FORM 10-KSB/A
                                 AMENDMENT NO. 1

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 2004

                          Commission file No. 000-27237



                                 GeneThera, Inc.
    ------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Florida                                       66-0622463
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

3930 Youngfield Street, Wheat Ridge, CO                 80033
(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code   (303) 463-6371

Securities registered pursuant to Section 12(b) of the Exchange Act: NONE

   Securities registered pursuant to Section 12(g) of the Exchange Act: Common
                             Stock, $.001 per share

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

Yes |X| No |_|

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained herein, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |_|

The issuer's revenues for its most recent fiscal year was $25,496.

The aggregate market value of the issuer's voting stock held by non-affiliates
of the issuer as of February 28, 2005 was $8,148,438.

The number of shares outstanding as of the issuer's common stock as of March 31,
2005 was 20,761,406.

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DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format:
Yes |_| No  |X|

<PAGE>

                                EXPLANATORY NOTE

      Genethera, Inc. ("Genethera" or the "Company") is filing this amendment to
its Annual Report on Form 10-KSB/A for the year ended December 31, 2004 (this
"Amendment") to reflect the restatement of its Consolidated Financial Statements
for the year ended December 31, 2003 and the interim periods ended March 31,
June 30, and September 30, for 2003 to reflect adjustments in the accounting for
the February 25, 2002 recapitalization of the Company determined to be necessary
by the Company. This restatement is limited to adjustments in accumulated
deficit and paid-in-capital in connection with the February 2002
recapitalization. For a more detailed description of the restatement see Note 10
to the accompanying consolidated financial statements. The Annual Report on Form
10-KSB for the year ended December 31, 2004 was initially filed with the
Securities and Exchange Commission ("SEC") on March 31, 2005 (the "Originally
Filed 10-KSB").

      This Amendment also includes additional notes to the Company's
Consolidated Financial Statements (Notes 15-17) not included in the Originally
Filed 10-KSB that the Company determined were necessary in connection with
responding to comments of the Division of Corporation Finance of the Securities
and Exchange Commission. In addition, this Amendment corrects certain errors
regarding dates of employment in Item 9 and regarding exhibits listed in the
exhibit index in Item 13.

         We have not amended and do not intend to amend our other previously
filed annual reports on Form 10-KSB or our quarterly reports on Form 10-QSB for
the periods affected by the restatement or adjustments. For this reason, the
consolidated financial statements and related financial information contained in
such previously filed reports should no longer be relied upon. All the
information in this Form 10-KSB/A is as of December 31, 2004 and does not
reflect any subsequent information or events other than as discussed above.

      This Form 10-KSB/A only amends and restates Items 6, 7, 9, 11 and 13 of
the Originally Filed 10-KSB in each case, solely as a result of, and to reflect,
the corrections discussed above and, except for such items and Exhibits 23.1,
31.1, 31.2, 32.1 and 32.2, no other information in the Originally Filed 10-KSB
is amended hereby. The foregoing items have not been updated to reflect other
events occurring after the Originally Filed 10-KSB or to modify or update those
disclosures affected by subsequent events. There have been no changes to any
other items in the Originally Filed 10-KSB, but such previous disclosure is
included herein for the reader's convenience.

      In addition, pursuant to rules of the SEC, Item 13 of Part IV of the
Originally Filed 10-KSB has been amended to contain currently-dated certificates
from the Company's Chief Executive Officer and Chief Financial Officer, as
required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The
certifications of the Company's Chief Executive Officer and Chief Financial
Officer are attached to this Form 10-KSB/A as Exhibits 31.1, 31.2, 32.1 and
32.2.

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FORWARD-LOOKING AND CAUTIONARY STATEMENTS

Sections of this Form 10-KSB, including the Management's Discussion and Analysis
or Plan of Operation, contain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
Section 21E of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and the Private Securities Litigation Reform Act of 1995, as
amended. These forward-looking statements are subject to risks and uncertainties
and other factors that may cause our actual results, performance or achievements
to be materially different from the results, performance or achievements
expressed or implied by the forward-looking statements. You should not unduly
rely on these statements. Forward-looking statements involve assumptions and
describe our plans, strategies, and expectations. You can generally identify a
forward-looking statement by words such as "may," "will," "should," "would,"
could," "plan," "goal," "potential," "expect," "anticipate," "estimate,"
"believe," "intend," "project," and similar words and variations thereof. This
report contains forward-looking statements that address, among other things,

* our financing plans,
* regulatory environments in which we operate or plan to operate, and
* trends affecting our financial condition or results of operations, the impact
of competition, the start-up of certain operations and acquisition
opportunities.

Factors, risks, and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements ("Cautionary
Statements") include, among others,

* our ability to raise capital,
* our ability to execute our business strategy in a very competitive
environment,
* our degree of financial leverage,
* risks associated with our acquiring and integrating companies into our own,
* risks relating to rapidly developing technology,
* regulatory considerations;
* risks related to international economies,
* risks related to market acceptance and demand for our products and services,
* the impact of competitive services and pricing, and
* other risks referenced from time to time in our SEC filings.

All subsequent written and oral forward-looking statements attributable to us,
or anyone acting on our behalf, are expressly qualified in their entirety by the
cautionary statements. We do not undertake any obligations to publicly release
any revisions to any forward-looking statements to reflect events or
circumstances after the date of this report or to reflect unanticipated events
that may occur.

<PAGE>

 PART I.

Item 1. Description of Business

GeneThera, Inc. ("we" or "the Company"), formerly known as Hand Brand
Distribution, Inc., was incorporated in November 1995, under the laws of the
State of Florida. Our Common Stock currently trades on the Over-the-Counter
Bulletin Board ("OTC") under the symbol GTHA. Our executive offices are located
at 3930 Youngfield Street, Wheat Ridge, Colorado 80033 and our telephone number
is 303-463-6371.

For the fiscal year 2004 the Company had two subsidiaries, GeneThera, Inc., a
Colorado corporation,("GeneThera"), and VDx, Inc.("VDX"), a Wisconsin
Corporation. GeneThera's business is based on its Integrated Technology Platform
(ITP) that combines a proprietary diagnostic solution called Gene Expression
Assay (GEA(TM)) with PURIVAX(TM), its system for analyzing large-scale DNA
sequencing. A manufacturer and distributor of veterinary diagnostic equipment
and tests, VDx currently markets and sells specialized tests for bovine IgG,
NEFA for the dairy industry, and Equine IgG. VDx has already made a significant
impact within the dairy cattle industry with their NEFA test and nutritional
supplement program to maximize output for the dairy farmer. The NEFA test offers
farmers the ability to test the health and nutrition of their cattle before
giving birth and also test the health of the new calves once born. Future milk
output from dairy cattle is directly affected by the nutrition just prior to
calving.

The Company is a biotechnology company that, through GeneThera, develops
molecular assays and is currently in the process of developing therapeutic
vaccines for the detection and prevention of food contaminating pathogens,
veterinary diseases, and diseases affecting human health.

GeneThera, Inc. was considered to be in the development stage for the year ended
December 31, 2004, and the accompanying comparative financial statements
represent those of a development stage company for that year. Activity during
the development stage included organization of the Company, and implementation
and revision of our business plan.

GeneThera's business is based on its Integrated Technology Platform (ITP) that
combines a proprietary diagnostic solution called Gene Expression Assay
(GEA(TM)) with PURIVAX(TM), its system for analyzing large-scale DNA sequencing.
The first part of this platform is the ongoing development of molecular
diagnostic assays solutions using Real Time Fluorogenic Polymerase Chain
Reaction (F-PCR) technology to detect the presence of infectious disease from
the blood of live animals. The second part of the ITP is the development of
therapeutic vaccines using RNA interference technology. It also allows for the
efficient, effective, and continuous testing, management and treatment of animal
populations. These facts distinguish the technology from any alternative testing
and management methodology available to agriculture today -- all of which
require the destruction of individual animals and even entire herds. Our testing
and data analysis processes also allow us not only to separate infected from
clean animals, but also to gain knowledge vital to development of preventative
vaccines.

To date, GeneThera has successfully developed the ability to detect Chronic
Wasting Disease, a disease affecting elk and deer in North America. GeneThera
has also successfully developed an assay for the detection of Mad Cow Disease, a
disease recently found in the United States, but has been in Europe for many
years. Chronic Wasting Disease and Mad Cow Disease are both in the family of
diseases called Transmissible Spongiform Encephalopathy (TSE). Diagnostic assays
for E.coli O157:H7 and Johnne's Disease are in the final stages of development.
Vaccines for Chronic Wasting Disease and E.coli O157:H7 are in advanced stages
of development.



<PAGE>


Government Regulations

GeneThera's unique approach to the testing for various diseases allows it to
begin commercialization of its diagnostic tests without the need for a long and
enduring approval process from the USDA. All tests are done utilizing the blood
of animals that can be collected in the field using the Company's proprietary
Field Collection System (FCS). The collected blood is then sent to GeneThera's
laboratory for testing. Since all of the testing for the diseases is done "in
house," meaning tested at laboratories operated by GeneThera and using GeneThera
developed testing methods, the USDA deems GeneThera's test to be under the
category of Veterinary Services. The regulations on Veterinary Services are much
different than that of third party testing. GeneThera's test is not a kit.

The Center for Biologics Evaluation and Research (CBER) regulates human gene
therapy products - products that introduce genetic material into the body to
replace faulty or missing genetic material, thus treating or curing a disease or
abnormal medical condition. CBER uses both the Public Health Service Act and the
Federal Food Drug and Cosmetic Act as enabling statutes for oversight. FDA has
not yet approved any human gene therapy product for sale. However, the FDA is
actively involved in overseeing this activity.

VDx, Inc.

In September 2004, the Company acquired VDx, Inc., a manufacturer and
distributor of veterinary diagnostic equipment and tests; VDx currently markets
and sells specialized tests for bovine IgG, NEFA for the dairy industry, and
Equine IgG. The NEFA test offers farmers the ability to test the health and
nutrition of their cattle before giving birth and also test the health of the
new calves once born. Future milk output from dairy cattle is directly affected
by the nutrition just prior to calving.

Product Selection and Supply

VDX does not have any long term supply contracts with the manufacturers of our
products. We believe that virtually all of the products we offer are available
from several sources and have not experienced any inability to obtain products
in the past.

Distribution

VDX distributes its products through a sales force of independent distributors
and direct sales. The Company does not rely on any one customer or a few major
customers for a significant part of its revenues.


Product Liability Insurance

VDX, like other distributors and retailers of products that are ingested, faces
an inherent risk of exposure to product liability claims if, among other things,
the use of its products results in injury. VDX does not currently have product
liability insurance for these products. VDX requires that each of our suppliers
provide the Company with certificates of insurance evidencing policies of
product liability insurance that are adequate in scope and amount based upon
industry standards. Nevertheless, such policies of insurance do not extend such
coverage to the Company and the Company's agreements with such suppliers do not
provide indemnification by the suppliers of any losses incurred by the Company
arising out of any product liability claims.

<PAGE>

Employees

As of February 28, 2005, the Company had a total of five (5) full-time employees
and three (3) part-time employees who devote substantial effort on the Company's
behalf. None of the employees of the Company are represented by a collective
bargaining unit.

Risk Factors

We encounter various risks related to our business and our industry. These
include the following risks.

Development Stage Company

We have a history of losses and may never become profitable. Our primary
subsidiary, GeneThera, Inc., is a development stage company. As such, GeneThera,
Inc. will continue to incur high research and development expenses and may not
generate significant revenue with the Company's launch of its CWD and Mad Cow
Disease diagnostic assay. There can be no assurance that the Company will become
profitable.

The Loss of Key Personnel Could Adversely Affect the Company

The Company depends to a large part on the efforts and continued employment of
Antonio Milici, M.D., Ph.D., our President and Chief Executive Officer. The loss
of the services of Dr. Milici could adversely affect our business.

Rapid Growth May Place Significant Demands on our Resources

We expect significant expansion of our operations. Our anticipated future growth
will place a significant demand on our managerial, operational and financial
resources due to:

* the need to manage relationships with various strategic partners and other
third parties;

* difficulties in hiring and retaining skilled personnel necessary to support
our business;

* the need to train and manage a growing employee base; and

* pressures for the continued development of our financial and information
management systems.

If we have not made adequate allowances for the costs and risks associated with
this expansion or if our systems, procedures or controls are not adequate to
support our operations, our business could be harmed.

Government Regulation

The Company is subject to or affected by laws and regulations that govern, for
example: (i) the vaccination of animals for certain diseases. The failure to
comply with these laws and regulations, or to obtain applicable governmental
approvals, could result in the imposition of penalties, cause delays in, or make
impossible, the marketing of our products and services.

<PAGE>

Item 2. Description of Property

We lease a 5,730 square foot biotechnology laboratory located at 3930 Youngfield
Street, Wheat Ridge, Colorado 80033. The lease expires in January 2006 and the
rent is $5,235.26 per month. We believe that our existing facilities are
adequate to meet our current requirements. We do not own any real property. If
we are able to develop assays for different diseases, we intend to formalize the
procedure into a commercial application through a series of laboratories to be
owned and operated by GeneThera. Currently we do not have the funds to purchase
or construct any such laboratories and do not have a commitment from any party
to provide the funds for a laboratory.


Item 3. Legal Proceedings

On or about July 23, 2004, Sisu Media sued the Company in Jefferson County
District Court for breach of an alleged contract for website services for which
the plaintiff seeks compensatory damages equal to the contract price or the
reasonable value of services it claims to have performed. Plaintiff seeks
approximately $61,000.00 plus the value of 14,706 shares of common stock in the
Company, plus costs, interest, attorney's fees in amounts to be determined at
trial. The Company believes that the plaintiff's claims have no merit and will
defend the claims. The Company has filed its answer denying the claims and has
asserted a counterclaim that Sisu Media aided and abetted a breach of fiduciary
duty by a third party, Gary Langstaff, with damages to be determined at trial. A
three-day jury trial is set to begin on June 21, 2005. The case is currently in
the discovery stage.

On or about August 5, 2004, Gary Langstaff, Nick Wollner and Springloose.com,
LLC sued the Company in Jefferson County District Court to gain access to
corporate records and seeking an accounting, a declaratory judgment determining
their status as shareholders, and alleging unpaid wages owed to Mr. Langstaff
and Mr. Wollner as employees in the amounts of $60,000.00 and $18,000.00
respectively, plus costs, interest, expert fees and attorney's fees in amounts
to be determined at trial. GeneThera has denied the claims and filed a
counterclaim for breach of fiduciary duty by both Langstaff and Wollner causing
unspecified damages, which include the expense of defending this action and the
action involving Sisu Media in the same jurisdiction. A four-day trial to the
court is set to begin July 26, 2005. The case is currently in the discovery
stage.

CIT Technology Financing Services, Inc. has sued the Company in Jefferson County
District Court seeking approximately $28,000 as the alleged past due balance of
an equipment lease, plus interest, costs and attorney fees. The Company has
denied the claim and filed a counterclaim for recovery of treble damages plus
costs and attorney fees for theft against the plaintiff based upon the conduct
of plaintiff's designated collections agent. Colorado has recently instituted an
electronic filing system in the courts for the filing of pleadings. Because of
an error in this system, the plaintiff CIT was able to obtain a default judgment
against the company. The company has filed a motion to set aside the default and
believes it will be granted. The court has not yet ruled upon the motion. The
company's counsel and CIT's counsel have initiated settlement discussions.

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

None

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 PART II.

Item 5. Market For Common Equity And Related Shareholder Matters
Our common stock currently trades on the Over The Counter Bulletin Board under
the symbol GTHA. The following sets forth the range of high and low bid
quotations for the periods indicated as reported by AlphaTrade. Such quotations
reflect prices between dealers, without retail mark-up, markdown or commission,
and may not represent actual transactions.


       Year                Quarter           High              Low
       ------------------- ----------------- ----------------- -----------------

       2004                Fourth           $1.94             $0.88
                           Third             1.60              0.70
                           Second            2.85              0.90
                           First             4.39              2.05

       2003                Fourth            3.42              1.55
                           Third             2.40              0.89
                           Second            1.70              0.35
                           First             1.55              0.60

       2002                Fourth            3.10              0.95
                           Third             3.48              1.00
                           Second            2.325             0.70

*Source AlphaTrade

There are no restrictions on the payment of dividends. We have paid no dividends
to date and none are anticipated. There were approximately 138 record holders of
common stock as of March 1, 2005.

DIVIDENDS

We have not paid or declared any dividends on our common stock and we do not
anticipate paying dividends on our common stock in the foreseeable future.


<PAGE>



Item 6. Management's Discussion and Analysis or Plan of Operation


You should read the following discussion of our results and plan of operation in
conjunction with the consolidated financial statements and the notes thereto
appearing elsewhere in this Form 10-KSB/A. Statements in this Management's
Discussion and Analysis or Plan of Operation that are not statements of
historical or current objective fact are "forward-looking statements."

OVERVIEW

We are a development stage company (as such term is defined by the Securities
and Exchange Commission ("SEC") and Generally Accepted Accounting Principles)
and have had negligible revenues from operations in the last two years. As a
development stage company, our research and development expenditures have not
been capitalized as of this date.

We have developed proprietary diagnostic assays for use in the agricultural and
veterinary markets. Specific assays for Chronic Wasting Disease (among elk and
deer) and Mad Cow Disease (among cattle) have been developed and are available
currently on a limited basis. E.coli (predominantly cattle) and Johnne's disease
(predominantly cattle and bison) diagnostics are in development. With the
acquisition of VDx, Inc., we have a commercial non-essential fatty acid, or
NEFA, test currently available. We are also working on vaccine solutions to meet
the growing demands of today's veterinary industry and tomorrow's agriculture
and healthcare industries. The Company is organized and operated both to
continually apply its scientific research to more effective management of
diseases and, in so doing, realize the commercial potential of molecular
biotechnology.

