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 January 31, 2000

[ ]  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                                     82-0490211
-------------------------------                --------------------------------
(State of other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

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

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

                                 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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The number of outstanding shares of the registrant's Common Stock, par value
$.001, was 15,213,773 as of January 31, 2000.

                                                                    Page 1 of 19

<PAGE>


                      GENEREX BIOTECHNOLOGY CORPORATION
                                    INDEX


PART I:  FINANCIAL INFORMATION

Item 1.       Consolidated Financial Statements - unaudited

              Consolidated Balance Sheets --
              January 31, 2000 and July 31, 1999 ............................  3

              Consolidated Statements of Operations -- for the six month
              periods ended January 31, 2000 and 1999, the six month periods
              ended January 31, 2000 and 1999, and cumulative from November
              2, 1995, to January 31, 2000...................................  4

              Consolidated Statements of Cash Flows -- For the six-month
              periods ended January 31, 2000 And 1999, the six month periods
              ended January 31, 2000 and 1999, and cumulative from November
              2, 1995, to January 31, 2000...................................  5

              Notes to Consolidated Financial Statements.....................  6

Item 2.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations............................ 11


PART II: OTHER INFORMATION

Item 1.       Legal Proceedings.............................................. 15

Item 5.       Other Information.............................................. 17

Signatures................................................................... 19




                                                                    Page 2 of 19



<PAGE>


Item I.  Consolidated financial statements

                        GENEREX BIOTECHNOLOGY CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                           January 31,          July 31,
                                                                               2000               1999
                                                                           ------------       ------------
<S>                                                                        <C>                <C>
         ASSETS

Current Assets:
   Cash and cash equivalents                                               $  4,730,735       $  5,633,201
   Short-term investments                                                       254,014            232,345
   Miscellaneous receivables                                                     69,897            182,413
   Other current assets                                                          87,657            119,010
                                                                           ------------       ------------
         Total Current Assets                                                 5,142,303          6,166,969

Property and Equipment, Net                                                   2,189,462          1,879,547

Deposits                                                                         72,399             66,159

Due From Related Parties                                                        778,828            776,991
                                                                           ------------       ------------

         TOTAL ASSETS                                                      $  8,182,992       $  8,889,666
                                                                           ============       ============

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                                   $    887,965       $    428,874
   Current maturities of long-term debt                                         560,896            550,589
                                                                           ------------       ------------
         Total Current Liabilities                                            1,448,861            979,463

Long-Term Debt, Less Current Maturities                                         269,094            444,971

Due to Related Parties                                                          161,916            155,383

Commitments and Contingencies

Stockholders' Equity:
   Preferred stock, $.001 par value; authorized 1,000,000 shares,
     issued and outstanding 1,000 shares at January 31, 2000
     and July 31, 1999                                                                1                  1
   Common stock, $.001 par value; authorized 50,000,000 shares,
     issued and outstanding 15,213,773 and 14,740,683 shares at
     January 31, 2000 and July 31, 1999, respectively                            15,214             14,741
   Additional paid-in capital                                                23,622,419         20,903,728
   Notes receivable - common stock                                             (252,902)          (434,903)
   Deficit accumulated during the development stage                         (16,973,323)       (12,975,678)
   Accumulated other comprehensive loss                                        (108,288)          (198,040)
                                                                           ------------       ------------
         Total Stockholders' Equity                                           6,303,121          7,309,849
                                                                           ------------       ------------

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $  8,182,992       $  8,889,666
                                                                           ============       ============
</TABLE>

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

                                      -3-

<PAGE>

                        GENEREX BIOTECHNOLOGY CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                                  Cumulative
                                                                                                                      From
                                                                                                                   November 2,
                                                                                                                 1995 (Date of
                                                  For the Three Months Ended         For the Six Months Ended       Inception)
                                                          January 31,                       January 31,           to January 31,
                                                 -----------------------------     -----------------------------
                                                    2000             1999             2000              1999          2000
                                                 ------------     ------------     ------------     ------------  -------------
<S>                                              <C>              <C>              <C>              <C>              <C>
Revenues                                         $       --       $       --       $       --       $       --       $       --

Operating Expenses:
   Research and development                         1,026,253          654,719        1,436,172        1,240,977        4,905,772
   Research and development - related party              --               --               --               --            220,218
   General and administrative                       1,887,743        1,250,224        2,660,166        1,702,775       11,556,436
   General and administrative - related party            --               --               --               --            314,328
                                                 ------------     ------------     ------------     ------------     ------------
       Total Operating Expenses                     2,913,996        1,904,943        4,096,338        2,943,752       16,996,754
                                                 ------------     ------------     ------------     ------------     ------------
Operating Loss                                     (2,913,996)      (1,904,943)      (4,096,338)      (2,943,752)     (16,996,754)

Other Income (Expense):
   Interest income                                     63,652             --            127,474               66          182,664
   Interest expense                                   (28,529)         (18,578)         (28,781)         (33,640)        (159,233)
                                                 ------------     ------------     ------------     ------------     ------------

Net Loss                                         $ (2,878,873)    $ (1,923,521)    $ (3,997,645)    $ (2,977,326)    $(16,973,323)
                                                 ============     ============     ============     ============     ============

