<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934.

                 For the quarterly period ended October 31, 2003

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

       For the transition period from_________________ to ________________

                         COMMISSION FILE NUMBER: 0-25169

                        GENEREX BIOTECHNOLOGY CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

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

                          33 HARBOUR SQUARE, SUITE 202
                                TORONTO, ONTARIO
                                 CANADA M5J 2G2
                    ----------------------------------------
                    (Address of principal executive offices)

                                  416/364-2551
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                        Internet Website: www.generex.com
                                          ---------------

                                 Not applicable
--------------------------------------------------------------------------------
               (Former name, former address and former fiscal year
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. [X] Yes [ ] No

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

APPLICABLE ONLY TO CORPORATE ISSUERS
The number of outstanding shares of the registrant's common stock, par value
$.001, was 27,682,682 as of October 31, 2003.


<PAGE>


                        GENEREX BIOTECHNOLOGY CORPORATION
                                      INDEX

                          PART I: FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements -- unaudited

         Consolidated Balance Sheets --
         October 31, 2003 and July 31, 2003 ....................................

         Consolidated Statements of Operations -- for the three month
         periods ended October 31, 2003 and 2002, and cumulative from
         November 2, 1995 to October 31, 2003...................................

         Consolidated Statements of Cash Flows -- For the three month
         periods ended October 31, 2003 and 2002, and cumulative from
         November 2, 1995 to October 31, 2003...................................

         Notes to Consolidated Financial Statements.............................

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

Item 3.  Quantitative and Qualitative Disclosures
         About Market Risk......................................................

Item 4.  Controls and Procedures................................................

PART II: OTHER INFORMATION

Item 1.  Legal Proceedings......................................................

Item 2.  Changes in Securities and Use of Proceeds..............................

Item 3. Defaults Upon Senior Securities.........................................

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

Item 5.  Other Information......................................................

Item 6.  Exhibits and Reports on Form 8-K.......................................

Signatures......................................................................


<PAGE>



Item 1. Consolidated Financial Statements


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                 October 31,          July 31,
                                                                                    2003                2003
                                                                               --------------      --------------
      ASSETS
Current Assets:
<S>                                                                            <C>                 <C>
   Cash and cash equivalents                                                   $   6,389,055       $  12,356,578
   Restricted cash                                                                   202,775             188,967
   Short-term investments                                                          5,420,570           2,362,071
   Other current assets                                                              251,010             319,293
                                                                               --------------      --------------
      Total Current Assets                                                        12,263,410          15,226,909

Property and Equipment, Net                                                        4,400,802           4,218,832
Assets Held for Investment, Net                                                    2,015,125           1,906,312
Patents, Net                                                                       5,785,679             898,876
Deposits                                                                                  --              25,000
Due From Related Party                                                               386,358             362,779
                                                                               --------------      --------------

      TOTAL ASSETS                                                             $  24,851,374       $  22,638,708
                                                                               ==============      ==============


      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                                       $   1,006,016       $   1,386,214
   Current maturities of long-term debt                                              454,842             426,767
                                                                               --------------      --------------
      Total Current Liabilities                                                    1,460,858           1,812,981

Long-Term Debt, Less Current Maturities                                            1,545,362           1,468,708

Commitments and Contingencies

Series A, Preferred stock, $.001 par value; authorized
   1,000,000 shares, 1,060 shares issued and outstanding
   at October 31, 2003 and July 31, 2003                                          13,500,054          13,500,054

Stockholders' Equity:
   Special Voting Rights Preferred stock, $.001 par value;
    authorized, issued and outstanding 1,000 shares at
    October 31, 2003 and July 31, 2003                                                     1                   1
   Common stock, $.001 par value; authorized 50,000,000 shares,
    issued 28,424,898 and 26,017,524 shares at October 31, 2003
    and July 31, 2003, and outstanding 27,682,682 and 25,275,308
    shares at October 31, 2003 and July 31, 2003, respectively                        28,425              26,017
   Common stock to be issued, 1,000,000 shares at $1.67                            1,670,000                  --
   Treasury stock, at cost; 742,216 shares at October 31, 2003
    and July 31, 2003                                                             (1,610,026)         (1,610,026)
   Additional paid-in capital                                                     89,240,571          85,065,980
   Notes receivable - common stock                                                  (366,216)           (359,998)
   Deficit accumulated during the development stage                              (80,966,057)        (77,353,787)
   Accumulated other comprehensive income                                            348,402              88,778
                                                                               --------------      --------------
      Total Stockholders' Equity                                                   8,345,100           5,856,965
                                                                               --------------      --------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $  24,851,374       $  22,638,708
                                                                               ==============      ==============
</TABLE>


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


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                              Cumulative From
                                                           For the Three Months Ended         November 2, 1995
                                                                   October 31,              (Date of Inception)
                                                        --------------------------------       to October 31,
                                                            2003                2002                2003
                                                        -----------         ------------    -------------------

<S>                                                        <C>                     <C>           <C>
Revenues                                                $    68,061         $        --        $   1,068,061

Operating Expenses:
   Research and development                               1,028,529           1,000,476           39,673,259
   Research and development - related party                      --                  --              220,218
   General and administrative                             2,830,316           1,804,895           46,412,087
   General and administrative - related party                    --                  --              314,328
                                                        -----------         -----------        -------------
      Total Operating Expenses                            3,858,845           2,805,371           86,619,892
                                                        -----------         -----------        -------------

Operating Loss                                           (3,790,784)         (2,805,371)         (85,551,831)

Other Income (Expense):
   Miscellaneous income (expense)                            (3,698)             25,527              125,243
   Income from Rental Operations, net                         4,081              21,385               24,871
   Interest income                                          196,317             104,745            3,318,665
   Interest expense                                         (18,186)            (15,573)            (436,136)
                                                        -----------         -----------        -------------

Net Loss Before Undernoted                               (3,612,270)         (2,669,287)         (82,519,188)

Minority Interest Share of Loss                                  --                 625            3,038,185
                                                        -----------         -----------        -------------

Net Loss                                                 (3,612,270)         (2,668,662)         (79,481,003)

Preferred Stock Dividend                                         --                  --            1,485,054
                                                        -----------         -----------        -------------

Net Loss Available to Common Shareholders               $(3,612,270)        $(2,668,662)       $ (80,966,057)
                                                        ===========         ===========        =============

Basic and Diluted Net Loss Per Common Share             $      (.13)        $      (.13)
                                                        ===========         ===========


Weighted Average Number of Shares of Common
Stock Outstanding                                        27,900,591          20,278,083
                                                        ===========         ===========
</TABLE>

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


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                  Cumulative From
                                                                                 For the Three Months Ended       November 2, 1995
                                                                                          October 31,           (Date of Inception)
                                                                                -----------------------------      to October 31,
                                                                                     2003           2002                2003
                                                                                -------------- --------------   --------------------
Cash Flows From Operating Activities:
<S>                                                                              <C>            <C>                 <C>
   Net loss                                                                      $ (3,612,270)  $ (2,668,662)       $ (79,481,003)
   Adjustments to reconcile net loss to net cash used
    in operating activities:
    Depreciation and amortization                                                     234,458        135,493            1,697,118
    Minority interest share of loss                                                        --           (625)          (3,038,185)
    Reduction of notes receivable - common stock in exchange
     for services rendered                                                                 --             --              423,882
    Write-off of deferred offering costs                                                   --             --            3,406,196
    Write-off of abandoned patents                                                         --          9,134                9,134
    Common stock issued for services rendered                                         918,000             --            3,212,839
    Stock options and warrants issued for services rendered                            27,000             --            6,134,685
    Preferred stock issued for services rendered                                           --             --                  100
    Founders' shares transferred for services rendered                                     --             --              353,506
    Changes in operating assets and liabilities (excluding the effects of acquisition):
     Miscellaneous receivables                                                             --         12,504               43,812
     Other current assets                                                              82,520         82,972             (222,582)
     Accounts payable and accrued expenses                                           (517,524)    (1,048,753)           1,680,672
     Other, net                                                                            --             --              110,317
                                                                                 ------------   ------------        -------------
       Net Cash Used in Operating Activities                                       (2,867,816)    (3,477,937)         (65,669,509)

Cash Flows From Investing Activities:
   Purchase of property and equipment                                                (120,742)      (200,073)          (3,703,340)
   Costs incurred for patents                                                         (78,303)       (30,200)          (1,094,510)
   Change in restricted cash                                                           (1,476)      (165,440)            (184,559)
   Proceeds from maturity of short term investments                                   141,846     10,561,195          119,828,038
   Purchases of short-term investments                                             (3,200,345)    (4,412,834)        (125,248,608)
   Cash received in conjunction with merger                                            82,232             --               82,232
   Advances to Antigen Express, Inc.                                                  (32,000)            --              (32,000)
   Increase in officers' loans receivable                                                  --        (12,073)          (1,126,157)
   Change in deposits                                                                      --        100,000             (477,194)
   Change in notes receivable - common stock                                           (6,218)        (5,373)             (66,216)
   Change in due from related parties                                                      --             --           (2,255,197)
   Other, net                                                                              --             --               89,683
                                                                                 ------------   ------------        -------------
       Net Cash Provided by (Used in) Investing Activities                         (3,215,006)     5,835,202          (14,187,828)

Cash Flows From Financing Activities:
   Proceeds from issuance of long-term debt                                                --             --              993,149
   Repayment of long-term debt                                                        (17,869)       (11,266)          (1,053,220)
   Change in due to related parties                                                        --             --              154,541
   Proceeds from exercise of warrants                                                      --             --            4,552,984
   Proceeds from exercise of stock options                                            104,590             --              988,390
   Proceeds from minority interest investment                                              --            625            3,038,185
   Proceeds from issuance of preferred stock                                               --             --           12,015,000
   Purchase of treasury stock                                                              --        (62,294)            (483,869)
   Proceeds from issuance of common stock, net                                             --             --           66,128,976
   Purchase and retirement of common stock                                                 --             --             (119,066)
                                                                                 ------------   ------------        -------------
       Net Cash Provided by (Used in) Financing Activities                             86,721        (72,935)          86,215,070

Effect of Exchange Rates on Cash                                                       28,578          1,470               31,322
                                                                                 ------------   ------------        -------------

Net Increase (Decrease) in Cash and Cash Equivalents                               (5,967,523)     2,285,800            6,389,055

Cash and Cash Equivalents, Beginning of Period                                     12,356,578      8,131,463                   --
                                                                                 ------------   ------------        -------------

Cash and Cash Equivalents, End of Period                                         $  6,389,055   $ 10,417,263        $   6,389,055
                                                                                 ============   ============        =============
</TABLE>


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


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       1.  Summary of Significant Accounting Policies
           Basis of Presentation
           The accompanying unaudited interim consolidated financial statements
           have been prepared pursuant to the rules and regulations for
           reporting on Form 10-Q. Accordingly, certain information and
           disclosures required by generally accepted accounting principles for
           complete financial statements are not included herein. The interim
           statements should be read in conjunction with the financial
           statements and notes thereto included in the Company's latest Annual
           Report on Form 10-K. The results for the three months may not be
           indicative of the results for the entire year.

