Edgar Filing: GENEREX BIOTECHNOLOGY CORP

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12

GENEREX BIOTECHNOLOGY CORPORATION
------------------------------------------------
(Name of Registrant as Specified in Its Charter)

________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

__________________________________________________________
2) Aggregate number of securities to which transaction applies:

__________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

__________________________________________________________
4) Proposed maximum aggregate value of transaction:

__________________________________________________________
5) Total fee paid:

__________________________________________________________

/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

1) Amount Previously Paid:
---------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
3) Filing Party:
---------------------------------------------------------------------------
4) Date Filed:
---------------------------------------------------------------------------

GENEREX BIOTECHNOLOGY CORPORATION
33 Harbour Square
Suite 202
Toronto, Ontario, Canada M5J 2G2

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 9, 2004

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders
of Generex Biotechnology Corporation ("Generex") that will be held on Tuesday,
March 9, 2004, at 10:00 a.m. (local time), at St. Lawrence Hall, 157 King Street
East, Toronto, Ontario, Canada M5E 1C4, for the following purposes, as set forth
in the accompanying proxy statement:

1. To elect five directors;
2. To authorize the Board of Directors, in the three-month period
commencing with the date of the annual 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
Generex 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
Generex, 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, which such authorization shall include shares of common
stock issued by Generex at or above market price prior to the date of
the annual meeting (a "Prior Issuance") in the event The NASDAQ Stock
Market, Inc. integrates (i) a new below market issuance by Generex
within the three-month period commencing on the date of the annual
meeting with (ii) the Prior Issuance;
3. To ratify the appointment of BDO Dunwoody, LLP as independent public
accountants for Generex for the fiscal year ending July 31, 2004; and
4. To transact such other business as may properly come before the annual
meeting and any adjournments or postponements of the meeting.

The Board of Directors has established the close of business on
February 9, 2004 as the record date for the determination of stockholders
entitled to receive notice of, and to vote at, the annual meeting and any
adjournment or postponement thereof.

YOU ARE URGED TO REVIEW CAREFULLY THE ACCOMPANYING PROXY STATEMENT AND TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.

You may revoke your proxy at any time before it has been voted. You are
cordially invited to attend the annual meeting in person if it is convenient for
you to do so.

By order of the Board of Directors,

/s/ Rose C. Perri
----------------------------
Rose C. Perri
Secretary

February _, 2004

GENEREX BIOTECHNOLOGY CORPORATION

PROXY STATEMENT

General Information

This proxy statement is provided to the stockholders of Generex
Biotechnology Corporation ("Generex") in connection with the solicitation by the
Board of Directors of Generex of proxies for use at the annual meeting of
stockholders of Generex to be held on Tuesday, March 9, 2004, at 10:00 a.m.
(local time), at St. Lawrence Hall, 157 King Street East, Toronto, Ontario,
Canada M5E 1C4, and any adjournments or postponements thereof. A form of proxy
is enclosed for use at the annual meeting. Proxies properly executed and
returned in a timely manner will be voted at the annual meeting in accordance
with the directions specified therein. If no direction is indicated, they will
be voted FOR (1) the election of the nominees named herein as directors, (2) the
proposal to authorize the Board of Directors to issue up to 10,000,000 shares of
common stock at less than market price in excess of amounts permitted under
NASDAQ rules, and (3) the ratification of appointment of BDO Dunwoody, LLP as
Generex's independent public accountants; and they will be voted on other
matters presented for a vote, in accordance with the judgment of the persons
acting under the proxies. The persons named as proxies were selected by the
Board of Directors and are present members of the executive management of
Generex.

Any stockholder voting by proxy may revoke that proxy at any time
before it is voted at the annual meeting by delivering written notice to the
Secretary of Generex, by delivering a proxy bearing a later date or by attending
the annual meeting in person and casting a ballot. If any stockholder holds
shares through an account with a bank or broker, the stockholder must obtain a
legal proxy from the bank or broker in order to vote at the meeting. Even if the
stockholder plans to attend the meeting, Generex encourages such stockholder to
vote its shares by proxy.

Generex's principal executive offices are located at 33 Harbour Square,
Suite 202, Toronto, Ontario, Canada M5J 2G2, and its telephone number is (416)
364-2551. Proxy materials are first being mailed to stockholders beginning on or
about February 13, 2004.

Shares Outstanding, Voting Rights and Vote Required

Only stockholders of record at the close of business on February 9,
2004 are entitled to vote at the annual meeting. The only voting stock of
Generex outstanding and entitled to vote at the annual meeting is its common
stock, $.001 par value per share (the "Common Stock"). As of the close of
business on January 26, 2004, 29,638,468 shares of Common Stock were
outstanding. Each share of Common Stock issued and outstanding is entitled to
one vote on matters properly submitted at the annual meeting. Cumulative voting
is not permitted under Generex's Restated Certificate of Incorporation, as
amended.

The presence, in person or by proxy, of the holders of a majority of
the total issued and outstanding shares of Common Stock entitled to vote at the
annual meeting is necessary to constitute a quorum for the transaction of
business at the annual meeting. Abstentions and broker non-votes will be counted
for purposes of determining the presence or absence of a quorum. A broker
non-vote occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received instructions from
the beneficial owner. Directors are elected by a plurality of the votes. This
means the five nominees for director receiving the highest number of "For" votes
will be elected as directors. Approval of each of (i) the proposal to authorize
the Board of Directors to issue up to 10,000,000 shares of common stock at less
than market price in excess of amounts permitted under NASDAQ rules, (ii) the

proposal to ratify the appointment of BDO Dunwoody, LLP as Generex's independent
public accountants and (iii) any other matter that may be submitted to a vote of
stockholders require the affirmative vote of a majority of the votes of the
shares present or represented by proxy at the annual meeting and cast on such
proposals. Except for the election of directors, abstentions will be counted in
tabulating votes cast on the proposals presented to stockholders and will have
the same effect as negative votes. Broker non-votes will not be counted in
tabulating votes cast on the proposals presented to stockholders. Votes cast in
person or by proxy at the annual meeting will be tabulated by the election
inspectors appointed for the meeting.

The Board of Directors recommends voting FOR (1) the election of the
nominees named herein for directors, (2) the proposal to authorize the Board of
Directors to issue up to 10,000,000 shares of common stock at less than the
market price in excess of amounts permitted under NASDAQ rules, and (3) the
appointment of BDO Dunwoody, LLP as Generex's independent public accountants for
fiscal 2004.

ELECTION OF DIRECTORS
(Proposal 1)

Five directors are to be elected at the annual meeting of stockholders.
All directors will be elected to hold office until the next annual meeting of
stockholders following election and until their successors are duly elected and
qualified.

The persons named below have been designated by the Board of Directors,
including a majority of the independent directors, as nominees for election as
directors. All nominees currently serve as directors of Generex. The individuals
named in the enclosed proxy intend to vote all proxies received by them for the
nominees listed below unless otherwise instructed. If you do not wish your
shares to be voted for any of the nominees, you may so indicate on the proxy.
If, for any reason, any of the nominees shall become unavailable for election,
the individuals named in the enclosed proxy may exercise their discretion to
vote for any substitutes proposed by the Board of Directors, including a
majority of the independent directors. At this time, the Board of Directors
knows of no reason why any of the nominees might be unavailable to serve.

Name Age Position Held with Generex
---- --- --------------------------

John P. Barratt 59 Director
Anna E. Gluskin 52 President, Chief Executive Officer and Director
Peter Levitch 71 Director
Rose C. Perri 36 Chief Operating Officer, Acting Chief Financial Officer,
Treasurer, Secretary and Director
Jan Michael Rosen 52 Director

John P. Barratt - Director since March 2003. Mr. Barratt is Chief
Operating Officer of Beyond.com, a company by which he has been employed since
2000. From January 1996 to September 2000, Mr. Barratt served as
partner-in-residence for the Quorum Group of Companies, an international
investment partnership specializing in providing debt and equity capital to the
emerging high growth technology sector. From 1988 to December 1995, Mr. Barratt
was Executive Vice President and Chief Operating Officer of Coscan Development
Corporation. He previously held a number of senior-level management positions,
including Deputy Chief Executive of Lloyds Bank Canada. Mr. Barratt also
currently serves as a director of GLP NT Corporation and BNN Split Corporation.
Mr. Barratt also serves on the Advisory Board of Brascan SoundVest Diversified
Income Fund.

Anna E. Gluskin - Director since September 1997. Ms. Gluskin has served
as the President and Chief Executive Officer of Generex since October 1997 and
the Chairman since November 2002. She held comparable positions with Generex
Pharmaceuticals, Inc. from its formation in 1995 until its acquisition by
Generex in October 1997.

Peter Levitch - Director since October 2002. Mr. Levitch has been
President of Peter Levitch & Associates, an independent consulting firm to
health professionals since 1981. In this capacity, he advises companies through
the various stages of the development of pharmaceuticals, medical devices,
biologics and diagnostics, including clinical evaluation and the FDA regulatory
approval phases. He has served as an advisor to more than 200 leading
biotechnology and biological firms, including Amgen, Genentech, Immunex, DuPont,
Baxter and Johnson and Johnson. Prior to 1981, Mr. Levitch was Vice President,
Clinical and Regulatory Affairs at Oxford Research International Corp. and held
senior positions managing the regulatory and clinical programs at Ortho
Diagnostic Systems (a subsidiary of Johnson & Johnson).

Rose C. Perri - Director since September 1997. Ms. Perri has served as
Treasurer and Secretary of Generex since October 1997, and as Chief Operating
Officer since August 1998. She was an officer of Generex Pharmaceuticals, Inc.
from its formation in 1995 until its acquisition by Generex in October 1997.
Effective November 2002, Ms. Perri became acting Chief Financial Officer.

Jan Michael Rosen - Director since August 2000. Mr. Rosen has been a
principal in a number of related travel management and hotel marketing
businesses since 1978. The principal companies in this group, all of which are
headquartered in Ontario, are Uniworld Travel & Tours, Inc., Nevada Vacations,
Inc., Casino Vacations, Inc. and Casino Tours, Inc. Mr. Rosen presently serves
as the President or a Vice President, and the Chief Financial Officer, of each
of these companies. Mr. Rosen is an accountant by training, and was engaged in
the private practice of accounting prior to 1978.

There are no family relationships among the officers and directors of Generex.

NASDAQ Rule 4350(c) requires that a majority of the Board of Directors be
comprised of independent directors as defined in NASDAQ Rule 4200(a)(14). The
Board of Directors has determined that Messrs. Barratt, Levitch and Rosen are
independent, in accordance with NASDAQ Rules 4200(a)(14) and 4350(c).