We are engaged primarily in research and development activities. We have not
generated significant operating revenues, and as of December 31, 2004 we had
incurred a cumulative net loss from inception of $10,540,830. Our ability to
generate substantial operating revenue will depend on our ability to develop and
obtain approval for molecular assays and developing therapeutic vaccines for the
detection and prevention of food contaminating pathogens, veterinary diseases,
and diseases affecting human health.

Our independent auditors have expressed substantial doubt about our ability to
continue as a going concern in their report on our consolidated financial
statements for the fiscal year ended December 31, 2004. For the years ended
December 31, 2004 and 2003, our operating losses were $5,755,754 and $ 3,080,740
respectively. Our current liabilities exceeded current assets by $898,403 and
$1,268,620 for the years ended December 31, 2004 and 2003, respectively.
Currently, we have minimal revenues generated from operations, and, as of
December 31, 2004 we have an accumulated deficit of $10,540,830.

Although we recently completed an equity financing with gross proceeds of
approximately $1.1 million, we will require significant additional funding in
order to achieve our business plan. We believe that our current cash needs will
be able to sustain our proposed operations for 8-10 months. Over the next 18
months, in order to have the capability of achieving our business plan, we
believe that we will require at least $1,200,000 in additional funding. We will
attempt to raise these funds by means of one or more private offerings of debt
or equity securities or both. At this time, we have no commitments for
additional capital funds. Moreover, depending on the development and activities
of our business, and unforeseen and unanticipated events in our business, we may
require additional funding over the next twelve to eighteen months to develop
our business. This amount may exceed an additional $1,000,000 depending on cost
involved in the further development and commercialization of our products. In
such event, we may need immediate additional funding. Our capital requirements

<PAGE>

will depend on many factors including, but not limited to, the timing of further
development of assays to detect the presence of infectious disease from the
blood of live animals, our hiring of additional personnel, the applications for,
and receipt of, regulatory approvals for any veterinary vaccines that we may
develop, and other factors. Our inability to raise capital could impair our
ability to implement our business plan and may ultimately force us to cease
operations.

Over the next 12 months, we do not expect any significant purchases or sales of
plant or equipment or any significant changes in the number of our employees or
any off-balance sheet arrangements that will have any current or future effect
on our financial condition. Over the next 12 months, we have contractual
obligations of $137,103, primarily related to equipment, vehicles and rent.
These obligations total $373,538 over the next five years.

Over the next 12 months, we expect to spend a significant amount of our capital
on research and development activities relating to development and vaccine
design/development. If we are able to develop assays for different diseases, we
intend to formalize the procedure into a commercial application through a series
of laboratories to be owned and operated by GeneThera. To date, we have
introduced our diagnostic solution for Chronic Wasting Disease and Mad Cow
Disease on a very limited basis. We anticipate that significant funds will be
spent on research and development throughout the life of the Company, as this is
the source for new products to be introduced to the market. Our plan is to seek
new innovations in the biotechnology field. We may not be successful in
developing or validating any new assays or, if we are successful in developing
and validating any such assays, we may be unable to successfully commercialize
them or earn profits from sales of those assays. Furthermore, we may not be able
to design, develop, or successfully commercialize any vaccines as a result of
our research and development efforts.

RECENT DEVELOPMENTS

On September 20, 2004, we closed on the acquisition of VDx, Inc., a Wisconsin
corporation. VDx will be run as a wholly owned subsidiary of the Company. A
manufacturer and distributor of veterinary diagnostic equipment and tests, VDx
currently markets and sells specialized tests for bovine IgG, NEFA for the dairy
industry, and Equine IgG. VDx has already made a significant impact within the
dairy cattle industry with their NEFA test and nutritional supplement program to
maximize output for the dairy farmer. The NEFA test offers farmers the ability
to test the health and nutrition of their cattle before giving birth and also
test the health of the new calves once born. Future milk output from dairy
cattle is directly affected by the nutrition just prior to calving. We are
currently in the process of integrating VDx's operations into those of the
Company. We may not achieve the desired benefits from the acquisition of VDx.

On November 1, 2004, we entered into a Stategic Alliance Agreement with G. Gekko
Enterprises pursuant to which G. Gekko Enterprises will assist the Company in
identifying potential distributors and/or licensees and securing suitable
agreement with such parties. In exchange for such services, the Company issued
G. Gekko Enterprises 325,000 shares of its common stock. In addition, on
November 8, 2004, we sold 175,000 shares of our common stock to G. Gekko
Enterprises for an aggregate consideration of $250,000. The proceeds of such
sale will be used for working capital purposes.

On January 18, 2005, we issued 11,000 shares of our Series A Preferred Stock to
Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP and Monarch Pointe
Fund, Ltd. (the "Purchasers"), for $100 per share, or an aggregate of
$1,100,000. We also issued warrants to purchase an aggregate of 597,826 shares
of common stock at an exercise price of $0.92 per share, in consideration for
the aggregate proceeds of $1,100,000 to the Purchasers and Mercator Advisory
Group, LLC, an affiliate of the Purchasers. The warrants became exercisable on
January 18, 2005 and are exercisable for three years from their date of

<PAGE>

issuance. We paid a due diligence fee of $88,000 and legal expenses of $10,000
to Mercator Advisory Group, LLC.

In March 2005, we entered into a consulting agreement with 0711005 B.C. Ltd (the
"Marketing Consultant") pursuant to which the Marketing Consultant agreed to
provide us with certain marketing and public relations services in exchange for
the issuance of 1,375,000 shares of our common stock. These shares had a market
value of approximately $1,430,000 on the date of issuance, which our board
determined to be a reasonable amount for the marketing and public relations
services to be provided by the Marketing Consultant.

In February 2005, we hired Thomas M. Muenzberg as our Chief Operating Officer.
Prior to joining GeneThera, Mr. Muenzberg served in Small Business Commercial
Lending Services for Key Bank, N.A. from April 2003 until June 2005. Mr.
Muenzberg provided Private Client Group Consulting at TM Financial Group, LLC
from July 2001 to April 2003. He also worked at Charles Schwab & Co., Inc. from
March 2000 to July 2001.


RESULTS OF OPERATIONS

Fiscal Year Ending December 31, 2004 Compared to Fiscal Year Ending December 31,
2003

Personnel and professional expenses (consulting and professional fees and
salaries) increased to $1,654,650 for the fiscal year ending December 31, 2004
from $829,758 for the year ending December 31, 2003. Comparing the year ended
December 31, 2004 to the year ended December 31, 2003, expenses grew to
$4,490,434 from $2,603,547. Further development of our management team, as well
as increased professional, legal, and consulting fees incurred as part of the
VDx acquisition and preparation of our periodic and other filings with the
Securities and Exchange Commission also increased expenses in 2004.

We recorded a net loss of $5,755,754 for the year ended December 31, 2004
compared to $3,080,740 for the year ended December 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

We had a cash balance of $7,402 as of December 31, 2004 and a cash balance of
$-0- as of December 31, 2003. As of January 31, 2005, we had a cash balance of
$827,366 as a result of the sale of our Series A Preferred Stock to the
Purchasers on January 18, 2005. Our current cash balance is not sufficient to
fund our business objectives and we will need significant additional capital
over the next 12-18 months in order to fund our planned operations. We may be
unable to secure any additional financing on terms that are acceptable to us, if
at all.

Since we completed the reverse merger with Hand Brand Distribution, Inc., we
have financed our operations, in large part, by private placements of our common
and preferred stock and promissory notes convertible into our common stock. We
have raised an aggregate of $2,613,900 through such sales, including the sale of
approximately $1.1 million of our preferred stock in January 2005.

Despite our recent equity financing completed in January 2005, we will require
significant additional funding in order to achieve our business plan.
Specifically, we intend to spend significant funds on validating and testing our
products, seeking necessary regulatory approvals and focusing on international
expansion. Over the next 12 months, in order to have the capability of achieving
our business plan, we believe that we will require at least $1,200,000. We will
attempt to raise these funds by means of one or more private offerings of debt
or equity securities or both. We raised an aggregate of $1,113,050 through

<PAGE>

convertible notes to certain individuals in late 2003 and 2004. Of this amount,
$1,096,050 in notes has been converted into 1,545,257 shares of our common stock
and $19,000 in notes has not yet been converted. We may not be able to secure
the financing that we believe is necessary to implement our strategic
objectives, and even if additional financing is secured, we may not achieve our
strategic objectives. As of the date of this Report, we do not have any firm
commitments from any investors for any additional funding.

Our longer-term working capital and capital requirements will depend upon
numerous factors, including revenue and profit generation, pre-clinical studies
and clinical trials, the timing and cost of obtaining regulatory approvals, the
cost of filing, prosecuting, defending, and enforcing patent claims and other
intellectual property rights, competing technological and market developments,
collaborative arrangements. Additional capital will be required in order to
attain such goals. Such additional funds may not become available on acceptable
terms and we cannot give any assurance that any additional funding that we do
obtain will be sufficient to meet our needs in the long term.

CRITICAL ACCOUNTING POLICIES

In December 2001, the SEC requested that all registrants discuss their most
"critical accounting policies" in Management's Discussion and Analysis of
Financial Condition or Plan of Operation. The SEC indicated that a "critical
accounting policy" is one which is both important to the portrayal of the
Company's financial condition and results and requires management's most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain. Our
significant accounting policies are described in Note 1 to our consolidated
financial statements included in this Report.

RECENTLY ISSUED ACCOUNTING STANDARDS

The Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business
Combinations, which establishes revised standards for accounting for business
combinations, eliminating the pooling method, and providing new guidance for
recognizing intangible assets arising in a business combination. Additionally,
SFAS No. 141 requires more prominent and more frequent disclosures in financial
statements about a business combination. This statement is effective for
business combinations initiated on or after July 1, 2001. The adoption of this
pronouncement on July 1, 2001 did not have a material effect on our financial
position, results of operations or liquidity.

SFAS 142, Goodwill and Other Intangible Assets provides guidance on accounting
for the acquisition of intangibles, except those acquired in a business
combination, which is subject to SFAS 141, and the manner in which intangibles
and goodwill should be accounted for subsequent to their initial recognition.
This statement is effective for all fiscal years beginning after December 15,
2001. The adoption of SFAS 142 on April 1, 2002 did not have a material effect
on our financial position, results of operations, or liquidity.

SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
provides implementation guidance regarding when and how to measure an impairment
loss, and expands the presentation to include a component of an entity, rather
than strictly a business segment. SFAS 144 also eliminates the current exemption
to consolidation when control over a subsidiary is likely to be temporary. This
statement is effective for all fiscal years beginning after December 15, 2001.
The adoption of SFAS 144 on April 1, 2002 did not have a material effect on our
financial position, results of operations or liquidity.

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SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity" ("SFAS No. 150") was issued in May 2003. This
statement establishes standards for how certain financial instruments with
characteristics of both liabilities and equity are classified and measured. It
requires that many financial instruments previously classified as equity now be
classified as a liability (or an asset in some circumstances). These financial
instruments are as follows: a financial instrument issued in the form of shares
that is mandatorily redeemable -- that embodies an unconditional obligation
requiring the issuer to redeem it by transferring its assets at a specified or
determinable date (or dates) or upon an event that is certain to occur; a
financial instrument, other than an outstanding share, that, at inception,
embodies an obligation to repurchase the issuer's equity shares, or is indexed
to such an obligation, and that requires or may require the issuer to settle the
obligation by transferring assets; a financial instrument that embodies an
unconditional obligation, or a financial instrument other than an outstanding
share that embodies a conditional obligation, that the issuer must or may settle
by issuing a variable number of its equity shares, if, at inception, the
monetary value of the obligation is based solely or predominantly on any of the
following: a) a fixed monetary amount known at inception, for example, a payable
settleable with a variable number of equity shares; b) variations in something
other than the fair value of equity shares, for example, a financial instrument
indexed to the S&P 500 and settle able with a variable number of equity shares;
c) variations inversely related to changes in the fair value of equity shares,
for example, a written put option that could be net share settled. SFAS No. 150
was effective for financial instruments entered into or modified after May 31,
2003, and otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of SFAS No. 150 did not have an
effect on our operating results, financial position, or liquidity.

In March 2004, the Emerging Issues Task Force ("EITF") reached a final consensus
on Issue 03-6, "Participating Securities and the Two-Class Method under
Financial Accounting Standards Board ("FASB") Statement 128," Issue 03-6
requires the two-class method of calculating earnings per share for companies
that have issued securities other than common stock that contractually entitle
the holder to participate in dividends of the company. This change in
computational methods had no impact on earnings per share for any period in
fiscal 2004 or any prior period. However, this change is likely to impact
earnings per share in fiscal 2005 as our Series A Preferred Stock contains a
mandatory monthly dividend.

In September 2004, the EITF reached a consensus on Issue No. 04-8, "The Effect
of Contingently Convertible Debt on Diluted Earnings per Share." EITF 04-8
requires that all issued securities that have embedded conversion features that
are contingently exercisable upon the occurrence of a market-price condition be
included in the calculation of diluted earnings per share, regardless of whether
the market price trigger has been met. EITF 04-8 is effective in the periods
ending after December 15, 2004 and would be applied by retrospectively restating
previously reported diluted earnings per share. We do not anticipate that the
adoption of EITF 04-8 will impact our earnings per share.

On December 16, 2004, the Financial Accounting Standards Board issued SFAS No.
123 (revised 2004), "Share-Based Payment", which is a revision of SFAS No.123.
SFAS No. 123(R) supersedes APB No.25, and amends SFAS No.95, "Statement of Cash
Flows". Generally, the approach in SFAS No. 123(R) is similar to the approach
described in SFAS No. 123. However, SFAS No.123(R) requires all share-based
payments to employees, including grants of employee stock options, to be
recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an alternative. SFAS No.123(R) must be adopted no later
than July 1, 2005. We expect to adopt SFAS No.123(R) in the third quarter of
2005. SFAS No.123(R) permits companies to adopt its requirements using one of
two methods:

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1. A "modified prospective" method in which compensation cost is recognized
beginning with the effective date (a) based on the requirements of SFAS
No.123(R) for all share-based payments granted after the effective date and (b)
based on the requirements of SFAS No.123 for all awards granted to employees
prior to the effective date of SFAS No.123(R) that remain unvested on the
effective date.

2. A "modified retrospective" method which includes the requirements of the
modified prospective method described above, but also permits entities to
restate based on the amounts previously recognized under SFASNo.123 for purposes
of pro forma disclosures either (a) all prior periods presented or (b) prior
interim periods of the year of adoption.

We are still assessing the appropriate transition method.

As permitted by SFAS No.123, we currently account for share-based payments to
employees using the APB No.25 intrinsic value method and, as such, generally
recognize no compensation cost for employee stock options. Accordingly, the
adoption of SFAS No.123(R)'s fair value method will have an impact on our
results of operations, although it will have no impact on our overall financial
position. Statement No.123(R) also requires the benefits of tax deductions in
excess of recognized compensation cost to be reported as a financing cash flow,
rather than as an operating cash flow. This requirement will reduce net
operating cash flows and increase net financing cash flows in periods after
adoption. While we cannot estimate what those amounts will be in the future
(because they depend on, among other things, when employees exercise stock
options), there were no operating cash flows recognized in prior periods for
such excess tax deductions for stock option exercises.

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BUSINESS

OVERVIEW

GeneThera, Inc., a Florida corporation, was formerly known as Hand Brand
Distribution, Inc., and was incorporated in November 1995, under the laws of the
State of Florida. Up until 2002, GeneThera, Inc. was a private Colorado
corporation ("GeneThera Colorado"). The Board of Directors at that time
determined it would be in the best interests of the Company to become a publicly
traded company in order to facilitate the business goals and objectives of the
Company. That led to negotiations with the Board of Hand Brand Distribution to
effect a reverse acquisition. The negotiations were on an "arms-length" basis at
the time and resulted in the reverse acquisition being completed in October of
2003 with the distribution of shares to Dr. Milici for the acquisition from him
of GeneThera, Inc. A total of 9,270,000 (after 2:1) shares were issued as
consideration for the sale of the private corporation. GeneThera received all
the assets of GeneThera Colorado including all laboratory equipment, laboratory
supplies, research and development, processes, and intellectual property. The
Company acquired Family Health News as a wholly owned subsidiary as an asset and
no liabilities. Family Health News was subsequently disposed of in October 2003.
In September 2004, the Company acquired Vdx, Inc., a manufacturer and
distributor of veterinary diagnostic equipment and tests, VDx currently markets
and sells specialized tests for bovine IgG, NEFA for the dairy industry, and
Equine IgG. The NEFA test offers farmers the ability to test the health and
nutrition of their cattle before giving birth and also test the health of the
new calves once born. Future milk output from dairy cattle is directly affected
by the nutrition just prior to calving. We have been in the development stage
since the formation of GeneThera Colorado in 1999 and have spent approximately 5
million dollars on the research and development activities.

We are a biotechnology company that develops molecular assays and is currently
in the process of developing therapeutic vaccines for the detection and
prevention of food contaminating pathogens, veterinary diseases, and diseases
affecting human health. We are in the development stage and have not generated
significant revenues since our organization. GeneThera's business is based on
its Integrated Technology Platform (ITP) that combines a proprietary diagnostic
solution called Gene Expression Assay (GEA TM) with PURIVAX TM, its system for
analyzing large-scale DNA sequencing. The first part of this platform is the
ongoing development of molecular diagnostic assays solutions using Real Time
Fluorogenic Polymerase Chain Reaction (F-PCR) technology to detect the presence
of infectious disease from the blood of live animals. The second part of the ITP
is the development of therapeutic vaccines using RNA interference technology. It
also allows for the efficient, effective, and continuous testing, management and
treatment of animal populations. These facts distinguish the technology from any
alternative testing and management methodology available to agriculture today --
all of which require the destruction of individual animals and even entire
herds. Our testing and data analysis processes also allow us not only to
separate infected from clean animals, but also to gain knowledge vital to
development of preventative vaccines.