           Interim statements are subject to possible adjustments in connection
           with the annual audit of the Company's accounts for the fiscal year
           2004. In the Company's opinion, all adjustments necessary for a fair
           presentation of these interim statements have been included and are
           of a normal and recurring nature.

           Revenue Recognition
           The Company, through its wholly owned subsidiary, Antigen Express,
           Inc., receives federal grant monies to reimburse expenditures related
           to certain research projects. These revenues are recognized when the
           expense is incurred and the money is received.

       2.  Effects of Recent Accounting Pronouncements
           In December 2002, the FASB issued SFAS No. 148, "Accounting for
           Stock-Based Compensation-Transition and Disclosure" which amends SFAS
           No. 123, "Accounting for Stock-Based Compensation". SFAS No. 148
           provides alternative methods of transition for a voluntary change to
           the fair value based method of accounting for stock-based employee
           compensation. SFAS No. 148 also amends the disclosure provisions of
           SFAS No. 123 to require prominent disclosure about the effects on
           reported net income of an entity's accounting policy decisions with
           respect to stock-based employee compensation, and requires disclosure
           about those effects in both annual and interim financial statements.
           SFAS No. 148 is effective for fiscal years ended after December 15,
           2002. The adoption of SFAS No. 148 did not have a significant impact
           on the Company's consolidated financial position or results of
           operations.

           The Company has elected to continue to account for its stock
           compensation plans under the recognition and measurement principles
           of Accounting Principles Board Opinion No. 25, "Accounting for Stock
           Issued to Employees" and related interpretations. No stock-based
           employee compensation cost related to stock options is reflected in
           the Company's Statements of Operations, as all options granted under
           the plan had an exercise price more than or equal to the market value
           of the underlying common stock on the date of grant. The following
           table illustrates the effect on net loss and loss per share as if the
           Company had applied the fair value recognition provisions of SFAS
           123.


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       2.  Effects of Recent Accounting Pronouncements (continued)

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                               October 31,
                                                                        2003             2002
                                                                   ---------------  ----------------
<S>                                                                <C>              <C>
                Net Loss Available to Common
                  Stockholders, as Reported                        $    (3,612,270) $     (2,668,662)

                Deduct:  Total Stock-Based Employee
                  Compensation Income Determined
                  Under Fair Value Based Method,
                  Net of Related Tax Effect                                175,500            20,600
                                                                   ---------------  ----------------

                Pro Forma Net Loss Available
                  to Common Stockholders                           $    (3,787,770) $     (2,689,262)
                                                                   ===============  ================
              Loss Per Share:
                  Basic and diluted, as reported                           $ (0.13)         $  (0.13)
                                                                           =======          ========
                  Basic and diluted, pro forma                             $ (0.14)         $  (0.13)
                                                                           =======          ========
</TABLE>

           In January 2003, the FASB issued FIN No. 46, "Consolidation of
           Variable Interest Entities". FIN No. 46 clarifies the application of
           Accounting Research Bulletin No. 51 for certain entities in which
           equity investors do not have the characteristics of a controlling
           financial interest or do not have sufficient equity at risk for the
           entity to finance its activities without additional subordinated
           financial support from other parties. FIN No. 46 applies to variable
           interest entities created after January 31, 2003, and to variable
           interest entities in which an enterprise obtains an interest after
           that date. It applies in the second quarter of fiscal 2004 to
           variable interest entities in which the Company may hold a variable
           interest that it acquired before February 1, 2003. The provisions of
           FIN No. 46 require that the Company immediately disclose certain
           information if it is reasonably possible that the Company will be
           required to consolidate or disclose variable interest entities when
           FIN No. 46 becomes effective. The Company has determined that it does
           not have a significant interest in such entities requiring the
           related disclosure based on its preliminary analysis and assessment.

           In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
           133 on Derivative Instruments and Hedging Activities." SFAS No. 149
           amends and clarifies financial accounting and reporting for
           derivative instruments, including certain derivative instruments
           embedded in other contracts and for hedging activities under SFAS No.
           133, "Accounting for Derivative Instruments and Hedging Activities."
           The changes are intended to improve financial reporting by requiring
           that contracts with comparable characteristics be accounted for
           similarly. Additionally, those changes are expected to result in more
           consistent reporting of contracts as either derivatives or hybrid
           instruments. SFAS No. 149 is effective for contracts and hedging
           relationships entered into or modified after June 30, 2003, and for
           provisions that relate to SFAS No. 133 implementation issues that
           have been effective for fiscal quarters that began prior to June 15,
           2003. The adoption of this statement did not have a significant
           effect on the Company's consolidated financial position or results of
           operations.


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       3.  Effects of Recent Accounting Pronouncements (continued)
           In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
           Financial Instruments with Characteristics of both Liability and
           Equity." SFAS No. 150 establishes standards for how an issuer
           classifies and measures certain financial instruments with
           characteristics of both liability and equity. It also requires that
           an issuer classify a financial instrument that is within its scope as
           a liability (or an asset in some circumstances). Many of those
           instruments were previously classified as equity. SFAS No. 150 is
           effective for financial instruments entered into or modified after
           May 31, 2003, and otherwise is effective at the beginning of the
           first interim period beginning after June 15, 2003, except for
           mandatory redeemable financial instruments of nonpublic entities. It
           is to be implemented by reporting a cumulative effect of a change in
           an accounting principle for financial instruments created before the
           issuance date of the statement and still existing at the beginning of
           the interim period of adoption. Restatement is not permitted. The
           Series A Preferred Stock is a conditional share equity obligation
           until the redemption date, therefore it does not meet the definition
           of a liability under SFAS No. 150 and its classification on the
           balance sheet is not changed. The adoption of this statement did not
           have a significant effect on the Company's consolidated financial
           position or results of operations.

       3.  Comprehensive Income/(Loss)
           Comprehensive loss, which includes net loss and the change in the
           foreign currency translation account during the period, for the three
           months ended October 31, 2003 and 2002, was $3,352,646 and
           $2,648,947, respectively.

       4.  Accounts Payable and Accrued Expenses
           Accounts payable and accrued expenses consist of the following:

                                            October 31,          July 31,
                                               2003                2003
                                            -----------        -----------

           Accounts Payable                 $   776,971        $ 1,094,129
           Accrued Legal Fees                   229,045            292,085
                                            -----------        -----------
                 Total                      $ 1,006,016        $ 1,386,214
                                            ===========        ===========

       5.  Acquisitions
           On August 8, 2003, the Company acquired all of the outstanding
           capital stock of Antigen Express, Inc. ("Antigen") pursuant to an
           Agreement and Plan of Merger ("Merger Agreement") and Antigen became
           a wholly-owned subsidiary of the Company.

           Antigen's facilities and headquarters are located in Worcester,
           Massachusetts. Antigen is engaged in research and development efforts
           focused on the development of immunomedicines for the treatment of
           malignant, infectious, autoimmune and allergic diseases.

           The acquisition of Antigen brings two additional platform
           technologies to the Company. The immunomedicines based on these
           technologies allow for specific modulation of the immune system to
           allow for activation and re-activation against cancer and infectious
           agents and de-activation in the case of allergy and autoimmune
           disease. The delivery technologies currently possessed by the
           Company, when used with Antigen's active immunotherapies may provide
           for breakthrough therapeutics.


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       5.  Acquisitions (continued)
           The Merger Agreement also calls for the Company to fund an aggregate
           amount of not less than $2,000,000 ratably over the two year period
           following the effective date of the agreement. The advances will be
           debt, equity or a combination thereof in the sole discretion of the
           Company.

           In conjunction with this acquisition, the Company recorded
           approximately $4,878,012 of intangible assets, consisting of granted
           patents and pending patent applications, which are being amortized on
           a straight-line basis over their useful life. The following table
           summarizes the preliminary fair value of the assets acquired and
           liabilities assumed in the acquisition:


                   Current assets                       $    100,558
                   Property and equipment                     10,026
                   Patents                                 4,878,012
                                                        ------------

                   Total assets acquired                $  4,988,596

                   Current liabilities                       191,187
                                                        ------------
                   Net assets acquired                  $  4,797,409
                                                        ============

           The results of operations of Antigen have been included in the
           consolidated financial statements since the date of acquisition.

