diabetes” refers to a group of disorders that are characterized by the inability of the body to properly regulate blood glucose levels. When glucose is abundant, it is converted into fat and stored for use when food is not available. When glucose is not available from food, these facts are broken down into free fatty acids that stimulate glucose production. Insulin acts by stimulating the use of glucose as fuel and by inhibiting the production of glucose. In a healthy individual, a balance is maintained between insulin secretion and glucose metabolism.

According to the Centers for Disease Control (CDC), there are two major types of diabetes. Type 1 diabetes (juvenile onset diabetes or insulin dependent diabetes) refers to the condition where the pancreas produces little or no insulin. Type 1 diabetes accounts for 5-10 percent of diabetes cases (CDC). It often occurs in children and young adults. Type 1 diabetics must take daily insulin injections, typically three to five times per day, to regulate blood glucose levels. Generex Oral-lyn™ provides a needle-free means of delivering insulin for these patients.

According to the American Diabetes Association, in Type 2 diabetes (adult onset or non-insulin dependent diabetes mellitus), the body does not produce enough insulin, or cannot properly use the insulin produced. Type 2 diabetes is the most common form of the disease and accounts for 90-95 percent of diabetes cases, according to the American Diabetes Association. In addition to insulin therapy, Type 2 diabetics may take oral drugs that stimulate the production of insulin by the pancreas or that help the body to more effectively use insulin. Generex Oral-lyn™ provides a simple means of delivering needed insulin to this major cohort of individuals.

Studies in diabetes have identified a condition closely related to and preceding diabetes, called impaired glucose tolerance (IGT). People with IGT do not usually meet the criteria for the diagnosis of diabetes mellitus. They have normal fasting glucose levels but two hours after a meal their blood glucose level is far above normal. With the increase use of glucose tolerance tests the number of people diagnosed with this pre-diabetic condition is expanding exponentially. Per the 2017 Diabetes Atlas Update, published by the International Diabetes Federation (IDF), approximately 40 million people in the United States and more than 425 million people world-wide suffer from IGT. Generex Oral-lyn™ is an ideal solution to providing meal-time insulin to the millions of IGT sufferers. This therapeutic area is currently being investigated.

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There is no known cure for diabetes. The IDF estimates that there are currently approximately 382 million diabetics worldwide per their 2017 Diabetes Atlas Update and is expected to affect over 592 million people by the year 2035. There are estimated to be over 37 million people suffering from diabetes in North America alone and diabetes is the second largest cause of death by disease in North America.

A substantial number of large molecule drugs (i.e., drugs composed of molecules with a high molecular weight and fairly complex and large spatial orientation) have been approved for sale in the United States or are presently undergoing clinical trials as part of the process to obtain such approval, including various proteins, peptides, monoclonal antibodies, hormones and vaccines. Unlike small molecule drugs, which generally can be administered by various methods, large molecule drugs historically have been administered predominately by injection. The principal reasons for this have been the vulnerability of large molecule drugs to digestion and the relatively large size of the molecule itself, which makes absorption into the blood stream through the skin inefficient or ineffective. The RapidMist technology provides a recognized and proven drug delivery system for the delivery of large molecules directly into the blood stream with the attendant advantages.

Oral-lyn History

In May 2005, we received approval from the Ecuadorian Ministry of Public Health for the commercial marketing and sale of Generex Oral-lyn™ for treatment of Type 1 and Type 2 diabetes. We have successfully completed the delivery and installation of a turnkey Generex Oral-lyn™ production operation at the facilities of PharmaBrand in Quito, Ecuador. The first commercial production run of Generex Oral-lyn™ in Ecuador was completed in May 2006. While Ecuador production capability may be sufficient to meet the needs of South America, it is believed to be insufficient for worldwide production for future commercial sales and clinical trials.

On the basis of the test results in Ecuador and other pre-clinical data, we made an Investigational New Drug (“IND”) submission to Health Canada (Canada's equivalent to the FDA) in July 1998 and received permission from the Canadian regulators to proceed with clinical trials in September 1998. We filed an IND application with the FDA in October 1998 and received FDA approval to proceed with human trials in November 1998.

We began our clinical trial programs in Canada and the United States in January 1999. Between January 1999 and September 2000, we conducted clinical trials of our insulin formulation involving approximately 200 subjects with Type 1 and Type 2 diabetes and healthy volunteers. The study protocols in most trials involved administration of two different doses of our insulin formulation following either a liquid Sustacal meal or a standard meal challenge. The objective of these studies was to evaluate our insulin formulation's efficacy in controlling post-prandial (meal related) glucose levels. These trials demonstrated that our insulin formulation controlled post-prandial hyperglycemia in a manner comparable to injected insulin. In April 2003, a Phase II-B clinical trial protocol was approved in Canada. In September 2006, a Clinical Trial Application relating to our Generex Oral-lyn™ protocol for late-stage trials was approved by Health Canada. The FDA’s review period for the protocol lapsed without objection in July 2007.

In late April 2008, we initiated Phase III clinical trials in North America for Generex Oral-lyn™ with the first subject screening in Texas. Other clinical sites participating in the study were located in the United States (Texas, Maryland, Minnesota and California), Canada (Alberta), European Union (Romania, Poland and Bulgaria), Eastern Europe (Russia and Ukraine),) and Ecuador. Approximately 450 subjects were enrolled in the program at approximately 70 clinical sites around the world. The Phase III protocol called for a six-month trial with a six-month follow-up with the primary objective to compare the efficacy of Generex Oral-lyn™ and the RapidMist™ Diabetes Management System with that of standard regular injectable human insulin therapy as measured by HbA1c, in patients with Type-1 diabetes mellitus. The final subjects completed the trial in August 2011. After appropriate validation, the data from approximately 450 patients was tabulated, reviewed and analyzed. Those results from the Phase III trial along with a comprehensive review and supplemental analyses of approximately 40 prior Oral-lyn clinical studies were compiled and submitted to the FDA in late December 2011 in a comprehensive package including a composite metanalysis of all safety data. We do not currently plan to expend significant resources on additional clinical trials of Oral-lyn™ until after such time that we secure additional financing. However, we have undertaken a formulation enhancement project with the University Health Network at the University of Toronto and the University of Guelph, Ontario to increase the amount of insulin reaching the blood stream. We believe that the preliminary results from an animal study are encouraging.

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In the past, we engaged a global clinical research organization to provide many study related site services, including initiation, communication with sites, project management and documentation; a global central lab service company to arrange for the logistics of kits and blood samples shipment and testing; an Internet-based clinical electronic data management company to assist us with global data entry, project management and data storage/processing of the Phase III clinical trial and regulatory processes. In the past, we have contracted with third-party manufacturers to produce sufficient quantities of the RapidMist™ components, the insulin, and the raw material excipients required for the production of clinical trial batches of Generex Oral-lyn™.

Future Plans

We have reformulated the original Oral-Lyn buccal insulin as a new patentable Oral-Lyn 2 that requires only 2 - 3 pre-prandial (before meal) sprays for the treatment of Type II diabetes. The reformulated Oral-lyn 2 was made possible by new techniques in protein chemistry and pharmaceutical formulation science, that with minimal changes in the production process and content of the components, allow the development of a new and improved, concentrated insulin formulation for improved diabetes management.

NuGenerex has engaged the University of Toronto’s Center for Molecular Design and Pre-formulations (CMDP) through the University Health Network with the goal of enhancing the Oral-lyn™ 2 formulation to make it more attractive to patients and prospective commercialization partners by increasing the bioavailability of insulin in the product and reducing the number of sprays required to achieve effective prandial metabolic control for patients with diabetes. Under the supervision of NuGenerex consultant Dr. Lakshmi P. Kotra, B.Pharm. (Hons), Ph.D., of CMDP, preliminary efforts succeeded in increasing the insulin concentration in the product by approximately 400 - 500% as confirmed by a variety of in vitro testing procedures, while preserving the solubility, stability, biologic activity, and potency of the insulin in the formulation.

NuGenerex subsequently entered into a Research Services Agreement with the University of Guelph pursuant to which Dr. Dana Allen, DVM, MSc. and Dr. Ron Johnson, DVM, Ph.D. of the Ontario Veterinary College of the University of Guelph conducted a study of the relative bioavailability of the enhanced formulation in dogs in the University’s Comparative Clinical Research Facility. The University had previously conducted the studies of the original formulation of Generex Oral-lyn™ for proof of concept, safety, and toxicity.

In the new studies, the enhanced NuGenerex Oral-lyn 2 formulation was compared with the original formulation in a blinded, parallel controlled study involving fasted, awake, healthy mature beagle dogs. Each dog received three sprays of either the enhanced formulation or the original formulation. Each dog was observed with assessments of serum insulin and glucose measured over a two-hour period. There were no adverse events observed in any of the animals.

In the dogs given the enhanced Generex Oral-lyn formulation (5X), there was a greater than 20-fold increase in serum insulin at 15 minutes (excluding one dog who had little response at any time point; (with dog included it was greater than 5-fold)) and almost 500% greater absorption of insulin over the two-hour test period compared to dogs given the original formulation (1X). There was a 33% decrease in serum glucose at 30 minutes in dogs treated with the enhanced Generex Oral-lyn™ formulation, compared to a 12% increase in serum glucose in dogs treated with the original formulation.

The results of the dog studies coupled with the positive findings from the in vitro work provide support and confidence to move forward with the remaining clinical and regulatory work necessary to achieve FDA approval of the enhanced NuGenerex Oral-lyn formulation through a 505(b)2 NDA.

The combined results provide evidence that the enhanced NuGenerex Oral-lyn 2 will be able to be used by people with either type 1 or type 2 diabetes mellitus as a safe, simple, fast, flexible, and effective alternative to pre-prandial insulin injections with dosing of only two to four sprays required before meals.

The Oral-lyn Safety Database contains information on 1,496 subjects. Eight hundred sixty-nine (869) subjects were exposed to Oral-lyn, while 627 served as Control subjects and were exposed to commercially available oral antihyperglycemics, injected insulin, or Oral-lyn placebo. There were 695 subjects in pK/pD studies (368, Oral-lyn; 327, Control) and 801 subjects in efficacy trials (501, Oral-lyn; 300, Control).

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Two hundred seventy-two (272) Oral-lyn subjects reported at least one adverse event (132 in pK/pD studies; 140 in efficacy studies) while 278 Control subjects reported at least one adverse event (111 in pK/pD studies; 167 in efficacy studies). With respect to adverse events by Maximum Severity there appeared to be no significant differences between Oral-lyn and the Control groups in either the Efficacy or the pK studies.

In summary, there appear to be no indications of any significant unexpected adverse events. The expected events of hypoesthesia oral, throat irritation, dry throat, and cough were for the most part mild and could be consistent with the Oral-lyn therapy especially during the learning phase of administration. There was an indication of overlap of some of these events with multiple event terms in the constellation of upper respiratory tract infection that appeared to be balanced across therapy groups.

Our strategy is to revitalize our diabetes program by advancing the reformulated buccal spray Oral-lyn 2 for the treatment of Type II diabetes, and to integrate Oral-Lyn 2 therapy into our end-to-end solution for disease management through our MSO model.

Beyond Oral-lyn 2 for Type II diabetes, we will advance the RapidMist buccal delivery technology with additional small and large molecule drugs which will benefit from an alternative route of administration.

NuGenerex Immuno-Oncology (NGIO, formerly Antigen Express)

NuGenerex Immuno-Oncology is a public company, majority owned by Generex that is focused on the modulation of the immune system and activation of T cells to treat cancer. To that end, we are developing immunotherapeutic products and vaccines based on our proprietary, patented platform technology, Ii-Key. The Ii-Key is a peptide derived from the major histocompatibility complex (“MHC”) Class II associated invariant chain (Ii) that regulates the formation, trafficking, and antigen-presenting functions of MHC class II complexes, essential for the activation of T cells in the immune response.

The patented NGIO Ii-Key technology uses synthetic peptides that mimic antigenic protein regions from a virus or tumor biomarker that are chemically linked to the 4-amino acid Ii-Key to ensure robust immune system activation. In particular, the Ii-Key ensures potent activation of CD4+ T cells, which in turn facilitates antibody production to ward off infection. This Ii-Key modification can be applied to any protein fragment of any pathogen to increase the potency of immune stimulation.

NGIO was created not only to advance the Ii-Key core technology, but also to expand our portfolio in the field of immunotherapy, infectious disease vaccines and personalized medicine through partnerships and acquisitions.

NGIO has developed a number of Ii-Key Hybrid peptides for the immunotherapeutic targeting of tumor associated antigens (TAAs) in cancer and for vaccines against infectious diseases.

AE37 – Ii-Key/HER2/neu Hybrid Immunotherapeutic Vaccine

Our most advanced immunotherapy vaccine is AE37, an Ii-Key-Hybrid molecule that contains the HER2/neu antigenic peptide linked to the Ii-Key to enhance immune stimulation against HER2, which is expressed in numerous cancers, including breast, prostate, and bladder cancers. We have completed a Phase I clinical trial of AE37 in breast cancer: A phase Ib safety and immunology study of AE37 and GM-CSF in 16 breast cancer patients who had completed all first-line therapies and who were disease-free at the time of enrollment to the study (Holmes et al. Results of the first phase I clinical trial of the novel Ii-Key hybrid preventive HER-2/neu peptide (AE37) vaccine. J Clin Oncol 2008;26:3426-33). Furthermore, we completed a Phase IIb trial of AE37 in the prevention of cancer recurrence in women who were at high risk of recurrence after undergoing successful primary standard of care breast cancer therapies and were disease free at time of enrollment.

The final results of the Phase IIb clinical trial of AE37 +/- GM-CSF vaccine for the prevention of recurrence of breast cancer have been published in the peer-reviewed journal, Breast Cancer Research & Treatment. In the AE37 arm of this trial, the investigators found that patients with advanced stage, HER2 under-expression, and TNBC may benefit from AE37 vaccination, and those with both advanced stage and HER2 under expression have a significant clinical

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benefit to AE37 vaccination, demonstrating earlier DFS plateau that was maintained for up to the ten years of follow-up. The study showed that AE37 induces CD4+ T helper cell stimulation which is required for the effective generation of long-term cell-mediated immunity, and postulates that the AE37 vaccine may have more of an immunoadjuvant effect to augment a vaccine-induced CD8+ T-Lymphocyte (CTL) response. Further, AE37 is able to directly stimulate the HLA-DR alleles with epitopes present in the HER2 protein, increasing interferon gamma (IFN-γ) and CD4+ T-helper (Th1) cells which in turn assist in strong in vivo autologous lysing of tumor cells by CD8+ cells. Thus, the addition of the Ii-Key in AE37 specifically enhances immune responses via the MHC class I pathway. Additionally, the study shows that the Ii-Key acts as an immune system adjuvant, activating both the CD4+ response and the CD8+ response against the HER2 antigenic epitope to which it is attached. The authors point out the benefit of such a complete immune response that combines CD8+ and CD4+ activation may not only induce an immediate cell mediated cytolytic response versus tumor cells but may also induce T-Helper cell mediated long-term immunity to protect against tumor recurrence.