To date, GeneThera has successfully developed the ability to detect Chronic
Wasting Disease, a disease affecting elk and deer in North America. The release
of commercialized Field Collection Systems and laboratory diagnostic testing
occurred in October of 2003. GeneThera has also successfully developed an assay
for the detection of Mad Cow Disease, a disease recently found in the United
States, but which has been in Europe for many years. Chronic Wasting Disease and
Mad Cow Disease are both in the family of diseases called Transmissible
Spongiform Encephalopathy (TSE). We received oral indication from the Director
of National Veterinary Services that the USDA would cooperate with us to
validate our test and vaccine on January 6, 2004. Per his request, we sent a
detailed proposal on January 7, 2004 to the USDA in order to validate our live
blood test for Mad Cow Disease and Chronic Wasting Disease as well as our

<PAGE>

currently under development vaccine for these diseases. We received no further
response to our proposal. The USDA has since denied us the opportunity to work
along side them in order to validate our live blood test for Mad Cow Disease and
Chronic Wasting Disease without giving us any reason. Diagnostic assays for
E.coli O157:H7 and Johnne's Disease are in the final stages of development.
Vaccines for Chronic Wasting Disease and E.coli O157:H7 are in advanced stages
of development. We are not currently in any regulatory or clinical trials for
any of the tests we have developed to date. Development of the CWD test and the
Mad Cow test are completed and we anticipate that the tests will require only
minimal costs of development going forward. We believe that estimated costs to
do a clinical trial for each of these will be minimal as we are currently in
negotiation with strategic testing partners that we anticipate will absorb these
costs.

BUSINESS MODEL

Summary. GeneThera's animal disease assay development business is based on its
Integrated Technology Platform (ITP) that combines a proprietary diagnostic
solution called Gene Expression Assay (GEATM) with PURIVAXTM, its system for
analyzing large-scale DNA sequencing. The first part of this platform is the
ongoing development of molecular diagnostic assays solutions using real time
Fluorogenic Polymerase Chain Reaction (F-PCR) technology to detect the presence
of infectious disease from the blood of live animals. The second part of the ITP
is the development of therapeutic vaccines using RNA interference technology. It
also allows for the efficient, effective, and continuous testing, management and
treatment of animal populations. These facts distinguish the technology from any
alternative testing and management methodology available to agriculture today --
all of which require the destruction of individual animals and even entire
herds. Our testing and data analysis processes also allow us not only to
separate infected from clean animals, but also to gain knowledge vital to
development of preventative vaccines.

Each individual assay utilizes the proprietary Field Collection System (FCS) for
the collection and transportation of blood samples to GeneThera's laboratory.
The FCS allows GeneThera to maintain the integrity of each sample by the
addition of specific reagents to test tubes contained in the system. GeneThera's
FCS is designed to be an easy-to-use method of gathering blood samples from
harvested or domesticated animals. It ensures consistency of samples as well as
increased assurance of each sample's integrity.

To date, GeneThera has successfully developed the ability to detect Chronic
Wasting Disease, a disease affecting elk and deer in North America. The release
of commercialized Field Collection Systems and laboratory diagnostic testing
occurred in October of 2003. GeneThera has also successfully developed an assay
for the detection of Mad Cow Disease, a disease recently found in the United
States, but which has been in Europe for many years. The Field Collection
Systems are available for purchase from the Company. Chronic Wasting Disease and
Mad Cow Disease are both in the family of diseases called Transmissible
Spongiform Encephalopathy (TSE). Diagnostic assays for E.coli O157:H7 and
Johnne's Disease are in the final stages of development.

We are also developing vaccines for Chronic Wasting Disease and E.coli O157:H7.
The Company will need the approval of the USDA before the vaccines can be
manufactured or sold. The approval process for animal vaccines is time-consuming
and expensive. We anticipate that such approval, if it is obtained, may require
more than $5 million and may require more than two years for each vaccine for
which approval is sought. Currently we do not have the capital necessary to seek
approval of any of our candidate vaccines, and we cannot provide any assurance
that we will be able to raise the capital necessary for such approval on terms
that are acceptable to us, if at all. In addition, even if we are successful in
raising the capital necessary to seek approval of any vaccine, there are no

<PAGE>

assurances that such an approval will be granted, or if granted, whether we will
be able to produce and sell such vaccines following such an approval in
commercial quantities or to make a profit from such production and sales.

Though the Company had commercialized one product in late 2003, we have derived
minimal revenues to date from the sale of our products or services. In 2003, we
recorded revenues from our subsidiary Family Health News up until divesture of
the subsidiary on October 1, 2003. After October 1, 2003, no revenues from
Family Health News were recorded as income by GeneThera.

INTEGRATED TECHNOLOGY PLATFORM (ITP)

GeneThera's integrated technology platform is the foundation for "fast-track"
rDNA vaccine development. At the present stage we are working on the development
of a recombinant DNA vaccine for transmissible spongiform encephalopathy (TSE)
and Johnne's disease. Transmissible Spongiform Encephalopathies (TSE) is a group
of invariably fatal neurodegenerative diseases that include Scrapie in sheep,
Bovine Spongiform Encephalopathy (BSE) in cattle, Chronic Wasting Disease (CWD)
in elk and deer, and Kuru Disease and variant Creutzfeld-Jacob disease( vGCD) in
humans. The pathological effects of the disease occur predominantly in the CNS
(central nervous system) where the predominant hallmark is accumulation of an
abnormally folded isoform of the prion protein (PrPsc). Johnne's disease is a
chronic debilitating infectious disease of ruminants, characterized by weight
loss and, particularly in cattle, by profuse diarrhea. The casual agent is a
bacterium, Mycobacterium avium subspecies paratubercolosis. Infected animals may
show no sign of the disease until years after the initial infection. Johnne's is
a slow, progressive disease with worldwide distribution.

Both vaccine developments are in the "in Vitro" stage. We expect to initiate
experimental animal studies for Johnne's disease in the next 2-3 months. A
longer time frame (6-8 months) will be needed to initiate experimental animal
studies for TSE. ITP is the assembly of GEA TM and PURIVAX TM rAD and rAAV
systems. This integrated technology platform yields fast-track vaccine
development. Leveraging its ITP, GeneThera believes that it can develop a
prototype vaccine within 4 to 6 months versus the current standard of 18 to 24.
We estimate that the cost to bring these vaccines to market is $2-5 million.
There is no assurance that we will be able to raise the capital necessary to
bring a vaccine to market and if the capital is raised, that we will be able to
overcome the government regulations involved in bringing such a product to
market. The GEA TM applied modular unit system utilizes robotics and is based on
nucleic acid extraction in conjunction with F-PCR technology to develop gene
expression assays. Using GEATM assays, vaccine efficacy can be measured quickly
because it will be unnecessary to wait for the antibody response to measure how
well the vaccine is working. F-PCR will allow effective quantification of the
precise number of viral or bacterial genetic particles before, during and after
vaccine injection(s). We anticipate that the more effective the vaccine is, the
stronger the decrease of the infectious disease particles will be.

GEATM SYSTEM

GEATM is a proprietary assay development system. GEA was developed in 2001. To
date the system has been used to develop our TSE molecular assay. GEA is a gene
expression system to be used solely in our laboratory and will not be marketed
for commercial sale. The core of GEATM is Fluorogenic Polymerase Chain Reaction
technology (F-PCR). GeneThera approaches the technical problems related to the
use of conventional PCR in molecular diagnostics via our modular unit concept.
Specifically, the modular unit consists of an Automated Nucleic Acid Workstation
(ANAW) and a Sequence Detection System (SDS) that are integrated, allowing an
operator to perform the entire procedure of DNA extraction and F-PCR analysis
within a closed computerized system. This system results in minimal intervention
and no post-PCR manipulation. GEA is a molecular genetic base system that
utilizes fluorogenic polymerase chain reaction (F-PCR). Fluorogenic PCR (F-PCR)
is a 5' nuclease assay based on a sequence specific hybridization between a
nucleic acid target and a fluorogenic probe complementary to the target

<PAGE>

sequence. The probe consists of an oligonucleotide with a reporter and quencher
dye attached. Due to the unique design of the fluorogenic probe the 5'-3'
nuclease activity of the Taq Polymerase allows direct detection of PCR products
by the release of the fluorogenic reporter during PCR. The reporter and the
quencher dye are linked to the 5' and 3' end of the probe. A fluorescent
reporter dye such as FAM (6-carboxyfluorescein) is covalently linked to the 5'
end of the oligonucleotide. Each of the reporters is quenched by TAMRA
(carboxytetramethylrhodamine) attached via linker arm that is typically located
at the 3' end of the probe. When the probe is intact, the proximity of the
reporter dye to the quencher dye results in a suppression of the reporter
fluorescence. During PCR, if the target of interest is present, the probe
specifically anneals between the forward and the reverse primer site. The
nuclease activity of the Taq DNA Polymerase cleaves the probe between the
reporter and the quencher only if the region hybridizes to the target. The Taq
Polymerase does not cleave free probe. After cleavage, the shortened probe
dissociates from the target and the polymerization of the strand continues. This
process occurs in every cycle and does not interfere with the exponential
accumulation of the product. The cleavage of the oligonucleotide between the
reporter and the quencher dye results in an increase of fluorescence of the
reporter that is directly proportional to the amount of the product accumulated.
The specificity of this 5' nuclease assay results from the requirement of
sequence complementary between probe and template in order for cleavage to
occur. Thus the fluorogenic signal is generated only if the target sequence of
the probe is generated by PCR. No signal is generated by non-specific
amplification.

To perform GEA, specific laboratory equipment is needed. . This involves some
substantial initial costs to set up the laboratory operations. We have performed
this substantial set up and are fully operational to perform GEA. We currently
have all the specific equipment necessary to further development. However, the
use of F-PCR represent a great advantage over other available systems because of
its greater sensitivity, speed and accuracy.

The Automated Nucleic Acid Workstation is a highly flexible robotic system that
extracts and purifies acids from a variety of complex samples, preparing them
for F-PCR analysis. Data management system software includes a database to
manage all run phases and record sample processing.

The Sequence Detection System detects the fluorescent signal generated by the
cleavage of the reporter dye during each PCR cycle. This process confers
specificity without the need of post-PCR hybridization. Most important, the SDS
offers the advantage of monitoring real time increases in fluorescence during
PCR. Specifically, monitoring real-time progress of the PCR completely changes
the approach to PR-based quantitation of DNA and RNA, most particularly in
improving the precision in both detection and quantitation of DNA and RNA
targets.

         GeneThera currently faces limited competition in the use of F-PCR
technology and the modular unit concept for commercial testing of either
infectious disease in animals or food pathogen contamination. Currently, most
labs utilize conventional microbiology, immunological or conventional PCR
methods for either veterinary diseases or food pathogen contamination detection.
Specific to microbiology and immunological techniques, the drawbacks of these
approaches are:

1.    the antibodies-based culture media used to detect the presence of
      infectious diseases has a low level of sensitivity;
2.    high background due to non-specific binding of antibodies and/or culture
      contamination;
3.    sample preparation and storage creates artifacts; and
4.    long, cumbersome protocols necessary to perform these tests.

<PAGE>

A major technical limitation of conventional PCR is the risk of contaminating a
specimen with the products of previously amplified sequences. Known as
cross-contamination, this phenomenon represents a constant challenge to any lab
using conventional PCR. Managing these challenges is cumbersome and difficult to
streamline. Fluorogenic PCR (F-PCR) attempts to overcome these drawbacks by
making it possible for PCR to efficiently test large numbers of samples even
when major laboratory facilities are not readily available. A novel methodology,
F-PCR allows quantitative and qualitative detection of specific nucleic acid
sequences in a sensitive, accurate and rapid fashion.

PURIVAXTM TECHNOLOGY

GeneThera has developed a large-scale process for highly purified and high viral
titer Adenovirus and AAV recombinant vectors. This technology enables GeneThera
to develop Adenovirus and AAV based recombinant DNA vaccines for veterinary
diseases and food pathogens.

GeneThera's PURIVAXTM is a multi-resin anion exchange chromatography system that
dramatically improves biological purity and viral titer of recombinant
Adenovirus and AAV vectors. PURIVAXTM is intended to completely eliminate toxic
side effects associated with adenoviruses and AAV vectors, thereby making it
possible to develop highly immunogenic and safe recombinant DNA vaccines.
Importantly, recombinant DNA (rDNA) vaccine technology represents a powerful
tool for an innovative vaccine design process known as "genetic immunization."

Recombinant Adenovirus (rAD) and AAV (rAAV) vectors are the ideal candidates for
a gene delivery system. These viruses can efficiently deliver genetic material
to both dividing and non-dividing cells, thereby overcoming some of the
obstacles encountered with first generation retroviral vectors.

Equally important, rAd and rAAV are engineered virus genomes that contain no
viral gene. One of the key features for rAd and rAAV is their ability to
transduce a large variety of cells. However, two technical challenges had to be
overcome to fully utilize rAd and rAAV in the development of rDNA vaccines:

      1.    lack of large scale purification system; and
      2.    low viral titer

Traditional technologies and first generation chromatography processes are
limited both in terms of purity and yield. And, due to the limitation of these
purification technologies, adequate viral titers cannot be achieved. We believe
that the result is that there is currently no efficient system to deliver
immuonogenic genetic sequences into cells.

This is the significance of GeneThera's PURIVAX TM, rAD and rAAV system for rDNA
vaccine development. Succinctly stated, it is designed to be able to achieve
both high purity and high viral titer (up to 10e16 viral particles/eulate) based
on its proprietary multi-resin anion exchange chromatography system. GeneThera
believes that biological contaminants such as endogenous retrovirus, bacterial,
mycoplasma, non-specific nucleic acids, lipids, proteins, carbohydrates and
endotoxins are eliminated during the purification process.

FIELD COLLECTION SYSTEM

GeneThera's Field Collection System (FCS) is a commercial product designed to
permit a standardized manner for drawing, stabilizing and handling blood samples

<PAGE>

intended for GeneThera's diagnostic assay testing. Each package is referred to
as a "System" because it is just that. There are two different FCS packages: one
for hunters and one for breeders or ranchers. GeneThera's FCS is designed to be
an easy-to-use method of gathering blood samples from harvested or domesticated
animals. It ensures consistency of samples as well as increased assurance of
each sample's integrity. The Field Collection System was developed in the middle
of 2002. We are currently marketing this system as a "marketing trial". A very
limited number of sales has been achieved to date (less than 25 units).

Common to each FCS are two test tubes, each containing a separate reagent. The
process, as described in the packaging, ensures that each individual sample of
blood will be stabilized, thereby increasing the integrity of that sample for
diagnostic testing. Additionally, this common method of receiving blood samples
at the GeneThera laboratory(ies) increases the efficiency of handling the volume
of samples received. We believe this will enable us to provide a fast, efficient
process, capable of posting results within 24 hours of receipt at a low cost to
the consumer. We require that all testing using the FCS must be done by
GeneThera and no third parties can test the blood collected. The Company is
currently offering the FCS for hunters, breeders, or ranchers directly through
the Company on a limited basis. The Company intends to begin a marketing
campaign through the addition of key personnel to achieve higher volumes of
sales for the FCS. The Company projects that no capital will be needed to hire
the additional personnel as we intend to hire such personnel on a strict
commission basis.

RESEARCH AND DEVELOPMENT SERVICES

Molecular, Cellular, Viral Biology Research, and Consulting Services. We intend
to provide independent research services to scientists in academia, the
pharmaceutical industry, and the biotechnology industry. Primarily, we focus on
technology relevant to animal and human immunotherapy. Our services are
supported by more than 50 years of cumulative experience in research and
development for both government and industry by GeneThera's senior scientists.
We intend to develop a commercial-scale implementation of Adenovector
Purification Process to support R&D material production. Furthermore, we intend
to evaluate and test commercially available expression vectors and incorporate
them into our vector repertoire. These technologies are well established within
the repertoire of GeneThera's scientific staff. We cannot provide any assurance,
however, that we will be able to successfully offer these services or that, if
offered, we can provide them profitably.

We intend to offer the following research and development services.

Molecular Biology services consisting of:

Synthetic cDNA Construction
Prokaryotic Expression Vector Construction & Development
E.  coli Expression Strain Evaluation
Pilot Scale Fermentation
Mammalian Expression Vector Construction & Development
Baculovirus Expression
Protein Isolation
Protein Engineering: Complement Determining Region Conjugated Proteins
Monoclonal Antibody Production Chimerization & Humanization
Vector design for Prokaryotic Expression of Antibody Fragments (Fab) and Single
Chain Antibody (ScFv)
Pilot Scale-up Development
Process Purification & Characterization
Assay Development & Quality Control Pharmaceutical Dosage and Formulation

<PAGE>

Molecular Biology Potential Agreement Structure, which refers to the following
stages or options available to a potential customer interested in developing a
gene/protein expression system for research purposes.

Stage I--cDNA Construction & Expression Vector Development Stage in which a
specific gene sequence is cloned in an expression vector and screened by
restriction enzyme analysis.

Stage II in which the expression vector is grown into bacteria and the protein
produced is purified by chromatography techniques .

Stage III, Assay for the protein stability and activity in which protein
activity is determined by testing the recombinant protein using a specific
stabilizing buffer. The recombinant protein is tested against a substrate. The
substrate is the target protein that is deactivated by the recombinant protein.

Stage IV--Quantification of protein yield per each cell line used for protein
expression. Each type of cell line responds differently to each recombinant
protein. Therefore, various cell lines that express each recombinant protein is
tested to determine the recombinant protein yield. Cell lines that express the
highest quantity of a specific recombinant protein are then used for large-scale
recombinant protein production.