           The following unaudited pro forma financial information assumes that
           the acquisition consummated in 2003 had occurred as of the beginning
           of each period:
<TABLE>
<CAPTION>
                                                                  For the Three Months Ended
                                                                           October 31,
                                                                   2003               2002
                                                                -----------        -----------

<S>                                                             <C>                <C>
              Total Revenues                                    $    68,061        $    97,821
              Net Loss Available to Common Stockholders         $ 3,612,270        $ 2,747,687


              Basic and Diluted Net Loss Per Common
                  Share                                         $      (.13)       $      (.12)
</TABLE>

       6.  Intangible Assets
           The components of the Company's identifiable intangible assets are as
           follows:

<TABLE>
<CAPTION>
                                                                   October 31,         July 31,
                                                                      2003               2003
                                                                ---------------    ----------------

<S>                                                             <C>                <C>
           Patents                                              $     5,995,529    $      1,020,805
           Less: Accumulated Amortization                               209,850             121,929
                                                                ---------------    ----------------

           Patents, Net                                         $     5,785,679    $        898,876
                                                                ===============    ================

           Average Useful Life Remaining                          14 1/2  years       14 1/2  years
</TABLE>

           Amortization expense amounted to $84,459 and $13,065 for the three
           months ended October 31, 2003 and 2002, respectively. Amortization
           expense is expected to be approximately $400,000 per year for the
           years ended July 31, 2004, 2005, 2006, 2007 and 2008.


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

       7.  Pending Litigation
           On October 2, 1998, Sands Brothers & Co. Ltd., a New York City-based
           investment banking and brokerage firm, initiated an arbitration
           against the Company under New York Stock Exchange rules. Sands
           alleged that it had the right to receive, for nominal consideration,
           approximately 1.5 million shares of the Company's common stock. Sands
           based its claim upon an October 1997 letter agreement that was
           purported by Sands to confirm an agreement appointing Sands as the
           exclusive financial advisor to Generex Pharmaceuticals, Inc., a
           subsidiary of the Company that was acquired in late 1997. In
           exchange, the letter agreement purported to grant Sands the right to
           acquire 17 percent of Generex Pharmaceuticals' common stock for
           nominal consideration. Sands claimed that its right to receive shares
           of Generex Pharmaceuticals' common stock applies to the Company's
           common stock since outstanding shares of Generex Pharmaceuticals'
           common stock were converted into shares of the Company's common stock
           in the acquisition. Sands' claims also included additional shares
           allegedly due as a fee related to that acquisition, and $144,000 in
           monthly fees allegedly due under the terms of the purported
           agreement.

           Pursuant to an arbitration award dated September 22, 1999, the
           arbitration panel that heard this case awarded Sands $14,070 and
           issued a declaratory judgment requiring the Company to issue to Sands
           a warrant to purchase 1,530,020 shares of the Company's common stock
           pursuant to and in accordance with the terms of the purported October
           1997 letter agreement. On October 13, 1999, Sands commenced a special
           proceeding to confirm the arbitration award in the Supreme Court of
           the State of New York, County of New York (the "New York Supreme
           Court"). On November 10, 1999, the Company moved to vacate the
           arbitration award. On March 20, 2000, the New York Supreme Court
           granted Sands' petition to confirm the award and denied the Company's
           motion to vacate the award. The Company appealed and on January 23,
           2001, the New York State Appellate Division, First Department (the
           "Appellate Division"), modified the judgment of the New York Supreme
           Court that had confirmed the arbitration award against the Company.
           The Appellate Division affirmed the portion of the New York Supreme
           Court judgment that had confirmed the granting of monetary relief of
           $14,070 to Sands but modified the judgment to vacate the portion of
           the arbitration award directing the issuance to Sands of a warrant to
           purchase 1,530,020 shares of the Company's common stock. The
           Appellate Division held that the portion of the award directing the
           Company to issue warrants to Sands is too indefinite to be
           enforceable and remanded the matter to the arbitration panel for a
           final and definite award with respect to such relief or its
           equivalent (including possibly an award of monetary damages). The
           arbitration panel commenced hearings on the matters remanded by the
           Appellate Division in June 2001. On November 7, 2001, the arbitration
           panel issued an award again requiring the Company to issue to Sands a
           warrant to purchase 1,530,020 shares of the Company's common stock
           purportedly pursuant to and in accordance with the terms of the
           October 1997 letter agreement. Thereafter, Sands submitted a motion
           to the New York Supreme Court to modify and confirm the arbitration
           panel's award while the Company filed a motion with the court to
           vacate the arbitration award. On February 25, 2002, the New York
           Supreme Court vacated the arbitration panel's award. The Supreme
           Court concluded that the arbitration panel had "disregarded the plain
           meaning" of the directive given by the Appellate Division in the
           Appellate Division's January 23, 2001 decision that remanded the
           matter of the warrant for reconsideration by the panel. The Supreme
           Court found that the arbitration panel's award "lacks a rational
           basis". The Supreme Court also remanded the matter to the New York
           Stock Exchange on the issue of whether the arbitration panel should
           be disqualified. Sands has appealed the February 25, 2002 order of
           the Supreme Court to the Appellate Division. The Company filed a
           cross-appeal on issues relating to the disqualification of the
           arbitration panel.


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       7.  Pending Litigation (continued)

           On October 29, 2002, the Appellate Division issued a decision and
           order unanimously modifying the lower court's order by remanding the
           issue of damages to a new panel of arbitrators and otherwise
           affirming the lower court's order. The Appellate Division's decision
           and order limits the issue of damages before the new panel of
           arbitrators to reliance damages which is not to include an award of
           lost profits. Reliance damages are out-of-pocket damages incurred by
           Sands. The Appellate Division stated that the lower court properly
           determined that the arbitration award, which had granted Sands
           warrants for 1,530,020 shares of the registrant's stock, was "totally
           irrational."

           On March 18, 2003, the Appellate Division of the Supreme Court of New
           York denied a motion by Sands for re-argument of the October 29, 2002
           decision, or, in the alternative, for leave to appeal to the Court of
           Appeals.

           At the present time, the Company is not able to predict the ultimate
           outcome of this legal proceeding or to estimate a range of possible
           loss from this legal proceeding. Therefore, no provision has been
           recorded in the accompanying financial statements.

           In February 2001, a former business associate of the Vice President
           of Research and Development (VP), and an entity called Centrum
           Technologies Inc. ("CTI") commenced an action in the Ontario Superior
           Court of Justice against the Company and the VP seeking, among other
           things, damages for alleged breaches of contract and tortious acts
           related to a business relationship between this former associate and
           the VP that ceased in July 1996. The plaintiffs' statement of claim
           also seeks to enjoin the use, if any, by the Company of three patents
           allegedly owned by CTI. On July 20, 2001, the Company filed a
           preliminary motion to dismiss the action of CTI as a nonexistent
           entity or, alternatively, to stay such action on the grounds of want
           of authority of such entity to commence the action. The plaintiffs
           brought a cross motion to amend the statement of claim to substitute
           Centrum Biotechnologies, Inc. ("CBI") for CTI. CBI is a corporation
           of which 50 percent of the shares are owned by the former business
           associate and the remaining 50 percent are owned by the Company.
           Consequently, the shareholders of CBI are in a deadlock. The court
           granted the Company's motion to dismiss the action of CTI and denied
           the plaintiffs' cross motion without prejudice to the former business
           associate to seek leave to bring a derivative action in the name of
           or on behalf of CBI. The former business associate subsequently filed
           an application with the Ontario Superior Court of Justice for an
           order granting him leave to file an action in the name of and on
           behalf of CBI against the VP and the Company. The Company has opposed
           the application which is now pending before the Court. In September
           2003, the Ontario Superior Court of Justice granted the request and
           issued an order giving the former business associate leave to file an
           action in the name of and on behalf of CBI against the VP and the
           Company. The Company is not able to predict the ultimate outcome of
           this legal proceeding at the present time or to estimate an amount or
           range of potential loss, if any, from this legal proceeding.


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       7.  Pending Litigation (continued)
           In February 1997, an individual alleging to be a former employee of
           Generex Pharmaceuticals, Inc., commenced an action in the Ontario
           Superior Court of Justice for wrongful dismissal. The Ontario
           Superior Court of Justice rendered judgment in favor of the plaintiff
           for approximately $127,000 plus interest in November 1999 and further
           awarded costs to the plaintiff in March 2000. An appeal of the
           judgment was filed with the Court of Appeal for Ontario in April
           2000. The appeal was heard on February 26, 2003, and on February 28,
           2003, the Court of Appeals dismissed the appeal with costs. Generex
           Pharmaceuticals, Inc., has sought leave to appeal the Courts of
           Appeal's decision to the Supreme Court of Canada. The Company intends
           to continue its vigorous defense of this action. The Company does not
           believe that the ultimate resolution of this legal proceeding will
           have a material effect on the consolidated financial position of the
           Company. The Company has established a reserve for potential loss
           contingencies related to the resolution of this legal proceeding, the
           amount of which is not material to the financial position, operations
           and cash flows of the Company.

           In July 2002 an individual and his related corporation commenced
           actions against certain defendants, including the Company and certain
           officers of the Company, in the Ontario Superior Court of Justice,
           claiming compensatory damages, punitive damages and various forms of
           injunctive and declaratory relief for breach of contract and various
           business torts. Most of the requested relief relates to restrictions
           on the use of patents and information allegedly owned by the
           plaintiffs, and an accounting for the use of such items. In October
           2003, the parties signed Minutes of Settlement resolving all
           outstanding issues in the action. The settlement is presently in the
           process of being finalized and the Company believes that the
           resolution will not have a material adverse effect on the Company's
           financial position, operations or cash flows.

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

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

       8.  Employment Agreements
           On August 6, 2003, in conjunction with the Antigen acquisition, (see
           Note 5) the Company entered into at will employment agreements with
           five Antigen employees requiring the Company to pay an annual
           aggregate salary of $621,500 to the five employees. In the event any
           agreement is terminated by reason other than death, disability, a
           voluntary termination not for good reason (as defined in the
           agreement) or a termination for cause, the Company is required to pay
           the employee severance in accordance with the terms of the individual
           employment agreement.


<PAGE>


               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       9.  Net Loss Per Share
           Basic EPS and Diluted EPS for the three months ended October 31, 2003
           and 2002 have been computed by dividing the net loss for each
           respective period by the weighted average number of shares
           outstanding during that period. All outstanding warrants and options,
           approximately 12,342,694 incremental shares, have been excluded from
           the computation of Diluted EPS as they are antidilutive.