Based on the results from this trial, NuGenerex has entered into a collaborative agreement with Merck Sharpe & Dohme B.V. (Merck) and the National Surgical Adjuvant Breast and Prostate Program (NSABP) to conduct a Phase II trial to evaluate the safety and efficacy of AE37 in combination with the anti-PD-1 therapy, KEYTRUDA (pembrolizumab) in patients with metastatic triple-negative breast cancer. The trial is scheduled to begin enrolling patients in the second quarter of 2019. As the clinical trial continues, NGIO will be obligated to pay NSABP, pursuant to the Clinical Trial Agreement, additional amounts during each completed phase in the increments and at the times set forth in the agreement up to $2,118,461 upon NASBP achieving certain milestones in four primary phases: Start-Up Activities, Accrual and Treatment Period, Follow-up Period and Primary Endpoint. As of ~~January~~April 3130, 2021, we have incurred $352,063 of expenses against this commitment.

In addition to the breast cancer program, NuGenerex has conducted a Phase I clinical trial in prostate cancer, enrolling thirty-two HER-2/neu+, castrate-sensitive, and castrate-resistant prostate cancer patients to demonstrate safety and strong immunological response to AE37. The results of a three-year follow-up analysis revealed that vaccinated patients had immune memory to the HER-2/neu epitope of the Ii-Key-HER-2 vaccine, AE37, and these patients had improved clinical outcomes as compared to the control group. These results demonstrate the ability of ii-Key vaccines to generate targeted, long-lasting immune responses against target epitopes of tumor biomarkers.

We are advancing AE37 for the treatment of prostate cancer through a licensing and research agreement with Shenzhen BioScien Pharmaceuticals Co., Ltd., for which NuGenerex has received a $700,000 upfront payment which was recognized as revenue during the Company’s fiscal year ended July 31, 2018, with additional future milestone and royalty payments.

In exchange for exclusive rights to AE37 for prostate cancer in China, Shenzhen is financing and conducting the Phase II trials in the European Union and Phase III trials globally under ICH guidelines, with NuGenerex retaining the rights to all clinical data for regulatory submissions and commercialization in the rest of the world outside China.

Since the start of the COVID-19 pandemic, NGIO has been working to develop an Ii-Key vaccine against the new coronavirus SARS-CoV-2 using the company’s proprietary and patented Ii-Key immune system regulation technology.

Generex has signed an exclusive licensing deal with our partners at EpiVax who have identified such protein fragments or epitopes to generate Ii-Key-SARS 2 peptide vaccines. The peptides and Ii-Key are made from naturally occurring amino acids, ensuring an excellent safety profile for Ii-Key vaccines. We have manufactured the Ii-Key epitopes at laboratory scale and have conducted testing of their immune regulating activities in a blood screening program using convalescent blood and serum samples from COVID-19 recovered patients.

The blood screening program is being conducted through a research grant to the University of California San Diego and the Scripps Institute that provides convalescent COVID-19 patient samples and antibody testing, and a commercial contract laboratory, CTL that is conducting the T cell assays of immune modulation. This work will support the filing of an IND with the FDA for human clinical trials.

Generex signed a Licensing & Distribution Agreement with Bintai Kinden Corporation of Malaysia for the development and commercialization of the Ii-Key-SARS-CoV-2 coronavirus vaccine. Under the terms of the

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Agreement, Bintai will have an exclusive license to distribute the Ii-Key-SARS-CoV-2 vaccine in Southeast Asia, including Malaysia (pop. 32.4 million), Vietnam (pop. 95.5 million), Indonesia, (pop. 69.4 million) and the Philippines (pop. 106.7 million). Additionally, Bintai was given an option, which they have exercised for distribution in Australia (pop. 25.5 million) and New Zealand (pop. 4.8 million) using its extensive connections to secure contracts in the region. The Licensing & Distribution agreement for Australia and New Zealand is currently being finalized.

In exchange for the license and distribution exclusivity, Bintai has paid a refundable advance of $2 million and has committed to funding 100% of the commercial development costs for the Ii-Key-CoV-2 vaccine including laboratory and pre-clinical work, GMP manufacturing in the U.S., U.S. and global Phase I, Phase II, and Phase III clinical trials, and all clinical and regulatory work required for approval. If the Company fails to secure FDA approvals within 6 months of execution of the agreement, or a reasonable time thereafter, the advance must be returned to Bintai.

The company has signed a potential $50 million Licensing and Development Agreement with the China CDC, Beijing Guoxin Haixiang Equity Investment Partnership, and Beijing Youfeng International Consulting Co., Ltd for the Ii-Key vaccine platform technology from NuGenerex Immuno-Oncology (NGIO). The agreement incorporates the first Ii-Key platform project for the development and commercialization of the Ii-Key-SARS-CoV-2 coronavirus vaccine in China, with a $5 million upfront licensing fee, 100% funding for manufacturing, development and commercial registration, and the first $20 million of profit on sales of Ii-Key- SARS-CoV-2 vaccine in China, plus royalty payments for COVID vaccine sales in China with the potential to reach several billion dollars. The Agreement incorporates provisions to advance the development of other Ii-Key vaccines for infectious diseases and cancer under separate contracts that are currently being finalized. Under the terms of the platform deal, Generex will receive a licensing fee of up to $50 million for the exclusive use of the Ii-Key vaccine platform for infectious disease and cancer in China and its territories. For each product developed using the Ii-Key technology under the platform license, Generex will receive an upfront payment, full funding for product development, regulatory approval, and commercialization in China, a success fee upon product approval, and a royalty to be determined on a case-by-case basis.

Generex has signed a worldwide Licensing and Development Agreement with a consortium of partners in China to utilize the Ii-Key vaccine platform technology from Generex subsidiary NuGenerex Immuno-Oncology (NGIO) for developing a vaccine against the G4 EA H1N1 swine influenza that is rapidly emerging in China. Under the terms of the deal, Generex will receive an upfront payment of $2.5 million to initiate the Ii-Key vaccine development work to identify swine flu epitopes for a new Ii-Key vaccine. The partnership will provide full funding for product development, regulatory approval, and commercialization worldwide. The current plan is to incorporate the Ii-Key-H1 vaccine into the seasonal influenza vaccine to create a Complete Vaccine across influenza strains. Upon commercialization, Generex will receive a royalty on sales of the influenza vaccine.

Future Plans

NGIO has been established to not only to advance the NuGenerex Immuno-Oncology core technology, but also to expand our portfolio in the field of immunotherapy and personalized medicine through partnerships and acquisitions. As part of our strategy, we spun-out NuGenerex Immuno-Oncology as a separate, public entity to unlock the true value of the Ii-Key technology for our stockholders as it creates a pure play in immunotherapy, which will foster investment and collaboration.

As of ~~January 31~~April 30, 2021, NGIO had 750,000,000 authorized shares of common stock.

On February 2, 2021, NGIO issued ~~one hundred thousand~~ 100,000 shares of the Company’s Series A Super Voting Preferred Stock (the “Super Voting Preferred Stock”) to Generex in exchange for ~~three hundred million~~ 300,000,000 shares of the Company’s common stock, which were immediately cancelled upon such exchange. As of ~~March~~April 1430, 2021, NGIO ~~has~~had 100,300,000 shares of common stock outstanding of which Generex owns 64,153,151 shares. The Super Voting Preferred Stock votes with the common stock and is entitled to 3,000 votes per share. The Super Voting Preferred Stock has no dividend, liquidation, conversion or redemption rights. The 300,000,000 shares cancelled by Generex will be available for future issuance.

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The Company believes that NGIO’s most value is its internally developed intellectual property. However, the internally developed intellectual property has not met the criteria for capitalization and accordingly, the Company has not recorded any such costs on its balance sheet.

On March 12, 2020, NGIO filed a Form 10 with the Securities and Exchange Commission, which has become effective and NGIO is subject to Exchange Act reporting requirements. NGIO has filed an application to have its common stock listed on the NASDAQ Capital Market.

NuGenerex Diagnostics (formerly Hema Diagnostic Systems, LLC)

Our wholly owned subsidiary, NuGenerex Diagnostics is in the business of developing, manufacturing, and distributing rapid point-of-care in-vitro medical diagnostics for infectious diseases. These are commonly referred as rapid diagnostic tests (“RDTs”). We manufacture and sell RDTs based upon our own proprietary EXPRESS platforms as well as standard “cassette” devices.

Since its founding, NuGenerex Diagnostics has been developing an expanding line of RDTs for infectious disease diagnosis. These include products for human immunodeficiency virus (HIV), tuberculosis, malaria, hepatitis B, hepatitis C, syphilis, and others. These assays are all qualitative in nature and provide a simple positive or negative result directly at the clinical site. They can be used for definitive diagnosis, triage or in combination with other assays depending on which disease is being considered.

Each device incorporates a test strip containing reagent lines (stripes) that have been impregnated with specific antigens or antibodies that detect the target molecules specific to an infectious disease. The test strips are incorporated into our proprietary EXPRESS platforms which are easy-to-use and user-friendly diagnostic devices. There are two EXPRESS platforms: the EXPRESS and the EXPRESS II. The EXPRESS II is an upgraded version of the original EXPRESS and its use involves fewer operator steps, making it of higher clinical utility value. The Express II platform is designed to be used in a broad range of clinical and laboratory medical settings and for direct use by consumers in the home. It is simple to use, with fewer steps of operation than other rapid point-of-care tests. A single drop of blood taken by a simple finger stick is added directly to the device and the assay is activated by placing a pod of buffer solution onto the device. Results can be read in as early as 5 minutes, and no longer than 30 minutes. The accuracy of the Express II Syphilis Treponemal Assay is equal to or better than standard laboratory assays for syphilis antibodies with sensitivities and specificities of over 99%.

We believe that each system delivers its own advantages which enhance the use, application and performance of each diagnostic. This ease of use in the EXPRESS delivery systems is designed to ensure that our RDTs perform efficiently and effectively providing the most accurate and repeatable test results available while, at the same time, minimizing the transference of a potentially infected blood sample. The EXPRESS and cassette diagnostic kits for infectious disease testing are designed for use in resource-poor countries throughout the world, especially in sub-Saharan Africa, where the World Health Organization coordinates population screening for infectious diseases. We recently filled our first international commercial order for 40,000 units of its NGDx -Malaria PF/PV Cassette Test Kit to Imres, BV, a Netherlands-based medical distribution company.

NuGenerex Diagnostics was recently granted a CE Mark Certification under the European Medical Devices Directive (MDD) for its The Express II Syphilis Treponemal Assay, a rapid point-of-care diagnostic assay for the detection of syphilis antibodies in primary and secondary syphilis. The assay is based upon NuGenerex Diagnostic’s innovative patent pending point-of-care diagnostic platform, the Express II. The accuracy of the Express II Syphilis Treponemal Assay is equal to or better than standard laboratory assays for syphilis antibodies with sensitivities and specificities of over 99%.

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With the receipt of the CE Mark Certification for its rapid point-of-care Express II Syphilis Treponemal Assay, we believe NuGenerex Diagnostics is well situated to enter into this growing syphilis testing market and will now pursue marketing efforts in Europe and, in parallel, begin plans for the filing of a 510k application with the United States FDA for marketing clearance in the United States. To this end, NuGenerex Diagnostics is fully qualified as a diagnostic test developer and manufacturer under FDA Good Manufacturing Procedures (GMP) and is certified by the International Standards Organization for the manufacture of medical devices under ISO 13485-2016 regulations.

NuGenerex Diagnostics has just begun a new initiative which revolves around the development of quantitative rapid diagnostic assays. These assays allow laboratory personnel and clinicians to assess the absolute amount of specific target molecules in blood or serum samples as opposed to “yes” or “no” results of qualitative RDTs. The first assay to be developed is a multiplex biomarker test for the diagnosis of sepsis and the potential differentiation of infectious sepsis from systemic immune response syndrome (SIRS).

We maintain an FDA registered facility in Miramar, Florida and are certified under both ISO9001 and ISO13485 for the Design, Development, Production and Distribution of the in-vitro devices. Approval of our HIV rapid test has been issued by the United States Agency for International Development (USAID). Additionally, some of our products qualified for and carry the European Union “CE” Mark, which allows us to enter into CE Member countries subject to individual country requirements. Currently, we have two malaria rapid tests approved under World Health Organization (WHO) guidelines. This process allows expedited approval of rapid tests, reducing the current 24 -30-month process down to approximately 6-9 months. WHO approval is necessary for our products to be used in those countries which rely upon the expertise of the WHO, as well as for non-governmental organizations (“NGO”) funding for the purchase of diagnostic products. NuGenerex Diagnostics had planned to initiate the development of rapid testing for COVID-19, but due to lack of funding has not been able to initiate this development as planned.

We maintain current U.S. Certificates of Exportability that are issued by two FDA divisions-CBER and CDRH. CBER (Center for Biologicals Evaluation and Research) is the FDA regulatory division that oversees infectious disease diagnostic devices, including our HIV, Hepatitis B and Hepatitis C EXPRESS and EXPRESS II kits. The other division, Center for Devices and Radiological Health (CDRH), is responsible for the oversight of other HDS devices which include Tuberculosis, Syphilis, and the remaining product line. Our HDS facility maintains FDA Establishment Registration status and is in accord with GMP (Good Manufacturing Practice) as confirmed by the FDA.

We do not currently have FDA clearance to sell our products in the United States. We intend to submit selected devices to the FDA under a Pre-Market Approval Application (PMA) or through the 510K process. The 510K would require the appropriate regulatory administrative submissions as well as a limited scientific review by the FDA to determine completeness (acceptance and filing reviews); in-depth scientific, regulatory, and Quality System review by appropriate FDA personnel (substantive review); review and recommendation by the appropriate advisory committee (panel review); and final deliberations, documentation, and notification of the FDA decision. The PMA process is more extensive, requiring clinical trials to support the application. We expect to apply to the FDA for clearance of our first RDT (Express II Syphilis Treponemal Assay) for FDA 510K approval in early 2020. We anticipate the FDA process will be completed within 9 months after submission. During this timeline, we will be preparing documentation for additional rapid tests to undergo either the FDA PMA or 510k process.

We plan to use the NuGenerex Diagnostics subsidiary to build a multi-faceted diagnostics business focused on personalized medicine. To that end, we are exploring opportunities in multiplex assays for point-of-care infectious disease testing, pharmacogenomic testing for medication management, and biomarker analysis for personalized cancer treatment, including immunotherapy.