Stage V--Experimental animal model development for determination of proper
biological active concentration and stability and determination of proper
storage. A typical animal model is a mouse model. Mice are divided into 2
groups: 1) normal control and 2) mice injected with different concentrations of
recombinant protein. The biological activity is determined by immunological
assays such as an ELISA test or Western blot analysis.

Gene Therapy Testing Services. GeneThera offers GLP testing programs for somatic
cell, viral and naked DNA-based gene therapies. Our scientists have over eight
years experience in providing fully integrated bio-safety testing programs for
the cell and gene therapy fields and have supported a number of successful BLA
and IND applications. To date, the Company has not generated any revenues with
regard to these services, and there is no assurance that we will generate any
revenues from such services.

Replication-Competent Viral Vector Testing. Sensitive in vitro cell culture
assays are used to detect replication-competent retroviruses or adenoviruses.
GeneThera intends to work with clients to provide custom replication-competent
virus detection assays for the particular vector construct.

Complete Somatic Cell and Viral Vector Packaging and Producer Cell Line
Characterization. GeneThera offers all of the assays mandated by regulatory
authorities worldwide for the bio-safety analysis and characterization of cells
and cell lines used in gene therapy products.

Vector Stock Characterization. Custom purity and potency testing is available
for gene therapy viral ector stocks.

Vector Purification Process Validation for Viral Clearance. Most
biopharmaceuticals require viral clearance studies to validate the removal of
potential contaminants, such as those from bovine components or from helper
viruses (adenovirus in AAV production). GeneThera can provide custom design and
performance of viral studies for various vector purification processes.

<PAGE>

Custom Bio-safety Testing Programs for Somatic Cell, Ex Vivo Cell, and Tissue
Therapies. GeneThera can guide our clients through the unique process of
designing and implementing a bio-safety testing program that meets the needs of
each specific project.

To date, we have not entered into any agreement for the provision of any of the
services described above with any customer. We are currently pursuing agreements
to provide some of these services to potential customers. There is no assurance
that any agreement will be entered into for the provision of the Company's
services or that the Company will generate significant revenues or profits from
any such agreement.

INTELLECTUAL PROPERTY

We do not own any patents on any of our technology and have not filed any
applications for patents in any country. We have only recently engaged a patent
law firm to assist us in the review of our technology, namely, PurivaxTM and
GEATM, to determine whether it might be patentable. We cannot give any assurance
that we will be able to file any patent applications or that, if we file one or
more applications for patents, any patents will issue or that, if issued, the
claims granted in any such patents will afford us adequate protection against
competitors with similar technology.

We also depend upon the skills, knowledge and experience of our scientific and
technical personnel, none of which is patentable. To help protect our
proprietary know-how which is not patentable, and for inventions for which
patents may be difficult to enforce, we rely on trade secret protection to
protect our interests.

MANUFACTURING

We do not currently manufacture any products and do not have any facilities
capable of manufacturing any products. If we are successful in developing a
vaccine for veterinary purposes, we intend to contract with third parties or a
collaborative partner to assist with production. We currently do not intend to
establish a manufacturing facility to manufacture any products that we may
develop. In the event we do decide to establish a commercial manufacturing
facility, we will require substantial additional funds and will be required to
hire and train significant numbers of employees and comply with the extensive
federal and state regulations applicable to such a facility. In addition, we
would be required to apply for a license from the United States Department of
Agriculture's Animal and Plant Health Inspection Service to manufacture any such
vaccines at such facilities.

SALES AND MARKETING

We currently have no sales, marketing, or distribution capabilities, and we do
not anticipate having the resources in the foreseeable future to allocate to the
sales and marketing of any products that we may develop. Our success will
depend, in part, on our ability to either (i) enter into and maintain
collaborative relationships with third parties for the marketing, sales, and
distribution of products that we develop, if any, or (ii) hire and retain our
own sales and marketing capabilities. Initially we plan to market products that
we develop and for which we obtain regulatory approval through marketing,
licensing, distribution, or other arrangements with collaborative partners. We
believe that this approach will both increase market acceptance of any products
that we develop and enable us to avoid expending significant funds to develop a
sales and marketing organization.

<PAGE>

COMPETITION

We face competition from many companies, universities, and research institutions
in the United States and abroad. Virtually all of our competitors have
substantially greater resources, experience in product commercialization, and
obtaining regulatory approvals for their products, operating experience,
research and development and marketing capabilities and manufacturing
capabilities than we do. We will face competition from companies marketing
existing products or developing new products for diseases targeted by our
technologies. The development of new products for those diseases for which we
are attempting to develop products could render our product candidates
noncompetitive and obsolete. Our current competitors include Prionics AG, IDEXX
Laboratories, Inc., Beckman Coulter, Inc., and Bio-Rad Laboratories, Inc.

Academic and government institutions are also carrying out a significant amount
of research in the field of veterinary health, particularly in the fields of
Chronic Wasting Disease and Mad Cow Disease. We anticipate that these
institutions will become more aggressive in pursuing patent protection and
negotiating licensing arrangements to collect royalties for use of technology
that they have developed and to market commercial products similar to those that
we seek to develop, either on their own or in collaboration with competitors.
Any resulting increase in the cost or decrease in the availability of technology
or product candidates from these institutions may affect our business.

Competition with respect to our veterinary technologies and potential products
is and will be based, among other things, on effectiveness, safety, reliability,
availability, price, and patent protection. Another important factor will be the
timing of market introduction of products that we may develop and for which we
may receive regulatory approval. Accordingly, the speed with which we can
develop products, complete the required animal studies or trials and approval
processes and ultimately supply commercial quantities of the products to the
market is expected to be an important competitive factor. Our competitive
position will also depend upon our ability to attract and retain qualified
personnel, to obtain patent protection or otherwise develop proprietary products
or processes, and to secure sufficient capital resources for the often
substantial period between technological conception and commercial sales.

Several attempts have been made to develop technologies that compete with F-PCR.
To our knowledge none of these technologies have resulted to date in any product
available on the market. The field of biotechnology is very dynamic. The
possibility that more advanced technologies could be developed into products
that may compete with ours is very strong. However it is very difficult to
predict the length of time necessary for this scenario to take place.

PRODUCT LIABILITY

The testing, manufacturing and marketing of the Company's proposed products
involves an inherent risk of product liability attributable to unwanted and
potentially serious health effects in animals that may receive any vaccines that
we may develop and market. To the extent we elect to test, manufacture, or
market veterinary vaccines and other products,, we will bear the risk of product
liability directly. We do not currently have product liability insurance There
is no guarantee that we can obtain product liability insurance at a reasonable
cost, or at all, or that the amount of such insurance will be adequate to cover
any liability that we may be exposed to. In the absence of such insurance, one
or more product liability lawsuits against us can be expected to have a material
adverse effect on our business and could result in our ceasing operations.

<PAGE>

GOVERNMENT REGULATION

Our unique approach to the testing for various animal diseases allows us to
begin commercialization of its diagnostic tests without the need for a long and
enduring approval process from the USDA. All tests are done utilizing the blood
of animals that can be collected in the field using the Company's proprietary
Field Collection System (FCS). The collected blood is then sent to our
laboratory for testing. Since all of the testing for the diseases is done "in
house," meaning tested at laboratories operated by us and using our developed
testing methods, the USDA deems our test to be under the category of Veterinary
Services. The regulations on Veterinary Services are much different than that of
third party testing. Our test is not a kit.

In the event that we develop a vaccine based on our research, the vaccine
product and the facility at which commercial quantities of the vaccine will be
produced will be subject to comprehensive regulation by the United States
Department of Agriculture's Animal and Plant Health Inspection Service. Before
any "biological product" (which includes vaccines) can be prepared for
commercial sale, APHIS must approve and license the product and the facility at
which it is proposed to be manufactured. The approval process is lengthy and
expensive. We will be required to submit an application containing, among other
things, an outline of production for the proposed product, characterization
data, and protocols for animal studies and trials of host animal immunogenicity,
safety, efficacy, backpassage, shed/spread, interference, and other studies.

We do not have the capability to conduct our own studies and trials of any
candidate vaccine that we may develop and will rely on collaborative partners to
conduct all such studies. Currently we do not have any such agreements with any
partner, and we cannot give any assurance that we will be able to enter into
such an agreement on terms that are favorable to the Company, if at all. If we
do enter into one or more such agreements, we will not be able to control the
timetable for completing such studies. Furthermore, we cannot give any assurance
that any applications that we submit for any vaccine products will be approved
by APHIS. The failure to receive such approval, or the receipt of approval
following the approval of a competing product, would have an adverse material
effect on the Company.

EMPLOYEES

As of March 1, 2005, we had a total of five (5) full-time employees and three
(3) part-time employees who devote substantial effort on our behalf. None of our
employees are represented by a collective bargaining unit. We entered into an
employment agreement with Antonio Milici, M.D., Ph.D, to serve as our Chief
Executive Officer and Chief Scientific Officer through January 7, 2007. In
consideration for his services, Dr. Milici will receive a base salary of
$144,000 per annum plus bonuses as may be determined by the Board of Directors
in its sole discretion. As part of his employment agreement, Dr. Milici is
subject to non-disclosure and non-competition obligations and has transferred to
the Company all of his interests in any idea, concept, technique, invention or
written work. We also entered into an employment agreement with Tannya L.
Irizarry to serve as our Chief Administrative Officer through January 1, 2007.
Ms Irizarry's base salary is $78,000 per annum. There are no employee issues at
this time.

RESEARCH AND DEVELOPMENT

We anticipate that R&D will be the source for both assay development and vaccine
design/development. If we are able to develop assays for different diseases, we
intend to formalize the procedure into a commercial application through a series
of laboratories to be owned and operated by GeneThera. To date, we have
introduced our diagnostic solution for Chronic Wasting Disease and Mad Cow
Disease on a very limited basis. We anticipate that R&D will be ongoing during

<PAGE>

the life of the Company, as this is the source for new products to be introduced
to the market. Our plan is to seek new innovations in the biotechnology field.
We cannot assure you that we will be successful in developing or validating any
new assays or, if we are successful in developing and validating any such
assays, that we can successfully commercialize them or earn profits from sales
of those assays. Furthermore, we cannot assure you that we will be able to
design, develop, or successfully commercialize any vaccines as a result of our
research and development efforts.

COMMERCIAL DIAGNOSTIC TESTING

In the event that we are able to develop assays for the detection of diseases in
animals, we intend to establish a series of diagnostic testing laboratories
geographically proximate to the primary sources of individual diseases and/or
according to specific available operating efficiencies. The specific number of
labs to be built and operated will be based on assay demand (demand facilitated
by the number of specific disease assays GeneThera develops), our ability to
obtain the capital to build the labs, and our ability to successfully manage
them from our principal office. As of the date of this prospectus, we do not
have specific plans to establish any given number of diagnostic testing
laboratories. In addition, we currently do not have sufficient capital to
establish any such laboratories. We cannot provide any assurances that we would
be able to raise the capital necessary to build any such laboratories or, if we
can build them, that they can be operated at a profit.

LICENSING

Through our third division, Licensing, we intend to manage the marketing and
sale of the vaccines developed by GeneThera's Research & Development division.
As GeneThera does not intend to be a vaccine manufacturer, we plan to use our
Licensing division to license the technology related to any vaccines that may be
developed and to manage the revenue potential available from the successful
development and validation of specific vaccines. We cannot provide any assurance
that we will develop any vaccines or that, if they are developed, we will be
able to license them successfully or that any such license will produce
significant revenues.

PROPERTIES

We lease a 5,730 square foot biotechnology laboratory located at 3930 Youngfield
Street, Wheat Ridge, Colorado 80033. The lease expires in January 2006 and the
rent is $5,235.26 per month. We believe that our existing facilities are
adequate to meet our current requirements. We do not own any real property. If
we are able to develop assays for different diseases, we intend to formalize the
procedure into a commercial application through a series of laboratories to be
owned and operated by GeneThera. Currently we do not have the funds to purchase
or construct any such laboratories and do not have a commitment from any party
to provide the funds for a laboratory.

LEGAL MATTERS

On or about July 23, 2004, Sisu Media sued the Company in Jefferson County
District Court for breach of an alleged contract for website services for which
the plaintiff seeks compensatory damages equal to the contract price or the
reasonable value of services it claims to have performed. Plaintiff seeks
approximately $61,000.00 plus the value of 14,706 shares of common stock in the
Company, plus costs, interest, attorney's fees in amounts to be determined at
trial. The Company believes that the plaintiff's claims have no merit and will
defend the claims. The Company has filed its answer denying the claims and has
asserted a counterclaim that Sisu Media aided and abetted a breach of fiduciary
duty by a third party, Gary Langstaff, with damages to be determined at trial. A

<PAGE>

three-day jury trial is set to begin on June 21, 2005. The case is currently in
the discovery stage.

On or about August 5, 2004, Gary Langstaff, Nick Wollner and Springloose.com,
LLC sued the Company in Jefferson County District Court to gain access to
corporate records and seeking an accounting, a declaratory judgment determining
their status as shareholders, and alleging unpaid wages owed to Mr. Langstaff
and Mr. Wollner as employees in the amounts of $60,000.00 and $18,000.00
respectively, plus costs, interest, expert fees and attorney's fees in amounts
to be determined at trial. GeneThera has denied the claims and filed a
counterclaim for breach of fiduciary duty by both Langstaff and Wollner causing
unspecified damages which include the expense of defending this action and the
action involving Sisu Media in the same jurisdiction. A four-day trial to the
court is set to begin July 26, 2005. The case is currently in the discovery
stage.

CIT Technology Financing Services, Inc. has sued the Company in Jefferson County
District Court seeking approximately $28,000 as the alleged past due balance of
an equipment lease, plus interest, costs and attorney fees. The Company has
denied the claim and filed a counterclaim for recovery of treble damages plus
costs and attorney fees for theft against the plaintiff based upon the conduct
of plaintiff's designated collections agent. Colorado has recently instituted an
electronic filing system in the courts for the filing of pleadings. Because of
an error in this system, the plaintiff CIT was able to obtain a default judgment
against the company. The company has filed a motion to set aside the default and
believes it will be granted. The court has not yet ruled upon the motion. The
company's counsel and CIT's counsel have initiated settlement discussions.

<PAGE>

Item 7. Financial Statements





Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

On January 15, 2005, our auditors, Kantor, Sewell & Oppenheimer, P.A., notified
the Company in writing that they changed their name to Kantor, Geisler &
Oppenheimer, P.A. The attached financials have been certified by Kantor, Geisler
& Oppenheimer, P.A.

Item 8A. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
"Exchange Act"), we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures within the 90 days prior
to the filing date of this report. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer.

There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date
we carried out our evaluation.

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.

Item 9. Directors, Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act

DIRECTORS AND EXECUTIVE OFFICERS

The following persons are currently serving as the Company's executive officers
and directors.

Name                       Age            Positions
----                       ---            ---------

Dr. Antonio Milici          49            Chairman of the Board, Chief Executive
                                          Officer and Chief Scientific Officer
Steven M. Grubner           46            Chief Financial Officer and Director
Thomas M. Muenzberg         36            Chief Operating Officer
Dr. Thomas Slaga            60            Director
Richard Bryans              48            Director


Dr. Antonio Milici founded GeneThera Inc. in 1999 and has served as its chairman
and CEO since inception. Prior to founding GeneThera, Dr. Milici served as CEO

<PAGE>

and President of Genetrans, Inc., a genetic diagnostic company from 1993 to
1998. Dr. Milici was also an assistant professor in the department of Molecular
Pathology at the University of Texas M.D. Anderson Cancer Center.

Steven M. Grubner joined GeneThera's Board of Directors in May 2004 and has
served as our Chief Financial Officer since June 2004. Mr. Grubner has over
twenty years of experience in the technology industry. Mr. Grubner served as the
president, finance and administration and chief financial officer at HH
Communications, Inc. from 1986 until the completion of its merger with Datatec
Systems, Inc. (DATC) in mid-1996. Until late 1999, he served as Datatec's vice
president and General Counsel, a position that put him in charge of Datatec's
public SEC filings, vendor contract negotiations, and internal employee
agreements. From 1999 to the present, Mr. Grubner has been involved the private
and public equity markets, raising capital for technology, biotech, and software
companies.

Thomas M. Muenzberg joined GeneThera in February 2005 as our Chief Operating
Officer. Prior to joining GeneThera, Mr. Muenzberg served in Small Business
Commercial Lending Services for Key Bank, N.A. from April 2003 until June 2005.
Mr. Muenzberg provided Private Client Group Consulting at TM Financial Group,
LLC from July 2001 to April 2003. He also worked at Charles Schwab & Co., Inc.
from March 2000 to July 2001.

Dr. Thomas Slaga has served on GeneThera's Board of Directors since 2003. Dr.
Slaga has investigated cancer causation and prevention for more than thirty-five
years. He has held his current position as Scientific Director of the AMC Cancer
Research Center in Denver, Colorado since 1999. He chairs the Center for Cancer
Causation and Prevention at AMC and also serves as Deputy Director of the
University of Colorado Cancer Center. Previously, from 1983 to 1997, he served
as Director of the Science Park - Research Division of The University of Texas
M. D. Anderson Cancer Center. Dr. Slaga was co-founder of Molecular
Carcinogenesis in 1987 and served as editor-in-chief until early 2003.

Richard Bryans has served on GeneThera's Board of Directors since 2003. Mr.
Bryans is corporate counsel for GeneThera and has managed his own private law
firm in Denver, Colorado since 1995.