       10.  Supplemental Disclosure of Cash Flow Information
<TABLE>
<CAPTION>
                                                                                                For the Three Months Ended
                                                                                                        October 31,
                                                                                          --------------------------------------
                                                                                                2003                  2002
                                                                                          --------------------------------------
           Cash paid during the period for:
<S>                                                                                       <C>                   <C>
              Interest                                                                    $        53,546       $         32,870
              Income taxes                                                                $            --       $             --

           Disclosure of non-cash investing and financing activities:

           Acquisition of Antigen Express, Inc through the issuance
              Of common stock and the assumption of stock options                         $     4,797,409       $             --
           Settlement of officer loans receivable in exchange for
              shares of common stock held in treasury                                     $            --       $      1,114,084
           Assumption of long-term debt in conjunction with building
              purchase                                                                    $            --       $      1,080,486
           Utilization of deposit in conjunction with building purchase                   $            --       $        501,839
</TABLE>


       11. Transactions with Related Party
           The Company's change in "Due from Related Party" for the three months
           ended October 31, 2003 represents only the effect of change in
           quarter end exchange rate versus that in effect at July 31, 2003.

       12. Stockholders' Equity
           On August 8, 2003, the Company, in conjunction with the Antigen
           acquisition (see Note 5), issued 1,779,974 shares of common stock in
           exchange for outstanding shares of Antigen. Pursuant to the terms of
           the Merger Agreement, the Company will issue an additional 1,000,000
           shares of common stock on January 31, 2004. The 2,779,974 shares were
           valued at $1.67 per share, based on the average market price for five
           days before and five days after the measurement date, resulting in an
           aggregate value of $4,642,557 which was assigned to the purchase
           price of Antigen. In addition, all outstanding options to purchase
           shares of common stock of Antigen became fully vested and exercisable
           for shares of the Company under the terms of the agreement. The
           options were valued at $154,852 under the Black Scholes pricing model
           and also included in the purchase price. The total purchase price of
           $4,797,409 was assigned to the assets acquired, including $4,878,012
           of intangible assets, and liabilities assumed.

           During the three months ended October 31, 2003, 139,900 stock options
           were exercised with exercise prices ranging from $0.30 to $2.10 per
           share, resulting in proceeds of $104,590.

           In October 2003, the Company issued 487,500 shares of common stock to
           consultants for services rendered, which resulted in charges to the
           statement of operations of $918,000.

           In October 2003, the Company issued 20,000 warrants in exchange for
           services rendered, which resulted in a charge to general and
           administrative expense of $27,000. The warrants have an exercise
           price of $2.50 each for the purchase of one share of the Company's
           common stock.


<PAGE>



               GENEREX BIOTECHNOLOGY CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


       13. Subsequent Events
           The following events occurred subsequent to October 31, 2003:

           On November 4, 2003, the Company granted a total of 1,046,000 options
           to purchase shares of common stock with an exercise price of $1.71.
           All of the options, except for 115,000, were issued to employees and
           qualified as incentive stock options; accordingly, no charge to
           operations was incurred. Options issued to other than employees, did
           not qualify as incentive stock options and, therefore, the Company
           recorded a charge to operations of $151,800.

           On November 5, 2003, the Company entered into an agreement
           ("Termination Agreement") with Eli Lilly and Company to terminate the
           September 2000 Development and License Agreement, effective June 2,
           2003. At the same time, the parties entered into a Bulk Supply
           Agreement for the sale of human insulin crystals by Lilly to the
           Company over a three year period. The Bulk Supply Agreement
           establishes purchase prices, minimum purchase requirements, maximum
           amounts which may be purchased in each year and a non-refundable
           prepayment of $1,500,000 to be applied against amounts due for
           purchases.

           On November 19, 2003, the Company terminated its employment agreement
           with an employee of its wholly-owned subsidiary, Antigen Express,
           Inc. In accordance with the terms of the agreement, the terminated
           employee will receive severance salary in the amount of $175,000,
           payable in twelve monthly installments of $14,583 each, less
           withholdings mandated by applicable law. In addition, the terminated
           employee's benefits package will remain in effect for a period of one
           year from the date of termination.

           On November 25, 2003, the Company cancelled all of the shares held in
           Treasury Stock. This cancellation resulted in a decrease of
           $1,610,026 in Additional Paid In Capital, the amount previously
           reported as Treasury Stock.


<PAGE>


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


Forward-Looking Statements

We have made statements in Management's Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this Report that may be
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements can be identified by
introductory words such as "expects", "plans", "intends", "believes", "will",
"estimates", "forecasts", "projects" or words of similar meaning, and by the
fact that they do not relate strictly to historical or current facts. Our
forward-looking statements address, among other things:

   o  our expectations concerning product candidates for our technology;
   o  our expectations concerning existing or potential development and license
      agreements for third party collaborations and joint ventures;
   o  our expectations of when different phases of clinical activity may
      commence; and
   o  our expectations of when regulatory submissions may be filed or when
      regulatory approvals may be received.

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

   o  the inherent uncertainties of product development based on a new and as
      yet not fully proven drug delivery technology;
   o  the risks and uncertainties regarding the actual effect on humans of
      seemingly safe and efficacious formulations when tested clinically;
   o  the inherent uncertainties associated with identification and initial
      development of product candidates;
   o  the inherent uncertainties associated with clinical trials of product
      candidates; and
   o  the inherent uncertainties associated with the process of obtaining
      regulatory approval to market product candidates.

Additional factors that could affect future results are set forth in Item 5 to
this Report. We caution investors that the forward-looking statements contained
in this Report must be interpreted and understood in light of conditions and
circumstances that exist as of the date of this Report. We expressly disclaim
any obligation or undertaking to update or revise forward-looking statements
made in this Report to reflect any changes in management's expectations
resulting from future events or changes in the conditions or circumstances upon
which such expectations are based.

General

Corporate History. We were incorporated in Delaware in September 1997 for the
purpose of acquiring Generex Pharmaceuticals, Inc., a Canadian corporation
formed in November 1995 to engage in pharmaceutical and biotechnological
research and other activities. Our acquisition of Generex Pharmaceuticals was
completed in October 1997 in a transaction in which the holders of all
outstanding shares of Generex Pharmaceuticals exchanged their shares for shares
of our common stock.

In January 1998, we participated in a "reverse acquisition" with Green Mt.
P. S., Inc., a previously inactive Idaho corporation formed in 1983. As a result
of this transaction, our shareholders (the former shareholders of Generex
Pharmaceuticals) acquired a majority (approximately 90%) of the outstanding
capital stock of Green Mt., we became a wholly-owned subsidiary of Green Mt.,
Green Mt. changed its corporate name to Generex Biotechnology Corporation


<PAGE>


("Generex Idaho"), and we changed our corporate name to GBC Delaware, Inc.
Because the reverse acquisition resulted in our shareholders becoming the
majority holders of Generex Idaho, we were treated as the acquiring corporation
in the transaction for accounting purposes. Thus, our historical financial
statements, which essentially represented the historical financial statements of
Generex Pharmaceuticals, were deemed to be the historical financial statements
of Generex Idaho.

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

In August, 2003, we acquired Antigen Express, Inc. ("Antigen"). Antigen is
engaged in the research and development of technologies and immunomedicines for
the treatment of malignant, infectious, autoimmune and allergic diseases. For
details about this acquisition, see "Business History" and "Developments in
Fiscal Quarter ended October 31, 2003."

Business History. We are primarily engaged in the development of proprietary
drug delivery technology. Our principal business focus has been to develop a
technology for buccal delivery (absorption through the inner cheek walls) of
large molecule drugs, i.e., drugs composed of molecules with molecular weights
above a specified level. Large molecule drugs historically have been
administered only by injection because their size inhibits or precludes
absorption if administered by oral, transdermal, transnasal or other means.

Our first product is an insulin formulation that is administered as a fine spray
into the oral cavity using a hand-held aerosol spray applicator. Between January
1999 and September 2000, we conducted limited clinical trials on this product in
the United States, Canada and Europe. In September 2000, we entered into an
agreement (the "Development and License Agreement") to develop this product with
Eli Lilly and Company ("Lilly"). To date, over 750 patients with diabetes have
been dosed with our oral insulin product at approved facilities in seven
countries. We have conducted several clinical trials with insulin supplied by
Lilly under our agreement. Lilly did not, however, authorize or conduct any
clinical trials or provide financial support for those trials. We did receive a
$1,000,000 up front payment from Lilly. On May 23, 2003, we announced that we
had agreed with Lilly to end the Development and License Agreement for the
development and commercialization of buccal delivery of insulin. On November 5,
2003, we entered into a termination agreement with Lilly terminating the
Development and License Agreement, effective as of June 2, 2003. We will retain
all of the intellectual property and commercialization rights with respect to
buccal spray drug delivery technology, and we will have the continuing right to
develop and commercialize the product. We also entered into a Bulk Supply
Agreement (the "Bulk Supply Agreement") for the sale of human insulin crystals
by Lilly to the Company over a three year period. The Bulk Supply Agreement
establishes purchase prices, minimum purchase requirements, maximum amounts
which may be purchased in each year and a non-refundable prepayment of
$1,500,000 to be applied against amounts due for purchases.

In January 2001, we established a joint venture with Elan International
Services, Ltd. ("EIS"), a wholly-owned subsidiary of Elan Corporation, plc (EIS
and Elan Corporation, plc being collectively referred to as "Elan"), to pursue
the application of certain of our and Elan's drug delivery technologies,
including our platform technology for the buccal delivery of pharmaceutical
products, for the treatment of prostate cancer, endometriosis and/or the
suppression of testosterone and estrogen. In January 2002, we and Elan agreed to
expand the joint venture to encompass the buccal delivery of morphine for the
treatment of pain and agreed to pursue buccal morphine as the initial
pharmaceutical product for development under Generex (Bermuda) Ltd., the entity
through which the joint venture is being conducted. This expansion of the joint
venture occurred after we successfully completed a proof of concept clinical
study of morphine delivery using our proprietary buccal delivery technology.