The “New” Generex & The NuGenerex Family of Subsidiary Companies

Through reorganization and acquisition, we are building the family of NuGenerex subsidiary companies to provide end-to-end solutions for physicians and patients. We have acquired 100% of Olaregen Therapeutix Inc. (“Olaregen”), a regenerative medicine company that has recently launched Excellagen wound conforming gel, which is FDA-cleared for the management of 17 wound healing indications, and Regentys Corporation (“Regentys”), a clinical-stage development company with regenerative medicine technology for the treatment of inflammatory bowel diseases Additionally, upon funding, NDS plans to launch a new software as a service (SaaS) business called DME-IQ that enables orthopedic surgeons to manage in house programs for orthopedic durable medical equipment, including inventory controls, insurance adjudication, and patient billing. We plan to roll out beyond our Arizona Startup of NugenHealth, LLC an RPM and CCM offering to our broader MSO network. Together, under the banner of these subsidiary companies offer a range of products and services to meet the needs of our proprietary distribution channels. Cross selling of products and services will enhance the revenue opportunities for the entire family of NuGenerex subsidiaries. Our management continues to search for value added services we can offer to physician relationships.

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NuGenerex Health, LLC

Generex is in the process of building the final link in our corporate mission to provide physicians, hospitals, and all healthcare providers with an end-to-end solution for patient centric care from rapid diagnosis through delivery of personalized therapies, streamlining care processes, minimizing expenses, and delivering transparency for payers.

In the future, and once the specialty practices are operational, NuGenerex Health plans to form an HMO to serve patients with Chronic Special Needs Plans (C-SNP) and Dual-Eligible Special Needs Plans under Medicare Advantage and Medicare Part B and Part D. In doing this, Generex intends to partner with an experienced HMO developer. Following the roadmap established by this partner in building some of the most successful HMO companies in recent history, NuGenerex plans to generate significant membership growth by developing patient centric engagement programs and building on our strong provider relationships.

Contemplated Product Positioning and HMO Plan Design

Medicare Advantage Prescription Drug Plan (MAPD) HMO for individuals who have both Medicare Part A and Part B. This plan caters to individuals that prefer an all-inclusive product that covers Part C, Part D, and additional supplemental benefits at a low plan premium amount.

Chronic Special Needs Plan (CSNP) HMO for individuals in addition to having Medicare Part A and Part B are faced with the burden of living with diabetes or a cardiovascular disorder. This plan is offered to individuals that prefer an all-inclusive product that covers Part C, Part D, and additional supplemental benefits at a low plan premium amount.

Dual Eligible Special Needs Plan (DSNP) HMO for individuals that have both Medicare Part A and Part B and medical assistance through their state of residence. This plan is offered to individuals that prefer an all-inclusive product that covers Part C, Part D, and additional supplemental benefits with no monthly plan premium.

NuGenerex Health D-SNP HMO Full will cover all Medicare-covered benefits at zero cost-sharing. In addition to the base supplemental products, the plan also offers routine foot care, and transportation.

Medicare Global Direct Medicare launched a pilot and will be issuing guidance on becoming a provider under the Global Direct Pay program. This program would replace the idea of forming an HMO as it purportedly has the same benefits with much less bureaucracy and expense. As soon as CMS releases final program details, we will compare the strategies of whether to go with an HMO or the new Medicare Global Direct.

Services and Products

NuGenHealth, LLC

NuGenerex Health LLC entered into a strategic joint venture with Worldwide Digitech, LLC (“WWDT”) by signing an Operating Agreement to form NuGenHealth LLC. Under the agreement profits shall be distributed equally; 50% to NuGenerex Health LLC and 50% to WWDT. WWDT will provide the software powered by the HealthKOS framework and back-end support for the NuGenHealth SaaS system, while NuGenerex Health LLC shall be responsible for the day-to-day management and oversight of business operations.

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On September 24, 2020, NuGenHealth, LLC signed a services agreement with Paradise Valley Family Medicine, P.C. an Arizona professional corporation (“PVFM”) to provide a software and services solution for patient engagement, Remote Patient Monitoring (RPM) and Chronic Care Management (CCM) services that are recommended and reimbursed by the Centers of Medicare and Medicaid Services (CMS) to the physicians. NuGenHealth, as the enabler of these reimbursements, are paid for our platform of services by the physician practice, including the software, training, technical support and the provision to the patients of Bluetooth devices to monitor their health. Similar agreements for RPM have subsequently been signed on May 6, 2021 and May 10, 2021 for Florida Health Care Associates, of Boynton Beach, Fl, and Westside Medical and Cardiology, of Westlake, Ohio. Numerous other clinics in other states are in discussion phase to sign up as well. The company has received its first funds to begin operations and plans its first kick off during the Month of May 2021 in the three signed clinics

~~This~~These services agreement allows us to launch the NuGenHealth Software as a Service (SaaS) business for Remote Patient Monitoring (RPM) and Chronic Care Management (CCM), reimbursable services from CMS, to facilitate patient care coordination and healthcare collaboration. Once the inaugural system is implemented at PVFM, we plan to expand the NuGenHealth SaaS system to other practices and ~~chronic care~~ patient populations ~~to rapidly grow revenues for the company. These practices and patient populations~~ can form the foundation that enables NuGenerex Health to establish a new HMO.

NuGenerex Distribution Solutions

We established NuGenerex Distribution Solutions in 2018 as the foundational piece in the transformation of the Company into an integrated healthcare holding company that provides end-to-end solutions for physicians and patients. The NDS model repositions the physician-owned Management Services Organization (MSO) model with a group purchasing model that is positioned to procure our new products and services that can be delivered directly to physician partners, cutting out the ~~middle-man~~middleman. NDS will also continue to provide inventory selection and management, as well as management services for legal and regulatory compliance, accounting, HR, IT and customer support services through the physician networks.

NDS’s corporate mission benefits the medical community by providing cost effective ancillary services that ultimately deliver better outcomes and enhance the doctor-patient relationship. NDS will make available numerous best of class products and services using a patient centric approach that enables ancillary service providers, physicians, and patients to better coordinate healthcare services from diagnosis through treatment and follow-up.

NDS Expansion

The NuGenerex physician network has operated in five states and ispost covid and funding we are configuring a roll out which will be compliant and reduce healthcare costs through better outcomes. Those organizations which join us in our new partnership model will be aligned solely with our shareholders and will receive discount codes to procure our products such as Excellagen, RPM, and DMEIQ programs.

DME-IQ

NDS is planning, upon funding and the lifting of Covid pandemic restrictions to launch DME-IQ, a novel software as a service (SaaS) solution for physicians to manage in-office distribution of durable medical equipment (DME). DME-IQ supports the development and management of compliant and profitable in-office DME programs. DME-IQ focuses on several key areas which include negotiating on behalf of the physicians with key vendors to decrease the COGS (Cost of Goods Sold), increasing insurance collections by providing oversight of the coding during the billing process, providing the necessary personnel to manage the appeals processes, and ensuring compliance with state and federal regulations.

DME-IQ will automate and provide the orthopedic practices with a proprietary, tablet-based software package that immediately verifies patient benefits and eligibility. This unique system manages DME inventory, collects patient copays and deductibles, and links patient information with the DME products and necessary patient forms all in one easy to use platform.

The DME Market

The US market for DME is large and growing, a result of several factors including the rising prevalence of chronic diseases requiring long-term care, the rapidly growing geriatric population, and the trend toward home healthcare services. Chronic disorders such as diabetes, diabetic foot & pressure ulcers, chronic pain, and cancer that require long-term patient care and postoperative recovery are driving demand for DME. According to a 2018 market report

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by Grand View Research, Inc., the US DME market is expected to reach $70.8 billion by 2025, growing at a 6.0% CAGR during the forecast period.

DME-IQ tracks and maintains DME inventory to ensure an adequate supply and product mix for orthopedic patient populations, and the system facilitates insurance claim submissions and adjudication to help achieve optimal reimbursements. With the DME-IQ system, the practice gains control of their DME program from an operations and financial perspective, while patients gain access to a wider variety of DME products that are custom fitted for their needs.

The explosion of high deductible insurance plans has resulted in a dramatic increase of patient out-of-pocket payments for care, and the subsequent requirement that physicians spend more time as collection agents rather than doctors. DME-IQ provides practice workflow solutions for DME with custom, tablet-based software that removes the administrative burden from the practice, facilitating patient eligibility review, collection of patient co-pay and deductibles, centralized insurance adjudication, DME product procurement, and other support services that allow physician practices to increase revenue and service quality. The launch of DME-IQ advances the mission of NDS to provide physicians with end-to-end solutions for patient centric care.”

NuGenerex Regenerative Medicine

Olaregen Therapeutix, Inc.

Our wholly owned subsidiary, Olaregen Therapeutix, Inc. is a regenerative medicine company focused on the development, manufacturing and commercialization of products that fill unmet needs in the current wound care market. We aim to provide advanced healing solutions that substantially improve medical outcomes while lowering the overall cost of care. Olaregen’s first product, Excellagen® (wound conforming matrix) is a topically applied product for dermal wounds and other indications. Excellagen is a FDA 510(k) cleared device for of a broad array of dermal wounds, including partial and full thickness wounds, pressure ulcers, venous ulcers, diabetic ulcers, chronic vascular ulcers, tunneled/undermined wounds, surgical wounds (donor sites/ grafts, post-Mohs surgery, post-laser surgery, podiatric, wound dehiscence), trauma wounds (abrasions, lacerations, second-degree burns and skin tears) and draining wounds, enabling Olaregen to market Excellagen in multiple vertical markets. Since acquisition, Excellagen® became commercially viable.

The ongoing COVID-19 pandemic has impacted the United States economy in a profoundly negative manner. Hospital elective surgeries, surgical centers and other direct-patient-facing businesses have been especially hard hit. Throughout the U.S., most states and municipalities, VAs have at various points throughout the pandemic issued “shut down” orders to non-urgent care in-order to mitigate the spread of the virus. As of today, VA’s are beginning to re-open with full access and have started elective surgeries once again.

DoWe had previously launched Excellagen and in December of 2019 had ramped it up to ~~the~~over ~~current~~$500,000 ~~restrictions~~in atsales that month. Unfortunately, the VACovid ~~only~~Pandemic ~~essential~~hit ~~personnel~~and ~~have~~stopped ~~been~~our ~~allowed~~sales ~~access~~in ~~therefore~~its ~~restricting~~track ~~our~~as ~~representatives~~elective surgeries and new sales calls were shut down completely ~~from~~to ~~access~~the focused Sales Channel. AsWe ~~you~~had ~~know~~signed wean ~~received~~Agreement ~~our~~with ~~BPA~~AvMedical which has a national contract with the VA. inThis ~~March~~created more ofopportunity ~~2020~~within the entire VA system. Excellagen is looked at ~~the~~as ~~height~~a ofbest ~~the~~in ~~pandemic~~class wound healing product. WeThe ~~have~~FDA ~~remained~~has authorized its use in ~~open~~17 different indications, and ~~regular~~we ~~communication~~had ~~with~~already completed our tests within the VA and ~~our~~gained acceptance. Now, some of the major metropolitan VA ~~partner~~centers ~~AvMedical~~are instill ~~regard~~closed to ~~keeping~~us, ~~Excellagen~~but onmany ~~top~~have ofreopened. ~~mind~~We inreceived ~~preparation for~~an exclusive investment into the restart ~~re-opening~~of revenues activities this week. The use of ~~access~~funds inwill ~~the~~be ~~near~~used ~~future.~~to:

~~We have~~• ~~also~~Convert ~~kept~~our inexisting ~~regular~~bulk ~~contact~~inventory ~~with~~of ~~our~~Excellagen ~~outsourced~~Wound ~~sales~~Conforming ~~representatives~~Gel Matrix into final fill finish and ~~continue~~will be shipping product to ~~cultivate~~AvMedical ~~relationships~~from ~~that~~our wepartners ~~believe will~~in ~~lead~~England, BSM. We have enough existing bulk inventory to ~~sales~~create ~~once~~approximately ~~the~~25,000 VAsyringes ~~system~~with ~~opens~~70% ~~the~~converted ~~outpatient~~into ~~wound~~our ~~care~~.08 ~~clinics~~cc syringes and 30% into our 3.0 cc syringes for ~~regular~~larger ~~business~~wounds. This ~~continues~~process is expected to ~~lead~~take 60-90 days to ~~some~~ ~~minor~~have ~~sales~~inventory in ~~certain~~place ~~VA’s~~to insale. ~~Connecticut~~We ~~and~~believe ~~Texas~~these runs will support our sales forecast up to approximately $30 million.

• We ~~have~~ ~~taken~~believe ~~advantage~~our offorecast ~~the~~for ~~lockout~~this slimmed down focus on just VA will yield, at the VAend toof ~~focus~~month ~~time~~12, onan ~~the~~annualized ~~private~~run ~~sector~~rate ~~and~~of ~~have~~approximately ~~been~~$10,000,000 while achieving a positive EBITDA in ~~negotiations~~Month 6 of this rollout and an EBITDA projected north of 70%. Years 2 and 3 is forecasted to ~~bring~~have ~~Excellagen on~~$39 ~~formulary~~million ~~for~~and a$92 ~~large~~million ~~hospital~~of ~~network~~revenue, inrespectfully, ~~Florida~~with EBITDA forecasted at $32 million and $65 million, respectfully.

~~We are~~• ~~also~~Begin ~~about~~our tosales ~~obtain~~initiative awith ~~new~~outsourced ~~order~~VA ~~for~~specialized ~~Excellagen~~sales ~~in a NYC Hospital who recently cleared us through the Value Analysis Committee~~groups.

~~In addition,~~• ~~Mount~~We ~~Sinai Hospital~~will isalso inneed to create more bulk inventory as the ~~process~~current ofinventory ~~completing~~runs ~~their~~out. ~~quality~~With ~~study~~timelines of 1090-120 ~~patients~~days ~~using~~to ~~Excellagen in~~create ~~post~~the ORbulk ~~debridement~~and ~~cases,~~60 ~~preliminary~~days ~~results~~for each fill finish run. We have ~~been~~to ~~“extremely~~balance ~~positive”~~our inventory to sales to ensure we have shelf life on the product. Once fill finished, Excellagen has a two-year shelf life.

46• Once we get a foothold in the VA System which is now open for business, we will immediately start with Managed Care and Insurance Systems. This is an important point because insurance companies spend a lot of money on wound care, hard to close wounds, and surgery where our 17 FDA cleared uses allow us to sell our product. If a large insurer pays out a billion dollars, approximately $3 million is for suturing with our competitors’ products at $1,200 per patient. Now we can save them this cost because our best-in-class product is non sutured. We believe insurers will be jump at the chance to save this money and achieve a less costly procedure with better outcomes. This is an advantage as we pursue this market.