During fiscal year 2003, the Board of Directors consisted of seven members, a
majority of whom did not meet the definition of independence under the NASDAQ
SmallCap Market listing requirements. As a result of the recently adopted NASDAQ
rules requiring that a Board of Directors consist of a majority of independent
directors, Pankaj Modi, Ph.D. and Gerald Bernstein, M.D., directors of Generex
during fiscal 2003 who were not considered independent, declined to stand for
re-election so that Generex would comply with the NASDAQ rules. Accordingly, the
Board of Directors reduced the number of directors from seven to five. Generex
continues to evaluate additional candidates for independent directors, and may
re-nominate one or more of Dr. Modi and Dr. Bernstein to the Board of Directors
when it has additional independent directors. In accordance with the Bylaws of
Generex, the Board of Directors is permitted to increase the number of directors
and the fill the vacancies created by the increase until the next annual meeting
of shareholders

In addition, pursuant to a Securities Purchase Agreement dated January 16, 2001,
between Generex, Elan Corporation plc and Elan International Services, Ltd.
("EIS"), EIS has the right to nominate one director to Generex's Board of
Directors for so long as EIS or its affiliates own at least 1.0% of the issued
and outstanding shares of common stock. EIS has not had a representative on the
Board since August, 2002 and at this time has not informed Generex whether it
intends to nominate a director in the future.

The Board of Directors Recommends a Vote FOR
the Election of the Above-Named Nominees

PROPOSAL TO APPROVE THE POTENTIAL ISSUANCE AND SALE OF SHARES
AT PRICES BELOW THE THEN CURRENT MARKET PRICE
IN POTENTIAL CAPITAL RAISING TRANSACTIONS AND ACQUISITIONS
(Proposal 2)

Management has recommended to the Board of Directors that, in light of
Generex's actual and potential cash needs, Generex must avail itself of all
possible means of financing, including the private placement of its securities.
In addition, Generex has been presented with potential acquisition candidates
and other acquisition and business combination opportunities in the past and
must have the flexibility to timely act upon any such opportunities and
transactions which may arise in the future. Management informed the Board of
Directors that the ability of Generex to offer its securities in private
placements or acquisitions at an offering price below the market price or book
value of such securities at the time of any such private placements or
acquisitions would afford Generex greater flexibility in structuring future
financings or acquisitions. However, NASDAQ Marketplace Rules 4350(i)(1)(C) and
(D) require stockholder approval prior to the sale or issuance or potential
issuance of shares equal to twenty percent (20%) or more of Generex's Common
Stock, or twenty percent (20%) or more of the voting power of Generex,
outstanding before the issuance, if the effective sale price of the Common Stock
is less than the greater of the book or market value of the Common Stock. Shares
of Generex's Common Stock issuable upon the exercise or conversion of warrants,
options, debt instruments, preferred stock or other equity securities issued or
granted in such capital raising transactions or acquisitions are considered
shares issued in the transaction or acquisition in determining whether the
twenty percent (20%) limit has been reached. Management believes the delay
required to arrange for a meeting of stockholders to approve a specific
financing transaction or acquisition might jeopardize the closing of the
transaction or acquisition. In order to comply with the possible application of
the NASDAQ rules, Generex is seeking stockholder approval for the issuance and
sale of shares, during the three-month period commencing with the date of the
annual meeting, in a potential acquisition, corporate transaction, other
business combination or private placement or other capital raising transaction
("Potential Equity Related Investment") so that the Board of Directors will have
flexibility to timely enter into and close any such transaction.

There are various reasons management may seek additional financing in
the three-month period. Generex may need additional investment to fund expanded
research and development activities and working capital needs. While Generex has
no present need for additional financing for these purposes, Generex believes it
should have the flexibility to respond to opportunities as they are presented.
In addition, the sale of equity securities may be necessary to enable Generex to
continue to comply with the Stockholders' Equity requirements of the NASDAQ
SmallCap Market; and increases in Stockholders' Equity could potentially permit
Generex to regain compliance with NASDAQ National Market standards. In addition,
Generex may be presented with an acquisition, corporate transaction or other
business combination opportunity that would be beneficial to it and would
require the issuance of shares and/or options in excess of the amounts required
under the NASDAQ rules.

Management believes it may need the general flexibility to issue shares
at prices which Generex and any prospective investor or acquisition candidate
expressly contemplate are below market value. Management also believes that it
needs this flexibility provided by this proposal because there may be situations
where the parties to a transaction believe the shares are being issued at a
price equal to or greater than book and market value but the effective price
would be considered below the greater of book or market value by NASDAQ. This
would primarily occur because investors and others in the financial community
may consider market value to be an average of closing prices for a period of
several days, while NASDAQ would consider the market value to be the closing
price on a particular day or an average over a much shorter period.

The shareholders approved a similar proposal at the special meeting held on
November 4, 2003, the private placements Generex conducted since then, however,
have been at or above market price and book value.

In the event NASDAQ were to "integrate" a new below market issuance with an
issuance of securities by Generex at or above market price prior to the date of
the annual meeting (a "Prior Issuance"), NASDAQ may consider the Prior Issuance
to retroactively be a below market issuance. Accordingly, this authorization
shall include shares of Common Stock issued by Generex in a Prior Issuance in
the event The NASDAQ Stock Market, Inc. integrates (i) a new below market
issuance of Common Stock by Generex within the three-month period commencing
on the date of the annual meeting with (ii) the Prior Issuance.

Potential Equity Related Investments

The following description of various forms of Potential Equity Related
Investments and the reasons for such Potential Equity Related Investments is
offered for informational purposes to Generex's stockholders in connection with
this proxy solicitation and does not constitute an offer to sell or a
solicitation of an offer to buy any securities of Generex. Generex cannot
guarantee any private placement or other financing will be completed (or if so,
what the timing and the terms may be) and, accordingly, cannot be certain that
it will receive any proceeds from any potential financing.

At the beginning of January 2004, Generex raised approximately
$3,000,000 in equity financing. All of these shares were sold at prices equal to
or greater than the market price and book value of the Common Stock at the time
of these transactions. Accordingly, the transactions did not require stockholder
approval under any NASDAQ rule. Generex intends to consider additional private
placements in the near future, or a different form of private placement, as well
as sales of securities directly to venture capital or other select institutional
investors. Given the uncertainty of the ultimate sales price for securities
placed in any such private placement or other equity investment, and the
percentage of Generex's currently outstanding Common Stock that may be sold, the
sale of shares in a Potential Equity Related Investment (or one more
transactions which NASDAQ would consider to be integrated) could result in the
issuance of twenty percent or more of the outstanding voting stock of Generex
and/or twenty percent (20%) or more of the voting power at a price less than the
greater of the book value or the market value of the shares. Therefore, Generex
is seeking stockholder approval because the potential issuance and sale of
shares may trigger the threshold requiring approval under NASDAQ Marketplace
Rules 4350(i)(1)(C) and/or (D). Generex believes that the current capital market
environment requires management to maintain maximum flexibility in order to be
able to timely consummate any potential capital-raising transaction without
undue delay.

The Board of Directors has the authority, without stockholder approval
and without endangering Generex's NASDAQ listing, to authorize the issuance in
each separate transaction (which is not integrated, under NASDAQ's
interpretation of its own rules, with other transactions) of up to twenty
percent (20%) of its shares outstanding before such transaction. As of January
26, 2004, the Company had 29,638,468 shares of Common Stock outstanding.
Consequently, the Board of Directors may authorize the issuance of up to
5,924,729 shares without obtaining shareholder approval, assuming issuance of
the new shares is not "integrated" with Generex's prior shares of stock below
market. Generally, transactions which are at least three months apart will not
be considered integrated by NASDAQ. The approval of Proposal No. 2 will give the
Board of Directors the right to authorize, upon terms as the Board of Directors
deems to be in the best interests of Generex, but in no event for (i) a price
less than 70% of the market price at the time of issuance and (ii) aggregate
consideration in excess of $50,000,000, the issuance of an aggregate of
10,000,000 additional shares in such three month period, in addition to the
5,924,729 shares, for an aggregate of 15,924,729 shares. In addition,
stockholders should note that, whether or not Proposal No. 2 is adopted, the
Board of Directors may authorize, without shareholder approval, the issuance of
any number of shares in separate transactions (provided that the Company issues
less than twenty percent (20%) of its then outstanding Common Stock in each
transaction and provided that the transactions would not be deemed integrated by
NASDAQ) even if the aggregate number of such shares exceeds the number
authorized by Proposal No. 2.

Effect of a Potential Equity Related Investment upon Existing Stockholders

Approval of Proposal No. 2 will give the Board of Directors complete
discretion to determine the amount, type and terms of securities to be issued by
Generex. For example, Generex may issue any one or more of Common Stock,
preferred stock convertible to Common Stock, debt securities or other debt
obligations convertible to Common Stock, options and warrants. Some or all of
these securities may be issued to investment bankers, placement agents,

financial advisors and others who assist Generex in raising capital or in
financial affairs, for services rendered and not for cash investment. The Board
of Directors will have discretion to determine any applicable dividend or
interest rates, conversion prices, voting rights, redemption prices, maturity
dates and similar matters. If securities convertible into or exercisable for
Common Stock are issued in a Potential Equity Related Investment and such
securities, at the time of issuance constitute twenty percent (20%) or more of
Generex's securities and/or twenty percent (20%) or more of its voting power
outstanding prior to such issuance, then stockholder approval of the Potential
Equity Related Investment also will constitute approval of the issuance of
shares of Common Stock upon conversion of such securities, and no additional
approval will be solicited.

It is expected that any such securities may not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), or under the
securities laws of any state or foreign country. The securities will likely be
offered and sold in reliance on Section 4(2) of the Securities Act or another
applicable exemption. However, it is also likely that the terms of the
transactions will require Generex to register the shares of Common Stock for
resale by the investors after closing of the investment.

Any transaction requiring approval by stockholders under NASDAQ Rules
4350(i)(1)(C) and (D) would be likely to result in a significant increase in the
number of shares of Common Stock of Generex outstanding on a fully-diluted
basis, and current stockholders will own a smaller percentage of the outstanding
Common Stock of Generex. If convertible preferred stock, convertible debt or
another senior security is issued in the Potential Equity Related Investment,
the holders of the shares of such preferred stock, debt or senior security will
have claims on Generex's assets and other rights superior to holders of Common
Stock. Stockholders should note that the Board of Directors has the authority
under Generex's Restated Certificate of Incorporation, as amended, to issue up
to 1,000,000 shares of preferred stock in one or more series, with such voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions as the Board of Directors
determines.

In addition, stockholders may experience potential dilution in the
market price of Generex's shares as a result of issuances of shares of Common
Stock at prices below the current market price. Such issuance could cause the
market price of Generex's shares to decline and/or remain below $1.00 per share.
Generex's shares traded below $1.00 on several occasions during fiscal year
ended July 31, 2003, and if the bid price of its shares is below $1.00 for an
extended period of time, Generex could be subject to de-listing from NASDAQ.

No Appraisal Rights

Under Delaware law, stockholders are not entitled to appraisal rights
with respect to this proposal.

The Board of Directors unanimously recommends that stockholders vote
FOR Proposal No. 2, approval of the potential issuance and
sale of equity securities in order to comply
with NASDAQ Marketplace Rules 4350(i)(1)(C) and (D).

PROPOSAL TO RATIFY THE APPOINTMENT OF
BDO DUNWOODY, LLP
AS GENEREX'S INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal 3)

The Board of Directors of Generex has selected BDO Dunwoody,, LLP
("BDO") to serve as the independent public accountants to audit the financial
statements of Generex and its subsidiaries for the fiscal year ending July 31,
2004. BDO served as Generex's independent public accountants for the audit of
Generex's financial statements for the fiscal year ended July 31, 2003.
Representatives of BDO will attend the annual meeting and will be available to
answer appropriate questions. They will have the opportunity to make a statement
at the annual meeting if they desire.