Basic and Diluted Net Loss Per Common
   Share                                         $       (.19)    $       (.15)    $       (.27)    $       (.24)
                                                 ============     ============     ============     ============
Weighted Average Number of Shares of
   Common Stock Outstanding                        14,824,124       13,029,867       14,783,254       12,637,233
                                                 ============     ============     ============     ============
</TABLE>

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

                                      -4-
<PAGE>

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

<TABLE>
<CAPTION>

                                                                                                 Cumulative
                                                                                                    From
                                                                                                 November 2,
                                                              For the Six Months Ended          1995 (Date of
                                                                     January 31,                  Inception)
                                                           -------------------------------      to January 31,
                                                               2000               1999               2000
                                                           ------------       ------------       ------------
<S>                                                         <C>              <C>                <C>
Cash Flows From Operating Activities:
Net loss                                                   $ (3,997,645)      $ (2,977,326)      $(16,973,323)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
       Depreciation                                              44,883             19,277            168,752
       Reduction of notes receivable - common
         stock in exchange for services rendered                182,001               --              220,980
       Common stock issued for services rendered                   --              245,408          1,174,428
       Stock options and warrants issued for
         services rendered                                      924,350            340,564          2,605,224
       Preferred stock issued for services rendered                --                 --                  100
       Founders shares transferred for services
         rendered                                                  --                 --              353,506
       Changes in operating assets and liabilities:
         Miscellaneous receivables                              118,839               --              (23,769)
         Other current assets                                    33,801            (24,387)           (90,166)
         Accounts payable and accrued liabilities               452,754            158,984          1,691,566
         Other, net                                                --               (9,215)           110,317
                                                           ------------       ------------       ------------
         Net Cash Used in Operating Activities               (2,241,017)        (2,246,695)       (10,762,385)

Cash Flows From Investing Activities:
   Purchase of property and equipment                           (85,095)          (676,994)          (377,886)
   Change in restricted cash                                       --              105,655             (5,595)
   Purchase of short-term investments                           (21,670)              --             (254,015)
   Change in deposits                                            (3,419)            16,442            (21,020)
   Change in due from related parties                            30,491            403,459         (2,515,679)
   Other, net                                                      --                 --               89,683
                                                           ------------       ------------       ------------
         Net Cash Used in Investing Activities                  (79,693)          (151,438)        (3,084,512)

Cash Flows From Financing Activities:
   Proceeds from issuance of long-term debt                        --                 --              993,149
   Repayment of long-term debt                                 (393,182)          (388,565)          (873,220)
   Change in due to related parties                                --              (80,299)           154,541
   Proceeds from issuance of common stock, net                1,794,815          3,991,942         18,411,561
   Purchase and retirement of common stock                         --             (119,066)          (119,066)
                                                           ------------       ------------       ------------
         Net Cash Provided By Financing Activities            1,401,633          3,404,012         18,566,965

Effect of Exchange Rates on Cash and Cash Equivalents            16,611             (2,012)            10,667
                                                           ------------       ------------       ------------
Net Increase (Decrease) in Cash and Cash Equivalents           (902,466)         1,003,867          4,730,735
Cash and Cash Equivalents, Beginning of Period                5,633,201          2,090,827               --
                                                           ------------       ------------       ------------
Cash and Cash Equivalents, End of Period                   $  4,730,735       $  3,094,694       $  4,730,735
                                                           ============       ============       ============
</TABLE>

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

                                      -5-
<PAGE>

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


1.   Basis of Presentation

     The accompanying unaudited interim consolidated financial statements have
     been prepared pursuant to the rules and regulations for reporting 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.

     Interim statements are subject to possible adjustments in connection with
     the annual audit of the Company's accounts for the fiscal year 2000; 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.

2.   Comprehensive Income/(Loss)

     The Company has adopted the provisions of Statement No. 130, Reporting
     Comprehensive Income, which modifies the financial statement presentation
     of comprehensive income and its components. Adoption of this statement had
     no effect on the Company's financial position or operating results.

     Comprehensive loss, which includes net loss and change in the foreign
     currency translation account during the period, for the six months ended
     January 31, 2000 and 1999 was $(3,907,893) and $(2,984,924), respectively.

3.   Accounts Payable and Accrued Expense

     Accounts payable and accrued expenses consist of the following:

                                                  January 31,        July 31,
                                                     2000              1999
                                                   ---------        ---------

     Accounts Payable and Accrued Expenses         $ 818,799        $ 366,927
     Litigation Accrual                               69,166            --
     Consulting Accruals                               --              61,947
                                                   ---------        ---------
          Total                                    $ 888,965        $ 428,874
                                                   =========        =========

4.   Pending Litigation

     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 on October 2, 1998. Sands alleged that it had the
     right to receive, for nominal consideration, approximately 1.6 to 2.5
     million shares of the Company's common stock. This claim was based upon an
     October 1997 letter agreement, which purported to confirm an agreement
     appointing Sands Brothers as the exclusive financial advisor to Generex
     Pharmaceuticals, Inc., (GPI), now a subsidiary of the Company. In exchange
     for agreeing to act in that capacity, the letter agreement purports to
     grant Sands the right to acquire 17% of GPI's common stock for nominal
     consideration. Following the Company's acquisition of GPI, Sands claimed
     right to receive shares of GPI's common stock applies to the Company's
     common stock since outstanding shares of GPI were converted into the
     Company's shares in the acquisition. Sands' claims also included additional
     shares as a fee related to that acquisition, and $144,000 in monthly fees
     due under the terms of the purported agreement.