WeThe ~~continue~~description togiven ~~work~~is ~~towards the FDA approval in Malaysia with~~ our ~~partner~~restart ~~NexGen~~of ~~Medical .~~just ~~They will be our sales channel partner and they expect an approval in Malaysia sometime in~~ the ~~next 6 months~~VA. WeOnce ~~have~~we ~~been~~achieve ~~involved~~our ~~with~~milestones ~~training their sales leadership team on the benefits~~ and ~~uniqueness~~secure offunding, ~~Excellagen.~~we ~~They~~will ~~are~~consider ~~excited~~more ~~and motivated to launch Excellagen in their market.~~aggressive plans:

~~Olaregen is~~• ~~working~~The ~~closely~~VA ~~with~~has ~~Joe~~over ~~Moscato~~160 centers, and ~~his~~over ~~team~~1,000 tooutpatient ~~develop an agreement with China~~centers. We ~~(Olaregen)~~will ~~licensor~~move ismore ~~providing~~aggressively anas ~~exclusive sublicense~~it tomakes ~~Licensee~~sense toso ~~make,~~as ~~use~~not ~~and~~get ~~sell~~ahead ~~products~~of ~~utilizing~~our acash ~~proprietary~~flow ~~Excellagen~~ and ~~related technologies for the treatment of 17 types of wounds including non-healing wounds~~controls. ~~This agreement will be with BEIJING YOUFENG BIOLOGICAL TECHNOLOGY COMPANY, LTD .~~

•

Managed Care is next up, and we are already engaged in discussion with a few as a test. This market is considered low hanging fruit given we believe we can save over $1,000 per procedure by converting from current practices to Excellagen.

•

Our Physician Network and entities are considered a third leg of sales with Medicare reimbursement test underway by our Sales leaders

•

We announced recently that Olaregen signed its first Asian Distribution Agreement with NexGen Medical for exclusive distribution rights in Malaysia. This starts out slow, but they have paid their own way for their equivalent FDA approval and believe they will have such approval at the end of May. We see this as a foot hold into the Asian market and NexGen has created their own Fill finish capabilities and stand to open up Malaysia while we retain the license for the product. This partnership could expand as we move forward.

•

We have also obtained a new order for Excellagen in a NYC Hospital that recently cleared us through the Value Analysis Committee.

•

In addition, Mount Sinai Hospital is in the process of completing their quality study of 10 patients using Excellagen in post OR debridement cases, preliminary results have been “extremely positive”.

In conclusion, we are excited for this restart amidst the negative impact of the pandemic and will provide further updates as necessary.

We continue to work towards the FDA approval in Malaysia with our partner NexGen Medical. They will be our sales channel partner and they expect an approval in Malaysia sometime in the next 6 months. We have been involved with training their sales leadership team on the benefits and uniqueness of Excellagen. They are excited and motivated to launch Excellagen in their market.

Olaregen is working closely with Joe Moscato and his team to develop an agreement with China. Olaregen is providing an exclusive sublicense to the licensee to make, use and sell products utilizing a proprietary Excellagen and related technologies for the treatment of 17 types of wounds including non-healing wounds. This agreement will be with BEIJING YOUFENG BIOLOGICAL TECHNOLOGY COMPANY, LTD.

We have done our best to keep relationships strong with our manufacturing partners with the expectation that we will be able to manufacturer new product sometime in the summer once pandemic begins to subside. We are confident our plans will lead to post pandemic success.

The Wound Care Market

The total global wound care industry is expected to reach $22.01 billion by 2022, according to Markets and Markets; the bioactive wound care market (i.e. skin substitute) is valued at $7.8 billion; there are 6.5 million patients in the U.S. with chronic wounds (NIH estimate) in the U.S.

Olaregen Highlights:

• Received FDA 510(k) clearance on October 3, 2013, for 17 indications • Obtained intellectual properties and global rights of Excellagen® except China, Russia and CIS • Received patent on October 10, 2017 • Has a unique Healthcare Common Procedure Coding System (HCPCS) Code - Q4149 • Clinical data show significant tissue growth and positive wound closure (PDGF) • Ease of use – No grafting • Low cost provider with high profit margins; • Low execution risk (seasoned management team with product launch experience) • No development risk (over $20 million invested and completed) • No regulatory risk (FDA cleared)

•

Obtained intellectual properties and global rights of Excellagen® except China, Russia and CIS

•

Received patent on October 10, 2017

•

Has a unique Healthcare Common Procedure Coding System (HCPCS) Code - Q4149

•

Clinical data show significant tissue growth and positive wound closure (PDGF)

•

Ease of use – No grafting

•

Low cost provider with high profit margins;

•

Low execution risk (seasoned management team with product launch experience)

•

No development risk (over $20 million invested and completed)

•

No regulatory risk (FDA cleared)

Excellagen is an advanced, wound care management platform:

• Formulated fibrillar Type I bovine collagen (2.6%) • High molecular weight • Viscosity optimized for dripless wound coverage • Flowable with no staples or sutures required • Pre-filled, ready to use syringes • One syringe covers up to 5.0 cm2 wound • Refrigerated storage only with no thawing or mixing • Treatment at only one-week intervals • Activates human platelets • Triggers the release of Platelet-Derived Growth Factor (PDGF) • Accelerates granulation tissue growth in “non-healing wounds”

•

High molecular weight

•

Viscosity optimized for dripless wound coverage

•

Flowable with no staples or sutures required

•

Pre-filled, ready to use syringes

•

One syringe covers up to 5.0 cm2 wound

•

Refrigerated storage only with no thawing or mixing

•

Treatment at only one-week intervals

•

Activates human platelets

•

Triggers the release of Platelet-Derived Growth Factor (PDGF)

•

Accelerates granulation tissue growth in “non-healing wounds”

Additionally, Excellagen can serve as an Enabling Delivery Platform for pluripotent stem cells, antimicrobial agents, small molecule drugs, DNA-Based Biologics, conditioned cell media and peptides. Olaregen's initial focus will be in advanced wound care including diabetic foot ulcers (DFU), venous leg ulcers and pressure ulcers. Future products focusing on innovative therapies in bone and joint regeneration comprise the current pipeline.

Excellagen® History

Olaregen Therapeutix Inc. acquired the intellectual properties and global rights of Excellagen® except in China, Russia and CIS, from Taxus Cardium, Inc. (OTC: CRXM), and its wholly owned subsidiaries Activation Therapeutics, Inc. and Gene Biotherapeutics, Inc.

On August 2018, Olaregen acquired the IP for a total consideration is $4,200,000 and is broken down as follows: 1) $650,000 upfront payment, 2) $200,000 sales credit for collagen solution, and 3) $3,350,000 payable at 10% of net sales, which is defined as total sales less allowances, including hub fees, sales concessions, co-promote fees, cost of goods sold and other charges.

Regentys Corporation

Our majority-owned subsidiary, Regentys Corporation (formerly Asana Medical, Inc.) is a regenerative medicine company developing a tissue engineered therapy for the treatment of Ulcerative Colitis (“UC”).

Overview

In January 2019, we acquired a majority interest in Regentys Corporation, a Florida corporation, a development-stage regenerative medicine company. Since its formation in May 2013 as Asana Medical Inc., Regentys has been developing a first-in-class tissue engineered therapies for the treatment of UC and other inflammatory bowel diseases.

Ulcerative Colitis

According to an article that was published in The Lancet on December 23, 2018, named worldwide incidence and prevalence of inflammatory bowel disease in the 21st century: a systematic review of population-based studies. (2018 Dec 23;390(10114):2769-2778), Ulcerative Colitis affects an estimated 3.2 million patients in Europe, the United States and Japan. It is a chronic, inflammatory disease that causes sores or ulcers in the lining of the large intestine (the colon). Immunological in nature, UC is thought to be facilitated by a variety of hereditary, genetic and environmental factors and it is increasingly being diagnosed in more urbanized areas. Symptoms, including urgency, bleeding, and diarrhea, that substantially affect quality of life.

Regentys™ Extracellular Matrix Hydrogel (“ECMH”)

Regentys’ initial product, ECMH™ Rectal Solution, is a first-in-class, non-pharmacologic, non-surgical treatment option for millions of patients suffering from mild to moderate ulcerative colitis. Its product candidate is a powder that is reconstituted with saline and delivered as a liquid via enema. As ECMH reaches body temperature, it gels and coats the mucosal lining of the GI tract.

The core technology is derived from ECM, a safe and effective FDA-approved base now extensively used for surgical applications and wound treatment. ECMH acts as a bio-scaffold, separating the damaged tissue from waste flow, covering ulcerations to limit the inflammatory response, and facilitating a healing environment using endogenous (the body’s own) stem cells.

Pre-Clinical Results

Published pre-clinical results in the Journal of Crohn’s and Colitis highlight the promise of Regentys technology. Animal data show the ECMH therapy can both alleviate clinical symptoms and facilitate healing in UC patients. Previous pre-clinical ECM animal data for approved products has been shown to have a high correlation with human data.

Competition

Currently four biologics are FDA-approved, including top-selling antibody medicines Humira® (adalimumab), Simponi® (golimumab), Remicade® (infliximab) and Entyvio® (vedolizumab), all of which act to suppress the pro-inflammatory protein, TNF-a (Tumor Necrosis Factor Alpha), a leading cause of the proliferation of ulcerative colis and other forms of IDB. However, even with these options, more than half of all UC patients do not achieve long- term remission. Moreover, 20-30% of non-responsive patients will undergo colon removal surgery in an attempt to remediate the disease.

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Regentys Advantages

We expect our product to offer a true alternative to patients non-responsive to first line therapies such as 5-ASA. Unresponsive patients will then need to choose among therapies that alter the body’s immune system or pose long term health risks or perhaps both. Regentys’ technology is expected to enable targeted tissue healing but pose none of the health risks of more expensive market-leading biologics that generally suppress the immune system. We expect to provide our therapy at a cost less than other therapies.

Market

In 2023, when we expect to receive approval, the projected drug costs for UC alone are expected to exceed $7.5B globally according to a 2017 report by Allied Market Research; including other inflammatory bowel disease indications, the global market is expected to be double the UC market. Based upon the nature of IBD, and the characteristics of Regentys’ technology, management believes variations of Regentys’ core technology will also be effective in treating IBD diseases such as Crohn’s, rectal mucositis, proctitis and anal fissures.

Intellectual Property

Regentys in-licensed patents and co-developed its technology platform with the University of Pittsburgh. It now holds patent rights in US and foreign jurisdictions, and has other global filings pending; as well, it has patent applications pending for similar indications predicated on its existing technology in other major global markets.

Regulatory Path

The FDA has affirmed our approach to file a 510(k) de novo application on its ECM hydrogel. We have developed a protocol and engaged a clinical research organization to manage the conduct of our first-in-human (FIH) clinical trials.

Delays caused by COVID-19 in 2020 impacted our expected funding, delayed the performance of activities by our university and corporate partners and complicated our patient recruitment plans. With funding, and a prompt resumption of development activities, our FIH trials may commence in the fourth quarter of fiscal year 2021. Any delays caused by mitigating factors beyond 90 days will likely shift our FIH timetable backward.

Our primary focus is to acquire sufficient data for FDA market approval in the US. Our initial plan includes a 20 person FIH pilot trial in Australia to allow for cost and time savings and additional 50 person pivotal trial to be held in the US, Israel, Canada and/or Europe.

Business Development

Regentys regularly undertakes discussions to try and add technology and products to its pipeline and to explore strategic opportunities in its global business development efforts. More specifically, the company has undertaken informal discussions regarding the possibility of a sublicensing arrangements in foreign jurisdictions. No firm agreements have been reached and there is no assurance any of these discussions will result in binding agreements.

Should management determine to commercialize its technology in a foreign jurisdiction, the elements of any sublicensing agreement would likely track the provisions included in the core Regentys-University of Pittsburgh exclusive licensing arrangement including an upfront payment, milestone payments, royalties on product sales, non-royalty payments, and some provision for regulatory costs and expenses. Regentys may act to amend its exclusive license agreement to maximize its business options with any changes contingent upon assent by its university partner.

In the event Regentys would undertake an arrangement to license its technology in a foreign jurisdiction, management expects the timing and location of its first-in-human trials to change. The company has executed consulting agreements that enable flexibility in the choice of venue for such trials.

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Product Development

Since 2013, we have maintained a research and development agreement with the University of Pittsburgh supplemented with personnel from the affiliated McGowan Institute of Regenerative Medicine. In February 2018, Regentys entered into a development agreement with (and has received a co-investment by) Cook Biotech, Inc., a global leader in ECM manufacturing technology (CookBio). Product batches now on hand are expected to be sufficient for additional development and testing. A larger clinical batch with finalized specifications will be generated in the coming months for use in clinical trials. There are alternate providers of development services who can assist with product development activities. Notwithstanding these options, management believes that because of the nature of ongoing development activities, and the reliance upon certain bench and manufacturing processes and ECM product expertise and technology, any interruption in the development relationship with CookBio would subject the Company to substantial expenditures of time and cost to duplicate the product.

Manufacturing

Regentys has an exclusive manufacturing agreement with CookBio for the production of biomaterial and use of its proprietary technology conditioned upon the completion of final product development work. Management has negotiated an agreement with a third-party manufacturer for product components and kitting. We believe that there are alternate sources of these manufacturing and supply services. However, because of the nature of regulation in the medical device industry, and the reliance upon the collection, reporting and management of medical device manufacturing data, a change of manufacturer would substantially impact the time and cost required for clinical product production and regulatory compliance.

Financing

In January 2019, Regentys was acquired by Generex for an aggregate purchase price of $15,000,000, with $400,000 paid in upfront cash up-front and a promissory note of $14,600,000. Installments payable under the note were tied to specific business development objectives and dates. As October 3, 2019, an additional $850,000 was paid for a total of $1,250,000 against the note. Regentys entered into an accommodation agreement dated March 14, 2019 with Generex to provide longer time to pay. On November 25, 2019, the payment due date for the first three installments was extended to December 30, 2019 and extended on January 10, 2020 further to January 31, 2020. A Fourth Payment of $5,000,000 was due on or about February 1, 2020 and the final payment of $1,150,000 payable on or about February 1, 2021 (both of which have not been paid).

Operations

Currently, Regentys employs four full-time contract employee and several part-time consultants. We supplement our business operations by engaging external legal (intellectual property, corporate and health care), accounting and tax professionals. We also have contracted with information services, regulatory and clinical trial companies who make available professionals to manage the information services, regulatory, clinical, and compliance aspects of the business. Upon payment of the interim note, Regentys will formally add two contract employees, additional administrative staff and a third-party provider to assist with employee payroll and benefits as well as undertake clinical trial activities suing external support.

NuGenerex Surgical Products

MediSource Partners & Pantheon Medical – Foot & Ankle

Due to various business complications including the termination of the Travis Brid consulting agreement and the ongoing COVID-19 pandemic, the operations of MediSource Partners and Pantheon Foot & Ankle have been curtailed until further notice.

Accounting for Research and Development Projects

Our major research and development projects are NGIO’s peptide immunotherapeutic vaccines, including COVID-19 and breast cancer vaccines.

Pursuant to this agreement and subsequent work orders, Generex will pay to CTL a fee for work plan completion an amount not to exceed $1,~~194~~296,~~442~~854 in the aggregate. During the three and ~~six~~nine months ended ~~January~~April 3130, 2021, the Company has incurred $~~562~~149,~~063~~895 and $1,~~115~~265,~~940~~835 of expenses, respectively, leaving a balance of $1,~~120~~020,~~637~~225 accrued under this agreement.