The Company has an Audit Committee comprised of Dr. Milici and Mr. Grubner and a
Compensation Committee comprised of Mr. Bryans and Dr. Slaga. Each Director is
elected at the Company's annual meeting of shareholders and holds office until
the next annual meeting of shareholders, or until the successors are elected and
qualified. At present, the Company's bylaws provide for not less than three or
more than seven Directors. Currently, we have four Director positions. The
bylaws permit the Board of Directors to fill any vacancy and such director may
serve until the next Annual Meeting of Shareholders or until his successor is
elected and qualified. Officers are elected by the Board of Directors and their
terms of office are, except to the extent governed by employment contracts, at
the discretion of the Board. The officers of the Company devote full time to the
business of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
Executive Officers, Directors and 10% Shareholders to file reports regarding
initial ownership and changes in ownership with the SEC. Executive Officers,
Directors, and 10% shareholders are required by SEC regulations to furnish us
with copies of all Section 16(a) forms they file. Our information regarding
compliance with Section 16(a) is based solely on a review of the copies of such
reports furnished to us by our Executive Officers, Directors and 10%
shareholders. These forms include (i) Form 3, which is the Initial Statement of
Beneficial Ownership of Securities, (ii) Form 4, which is a Statement of Changes

<PAGE>

in Beneficial Ownership, and (iii) Form 5, which is an Annual Statement of
Changes in Beneficial Ownership.

The required Section 16 reports were timely filed.

The Company has recently adopted a Code of Ethics applicable to its principal
executive officer, principal financial officer, and principal accounting
officer. Our Code of Ethics can be obtained by calling the company at
303-463-6371.

Item 10. Executive Compensation

The following table sets forth certain summary information for the fiscal year
ended December 31, 2004 concerning the compensation awarded to, earned by, or
paid to those persons serving as executive officers during fiscal year 2004.


                           SUMMARY COMPENSATION TABLE

The following table sets forth certain summary information for the fiscal year
ended December 31, 2004 concerning the compensation awarded to, earned by, or
paid to those persons serving as executive officers during fiscal year 2004 that
served as our Chief Executive Officer or earned compensation in excess of
$100,000 (the "Named Executive Officers"). No other executive officer of the
company had a total annual salary and bonus for 2004 that exceeded $100,000.
Antonio Milici, M.D., Ph.D. and Steven M. Grubner were the only executive
officers during the fiscal year ended December 31, 2004.

         The following table summarizes compensation earned in each of the last
three fiscal years by the named officers.

<TABLE>
<CAPTION>
                                   Annual Compensation                           Long-Term Compensation
                                   -------------------                           ----------------------

                                                                 All Other      Restricted  Securities   All Other
                                                                 Annual         Stock       Underlying   Compensation
                                                                 Compensation   Awards      Options/     ($)
Name and Principal          Year         Salary       Bonus      (4)            ($)         SARS (#)
Position
<S>                         <C>          <C>          <C>        <C>            <C>         <C>          <C>
Antonio Milici M.D. PhD.,   2004         $144,000(1)  --         --             --          300,000 (5)  --
Chief Executive Officer     2003         $144,000     --         --             --          --           --
                            2002         (2)          $ 18,000   --             --          --           --
                                         $144,000
                                         (3)
</TABLE>



Of this amount, $54,000 was paid to Dr. Milici in 2004 and $90,000 has been
deferred. All of this amount has been deferred. Of this amount, $36,000 was paid
to Dr. Milici in 2002 and $108,000 has been deferred. The Company provides Dr.
Milici with a company car and reimburses him for fuel costs. These options were
granted on 6/29/04 at an exercise price of $.90.

<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

The Company grants options to its executive officers under the GeneThera 2004
Senior Executive Officer Plan. As of March 1, 2005, options to purchase a total
of 850,000 shares were outstanding under the 2004 Senior Executive Officer Plan
and options to purchase 1,150,000 shares remained available for grant
thereunder.

The following table shows for the fiscal year ended December 31, 2004, certain
information regarding options granted to the Named Executive Officers:

Option Grants in Fiscal 2004

<TABLE>
<CAPTION>
                                Individual Grants
                                --------------------------------------------------------
<S>                             <C>                 <C>                <C>                 <C>
Name                            Number of           Percentage of      Exercise Price      Expiration Date
                                Securities          Total Options
                                Underlying          Granted to
                                Options Granted     Employees in
                                (#)                 Fiscal 2004(1)     ($/Sh)
Antonio Milici                  300,000(2)          35.3%              $0.90               6/29/2014
</TABLE>

(1)   Based on options to purchase 850,000 shares granted in 2004.

(2)   Fifty percent of these options were vested on December 1, 2004 and the
      remaining fifty percent vested on March 1, 2005.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values

<TABLE>
<CAPTION>
                        Shares          Value        Number of Securities              Value of Unexercised
                        Acquired on     Realized     Underlying Unexercised            In-the-Money Options
Name                    Exercise (#)    ($)          Options at FY-End (#)(1)          at December 31, 2004 ($)(2)
                                                     Exercisable     Unexercisable     Exercisable     Unexercisable
                                                     -----------     -------------     -----------     -------------
<S>                     <C>             <C>          <C>             <C>               <C>             <C>
Antonio Milici          --              --             150,000         150,000           $9,000          $9,000
</TABLE>

(1) Includes both "in-the-money" and "out-of-the-money" options. "In-the-money"
options are options with exercise prices below the market price of the Company's
common stock at December 30, 2004.

(2) Value is based on the fair market value of the Company's common stock at
December 30, 2004 ($.96) with respect to in-the-money options, minus the
exercise price of the options.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

On January 23, 2002, the Company entered into an employment agreement with
Antonio Milici, M.D., Ph.D, to serve as the Chief Executive Officer and Chief
Scientific Officer of the Company through January 7, 2007. Unless either party
gives notice to terminate the agreement at least thirty days prior to expiration
of the agreement, the agreement will automatically be extended for an additional
two year period. In consideration for his services, Dr. Milici receives a base
salary of $144,000 per annum throughout the term of the agreement plus bonuses
as may be determined by the Compensation Committee of the Board of Directors in
its discretion or if the Company achieves net income in excess of $2,000,000 per
year. As part of his employment agreement, Dr. Milici has agreed not to compete
with the Company, solicit any of its customers or solicit any of its employees
for a period of two years after the term of the agreement. Dr. Milici is also
subject to confidentiality obligations in favor of the Company and has agreed to
transfer to the Company of all his interests in any idea, concept, technique,

<PAGE>

invention or written work developed by him during the term of his employment
agreement.

No director received compensation for his services to the Company.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters


The following table shows, as of March 2, 2005, the common stock owned
beneficially by (i) each person known by us to be the beneficial owner of more
than five percent of our Common Stock, (ii) each of our directors, (iii) each of
our executive officers and (iv) all of our directors and executive officers as a
group. Unless otherwise indicated, the address of each person or entity named
below is c/o GeneThera, Inc., 3930 Youngfield Street, Wheat Ridge, CO 80033.

<TABLE>
<CAPTION>
                                                        Number of Shares
Name of Beneficial Owner                                Beneficially Owned (1)      Percent of Class (1)
<S>                                                     <C>                         <C>
Five Percent Shareholders:

David F. Firestone (2)                                  1,686,934                   7.6%
Mercator Advisory Group, LLC (2)
 555 South Flower Street, Suite 4200
 Los Angeles, CA  90071

0711005 BC Ltd. Marketing Group                         1,375,000                   6.7%
 565 Stevens Dr.
 West Vancouver, BC, Canada V7S 1E1


Directors and Executive Officers:

Dr. Antonio Milici (3)                                  11,043,339                  53%

Steven M. Grubner (4)                                   375,000                     1.4%

Thomas M. Muenzberg                                     --                          --

Dr. Thomas Slaga                                        100,000                     *

Richard Bryans                                          75,000                      *
1177 Grant Street, Suite 308
               Denver, CO  80203

All Directors and Executive Officers as a Group (5      11,593,339                  54.8%
persons) (5):
</TABLE>

* Less than 1%.
(1) This table is based upon information supplied by officers, directors and
principal shareholders and Schedules 13D and 13G filed with the SEC. Unless
otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, the Company believes that each of the
shareholders named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. Applicable percentages

<PAGE>

are based on 20,559,873 shares of common stock outstanding on March 2, 2005,
adjusted as required by rules promulgated by the SEC.

(2) Consists of 283,168 shares of common stock issuable upon conversion of 2,860
shares of Series A Preferred Stock held by Mercator Momentum Fund, LP, 185,148
shares of common stock issuable upon conversion of 1,870 shares of Series A
Preferred Stock held by Mercator Momentum Fund III, LP, 620,792 shares of common
stock issuable upon conversion of 272,609 shares of Series A Preferred Stock
held by Monarch Point Fund, Ltd., 124,348 shares of common stock that may be
acquired by Mercator Momentum Fund, LP upon exercise of warrants, 81,304 shares
of common stock that may be acquired by Mercator Momentum Fund III, LP upon
exercise of warrants, 272,609 shares of common stock that may be acquired by
Monarch Pointe Fund, Ltd. upon exercise of warrants and 119,565 shares of common
stock that may be acquired by Mercator Advisory Group, LLC upon exercise of
warrants. The conversion price of the Series A Preferred Stock is subject to
adjustment as described under Description of Capital Stock - Preferred Stock
below. For purposes of the beneficial ownership table above, we calculated the
number of shares of common stock to be received upon conversion of the Series A
Preferred Stock based upon the conversion price as of March 2, 2004, which was
$1.01 per share. The documentation governing the terms of the Series A Preferred
Stock and warrants contains provisions prohibiting any conversion of the Series
A Preferred Stock or exercise of the warrants that would result in Mercator
Advisory Group, LLC; Mercator Momentum Fund, LP; Mercator Momentum Fund III, LP;
and Monarch Pointe Fund, Ltd. collectively owning beneficially more than 9.99%
of the outstanding shares of our common stock as determined under Section 13(d)
of the Securities Exchange Act of 1934. As a result of these provisions, such
entities disclaim beneficial ownership in excess of 9.99% of the outstanding
shares of our common stock. The right to vote and the right to dispose of the
shares beneficially owned by Mercator Momentum Fund, LP; Mercator Momentum Fund
III, LP; and Monarch Pointe Fund, Ltd. are, in each case, shared among either
Mercator Momentum Fund, LP; Mercator Momentum Fund III, LP; and Monarch Pointe
Fund, Ltd., as applicable, and both MAG and David F. Firestone. The right to
vote and the right to dispose of the shares beneficially owned by Mercator
Advisory Group, LLC are shared by Mercator Advisory Group, LLC and David F.
Firestone.

(3) Includes 300,000 shares subject to options exercisable within 60 days of
March 2, 2005.

(4) Includes 300,000 shares subject to options exercisable within 60 days of
March 2, 2005.

(5) Includes 600,000 shares subject to options exercisable within 60 days of
March 2, 2005.

Item 12. Certain Relationships and Related Transactions


NVO SOLUTIONS, INC.

Mr. Grubner is the President and sole shareholder of NVO Solutions, Inc., an
Illinois corporation existing to help companies raise capital for growth. Prior
to Mr. Grubner joining the Company as a director and Chief Financial Officer,
NVO Solutions was compensated with 56,000 shares of GeneThera for assisting the
Company raise capital in 2004. An agreement was signed in November 2003
retaining NVO Solutions to provide certain services, including the development
of financial and financing strategies, advising in a possible merger with and/or
acquisition of businesses, filling management roles and providing legal and
business process support. NVO Solutions raised a total of $453,000 under the
agreement. The agreement was terminated upon Mr. Grubner's employment with the
Company. These 56,000 shares are no longer held by Mr. Grubner. The value as
reflected in the Company's financial statements for beneficial conversion

<PAGE>

purposes of these shares was $88,480. The terms as described in the agreement
were as favorable as those that could have been obtained from unaffiliated third
parties.

REVERSE ACQUISITION

A Reverse Acquisition Agreement was executed on March 28, 2003. One million
common shares were issued from the Company's authorized shares to acquire 51% of
the ownership of GeneThera from Antonio Milici M.D., Ph.D. On November 6, 2003,
an additional 1,000,000 shares were issued to shareholders of GeneThera
(Colorado) which includes an additional 545,000 shares issued to Antonio Milici
M.D., Ph.D. Upon completion of the issuance of these additional shares,
GeneThera has become a 100% wholly owned subsidiary of the Company. The value as
reflected in the Company's financial statements for beneficial conversion
purposes of these shares was $2,441,100. In June 2004, the remainder of the
shares to complete the agreement were issued to Dr. Milici. The terms as
described in the Agreement were as favorable as those that could have been
obtained from unaffiliated third parties.

LEGAL SERVICE PROVIDERS

As payment for legal services rendered, Steven Slaw received 16,000 shares of
restricted stock valued at $16,000 in January 2004. As further payment for legal
services rendered, Steven Slaw received 35,555 shares of restricted stock valued
at $34,750 in November and December 2004. Each of these transactions was on
terms as favorable as those that could have been obtained from unaffiliated
third parties.

As payment for legal services rendered, Richard W. Bryans, a director of the
Company, received 75,000 shares of restricted stock valued at $71,250 in August
2004. This transaction was on terms as favorable as those that could have been
obtained from unaffiliated third parties.

SERIES A PREFERRED STOCK FINANCING

On January 18, 2005, we issued 11,000 shares of our Series A Preferred Stock to
Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP and Monarch Pointe
Fund, Ltd. (the "Purchasers"), for $100 per share, or an aggregate of
$1,100,000. We also issued warrants to purchase an aggregate of 597,826 shares
of common stock at an exercise price of $0.92 per share, in consideration for
the aggregate proceeds of $1,100,000 to the Purchasers and Mercator Advisory
Group, LLC, an affiliate of the Purchasers. The warrants became exercisable on
January 18, 2005 and are exercisable for three years from their date of
issuance. We paid a due diligence fee of $88,000 and legal expenses of $10,000
to Mercator Advisory Group, LLC.

The Series A Preferred Stock is convertible into the Company's common stock at
an initial conversion price of $1.01, subject to adjustment. If, at any time
after March 14, 2005, the market price (i.e., the average of the lowest three
intra-day trading prices of the Company's common stock during the 15 trading
days immediately preceding the conversion date) is less than $1.11, then the
conversion price of the Series A Preferred Stock is 80% of the market price on
the date of such conversion. If an "Event of Default" as defined in the
subscription agreement under which the Purchasers bought the Series A Preferred
Stock, occurs (e.g., bankruptcy, failure to timely file the registration
statement, failure of such registration statement to be timely declared
effective), the conversion price of the Series A Preferred Stock is reduced by
10%. The Series A Preferred Stock pays a per share monthly dividend equal to
$100 multiplied by the prime rate (as reported in the Wall Street Journal) plus
2.5% to the extent that funds are lawfully available. The Series A Preferred
Stock is not entitled to vote, except to the extent required under Florida law.
The Series A Preferred Stock has sole preference of priority at par in
liquidation over our common stock and any subsequent series of preferred stock.

<PAGE>

In connection with the issuance of the Series A Preferred Stock and warrants, we
agreed to file a registration statement with the U.S. Securities and Exchange
Commission ("SEC") registering the shares of common stock issuable upon
conversion of the preferred stock and exercise of the warrants, and to use
diligent efforts to have the registration statement declared effective within
120 days after the initial filing of the registration statement. Under the terms
of the agreements with the Purchasers, the ownership of our common stock by the
Purchasers will not exceed 9.99% of the total outstanding shares at any one
time. In addition, the Purchasers agreed not to sell, in any trading day, shares
of our common stock in excess of 20% of the total shares traded on such trading
day.

MARKETING CONSULTANT

In March 2005, we entered into a consulting agreement with 0711005 B.C. Ltd (the
"Marketing Consultant") pursuant to which the Marketing Consultant agreed to
provide us with certain marketing and public relations services in exchange for
the issuance of 1,375,000 shares of our common stock. These shares had a market
value of approximately $1,430,000 on the date of issuance, which our board
determined to be a reasonable amount for the marketing and public relations
services to be provided by the Marketing Consultant.