Effective July 1, 2003 Generex dismissed Deloitte & Touche, LLP ("Deloitte &
Touche") and engaged BDO to serve as the independent public accountants to audit
the financial statements of Generex for the fiscal year ending July 31, 2003.
The decision to appoint BDO as Generex's independent public accountants
beginning with the fiscal year ended July 31, 2003, replacing Deloitte & Touche,
was approved by the Audit Committee of the Board of Directors. Deloitte & Touche
did not decline to stand for re-election and Deloitte & Touche's reports on
financial statements for the two fiscal years preceding their replacement did
not contain an adverse opinion, disclaimer of opinion or qualification as to
uncertainty, audit scope or accounting principles. There had been no
disagreements with Deloitte & Touche at any time in the two fiscal years and any
subsequent interim period preceding their replacement on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure.

During the two fiscal years and any subsequent interim period preceding
their replacement, Deloitte & Touche did NOT advise Generex that:

o The internal controls necessary for Generex to develop reliable financial
statements did not exist;

o Information had come to their attention that led them to believe that they
could no longer rely on management's representations or that made them
unwilling to be associated with the financial statements prepared by
management;

o They needed to expand the scope of their audit or that information existed,
that had come to their attention during the last two fiscal years, that if
further investigated may (i) materially impact the fairness or reliability
of either a previously issued audit report or the underlying financial
statements, or the financial statements issued or to be issued covering the
fiscal period(s) subsequent to the date of the most recent financial
statements covered by an audit report (including information that may
prevent them from rendering any unqualified audit report on those financial
statements) or (ii) cause them to be unwilling to rely on management's
representations or be associated with Generex's financial statements; and
that due to their replacement or for any other reason, they did not so
expand the scope of their audit or conduct further investigation; or

o Information has come to their attention that they have concluded materially
impacts the fairness or reliability of either (i) a previously issued audit
report or the underlying financial statements, or (ii) the financial
statements issued or to be issued covering the fiscal period(s) subsequent
to the date of the most recent financial statements covered by an audit
report (including information that, unless resolved to their satisfaction,
would prevent them from rendering an unqualified audit report on those
financial statements); and due to their replacement, or for any other
reason, the issue has not been resolved to their satisfaction prior to
their replacement.

If the stockholders do not ratify the appointment of BDO as independent
public accountants, the Audit Committee of the Board of Directors will
investigate the reasons for the rejection by the stockholders and the Audit
Committee will reconsider the appointment.

The Board of Directors Recommends a Vote FOR
the Appointment of BDO As Generex's
Independent Public Accountants for the Fiscal Year Ending July 31, 2004.

Fees Paid to Generex's Independent Public Accountants

The following table sets forth the aggregate fees paid by Generex for
the fiscal years ended July 31, 2002 and July 31, 2003 to its independent
auditors:

July 31, 2002 July 31, 2003
------------- -------------

Audit Fees............................................... $ 102,929(1) $74,925(4)
Audit-Related Fees....................................... $ 0(2) $50,932(5)
Tax Fees................................................. $ 0(3) $ 0(6)
All Other Fees ....................................... $ 0(3) $ 0(6)

(1) Includes the aggregate fees billed for professional services rendered by
Deloitte & Touche for the audit of Generex's annual financial statements
for the fiscal year ended July 31, 2002 and the reviews of financial
statements included in Generex's Quarterly Reports on Form 10-Q for the
2003 fiscal year. This amount is shown in U.S. Dollars and was converted
from Canadian dollars to U.S. dollars based on the exchange rate on January
15, 2003.

(2) No amounts were billed by Deloitte & Touche in fiscal 2002 for related
services.

(3) No amounts were billed by Deloitte & Touche in fiscal 2002 for tax related
or other services.

(4) Represents charges of BDO, Generex's auditor for fiscal year ended
July 31, 2003.

(5) Represents amounts billed by Deloitte & Touche for review of financial
statements contained in Generex's Quarterly Reports on Form 10-Q prior to
their dismissal on July 1, 2003 and review of registration statements
incorporating by reference their reports.

(6) Neither Deloitte & Touche nor BDO billed amounts for tax related or other
services.

Policy for Pre-Approval of Audit and Non-Audit Services

The Audit Committee's policy is to pre-approve all audit services and all
non-audit services that Generex's independent auditor is permitted to perform
for Generex under applicable federal securities regulations. As permitted by the
applicable regulations, the Audit Committee's policy utilizes a combination of
specific pre-approval on a case-by-case basis of individual engagements of the
independent auditor and general pre-approval of certain categories of
engagements up to predetermined dollar thresholds that are reviewed annually by
the Audit Committee. Specific pre-approval is mandatory for the annual financial
statement audit engagement, among others.

The pre-approval policy was implemented effective as of October 30, 2003. All
engagements of the independent auditor to perform any audit services and
non-audit services since that date have been pre-approved by the Audit Committee
in accordance with the pre-approval policy. The policy has not been waived in
any instance. All engagements of the independent auditor to perform any audit
services and non-audit services prior to the date the pre-approval policy was
implemented were approved by the Audit Committee in accordance its normal
functions.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The business affairs of Generex are managed under the direction of the
Board of Directors. During the fiscal year ended July 31, 2003, Generex's Board
of Directors held five meetings and took action by unanimous consent eight
times. During the fiscal year ended July 31, 2003, all of the directors attended
all of the Board of Directors meetings that were held.

During fiscal year 2003, the Board of Directors consisted of seven
members, a majority of whom did not meet the definition of independence under
the NASDAQ SmallCap Market listing requirements. As a result of recently adopted
NASDAQ rules requiring that a Board of Directors consist of a majority of
independent directors, Pankaj Modi, Ph.D. and Gerald Bernstein, M.D., directors
of Generex during fiscal 2003 who were not considered independent, declined to
stand for re-election so that Generex would comply with the NASDAQ rules.
Accordingly, the Board of Directors reduced the number of directors from seven
to five. Generex continues to evaluate additional candidates for independent
directors, and may re-nominate one or more of Dr. Modi and Dr. Bernstein to the
Board of Directors when it has additional independent directors. In accordance
with the Bylaws of Generex, the Board of Directors is permitted to increase the
number of directors and the fill the vacancies created thereby until the next
annual meeting of shareholders.

The Board of Directors has established two committees, the Audit
Committee and the Compensation Committee. Generex has not established a
Nominating Committee.

The Audit Committee, which was established on March 1, 2000, met two
times during the fiscal year ended July 31, 2003. The Audit Committee reviews
and discusses with Generex's management and its independent auditors the audited
and unaudited financial statements contained in Generex's Annual Reports on Form
10-K and Quarterly reports on Form 10-Q, respectively. Although Genrex's
management has the primary responsibility for the financial statements and the
reporting process, including the system of internal controls and disclosure
controls and procedures, the Audit Committee reviews and discusses the reporting
process with management on a regular basis. The Audit Committee also discusses
with the independent auditor their judgments as to the quality of Generex's
accounting principles, the reasonableness of significant judgments reflected in
the financial statements and the clarity of disclosures in the financial
statements as well as such other matters as are required to be discussed with
the Audit Committee under generally accepted auditing standards. The Audit
Committee has adopted a written charter, which was amended on October 30, 2003
and, as amended is reproduced as Appendix A to this Proxy Statement. The Audit
Committee Charter is also available on Generex's website-www.generex.com.

During fiscal 2003, the Audit Committee was initially composed of Mr.
Rosen, who was the chairman of the Audit Committee, our former director Dr.
Hawke, and Mr. Levitch. Dr. Hawke resigned from the Board effective March 13,
2003. On March 19, 2003, the Board of Director's elected Mr. Barratt to fill the
vacancy on the Board left by Dr. Hawke's resignation and appointed Mr. Barratt
as a member of the Audit Committee. At that time, Mr. Barratt was also elected
as Chairman of the Audit Committee. All of the members of the Audit Committee
attended all of the meetings that they were eligible to attend. The Audit
Committee is currently composed of Mr. Rosen, Mr. Levitch and Mr. Barratt.

Generex's common stock is listed on the NASDAQ SmallCap Market.
Therefore, Generex is governed by the applicable rules of the NASDAQ SmallCap
Market. The listing requirements for NASDAQ SmallCap Market issuers require that
each issuer's audit committee be comprised of three independent directors. Mr.
Rosen, Mr. Barratt and Mr. Levitch meet the definition of independence under
Rule 4200(a)(14) of the listing requirements.

The Compensation Committee was formed on July 30, 2001 and met two
times during the fiscal year ended July 31, 2003. The Compensation Committee was
formed to set policies for compensation of the Chief Executive Officer and the
other executive officers of Generex. The Compensation Committee periodically
compares Generex's executive compensation levels with those of companies with
which Generex believes that it competes for attraction and retention of senior
caliber personnel. Under NASDAQ rules effective as of the date of the annual
meeting, the Compensation Committee will either determine or recommend to the
Board the compensation of all executive officers.

During fiscal 2003, the Compensation Committee was initially composed
of Dr. Hawke, who was the Chairman of the Compensation Committee, Mr. Rosen and
our former director, Dr. Lieberburg. Dr. Lieberburg resigned in August, 2002 and
Dr. Hawke resigned effective March 13, 2003. Mr. Levitch was appointed as a
member of the Compensation Committee in October 2002 and Mr. Barratt was
appointed as a member of the Compensation Committee upon his election to the
Board on March 19, 2003. All of the members of the Compensation Committee
attended all of the meetings of the Compensation Committee. The Compensation
Committee is currently composed of Mr. Barratt, Mr. Rosen and Mr. Levitch.
Currently, there is no chairman of the Compensation Committee.

Report of the Audit Committee

The Audit Committee reviewed and discussed Generex's audited financial
statements for the fiscal year ended July 31, 2003 with management. The Audit
Committee discussed with BDO Dunwoody, LLP, Generex's independent public
accountants for the fiscal year ended July 31, 2003, the matters required to be
discussed by Statement on Auditing Standards No. 61. The Audit Committee
received the written disclosures and the letter from BDO Dunwoody, LLP required
by Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and discussed with BDO Dunwoody, LLP its independence. Based
on the review and discussions described above, among other things, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in Generex's Annual Report on Form 10-K for the fiscal
year ended July 31, 2003.

Submitted by the Audit Committee

John P. Barratt (Chairman)
J. Michael Rosen
Peter Levitch

The foregoing Report of the Audit Committee shall not be deemed to be soliciting
material, to be filed with the Securities and Exchange Commission (the "SEC") or
to be incorporated by reference into any of Generex's previous or future filings
with the SEC, except as otherwise explicitly specified by Generex in any such
filing.

Audit Committee Financial Expert

The Board of Directors at Generex has determined that at least one person
serving on its Audit Committee is an "audit committee financial expert" as
defined under Item 401(h) of Regulation S-K. Mr. Barratt, a member of the Audit
Committee, is an audit committee financial expert and is independent as that
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended and NASDAQ Rules 4200(a)(14) and 4350(d).

Report of the Compensation Committee on Executive Compensation

Compensation Philosophy. The goals of Generex's compensation program are to
attract and retain talented executives, to motivate these executives to achieve
Generex's business goals, to align executive and stockholder interests and to
recognize individual contributions as well as overall business results.