<PAGE>


In connection with the joint venture, EIS purchased 1,000 shares of a new series
of our preferred stock, designated as Series A Preferred Stock, for $12,015,000.
We applied the proceeds from the sale of the Series A Preferred Stock to
subscribe for an 80.1% equity ownership interest in Generex (Bermuda), Ltd. EIS
paid in capital of $2,985,000 to subscribe for a 19.9% equity ownership interest
in the joint venture entity. While we presently own 80.1% of the joint venture
entity, EIS has the right, subject to certain conditions, to increase its
ownership up to 50% by exchanging the Series A Preferred Stock for 30.1% of our
equity ownership of the joint venture entity. In January 2002 and 2003, pursuant
to the terms of the agreement with EIS, EIS received a 6% stock dividend of
Series A Preferred Stock.

Generex (Bermuda), Ltd. has been granted non-exclusive licenses to utilize our
buccal delivery technology and certain Elan drug delivery technologies. Using
the funds from its initial capitalization, Generex (Bermuda), Ltd. paid a
non-refundable license fee of $15,000,000 to Elan in consideration for being
granted the rights to utilize the Elan drug delivery technologies.

EIS also purchased 344,116 shares of our common stock for $5,000,000. We may use
the proceeds of this sale for any corporate purpose. If the joint venture
achieves certain milestones, we may require EIS to purchase an additional
$1,000,000 of our common stock at a 30% premium to the then prevailing fair
market value of our common stock.

Our new subsidiary Antigen is engaged in research and development of
technologies and immunomedicines for the treatment of malignant, infectious,
autoimmune and allergic diseases. Our immunomedicine products work by
stimulating the immune system to either attack offending agents (i.e., cancer
cells, bacteria, and viruses) or to stop attacking benign elements (i.e., self
proteins and allergens). Our immunomedicine products are based on two platform
technologies that were discovered by an executive officer of Antigen, the Ii-Key
hybrid peptides and Ii-Suppression. The immunomedicine products are in the
pre-clinical stage of development, and trials in human patients are not expected
for at least 12 months. Development efforts are underway in melanoma, breast
cancer, prostate cancer, HIV and Type I diabetes. We are establishing
collaborations with academic centers to advance the technology, with the
ultimate goal of conducting clinical testing.

We do not expect to receive any revenues from product sales in the current
fiscal year. We do expect to receive some revenue from research grants for
Antigen's immunomedicine products. We do not expect the research grants to fully
fund Antigen's expenses. We expect to satisfy all of our cash needs during the
current year from capital raised through prior equity financing.

Disclosure Regarding Research and Development Projects

Our major research and development projects are the refinement of our basic
buccal delivery technology, our buccal insulin project and our buccal morphine
product.

Both our insulin product and our morphine product are in clinical trials. In
Canada, we have recently begun Phase II-B trials for insulin. In order to obtain
FDA and Canadian HPB approval for any of our product candidates, we will be
required to complete "Phase III" trials which involve testing our product with a
large number of patients over a significant period of time. The conduct of Phase
III trials will require significantly greater funds than we either have on hand
or have experience in raising in any year or two years' time. We will therefore
need to receive funding from a corporate collaborator, or engage in fundraising
on a scale with which we have no experience.

Because of various uncertainties, we cannot predict the timing of completion of
our buccal insulin or buccal morphine products. These uncertainties include the
success of current studies, our ability to obtain the required financing and the
time required to obtain regulatory approval even if our research and development
efforts are completed and successful. For the same reasons, we cannot predict
when any products may begin to produce net cash inflows.

Most of our buccal delivery research and development activities to date have
involved developing our platform technology for use with insulin and morphine.


<PAGE>


Insubstantial amounts have been expended on projects with other drugs, and those
projects involved a substantial amount of platform technology development.
Therefore, in the past, we have not made significant distinctions in the
accounting for research and development expenses among products, as a
significant potion of all research has involved improvements to the platform
technology in connection with insulin, which may benefit all our potential
products. In the fiscal quarter ended October 31, 2003, approximately 67% of our
$1,207,320 in research expenses was attributable to insulin and platform
technology development, and approximately 2% was attributable to morphine and
fentanyl projects. As morphine and fentanyl are both narcotic painkillers, the
research is related. In the fiscal quarter ended October 31, 2002, approximately
78% of our $1,000,476 of research and development was expended for insulin and
platform technology, and approximately 22% for morphine and fentanyl.

Approximately 31%, or $371,841 of our research and development expenses for the
fiscal quarter ended October 31, 2003 were related to Antigen's immunomedicine
products. Because these products are in a very early, pre-clinical stage of
development, all of the expenses were accounted for as basic research and no
distinctions were made as to particular products. Because of the early stage of
development, we cannot predict the timing of completion of any products arising
from this technology, or when products from this technology might begin
producing revenues. However, we can predict that we do not expect to begin
clinical trials during the current fiscal year.

Developments in Fiscal Quarter ended October 31, 2003
-----------------------------------------------------

In August 2003, we acquired all of the outstanding capital stock of Antigen
pursuant to an Agreement and Plan of Merger (the "Merger Agreement") between us,
Antigen and AGEXP Acquisition, Inc. ("AGEXP"), our wholly owned subsidiary that
was formed for purposes of the transaction. Pursuant to the Merger Agreement:

   o  AGEXP merged with and into Antigen (the "Merger");
   o  Antigen became our wholly owned subsidiary; and
   o  all of the former shareholders of Antigen were entitled to receive shares
      of our common stock in exchange for their shares of Antigen capital stock.

Antigen has facilities and its headquarters located at Worcester, Massachusetts.
Antigen is engaged in research and development to develop immunomedicines for
the treatment of malignant, infectious, autoimmune and allergic diseases.
Antigen's potential products are based on two platform technologies (Ii-Key
hybrid peptides and Ii-Suppression) discovered by an officer of Antigen.

The Merger Agreement provided for each holder of Antigen common stock and each
holder of each of the four outstanding series of Antigen preferred stock to
receive shares of our common stock for each share of Antigen common stock or
preferred stock held by such holder. The Merger Agreement established exchange
rates for the conversion of Antigen common and the various series of preferred
stock into our common stock. We have issued an aggregate of approximately
1,779,974 shares of our common stock to the former Antigen stockholders in
connection with the Merger, and are obligated to issue an additional 1,000,000
shares on January 31, 2003. In addition, pursuant to the Merger Agreement, we
assumed Antigen common stock purchase options. These options have been exercised
for a total of 105,000 shares of our common stock at an average exercise price
of $0.40 per share. The remainder of the option shares expired November 6, 2003.

The shares of our common stock issued in connection with the Merger are
restricted securities. However, they are registered for resale pursuant to a
registration statement on Form S-3 that became effective in November 2003

More information regarding the accounting for this transaction is contained in
Note 12 to our consolidated financial statements contained in this report.


<PAGE>


We have committed to funding at least $2,000,000 for Antigen's research and
development projects in the next two years.

Results of Operations - Three months ended October 31, 2003 and 2002
--------------------------------------------------------------------

We have been in the development stage since inception and have not generated any
operating revenues to date, other than $1,000,000 in revenues received in
connection with the Development and License Agreement with Lilly in the quarter
ended October 31, 2000 and $68,061 in research grants and consulting revenue
earned by Antigen in the fiscal quarter ended October 31, 2003.

Our net loss for the quarter ended October 31, 2003 was $3,612,270 versus
$2,668,662 in the corresponding quarter of the prior fiscal year. The increase
in net loss in this fiscal quarter versus the corresponding quarter of the prior
fiscal year is primarily due to a moderate increase in research and development
expenses of $28,053 and an increase in general and administrative expenses of
$1,025,421.

The increase in general and administrative expenses in the quarter ended October
31, 2003, compared to the quarter ended October 31, 2002, was the result of
additional non-cash expenses incurred this year in connection with the issuance
of common stock to consultants and an increase in expenses for accounting, legal
and financial services. The increase in general and administrative expenses was
lessened by a reduction in consulting services and a small reduction in
advertising and travel expenses.

The moderate increase in research and development expenses in the three-month
period ending October 31, 2003 compared to the corresponding period of the prior
fiscal year reflects the additional research and development activities by
Antigen in the three-month period ending October 31, 2003.

Financial Condition, Liquidity and Resources
--------------------------------------------

To date we have financed our development stage activities primarily through
private placements of common stock. In September 2001, we began a program to
repurchase up to $1 million of our common stock from the open market. Through
January 31, 2003, we repurchased a total of 149,500 shares of common stock to be
held in treasury for $484,588, at an average price of $3.24 per share. No
repurchases have been made since January 31, 2003. The total number of treasury
shares shown on our balance sheet includes these shares and 592,716 shares
received in satisfaction of outstanding loans to officers, as described in
"Transactions with Affiliates," below. In addition, we completed two private
placements of our common stock in May and June of 2003.

At October 31, 2003, we had cash and short-term investments (primarily notes of
United States corporations) of approximately $11.8 million. At July 31, 2003,
our cash and short term investments were approximately $14.7 million. The
decrease was attributable to the use of cash for ongoing operations. We believe
that our current cash position is sufficient to meet all of our working capital
needs for at least the next 12 months based on the pace of our current
development activities. Beyond that, we will likely require additional funds to
support our working capital requirements or for other purposes. From time to
time as deemed appropriate by management, we may seek to raise funds through
private or public equity financing or from other sources. If we were unable to
raise additional capital as needed, we could be required to "scale back" or
otherwise revise our business plan. Any significant scale back of operations or
modification of our business plan due to a lack of funding could be expected to
affect our prospects materially and adversely.