                                      -6-

<PAGE>

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


4.   Pending Litigation (Continued)

     On October 1, 1999, the Company was informed that the arbitration panel
     that heard this case had awarded Sands $14,070 and issued a declaratory
     judgment to the effect that the Company is required 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 October 9, 1997 letter
     agreement. Thereafter, Sands filed a motion to confirm the award with the
     New York Supreme Court. In November 1999, the Company filed a cross-motion
     to vacate the award. Briefing of these motions was completed in December
     1999, and a hearing on the motion took place in January 2000. The Company
     is presently awaiting a decision of the court on these motions.

     If the Company is unsuccessful in their effort to vacate the arbitration
     award obtained by Sands and are required to issue warrants or other
     securities to Sands under the October 1997 letter agreement, the Company
     will record a charge to operations, and a corresponding increase to
     Additional Paid in Capital, equal to the fair value of the securities
     issued to Sands less any consideration which the Company receives for the
     securities. However, the Company's ultimate legal and financial liability,
     including a range of possible losses with respect to the award, cannot be
     estimated at this time. Therefore, no provision for the award has yet been
     recorded in the financial statements. The Company does not believe that the
     final outcome of this case is reasonably likely to have a material adverse
     effect on their consolidated financial position apart from any charge to
     operations as previously described.

     In February 1997, a claim of wrongful dismissal by a former employee
     seeking damages of approximately $311,245 was brought in Ontario Court in
     Toronto, Ontario. This case was tried without a jury in October 1999, and a
     decision in favor of the plaintiff in the amount of approximately $131,908,
     plus interest and costs was rendered against the Company in December 1999.
     The Company is presently awaiting the resolution of certain issues relating
     to the assessment of interests and costs by the court. When those issues
     are resolved, the Company intends to appeal the trial court's decision.

     The Company's management, after consultation with its legal counsel, has
     determined the range of likely loss to be approximately $69,166 to $192,281
     and therefore have recorded a charge to operations accordingly.

     An action was also commenced against GPI and other companies and
     individuals seeking approximately $4,080,000 for allegedly causing certain
     adverse consequences of a plaintiff's investment in a particular company.
     GPI's only involvement was that at one time there was interest on its part
     in buying certain assets from this company. GPI failed to file a Statement
     of Defense to the Statement of Claim and GPI was noted in default on
     October 1, 1996. On December 9, 1999, an application was filed to set aside
     the notice of default and permit the Company to enter a statement of
     defense. The Company has not yet received a formal decision or a formal
     order denying their applications. Once the order is served, the Company
     will have a period of seven days to seek a new hearing before a judge,
     which is in essence is a new proceeding at which new evidence can be
     introduced. The Company cannot now predict whether it will succeed in
     setting aside the notice of default. Failure to do so would preclude the
     Company from contesting the issue of liability. The Company, however, would
     be permitted to contest the amount of damages, if any, the plaintiff as a
     result of the Company's actions or the actions for which the Company is
     legally responsible.

                                      -7-

<PAGE>

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


4.   Pending Litigation (Continued)

     In February 1999, MQS, Inc., a former consultant to the Company, commenced
     a civil action against the Company in the United States District Court for
     the District of New Jersey claiming that 242,168 shares of the Company's
     Common Stock, and $243,066 are due to it for services which it rendered
     through December 22, 1998. MQS also claims compensation on a quantum merit
     basis for the value of its services, and for punitive damages. In May 1999,
     the Company responded to the complaint in which the Company denied that MQS
     is entitled to the relief it seeks or that any of the Company's' products
     or technology incorporates any proprietary technology belonging to MQS. The
     Company has also filed a counterclaim against MQS, Inc. for breach of
     contract.

     In December 1999, the Company filed a motion with the court to amend their
     answer and counterclaim to add additional claims against MQS, including
     claims based upon unauthorized use and misappropriation of the Company's
     trade secrets and technology by MQS, and to add additional parties as
     counterclaim defendants. Subsequent to the Company's filing, MQS filed a
     motion to amend its complaint to add certain officers of the Company as
     individual defendants on the claims previously made. The Company and MQS
     have agreed to allow the other to amend its pleadings in the manner sought
     and are jointly developing a schedule for responding to the new pleadings
     and conducting discovery in the case. The Company is unable to predict the
     outcome of this litigation at this time.

     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. Estimates that are particularly sensitive to future change
     relate to legal matters, which are subject to change as events evolve and
     as additional information becomes available during the administration and
     litigation process.

5.   Net Loss Per Share

     Basic EPS and Diluted EPS for the six months ended January 31, 2000 and
     1999 have been computed by dividing the net loss for each respective period
     by the weighted average shares outstanding during that period. All
     outstanding warrants and options have been excluded from the computation of
     Diluted EPS as they are antidilutive.