The key elements of Generex's executive compensation are base salary, cash
bonuses and stock options. While the elements of compensation are considered
separately, the Compensation Committee ultimately looks to the value of the
total compensation package provided by Generex to the individual executive.

At the end of the fiscal year ended July 31, 2001, the Compensation Committee
conducted a review of Generex's executive compensation program. This review
included a comprehensive report from an independent executive compensation
consultant and compared Generex's total executive compensation, including base
salaries, cash bonuses and stock options, to a peer group of publicly traded
biotechnology companies. For the fiscal year ended July 31, 2001, the
Compensation Committee targeted total cash compensation for Generex executives
to the median of the peer group. For the fiscal year ended July 31, 2002, the
Compensation Committee targeted total cash compensation for executives at the
higher end of the peer group. In setting this policy, the Compensation Committee
took into account Generex's relatively lean management structure and the number
of roles filled by each officer. After the end of fiscal year ended July 31,
2003, the Compensation Committee determined that notwithstanding substantial
efforts made on Generex's behalf by the executive officers and the substantial
challenges faced by Generex given its stage of development, the salaries
received by the executive officers, having been "brought to market" the previous
year, represented the higher end of the compensation range for executives at
similar development stage companies. The Committee therefore determined that the
salaries represented appropriate cash compensation, awarded no bonuses for 2003
and made no changes to salaries for fiscal 2004. During all relevant periods,
Dr. Modi's compensation has been based on his contract. The contract provides
for a predetermined salary and achievement based bonuses.

Base Salaries. Prior to 2001, Generex historically paid very modest base
salaries to its executive officers, relying on option grants to supplement the
low base salaries. The Compensation Committee implemented increases for fiscal
2002 to bring the base salaries of Generex's executives in line with base
salaries of Generex's principal competitors. Continuing this philosophy, Ms.
Gluskin's salary for 2003 was set at the same rate as 2002, and Ms. Perri
received a modest increase based primarily on the increase in her
responsibilities after the death of Mark Perri, Generex's former Chairman and
Chief Financial Officer.

Cash Bonuses. Cash bonuses were granted for fiscal 2002 in order to recognize
and reward the executives of Generex for their performance and for the
accomplishments achieved by Generex during fiscal 2002. The Compensation
Committee adopted performance objectives for executive officers in fiscal 2002.
Executive officer bonuses were based on the executive's position within Generex,
Generex's attainment of the objectives and individual contributions to the
attainment of the objectives. The Compensation Committee met to determine 2002
bonuses after Mr. Mark Perri's death. In determining bonuses for Ms. Gluskin and
Ms. Rose Perri, the Compensation Committee also took into account the need to
provide appropriate incentives to maintain a stable management team following
Mr. Mark Perri's death. The Compensation Committee judged that the executive
officer bonus awards for fiscal 2002 were consistent with each executive's level
of accomplishment and appropriately reflected Generex's achievement of the
objectives and the Compensation Committee's other goals.

As discussed above, the Compensation Committee determined that the salaries (and
in the case of Mark Fletcher, guaranteed bonus) received by the executive
officers during fiscal 2003 represented appropriate cash compensation.
Therefore, no cash bonuses were awarded to the executive officers for fiscal
2003, other than Mr. Fletcher's guaranteed bonus. At the same time, the
Committee decided to develop a plan for 2004 that would tie potential executive
bonuses to measurable and realistic milestones. Under his agreement with
Generex, Mr. Fletcher receives a guaranteed bonus of $30,000 per annum, payable
in quarterly installments, while he is employed by Generex. Dr. Modi's contract
currently provides for bonuses based on specific milestones.

Stock Options. The purpose of stock option grants is to provide an additional
incentive to Generex employees, including executive officers, to contribute
materially to the growth of Generex. Stock options are granted to align the
interests of the recipients with the interests of stockholders. In November,
2002, the Committee granted 350,000 options to Ms. Gluskin and 300,000 options
to Ms. Perri for fiscal year 2003, as well as 200,000 options to the estate of
Mark Perri, in consideration of his services in 2002. Mr. Fletcher received
options for 250,000 shares upon initiation of his employment in March 2003. Dr.
Modi receives options for 150,000 shares each year under the terms of his
agreement with Generex. In November 2003, the Committee granted Ms. Gluskin
and Ms. Perri options for 100,000 shares each.

Chief Executive Officer Compensation. Ms. Gluskin's compensation for the fiscal
year ended July 31, 2003 was determined in accordance with the compensation
policies described above. Ms. Gluskin was paid a cash salary of approximately
$350,000, which the Committee deemed appropriate compensation, and received no
cash bonus for 2003. Ms. Gluskin was granted an option for 100,000 shares. The
compensation paid to Ms. Gluskin for fiscal 2003 was considered to give
appropriate incentives to Ms. Gluskin to continue to promote the strategic
objectives of Generex and to enhance stockholder value.

Deductibility of Compensation. Section 162(m) of the Internal Revenue Code does
not allow public companies to take a Federal income tax deduction for
compensation paid to certain executive officers, to the extent that compensation
exceeds $1 million for any such officer in any fiscal year. This limitation does
not apply to compensation that qualifies as "performance-based compensation"
under the Code. The Board of Directors believes that at the present time it is
quite unlikely that the compensation paid to any executive officer will exceed
$1 million in any fiscal year. Therefore, the Board of Directors has not taken
any measures to date specifically to qualify any of the compensation paid to its
executive officers as "performance-based compensation" under the Code.

Submitted by the Compensation Committee

Peter Levitch
J. Michael Rosen
John P. Barratt

The foregoing Report of the Compensation Committee on Executive Compensation and
the Performance Graph on page 18 shall not be deemed to be soliciting material,
to be filed with the SEC or to be incorporated by reference into any of
Generex's previous or future filings with the SEC, except as otherwise
explicitly specified by Generex in any such filing.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") requires that Generex's directors and executive officers, and any persons
who own more than ten percent (10%) of the Common Stock, file with the SEC
initial reports of ownership and reports of changes in ownership of the Common
Stock and other equity securities of Generex. Such persons are required by SEC
regulations to furnish Generex with copies of all such reports that they file.
Form 4 Reports were not filed to disclose the receipt of (i) options to purchase
350,000 shares of Common Stock by Ms. Gluskin on November 26, 2002, (ii) options
to purchase 300,000 shares of Common Stock by Ms. Perri on November 26, 2002,
and (iii) options to purchase 50,000 shares of Common Stock by Mr. Rosen on
November 29, 2002, all under the Generex 2001 Stock Option Plan, but the receipt
of such options was disclosed in timely filed Form 5 Reports. To the knowledge
of Generex, based upon its review of these reports, all other Section 16 reports
required to be filed by our directors and executive officers during the fiscal
year ended July 31, 2003 were filed on a timely basis.

Executive Officers and Directors

Name Age Position Held with Generex
---- --- --------------------------

Anna E. Gluskin 52 Chairman, President, Chief Executive Officer and
Director
Rose C. Perri 36 Chief Operating Officer, Acting Chief
Financial Officer, Treasurer, Secretary and Director
Pankaj Modi, Ph.D. 49 Vice President, Research and Development
and Director
Gerald Bernstein, M.D. 70 Director, Vice President Medical Affairs
Mark Fletcher, Esquire 38 Executive Vice President and General Counsel
J. Michael Rosen 52 Director
Peter Levitch 71 Director
John P. Barratt 59 Director

All directors are elected to hold office until the next annual meeting of
stockholders following election and until their successors are duly elected and
qualified. Executive officers are appointed by the Board of Directors and serve
at the discretion of the Board.

Anna E. Gluskin -- Director since September 1997. Ms. Gluskin has served as the
President and Chief Executive Officer of Generex since October 1997 and the
Chairman since November 2002. She held comparable positions with Generex
Pharmaceuticals, Inc. from its formation in 1995 until its acquisition by
Generex in October 1997.

Rose C. Perri -- Director since September 1997. Ms. Rose Perri has served as
Treasurer and Secretary of Generex since October 1997, and as Chief Operating
Officer since August 1998. She was an officer of Generex Pharmaceuticals, Inc.
from its formation in 1995 until its acquisition by Generex in October 1997.
Effective November 2002, Ms. Perri became acting Chief Financial Officer.

Pankaj Modi, Ph.D. -- Director since September 1997. Dr. Modi has served as Vice
President, Research and Development of Generex since October 1997. Prior to that
time, Dr. Modi was Director of Insulin Research for Generex Pharmaceuticals,
Inc., a position he assumed in October 1996. Prior to joining Generex
Pharmaceuticals, Dr. Modi was engaged in independent research and was employed
as a senior researcher at McMaster University in Hamilton, Ontario from February
1994 through October 1996.

Gerald Bernstein, M.D. -- Director since October 2002. Dr. Gerald Bernstein has
served as Vice President of Generex since October 1, 2001. Dr. Bernstein acts as
a key liaison for Generex on medical and scientific affairs to the medical,
scientific and financial communities and consults with Generex under a
consulting agreement on research and medical affairs and on development
activities. Dr. Bernstein has been an associate clinical professor at the Albert
Einstein College of Medicine in New York and an attending physician at Beth
Israel Medical Center, Lenox Hill Hospital and Montefore Medical Center, all in
New York. He is a former president of the American Diabetes Association.

Mark Fletcher, Esq. -- Mr. Fletcher has served as our Executive Vice President
and General Counsel since April 2003. From October 2001 to March 2003, Mr.
Fletcher was engaged in the private practice of law as a partner at Goodman and
Carr LLP, a leading Toronto law firm. From March 1993 to September 2001, Mr.
Fletcher was a partner at Brans, Lehun, Baldwin LLP, a law firm in Toronto. Mr.
Fletcher received his LL.B. from the University of Western Ontario in 1989 and
was admitted to the Ontario Bar in 1991.

J. Michael Rosen -- Director since August 2000. Mr. Rosen has been a principal
in a number of related travel management and hotel marketing businesses since
1978. The principal companies in this group, all of which are headquartered in
Ontario, are Uniworld Travel & Tours, Inc., Nevada Vacations, Inc., Casino
Vacations, Inc. and Casino Tours, Inc. Mr. Rosen presently serves as the
President or a Vice President, and the Chief Financial Officer, of each of these
companies. Mr. Rosen is an accountant by training, and was engaged in the
private practice of accounting prior to 1978.

Peter Levitch - Director since October 2002. Mr. Levitch has been President of
Peter Levitch & Associates, an independent consulting firm to health
professionals since 1981. In this capacity, he advises companies through the
various stages of the development of pharmaceuticals, medical devices, biologics
and diagnostics, including clinical evaluation and the FDA regulatory approval
phases. He has served as an advisor to more than 200 leading biotechnology and
biological firms, including Amgen, Genentech, Immunex, DuPont, Baxter and
Johnson and Johnson. Prior to 1981, Mr. Levitch was Vice President, Clinical and
Regulatory Affairs at Oxford Research International Corp. and held senior
positions managing the regulatory and clinical programs at Ortho Diagnostic
Systems (a subsidiary of Johnson & Johnson).