In the past, we have funded most of our development and other costs with equity
financing. While we have been able to raise equity capital as required,
unforeseen problems with our clinical program or materially negative
developments in general economic conditions could interfere with our ability to
raise additional equity capital as needed, or materially adversely affect the
terms upon which such capital is available.


<PAGE>


Critical Accounting Policies
----------------------------

Our discussion and analysis of our financial condition and results of operations
is based on our consolidated financial statements which have been prepared in
conformity with accounting principles generally accepted in the United States of
America. It requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

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

Impairment of Long-Lived Assets. Management reviews for impairment whenever
events or changes in circumstances indicate that the carrying amount of property
and equipment may not be recoverable under the provisions of Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." If it is determined that an impairment loss has
occurred based upon expected future cash flows, the loss is recognized in the
Statement of Operations.

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

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

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Transactions with Affiliates

On May 3, 2001, we advanced $334,300 to each of three senior officers, who are
also our shareholders, in exchange for promissory notes. These notes bore
interest at 8.5 percent per annum and were payable in full on May 1, 2002. These
notes were guaranteed by a related company owned by these officers and secured
by a pledge of 2,500,000 shares of our common stock owned by this related
company. On June 3, 2002, our Board of Directors extended the maturity date of
the loans to October 1, 2002. The other terms and conditions of the loans and
guaranty remained unchanged and in full force and effect. As of July 31, 2002,
the balance outstanding on these notes, including accrued interest, was
$1,114,084. Pursuant to a decision made by the Compensation Committee as of
August 30, 2002, these loans were satisfied through the application of 592,716
shares of pledged stock, at a value of $1.90 per share, which represented the
lowest closing price during the sixty days prior to August 30, 2002.

Prior to January 1, 1999, a portion of our general and administrative expenses
resulted from transactions with affiliated persons, and a number of capital
transactions also involved affiliated persons. Although these transactions were
not the result of "arms-length" negotiations, we do not believe that this fact
had a material impact on our results of operations or financial position. Prior
to December 31, 1998, we classified certain payments to executive officers for
compensation and expense reimbursements as "Research and Development - related


<PAGE>


party" and "General and Administrative - related party" because the executive
officers received such payments through personal services corporations rather
than directly. After December 31, 1998, these payments have been and will
continue to be accounted for as though the payments were made directly to the
officers, and not as a related party transaction. We do not foresee a need for,
and therefore do not anticipate, any related party transactions in the current
fiscal year.

On August 7, 2002, we purchased real estate with an aggregate purchase price of
approximately $1.6 million from an unaffiliated party. In connection with that
transaction, Angara Enterprises, Inc., a licensed real estate broker that is an
affiliate of Anna Gluskin, received a commission from the proceeds of the sale
to the seller in the amount of 3% of the purchase price, or $45,714. We believe
that this is less than the aggregate commission which would have been payable if
a commission had been negotiated with an unaffiliated broker on an arm's length
basis.

We utilize a management company to manage all of our real properties. The
property management company is owned by Rose Perri, Anna Gluskin and the estate
of Mark Perri, our former Chairman of the Board. In the fiscal quarters ended
October 31, 2003 and 2002 we paid the management company approximately $9,057
and $9,064, respectively, in management fees.

New Accounting Pronouncements

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure" which amends SFAS No. 123, "Accounting
for Stock-Based Compensation". SFAS No. 148 provides alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. SFAS No. 148 also amends the disclosure
provisions of SFAS No. 123 to require prominent disclosure about the effects on
reported net income of an entity's accounting policy decisions with respect to
stock-based employee compensation, and requires disclosure about those effects
in both annual and interim financial statements. SFAS No. 148 is effective for
fiscal years ending after December 15, 2002. The adoption of SFAS No. 148 did
not have a significant impact on the Company's consolidated financial position
or results of operations.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), "Consolidation
of Variable Interest Entities". FIN No. 46 clarifies the application of
Accounting Research Bulletin No. 51 for certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. FIN No. 46
applies to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that
date. It applies in the second quarter of fiscal 2004 to variable interest
entities in which the Company may hold a variable interest that it acquired
before February 1, 2003. The provisions of FIN No. 46 require that the Company
immediately disclose certain information if it is reasonably possible that the
Company will be required to consolidate or disclose variable interest entities
when FIN No. 46 becomes effective. The Company has determined that it does not
have a significant interest in such entities requiring the related disclosure
based on its preliminary analysis and assessment.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The changes are intended to improve financial reporting
by requiring that contracts with comparable characteristics be accounted for
similarly. Additionally, those changes are expected to result in more consistent
reporting of contracts as either derivatives or hybrid instruments. SFAS No. 149
is effective for contracts and hedging relationships entered into or modified
after June 30, 2003, and for provisions that relate to SFAS No. 133
implementation issues that have been effective for fiscal quarters that began
prior to June 15, 2003. The adoption of this statement did not have a
significant effect on the Company's consolidated financial position or results
of operations.


<PAGE>


In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liability and Equity." SFAS No. 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liability and equity. It also
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003, except for mandatory redeemable financial instruments of nonpublic
entities. It is to be implemented by reporting a cumulative effect of a change
in an accounting principle for financial instruments created before the issuance
date of the Statement and still existing at the beginning of the interim period
of adoption. Restatement is not permitted. The Series A Preferred Stock is a
conditional share equity obligation until the redemption date, therefore it does
not meet the definition of a liability under SFAS No. 150 and its classification
on the balance sheet is not changed. The adoption of this statement did not have
a significant effect on the Company's consolidated financial position or results
of operations.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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

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

As of October 31, 2003, we have fixed rate debt totaling $2,000,204, of which
$841,395, $585,690 and $573,119 bears interest at a fixed rate of 5.8%, 9.7% and
10%, respectively. These debt instruments mature from July 2004 through October
2005. As our fixed rate debt mature, we will likely refinance such debt at their
existing market interest rates which may be more or less than interest rates on
the maturing debt. Since this debt is fixed rate debt, if interest rates were to
increase 100 basis points prior to maturity, there would be no impact on
earnings or cash flows.

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


Item 4.  Controls and Procedures.

Evaluation of disclosure controls and procedures.

Based on our management's evaluation (with the participation of our principal
executive officer and principal financial officer), as of the end of the period
covered by this Quarterly Report on Form 10-Q, our chief executive officer and
chief financial officer have concluded that our disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) are effective
to ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.


<PAGE>


Changes in internal controls.

There was no change in our internal controls over financial reporting (as
defined in Rules 13a-15(f) and 15(d) - 15(f) under the Exchange Act) during the
period covered by this Quarterly Report on Form 10-Q that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings

Hope Manufacturing, Inc. and Steven Wood. In October 2003, the parties signed
Minutes of Settlement resolving all outstanding issues in this previously
reported Ontario Superior Court action. The Settlement requires the payment of a
non-material sum of money by the Company. The settlement is presently in the
process of being finalized.

There were no other legal proceedings which first became reportable or in which
there were material developments during the fiscal quarter ended October 31,
2003.

For a full description of the foregoing legal proceeding, and all other legal
proceedings against the Company, see the Company's Report on Form 10-K for the
year ended July 31, 2003, which is incorporated herein by reference.

Item 2.  Changes in Securities and Use of Proceeds


The following transaction occurred during fiscal quarter ended October 31, 2003
and was previously reported in our annual report on Form 10-K for the fiscal
year ended July 31, 2003.

   o  On August 8, 2003, we acquired all of the outstanding capital stock of
      Antigen Express, Inc. pursuant to an Agreement and Plan of Merger.
      Pursuant to the merger agreement, Antigen became our wholly-owned
      subsidiary. We issued 1,779,974 shares of our common stock to the former
      shareholders of Antigen in exchange for the all of the outstanding shares
      of capital stock of Antigen. We also became obligated to issue an
      additional 1,000,000 shares on January 31, 2003 in connection with the
      Merger Agreement. No commissions or similar fees were paid in connection
      with this transaction. We relied on Section 4(2) of the Securities Act and
      Rule 506 of Regulation D promulgated thereunder in issuing these shares
      without registration under the Securities Act of 1933.
   o  During the fiscal quarter ended October 31, 2003, we issued an aggregate
      of 487,500 shares to Jeffrey Trenk, Sound Capital Incorporated, Global
      Advisory Services, LLC and CEOcast Inc. for consulting services. For
      financial reporting purposes, we recognized an expense of $918,000 in
      connection with issuance of these shares for services, approximately equal
      to the fair market value of the shares when issued. As transactions were
      not eligible for S-8 registration, we relied on Section 4(2) of the
      Securities Act in connection with the issuance of these shares. The shares
      are restricted, and each of the consultants, being primarily engaged in
      the financial industry, had access to the information which would have
      been presented in a registration statement and sufficient sophistication
      so as to not require the protections afforded by registration under the
      Securities Act. 150,000 of these shares have been registered for resale on
      form S-3.


Item 3.  Defaults Upon Senior Securities

None.