During the ~~six~~nine months ended ~~January~~April 3130, 2021 and 2020, expensed $~~80,000~~0 and $251,459, respectively, to NSABP for clinical trials for ~~additional~~ additional research and development relating to NGIO’s peptide immune therapeutic vaccines and related technologies. One NGIO vaccine is currently in Phase II clinical trials in the United States involving patients with HER-2/neu positive breast cancer, and we have completed a Phase I clinical trial for an NGIO vaccine for H5N1 avian influenza which was conducted at the Lebanese-Canadian Hospital in Beirut. NGIO’s prostate cancer vaccine based on AE37 has been tested in a completed (August 2009) Phase I clinical trial in Greece.

Because of various uncertainties, we cannot predict the timing of completion and commercialization of NGIO’s peptide immunotherapeutic vaccines or related technologies. These uncertainties include the success of current studies net operating losses attributed to NGDx, 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.

The following table summarizes our research and development projects in development and the next milestone in its development and estimated costs to achieve such milestone:

List of Projects

Company (Subsidiary)	R&D Project	Current Milestone Target	Estimated Milestone Start Dates	Estimated Milestone Costs
NGIO	AE37 Cancer Vaccine	Phase II Clinical Trial	~~March~~January ~~2021~~2022	$	1,800,000
NGIO	COVID-19 Vaccine	Development of Human Trials	~~Jan.~~September 2021		1,700,000
Regentys	ECM	First In-Human Clinical Trial in Australia	~~June~~December ~~2021~~2022		2,000,000
NGDx	Express I & II	FDA 510K Approval		$	750,000

The following is a summary of our research and development costs for the ~~six~~nine months ending ~~January~~April 3130, 2021 and 2020:

	Six Months Ending January 31,
	Nine Months Ending April 30,
R&D Project	2021		2020
AE37 Cancer Vaccine	$	~~305~~118,~~267~~496	$	~~142~~255,~~200~~265
COVID-19 Vaccine		23,~~053~~305,~~830~~144		—17,150
ECM		~~244~~293,~~113~~551		~~566~~676,~~190~~464
Express I & II		~~125~~213,~~097~~980		~~207~~298,~~221~~761
Excellagen		—		15,760
Excellagen*		—		15,760
Excellasome®**		—		7,200
	$	23,~~728~~931,~~307~~142	$	~~938~~1,~~571~~270,600

*Product in active commercialization

**No longer an active research and development project

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Critical Accounting Policies

There are no material changes from the critical accounting policies set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended July 31, 2020 filed with the SEC on November 13, 2020~~, except as follows:~~.

Derivative warrant liability. FASB ASC 815, Derivatives and Hedging, requires all derivatives to be recorded on the condensed interim consolidated balance sheet at fair value. As a result, certain derivative warrant liabilities are separately valued and accounted for on our balance sheet, with any changes in fair value recorded in earnings. On our condensed interim consolidated balance sheets as of January 31, 2021 and July 31, 2020, we used the binomial lattice model to estimate the fair value of these warrants. Key assumptions of either a multinomial lattice model or a Monte Carlo model include the market price of our stock, the exercise price of the warrants, applicable volatility rates, risk-free interest rates, expected dividends, contractual exercise price reset events, and change in control timing estimate 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.

As reported above, the Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares.

On January 24, 2019, the company entered into a note payable with an unrelated party at a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. Accordingly, all convertible instruments issued after January 24, 2019 are considered derivatives according to the Company’s sequencing policy.

Results of Operations

Three months ended ~~January~~April 3130, 2021 compared to three months ended ~~January~~April 3130, 2020

During the three months ended ~~January~~April 3130, 2021 and 2020, net revenues were $020,695 and $~~857~~498,~~427~~676, respectively. The decrease resulted primarily because there was no revenue generated by Pantheon in the three months ended ~~January~~April 3130, 2021 while it generated $~~804~~497,~~567~~386 during the same period in the prior fiscal year. Additionally, there was a decrease in revenues generated by Olaregen which has been impacted by COVID-19.

Research and development costs in the three months ended ~~January~~April 3130, 2021 and 2020 were $1,~~558~~202,~~299~~835 and $~~599~~332,~~837~~029, respectively. The increase of $~~958~~870,~~462~~806 is primarily from the clinical costs related to NGIO’s COVID vaccine for which nominimal expenses were incurred ~~during~~ during the same period in the prior fiscal year.

General and administrative expenses in the three months ended ~~January~~April 3130, 2021 and 2020 were $65,~~913~~115,~~295~~320 and $43,~~647~~624,~~065~~709, respectively. The increase of $21,~~266~~490,~~230~~611 is primarily due to ~~the~~increase ~~$3,748,177~~in ~~judgement~~commissions ~~from~~paid, ~~AEXG arbitration~~ partially offset by reduction inof ~~consulting~~operations ~~fees~~from ~~incurred~~Veneto, inMediSource ~~the~~and ~~previous~~Pantheon, interest ~~fiscal~~due ~~period~~ to ~~Travis~~settle ~~Bird~~with ofAEXG ~~approximately~~and ~~$291,000~~loss on impairment related to inventory and ~~other~~accounts ~~various~~receivable ~~consulting~~held ~~fees~~by ofMediSource ~~approximately~~and ~~$323,000~~Pantheon.

Interest expense in the three months ended ~~January~~April 3130, 2021 and 2020 was $~~587~~978,~~489~~524 and $1,~~431~~506,~~052~~103, respectively. The decrease is primarily due to the decrease in amortization of debt discount of approximately $1600,000~~,000~~ from the previous year’s fiscal quarter, partially offset default interest and increase of interest on notes payable.

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The change in fair value of derivative liabilities for the three months ended ~~January~~April 30, 2021 and 2020 was a ~~loss~~gain of $15,~~257~~388,~~066~~602 and a loss of $1466,~~406~~217,~~569,~~ respectively. The $1315,~~850~~854,~~497~~ 819 increase is primarily due to the change in fair value of the Series A, B, C and D Warrants issued in connection with the PIPE during the three months ended ~~January~~April 3130, 2021, which resulted in a ~~loss~~gain of approximately $14,564,363~~, compared to the $1,406,569 loss in the previous year’s fiscal quarter~~. The significant change in fair value is primarily driven by the stock price ~~which~~decreased ~~more~~by ~~than~~about ~~doubled~~40% during the quarter from $0.2043 per share on ~~November~~January 229, ~~2020~~2021 to $0.43 26 per share on ~~January~~April 2930, 2021.

~~We had~~As a ~~net~~result ~~loss~~of ~~for~~a ~~the~~Settlement ~~three~~Agreement ~~months~~with Alpha ~~ended~~on ~~January~~March 3125, 2021 ~~and~~(Note ~~2020~~2), ofthe ~~$24,406,621~~Company ~~and~~recorded ~~$7,280,030,~~a ~~respectively.~~gain ~~The~~on ~~increase in~~the ~~net~~settlement ~~loss~~of ~~for~~accrued ~~the~~interest ~~three~~in ~~months~~the ~~ended~~amount ~~January~~of 31$370,553 ~~2021~~for the accrued interest previously recorded that was ~~caused~~not byrequired ~~the~~to ~~factors~~be ~~described~~paid ~~above~~under the Settlement.

~~Six months~~As ~~ended~~a ~~January~~result ~~31,~~of ~~2021~~the ~~compared~~forgiveness of a PPP loan awarded to ~~Six~~Regentys ~~months~~the ~~ended~~Company ~~January~~the 31$73,100 ~~2020~~principal forgiven was recognized as Gain on Forgiveness of PPP loan on the Statement of Operations.

~~During the~~We ~~six~~had ~~months~~net ~~ended~~income ~~January~~for ~~31,~~the ~~2021~~three ~~and~~months ~~2020,~~ended April ~~net revenues decreased $1~~30,~~490,653~~ to2021 ~~$88,435~~of ~~from~~ $18,~~579~~485,~~088,~~334 ~~respectively.~~and ~~The decrease~~a ~~resulted~~net ~~primarily~~loss ~~because~~of ~~there was no revenue generated by Pantheon in the six months ended January 31, 2021 while it generated~~ $15,~~253~~760,~~763~~817, during the same period in the prior fiscal year. ~~Additionally,~~The ~~there~~increase ~~was~~in anet income ~~decrease~~for inthe ~~revenues~~three ~~generated by~~months ~~Olaregen~~ended ~~which~~April ~~has~~30, ~~been~~2021 ~~impacted~~was caused by ~~COVID-19~~the factors described above.

~~Research and~~Nine ~~development costs in the six~~ months ended ~~January~~April 3130, 2021 ~~and 2020 were $2,728,307 and $938,571, respectively. The increase~~compared ~~of $1,789,736 is primarily from the clinical costs related~~ to ~~NGIO’s~~Nine ~~COVID-19~~months ~~vaccine~~ended ~~for~~April ~~which~~30, ~~no expenses were incurred during the same period in the prior fiscal year.~~2020

~~General and~~During ~~administrative expenses in~~ the ~~six~~nine months ended ~~January~~April 3130, 2021 and 2020, net revenues were $19109,~~921,467~~130 and $92,~~434~~077,~~104~~764, respectively. The ~~increase~~ ofdecrease ~~$10,487,363~~resulted is primarily ~~due~~because tothere ~~bonus~~was ~~compensation~~no ofrevenue generated ~~$7,050,417~~by toPantheon ~~be paid~~ in ~~approximately~~the $1nine ~~million~~months inended ~~cash~~April ~~and $6~~30, ~~million~~2021 inwhile ~~stock~~it ~~and~~generated $32,~~748~~059,~~177~~662 ~~judgement~~during ~~from~~the same period in the ~~AEXG~~prior fiscal ~~arbitration~~year. ~~that~~Additionally, there was ~~accrued~~a decrease in revenues generated by Olaregen which was impacted by COVID-19.

~~Interest expense~~Research and development costs in the ~~six~~ nine months ended ~~January~~April 3130, 2021 and 2020 ~~was~~were $13,~~606~~931,~~569~~142 and $31,~~947~~270,~~165~~600, respectively. The ~~decrease~~increase of $2,660,542 is primarily ~~due~~ to from the ~~decrease~~clinical incosts ~~amortization~~related ofto ~~debt~~NGIO’s ~~discount~~COVID-19 ofvaccine ~~$2,221,253~~for ~~from~~which ~~the~~no ~~previous~~expenses ~~year’s~~were ~~fiscal~~incurred ~~quarter,~~during ~~partially~~the ~~offset by~~same ~~approximately~~period ~~$255,080~~in ofthe ~~default~~prior fiscal ~~interest~~year.

~~The change~~General inand ~~fair~~administrative ~~value~~expenses ofin ~~derivative liabilities for~~ the nine ~~six~~ months ended ~~January~~April 30, 2021 and 2020 ~~was~~were ~~a loss of~~ $1125,~~237~~036,~~214~~787 and $313,~~645~~058,~~991~~813, respectively. The increase of $711,~~591~~977,~~223~~974 ~~increase~~ is primarily due to ~~the~~bonus ~~change~~compensation ~~in fair value~~ of ~~the Series A~~$7, B050,417 Cto ~~and~~be Dpaid ~~Warrants issued~~ in ~~connection~~approximately ~~with~~$1 ~~the~~million ~~PIPE~~in ~~during~~cash ~~the~~and ~~first~~$6 ~~quarter~~million ofin ~~fiscal~~stock, ~~year 2021~~$457,653 ~~which~~due ~~resulted~~to impairment ~~in a loss~~ of ~~approximately~~inventory ~~$10,643,052, compared~~held toby ~~the~~Medisource ~~loss~~and ofPantheon ~~approximately~~and $34,~~033~~538,~~000~~735 injudgement ~~the previous year’s fiscal quarter which resulted~~ from the ~~change~~AEXG ~~in fair~~arbitration ~~value~~that ofwas ~~downside~~accrued ~~protection. The significant change in fair value of the PIPE warrants is primarily driven by the stock price which more than doubled~~ during the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~April ~~year~~30, 2021 ~~from $0~~.~~20 to $0.43 per share.~~

WeInterest ~~had~~expense ain ~~net loss for~~ the ~~six~~nine months ended ~~January~~April 3130, 2021 and 2020 ofwas $352,~~395~~585,~~697~~640 and $165,~~592~~453,~~577~~268, respectively. The ~~increase~~decrease inis primarily ~~net~~due ~~loss~~to ~~for~~ the ~~six~~decrease ~~months~~in ~~ended~~amortization ~~January~~of ~~31,~~debt ~~2021~~discount ~~was~~approximately ~~caused~~$2,300,000 byfrom the ~~factors~~previous ~~described~~year’s ~~above~~fiscal quarter.

The change in fair value of derivative liabilities for the nine months ended April 30, 2021 and 2020 was a gain of $4,151,388 and a loss of $4,112,208, respectively. The $8,263,596 increase is primarily due to the change in fair value of the Series A, B, C and D Warrants issued in connection with the PIPE during the first quarter of fiscal year 2021, which resulted in a gain of approximately $3,921,311, compared to the loss of approximately $3,033,000 in the previous year’s fiscal quarter which resulted from the change in fair value of downside protection.

We had a net loss for the nine months ended April 30, 2021 and 2020 of $26,910,363 and $22,353,394, respectively. The increase in net loss for the nine months ended April 30, 2021 was caused by the factors described above.

Financial Condition, Liquidity and Resources

Sources of Liquidity

To date we have financed our development stage activities primarily through private placements of our common stock, securities convertible into our common stock, and investor loans. We will require additional funds to support our working capital requirements and any development or other activities. NGDx will require additional funds to support its working capital requirements and any development or other activities or will need to curtail its research and development and other planned activities or suspend operations. NGDx will no longer be able to rely on its former primary owner for necessary financing. Going forward, NGDx will rely on Generex financing activities to fund NGDx operations, development, and other activities.

While we raised $1,850,000 of net proceeds from a private placement, ~~and~~ $1,~~164~~854,~~616~~257 from the sale of common stock and $2,050,200 of net proceeds from notes payable during the ~~six~~nine months ended ~~January~~April 3130, 2021, the Company’s cash position is not sufficient for twelve months of operations from the filing of this report.

5352

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.

In addition, management is actively pursuing financial and strategic alternatives, including strategic investments and divestitures, industry collaboration activities, and potential strategic partners. Management has sold non-essential real estate assets which are classified as Assets Held for Investment to augment the company’s cash position and reduce its long-term debt.

We will continue to require substantial funds to continue research and development, including preclinical studies and clinical trials of our product candidates, further clinical trials for Oral-lyn™ and to commence sales and marketing efforts if the FDA or other regulatory approvals are obtained.

Financings

The following is a summary of the financing activities that we have completed during the ~~six~~nine months ended ~~January~~April 3130, 2021.

Financing – August 4, 2020

On August 4, 2020, the Company and three institutional accredited investors (each a “Buyer” and, collectively, the “Buyers”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which the Company sold and issued to the Buyers an aggregate of 5,102,040 shares (the “Common Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at an aggregate price of $2,000,000 (the “Private Placement”).