6.   Supplemental Disclosure of Cash Flow Information

<TABLE>
<CAPTION>
                                                                     For the Six Months Ended
                                                                            January 31,
                                                                     ------------------------
                                                                        2000            1999
                                                                     -----------      --------
<S>                                                                 <C>              <C>
     Cash paid during the period for:
       Interest                                                     $  28,781        $  33,640
       Income taxes                                                 $  --            $  --

     Disclosure of non-cash investing and financing activities:

       Issuance of common stock to satisfy accrued liability        $   --           $ 738,000
       Long-term debt incurred in conjunction with acquisition
         of property and equipment                                  $ 190,206        $  81,492

</TABLE>

                                      -8-
<PAGE>

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


8.   Transactions with Related Parties

     The Company's change in "Due from Related Parties" and "Due to Related
     Parties" for the six months ended January 31, 1999 represents cash
     collections and the effects of changes in exchange rates during the six
     month period ended January 31, 2000.

9.   Stockholders' Equity

     In exchange for services rendered, the Company issued a warrant to purchase
     150,000 shares of the Company's common stock at a price of $7.50 per share,
     with an expiration date of January 31, 2004. This warrant was determined to
     have a value of $355,500 and was charged to operations.

     In conjunction with raising capital, the Company issued a warrant to its
     underwriter to purchase 47,059 units, with an exercise price of $4.25 per
     unit. Each unit, until January 6, 2003, consists of one share of the
     Company's common stock and three quarters of one of the Company's Series CU
     warrants. On or after January 7, 2003 until January 7, 2005, the holder
     shall be entitled to only receive shares of the Company's common stock.

     Attached to each share of common stock sold during the private placement of
     470,590 shares in January 2000, was three quarters of one of the Company's
     Series CU warrants. Each CU warrant has an exercise price of $7.00 and
     expires in January 2003.

10.  Stock Based Compensation

     The Company granted 1,280,000 Incentive Stock Options (ISOs) to employees,
     of which 985,000 vested upon grant, 265,000 on January 3, 2001, 15,000 on
     January 3, 2002 and 15,000 on January 3, 2003. The exercise price for all
     1,280,000 is $5.00 per share. Since the Company accounts for its options
     under APB No. 25, no compensation cost was recognized.

     The Company granted 155,000 stock options to consultants, which vested upon
     grant with an exercise price of $5.00 - $5.50 per share. The options
     granted were determined to have a value of $366,350 and was charged to
     operations.

     In exchange for services rendered, the Company issued a stock option to
     purchase 125,000 shares of the Company's common stock at a price of $8.00
     per share, with an expiration date of June 15, 2004. The options granted
     were determined to have a value of $202,500 and was charged to operations.

     The Company granted 15,000 ISOs to employees, which vested in three equal
     increments on April 14, 2000, April 14, 2001 and April 14, 2002, with an
     exercise price of $5.50. Since the Company accounts for its operations
     under APB No. 25, no compensation cost was recognized.

                                      -9-

<PAGE>

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

Forward Looking Statements

     Statements in this discussion and analysis include forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. You can identify these statements by the
use of words such as "may", "will", "expect", "anticipate", "believe",
"estimate", and similar terminology. Forward-looking statements address, among
other things:

     o    implementing our clinical programs and other aspects of our business
          plans;

     o    financing goals and plans; and

     o    our expectations of when regulatory approvals will be received or
          other actions will be taken by parties other than us.

     While we believe it is important to communicate our expectations to
investors, these expectations involve known and unknown risks and uncertainties.
Future events that we are not able to accurately predict or which we do not
fully control may cause actual results to differ materially from those expressed
or implied by our forward-looking statements. Risks and uncertainties that may
affect our results may include, among others:

     o    unexpected costs or delays in carrying out our clinical programs;

     o    the availability of capital to carry out our clinical programs and
          other business plans; and

     o    outcomes of pending litigations.

Because of these and other risks and uncertainties, we cannot guarantee
future results, levels of activity, performance or achievements.

General

     Generex Biotechnology Corporation was incorporated in 1983 as Green Mt.
P.S., Inc. In January 1998, we acquired all of the outstanding capital stock of
Generex Pharmaceuticals, Inc. ("Generex Pharmaceuticals"), a Canadian
corporation formed in November 1995 to engage in pharmaceutical and
biotechnological research and other activities, and changed our corporate name
to Generex Biotechnology Corporation. The acquisition of Generex Pharmaceuticals
was effected by the merger of a recently formed Delaware corporation ("Generex
Delaware"), which had acquired all of the outstanding capital stock of Generex
Pharmaceuticals in October 1997, with a wholly-owned subsidiary which we formed
for this transaction (the "Reverse Acquisition"). As a result of the Reverse
Acquisition, the former shareholders of Generex Delaware acquired a majority of
our outstanding capital stock and, for accounting purposes, Generex Delaware was
treated as the acquiring corporation. Thus, the historical financial statements
of Generex Delaware, which essentially represent the historical financial
statements


                                                                   Page 10 of 19
<PAGE>

of Generex Pharmaceuticals, are deemed to be the historical financial
statements of Generex Biotechnology Corporation.

     On April 30, 1999, we completed a reorganization in which we merged into
Generex Delaware to change our state of incorporation from Idaho to Delaware.
This reorganization did not result in any material change in our historical
financial statements or current financial reporting. As part of the
reorganization, Generex Delaware changed its corporate name to "Generex
Biotechnology Corporation".