John P. Barratt -- Director since March 2003. Mr. Barratt is Chief Operating
Officer of Beyond.com, a company in which he has been employed since 2000. From
January 1996 to September 2000, Mr. Barratt served as partner-in-residence for
the Quorum Group of Companies, an international investment partnership
specializing in providing debt and equity capital to the emerging high growth
technology sector. From 1988 to December 1995, Mr. Barratt was Executive Vice
President and Chief Operating Officer of Coscan Development Corporation. He
previously held a number of senior-level management positions, including Deputy
Chief Executive of Lloyds Bank Canada. Mr. Barratt also currently serves as a
director of GLP NT Corporation and BNN Split Corporation. Mr. Barratt also
serves on the Advisory Board of Brascan SoundVest Diversified Income Fund.

Other Key Employees and Consultants

Slava Jarnitskii is our Financial Controller. He began his employment with
Generex Pharmaceuticals in September 1996 and has been in the employment of
Generex since its acquisition of Generex Pharmaceuticals in October 1997. Before
his employment with Generex Pharmaceuticals, Mr. Jarnitskii received a Masters
of Business Administration degree from York University in September 1996.

Dr. Robert E. Humphreys, MD, PhD, is currently Executive Vice-President and
Chief Operating Officer of our subsidiary, Antigen Express, Inc.. Dr. Humphreys
founded Antigen in 1999 and was its President. He has extensive experience in
the National Institute of Health, arthritis, cancer and diabetes study sections.
Dr. Humphreys is the principal inventor on 6 awarded US patents and has over 150
peer-reviewed publications to his credit. Prior to founding Antigen, Dr.
Humphreys was Professor of Medicine and Pharmacology at University of
Massachusetts Medical School. He received his MD and PhD degrees from Yale
University and post-doctoral fellow degree in immunology from Harvard
University. He also received his initial training at Bethesda Naval Hospital.

Dr. Minzhen Xu is Vice President - Biology of Antigen. Dr. Xu received an MD
from Shanghai Medical University in China and a PhD in immunology from
University of Massachusetts Medical School. He has been with Antigen since its
inception and is the company's chief experimentalist.

Nomination of Directors

Generex currently does not have a nominating committee. Nominations for the
election of directors at annual meetings have generally been handled by the full
Board of Directors, which has never exceeded seven members. In order to comply
with newly implemented NASDAQ rules, Generex is reducing the size of its Board
of Directors to five members, three of whom will be independent. Accordingly,
due to the small size of its Board of Directors, Generex does not foresee the
need to establish a separate nominating committee. Future candidates for
director will either be (i) recommended by a majority of the independent
directors for selection by the Board of Directors or (ii) discussed by the full
Board of Directors and approved for nomination by the affirmative vote of a
majority of the Board of Directors, including the affirmative vote of a majority
of the independent directors, as required by the new NASDAQ rules. A board
resolution providing this nominating process will be in place on the date of the
annual meeting.

As a small company, Generex has generally used an informal process to identify
and evaluate director candidates. Although Generex believes that indentifying
and nominating highly skilled and experienced director candidates is critical to
its future, Generex has not engaged, nor does it believe that it is necessary at
this time to engage, any third party to assist it in identifying director
candidates. Generex has encouraged both independent directors and directors that
are not independent to identify nominees for the Board of Directors. Generex
believes that as a result, it is presented with a more diverse and experienced
group of candidates for discussion and consideration.

During the evaluation process, Generex seeks to identify director candidates
with the highest personal and professional ethics, integrity and values. Generex
seeks candidates with diverse experience in business, finance, pharmaceutical
and regulatory matters, and other matters relevant to a company such as Generex.
Additionally, Generex requires that director nominees have sufficient time to
devote to its affairs.

Generex will consider candidates that are put forward by its stockholders. The
name, together with the business experience and other relevant background
information of a candidate, should be sent to Mark Fletcher, the Executive
Vice-President and General Counsel of Generex, at Generex's principal executive
offices located at 33 Harbour Square, Suite 202, Toronto, Ontario, Canada M5J
2G2. Mr. Fletcher will then submit such information to the independent directors
for their review and consideration. The process for determining whether to
nominate a director candidate put forth by a stockholder is the same as that
used for reviewing candidates submitted by directors. Other than candidates
submitted by its directors and executive officers, Generex has never received a
proposed candidate for nomination from any large long-term shareholder.

Generex has not, to date, implemented a policy or procedure by which its
stockholders can communicate directly with its directors. Generex is currently
reviewing alternative policies and procedures for such communication and intends
to have a policy in place before the end of fiscal year 2004. All of the then
directors of Generex attended its last annual meeting of stockholders.

Director Nominees

Any stockholder entitled to vote for the election of directors may
nominate a person for election to the Board of Directors at the annual meeting.
Any stockholder wishing to do so must submit a notice of such nomination in
writing to the Secretary of Generex at Generex's principal offices located at 33
Harbour Square, Suite 202, Toronto, Ontario, Canada M5J 2G2 not less than 60 nor
more than 90 days prior to the annual meeting. In the event that less than 70
days notice or prior disclosure of the date of the meeting is given or made to
stockholders, notice of nomination by a stockholder to be timely must be
received not later than the close of business on the 10th day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made. The stockholder's notice of nomination must provide
information about both the nominee and the nominating stockholder, as required
by Generex's Amended and Restated Bylaws. A copy of these Bylaw requirements
will be provided upon request in writing to Mark Fletcher, the Executive
Vice-President and General Counsel of Generex, at Generex's principal executive
offices located at 33 Harbour Square, Suite 202, Toronto, Ontario, Canada M5J
2G2.

STOCK PERFORMANCE GRAPH

Set forth below is a line graph comparing the cumulative total return
on Generex's Common Stock with cumulative total returns of the NASDAQ Stock
Market (U.S. Companies) and the NASDAQ Biotechnology Index for the period
commencing May 5, 2000 (the date Generex's Common Stock was first listed for
trading on the NASDAQ Stock Market) and ending on December 31, 2003. The graph
assumes that $100 was invested on May 5, 2000, in Generex's Common Stock, the
stocks in the NASDAQ Stock Market (U.S. Companies) and the stocks comprising the
NASDAQ Biotechnology Index, and that all dividends were reinvested. Generex's
Common Stock has been trading on the NASDAQ SmallCap Market since June 5, 2003.

[insert graph here]

May July July July July December
2000 2000 2001 2002 2003 2003
------ ----- ---- ---- ---- --------

Generex Biotechnology
Corporation ................ $100 72.5 81.4 21.5 14.0 12.9
The NASDAQ
Stock Market ............... $100 99.2 53.2 35.2 46.0 53.0
NASDAQ Biotechnology
Index ...................... $100 109.5 91.3 58.8 86.7 87.1

Compensation Of Executive Officers And Directors

Compensation of Executive Officers

The following table sets forth, for Generex's last three fiscal years,
all compensation awarded to, earned by or paid to the chief executive officer
("CEO") and the other executive officers of Generex other than the CEO whose
salary and bonus payments exceeded $100,000 for the fiscal year ended July 31,
2003.

Summary Compensation Table

------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------------------------------------------------------------------------------------------------
AWARDS PAYOUTS
------------------------------------------------------------------------------------------------------------------------------------
All
Other Restricted Securities Other
Year Salary Annual Stock Underlying Compensa-
Name and Principal Ended ($) Bonus Compensa- Award(s) Options LTIP tion
Position July 31 (3) ($) tion ($) (#) Payouts ($)
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Anna E. Gluskin (1), 2003 350,000 0 * 0 350,000(4) 0 0
President and Chief 2002 350,000 125,000 * 0 0 0 0
Executive Officer 2001 127,240 250,000 * 0 0 0 0

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Rose C. Perri (1), 2003 295,000 0 * 0 300,000(4) 0 0
Chief Operating 2002 250,000 100,000 * 0 0 0 0
Officer, acting Chief 2001 81,068 100,000 * 0 0 0 0
Financial Officer, 0
Treasure and Secretary
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Pankaj Modi (2), 2003 262,000 0 * 0 150,000(5) 0 0
Vice President, 2002 262,500 0 * 0 150,000 0 0
Research and Development 2001 250,000 300,000 * 0 150,000 0 0

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Mark Fletcher, 2003 $100,000 $15,000(6) * 0 250,000(7) 0 0
Executive Vice
President and General
Counsel
------------------------------------------------------------------------------------------------------------------------------------

* Perquisites and other personal benefits, securities or other property received
by each executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.

(1) Portions of the cash compensation paid to Ms. Gluskin and Ms. Rose Perri
are attributable to amounts paid indirectly through a management services
agreement with a corporation of which, at July 31, 2003, Ms. Gluskin and
Ms. Rose Perri were equal owners.

(2) All of the cash compensation paid to Dr. Modi is paid indirectly to him
through a corporation owned 100% by him.

(3) Cash compensation is stated in the table in U.S. dollars. To the extent any
cash compensation was paid in Canadian dollars, it has been converted into
U.S. dollars based on the weighted average Canadian/U.S. dollar exchange
rate for the years ended July 31, 2003, 2002 and 2001, respectively.

(4) These options were granted under the Generex Biotechnology Corporation 2001
Stock Option Plan on November 26, 2002.

(5) Granted as of July 31, 2003 pursuant to the terms of Dr. Modi's consulting
agreement. These options were granted under the Generex Biotechnology
Corporation 2001 Stock Option Plan.

(6) Mr. Fletcher's employment agreement guarantees him a bonus of $30,000
annually, payable in quarterly installments.

(7) Granted on March 19, 2003 with effect as of April 21, 2003 pursuant to the
terms of Mr. Fletcher's employment agreement. These options were granted
under the Generex Biotechnology Corporation 2001 Stock Option Plan.

Option Grants during the 2002 Fiscal Year

The following tables set forth information related to options to
purchase Common Stock granted to the CEO and the executive officers during the
fiscal year ended July 31, 2003.

Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Appreciation for Option Term
----------------- ----------------------------

----------------------- -------------- -------------- ----------------- -------------- ------------ ------------
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration
Name Granted (#) Year (%) ($/Sh) Date 5%($) 10%($)
----------------------- -------------- -------------- ----------------- -------------- ------------ ------------

Anna E. Gluskin 350,000(1) 19.89% $2.10 11/25/07 $203,067 $448,725
----------------------- -------------- -------------- ----------------- -------------- ------------ ------------

----------------------- -------------- -------------- ----------------- -------------- ------------ ------------
Rose C. Perri 300,000(1) 17.05% $2.10 11/25/07 $174,057 $384,621
----------------------- -------------- -------------- ----------------- -------------- ------------ ------------

----------------------- -------------- -------------- ----------------- -------------- ------------ ------------
Pankaj Modi 150,000(2) 8.52% $1.52 7/30/08 $ 62,992 $139,196
----------------------- -------------- -------------- ----------------- -------------- ------------ ------------

----------------------- -------------- -------------- ----------------- -------------- ------------ ------------
Mark Fletcher 250,000(3) 14.20% $0.89 04/20/03 $ 61,473 $135,838
----------------------- -------------- -------------- ----------------- -------------- ------------ ------------

(1) These options were granted under the Generex Biotechnology Corporation 2001
Stock Option Plan on November 26, 2002. The options are exercisable immediately,
with a five-year term.

(2) Granted on July 31, 2003 pursuant to the terms of Dr. Modi's consulting
agreement. These options were granted under the Generex Biotechnology
Corporation 2001 Stock Option Plan. The options are exercisable immediately,
with a five-year term.