Financing – Oasis Capital, LLC (“Oasis”)

On September 25, 2020, the Company sold 600,000 shares of common stock to Oasis for net proceeds of $95,083.

On October 9, 2020, the Company sold 750,000 shares of common stock to Oasis for net proceeds of $131,204.

On October 9, 2020, the Company sold 750,000 shares of common stock to Oasis for net proceeds of $130,424.

On November 6, 2020, the Company sold 750,000 shares of common stock to Oasis for net proceeds of $123,524.

On November 17, 2020, the Company sold 1,000,000 shares of common stock to Oasis for net proceeds of $183,416.

On January 12, 2021, the Company sold 1,000,000 shares of common stock to Oasis for net proceeds of $239,120.

On January 20, 2021, the Company sold 750,000 shares of common stock to Oasis for net proceeds of $261,450.

On January 29, 2021, the Company sold 750,000 shares of common stock to Oasis for net proceeds of $275,324.

On February 24, 2021, the Company sold 750,000 shares of common stock to Oasis for net proceeds of $271,874.

On March 4, 2021, the Company sold 750,000 shares of common stock to Oasis for net proceeds of $175,964 which went directly towards repaying an outstanding note with Oasis.

54On March 9, 2021, the Company sold 500,000 shares of common stock to Oasis for net proceeds of $144,224 which went directly towards repaying an outstanding note with Oasis.

~~Cash~~On ~~flows~~March ~~for~~30, 2021, the ~~Six~~Company ~~months~~sold ~~ended~~300,000 ~~January~~shares ~~31,~~of ~~2021~~common stock to Oasis for net proceeds of $74,120.

~~For~~On April ~~the six months ended January 31~~12, 2021, we ~~used~~the ~~$2,315,721~~Company insold ~~cash~~300,000 toshares ~~fund~~of ~~our~~common ~~operating~~stock ~~activities.~~to ~~The~~Oasis ~~use~~ for ~~operating activities included a~~ net ~~loss~~proceeds of $3568,~~395,697, offset primarily by change in fair value of derivative liabilities of $11,237,214 and contract liabilities of $3,000,000 and change of $15,445,719 in accounts payable and accrued expenses~~324.

~~The~~On April ~~use~~23, of2021, ~~cash~~the ~~was~~Company ~~offset~~sold by300,000 ~~non-cash~~shares ~~expenses~~ of ~~$523,699~~common ~~related~~stock to ~~depreciation~~Oasis ~~and~~for ~~amortization,~~net ~~$1,742,050~~proceeds ~~related~~of ~~to stock compensation,~~ $~~340~~71,~~226~~084 ofwhich ~~amortization~~went ofdirectly ~~debt~~towards ~~discount~~repaying ~~and~~an aoutstanding ~~$11,237,214~~note ~~change~~with ~~in fair value of derivative liabilities~~Oasis.

We had cash provided by financing activities in the six months ended January 31, 2021 of $2,896,301, most of which was from net proceeds from private placement (PIPE) of $1,850,000 and net proceeds from sale of common stock of $1,164,616 partially offset by payments on notes payable of $127,459.53

~~Our net working capital deficiency on January~~Cash ~~31,~~flows ~~2021~~for ~~increased~~the tonine ~~$57.9~~months ~~million~~ended ~~from~~April ~~$40.1 million on July 31~~30, ~~2020, which was attributed primarily to an increase in accounts payable and accrued expenses.~~2021

For the nine months ended April 30, 2021, we used $1,739,029 in cash to fund our operating activities. The use for operating activities included a net loss of $26,910,363. Changes to working capital included an increase of $17,032,881 related to accounts payable and accrued expenses.

The use of cash was offset by non-cash expenses of $783,173 related to depreciation and amortization, $2,160,788 related to stock compensation, $975,835 of amortization of debt discount and an offset by a gain in fair value of derivative liabilities of $4,151,388.

We had cash provided by financing activities in the nine months ended April 30, 2021 of $3,398,604, most of which was from net proceeds from private placement (PIPE) of $1,850,000, net proceeds from sale of common stock of $1,854,257 and net proceeds from notes payable of $2,050,200 partially offset by payments on notes payable of $2,349,996.

Our net working capital deficiency on April 30, 2021 increased to $61 million from $40.1 million on April 30, 2020, which was attributed primarily to an increase in accounts payable and accrued expenses.

Funding Requirements and Commitments

In addition to our commitments under the financings described above, we have the following obligations:

Olaregen and Regentys Acquisitions

Olaregen

As of January 7, 2019, the Company completed a definitive Stock Purchase Agreement and related documents relating to the Company’s purchase of 3,282,632 newly issued shares of the Olaregen common stock representing 51% percent of the issued and outstanding capital stock of Olaregen for an aggregate $12,000,000.

In addition to $400,000 paid to Olaregen upon signing of the LOI, the purchase price for the Olaregen shares will consist of the following cash payments:

•

$800,000 on or before January 15, 2019. The Company has paid this installment.

•

$800,000 on or before January 31, 2019. The Company has paid this installment.

•

$3,000,000 on or before February 28, 2019. The full balance of $3,000,000 is payable on or before January 31, 2020 per extension in amended agreement.

• $1,000,000 on or before May 31, 2019. As of September 14, 2020, the Company has not paid this installment and the full balance of $1,000,000 was payable on or before January 31, 2020 per extension in amended agreement. We have not yet made this payment.

• $6,000,000 on or before January 31, 2020. We have not yet made this payment.

Generex issued its promissory note in the amount of $11,600,000 (the “Note’) representing its obligation to pay the above amounts. The Note is secured by a pledge of the Olaregen Shares pursuant to a Pledge and Security Agreement.

On November 24, 2019, the Company and Olaregen amended the Stock Purchase Agreement and Promissory Note to extend the due date of the remaining balance of the note on or before April 30, 2020. The extension of this due date has no impact on the existing schedule of future payments or any additional terms within the Note.

Based on the Note, in the event any incremental payment is not paid when due, Olaregen has the option to increase the per share purchase price for all remaining purchased shares to $4.00 per share. Based on $1,400,000 of remitted payments and a Promissory Note balance of $10,400,000 prior to the first extension agreement on March 14, 2019, Olaregen elected the option to proportionally increase the per share purchase price to $4.00 for the remaining 2,899,658 of the total 3,282,632 shares to be acquired. This resulted in an additional $998,633 which has been accrued

5554

for the Company to remit to Olaregen pursuant to the acquisition. On February 14, 2020, the Company acquired the remaining outstanding shares of Olaregen in exchange for 4,250,000 shares of GNBT Stock and 1,065,000 shares of NGIO Stock and the penalty and outstanding interest of approximately $1,900,000 was waived.

Regentys

On January 7, 2019 the Company completed a definitive Stock Purchase Agreement and related documents relating to the Company’s purchase of 12,048,161 newly issued shares of the Regentys common stock representing 51% percent of the issued and outstanding capital stock of Regentys (“Regentys Shares”) for an aggregate of $15,000,000.

In addition to $400,000 paid to Regentys upon signing of the LOI, the purchase price for the Regentys shares consist of the following cash payments, with the proceeds intended to be used for specific purposes, as noted:

• $3,450,000 to initiate pre-clinical activities on or before January 15, 2018. The balance was payable on or before December 30, 2019, but as of ~~January~~April 3130, 2021, the Company has paid $1,~~887~~987,790.

• $2,000,000 to initiate patient recruitment activities on or before May 1, 2019. As of ~~January~~April 3130, 2021, the Company has not yet paid this installment and the full balance of $2,000,000 was payable on or before December 30, 2019 per extension in amended agreement. ~~As January 31, 2021, the company has not paid this amount.~~

• $3,000,000 to initiate a first-in-human pilot study on or before December 30, 2019. As ~~January~~April 3130, 2021, the company has not paid this amount.

• $5,000,000 to initiate a human pivotal study on or before February 1, 2020. As ~~January~~April 3130, 2021, the company has not paid this amount.

• $1,150,000 to submit a 510(k) de novo submission to the FDA on or about February 1, 2021. As ~~January~~April 3130, 2021, the company has not paid this amount.

The Company issued its promissory note in the amount of $14,600,000 (the “Note’) representing its obligation to pay the above amounts. The Note is secured by a pledge of the Regentys pursuant to a Pledge and Security Agreement.

On November 25, 2019, the Company and Regentys amended the Stock Purchase Agreement and Promissory Note to extend the due date of the remaining balance of the note on or before December 30, 2019. The extension of this due date has no impact on the existing schedule of future payments or any additional terms within the Note. Regentys has not filed any notice of default as of the date of publication, and Generex continues to provide Regentys with business opportunities continuing the relationship.

If we obtain necessary financing, we expect to expend resources towards additional acquisitions and regulatory approval and commercialization of Generex Oral-lyn™ and further clinical development of our immunotherapeutic vaccines.

In addition to our future funding requirements, commitments, and our ability to raise additional capital will depend on factors that include:

•

the timing and amount of expenses 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;

• the timing, receipt, and ~~amount~~number of sales, if any, from Generex Oral-lyn™ in India, Lebanon, Algeria and Ecuador;

•

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;

•

our ability to obtain the necessary financing to fund our operations and effect our strategic development plan; and the receptivity of the financial market to biopharmaceutical companies.

•

our ability to obtain the necessary financing to fund our operations and effect our strategic development plan; and

•

the receptivity of the financial market to biopharmaceutical companies.

5655

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.

Tabular Disclosure of Contractual Obligations

Generex is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

Recently Issued Accounting Pronouncements

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Generex is a smaller reporting company and not required to provide Quantitative and Qualitative Disclosures about Market Risk pursuant to Regulation S-K 305 (e).

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of ~~January~~April 3130, 2021, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and concluded that, subject to the inherent limitations, our disclosure controls and procedures were not effective due to the existence of several significant deficiencies culminating in material weaknesses in our internal control over financial reporting because of inadequate segregation of duties over authorization, review and recording of transactions, as well as the financial reporting of such transactions.

5756

We have been working, and are currently working, to remediate the material weaknesses described above, including assessing the need for additional remediation steps and implementing additional measures to remediate the underlying causes that gave rise to the material weaknesses. We believe we have taken appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies, however we cannot be certain that our remediation efforts will ensure that our management designs, implements and maintains adequate controls over our financial processes and reporting in the future or that the changes made will be sufficient to address and eliminate the material weaknesses previously identified. Our inability to remedy any additional deficiencies or material weaknesses that may be identified in the future could, among other things, have a material adverse effect on our business, results of operations and financial condition, as well as impair our ability to meet our quarterly, annual and other reporting requirements under the Securities Exchange Act of 1934 in a timely manner, and require us to incur additional costs or to divert management resources.

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated our internal control over financial reporting to determine whether any changes occurred during the 2020 third quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, and have concluded that there have been no changes that occurred during the first quarter of fiscal year 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

InThe ~~December~~Company ~~2011,~~is a ~~vendor~~defendant ofin ~~the~~one ~~Company~~legal ~~commenced~~proceeding anrelating ~~action~~to ~~against~~alleged ~~the~~breach ~~Company~~of contract and ~~its~~claims ~~subsidiary,~~against ~~Generex~~certain ~~Pharmaceuticals, Inc., in the Ontario Superior Court~~ of ~~Justice claiming damages for unpaid invoices including interest in~~ the ~~amount of $429,000, in~~Company’s ~~addition~~original tobuccal ~~costs~~delivery ~~and further interest~~patents. The Company ~~responded~~is ~~to this statement of claim and~~ also ~~asserted~~ a ~~counterclaim~~defendant in ~~the proceeding~~two ~~for~~legal ~~$200,000~~proceedings ~~arising~~brought ~~from~~by ~~the~~a ~~vendor’s~~former ~~breach~~executive ~~of contract and detinue, together with interest and costs. On November~~officer ~~16, 2012, the parties agreed to settle this action~~ and ~~the~~her ~~Company has agreed to pay the plaintiff $125,000, following the spinout of its subsidiary NGIO, from the proceeds of any public or private financing related to NGIO subsequent to such spinout~~affiliate. ~~Each party~~These ~~agreed~~legal toproceedings ~~execute~~have ~~mutual~~been ~~releases~~reported toin the ~~claim and counterclaim to be held in trust by each party~~Company’s ~~counsel~~prior ~~until payment~~periodic ~~of the settlement amount~~reports. ~~Following~~No ~~payment~~activity tohas ~~the plaintiff, the parties agree that a Consent Dismissal Order without~~occurred ~~costs~~in ~~will~~these becases ~~filed~~in ~~with~~several ~~the~~years, ~~court.~~and If the Company ~~fails~~now toconsiders ~~make~~them the payment following completion of any post-spinout financing related to NGIO or any other subsidiaries, the Plaintiffs may take out a judgment in the amount of the claim plus interest of 3% per annum and costs fixed at $25,000 which has been accrued as of January 31, 2021dormant.