     We are engaged in developing drug delivery systems. Our principal business
focus has been to develop a technology to administer large molecule drugs (i.e.,
drugs composed of molecules above a specified molecular weight) by the oral
route. Historically, large molecule drugs have been administered only by
injection because their size inhibits or precludes absorption if administered by
oral, transdermal, transnasal or other means.

     The first product based on our large molecule drug delivery technology is a
liquid insulin formulation that is administered using a hand-held aerosol spray
applicator. The formulation, which includes insulin and various excipients
(i.e., non-active pharmaceutical ingredients) to facilitate the absorption of
insulin molecules through the mucous membranes in the mouth and upper
gastro-intestinal tract, is sprayed into and absorbed in the mouth and back of
the throat. This product is presently undergoing clinical trials in the United
States, Canada and England.

     We do not expect to receive significant revenue from product sales in the
current fiscal year or in the next fiscal year. We may, however, receive
licensing income, or income in the nature of licensing income (e.g., "signing
bonuses" or "advance royalties") in connection with our entering into marketing
and distribution agreements. Income from such sources, if received, is likely to
be material relative to our total cash needs. We do not have any commitments to
receive such payments at the present time, and we do not expect to receive any
such payments in our current fiscal year.

Results of Operations - Three months ended January 31, 2000 and 1999

     We have been in the development stage since its inception and have not
generated any operating revenues to date. Through January 31, 2000, we
accumulated an operating deficit of $16,973,323 as a result of research and
development and general and administrative expenses incurred during the
development stage.

     Our accumulated operating deficit at January 31, 2000, includes an
operating loss of $2,913,996 for the quarter then ended. In the corresponding
quarter of the prior year our operating loss was $1,904,943. We had net interest
income of $35,123 in the quarter ended January 31, 2000 versus net interest
expense of $18,578 in the corresponding quarter of 1999.

     The principal reason for the increase in our operating loss in the quarter
ended January 31, 2000, versus the quarter ended January 31, 1999, was an
increase in research and development expenses (to $1,026,253 from $654,719), and
in general and administrative expenses (to $1,887,743 from $1,250,224).


                                                                   Page 11 of 19

<PAGE>

        The increase in research and development expense in the current
period reflects the conduct of Phase II clinical trials of our oral insulin
formulation in the United States and Canada, preparation for the commencement
of clinical trials in Europe, and professional services relating to patents.

     The increase in general and administrative expenses in the quarter ended
January 31, 2000, compared the prior year was primarily a result of increased
salary and other employee and consultant costs ($873,589 in the three months
ended January 31, 2000 versus $246,918 in the year earlier period), increased
legal and accounting expenses (to $455,170 from $349,962), and establishing a
$69,166 reserve for loss in a pending litigation. A significant portion of
personnel costs in the period were the result of non-cash compensation of
$924,350 in the form of options and warrants to purchase common stock. The
remaining increase in general and administrative expenses in the period was
attributable to travel expenses associated with administering our clinical
trials program and in presenting and attending industry seminars.

Results of Operations - Six months ended January  31, 2000 and 1999

     Our operating loss for the six months ended January 31, 2000, was
$4,096,338, compared to an operating loss of $2,943,752 in the first half of the
preceding fiscal year. We had net interest income of $98,693 in the six month
period ended January 31, 2000 versus net interest expense of $33,574 in the
comparable six month period ended January 31, 1999.

     The principal reasons for the increase in our operating loss in six month
period ended January 31, 2000, was an increase in research and development
expenses to $1,436,172 in the six month period ended January 31, 2000, from
$1,240,977 for the six month period ended January 31, 1999, and an increase in
general and administrative expenses to $2,660,166 in the six months ended
January 31, 2000 versus $1,702,775 in the year earlier period.

     The increase in research and development expense in the six months ended
January 31, 1999, reflects the increase in such expenses in the second quarter.
Research and development expenses in the first quarter were slightly less this
year than last (by approximately $177,000), primarily because of consulting
expenses incurred in the first quarter last year.

     The increase in general and administrative expenses the first six months of
the current year are primarily the result of the increase in such expenses
during the second quarter as discussed above. General and administrative
expenses increased approximately $319,872 in the first quarter, compared to the
comparable 1998 quarter, primarily as a result of increased legal and accounting
expenses incurred in connection with pending litigation and the registration of
securities under the Securities Act.


Liquidity and Capital Resources

     To date we have financed our development stage activities primarily through
private placements of common stock. In January 2000, we raised approximately
$1.8 million of additional equity capital, net of costs of raising the capital
(approximately $200,000), in a private placement of common stock and warrants.
Primarily as a result of this additional equity financing, we had approximately
$4.7 of cash on hand at January 31, 2000 (versus approximately



                                                                   Page 12 of 19

<PAGE>

$5.63 million cash on hand at July 31, 1999), despite our net loss in the
six months then ended and our use in this period of approximately $393,000 to
satisfy outstanding mortgages on certain of our Canadian facilities.