(3) Granted on March 17, 2003 with effect as of April 21, 2003 pursuant to the
terms of Mr. Fletcher's employment agreement. These options were granted under
the Generex Biotechnology Corporation 2001 Stock Option Plan. The options are
exercisable immediately, with a five-year term.

Fiscal Year End Option Values

No options were exercised by the CEO or the executive officers during
the fiscal year ended July 31, 2003. The following table provides information
relating to the number and value of options held by the CEO and the executive
officers at fiscal year end.

------------------------------- ----------------------- ----------------------- ----------------------- -----------------------
Number of securities Value of
underlying unexercised
unexercised options options at July 31,
at July 31, 2003 2003(1)
Shares Acquired (#) Exercisable/ ($) Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
------------------------------- ----------------------- ----------------------- ----------------------- -----------------------

Anna E. Gluskin -0- -0- 650,000/0 0/0
------------------------------- ----------------------- ----------------------- ----------------------- -----------------------
Rose C. Perri -0- -0- 550,000/0 0/0
------------------------------- ----------------------- ----------------------- ----------------------- -----------------------
Pankaj Modi -0- -0- 750,000/0 0/0
------------------------------- ----------------------- ----------------------- ----------------------- -----------------------
Mark Fletcher -0- -0- 250,000/0 $142,500/0
------------------------------- ----------------------- ----------------------- ----------------------- -----------------------

---------------------
(1) Based on the closing price of Common Stock ($1.46) on July 31, 2003.

Other Benefit Plans

We have no long-term incentive plans or defined benefit or actuarial
pension plans, and have not repriced any options previously granted to the above
named officers.

Directors' Compensation; Consulting and Employment Agreements

Directors who are not officers or employees of the Company receive cash
compensation of $10,000 each fiscal quarter. Mr. Levitch and Mr. Barratt each
received $10,000 upon becoming directors, applicable to the quarter in which
their service began. Each outside director received options exercisable for
50,000 shares for fiscal 2003. Mr. Levitch and Mr. Barratt also received options
for an additional 20,000 shares each upon appointment to the Board of Directors.

Dr. Modi is compensated through a consulting agreement that was
originally entered into as of October 1, 1996, that was amended and supplemented
as of January 7, 1998, and that was further amended and supplemented as of
December 31, 2000. The parties to the agreement are Dr. Modi, Generex and
Generex Pharmaceuticals, Inc., a wholly-owned subsidiary of Generex. An
amendment to Dr. Modi's consulting agreement was approved by the Board of
Directors in January 2002 granting Dr. Modi cash bonuses upon the occurrence of
certain events in connection with the extension of the joint venture with Elan
to include Morphine. All references to the consulting agreement in the following
discussion relate to the agreement, as amended and supplemented.

Pursuant to the terms of the consulting agreement, Dr. Modi holds the
position of Vice President, Research and Development of Generex and Generex
Pharmaceuticals, and both Generex and Generex Pharmaceuticals are jointly and
severally responsible for the payment to Dr. Modi of all amounts due under the
consulting agreement. The agreement provides for Dr. Modi's term of service to
extend through July 31, 2010, subject to termination without cause by Dr. Modi
or Generex at any time after January 1, 2003 upon 12 months' prior written
notice.

In connection with amending and supplementing the consulting agreement
in January 1998, Generex issued 1,000 shares of Special Voting Rights Preferred
Stock ("Special Preferred Stock") to Dr. Modi, comprising all of the outstanding
shares of Special Preferred Stock. Special Preferred Stock does not generally
carry the right to vote, but does have the following special voting rights:

o the holders of Special Preferred Stock have the right to elect a majority of
Generex's Board of Directors if a change of control occurs; and
o the holders of Special Preferred Stock have the right to approve any
transaction that would result in a change of control.

A "change of control" is deemed to occur if Generex's founders (namely, Ms.
Gluskin, Dr. Modi or Ms. Rose Perri), or directors appointed or nominated with
the approval of Generex's founders, should cease to constitute at least 60% of
Generex's directors, or if any person becomes either Chairman of the Board of
Directors or Chief Executive Officer of Generex without the prior approval of
the founders. If a change of control were to occur, Dr. Modi would thereafter be
able to elect a majority of the directors. No change of control has occurred to
date.

The consulting agreement provides for an annual base compensation of $250,000 a
year, effective as of August 1, 2000, subject to certain cost-of-living
increases. In addition, Dr. Modi is entitled to receive certain bonus
compensation during the term of the agreement. Dr. Modi will also receive
certain additional bonus payments based upon agreements entered into by Generex
for rights granted to third parties to develop, manufacture and/or market
products based upon ideas, improvements, designs or discoveries made or
conceived by Dr. Modi.

The consulting agreement provides for Dr. Modi to be granted options to purchase
150,000 shares of Common Stock in each of the ten fiscal years starting with the
fiscal year ended July 31, 2001. The options may be granted only under option
plans of Generex that have been approved by the stockholders.

Dr. Bernstein is compensated through an employment agreement, dated April 1,
2002, between Dr. Bernstein and Generex. Pursuant to the terms of the employment
agreement, Dr. Bernstein holds the position of Vice President of Medical
Affairs. The employment agreement provides for Dr. Bernstein's term of service
to extend through March 31, 2005, subject to termination (i) without cause by
Dr. Bernstein or Generex upon 90 days' prior written notice and (ii) for cause
by Generex immediately upon the giving of notice.

The employment agreement provides for an annual base compensation of $150,000 a
year, effective as of April 1, 2002. During each year of the employment
agreement, Dr. Bernstein may receive cash bonuses at the discretion of the Board
of Directors and is entitled to receive options to purchase 50,000 shares of
Common Stock.

Mr. Fletcher is compensated through an employment agreement, dated March 17,
2003, between Mr. Fletcher and Generex. Pursuant to the terms of the employment
agreement, Mr. Fletcher holds the position of Executive Vice President and
General Counsel. The employment agreement provides for Mr. Fletcher's term of
service to extend through March 16, 2008, subject to termination (i) without
cause by Generex upon 30 days' prior written notice and (ii) for cause by
Generex immediately upon the giving of notice.

The employment agreement provides for an annual base compensation of $100,000 a
year, effective as of April 21, 2003. During each year of the employment
agreement, Mr. Fletcher shall receive a cash bonus of $30,000, payable in
quarterly installments, and may receive additional cash bonuses at the
discretion of the Board of Directors. Upon the effective date of the employment
agreement Mr. Fletcher received options to purchase 250,000 shares of common
stock.

Compensation Committee Interlocks and Insider Participation

Effective July 30, 2001, decisions regarding executive compensation
were made by the Compensation Committee of the Board of Directors. Mr. Levitch,
Mr. Rosen and Mr. Barratt are the members of the Compensation Committee.

No executive officer of Generex has served on the board of directors or
compensation committee of any other entity that has or has had one or more
executive officers serving as a director of Generex (excluding entities that are
wholly owned by one or more of the executive officers).

Existing Stock Compensation Plans

The following table sets forth as of July 31, 2003 information regarding our
existing compensation plans and individual compensation arrangements pursuant to
which our equity securities are authorized for issuance to employees or
non-employees (such as directors, consultants and advisors) in exchange for
consideration in the form of services:

------------------------------- ----------------------------- ----------------------------- -----------------------------
Number of securities
remaining available for
future issuance under
Number of securities to Weighted-average equity compensation
be issued upon exercise exercise price of plans (excluding
of outstanding options, outstanding options, securities reflected in
Plan Category warrants and rights warrants and rights column (a))
------------------------------- ----------------------------- ----------------------------- -----------------------------
(a) (b) (c)
------------------------------- ----------------------------- ----------------------------- -----------------------------

Equity compensation
plans approved by
security holders

1998 Stock Option Plan
1,095,500 $5.13 0
2000 Stock Option Plan
1,804,500 $7.74 195,500
2001 Stock Option Plan
3.858,159 $3.37 141,841
--------- ----- -------
Total
6,758,159 $4.82 337,341
------------------------------- ----------------------------- ----------------------------- -----------------------------
Equity compensation
plans not approved by
security holders 0 0 0
------------------------------- ----------------------------- ----------------------------- -----------------------------
Total 6,758,159 $4.82 337,341
------------------------------- ----------------------------- ----------------------------- -----------------------------

Security Ownership Of Certain Beneficial Owners And Management

The table on the following pages sets forth information regarding the beneficial
ownership of the Common Stock by:

o Our executive officers and directors;
o All directors and executive officers as a group; and
o Each person known to Generex to beneficially own more than five percent
(5%) of the outstanding shares of Common Stock.

The information contained in these tables is as of January 26, 2004.
At that date, Generex had 29,638,468 shares of common stock outstanding. In
addition to Common Stock, Generex has outstanding 1,000 shares of Special Voting
Rights Preferred Stock. All of the shares of Special Voting Rights Preferred
Stock are owned by Dr. Pankaj Modi. In connection with Generex's joint venture
with Elan, Generex issued 1,000 shares of Series A Preferred Stock to an
affiliate of Elan. After the issuance of annual dividends, 1,123 shares of
Series A Preferred are currently outstanding. Neither series of preferred stock
generally have voting rights.

A person is deemed to be a beneficial owner of shares if he has the
power to vote or dispose of the shares. This power can be exclusive or shared,
direct or indirect. Except as discussed in the footnotes to the table, the
beneficial owners have sole power to vote the shares of common stock
beneficially owned by them. In addition, a person is considered by SEC rules to
beneficially own shares underlying options or warrants that are presently
exercisable or that will become exercisable within sixty (60) days.

BENEFICIAL OWNERSHIP

Name of Beneficial Owner Number of Shares Percent of Class

(i) Directors and Executive Officers

John P. Barratt(1).................................. 140,000 *
Gerald Bernstein, M.D(2)............................ 63,628 *
Mark Fletcher(3).................................... 250,000 *
Anna E. Gluskin(4).................................. 1,603,794 5.7%
Peter Levitch(5).................................... 189,483 *
Pankaj Modi, Ph.D(6)................................ 1,700,200 6.1%
Rose C. Perri(7) ................................... 4,650,202 16.6%
J. Michael Rosen(8)................................. 218,730 *
Officers and directors as a group (8 persons)(9). 7,842,370 28.4%

(ii) Other Beneficial Owners (and their addresses)

Cranshire Capital, L.P.(10).............................. 2,840,416 9.6%
666 Dundee Road, Suite 1901
Northbrook, IL 60062

EBI, Inc. In Trust(11) .................................. 1,441,496 5.3%
c/o Miller & Simons
First Floor, Butterfield Square
P.O. Box 260 Providencials
Turks and Caicos Islands
British West Indies

GHI, Inc. In Trust(12)................................... 1,907,334 7.0%
c/o Miller & Simons
First Floor, Butterfield Square
P.O. Box 260 Providencials
Turks and Caicos Islands
British West Indies

* Less than one percent.

(1) Includes 70,000 options granted on March 19, 2003 and 70,000 options granted
on October 30, 2003 under Generex's 2001 Stock Option Plan (the "2001 Plan").