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

A Special Meeting of Stockholders of Generex Biotechnology Corporation was held
on November 4, 2003, subsequent to the end of the fiscal quarter but prior to
the filing of this report. At the meeting, 18,762,201 shares of our common stock


<PAGE>


were represented and entitled to vote. Generex stockholders approved all
proposals presented at the meeting. The proposals were:

   o  To approve an amendment to Generex's Restated Certificate of Incorporation
      increasing the number of authorized shares of common stock to 150,000,000.

   o  To authorize the Board of Directors, in the three-month period commencing
      with the date of the meeting, to issue, without prior stockholder
      approval, in connection with capital raising transactions, and/or
      acquisitions of assets, businesses or companies, up to 10,000,000 shares
      of common stock, including options, warrants, securities or other rights
      convertible into common stock, in the aggregate, in excess of the number
      of shares that NASDAQ's Rules 4350(i)(1)(C) and (D) permit the Company to
      issue in such transactions without prior stockholder approval. The
      issuance of such 10,000,000 shares to be upon such terms as the Board of
      Directors shall deem to be in the best interests of the Company, for a
      price of not less than 70% of the market price at the time of such
      issuance and for an aggregate consideration not to exceed $50,000,000.

   o  To approve an amendment to the Generex Biotechnology Corporation 2001
      Stock Option Plan ("2001 Plan") increasing the number of shares which may
      be issued upon exercise of options under the 2001 Plan from 4,000,000 to
      8,000,000

      The results of the votes were as follows:
<TABLE>
<CAPTION>
                                                                                                           Broker
                                                     Votes For          Votes Against      Abstentions     Non-Votes
                                                     ---------          -------------      -----------     ---------
<S>                                                  <C>                      <C>          <C>             <C>

Proposal to Amend Restated
Certificate of Incorporation                         18,037,805               669,567      54,829          0
----------------------------


Proposal to Authorize Issuance of
Shares at below Market Prices                         7,299,461               861,854      33,622          10,567,264
-----------------------------

Proposal to Approve Amendment
to the 2001 Stock Option Plan                         7,414,142               674,303      90,692          10,583,064
</TABLE>


Item 5.  Other Information

An investment in our stock is very speculative and involves a high degree of
risk. You should carefully consider the following important factors, as well as
the other information in this Report and the other reports that we have filed
heretofore (and will file hereafter) with the Securities and Exchange
Commission, before purchasing our stock. The following discussion outlines
certain factors that we think could cause our actual outcomes and results to
differ materially from our forward-looking statements.

We have a history of losses, and will incur additional losses.

We are a development stage company with a limited history of operations, and do
not expect ongoing revenues from operation in the immediately foreseeable
future. To date, we have not been profitable and our accumulated net loss before
preferred stock dividend was approximately $82,500,000 at October 31, 2003. Our
losses have resulted principally from costs incurred in research and
development, including clinical trials, and from general and administrative
costs associated with our operations. While we seek to attain profitability, we
cannot be sure that we will ever achieve product and other revenue sufficient
for us to attain this objective.


<PAGE>


Our product candidates are in research or early stages of pre-clinical and
clinical development. We will need to conduct substantial additional research,
development and clinical trials. We will also need to receive necessary
regulatory clearances both in the United States and foreign countries and obtain
meaningful patent protection for and establish freedom to commercialize each of
our product candidates. We cannot be sure that we will obtain required
regulatory approvals, or successfully research, develop, commercialize,
manufacture and market any other product candidates. We expect that these
activities, together with future general and administrative activities, will
result in significant expenses for the foreseeable future.

To progress in product development or marketing, we will need additional capital
which may not be available to us. This may delay our progress in product
development or market.

We will require funds in excess of our existing cash resources:

   o  to proceed under our joint venture with Elan, which requires us to fund
      80.1% of initial product development costs;
   o  to develop buccal and immunomedicine products;
   o  to develop new products based on our buccal delivery and immunomedicine
      technologies, including clinical testing relating to new products;
   o  to develop or acquire other technologies or other lines of business;
   o  to establish and expand our manufacturing capabilities;
   o  to finance general and administrative and research activities that are not
      related to specific products under development; and
   o  to finance the research and development activities of our new subsidiary
      Antigen. We have agreed to fund at least $2,000,000 of Antigen
      expenditures during the first two years following the acquisition.

In the past, we have funded most of our development and other costs through
equity financing. We anticipate that our existing capital resources will enable
us to maintain currently planned operations through the next twelve months.
However, this expectation is based on our current operating plan, which could
change as a result of many factors, and we may need additional funding sooner
than anticipated. To the extent operating and capital resources are insufficient
to meet future requirements, we will have to raise additional funds to continue
the development and commercialization of our products. Unforeseen problems,
including materially negative developments in our joint venture with Elan, in
our clinical trials or in general economic conditions, could interfere with our
ability to raise additional equity capital or materially adversely affect the
terms upon which such funding is available.

It is possible that we will be unable to obtain additional funding as and when
we need it. If we were unable to obtain additional funding as and when needed,
we could be forced to delay the progress of certain development efforts. Such a
scenario poses risks. For example, our ability to bring a product to market and
obtain revenues could be delayed, our competitors could develop products ahead
of us, and/or we could be forced to relinquish rights to technologies, products
or potential products.

New equity financing could dilute current shareholders.

If we raise funds through equity financing to meet the needs discussed above, it
will have a dilutive effect on existing holders of our shares by reducing their
percentage ownership. The shares may be sold at a time when the market price is
low because we need the funds. This will dilute existing holders more than if
our stock price was higher. In addition, equity financings normally involve
shares sold at a discount to the current market price.

Our research and development and marketing efforts are likely to be highly
dependent on corporate collaborators and other third parties who may not devote
sufficient time, resources and attention to our programs, which may limit our
efforts to successfully develop and market potential products.


<PAGE>


Because we have limited resources, we have sought to enter into collaboration
agreements with other pharmaceutical companies that will assist us in
developing, testing, obtaining governmental approval for and commercializing
products using our buccal delivery and immunomedicine technologies. Any
collaborator with whom we may enter into such collaboration agreements may not
support fully our research and commercial interests since our program may
compete for time, attention and resources with such collaborator's internal
programs. Therefore, these collaborators may not commit sufficient resources to
our program to move it forward effectively, or that the program will advance as
rapidly as it might if we had retained complete control of all research,
development, regulatory and commercialization decisions.

Risks Related to Our Technologies
---------------------------------

Because our technologies and products are at an early stage of development, we
cannot expect revenues in the foreseeable future.

We have no products approved for commercial sale at the present time. To be
profitable, we must successfully research, develop, obtain regulatory approval
for, manufacture, introduce, market and distribute our products under
development. We may not be successful in one or more of these stages of the
development of our products, and/or any of the products we develop may not be
commercially viable.

While over 750 patients with diabetes have been dosed with our oral insulin
formulation at approved facilities in seven countries, our clinical program has
not reached a point where we are prepared to apply for regulatory approvals to
market the product in any country. Until we have developed a commercially viable
product which receives regulatory approval, we will not receive revenues from
ongoing operations.

We will not receive revenues from operations until we receive regulatory
approval to sell our products. Many factors impact our ability to obtain
approvals for commercially viable products.

We have no products approved for commercial sale by drug regulatory authorities.
We have begun the regulatory approval process for our oral insulin formulation,
buccal morphine and fentanyl products. Our immunomedicine products are in the
pre-clinical stage of development.

Pre-clinical and clinical trials of our products, and the manufacturing and
marketing of our technologies, are subject to extensive, costly and rigorous
regulation by governmental authorities in the United States, Canada and other
countries. The process of obtaining required regulatory approvals from the FDA
and other regulatory authorities often takes many years, is expensive and can
vary significantly based on the type, complexity and novelty of the product
candidates. For these reasons, it is possible we will never receive approval for
one or more product candidates.

Delays in obtaining United States or foreign approvals for our products could
result in substantial additional costs to us, and, therefore, could adversely
affect our ability to compete with other companies. If regulatory approval is
ultimately granted, the approval may place limitations on the intended use of
the product we wish to commercialize, and may restrict the way in which we are
permitted to market the product.

Due to legal and factual uncertainties regarding the scope and protection
afforded by patents and other proprietary rights, we may not have meaningful
protection from competition.

Our long-term success will substantially depend upon our ability to protect our
proprietary technologies from infringement, misappropriation, discovery and
duplication and avoid infringing the proprietary rights of others. Our patent
rights, and the patent rights of biotechnology and pharmaceutical companies in
general, are highly uncertain and include complex legal and factual issues.
Because of this, our pending patent applications may not be granted. These
uncertainties also mean that any patents that we own or will obtain in the
future could be subject to challenge, and even if not challenged, may not
provide us with meaningful protection from competition. Due to our financial


<PAGE>


uncertainties, we may not possess the financial resources necessary to enforce
our patents. Patents already issued to us or our pending applications may become
subject to dispute, and any dispute could be resolved against us.

Because a substantial number of patents have been issued in the field of
alternative drug delivery and because patent positions can be highly uncertain
and frequently involve complex legal and factual questions, the breadth of
claims obtained in any application or the enforceability of our patents cannot
be predicted. Consequently, we do not know whether any of our pending or future
patent applications will result in the issuance of patents or, to the extent
patents have been issued or will be issued, whether these patents will be
subject to further proceedings limiting their scope, will provide significant
proprietary protection or competitive advantage, or will be circumvented or
invalidated.

Also because of these legal and factual uncertainties, and because pending
patent applications are held in secrecy for varying period in the United States
and other countries, even after reasonable investigation we may not know with
certainty whether any products that we (or a licensee) may develop will infringe
upon any patent or other intellectual property right of a third party. For
example, we are aware of certain patents owned by third parties that such
parties could attempt to use in the future in efforts to affect our freedom to
practice some of the patents that we own or have applied for. Based upon the
science and scope of these third party patents, we believe that the patents that
we own or have applied for do not infringe any such third party patents,
however, we cannot know for certain whether we could successfully defend our
position, if challenged. We may incur substantial costs if we are required to
defend ourselves in patent suits brought by third parties. These legal actions
could seek damages and seek to enjoin testing, manufacturing and marketing of
the accused product or process. In addition to potential liability for
significant damages, we could be required to obtain a license to continue to
manufacture or market the accused product or process.

Risks Related to Marketing of Our Potential Products
----------------------------------------------------

We may not become, or stay, profitable even if our products are approved for
sale.

Even if we obtain regulatory approval to market our oral insulin product or any
other product candidate, many factors may prevent the product from ever being
sold in commercial quantities. Some of these factors are beyond our control,
such as:

   o  acceptance of the formulation or treatment by health care professionals
      and diabetic patients;
   o  the availability, effectiveness and relative cost of alternative diabetes
      or immunomedicine treatments that may be developed by competitors; and
   o  the availability of third-party (i.e., insurer and governmental agency)
      reimbursements.

We may not be able to compete with treatments now being marketed and developed,
or which may be developed and marketed in the future by other companies.