     We believe that our cash on hand is sufficient to complete the Phase II
clinical programs for our oral insulin formulation in the United States and
Canada, to fund expected general and administrative expenses and anticipated
capital costs through the end of the current fiscal year, and to satisfy the
principal amount due in March 2000 (approximately $531,000) on a mortgage
incurred to purchase our existing executive and administrative offices.
Additional funds will be required, however, to carry out a Phase III clinical
program, to continue to fund other research and development activities and
general and administrative expenses in our next fiscal year, and to satisfy
obligations which become due next year. We expect to raise additional equity
capital in the third and fourth quarter of this year. As yet, however, we have
no commitments for additional financing of any kind. Thus, we face the risk that
unforeseen problems with our clinical program or materially negative
developments in general economic conditions could interfere with our ability to
raise the capital we need, or materially adversely affect the terms upon which
such capital is available. 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 materially and adversely
affect our prospects.

     We expect that a significant portion of our Phase III clinical program
costs will be obtained through licensing income and future marketing partners'
contributions to clinical program costs and/or equity investments. We do not,
however, have any licensing agreements or contractual arrangements for other
funding at the present time.

Transactions with Affiliates

     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 the current fiscal year, our classified payments to
its executive officers as compensation and expense reimbursements as "Research
and development - related party" because its executive officers received such
payments through personal services corporations rather than directly. For this
fiscal year and in the future, these payments have been and will 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.

Year 2000 Issues

     We have completed our assessment of year 2000 issues and believe that the
consequences of such issues will not have a material effect on our business,
results of operations or financial condition, without taking into account any
efforts by us to avoid such consequences.



                                                                   Page 13 of 19


<PAGE>

New Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in either assets or
liabilities. As amended in June 1999 by SFAS No. 137 this statement is effective
for all fiscal years beginning after June 15, 2000, and is not to be applied
retroactively to financial statements for prior periods. The impact of the
adoption of the standard has not been determined.


                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings

     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 on October 2, 1998. Sands alleged that it had the right to
receive, for nominal consideration, approximately 1.6 to 2.5 million shares
of our common stock. This claim was based upon an October 1997 letter
agreement which purported to confirm an agreement appointing Sands Brothers
as the exclusive financial advisor to Generex Pharmaceuticals, Inc., our
subsidiary. In exchange for agreeing to act in that capacity, the letter
agreement purports to grant Sands the right to acquire 17% of Generex
Pharmaceuticals common stock for nominal consideration. Following our
acquisition of Generex Pharmaceuticals, Sands claimed right to receive shares
of Generex Pharmaceuticals common stock applies to our common stock since
outstanding shares of Generex Pharmaceuticals were converted into our shares
in the acquisition. Sands' claims also included additional shares as a fee
related to that acquisition, and $144,000 in monthly fees due under the terms
of the purported agreement.

     On October 1, 1999, we were informed that the arbitration panel that heard
this case had awarded Sands $14,070 and issued a declaratory judgment to the
effect that we are required to issue to Sands a warrant to purchase 1,530,020
shares of our common stock pursuant to and in accordance with the terms of the
October 9, 1997 letter agreement. Thereafter, Sands filed a motion to confirm
the award with the New York Supreme Court. In November 1999, we filed a
cross-motion to vacate the award. Briefing of these motions was completed in
December 1999, and a hearing on the motion took place in January 2000. We
presently are awaiting a decision of the court on these motions.

     If we are unsuccessful in our effort to vacate the arbitration award
obtained by Sands and are required to issue warrants or other securities to
Sands under the October 1997 letter agreement, we will record a charge to
operations, and a corresponding increase to Additional Paid in Capital, equal to
the fair value of the securities issued to Sands less any consideration which we
receive for the securities. However, our ultimate legal and financial liability,
including a range of possible losses with respect to the award, cannot be
estimated at this time. Therefore, no provision for the award has yet been
recorded in our financial statements. We do not believe



                                                                   Page 14 of 19

<PAGE>

that the final outcome of this case is reasonably likely to have a material
adverse effect on our consolidated financial position apart from any charge to
operations as previously described.

     We also are involved in the following proceedings:

     o    In February 1997, a claim of wrongful dismissal by a former employee
          seeking damages of CDN$450,000 was brought in Ontario Court in
          Toronto, Ontario (Lorne Sparks v. Generex Pharmaceuticals, Inc.). This
          case was tried without a jury in October 1999, and a decision in favor
          of the plaintiff in the amount of CDN $193,981.80 (approximately
          US$131,908), plus interest and costs, was rendered against us in
          December 1999. We presently are awaiting the resolution of certain
          issues relating to the assessment of interest and costs by the court.
          When those issues are resolved, we intend to appeal the trial court's
          decision.

     o    In June 1996, "Generex Inc." was named as an additional defendant in a
          pending action in The Court of Queen's Bench of Alberta, in Calgary,
          Alberta (Elbourne, et al. v. Acepharm, Inc., et al.). In this action
          the plaintiffs seek injunctive relief relating to the ownership and
          control of Acepharm, damages for an alleged reduction in the value of
          their shares in Acepharm, Inc. (approximately $680,000 U.S.), and
          punitive damages (approximately $3.4 million U.S.). In one paragraph,
          plaintiff's amended Statement of Claim identifies Generex
          Pharmaceuticals and mis-identifies it as a subsidiary of another
          corporation. Except for this paragraph, there is no reference to us in
          the amended Statement of Claim. The specific acts alleged in the
          amended Statement of Claim to have violated plaintiffs' interests and
          caused it injury are ascribed to other defendants, and occurred prior
          to Generex Pharmaceuticals' incorporation in November 1995. We believe
          that we were made a party to this case because Generex Pharmaceuticals
          had expressed interest in acquiring certain assets of Acepharm, and
          the plaintiffs wished to prevent the sale. Because of the dispute over
          management, ownership and control of Acepharm, Inc., and because
          Acepharm's assets are unrelated to its business plans and goals,
          Generex Pharmaceuticals has long since abandoned any interest in
          purchasing such assets.