OnIn ~~August~~December 222011, ~~2017, Generex received~~ a ~~letter~~vendor ~~from~~of ~~counsel~~the ~~for~~Company ~~Three~~commenced ~~Brothers~~an ~~Trading~~action ~~LLC,~~against ~~d/b/a~~the ~~Alternative~~Company ~~Execution~~and ~~Group~~its ~~(“AEXG”)~~subsidiary, ~~claiming~~ ~~breach of a Memorandum of Understanding (“MOU”) between~~ Generex ~~and~~Pharmaceuticals, ~~AEXG~~Inc. ~~The MOU related to AEXG referring potential financing candidate to Generex. The letter from AEXG counsel claimed that Generex’s acceptance of $3~~,~~000,000~~ in ~~financing~~the ~~from~~Ontario ~~Pharma~~Superior ~~Trials,~~Court ~~LLC, in March 2017, violated the provisions~~ of ~~the~~Justice ~~MOU~~claiming ~~prohibiting~~damages ~~Generex from seeking other financing, with certain exceptions,~~ for aunpaid ~~period~~invoices ofincluding 60interest ~~days~~in ~~after~~the ~~execution~~amount of ~~the MOU. AEXG has demanded at least~~ $~~210~~429,000, in ~~cash~~addition ~~and~~to ~~84,000 warrants for Generex stock convertible at $2.50 per share, for attorney’s fees and~~ costs~~. AEXG~~ ~~filed a demand for arbitration~~ and onfurther ~~September 25, 2018 an arbitration hearing was held with an arbitrator from the American Arbitration Association’s International Centre for Dispute Resolution~~interest. OnThe ~~December~~Company 3,responded ~~2018,~~to anthis ~~arbitrator~~statement ~~awarded AEXG an aggregate~~ of ~~$315,695~~claim ~~in damages, costs~~ and ~~fees~~also asasserted ~~well as warrants exercisable for 84,000 shares of Generex Common Stock at an exercise price of $2.50 per share. AEXG filed~~ a ~~petition~~counterclaim ~~to confirm the arbitrator’s award~~ in the ~~United States District Court~~ proceeding for ~~the Southern District of New York. The petition includes a demand of~~ $3200,~~300,360~~000 asarising ~~the~~from ~~value of~~ the ~~warrants.~~vendor’s ~~The~~breach ~~arbitrator did not award the specific amount~~ of ~~$3.5~~contract ~~million, but only liquidated damages in the amount of $210,000~~ and ~~the value of 84~~detinue,~~000 warrants~~ ~~“as~~together ofwith ~~today” (the date of the award) plus attorney’s fees, certain costs, prejudgment and post-judgment~~ interest ~~(which continues to run on a daily basis)~~ and ~~arbitration fees~~costs. ~~Generex~~On ~~has responded that the value of the warrants~~November on16, ~~the~~2012, ~~date of~~ the ~~award~~parties isagreed ~~$0 or some figure far less than the value calculated by AEXG. The petition~~ to ~~confirm~~settle ~~the~~this ~~arbitrator’s award~~action and ~~Generex’s opposition were remanded by~~ the ~~Court~~Company tohas ~~the~~agreed ~~arbitrator and returned for clarification. The arbitrator stated that he was unable~~ to ~~add~~pay ~~any clarification, as he did not take evidence on~~ the ~~issue~~plaintiff ~~of warrant valuation. AEXG filed a petition and on April 24~~$125, ~~2020~~000, ~~the~~following ~~Court issued an Opinion and Order in~~ the ~~Litigation confirming the portions~~ spinout of ~~the~~its ~~Arbitration Award~~subsidiary ~~regarding liquidated damages~~NGIO, ~~pre-judgment~~from ~~interest, legal fees, and costs, but remanding to~~ the ~~Arbitrator~~proceeds ~~for~~of ~~further proceedings~~any ~~the~~public ~~portion~~or ofprivate ~~the~~financing ~~Arbitration~~related ~~Award relating~~ to ~~“the~~NGIO ~~economic~~subsequent ~~value today of 84,000 warrants convertible~~ to ~~Generex’s~~ ~~stock~~such ~~exercisable at $2~~spinout.50 ~~per share as of September 24, 2018” (the “Remanded Arbitration”).~~Each Onparty ~~September~~agreed ~~18,~~to ~~2020,~~execute ~~the~~mutual ~~Court~~releases ~~issued~~to ~~that AEXG recover from Generex~~ the ~~total~~claim ~~sum~~and ofcounterclaim ~~$384,771,~~to ~~which~~be ~~sum~~held ~~consists of $210,000~~ in ~~liquidated~~trust ~~damages, $93,304 in legal fees, $12,393 in arbitration fees, $3,313 in arbitration expenses, $65,762 in pre-judgment interest, and post-judgment interest at a rate established~~ by 28each ~~U.S.C~~party’s §counsel ~~1961 from September 18, 2020,~~ until ~~the judgment~~ ispayment ~~satisfied, this judgement dealt only with the dollar fees portion, leaving still open the value~~ of the ~~warrants~~settlement ~~(the “Partial Judgement”)~~amount. ~~The~~ ~~parties~~Following ~~settled~~payment ~~and agreed~~ to the ~~terms~~plaintiff, of the ~~Partial~~parties ~~Judgment~~agree that ~~included~~ a ~~payment~~Consent ~~schedule to~~Dismissal ~~which~~Order ~~Generex~~without costs ~~has~~will ~~paid~~be ~~$200,000~~filed ~~in cash to date~~ with the ~~remaining balance being paid and retired in 30 days~~court. ~~The~~If ~~settlement terms do not apply, settle, or resolve in any manner~~ the ~~Remanded~~Company ~~Arbitration~~fails ~~or the issues pending therein, including, but not limited~~ to, ~~the~~make ~~economic value of~~ the ~~84,000~~payment ~~warrants,~~following ~~Generex’s~~completion ~~right~~of toany ~~contest~~post-spinout ~~AEXG’s attorneys’ fees, or~~financing ~~Generex’s~~related ~~right~~ to ~~contest~~NGIO ~~the~~or ~~issue~~any ~~of who is the prevailing party for fees~~ other ~~than those fees awarded in the Arbitration Award. Generex continues to vigorously defend the open matters. On January 29~~subsidiaries, ~~2021,~~ the ~~Remanded~~Plaintiffs ~~Arbitration~~may ~~order~~take ~~was~~out ~~issued by~~a ~~the~~judgment ~~Arbitrator;~~in ~~AEXG was awarded (i) $3,300,000 as~~ the ~~economic~~amount ~~value~~ of the ~~warrants~~claim plus ~~accrued simple~~ interest ~~at 9% from~~of ~~December~~ 3,% ~~2018~~per ~~and~~annum ~~(ii) $550,320 in legal fees; Generex does not agree with this award~~ and ~~shall~~costs ~~contest~~fixed ~~the~~at ~~arbitration award in court. In this quarter, the Company accrued an additional~~ $325,~~748,177~~000 towhich ~~recognize~~has ~~the~~been ~~conclusion~~accrued ofas ~~the arbitration award. As~~ of ~~January~~April 3130, 2021~~, the Company has made payments of $350,140, leaving a balance of $3,850,320 accrued related to this matter~~.

58On August 22, 2017, Generex received a letter from counsel for Three Brothers Trading LLC, d/b/a Alternative Execution Group (“AEXG”), claiming breach of a Memorandum of Understanding (“MOU”) between Generex and AEXG. The MOU related to AEXG referring potential financing candidate to Generex. The letter from AEXG counsel claimed that Generex’ acceptance of $3,000,000 in financing from Pharma Trials, LLC, in March 2017, violated the provisions of the MOU prohibiting Generex from seeking other financing, with certain exceptions, for a period of 60 days after execution of the MOU. AEXG has demanded at least $210,000 in cash and 84,000 warrants for Generex stock convertible at $2.50 per share, for attorney’s fees and costs. AEXG filed a demand for arbitration and on September 25, 2018 an arbitration hearing was held with an arbitrator from the American Arbitration Association’s International Centre for Dispute Resolution. On December 3, 2018, an arbitrator awarded AEXG an aggregate of $315,695 in damages, costs and fees as well as warrants exercisable for 84,000 shares of Generex Common Stock at an exercise price of $2.50 per share. AEXG filed a petition to confirm the arbitrator’s award in the United States District Court for the Southern District of New York. The petition includes a demand of $3,300,360 as the value of the warrants. The arbitrator did not award the specific amount of $3.5 million, but only liquidated damages in the amount of $210,000 and the value of 84,000 warrants “as of today” (the date of the award) plus attorney’s fees, certain costs, prejudgment and post-judgment interest (which continues to run on a daily basis) and arbitration fees. Generex has responded that the value of the warrants on the date of the award is $0 or some figure far less than the value calculated by AEXG. The petition to confirm the arbitrator’s award and Generex’ opposition were remanded by the Court to the arbitrator and returned for clarification. The arbitrator stated that he was unable to add any clarification, as he did not take evidence on the issue of warrant valuation. AEXG filed a petition and on April 24, 2020, the Court issued an Opinion and Order in the Litigation confirming the portions of the Arbitration Award regarding liquidated damages, pre-judgment interest, legal fees, and costs, but remanding to the Arbitrator for further proceedings the portion of the Arbitration Award relating to “the economic value today of 84,000 warrants convertible to Generex’ stock exercisable at $2.50 per share as of September 24, 2018” (the “Remanded Arbitration”). On September 18, 2020, the Court issued that AEXG recover from Generex the total sum of $384,771, which sum consists of $210,000 in liquidated damages, $93,304 in legal fees, $12,393 in arbitration fees, $3,313 in arbitration expenses, $65,762 in pre-judgment interest, and post-judgment interest at a rate established by 28 U.S.C § 1961 from September 18, 2020, until the judgment is satisfied, this judgement dealt only with the dollar fees portion, leaving still open the value of the warrants (the “Partial Judgement”). The parties settled and agreed to the terms of the Partial Judgment that included a payment schedule to which Generex has paid $200,000 in cash to date with the remaining balance being paid and retired in 30 days. The settlement terms do not apply, settle, or resolve in any manner the Remanded Arbitration or the issues pending therein, including, but not limited to, the economic value of the 84,000 warrants, Generex’ right to contest AEXG’s attorneys’ fees, or Generex’ right to contest the issue of who is the prevailing party for fees other than those fees awarded in the Arbitration Award. On January 29, 2021, the Remanded Arbitration order was issued by the Arbitrator; AEXG was awarded (i) $3,300,000 as the economic value of the warrants plus accrued simple interest at 9% from December 3, 2018 and (ii) $550,320 in legal fees. On January 29, 2021, the Remanded Arbitration order was issued by the Arbitrator; AEXG was awarded (i) $3,300,000 as the economic value of the warrants plus accrued simple interest at 9% from December 3, 2018 and (ii) $550,320 in legal fees. On April 7, 2021, Generex entered into a Settlement Agreement and Release with AEXG (the “Settlement”); under the terms of the Settlement, Generex agreed to pay $41,730 in legal fees and $3,300,000 as the warrants plus accrued simple interest at 9% from December 3, 2018. As of April 30, 2021, the Company accrued $4,595,899 related to this matter. The April 7, 2021 Settlement also included interest awarded to AEXG of approximately $790,000 that was accrued during the quarter ended April 30, 2021. The payment under the Settlement was due June 15, 2021, but not paid by Generex; Generex is working with AEXG to make such payment. The payment under the Settlement was due June 15, 2021, but not paid by Generex; Generex is working with AEXG to make such payment.

On June 28, 2018, the Company was named in respect of a claim by Burrard Pharmaceutical Enterprises Ltd. and Moa’yeri Kayhan for unspecified damages and other remedies issued by the Supreme Court of British Columbia. The claim is made in connection with one advanced against Burrard and Kayhan by Middle East Pharmaceutical Factory L.L.C., a foreign corporation, for fraudulent or negligent misrepresentation. Middle East alleges that it was misled by Burrard and Kayhan into believing that Burrard had rights to distribute Generex product in the Middle East. Burrard and Kayhan allege that they did have rights in that regard, which the Company denies. The matter remains at the pleadings stage and the Company is investigating the facts.

On October 26, 2018, Generex entered into a securities purchase agreement with Alpha Capital Anstalt (“Alpha”) pursuant to which a note due on October 26, 2019 was called for repayment in the principal amount of $682,000. On January 25, 2019, Generex received a letter from Alpha’s counsel stating that the note was in default because Generex’s common ~~stock~~ stock was not listed on NASDAQ within 90 days after the issuance of the note. The letter demanded repayment in full. On ~~February~~ February 12, 2019, Alpha filed a lawsuit in the Supreme Court of New York, demanding the aggregate principal amount, default interest ~~and~~ and costs. Generex does not agree with Alpha’s legal demands and continues to defend the lawsuit. On March 25, 2021, Generex entered into a Settlement Agreement and Mutual Release with Alpha (the “Settlement”); under the terms of the Settlement, Generex agreed to pay Alpha $750,000. There was an additional $370,553 of accrued interest related to this note that the Company recognized as a gain on settlement of debt. On May 17, 2021, Generex paid $750,000 to Alpha.

On March 21, 2019, Compass Bank filed suit against NuGenerex Distributions Solutions 2, L.L.C. (“NDS”) in the District Court of Dallas County, Texas requesting damages of $3,413,000. This lawsuit is directly connected to assets that were supposed to be transferred to NDS from a third party, but never were transferred. Compass Bank had a lien on those certain assets that were supposed to be transferred into the ownership of NDS, a subsidiary of Generex. NDS and Generex shall continue to defend this legal matter. As of ~~January~~April 3130, 2021, the Company has accrued $3,416,695 related to this matter.

5958

On September 9, 2019 Generex and its subsidiary NuGenerex Distribution Solutions, LLC, and NuGenerex Distributions Solutions 2, LLC (jointly “NDS”) filed a litigation against Veneto, and the constituent entities, for fraud, breach of contract, and a motion for a temporary restraining order restraining the shares contemplated in the Asset Purchase Agreement (“APA”) (supra) for hiding their involvement in a massive healthcare fraud scheme, which is currently being prosecuted civilly by the federal government and filing to transfer assets specified in the APA. . Our motion for a temporary restraining order on transfer of shares we issued in connection with the acquisition of Veneto assets was denied by the Court of Chancery. Generex has continued to pursue claims against Veneto and its principals in a separate arbitration. In a related action, our transfer agent for our common stock was sued for failure to process a transfer of the shares issued pursuant to the APA. This suit was brought in the United States District Court for the Eastern District of New York. Generex was not named in the suit, but our transfer agent notified us of our obligation to indemnify them pursuant to our agreement with the transfer agent. The action against the transfer agent was dismissed with prejudice and on consent on November 25, 2019. As of this filing, Generex’s arbitration against Veneto and its principals is still active.

On December 2, 2019, the Company was named as a respondent in an arbitration brought by KSKZ Management, LLC before the American ~~Arbitration~~ Arbitration Association in Texas. The Claimant alleges that the Company breached a consulting agreement that purportedly obligated the Company to pay claimant a monthly consulting fee for three years. Kevin Kuykendall is the manager and a member of Claimant. Claimant is seeking approximately $3,450,000 in unpaid consulting fees allegedly due. The Company is vigorously ~~defending~~ defending itself and has filed counterclaims against Claimant. The Company believes that the likelihood of an unfavorable outcome is remote and as result has not accrued anything for this claim.

On February 18, 2020, the Company was named as a defendant in an action brought by Discover Growth Fund, LLC (“Discover”) in the United States District Court for the District of Delaware. The plaintiff alleges that the Company breached a Purchase Agreement and Promissory Note and seeks $2,475,000 in damages. The plaintiff also filed a confession of judgment in support of its claim. On May 4, 2020, the District Court entered judgment against the Company in the amount of $2,200,000. Counsel for Generex and Discover have engaged in settlement discussions. In addition, on August 20, 2020, the Company was named as a defendant in an action brought by Discover in the Court of Chancery of the State of Delaware. The complaint alleges that the Company breached a Purchase Agreement, ~~Promissory~~ Promissory Note and Transfer Agent Instructions and seeks to compel the Company to honor notices of conversion from Discover and issue it shares pursuant to the Purchase Agreement and Promissory Note. Discover has since dropped the Delaware case ~~without~~ without prejudice. The Company has accrued approximately $2,500,000 asrelated ofto ~~January~~this ~~31, 2021~~claim. Several months ago, Discover was awarded $2,200,000 via a confession of judgment award, along with legal fees of $53,312 against Generex and personally, its CEO, Joseph Moscato. On February 19, 2021, Generex paid $2,253,312 to Discover to fully satisfy the judgement; no stock was exchanged to satisfy this judgment.

60On April 20, 2021, the Company was named as a defendant in an action brought by Quantum Media Group, LLC (“Quantum”) in the Supreme Court of the State of New York County of New York. The complaint alleges that the Company breached a service contract. Quantum claims entitlement to $102,260 in service payments. The Company has filed a motion to dismiss the case for failure to state a cause of action, and it intends to vigorously defend the case. The Company has accrued the total amount of the claim.