<PAGE>



Item 13. Exhibits and Reports on Form 8-K

EXHIBITS

         The following documents are filed herewith or have been included as
exhibits to previous filings with the SEC and are incorporated herein by this
reference:

Exhibit           Description of Document

3.1               Articles of Incorporation of GeneThera, Inc., as amended. (6)

3.2               Bylaws, as amended. (2)

10.1              Form of Common Stock Purchase Agreement among GeneThera, Inc.
                  and various original holders of the common stock of GeneThera,
                  Inc. (1)

10.2              Form of Letter Agreement between GeneThera, Inc. and various
                  original holders of the Common Stock of GeneThera, Inc. (2)

10.3              Employment Agreement, dated as of January 23, 2002, between
                  Antonio Milici, M.D., Ph.D. and GeneThera, Inc. (2)

10.4              Letter of Intent, dated November 6, 2003, between Oncology
                  Sciences Corporation and GeneThera, Inc. (3)

10.5              Placement Agent Agreement, dated as of May 31, 2004, between
                  Invest Linc Securities, LLC and GeneThera, Inc. (4)

10.6              Letter Agreement, dated November 22, 2003, between NVO
                  Solutions, Inc. and GeneThera, Inc. (4)

10.7              Resolution Agreement, dated August __, 2004, by and among,
                  John Taggert, Family Health News, Inc. and GeneThera, Inc. (4)

10.8              GeneThera, Inc. 2004 Employee, Director and Consultant Stock
                  Option Plan. (6)

10.9              GeneThera, Inc. 2004 Senior Executive Officer Option Plan. (6)

10.10             Subscription Agreement, dated as of January 18, 2005, by and
                  between GeneThera, Inc., Mercator Advisory Group, LLC,
                  Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP and
                  Monarch Pointe Fund, Ltd. (5)

10.11             Registration Rights Agreement, dated as of January 18, 2005,
                  by and between GeneThera, Inc., Mercator Advisory Group, LLC,
                  Mercator Momentum Fund, LP, Mercator Momentum Fund III, LP and
                  Monarch Pointe Fund, Ltd. (5)

10.12             Warrant to Purchase Common Stock issued to Mercator Advisory
                  Group, LLC. (5)

10.13             Warrant to Purchase Common Stock issued to Mercator Momentum
                  Fund, LP. (5)

10.14             Warrant to Purchase Common Stock issued to Mercator Momentum
                  Fund III, LP. (5)

<PAGE>

10.15             Warrant to Purchase Common Stock issued to Monarch Pointe
                  Fund, Ltd. (5)

10.16             Industrial Multi-Tenant Lease, dated December 4, 2001, between
                  Youngfield Plaza LLC and GeneThera, Inc. (4)

10.17             Amendment to Industrial Multi-Tenant Lease, dated December 12,
                  2004, between Youngfield Plaza LLC and GeneThera, Inc. (6)

10.18             Strategic Alliance Agreement, dated November 1, 2004, between
                  G. Gekko Enterprises and GeneThera, Inc. (6)

10.19             Securities Purchase Agreement, dated November 8, 2004, between
                  G. Gekko Enterprises and GeneThera, Inc. (6)

10.20             Letter Agreement, dated March 1, 2005, between 0711005 B.C.
                  Ltd and GeneThera, Inc. (6)

10.21             Mutual Release and Settlement Agreement, dated March 1, 2005,
                  between J.P. Turner & Company, L.L.C. and GeneThera, Inc. (6)

21.1              List of Subsidiaries. (6)

31.1              Certification of Chief Executive Officer required by Rule
                  13a-14(a) or Rule 15d-14(a) of the Exchange Act

31.2              Certification of Chief Financial Officer required by Rule
                  13a-14(a) or Rule 15d-14(a) of the Exchange Act

32.1              Certificate of Chief Executive Officer furnished pursuant to
                  Rule 13a-14(b) of the Exchange Act and Section 1350 of Chapter
                  63 of Title 18 of the United States Code (18 U.S.C. 1350)

32.2              Certificate of Chief Financial Officer furnished pursuant to
                  Rule 13a-14(b) of the Exchange Act and Section 1350 of Chapter
                  63 of Title 18 of the United States Code (18 U.S.C. 1350)

99.1              Curriculum Vitae. (4)


(1) Incorporated by reference to our Current Report on Form 8-K, as filed with
the Commission on March 5, 2002.

(2) Incorporated by reference to our Annual Report on Form 10KSB, as filed with
the Commission on June 4, 2002.

(3) Incorporated by reference to our Annual Report on Form 10-KSB, as filed with
the Commission on April 14, 2004.

(4) Incorporated by reference to our Registration Statement on Form SB-2 (File
No. 333-118937) and amendments thereto, declared effective December 1, 2004.

(5) Incorporated by reference to our Current Report on Form 8-K, as filed with
the Commission on January 19, 2005.

(6) Incorporated by reference to our Registration Statement on Form SB-2 (File
No. 333-123138) filed on March 4, 2005.

<PAGE>

Item 14. Principal Accounting Fees and Services

Audit Fees

The aggregate fees billed for each of the last 2 fiscal years for professional
services rendered by our principal accountant for the audit of the Company's
annual financial statements and review of financial statements included in the
registrant's Form 10-KSB was as follows:

     2003     $30,000
     2004     $93,585

Audit-Related Fees

The aggregate fees billed in each of the last 2 fiscal years for assurance and
related services by our principal accountant that are reasonably related to the
performance of the audit and not reported in Audit Fees was $-0-.

Tax Fees

The aggregate fees billed in each of the last 2 fiscal years for services
rendered by our principal accountant for tax compliance, tax advice, and tax
planning was $-0-.

All Other Fees

The aggregate fees billed in each of the last 2 fiscal years for products and
services provided by our principal accountant other than those described above
was $-0-.

The Company's audit committee, which consists of all directors, approved the
services described above.





<PAGE>


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized on this 3rd day of June, 2005.

GeneThera, Inc.

By: /s/ Antonio Milici
------------------------
Antonio Milici, M.D., Ph.D.
President

By: /s/ Steven M. Grubner
----------------------------
Steven M. Grubner
Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Signature                            Title                      Date
---------                            -----                      ----

/s/ Antonio Milici                  President                June 3, 2005
Antonio Milici, M.D., Ph.D.         Director

/s/ Steven M. Grubner               Chief Financial          June 3, 2005
Steven M. Grubner                   Officer

/s/ Richard Bryans                  Director                 June 3, 2005
Richard Bryans

/s/ Dr. Thomas Slaga                Director                 June 3, 2005
Dr. Thomas Slaga



<PAGE>


                                 GENETHERA, INC.
                                AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004











                                TABLE OF CONTENTS




                                                                       Page No.


Independent Registered Public Accounting Firm's Report                    2

Consolidated Balance Sheets - December 31, 2004 and 2003                  4

Consolidated Statements of Operations for the
Period From October 5, 1998 (Inception) to December 31, 2004              6

Consolidated Statements of Changes in Stockholders' Equity (Deficit)
for the Period From October 5, 1998 (Inception) to December 31, 2004      7

Consolidated Statements of Cash Flows for the
Period From October 5, 1998 (Inception) to December 31, 2004             10

Notes to Consolidated Financial Statements                               11


                                       1
<PAGE>

                        Kantor, Geisler & Oppenheimer, PA
--------------------------------------------------------------------------------
                    Certified Public Accountants & Associates
                            7705 Davie Road Extension
                            Hollywood, Florida 33024
                (954) 432-3100 (305) 620-0616 (954) 436-6898 Fax



             INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT



To the Board of Directors
GeneThera, Inc., and Subsidiaries
Wheat Ridge, Colorado

We have audited the accompanying consolidated balance sheets of GeneThera, Inc.
(a development stage company) and Subsidiaries as of December 31, 2004 and 2003,
and the related consolidated statements of operations, changes in stockholders'
equity (deficit), and comprehensive loss and cash flows for the periods ended
December 31, 2004, December 31, 2003, and from October 5, 1998 (inception) to
December 31, 2004. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
GeneThera, Inc. and Subsidiaries as of December 31, 2004 and 2003, and the
consolidated results of its operations, and its cash flows for each of the years
in the period ended December 31, 2004, December 31, 2003, and from October 5,
1998 (inception) to December 31, 2004, in conformity with U.S. generally
accepted accounting principles.

As discussed in Note 10 to the accompanying consolidated financial statements,
the Company has restated the consolidated balance sheets as of December 31,
2003, and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for the period from October 5, 1998 (inception)
to December 31, 2003.

--------------------------------------------------------------------------------
        Member of the American Institute of Certified Public Accountants
               Member of the Center for Public Company Audit Firms
         Member of the Florida Institute of Certified Public Accountants


                                       2
<PAGE>

Independent Registered Public Accounting Firm's Report
Page 2


The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 14 to the
consolidated financial statements, the Company has no established or sufficient
sources of revenue, and has incurred significant recurring losses from its
operations. This raises substantial doubt about its ability to continue as a
going concern. Management's plan in regards to these matters is also described
in Note 14. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.






KANTOR, GEISLER & OPPENHEIMER, PA



Hollywood, Florida
February 28, 2005, except for Notes 15, 16, and 17, as to which the date is May
27, 2005.


                                       3
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2004 and 2003

                       Assets

                                 2004         2003
                                           (Restated)
                              ----------   ----------
Current Assets
Cash                          $    7,402   $       --
Accounts receivable               13,601           --
Prepaid expenses                  48,694           --
                              ----------   ----------

Total Current Assets              69,697           --
                              ----------   ----------

Property and equipment, net      510,215      480,872
                              ----------   ----------

Other Assets
VDx licensing agreement          326,250
Deposits                           7,478        6,278
                              ----------   ----------

Total Other Assets               333,728        6,278
                              ----------   ----------


Total Assets                  $  913,640   $  487,150
                              ==========   ==========

                 Read report and notes to financial statements.


                                       4
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2004 and 2003

                    Liabilities and Stockholders' Deficit

<TABLE>
<CAPTION>
                                                                       2004            2003
                                                                                    (Restated)
                                                                   ------------    ------------
<S>                                                                <C>             <C>
Current Liabilities
Accounts payable                                                   $    143,838    $    158,000
Accrued expenses                                                        714,544         611,126
Due to related company                                                    2,059             500
Leases payable, current portion                                          30,506          18,715
   Notes and loan payable                                                58,153         193,405
   Convertible notes                                                     19,000         286,874
                                                                   ------------    ------------

Total Current Liabilities                                               968,100       1,268,620
                                                                   ------------    ------------


Long Term Liabilities
Long term portion of capital lease payable                              128,430              --
                                                                   ------------    ------------


Total Liabilities                                                     1,096,530       1,268,620
                                                                   ------------    ------------



Stockholders' Deficit
Preferred stock, $0.001 par value, 20,000,000 shares authorized;
no shares issued and outstanding                                   $         --    $         --
Common stock $.001 par value, authorized 100,000,000 shares;
19,061,010 and 4,796,478 issued and outstanding at
December 31, 2004 and 2003, respectively                                 19,061           4,796
Additional paid in capital                                           10,438,919       3,998,810
Subscription receivable                                                (100,040)             --
Deficit accumulated during development stage                        (10,540,830)     (4,785,076)
                                                                   ------------    ------------

Total Stockholders' Deficit                                            (182,890)       (781,470)
                                                                   ------------    ------------



Total Liabilities &  Stockholders' Deficit                         $    913,640    $    487,150
                                                                   ============    ============
</TABLE>

                 Read report and notes to financial statements.


                                       5
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
      FOR THE PERIOD FROM OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                            For the period from
                                                  Year Ended December 31,     October 5, 1998
                                                    2004            2003       (inception) to
                                                                 (Restated)   December 31, 2004
                                                ------------    ------------    ------------
<S>                                             <C>             <C>             <C>
Income
Sales                                           $     25,496    $         96    $    103,108
Research fees                                             --              --         188,382
                                                ------------    ------------    ------------
Total income                                          25,496              96         291,490

Cost of sales                                        (13,486)             --         (43,838)
                                                ------------    ------------    ------------

Gross profit                                          12,010              96         247,652
                                                ------------    ------------    ------------

Expenses
Other compensation                                 2,119,009       1,164,000       3,283,009
Consulting                                         1,341,160         607,750       2,165,544
   General and administrative expenses               415,523         391,577       1,449,127
Salaries                                             313,490         222,000       1,151,689
Lease expense                                         90,987          97,775         400,751
   Depreciation and amortization                      73,794          61,845         228,022
Settlement expense                                    57,493              --          57,493
Impairment of long-lived asset                        55,714              --          55,714
Lab expenses                                          23,264          58,600         201,346
                                                ------------    ------------    ------------
Total expenses                                     4,490,434       2,603,547       8,992,695
                                                ------------    ------------    ------------

Loss from operations                              (4,478,424)     (2,603,451)     (8,745,043)

Other income (expenses)
Beneficial conversion expense                     (1,301,373)       (319,221)     (1,620,594)
Interest expense                                      (4,022)        (26,511)        (44,628)
Other income (expenses), net                          28,065          (9,492)         (8,500)
                                                ------------    ------------    ------------

Net loss from continuing operations               (5,755,754)     (2,958,675)    (10,418,765)

Loss from discontinued operations                         --          (9,039)         (9,039)
Loss from disposal of discontinued operations             --        (113,026)       (113,026)
                                                ------------    ------------    ------------

Net loss                                        $ (5,755,754)   $ (3,080,740)   $(10,540,830)
                                                ============    ============    ============


Loss per common share                           $      (0.30)   $      (0.64)   $      (0.55)
</TABLE>

                 Read report and notes to financial statements.


                                       6
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
      FOR THE PERIOD FROM OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                                                            Development
                                                                                                               Stage
                                                                   Common Stock                Paid in      Accumulated
                                                                Shares         Amount          Capital         Deficit
                                                             ---------------------------------------------------------------
<S>                                                             <C>          <C>             <C>             <C>
Shares issued to founders for consulting                          420,000    $        420    $     35,580    $         --

Shares issued in exchange for equipment, supplies and cash        100,000             100          99,900

Shares issued for computer services and financing                  60,000              60          59,940

Shares issued in exchange for cash                                  5,000               5           4,995

Net loss for the year 1999                                                                                        (84,350)
                                                             ---------------------------------------------------------------

Balance December 31, 1999                                         585,000             585         200,415         (84,350)

Shares issued for consulting services                              35,000              35          36,965

Shares issued for management and financing services                40,000              40          39,960

Net loss for the year 2000                                                                                       (226,659)
                                                             ---------------------------------------------------------------

Balance  December 31, 2000                                        660,000             660         277,340        (311,009)

Shares issued to an officer in lieu of salary                   1,125,000           1,125         238,875

Shares issued to employees in lieu of salary                       75,000              75          74,925

Shares issued in exchange for consulting services                 100,000             100          99,900

Net loss for the year 2001                                                                                       (393,664)
                                                             ---------------------------------------------------------------
Balance December 31, 2001                                       1,960,000    $      1,960    $    691,040    $   (704,673)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>



                                                                  Total
                                                             --------------
<S>                                                            <C>
Shares issued to founders for consulting                       $     36,000

Shares issued in exchange for equipment, supplies and cash          100,000

Shares issued for computer services and financing                    60,000

Shares issued in exchange for cash                                    5,000

Net loss for the year 1999                                          (84,350)
                                                             --------------

Balance December 31, 1999                                           116,650

Shares issued for consulting services                                37,000

Shares issued for management and financing services                  40,000

Net loss for the year 2000                                         (226,659)
                                                             --------------

Balance  December 31, 2000                                          (33,009)

Shares issued to an officer in lieu of salary                       240,000

Shares issued to employees in lieu of salary                         75,000

Shares issued in exchange for consulting services                   100,000

Net loss for the year 2001                                         (393,664)
                                                             --------------
Balance December 31, 2001                                      $    (11,673)
</TABLE>

                 Read report and notes to financial statements.

                                       7
<PAGE>


                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
      FOR THE PERIOD FROM OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                                                            Development
                                                                                                               Stage
                                                                   Common Stock                Paid in      Accumulated
                                                                Shares         Amount          Capital         Deficit
                                                             ---------------------------------------------------------------
<S>                                                          <C>             <C>             <C>             <C>
Balance December 31, 2001                                       1,960,000    $      1,960    $    691,040    $   (704,673)

Recapitalization on February 25, 2002                             697,176             697        (115,352)             --

Shares issued in exchange for convertible notes payable            81,000              81          40,419

Additional paid in capital - related party                                                        368,962

Net loss for the year 2002                                                                                       (999,663)
                                                             ------------    ------------    ------------    ------------

Balance December 31, 2002                                       2,738,176           2,738         985,069      (1,704,336)

Additional paid in capital contributed as equipment                                               201,976

Additional paid in capital - related party                                                        200,000

Beneficial conversion feature                                                                     319,221

Shares issued in exchange for services                            715,000             715         607,035

Shares issued to officer                                          600,000             600       1,163,400

Shares issued in exchange for convertible notes payable           743,302             743         522,109

Net loss for the year 2003                                                                                     (3,080,740)
                                                             ------------    ------------    ------------    ------------

Balance December 31, 2003                                       4,796,478    $      4,796    $  3,998,810    $ (4,785,076)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>



                                                                  Total
                                                             --------------
<S>                                                            <C>
Balance December 31, 2001                                      $    (11,673)

Recapitalization on February 25, 2002                              (114,655)

Shares issued in exchange for convertible notes payable              40,500

Additional paid in capital - related party                          368,962

Net loss for the year 2002                                         (999,663)
                                                               ------------

Balance December 31, 2002                                          (716,529)

Additional paid in capital contributed as equipment                 201,976

Additional paid in capital - related party                          200,000

Beneficial conversion feature                                       319,221

Shares issued in exchange for services                              607,750

Shares issued to officer                                          1,164,000

Shares issued in exchange for convertible notes payable             522,852

Net loss for the year 2003                                       (3,080,740)
                                                               ------------

Balance December 31, 2003                                      $   (781,470)
</TABLE>


                 Read report and notes to financial statements.


                                       8
<PAGE>


                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
      FOR THE PERIOD FROM OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                                                            Development
                                                                                                               Stage
                                                                   Common Stock                Paid in      Accumulated
                                                                Shares         Amount          Capital         Deficit
                                                             ----------------------------------------------------------------
<S>                                                          <C>             <C>             <C>             <C>
Balance December 31, 2003                                       4,796,478    $      4,796    $  3,998,810    $ (4,785,076)

Shares issued in exchange for convertible notes payable         1,434,409           1,434       1,103,179

Shares issued for consulting and legal services                   698,805             699       1,126,164

Beneficial conversion feature                                                                   1,301,373

Shares issued to founder for completion of reverse merger       7,725,000           7,725          (7,725)             --

Shares issued to founder for compensation                       1,473,339           1,474       2,117,535

Warrants exercised                                              2,382,979           2,383         235,915

Shares issued for the acquisition of VDx Inc.                     375,000             375         313,843

Shares issued for cash and subscription agreement                 175,000             175         249,825

Net loss for the year 2004                                                                                     (5,755,754)

   Adjustment for Subscription receivable

                                                             ----------------------------------------------------------------
Balance December 31, 2004                                      19,061,010    $     19,061    $ 10,438,919    $(10,540,830)
                                                             ================================================================
</TABLE>

<PAGE>

<TABLE>
<CAPTION>



                                                                  Total
                                                             --------------
<S>                                                            <C>
Balance December 31, 2003                                      $   (781,470)

Shares issued in exchange for convertible notes payable           1,104,613

Shares issued for consulting and legal services                   1,126,860

Beneficial conversion feature                                     1,301,373

Shares issued to founder for completion of reverse merger                --

Shares issued to founder for compensation                         2,119,012

Warrants exercised                                                  238,298

Shares issued for the acquisition of VDx Inc.                       314,218

Shares issued for cash and subscription agreement                   250,000

Net loss for the year 2004                                       (5,755,754)

   Adjustment for Subscription receivable                          (100,040)

                                                             --------------
Balance December 31, 2004                                      $   (182,890)
                                                             ==============
</TABLE>

                 Read report and notes to financial statements.