(2) Includes shares issuable upon exercise of 50,000 options granted in
November, 2002, 5,159 options granted on December 31, 2001 and 5,000 options
granted on January 3, 2000, under the 2001 Plan and pursuant to Dr. Bernstein's
Employment Agreement with Generex and his prior consulting agreement.

(3) Includes 250,000 shares issuable upon the exercise of an option granted
under the 2001 Plan.

(4) Includes 953,667 shares owned of record by GHI, Inc. that are beneficially
owned by Ms. Gluskin, 100,000 shares issuable upon the exercise of an option
granted under Generex's 1998 Stock Option Plan (the "1998 Plan"), 200,000 shares
issuable upon the exercise of an option granted under Generex's 2000 Stock
Option Plan (the "2000 Plan"), and 350,000 shares issuable upon exercise of an
option granted under the 2001 Plan.

(5) Includes 140,000 shares issuable upon the exercise of options granted under
the 2001 Plan.

(6) Includes 150,000 shares issuable upon the exercise of an option granted
under the 1998 Plan and 150,000 shares issuable upon the exercise of an option
granted under the 2000 Plan. Also includes 450,000 shares issuable upon the
exercise of options granted under the 2001 Plan. Dr. Modi also owns all the
1,000 outstanding shares of Generex's Special Voting Rights Preferred Stock.
This stock is not convertible into Common Stock.

(7) Includes 953,667 shares owned of record by GHI, Inc. that are beneficially
owned by Ms. Rose Perri, 100,000 shares issuable upon the exercise of an option
granted under the 1998 Plan, 150,000 shares issuable upon the exercise of an
option granted under the 2000 Plan, and 300,000 shares issuable upon exercise of
an option under the 2001 Plan. Also includes the shares and options that are
owned by the estate of Mr. Mark Perri, of which Ms. Rose Perri is executor and
beneficiary, but is not considered to beneficially own for some purposes: 45,914
shares previously owned of record by Mr. Mark Perri; 1,100,000 shares owned of
record by EBI, Inc. (of which Mr. Mark Perri was beneficial owner); 305,332
shares held of record by brokerage accounts and options for 200,000 shares which
survived Mr. Perri's death. Also includes 341,496 shares owned of record by EBI,
Inc., which Ms. Rose Perri may be deemed to beneficially own because of the
power to vote the shares but which are beneficially owned by other stockholders
because they are entitled to the economic benefits of the shares. Ms. Rose Perri
is also deemed to beneficially own an additional 953,667 shares owned of record
by GHI, Inc. by holding the right to vote such shares. These shares are also
beneficially owned by Ms. Gluskin.

(8) Includes 20,000 shares issuable upon the exercise of an option granted under
the 2000 Plan, and 120,000 shares issuable upon exercise of options granted
under the 2001 Plan. Also includes 7,943 shares owned by a company of which Mr.
Rosen is an officer and indirect 25% owner; Mr. Rosen may be deemed to
beneficially own these shares because he shares voting power and investment
power with respect to such shares.

(9) Includes 2,450,159 shares issuable upon the exercise of options. Includes
1,441,496 shares owned of record by EBI, Inc. but beneficially owned or deemed
to be beneficially owned by Ms. Rose Perri. Includes 1,907,334 shares owned of
record by GHI, Inc. but beneficially owned by Ms. Gluskin or Ms. Rose Perri.

(10) Includes 1,179,527 outstanding shares and 1,660,889 shares issuable upon
exercise of warrants. Does not include an Additional Investment Right
exercisable for an additional 680,272 shares of Common Stock and Warrants to
purchase 170,068 shares of Common Stock because the right contains a provision
stating that it is not exercisable to the extent exercise would result in the
holder's beneficially owning more than 9.9% of Generex's outstanding common
stock.

(11) All these shares were previously beneficially owned by Mr. Mark Perri but
are now deemed to be beneficially owned by Ms. Rose Perri because she has the
sole power to vote the shares. With respect to 1,100,000 of the shares owned of
record by EBI, Inc., Ms. Rose Perri also has investment power and otherwise is
entitled to the economic benefits of ownership.

(12) Ms. Gluskin and Ms. Rose Perri each own beneficially 953,667 of the shares
owned of record by GHI, Inc. by reason of their ownership of investment power
and other economic benefits associated with such shares. The shares beneficially
owned by Ms. Gluskin also are deemed to be beneficially owned by Ms. Rose Perri
because she has the sole power to vote the shares.

Certain Relationships and Related Transactions.

Generex acquired Generex Pharmaceuticals, Inc. in October 1997. Prior
to Generex's acquisition of Generex Pharmaceuticals, it was a private Canadian
corporation majority-owned and controlled by Mr. Mark Perri, Ms. Rose Perri and
Ms. Gluskin. Unless otherwise indicated, the transactions described below
occurred prior to the acquisition of Generex Pharmaceuticals or pursuant to
contractual arrangements entered into prior to that time. Generex presently has
a policy requiring approval by stockholders or by a majority of disinterested
directors of transactions in which one of our directors has a material interest
apart from such director's interest in Generex. Generex presently has a policy
requiring the approval of the Audit Committee for any transactions in which a
director has a material interest apart from such director's interest in Generex.

Real Estate Financing Transactions: In May 1997, EBI, Inc., a company
controlled by Mr. Mark Perri, acquired shares of common stock of Generex
Pharmaceuticals for $3 million (CAD) which, based on the exchange rate then in
effect, represented approximately $2.1 million (US). Generex Pharmaceutical's
use of those funds was restricted to acquiring an insulin research facility.
Subsequently this restriction was eased to permit use of the funds to acquire
properties used for manufacturing Generex Pharmaceutical's oral insulin product
and other proprietary drug delivery products, and related testing, laboratory
and administrative services. Under the terms of the investment, Generex
Pharmaceuticals was required to lend these funds back to EBI until they were
needed for the purposes specified. The entire amount was loaned back to EBI and
was outstanding at July 31, 1997. During the period ended July 31, 1998, a total
of $2,491,835 (CAD) was repaid by EBI. There were no repayments made in the
years ended July 31, 2003, 2002 and 2001. The balance due from EBI at July 31,
2003, was $508,165 (CAD) (approximately $362,779 (US) based on the exchange rate
then in effect). These funds are due on demand by Generex Pharmaceuticals,
provided they are used for the purchase and/or construction or equipping of oral
insulin manufacturing and testing facilities. The amounts repaid by EBI were
used primarily to purchase and improve certain of the real estate and buildings
owned by Generex Pharmaceuticals.

Related Party Transactions: Between November 1995 and July 31, 1998,
companies owned and controlled by Mr. Mark Perri, Ms. Rose Perri and Ms. Gluskin
incurred a net indebtedness of $629,234 to Generex Pharmaceuticals, excluding
the indebtedness of EBI described in the preceding paragraph. This indebtedness
arose from cash advances and the payment by Generex Pharmaceuticals of expenses
incurred by these companies, net of repayments and payment of expenses on behalf
of Generex Pharmaceuticals. At July 31, 1999, these companies' net indebtedness
to Generex Pharmaceuticals, exclusive of the EBI indebtedness described above,
was $284,315. At July 31, 2000, this balance had been reduced to zero. The
transactions between Generex Pharmaceuticals and entities owned and controlled
by Mr. Mark Perri, Ms. Rose Perri and Ms. Gluskin were not negotiated at
arms-length, and were not on normal commercial terms. No interest was charged on
any of the advances, and the transactions were of far greater financial benefit
and convenience to Mr. Mark Perri, Ms. Rose Perri and Ms. Gluskin than to
Generex Pharmaceuticals. These transactions and financing arrangements were
mostly initiated prior to the transaction in which Generex acquired Generex
Pharmaceuticals, and no such transactions have taken place since January 1,
1999.

We utilize a management company to manage all of our real properties.
The property management company is owned by Ms. Rose Perri, Ms. Gluskin and the
estate of Mr. Mark Perri, our former Chairman of the Board. For the fiscal years
ended July 31, 2003, 2002 and 2001, we have paid the management company $33,237,
$37,535 and $38,450, respectively, in management fees.

Loans to Executive Officers: On May 3, 2001, Generex's Ms. Rose Perri,
Ms. Gluskin and Mr. Mark Perri were advanced $334,300 each, 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 Generex's
common stock owned by this related company. On June 3, 2002, Generex's 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. Subsequent to July 31, 2002,
pursuant to a decision made as of August 30, 2002, these loans were satisfied by
application of the 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.

Brokerage Payment: On August 7, 2002, Generex Pharmaceuticals purchased
real estate with an aggregate purchase price of approximately $1,525,000, from
an unaffiliated party. In connection with that transaction, Angara Enterprises,
Inc., a licensed real estate broker that is an affiliate of Ms. 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. Management believes that this is less
than the aggregate commission which would have been payable if an unaffiliated
broker had been used.

Joint Venture with Elan: In January 2001, Generex established a joint
venture with Elan International Services, Ltd. ("EIS") and Elan Corporation, plc
("Elan"). Pursuant to the Securities Purchase Agreement dated January 16, 2001,
between Generex, Elan and EIS, EIS has the right to nominate one director to
Generex's Board of Directors for so long as EIS or its affiliates own at least
1.0% of the issued and outstanding shares of common stock. Dr. Lieberburg was
the nominee of EIS thereunder. Dr. Lieberburg resigned effective August 1, 2002
because he felt that due to the increasing demands of his position with Elan
Corporation, he could no longer devote the time and attention necessary to serve
as a director of Generex. EIS has not informed Generex as to its nominee to
replace Dr. Lieberburg.

In connection with the transaction, EIS purchased 344,116 shares of
Common Stock for $5,000,000 and was issued a warrant to acquire 75,000 shares of
Common Stock at $25.15 per share. If the joint venture achieves certain
milestones, Generex may require EIS to purchase an additional $1,000,000 of
Common Stock at a 30% premium to the then prevailing fair market value of shares
of Common Stock. EIS also purchased 1,000 shares of a new series of Generex
preferred stock, designated as Series A Preferred Stock, for $12,015,000. The
proceeds from the sale of the Series A Preferred Stock were applied by Generex
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 interest in
Generex (Bermuda) Ltd. While Generex initially owns 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
Generex's interest in the joint venture entity. Alternatively, the Series A
Preferred Stock may be converted, under certain conditions, into shares of
Generex's Common Stock. In January of 2002, Generex declared a 6% stock dividend
of Series A Preferred stock. The shares of Common Stock and shares of Series A
Preferred Stock presently are held of record by an affiliate of EIS.

OTHER INFORMATION

Annual Report

Generex has enclosed its Annual Report for the year ended July 31,
2003, with this proxy statement, which includes Generex's Annual Report to the
Securities and Exchange Commission on Form 10-K for the fiscal year ended July
31, 2003, without exhibits. Stockholders are referred to the report for
financial and other information about Generex, but such report is not
incorporated in this proxy statement and is not a part of the proxy soliciting
material.

Stockholder Proposals for the Next Annual Meeting

Any proposals of stockholders intended to be presented at the annual
meeting of stockholders for the fiscal year ended July 31, 2004, must be
received by Generex at 33 Harbour Square, Suite 202, Toronto, Ontario, Canada
M5J 2G2, no later than ___________, 2004 in order to be included in the proxy
materials and form of proxy relating to such meeting. It is suggested that
stockholders submit any proposals by an internationally recognized overnight
delivery service to the Secretary of Generex at its principal executive offices
located at 33 Harbour Square, Suite 202, Toronto, Ontario, Canada M5J 2G2. Such
proposal must meet the requirements set forth in the rules and regulations of
the Securities and Exchange Commission in order to be eligible for inclusion in
the proxy materials for such meeting. The annual meeting for the fiscal year
ended July 31, 2004 is scheduled to take place in February 2005.