Our products will compete with existing and new therapies and treatments. We are
aware of a number of companies currently seeking to develop alternative means of
delivering insulin, as well as new drugs intended to replace insulin therapy at
least in part. We are also aware of a number of companies currently seeking to
develop alternatives means of enhancing and suppressing peptides. In the longer
term, we also face competition from companies that seek to develop cures for
diabetes and other malignant, infectious, autoimmune and allergic diseases
through techniques for correcting the genetic deficiencies that underlie such
diseases.

We will have to depend upon others for marketing and distribution of our
products, and we may be forced to enter into contracts limiting the benefits we
may receive and the control we have over our products. We intend to rely on
collaborative arrangements with one or more other companies that possess strong
marketing and distribution resources to perform these functions for us. We may
not be able to enter into beneficial contracts, and we may be forced to enter
into contracts for the marketing and distribution of our products that


<PAGE>


substantially limit the potential benefits to us from commercializing these
products. In addition, we will not have the same control over marketing and
distribution that we would have if we conducted these functions ourselves.

Numerous pharmaceutical, biotechnology and drug delivery companies, hospitals,
research organizations, individual scientists and nonprofit organizations are
engaged in the development of alternatives to our technologies. Many of these
companies have greater research and development capabilities, experience,
manufacturing, marketing, financial and managerial resources than we do.
Accordingly, our competitors may succeed in developing competing technologies,
obtaining FDA approval for products or gaining market acceptance more rapidly
than we can.

If government programs and insurance companies do not agree to pay for or
reimburse patients for our products, we will not be successful.

Sales of our potential products depend in part on the availability of
reimbursement by third-party payors such as government health administration
authorities, private health insurers and other organizations. Third-party payors
often challenge the price and cost-effectiveness of medical products and
services. FDA approval of health care products does not guarantee that these
third party payors will pay for the products. Even if third party payors do
accept our product, the amounts they pay may not be adequate to enable us to
realize a profit. Legislation and regulations affecting the pricing of
pharmaceuticals may change before our products are approved for marketing and
any such changes could further limit reimbursement.

Risks Related to Potential Liabilities
--------------------------------------

We face significant product liability risks, which may have a negative effect on
our financial condition.

The administration of drugs or treatments to humans, whether in clinical trials
or commercially, can result in product liability claims whether or not the drugs
or treatments are actually at fault for causing an injury. Furthermore, our
products may cause, or may appear to have caused, serious adverse side effects
(including death) or potentially dangerous drug interactions that we may not
learn about or understand fully until the drug or treatment has been
administered to patients for some time. Product liability claims can be
expensive to defend and may result in large judgments or settlements against us,
which could have a severe negative effect on our financial condition. We
maintain product liability insurance in amounts we believe to be commercially
reasonable for our current level of activity and exposure, but claims could
exceed our coverage limits. Furthermore, due to factors in the insurance market
generally and our own experience, we may not always be able to purchase
sufficient insurance at an affordable price. Even if a product liability claim
is not successful, the adverse publicity and time and expense of defending such
a claim may interfere with our business.

Outcome of an Arbitration Proceeding with Sands Brothers may have an adverse
impact on us.

On October 2, 1998, Sands Brothers & Co. Ltd., a New York City-based investment
banking and brokerage firm, initiated an arbitration against us under New York
Stock Exchange rules. Sands alleged that it had the right to receive, for
nominal consideration, approximately 1.5 million shares of our common stock.
Sands based its claim upon an October 1997 letter agreement that was purported
by Sands to confirm an agreement appointing Sands as the exclusive financial
advisor to Generex Pharmaceuticals, Inc., a subsidiary that we acquired in late
1997. In exchange therefor, the letter agreement purported to grant Sands the
right to acquire 17% of Generex Pharmaceuticals' common stock for nominal
consideration. Sands claimed that its right to receive shares of Generex
Pharmaceuticals' common stock applies to our common stock since outstanding
shares of Generex Pharmaceuticals' common stock were converted into shares of
our common stock in the acquisition. Sands' claims also included additional
shares allegedly due as a fee related to that acquisition, and $144,000 in
monthly fees allegedly due under the terms of the purported agreement.


<PAGE>


After several arbitration and court proceedings, on October 29, 2002, the
Appellate Division of the New York Supreme Court issued a decision remanding the
issue of damages to a new panel of arbitrators and limiting the issue of damages
before the new panel to reliance damages which is not to include an award of
lost profits. Reliance damages are out-of-pocket damages incurred by Sands.

On November 27, 2002, Sands filed with the Appellate Division a motion to
reargue the appeal, or, in the alternative, for leave to appeal to the Court of
Appeals of New York from the order of the Appellate Division. On March 18, 2003,
the Appellate Division denied Sands' motion.

Despite the recent favorable decisions, the case is still ongoing and our
ultimate liability cannot yet be determined with certainty. Our financial
condition would be materially adversely affected to the extent that Sands
receives shares of our common stock for little or no consideration or
substantial monetary damages as a result of this legal proceeding. We are not
able to estimate an amount or range of potential loss from this legal proceeding
at the present time.

Risks Related to the Market for Our Stock
-----------------------------------------

If our stock is delisted from the NASDAQ SmallCap Market and/or becomes subject
to Penny Stock regulations, the market price for our stock may be reduced and it
may be more difficult for us to obtain financing.

On June 5, 2003, our common stock was delisted from the NASDAQ National Market
because of our failure to maintain a minimum of $10,000,000 in stockholders'
equity. On June 5, 2003, our stock began trading on the NASDAQ SmallCap Market.
The NASDAQ SmallCap Market has its own standards for continued listing,
including a minimum of $2.5 million stockholders' equity. As of October 31,
2003, our stockholders' equity was $8,345,100.

In addition, for continued listing on both the NASDAQ National Market and
SmallCap Market, our stock price must be at least $1.00. During periods in
fiscal 2002 and the beginning of fiscal 2003, our stock price dropped close to
$1.00 per share. If we do not meet this requirement in the future, we may be
subject to delisting by NASDAQ.

If our stock is delisted from NASDAQ, there will be less interest for our stock
in the market. This may result in lower prices for our stock and make it more
difficult for us to obtain financing.

If our stock is not listed on NASDAQ and fails to maintain a price of $5.00 or
more per share, our stock would become subject to the Securities and Exchange
Commission's "Penny Stock" rules. These rules require a broker to deliver, prior
to any transaction involving a Penny Stock, a disclosure schedule explaining the
Penny Stock Market and its risks. Additionally, broker/dealers who recommend
Penny Stocks to persons other than established customers and accredited
investors must make a special written suitability determination and receive the
purchaser's written agreement to a transaction prior to the sale. In the event
our stock becomes subject to these rules, it will become more difficult for
broker/dealers to sell our common stock. Therefore, it may be more difficult for
us to obtain financing.

The price of Our Stock may be volatile.

There may be wide fluctuation in the price of our stock. These fluctuations may
be caused by several factors including:

   o  announcements of research activities and technology innovations or new
      products by us or our competitors;
   o  changes in market valuation of companies in our industry generally;
   o  variations in operating results;
   o  changes in governmental regulations;


<PAGE>


   o  developments in patent and other proprietary rights;
   o  public concern as to the safety of drugs or treatments developed by us or
      others;
   o  results of clinical trials of our products or our competitors' products;
      and
   o  regulatory action or inaction on our products or our competitors'
      products.

From time to time, we may hire companies to assist us in pursuing investor
relations strategies to generate increased volumes of investment in our stock.
Such activities may result, among other things, in causing the price of our
stock to increase on a short-term basis.

Furthermore, the stock market generally and the market for stocks of companies
with lower market capitalizations and small biopharmaceutical companies, like
us, have from time to time experienced, and likely will again experience
significant price and volume fluctuations that are unrelated to the operating
performance of a particular company.

Our outstanding Special Voting Rights Preferred Stock and provisions of our
Certificate of Incorporation could delay or prevent the acquisition or sale of
our business.

Holders of our Special Voting Rights Preferred Stock have the ability to prevent
any change of control in us. Our Vice President of Research and Development, Dr.
Pankaj Modi, owns all of our Special Voting Rights Preferred Stock. In addition,
our Certificate of Incorporation permits our Board of Directors to designate new
series of preferred stock and issue those shares without any vote or action by
the shareholders. Such newly authorized and issued shares of preferred stock
could contain terms that grant special voting rights to the holders of such
shares that make it more difficult to obtain shareholder approval for an
acquisition of our business or increase the cost of any such acquisition.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

2        Agreement and Plan of Merger among Generex Biotechnology Corporation,
         Antigen Express, Inc. and AGEXP Acquisition Inc. filed as Exhibit 2.1
         to our Current Report on Form 8-K filed with the Commission on august
         15, 2003 is incorporated herein by reference.

3.1      Amendment to Certificate of Incorporation increasing authorized common
         stock.*

4.1      Amended Biotechnology Corporation 2001 Stock Option Plan.*

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

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

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


-------------------------------
* Filed herewith. All other exhibits are incorporated by reference, as
described.

(b) Reports on Form 8-K.

The following Reports on Form 8-K were filed in the quarter ended October, 2003:

   o  On August 15, 2003, the Company filed a Current Report on Form 8-K
      announcing the acquisition of Antigen Express, Inc. under Item 2 of Form
      8-K - "Acquisition of Assets". An exhibit relating the acquisition was
      filed under ITEM 7.

   o  September 9, 2003, the Company filed an Current Report on Form 8-K
      originally filed on January 16, 2002. The amendment contains revised
      versions of Exhibits filed under Item 7 reflecting the SEC Staff's
      comments on the Company's confidentiality request for portions of those
      exhibits.


<PAGE>



     SIGNATURES

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

     DATE:  December 15, 2003

     GENEREX BIOTECHNOLOGY CORPORATION


     By: /s/ Rose C. Perri                           By: /s/ Anna Gluskin
     ---------------------                           --------------------
     Principal Financial Officer                     Chief Executive Officer