                                       9
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
      FOR THE PERIOD FROM OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                                 For the period from
                                                       Year ended December 31,     October 5, 1998
                                                                        2003        (inception) to
                                                         2004         (Restated)   December 31, 2004
                                                     ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>
Cash flows from operating activities:
  Net loss                                           $ (5,755,754)   $ (3,080,740)   $(10,540,830)
                                                     ------------    ------------    ------------

  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
Depreciation and amortization                              73,794          69,344         235,521
Compensation in exchange for common stock               3,484,168       1,771,750       5,722,918
Beneficial conversion feature                           1,301,373         319,221       1,620,594
Loss on impairment                                         55,714              --          55,714
Changes in operating assets and liabilities
(Increase) Decrease in:
Accounts receivable                                       (13,601)          5,517         (13,601)
Inventory                                                      --          24,999              --
Prepaid expenses                                          (48,694)             --         (48,694)
Other assets                                               (1,200)         44,090          35,548
Increase in account payable
and accrued liabilites                                     90,455         205,553         824,595
                                                     ------------    ------------    ------------

      Total adjustments                                 4,942,009       2,440,474       8,432,595
                                                     ------------    ------------    ------------

  Net cash used in operating activities                  (813,745)       (640,266)     (2,108,235)
                                                     ------------    ------------    ------------

Cash flows from investing activities:
  Cash payments for the purchase of property             (158,831)         (8,735)       (193,900)
                                                     ------------    ------------    ------------


Cash flows from financing activities:
   Bank overdraft                                                          35,486          35,486
Capital contributed as equipment                                          201,976         272,376
Principal payments on notes & leases payable             (162,482)        (31,155)       (233,297)
Proceeds from lease payable                               150,000              --         150,000
Proceeds from issuance of common stock                    149,960              --         593,922
Proceeds from loans payable                               842,500         433,550       1,491,050
                                                     ------------    ------------    ------------

  Net cash provided by financing activities               979,978         639,857       2,309,537
                                                     ------------    ------------    ------------

Net increase (decrease) in cash                             7,402          (9,144)          7,402

Cash, beginning of year                                        --           9,144              --
                                                     ------------    ------------    ------------

Cash, end of year                                    $      7,402    $         --    $      7,402
                                                     ============    ============    ============


Supplemental disclosures of cash flow information:
Cash paid during the period for interest expense     $      4,022    $     26,511    $     33,815
                                                     ------------    ------------    ------------
</TABLE>

                 Read report and notes to financial statements.


                                       10
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

The consolidated financial statements include GeneThera, Inc. and its wholly
owned subsidiaries (collectively the "Company")

GeneThera, Inc., formerly known as Hand Brand Distribution, Inc., was
incorporated in November 1995, under the laws of the State of Florida. On
February 25, 2002, GeneThera, Inc. acquired 100% of the outstanding shares of
GeneThera, Inc. (Colorado) in an 8:1 reverse split. A total of 16,611,900 shares
of common stock were issued for the acquisition. (See Note 10 for historical
review of the transaction.) For accounting purposes, the acquisition has been
treated as a capital transaction and as a recapitalization of GeneThera, Inc.
(Colorado). On September 20, 2004, the Company acquired 100% of the outstanding
shares of VDx, Inc. A total of 375,000 shares of common stock were issued for
the transaction.

GeneThera, Inc. (Colorado) is a biotechnology company that develops molecular
assays for the detection of food contaminating pathogens, veterinary diseases
and genetically modified organisms. VDx, Inc. is a manufacturer and distributor
of veterinary diagnostic equipment and tests.

GeneThera, Inc. (Colorado) and VDx, Inc. are considered to be in the development
stage. The companies devote substantially all of their efforts to establishing
new business and have not begun planned principal operations and have not
generated significant revenue. Activity during the development stage includes
organization, development of strategic alliances, and implementation and
revision of the business plan. It is important to also include testing and
continued development and refinement of their principal technologies. GeneThera,
Inc. (Colorado) also provides research services to unrelated parties.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
GeneThera, Inc. (Florida) and its wholly owned subsidiaries. All significant
inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration
risks are cash and accounts receivable. At various times during the year, the
Company had deposits in excess of the federally insured limits. The Company
maintains its cash with high quality financial institutions, which the Company
believes limits these risks.


                                       11
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Property and Equipment

Property and equipment are stated at cost. Equipment under capital leases is
stated at the present value of minimum lease payments. Depreciation is
calculated on a straight-line basis over the estimated useful lives of the
assets, which is 5 to 10 years. Betterments, which extend the life of the asset,
are capitalized, and maintenance and repairs are expensed as incurred.

Impairment of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets to determine
whether events or changes in circumstances occurred that indicate the carrying
value of the asset may not be recoverable. The assessment of possible impairment
is based on the ability to recover the carrying value of the asset from the
expected future cash flows of the related operations. If these cash flows are
less than the carrying value of such asset, an impairment loss is recognized for
the difference between the estimated fair value and carrying value. The
measurement of impairment requires management to make estimates of these cash
flows related to long-lived assets, as well as other fair value determinations.

Revenue Recognition

Revenues from VDx sales are recognized when services are rendered.

Loss per Share

Basic loss per share for each year is computed by dividing loss for the year by
the weighted average number of common shares outstanding during the year.
Diluted loss per share includes the effects of common stock equivalents to the
extent they are dilutive. At December 31, 2004 and 2003 all common stock
equivalents were antidilutive and therefore diluted loss per share equaled basic
loss per share.

Fair Value of Financial Instruments

The respective carrying value of certain on-balance sheet financial instruments
approximated their fair value. These instruments include cash, accounts
receivable and accounts payable. Fair values were assumed to approximated
carrying values for these financial instruments since they are short-term in
nature and their carrying amounts approximate fair values or they are receivable
or payable on demand.

Segment Information

The Company consists of two distinct businesses, although it operates in one
segment for management reporting purposes.


                                       12
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
No. 141, Business Combinations (SFAS 141). SFAS 141 establishes revised
standards for accounting for business combinations. Specifically, the statement
eliminates the pooling method, provides new guidance for recognizing intangible
assets arising in a business combination, and calls for disclosure of
considerably more information about a business combination. This statement is
effective for business combinations initiated on or after July 1, 2001. The
adoption of this pronouncement on July 1, 2001 did not have a material effect on
the Company's financial position, results of operations or liquidity.

In August 2001, the FASB issued Statement No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS 144 supersedes Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of (SFAS 121). Although SFAS 144 retains the basic requirements of
SFAS 121 regarding when and how to measure an impairment loss, SFAS 144 provides
additional implementation guidance. SFAS 144 excludes goodwill and intangibles
not being amortized, among other exclusions. SFAS 144 also supersedes the
provisions of APB 30, Reporting the Results of Operations, pertaining to
discontinued operations. Separate reporting of a discontinued operation is still
required, but SFAS 144 expands the presentation to include a component of an
entity, rather than strictly a business segment as defined in SFAS 131,
Disclosures about Segments of an Enterprise and Related Information. SFAS 144
also eliminates the current exemption to consolidation when control over a
Subsidiary is likely to be temporary. This statement is effective for all fiscal
years beginning after December 15, 2001. The adoption of SFAS 144 and impact on
these consolidated financial statements is explained in Note 12.

In May 2003, the FSAB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity. SFAS No. 150
affects the issuer's accounting for three types of freestanding financial
instruments. One type is a mandatorily redeemable share, which the issuing
company is obliged to buy back in exchange for cash or other assets. A second
type, which includes put options and forward purchase contracts, involves
instruments that do or may require the issuer to buy back some of its shares in
exchange for cash or other assets. The third type of instrument consists of
obligations that can be settled with shares, the monetary value of which is
fixed, tied solely or predominately to a variable such as a market index, or
varies inversely with the value of the issuer's shares. SFAS No. 150 does not
apply to features embedded in a financial instrument that is not a derivative in
its entity. SFAS No. 150 also requires disclosures about alternative ways of
settling the instruments and the capital structure of entities whose shares are
mandatorily redeemable. Most of the guidance in SFAS No. 150 is effective for
all financial instruments entered into or modified after May 31, 2003 and
otherwise is effective from the start of the first interim period beginning
after June 15, 2003. The adoption of this standard did not have a material
impact on the Company's results of operations or financial position.


                                       13
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary
Assets, an amendment to Accounting Principles Board Opinion No. 29, Accounting
for Non-monetary Transactions is based on the principle that exchanges of
non-monetary assets should be measured based on the fair value of the assets
exchanged. The guidance in that Opinion, however, included certain exceptions to
that principle. This Statement amends Opinion 29 to eliminate the exception for
non-monetary exchanges of similar productive assets and replaces it with a
general exception for exchanges in which the future cash flows of the entity are
not expected to changes significantly as a result of the exchange. The
provisions of SFAS No. 153 will become effective for non-monetary asset
exchanges in fiscal periods beginning after June 15, 2005. The Company has not
yet determined the impact of adopting this standard.

In December 2004, the FASB issued SFAS 123 (revised 2004), Share-Based Payment,
("SFAS No. 123(R)"). SFAS No. 123(R) requires companies to recognize the
compensation cost relating to share-based payment transactions in the financial
statements. This Statement eliminates the ability to account for share-based
compensation transactions using the Accounting Principles Board Opinion No. 25,
and requires instead that such transactions be accounted for using a fair-value
method. SFAS No. 123(R) will be effective for the Company's annual report for
the period ending December 31, 2005.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified
for comparative purposes to conform to the presentation in the current year
financial statements.


NOTE 2 PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2004 and 2003 consisted of the following:

                                            2004          2003
                                          ---------    ---------
                                                       (Restated)

      Office equipment                    $  45,452    $  39,107
      Laboratory equipment                  730,488      578,041
                                          ---------    ---------

                                            775,940      617,148
      Less:  Accumulated depreciation      (265,726)    (136,276)
                                          ---------    ---------


                                          $ 510,214    $ 480,872
                                          =========    =========


                                       14
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 2 PROPERTY AND EQUIPMENT - continued

Depreciation expense for the years ended December 31, 2004 and 2003 was $ 73,794
and $61,845, respectively.

During the year ended December 31, 2002, the Company entered into capital lease
agreements to acquire laboratory equipment and a computer. (See Note 3)

During the year ended December 31, 2004, the Company entered into a capital
lease agreement to acquire laboratory equipment. (See Note 3)


NOTE 3 LEASE OBLIGATIONS

Operating Leases

The Company leases its office, warehouse, laboratory space and vehicles under
non-cancelable operating leases, which have initial terms in excess of one year.

Total lease expense for the years ended December 31, 2004 and 2003 was $90,987,
and $104,509, respectively.

Capital Leases

The Company's property under capital leases is included in property and
equipment (See Note 2) and is summarized as follows:

                                                     2004               2003
                                                 ------------      ------------
                                                                     (Restated)

         Laboratory Equipment                      $   183,312      $    31,574
         Computer                                        2,672            2,672
                                                   -----------      -----------

                                                       185,984           34,246
         Less:  Accumulated depreciation               (11,396)          (6,441)
                                                   -----------      -----------

         Net assets under capital leases            $  174,588      $    27,805
                                                    ==========      ===========


                                       15
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 3 LEASE OBLIGATIONS - continued

Capital Leases

Future annual minimum lease payments under these non-cancelable operating and
capital leases at December 31, 2004 were as follows:
<TABLE>
<CAPTION>
                                                           Operating              Capital
                                                            Leases                 Leases
                                                         -----------            ----------
         <S>                                             <C>                    <C>
         2005                                            $    89,232            $   47,871
         2006                                                 26,400                47,527
         2007                                                 22,000                46,836
         2008                                                      0                46,836
         2009 and thereafter                                       0                46,836
                                                         -----------            ----------

                                                         $   137,632               235,906
                                                         ===========
         Less amount representing interest                                         (76,970)
                                                                                ----------
         Present value of minimum lease payments                                   158,936
         Less current portion                                                      (30,506)
                                                                                ----------
         Long-term portion of capital lease payable                             $  128,430
                                                                                ==========
</TABLE>

Total interest expense, including late fees, under capital leases was $2,352 and
$2,510 for the years ended December 31, 2004 and 2003, respectively.


NOTE 4 LOAN PAYABLE

The Company has an outstanding loan payable to a related party as follows:

<TABLE>
<CAPTION>
                                                                             2004                  2003
                                                                         -----------           -----------
                                                                                                (Restated)
         <S>                                                             <C>                   <C>
         Loan payable with no interest, due on demand, unsecured.        $    20,000           $         0
         Less current portion                                                (20,000)                   (0)
                                                                         -----------           -----------

         Total long-term loan payable - related party                    $         0           $         0
                                                                         ===========           ===========
</TABLE>

There was no interest expense related to this obligation for the years ended
December 31, 2004 and 2003.


                                       16
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

NOTE 5 NOTES PAYABLE

The Company has outstanding notes payable at December 31, 2004 and 2003 as
follows:

<TABLE>
<CAPTION>
                                                                            2004                   2003
                                                                         -----------            ----------
                                                                                                 (Restated)
         <S>                                                             <C>                    <C>
         Various notes payable with interest rates ranging
         from 0% to 14%; various terms; secured by equipment
         and personal guarantees.                                        $    38,153            $  193,405
         Less current portion:                                               (38,153)             (193,405)
                                                                         -----------            ----------

         Total long-term notes payable                                   $         0            $        0
                                                                         ===========            ==========

         Total interest expense for these obligations for the year ended
         December 31, 2004 and 2003 was $5,136 and $4,022, respectively.
</TABLE>

NOTE 6 CONVERTIBLE NOTES PAYABLE

The Company has outstanding convertible notes payable at December 31, 2004 and
2003 as follows:

<TABLE>
<CAPTION>
                                                                            2004                   2003
                                                                       ------------           ------------
                                                                                                (Restated)
         <S>                                                           <C>                    <C>
         Various convertible notes payable to individuals, with
         interest at 8%; due at various dates from April 14, 2003
         through June 18, 2004; convertible into shares of common
         stock at a price of $0.50 per share.                          $          0           $   223,124

         Convertible note payable to an individual, with interest
         at 10%; due May 16, 2004; convertible into shares of common
         stock at a price of $0.25 per share.                                     0                63,750

         Convertible note payable to an individual, with interest at
         12%; due July 8, 2004; convertible into shares of common
         stock at a price of $1.00 per share.                                17,000                     0
</TABLE>


                                       17
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

NOTE 6 CONVERTIBLE NOTES PAYABLE - continued

<TABLE>
<CAPTION>
                                                                            2004                   2003
                                                                         -----------          ------------
                                                                                                (Restated)
         <S>                                                             <C>                  <C>
         A convertible note payable to an individual, with
         interest at 8%; due February 15, 2005; convertible
         into shares of common stock at a price of $1.00
         per share.                                                            2,000                63,750
                                                                         -----------          ------------

                                                                              19,000               286,874
         Less:  current portion                                              (19,000)             (286,874)
                                                                         -----------          ------------

         Total long-term convertible notes payable                       $         0          $          0
                                                                         ===========          ============
</TABLE>

Interest expense for these obligations for the years ended December 31, 2004 and
2003 was $1,614 and $15,677, respectively.


NOTE 7 STOCKHOLDERS' EQUITY (DEFICIT)

Common Stock

On March 5, 1999, the Company issued 420,000 shares of common stock valued at
$36,000 according to an employment agreement, approved by the board of
directors, to the founder for services rendered during 1999. Accordingly,
consultant expense of $36,000 was charged to operations.

On March 5, 1999, 100,000 shares of common stock were issued in exchange for
used equipment with a fair market value of $34,586, supplies, and other items
totaling $25,414, and $40,000 in cash from an unrelated party. Accordingly, lab
equipment was recorded at $34,586, supplies at $21,414, and glassware at $4,000
- the market value for these items.

On April 1, 1999, according to a contract agreement to provide computer
services, the Company issued 60,000 shares of common stock valued at $60,000, in
exchange for computer & consulting services in the amount of $55,000, and $5,000
in cash. Accordingly, consultant expense of $55,000 was charged to operations.

On April 1, 1999, 5,000 shares of common stock valued at $5,000 were issued to
an unrelated party for $5,000 in cash.

On January 1, 2000, 25,000 shares of common stock valued at $25,000 were issued
to a consultant in exchange for services rendered. Accordingly, consultant
expense of $25,000 was charged to operations.


                                       18
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 7 STOCKHOLDERS' EQUITY (DEFICIT) - continued

Common Stock - continued

On April 10, 2000, according to a contract agreement to provide management
services, the Company issued 40,000 shares of common stock valued at $40,000, in
exchange for management services. Accordingly, consultant expense of $40,000 was
charged to operations.

On May 15, 2000, according to a contract agreement to provide consulting
services, the Company issued 10,000 shares of common stock valued at $12,000.
Accordingly, consultant expense of $12,000 was charged to operations.

On February 15, 2001, the Company issued 1,125,000 shares of common stock valued
at $240,000 according to an employment agreement, approved by the board of
directors, to an officer in lieu of salary for services rendered during 2000 &
2001. Accordingly, salary expense of $120,000 was charged to operations at
December 31, 2001 and $120,000 in 2000.

On February 15, 2001, the board of directors of the Company approved the
issuance of 60,000 shares of common stock valued at $60,000 to an officer in
lieu of salary for services rendered. Accordingly, salary expense of $60,000 was
charged to operations.