For business to be properly brought before the annual meeting by a
stockholder in a form other than a stockholder proposal requested to be included
in Generex's proxy materials, any stockholder who wishes to bring such business
before the annual meeting of stockholders must give notice of such business in
writing to the Secretary of Generex not less than 60 nor more than 90 days prior
to the annual meeting. In the event that less than 70 days notice or prior
disclosure of the date of the meeting is given or made to stockholders, notice
of such business to be timely must be received by the Secretary of Generex not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
The stockholder's notice of such business must provide information about the
stockholder proposing such business and the nature the business, as required by
Generex's Amended and Restated Bylaws. A copy of these Bylaw requirements will
be provided upon request in writing to the Secretary at the principal offices of
Generex located at 33 Harbour Square, Suite 202, Toronto, Ontario, Canada M5J
2G2.

If there should be any change in the foregoing submission deadlines,
Generex intends to publicly disseminate information concerning the change.

Corporate Governance Documents

Generex amended its Audit Committee Charter on October 30, 2003. The
Audit Committee Charter, as amended, is reproduced in Appendix A to this Proxy
Statement. In addition, the Audit Committee Charter, the Compensation Committee
Charter and the Generex Code of Ethics have been posted on Generex's Internet
website - www.generex.com.

Other Matters

The Board of Directors does not intend to present, and does not have
any reason to believe that others will present, any item of business at the
annual meeting other than those specifically set forth in the notice of the
meeting. However, if other matters are properly brought before the meeting, the
persons named on the enclosed proxy will have discretionary authority to vote
all proxies in accordance with their best judgment.

Solicitation of Proxies

All costs and expenses of this solicitation, including the cost of
preparing and mailing this proxy statement will be borne by Generex. In addition
to the use of the mails, certain directors, officers and regular employees of
Generex may solicit proxies personally, or by mail, telephone or otherwise, but
such persons will not be compensated for such services. Arrangements will be
made with brokerage firms, banks, fiduciaries, voting trustees or other nominees
to forward the soliciting materials to each beneficial owner of stock held of
record by them, and Generex will reimburse them for their expenses in doing so.

By order of the Board of Directors

/s/ Rose C. Perri
----------------------------
Rose C. Perri
Secretary
February __, 2004

APPENDIX A
GENEREX BIOTECHNOLOGY
CORPORATION
AUDIT COMMITTEE CHARTER

The Audit Committee (the "Committee") is appointed by the Board of
Directors (the "Board") to assist the Board in monitoring (1) the integrity of
the Company's financial statements and reports and (2) the independence and
performance of the Company's auditors. The Committee shall be solely responsible
for the appointment, compensation, retention and oversight of the work of any
independent auditors employed by the Company for the purpose of preparing or
issuing an audit report or related work. The independent auditor so employed
shall report directly to the Committee.

The Committee shall pre-approve all auditing and permitted non-audit
services (including the fees and terms thereof) to be performed for the Company
by its independent auditor, subject to the de minimis exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which are approved by the Committee prior
to the completion of the audit. The Committee may form and delegate authority to
subcommittees consisting of one or more members when appropriate, including the
authority to grant pre-approvals of audit and permitted non-audit services,
provided that such delegation is in compliance with Section 10A(i)(3) of the
Exchange Act and the rules thereunder and decisions of such subcommittees to
grant pre-approvals shall be presented to the Committee at its next scheduled
meeting. The Committee shall not delegate its responsibilities to pre-approve
services performed by the independent auditors to management.

The Committee shall have the authority to retain independent legal,
accounting or other consultants or advisors to advise it. The Committee shall
have the authority to request any officer or employee of the Company or the
Company's outside counsel, auditor or other consultant or advisor to attend a
meeting of the Committee or to meet with any members of, or consultants or
advisors to, the Committee. The Company shall provide sufficient funds to the
Committee for the retention, use or employment of any legal, accounting or other
consultant or advisor by the Committee that is necessary for the Committee to
carry out its duties under this Charter.

The Committee shall:

1. Review and reassess the adequacy of this Charter from time to
time and recommend any proposed changes to the Board for
approval.

2. Review the Company's annual audited financial statements with
management and the Company's independent auditor, including
major issues regarding accounting and auditing principles and
practices.

3. Review with management and the Company's independent auditor any
significant financial reporting issues and judgments observed by
or brought to the attention of the Committee relative to the
preparation of the Company's financial statements.

4. Review the Company's quarterly financial statements prior to the
filing of its Form 10-Q.

5. Review any proposed major changes to the Company's auditing and
accounting principles prior to their adoption.

6. Receive periodic reports from the Company's independent auditor
regarding the auditor's independence, discuss such reports with
the auditor, and recommend any Board action deemed necessary and
appropriate by the Committee to assure the independence of the
auditor.

7. Ensure the rotation of the audit partners of the independent
auditor to the extent required by law.

8. Recommend to the Board policies for the Company's hiring of
employees, or former employees, of the Company's independent
auditor who participated in any capacity in the audit of the
Company, prior to the Company's hiring any such persons.

9. Review and discuss reports from the independent auditor on: (a)
all critical accounting policies and practices to be used; (b)
all alternative treatments of financial information within
generally accepted accounting principles that have been
discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment
preferred by the independent auditor; and (c) other material
communications between the independent auditor and management.

10. Discuss with the independent auditor the matters required to be
discussed with the Committee by the independent auditor under
Statement on Auditing Standards No. 61 relating to the conduct
of the audit of the Company's financial statements.

11. Review with the Company's independent auditor any problems or
difficulties the auditor may have encountered, as well as any
management letter provided by the auditor and the Company's
response to that letter.

12. Review and discuss with management, the independent auditor and
the Controller: (a) the adequacy and effectiveness of the
Company's internal controls (including any significant
deficiencies and significant changes in internal controls
reported to the Committee by the independent auditor or
management); (b) the Company's internal audit procedures; and
(c) the adequacy and effectiveness of the Company's disclosures
controls and procedures, and management reports thereon.

13. Review disclosures made to the Committee by the Company's Chief
Executive Officer and Chief Financial Officer during their
certification process for the Form 10-K and Form 10-Q about any
significant deficiencies in the design or operation of internal
controls or material weaknesses therein and any fraud involving
management or other employees who have a significant role in the
Company's internal controls.

15. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement.

16. Review with the Company's attorneys such legal matters as the
Committee determines may have a material impact on the Company's
financial statements.

17. Evaluate together with the Board the performance of the
Company's independent auditor.

18. Review the appointment and any replacements of the Company's
principal accounting officer.

19. Establish procedures for the receipt, retention and treatment of
complaints received regarding accounting, internal accounting
controls or auditing matters and the confidential, anonymous
submission by employees of concerns regarding questionable
accounting or auditing matters.

The Committee shall consist of no fewer than three members. Each member
of the Committee shall be independent and shall have the ability to read and
understand financial statements, including the Company's balance sheet, income
statement and cash flow statement. For purposes of this Charter, to be
considered "independent" a Committee member: (1) must meet the independence
requirements of the NASDAQ Stock Market, Inc. and any U.S. Securities and
Exchange Commission regulation applicable to the Company; and (2) may not, other
than in his or her capacity as a member of the Committee, (a) accept any
consulting, advisory or other compensatory fee from the Company or any
subsidiary thereof, or (b) be an affiliated person of the Company or any
subsidiary thereof.

Committee members shall be members of the Board of the Company and
shall be nominated and elected by the full Board annually. The full Board shall
promptly fill vacancies that may occur on the Committee. At least one member of
the Committee shall have past employment experience in finance or accounting, or
comparable experience or background (including, for example, being or having
been a chief executive officer, chief financial officer or other senior
corporate officer with financial oversight responsibilities) which results in
such member having financial sophistication. The qualifications of Committee
members shall be determined by the full Board.

Meetings of the Committee may be called from time to time by the
Chairman or any two members of the Committee upon not less than seventy-two (72)
hours prior notice (which may but need not state the business intended to be
conducted at the meeting), provided that a meeting may be held without such
notice if all members are present or, if absent, waive notice of the meeting. A
majority of the members of the Committee shall constitute a quorum for the
purpose of taking any action upon any matter than may come before it, and the
Committee may take any action which it is authorized to take as a committee
without the necessity of a meeting if all members of the Committee consent in
writing in accordance with Section 141(f) of the Delaware General Corporation
Law. The Chairman of the Committee shall promulgate such other rules or
procedures as he or she deems necessary or appropriate for the proper and
efficient conduct of the business of the Committee.

While the Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Company's financial statement are complete and accurate
and in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure the Company's
compliance with laws and regulations relating to financial disclosure or any
other area.

GENEREX BIOTECHNOLOGY CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
MARCH 9, 2004

The undersigned stockholder of Generex Biotechnology Corporation (the
"Company") hereby appoints Anna E. Gluskin and Rose C. Perri, and each of them
with full power of substitution, the true and lawful attorneys, agents and proxy
holders of the undersigned, and hereby authorizes them to represent and vote, as
specified herein, all of the shares of Common Stock of Generex held of record by
the undersigned on February 9, 2004, at the annual meeting of stockholders of
Generex to be held on March 9, 2004 (the "Annual Meeting") at 10:00 a.m. at St.
Lawrence Hall, 157 King Street East, Toronto Ontario and any adjournments or
postponements thereof.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED.
IN THE ABSENCE OF DIRECTION, THE SHARES WILL BE VOTED FOR THE PROPOSALS.

THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS RELATING TO THE ANNUAL MEETING.

Item 1. To elect as directors, to hold office until the next meeting of
stockholders and until their successors are elected, the five (5) nominees
listed below:

NOMINEES: John P. Barratt, Anna E. Gluskin, Peter Levitch, Rose C. Perri and
Jan Michael Rosen.

o FOR ALL NOMINEES o WITHHOLD ALL NOMINEES o ____________________
For all nominees
except as noted
above

Item 2. To approve the potential issuance and sale of equity securities below
market price in excess of shares permitted to be issued without shareholder
approval under NASDAQ Marketplace Rules 4350(i)(1)(C) and (D).

o FOR o AGAINST o ABSTAIN

Item 3. To ratify the appointment of BDO Dunwoody, LLP as Generex's independent
public accountants for the fiscal year ending July 31, 2004.

o FOR o AGAINST o ABSTAIN

NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
Trustees and others acting in a representative capacity should indicate the
capacity in which they sign and give their full title. If a corporation, please
indicate the full corporate name and have an authorized officer sign, stating
title. If a partnership, please sign in partnership name by an authorized
person.

Signature:

_____________________________________________
Signature:

_____________________________________________
Date:

_____________________________________________

PLEASE MARK, SIGN AND DATE THIS PROXY AND
RETURN IT PROMPTLY WHETHER YOU PLAN TO ATTEND
THE MEETING OR NOT. IF YOU DO ATTEND, YOU MAY
VOTE IN PERSON IF YOU DESIRE.