     We deny any wrongdoing relative to any of the matters upon which
     plaintiff's claims in this action are based. We failed, however, to file a
     Statement of Defense to those claims on a timely basis, and plaintiffs
     caused a notice of default to be entered against us, and applied to the
     court to have the notice of default set aside, and for leave to file a
     Statement of Defense. Our application was referred to a Master, who
     declined to set the Noting of Default aside, primarily because of our delay
     in seeking relief. We have not yet received a formal decision from the
     Master or a formal order denying our application. When the order is served,
     we will have a period of seven days within which to seek a new hearing
     before a judge, which in essence is a new proceeding at which new evidence
     can be introduced.

     If we do not succeed in setting aside the notice of default, we would be
     precluded from contesting liability, but would be permitted to contest the
     amount of damages, if any, which plaintiffs incurred as a result of our
     actions or of actions for which we are legally responsible. We believe that
     plaintiffs have suffered no loss or injury based on any action of ours or
     for which we were responsible, and have made no provision in our financial
     statements for any loss which might be incurred in this litigation.


                                                                   Page 15 of 19

<PAGE>

     o    In February 1999, MQS, Inc., a former consultant of ours, commenced a
          civil action against us in the United States District Court for the
          District of New Jersey claiming that 242,168 shares of our Common
          Stock and $243,065.50 are due to it for services which it rendered
          through December 22, 1998. MQS also claimed that we used proprietary
          technology of MQS in developing our aerosol applicator and in
          formulating our oral insulin product for aerosol application. We filed
          our answer to MQS's claims in May 1999, in which we denied that MQS is
          entitled to the relief that it seeks, or that any of our products or
          technology incorporates any proprietary technology belonging to MQS.
          We also filed a counterclaim against MQS for breach of contract.

     In December 1999, we filed a motion with the court to amend our answer and
     counterclaim to add additional claims against MQS, including claims based
     upon unauthorized use and misappropriation of our trade secrets and
     technology by MQS, and to add additional parties as counterclaim
     defendants. Subsequent to our filing, MQS filed a motion to amend its
     complaint to add certain of our officers as individual defendants on the
     claims previously made against us. We and MQS each has agreed to allow the
     other to amend its pleadings in the manner sought, and presently are
     jointly developing a schedule for responding to the new pleadings and
     conducting discovery in the case. We are unable to predict the outcome of
     this litigation at this time.

        We maintain product liability coverage for claims arising from the use
of our products in clinical trials, etc., but do not have any insurance which
covers our potential liability in any of the legal proceedings described above.


Item 2.  Changes in Securities and Use of Proceeds

        Paragraphs (a) and (b) of Part II, Item 2 are inapplicable.

        (c) Issuance of Unregistered Securities

           (i) Private Placement of Common Stock and Warrants

           In January 2000, we sold 450,790 units of securities ("Units") for
cash at a price of $4,25 per Unit. Each Unit consisted of one share of
Common Stock and 0.75 Series CU Warrants ("CU Warrants"). The Units were
purchased by six investors, as follows:


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                         Securities Purchased
------------------------------------------------------------------------------------------------------
                                         Common
Purchaser                                Stock                      Warrants          Consideration
---------                                -----                      --------          -------------
                                                                                           ($)
------------------------------------------------------------------------------------------------------
<S>                                      <C>                       <C>                   <C>
Cranshire Capital, L.P.                  105,883                   79,413                450,000
------------------------------------------------------------------------------------------------------
Keyway Investments Ltd.                  105,883                   79,413                450,000
------------------------------------------------------------------------------------------------------
Lionhart Investments Ltd.                 94,117                   70,587                400,000
------------------------------------------------------------------------------------------------------
Howard Todd Horberg                       58,824                   44,118                250,000
------------------------------------------------------------------------------------------------------
</TABLE>

                                                                   Page 16 of 19

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                         Securities Purchased
------------------------------------------------------------------------------------------------------
                                         Common
Purchaser                                Stock                      Warrants          Consideration
---------                                -----                      --------          -------------
                                                                                           ($)
------------------------------------------------------------------------------------------------------
<S>                                      <C>                       <C>                   <C>
Steve Levy                                58,824                   44,118                250,000
------------------------------------------------------------------------------------------------------
The dotCom Fund, LLC                      47,049                   35,924                200,000
                                       ---------                ---------             ----------
------------------------------------------------------------------------------------------------------
                  Total                  450,790                  353,573             $2,000,000
------------------------------------------------------------------------------------------------------

</TABLE>

        Coleman & Company Securities, Inc. acted as our placement agent in the
placement of the Units, and received in compensation for services in such
capacity a cash commission of $160,000 and warrants ("Placement Agent Warrants")
to purchase 23,528 Units $4.25 per Unit (i.e., 23,528 shares and 17,646 CU
Warrants). Coleman & Company assigned its right to receive the Placement Agent
Warrants to two of its officers, Ernest Pellegrino and Philip Puccio (11,764
Placement Agent Warrants to each). We also paid a "finder's fee" of $20,000
cash and 11,764 Placement Agent Warrants to each of Patrick G. Nolan and Zazoff
Associates LLC for their services in introducing certain of the investors to
Coleman & Company.