On February 15, 2001, the board of directors of the Company approved the
issuance of 15,000 shares of common stock valued at $15,000 to an officer in
lieu of salary for services rendered. Accordingly, salary expense of $15,000 was
charged to operations.

On October 1, 2001, according to a contract agreement to provide consulting
services, the Company issued 100,000 shares of common stock valued at $100,000.
Accordingly, consultant expense of $100,000 was charged to operations.

As a result of the recapitalization on February 25, 2002, the Company is deemed
to have issued 697,176 common shares to the stockholders of GeneThera, Inc.
(f/k/a Hand Brand Distribution, Inc.).

During November 2002, certain holders exercised their option to convert $40,500
in convertible notes payable per various agreements dated in 2002. As a result,
81,000 shares of common stock were issued.

In June 2003, the Company issued 715,000 shares of common stock valued at
$607,750 in exchange for consulting services. Accordingly, consultant expense of
$607,750 was charged to operations.

On November 15, 2003, the Company issued 600,000 shares of common stock valued
at $1,164,000 as "officer incentive" to an officer of the Company following a
resolution of the board of directors. Accordingly, salary expense of $1,164,000
was charged to operations.


                                       19
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 7 STOCKHOLDERS' EQUITY (DEFICIT) - continued

Common Stock - continued

During 2003, certain holders exercised their option to convert $331,652 in
convertible notes payable per various agreements dated in 2002 and 2003. As a
result, 663,302 shares of common stock were issued.

On October 1, 2004, the Company issued 80,000 shares of common stock to the
President of Family Health News, Inc. (FHNI) to satisfy all outstanding
convertible notes and accrued interest for funds loaned to the Company.
Additionally, the Company released and conveyed all interest in the FHNI to its
president. Although signed on August 1, 2004, the agreement was effective as of
October 1, 2003.

During 2004, certain holders exercised their option to convert $1,048,989 in
convertible notes payable per various agreements dated in 2003 and 2004. As a
result, 1,434,409 shares of common stock were issued.

In January 2004, the Company issued 30,000 shares valued at $88,710 pursuant to
a one-year agreement with a consultant. Accordingly, $88,710 for consulting
expense was charged to operations.

In January 2004, the Company issued 211,000 shares valued at $437,481 to
consultants for services rendered. Accordingly, $437,481 for consulting expense
was charged to operations.

In June 2004, the Company issued 7,725,000 shares to the founder by resolution
of the board of directors in conjunction with the completion of the reverse
acquisition.

In June 2004, the Company issued 1,473,339 shares valued at $2,117,535 to the
founder by resolution of the board of directors for compensation.

In June 2004, a consultant exercised its option to purchase 2,382,979 shares
under warrants issued for consulting services valued at $238,298. Accordingly,
$238,298 for consulting expense was charged to operations. All warrants related
to this consulting agreement have been exercised.

In August and September 2004, the Company issued 97,250 shares valued at $94,671
to several consultants and an attorney for services rendered. Accordingly,
$23,421 for consulting expense and $71,250 for professional fees was charged to
operations.

On September 20, 2004 the Company issued 375,000 shares valued at $314,218 in
connection with the acquisition of VDx, Inc.

In November 2004, the Company issued 325,000 valued at $471,250 to a consultant
for marketing. Accordingly, $471,250 for consulting expense was charged to
operations.

In November 2004, the Company issued 175,000 shares valued at $250,000 to a
subscriber for a total of $149,960 in cash and a subscription receivable of
$100,040.


                                       20
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 7 STOCKHOLDERS' EQUITY (DEFICIT) - continued

Common Stock - continued

In November and December 2004, the Company issued 35,555 shares valued at
$34,750 for legal services rendered. Accordingly, $34,750 for professional fees
was charged to operations.


NOTE 8 INCOME TAXES

The Company has no current or deferred income tax due to its operating losses.

The Company has a federal net operating loss carry forward at December 31, 2004
and 2003 of approximately $10,670,000 and $4,930,000, respectively, subject to
annual limitations prescribed by the Internal Revenue Code, that are available
to offset future taxable income through 2024. A 100% valuation allowance has
been recorded to offset the net deferred taxes due to uncertainty of the
Company's ability to generate future taxable income.


NOTE 9 AMENDMENT TO ARTICLES OF INCORPORATION

Following a resolution of the board of directors, the Company amended its
articles of incorporation effective June 16, 2003, to change the Company's name
from Hand Brand Distribution, Inc. to GeneThera, Inc., and to provide for a
maximum of 100,000,000 shares of common stock and 20,000,000 shares of preferred
stock.


NOTE 10 RESTATEMENT

On February 25, 2002, GeneThera, Inc., f/k/a Hand Brand Distribution, Inc., (the
Company), entered into an agreement to acquire GeneThera, Inc. (Colorado). The
Company was to issue 6 shares of common stock (after a 2:1 forward stock split)
for each share of GeneThera, Inc. (Colorado). At the end of the transaction the
Company would have issued a total of 16,611,900 shares of common stock and own
approximately 91% of GeneThera, Inc. (Colorado). At the time the agreement was
signed, the Company did not have sufficient authorized shares of common stock to
complete the transaction. The stockholders of GeneThera, Inc. (Colorado) decided
to proceed with the acquisition and agreed to delay receipt of the shares until
the Company increased the number of authorized shares. This did not occur until
late in 2003. In the 10-K filed for the year ended December 31, 2002, the
Company reported a total of 18,621,476 shares issued, but only 2,009,576
outstanding. The 16,611,900 shares of common stock related to the acquisition
were never issued due to the insufficient number of authorized shares of common
stock of the Company.


                                       21
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 10 RESTATEMENT - continued

The assets of GeneThera, Inc. (f/k/a Hand Brand Distribution, Inc.) and
GeneThera, Inc. (Colorado) are at historical cost as of December 31, 2001. The
value of the net assets of GeneThera, Inc. at the time of the acquisition is the
same as the historical negative book deficiency of ($114,654). For the
recapitalization, equity accounts of GeneThera, Inc. (Colorado) have been
restated, based on the ratio of exchange of 1 (one) share of the Company for 1
(one) share of GeneThera, Inc. (Colorado).

The financial statements became those of GeneThera, Inc. (Colorado), with
adjustments to reflect the changes in equity structure. The operations are those
of GeneThera, Inc. (Colorado) from inception, October 5, 1998 to December 31,
2003, and those of GeneThera, Inc. (f/k/a Hand Brand Distribution, Inc.) from
February 25, 2002, the recapitalization date.

During the first quarter of 2003, the agreement of February 25, 2002 was
rescinded and a new acquisition agreement was signed. At this time, the board of
directors of the Colorado corporation resolved to restructure the equity of the
Colorado corporation, whereby of the 3,039,050 shares of common stock issued and
outstanding (including the minority interest) at the time of the first
agreement, only 1,960,000 shares of common stock remained at March 23, 2003.

The canceled shares had the following effect on the Colorado corporation:

<TABLE>
<CAPTION>
                                                     Shares  of          Additional           Accumulated
                                                    Common Stock       Paid in Capital          Deficit
                                                    ------------       ---------------          -------
<S>                                                 <C>                <C>                   <C>
As reported February 25, 2002 - before
         acquisition                                  18,234,300       $    1,048,428        $    (995,073)

     Adjustments
         Reversal 3:1 (2:1 fwd stock split)          (15,195,250)             (72,799)                   0
         Cancelled shares                               (290,400)            (290,109)             290,400
         Cancelled shares                               (788,650)               5,520                    0
                                                     -----------       --------------        -------------

     Total adjustments                               (16,274,300)            (357,388)             290,400
                                                     -----------       --------------        -------------
As restated - retroactive to
      February 25, 2002 acquisition                    1,960,000       $      691,040        $    (704,673)
                                                     ===========       ==============        =============
</TABLE>


During 2002, the Company issued a total of 1,312,400 shares--652,400 related to
convertible notes, and the remaining 660,000 shares associated with a credit
line commitment fee having an option to convert to shares. By resolution of the
Board of Directors a total of 1,231,400 shares were canceled.


                                       22
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004

NOTE 10 RESTATEMENT - continued

Following is the aggregate effect on the consolidated financial statements of
the Company at December 31, 2002, reflecting the cancellation of shares by both
the Colorado corporation and the Company, as well as the retroactive effect of
the initial acquisition as per the terms of the new agreement dated March 23,
2003.


<TABLE>
<CAPTION>
                                                    Shares of           Additional         Accumulated
                                                   Common Stock       Paid in Capital        Deficit
                                                   ------------       ---------------        -------

<S>                                                  <C>              <C>                 <C>
As reported December 31, 2002                         18,621,476       $    2,433,240      $    (3,401,716)

    Adjustments
         Rescission/Acquisition                      (16,274,300)            (1,390,180)         1,406,454
         Reversal minority interest                    1,622,400              270,778              (62,998)
         Cancelled shares                               (660,000)            (329,340)             330,000
         Cancelled shares                               (571,400)                 571                    0
         FHNI adjustment COGS                                  0                    0               23,924
                                                   -------------       --------------     ----------------

As restated retroactive December 31, 2002          $   2,738,176       $      985,069     $     (1,704,336)
                                                   =============       ==============     ================
</TABLE>

The consolidated financial statements of the Company included in the 10-KSB for
December 31, 2003 depicted the new acquisition as of March 23, 2003, and
considered the 2002 reverse acquisition null and void. The historical
information was that of the Colorado corporation. After reviewing FAS 141,
Business Combination and all facts surrounding the original acquisition, the
rescission and consequent re-acquisition, the Company determined that even
though the January 2002 acquisition agreement was rescinded, control of the
Company remained continuously with the Colorado corporation through its major
shareholders. Also, upon subsequent review of the financial statements in
connection with our 2004 Annual Report, the Company determined that adjustments
to Paid in Capital and Accumulated Deficit were warranted under Generally
Accepted Accounting Principles. Consequently, the consolidated financial
statements for December 31, 2003 are restated as follows:

<TABLE>
<CAPTION>
                                                    Shares of            Additional            Accumulated
                                                   Common Stock        Paid in Capital            Deficit
                                                   ------------        ---------------            -------
<S>                                                 <C>                 <C>                   <C>
As reported December 31, 2003                          4,749,976        $   4,300,500         $   (4,798,772)

     Adjustments
         Cumulative effect of recapitalization                             (1,116,054)             1,116,054
         Additional liabilities                                0                    0                (26,989)
         Reclassification of supplies                          0                    0                (33,314)
         Revaluation of fixed assets                           0             (248,024)                11,649
         Related party debt                                    0              568,962               (518,962)
         Beneficial conversion features                        0              319,221               (319,221)
         Correction of shares converted                  (33,498)             (16,915)                     0
         Consolidation of FHNI                                 0                    0                (93,457)
         Disposal of subsidiary                           80,000              191,120               (122,064)
                                                    ------------        -------------        ---------------

As restated December 31, 2003                          4,796,478        $   3,998,810        $    (4,785,076)
                                                    ============        =============        ===============
</TABLE>


                                       23
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 11 CONSOLIDATION AND DIVESTITURE OF SUBSIDIARY

The consolidated financial statements of the Company included in the 10-KSB
filed for December 31, 2003 did not include the financial statements of its
wholly own subsidiary, Family Health News, Inc. (FHNI). Further evaluation of
the applicable standards revealed that FAS 144 amended ARB 51, and eliminated
the exemption to consolidation for subsidiaries for which control is likely to
be temporary. In reevaluating the accounting treatment, the Company restated the
consolidated financial statements for the year ended December 31, 2003 to
include FHNI and the results of its operations through September 30, 2003, and
the effect of its disposal on October 1, 2003. On August 1, 2004 the Company
signed a resolution agreement with the President of FHNI. As stated in the
agreement, the Company issued 80,000 shares of common stock to the President of
FHNI to satisfy all outstanding convertible notes and accrued interest for funds
loaned to the Company. Additionally, the Company released and conveyed all
interest in the FHNI to its president. Although signed on August 1, 2004, the
agreement was retroactively effective as of October 1, 2003.

As a result of the disposition the Company recorded a loss of $113,026. FHNI had
net sales of $119,445 and a net loss of $9,039 through September 31, 2003, which
is included as a loss from discontinued operations in the consolidated financial
statements.

At December 31, 2003, there were no assets related to discontinued operations on
the consolidated balance sheet.


NOTE 12 IMPAIRMENT OF LONG - LIVED ASSET

In 2004, management reviewed the carrying amount of certain laboratory
equipment. Based on quotations from vendors, the carrying value of the Nucleic
Acid machine was reduced from $80,714 to a salvage value of $25,000. The
impairment is therefore $55,714.


NOTE 13 CONTINGENCIES

The Company is involved in claims arising during the ordinary course of business
resulting from disputes with vendors and shareholders over various contracts and
agreements. While the ultimate outcome of these matters has yet to be
determined, management has included a provision for these claims based on known
facts and circumstances as of December 31, 2004.


NOTE 14 GOING-CONCERN UNCERTAINTY

These financial statements are presented assuming the Company will continue as a
going concern. For the years ended December 31, 2004 and 2003, the Company
showed operating losses of $5,755,754 and $3,080,740, respectively. The
accompanying financial statements indicate that current liabilities exceed
current assets by $898,403 and $1,268,980 for the years ended December 31 2004
and 2003, respectively.


                                       24
<PAGE>

                        GENETHERA, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE PERIOD FROM
                OCTOBER 5, 1998 (INCEPTION) TO DECEMBER 31, 2004



NOTE 14 GOING-CONCERN UNCERTAINTY - continued

These factors raise substantial doubt about its ability to continue as a going
concern. Management's plan with regard to these matters includes raising working
capital and significant assets and resources to assure the Company's viability,
through private or public equity offering, and/or debt financing, and/or through
the acquisition of new business or private ventures.


NOTE 15 RESEARCH AND DEVELOPMENT COSTS

All research and development costs are charged to expense when incurred. The
following table illustrates the types of expenses imbedded in the financial
statements as costs related to laboratory research, formulation, design and
testing of products and processes as related to the business plan.


                    2004           2003
                ------------   ------------
Consulting      $    240,000   $    240,000
Salaries             164,714        137,067
Lease expense         50,703         51,135
Depreciation          66,551         54,497
Lab expenses          23,264         58,600
                ------------   ------------

Totals          $    545,232   $    541,299

NOTE 16 BENEFICIAL CONVERSION EXPENSE

The Company's accounting policy with respect to instruments with beneficial
conversion features is as follows:

Convertible notes issued to investors in response to public and private
placement offerings made in 2002, 2003, and 2004 were convertible at inception
with fixed dollar conversion terms. The beneficial conversion feature is
calculated at its intrinsic value (that is, the difference between the
conversion price and the fair value of the common stock at the time of issuance
of the debt into which the debt is convertible) at the commitment date. A
portion of the proceeds from issuance of the convertible debt, equal to the
intrinsic value, is then allocated to additional paid-in capital. Because the
debt is convertible at the date of issuance, the debt discount is charged to
interest expense at the date of issuance.

Beneficial conversion expense was $1,301,373 and $319,221 for the periods ended
December 31, 2004 and 2003, respectively.


                                       25
<PAGE>

NOTE 17 ACQUISITION OF VDx, INC.

On September 20, 2004 the Company acquired 100% of the equity interests of VDx,
Inc. (VDx). The income and expenses for VDx from the period September 20, 2004
through December 31, 2004 are included in the consolidated statements of
operations. VDx is a corporation organized under the laws of the state of
Wisconsin and is a manufacturer and distributor of veterinary diagnostic
equipment and tests. VDx currently markets and sells specialized tests for
bovine IgG, NEFA for the dairy industry, and Equine IgG. VDx has already made a
significant impact within the dairy cattle industry with their NEFA test and
nutritional supplement program to maximize output for the dairy farmer. The NEFA
test offers farmers the ability to test the health and nutrition of their cattle
before giving birth and also test the health of the new calves once born. Future
milk output from dairy cattle is directly affected by the nutrition just prior
to calving. By acquiring VDx, the Company was granted an exclusive license for
the above named tests, which will enable the Company to generate revenues and
increase its penetration into the dairy cattle industry in order to market it's
future Johne's test and vaccine.

The purchase price of VDx was $338,282 for which the Company issued 375,000
shares of common stock valued at $326,250 based on the closing price of the
shares on the date of acquisition.

The following table summarizes the estimated fair values of the assets acquired
and liabilities assumed at the date of acquisition.

<TABLE>
<CAPTION>
         <S>                        <C>         <C>                            <C>
         Cash                       $  1,000    Accounts payable               $ 15,683
         Accounts receivable           4,445    Loan payable                      3,994
                                                                               --------
         Goodwill                    350,314
         Security deposit              2,200    Total liabilities assumed        19,677
                                    --------                                   --------
         Total assets               $357,959    Net assets acquired            $338,282
                                    --------                                   --------
</TABLE>

The exclusive licensing agreement was assigned a value of $326,250, based on the
purchase price of VDx less the net liabilities assumed by the Company. The
Company is in the process of evaluating the future benefits and cash flows of
the licensing agreement through field-testing and other methods.

The Company agreed to pay the salaries of two employees of VDx for services
rendered in pursuit of revenues generated under the licensing agreement. Either
the Company or the employees may terminate the employment agreements after
ninety days upon receipt of written notice by either party. In addition, the
Company signed a non-cancelable three-year lease agreement for office,
warehouse, furniture, and storage facilities in Wisconsin. The minimum future
lease payments of these facilities have been included in the Company's total
future operating lease payments in Note 3.

For the period of September 20, 2004 through December 31, 2004, VDx generated
gross revenues of approximately $25,500. The costs of goods sold were
approximately $13,500, and general and administrative costs were approximately
$83,400, resulting in an overall loss for the period of approximately $71,400.

                                       26