Item 1A. Risk Factors.

Generex is a smaller reporting company defined by Rule 12b-2 of the Exchange Act and not required to provide Risk Factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Between August 7, 2020 and October 13, 2020, the Company converted $838,622 of principal and $41,733 of interest and $255,000 of default penalties into 5,860,255 shares of common stock.

Between September 24, 2020 and January 31, 2021, the Company exercised put options pursuant to an Equity Purchase Agreement with an investor for an aggregate of 6,350,000 shares of Generex common stock for $1,164,616 of net proceeds.

In November 2020, the Company issued 284,900 shares of common stock to consultants in connection with the offering.

On February 1, 2020, the company fully converted a promissory note with a balance of $90,000 of principal and $9,490 of interest into 255,104 shares of common stock.

On February 24, 2021, the Company issued 750,000 shares of common stock to Oasis for net proceeds of $271,874.

On March 4, 2021, the Company issued 750,000 shares of common stock to Oasis for net proceeds of $175,964 which went directly towards repaying an outstanding note with Oasis.

On March 9, 2021, the Company ~~issued~~sold 500,000 shares of common stock to Oasis for net proceeds of $144,224 which went directly towards repaying an outstanding note with Oasis.

On March 30, 2021, the Company sold 300,000 shares of common stock to Oasis for net proceeds of $74,120.

On April 12, 2021, the Company sold 300,000 shares of common stock to Oasis for net proceeds of $68,324.

On April 23, 2021, the Company sold 300,000 shares of common stock to Oasis for net proceeds of $71,084 which went directly towards repaying an outstanding note with Oasis.

Item 3. Defaults Upon Senior Securities.

Reference is made to Item 1 - Legal Proceedings, above for a description of claims relating to the Note held by Alpha Capital Anstalt.

Item 5. Other Information.

None

6160

Item 6. Exhibits.

EXHIBIT INDEX

Exhibit Number		Description of Exhibit
3.1		Restated Certificate of Incorporation (incorporated by reference to Exhibit 3 to 10-K filed October 9, 2015)
3.2		Certificate of Amendment to Restated Certificate of Incorporation of Generex Biotechnology Corporation (incorporated by reference to Exhibit 3(i)(f) to Registration Statement on Form S-1 (File No. 333-187656) filed on April 1, 2013)
3.3		Amended and Restated By-Laws (incorporated by reference to Exhibit 3.2(ii) to Generex Biotechnology Corporation’s Report on Form 8-K filed December 5, 2007)
3.4		Certificate of Designation of Series A Preferred Stock
4.1		Form of Series A Warrant (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed August 7, 2020)
4.2		Form of Series B Warrant (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed August 7, 2020)
4.3		Form of Series C Warrant (incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K filed August 7, 2020)
4.4		Form of Series D Warrant (incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K filed August 7, 2020)
4.5		Registration Rights Agreement among Generex Biotechnology Corporation and each other party a signatory thereto (incorporated by reference to Exhibit 4.5 to Current Report on Form 8-K filed August 7, 2020)
5.1		Opinion of Carmel, Milazzo & Feil LLP (to be filed by amendment)
10.1		Amendment to Asset Purchase Agreement by and between Veneto Holdings, L.L.C. and NuGenerex Distribution Solutions 2, LLC effective November 1, 2018 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on November 5, 2018).
10.2		Clinical Trial Agreement between NSABP Foundation, Inc. and NGIO, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on November 26, 2018)
10.3		Form of Stock Control Agreement among the Company, Lawrence Salvo, Stephen L. Berkman, Joseph Moscato and B-H Sanford, LLC. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on December 3, 2018)
10.4		Form of Agreement, Assignment and Release among the Company, Hema Diagnostic Systems, LLC and Stephen L. Berkman. (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Current Report on Form 8-K filed on December 3, 2018)
10.5		Form of Stock Pledge Agreement between Joseph Moscato and Istvan Elek dated November 25, 2018. (incorporated by reference to Exhibit 10.1 to Generex Biotechnology Corporation’s Current Report on Form 8-K filed on December 3, 2018)
10.6		Stock Purchase Agreement between Regentys Corporation and Generex Biotechnology Corporation as of January 7, 2019. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 11, 2019)
10.7		Promissory Note issued by Generex Biotechnology Corporation to Regentys Corporation. (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on January 11, 2019)
10.8		Pledge and Security Agreement between Generex Biotechnology Corporation and Regentys Corporation. (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on January 11, 2019)
10.9		Pledge and Security Agreement between Generex Biotechnology Corporation and Regentys Corporation. (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K filed on January 11, 2019)
10.10		Management Services Agreement among Regentys Corporation and its officers. (incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K filed on January 11, 2019)
10.11		Stock Purchase Agreement between Olaregen Therapeutix, Inc. and Generex Biotechnology Corporation as of January 7, 2019. (incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K filed on January 11, 2019)
10.12		Stock Purchase Agreement between Olaregen Therapeutix, Inc. and Generex Biotechnology Corporation as of January 7, 2019. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 11, 2019)
10.13		Promissory Note issued to Olaregen. (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on January 11, 2019)
10.14		Pledge and Security Agreement between Generex Biotechnology Corporation and Olaregen (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on January 11, 2019)
10.15		Amended and Restated Investor Rights Agreement of Olaregen (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K filed on January 11, 2019)
10.16		Amendment Agreement by and between Veneto Holdings, L.L.C., Generex Biotechnology Corporation, NuGenerex Distribution Solutions 2, LLC and the members of Veneto Holdings, L.L.C. effective January 15, 2019 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on January 22, 2019)
10.17		Restructuring Agreement by and between Veneto Holdings, L.L.C., Generex Biotechnology Corporation, NuGenerex Distribution Solutions 2, LLC and the members of Veneto Holdings, L.L.C. dated March 28, 2019 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 4, 2019)
10.18		Asset Purchase Agreement by and among Medisource Partners, LLC, Generex Biotechnology Corporation and NuGenerex Distribution Solutions, LLC, dated July 11, 2019 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on July 16, 2019)
10.19		Asset Purchase Agreement by and among Pantheon Medical - Foot & Ankle, LLC, Generex Biotechnology Corporation and NuGenerex Distribution Solutions, LLC, dated July 11, 2019 (incorporated by reference to Current Report on Form 8-K filed on July 16, 2019)
10.20		Stock Purchase Agreement by and between Generex Biotechnology Corporation and GH Care, Inc. DBA ALTuCELL, Inc., effective as of November 15, 2019 (incorporated by reference to 8-K filed November 27, 2019)
10.21		Equity Purchase Agreement between the Company and Oasis (incorporated by reference to Exhibit 10.21 to Registration Statement on Form S-1 (File No. 333-236481) filed on February 18, 2020)
10.22		Registration Rights Agreement between the Company and Oasis (incorporated by reference to Exhibit 10.22 to Registration Statement on Form S-1 (File No. 333-236481) filed on February 18, 2020)
10.23		Purchase Agreement between the Company and Discover (incorporated by reference to Exhibit 10.23 to Registration Statement on Form S-1 (File No. 333-236481) filed on February 18, 2020)
10.24		Amendment Agreement between the Company and ALTuCELL (incorporated by reference to 8-K filed January 28, 2020)
10.25		Securities Purchase Agreement between the Company and Auctus (incorporated by reference to Exhibit 10.25 to Registration Statement on Form S-1 (File No. 333-236481) filed on February 18, 2020)
10.26		Registration Rights Agreement between the Company and Auctus (incorporated by reference to Exhibit 10.26 to Registration Statement on Form S-1 (File No. 333-236481) filed on February 18, 2020)
10.27		Warrant issued by the Company to Auctus (incorporated by reference to Exhibit 10.27 to Registration Statement on Form S-1 (File No. 333-236481) filed on February 18, 2020)
10.28		Collaboration Agreement, dated February 28, 2020 among the Company, Beijing Zhonghua Investment Fund Management Co., LTD and Sinotek-Advocates International Industry Development (Shenzhen) Co., Ltd. (incorporated by reference to 8-K filed March 2, 2020)
10.29		Purchase Agreement between the Company and BHP Capital (incorporated by reference to Exhibit 10.92 to Current Report on Form 10-Q filed on March 20, 2020)
10.30		Purchase Agreement between the Company and Jefferson Street Capital (incorporated by reference to Exhibit 10.93 to Current Report on Form 10-Q filed on March 20, 2020)
10.31		Purchase Agreement between the Company and Platinum Point Capital (incorporated by reference to Exhibit 10.94 to Current Report on Form 10-Q filed on March 20, 2020)
10.32		Purchase Agreement between the Company and Group 10 Holdings (incorporated by reference to Exhibit 10.95 to Current Report on Form 10-Q filed on March 20, 2020)
10.33		Master Services Agreement, dated March 3, 2020, between the Company and EpiVax, Inc. (incorporated by reference to 8-K filed March 17, 2020)
10.34		Laboratory Services Agreement and Statement of Work Agreement between Generex Biotechnology Corporation and Cellular Technology Limited dated June 2, 2020 (incorporated by reference to 8-K filed June 8, 2020).
10.35		Clinical Trial Collaboration and Supply Agreement. Merck Sharp & Dohme B.V., Antigen Express, Inc. June 28, 2017 (incorporated by reference to 8-K filed August 1, 2017).
10.36		Clinical Trial Agreement, Phase II Study, NSABP and Antigen Express, November 20, 2018 (incorporated by reference to 8-K filed November 26, 2018)
10.37		License and Research Agreement between Antigen Express, Inc. and Shenzhen Bioscien Pharmaceuticals Co., Ltd. November 29, 2017 (incorporated by reference to 8-K filed December 11, 2017)
10.38		Purchase Agreement between the Company and Firstfire Global Opportunities Fund LLC. (incorporated by reference to Exhibit 10.38 to 10-K filed November 13, 2020)
10.39		Promissory Note dated May 4, 2020 made to Michael Caridi (incorporated by reference to 8-K filed June 22, 2020
10.40		Promissory Note dated May 4, 2020 made to Michael Caridi (incorporated by reference to 8-K filed June 22, 2020
10.41		Securities Purchase Agreement dated August 4, 2020 among Generex Biotechnology Corporation and each other party a signatory thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 7, 2020)
10.42		Securities Purchase Agreement dated as of June 25, 2020 between FirstFire Global Opportunities Fund, LLC and Generex Biotechnology Corporation (incorporated by reference to Exhibit 10.35 to Registration Statement on Form S-1/A filed on September 3, 2020)
10.43		Registration Rights Agreement dated as of June 25, 2020 between FirstFire Global Opportunities Fund, LLC and Generex Biotechnology Corporation (incorporated by reference to Exhibit 10.36 to Registration Statement on Form S-1/A filed on September 3, 2020)
10.44		Promissory Note dated June 25, 2020 issued to FirstFire Global Opportunities Fund, LLC (incorporated by reference to Exhibit 10.37 to Registration Statement on Form S-1/A filed on September 3, 2020)
10.45		Laboratory Services Agreement (incorporated by reference to 8-K filed June 8, 2020)
10.46		Appendix A Statement of Work (incorporated by reference to 8-K filed June 8, 2020)
10.47		Note Settlement Agreement between Iliad Research and Trading, L.P. and Generex Biotechnology Corporation (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 11, 2020)
10.48		Joint Venture Operating Agreement to Form NuGenHealth LLC dated August 25, 2020 between Generex Biotechnology Corporation’s wholly owned subsidiary NuGenerex Health LLC and Worldwide Digitech, LLC (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed August 31, 2020)
10.49		Heads of Agreement dated September 18, 2020 between Generex Biotechnology Corporation and its majority owned entity NuGenerex Immuno-Oncology, Inc. and Bintai Kinden Corporation of Malaysia (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed September 24, 2020)
10.50		Service Agreement dated September 24, 2020 between NuGenHealth, LLC, a subsidiary of Generex Biotechnology Corporation and Paradise Valley Family Medicine, P.C. (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed September 25, 2020)
10.51		Distribution and Licensing Agreement dated October 5, 2020 between Generex Biotechnology Corporation and its majority owned entity NuGenerex Immuno-Oncology, Inc. and Bintai Healthcare SDN BHD, a subsidiary of Bintai Kinden Corporation Berhad of Malaysia (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed October 9, 2020)
10.52		Framework Agreement on Cooperative Development of Coronavirus Peptide Vaccine dated October 30, 2020 between Generex Biotechnology Corporation and its majority owned entity NuGenerex Immuno-Oncology, Inc. and Beijing Youfeng International Consulting Co., Ltd, Chinese Centre for Disease Control and Prevention National Institute for Viral Disease Control and Prevention (NIVDC) and Beijing Guoxin Haixiang Equity Investment Partnership (Limited Partnership) (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed November 5, 2020)
10.53		The Ii-Key Innovative Vaccine Development Agreement dated November 13, 2020 between Generex Biotechnology Corporation and its majority owned entity NuGenerex Immuno-Oncology, Inc. and Beijing Youfeng International Consulting Co., Ltd, National Institute for Viral Disease Control and Prevention, Chinese Centre for Disease Control and Prevention and Beijing Guoxin Haixiang Equity Investment Partnership (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed November 18, 2020)
10.54		The Ii-Key Innovative Flu Vaccine Development Agreement dated November 13, 2020 between Generex Biotechnology Corporation and its majority owned entity NuGenerex Immuno-Oncology, Inc. and Beijing Youfeng International Consulting Co., Ltd, National Institute for Viral Disease Control and Prevention, Chinese Centre for Disease Control and Prevention and Beijing Guoxin Haixiang Equity Investment Partnership (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed November 19, 2020
10.55		Non-binding Memorandum of Understanding (MOU) dated November 23, 2020 between Generex Biotechnology Corporation and its majority owned entity NuGenerex Immuno-Oncology, Inc. and Bintai Healthcare SDN. BHD., a subsidiary of Bintai Kinden Corporation Berhad (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed November 25, 2020)
10.56		The Performance Guarantee Fee Agreement signed January 6, 2021 between Generex Biotechnology Corporation and its majority owned entity NuGenerex Immuno-Oncology, Inc. and Beijing Youfend Biological Technology Co. LTD (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed January 8, 2021)
10.57		GNBT Instruction Letter to transfer agent, Securities Transfer Corporation signed February 1, 2021 (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed February 2, 2021)
10.59		Securities Purchase Agreement dated February 17, 2021 (incorporated by reference to 8-K filed February 23, 2021)
21.1		Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to 10-K filed November 30, 2020)
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**
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

* Management contract or management compensatory plan or arrangement.

** Filed herewith

(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.

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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
	(Registrant)
Date: March 17, 2021	By:	/s/ Joseph Moscato
Date: June 21, 2021	By:	/s/ Joseph Moscato
		Joseph Moscato
		President and Chief Executive Officer
Date: March 17, 2021	By:	/s/ Mark Corrao
Date: June 21, 2021	By:	/s/ Mark Corrao
		Mark Corrao
		Chief Financial Officer

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