        No general solicitation was made in connection with the placement. All
securities sold were acquired for investment, and appropriate restrictions have
been placed upon the resale of any of the securities consistent, including
restrictive legends on the face of the securities and stop orders on the
Registrant's stock and warrant registers. The securities were sold without
registration under the Securities Act of 1933 in reliance upon the exemption
from registration provided in Section 4(2) thereof and Rule 506, Regulation D
promulgated thereunder.

        The terms of exercise of the CU Warrants and Placement Agent Warrants
are as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                               Expiration            Exercise          Securities Issuable
                               Date                  Price per         Issuable Upon Exercise
                                                     Warrant           per Warrant
---------------------------------------------------------------------------------------------------
<S>                            <C>                   <C>               <C>
CU Warrants                    1/7/2005              $7.00             1 share of Common Stock
---------------------------------------------------------------------------------------------------
Placement Agent Warrants       1/7/2005              $4.25             1 share of Common Stock and
                                                                       0.75 CU Warrants
---------------------------------------------------------------------------------------------------
</TABLE>

        (ii) Issuance of Options and Warrants to Advisors

     In January 2000, we issued warrants to purchase 150,00 shares of Common
Stock at a price of $7.50 per share to The Shemano Group, Inc. ("Shemano"), a
California-based broker-dealer, as compensation for financial advisory services.
The Warrant expires January 31, 2004. The right to receive these warrants was
assigned by Shemano to two of its officers.


                                                                   Page 17 of 19

<PAGE>

     We also entered into an Option Agreement with Wolfe Axelrod Weinberger LLC
("Wolfe"), a New York-based financial public relations company that has been
engaged by the Registrant to provide financial public relations services since
June 1999. Under the Agreement, Wolfe is entitled to purchase 125,000 shares of
Common Stock at a price of $8.00 per share until June 15, 2004.

     None of the aforementioned securities has been registered under the
Securities Act of 1933, no public solicitation was involved in connection with
these transactions, and transfer of the securities is restricted. We relied on
the exemption provided by Section 4(2) of the Securities Act.

     (d) Use of Proceeds from Sales of Registered Securities

     The Registration Statement to which the following disclosures pertain is
Registration Statement on Form S-1 (Registration No. 333-82667) effective
November 19, 1999 (the "Registration Statement"). From the effective date of the
Registration Statement through January 31, 2000, net proceeds from the sale of
securities pursuant to the Registration Statement have been applied as follows*:

        (1)        Construction of plant, building and               $   0
                   facilities

        (2)        Purchase and installation of                          0
                   machinery and equipment

        (3)        Purchase of real estate                               0

        (4)        Acquisition of other businesses                       0

        (5)        Repayment of debt                                     0

        (6)        Working capital                                       0

        (7)        Temporary investments                                 0

        (8)        Any other purpose expected to involve                 0
                   $100,000 or more

        (9)        Research and development                              0

                   Total applied through 1/31/00*                        0

        *The Registration Statement registered shares of outstanding Common
Stock for sale by certain of our stockholders, and we will receive no
proceeds from such sales. The registration statement also registered shares of
common Stock for sale by us upon the exercise of certain outstanding warrants.
At January 31, 2000, none of such warrants had been exercised.

                                                                   Page 18 of 19


<PAGE>

Item 6.   Exhibits and Reports on Form 8-K

  (a)     Exhibits.

          Exhibit                            Exhibit Title
          -------                            -------------

     4.1  Registration Rights Agreement dated January 7, 2000, with purchasers
          of Common Stock and CU Warrants in January 2000 placement

     4.2  Form of CU Warrant issued to investors in January 2000 placement

     4.3  Form of Placement Agent Warrant issued to Coleman & Company
          Securities, Inc., Patrick G. Nolan and Zazoff Associates LLC in
          January 2000 placement

     4.4  Form of Warrant issued to principals of The Shemano Group, Inc.

     4.5  Form of Option Agreement with Wolfe Axelrod Weinberger LLC

      27  Financial Data Schedule

     (b)  Reports on Form 8-K.

          On March 2, 2000, we filed a Current Report on Form 8-K in response
to Item 1 of Form 8-K - Change in Control of Registrant to report the
expansion of our Board of Directors to six persons, the election of Iain Brown
and William M. Hawke, M.D., as directors, and the formation of an Audit
Committee of the Board on which Dr. Hawke and Mr. Brown will serve along with
Mark Perri, our Chief Financial Officer.



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, we
have duly caused this report to be signed on our behalf by the undersigned.

DATE:  March 14, 2000

                                     GENEREX BIOTECHNOLOGY CORPORATION


                                     By: /s/ E. Mark Perri
                                         -------------------------------------
                                          E. Mark Perri
                                          Chairman and Chief Financial Officer


                                                                   Page 19 of 19