Item
3.02. Unregistered Sales of Equity Securities.
On
February 17, 2021, Generex Biotechnology Corporation (the “Company”) entered into a Securities Purchase Agreement
with an investor pursuant to which the Company agreed to sell and sold a convertible promissory note bearing interest at 8% per
annum with a 12-month maturity date (the “Note”) in the aggregate principal amount of $1,689,500. The purchase
price of the Note was $1,425,000 and the remaining $264,500 of principal amount represented original issue discount, along with
the issuance of 201,072 shares of the Company’s common stock, as inducement shares. Pursuant to the Securities Purchase
Agreement, the Company also sold to the Investor warrants to purchase up to an aggregate 1,407,917 shares of common stock.
Subject
to certain ownership limitations, the Note will be convertible at the option of the holder six months from the issue date into
shares of the Company’s common stock at an effective conversion price of $0.60. Subject to certain ownership limitations,
the warrants will be exercisable after the six-month anniversary of the initial exercise date through the fifth anniversary of
issuance at an exercise price of $0.60 per share of common stock.
The
conversion price of the Note and the exercise of the warrants will be subject to adjustment in the case of stock splits, stock
dividends, combinations of shares, similar recapitalization transactions and certain pro-rata distributions to common stockholders.
If the Company defaults on a timely repayment, then the conversion price will also be adjusted if the Company sells or grants
any shares of common stock or securities convertible into, or rights to acquire, common stock at an effective price per share
that is lower than the then conversion price, except in the event of certain exempt issuances.
The
investor has piggyback registration rights under the Securities Purchase Agreement.
The
Company has the right to prepay the Note at a premium after issuance. If the Note is prepaid within 60 days, the Company will
pay 105% of the principal amount; if the Note is prepaid after 60 days but prior to 90 days, the Company will pay 110% of the
principal amount. If the Note is prepaid after 90, the Company will pay 120% of the principal amount.
The
net cash proceeds to the Company from the sale of the Note, after deducting the Company’s estimated offering expenses, and
excluding the proceeds, if any, from the exercise of the warrants issued in the offering, is expected to be approximately $1,425,000.
The
Note, warrants, and the shares of common stock underlying the warrants, were offered privately pursuant to Rule 506 of Regulation
D under the Securities Act of 1933.
Forward-Looking
Statements
Statements
in this report may contain certain forward-looking statements. All statements included concerning activities, events or developments
that the Generex expects, believes or anticipates will or may occur in the future are forward-looking statements. Actual results
could differ materially from the results discussed in the forward-looking statements. Forward-looking statements are based on
current expectations and projections about future events and involve known and unknown risks, uncertainties and other factors
that may cause actual results and performance to be materially different from any future results or performance expressed or implied
by forward-looking statements. Known risks and uncertainties also include those identified from time to time in the reports filed
by Generex with the Securities and Exchange Commission, which should be considered together with any forward-looking statement.
No forward-looking statement is a guarantee of future results or events, and one should avoid placing undue reliance on such statements.
Generex undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future
events or otherwise. Generex cannot be sure when or if it will be permitted by regulatory agencies to undertake additional clinical
trials or to commence any particular phase of clinical trials. Because of this, statements regarding the expected timing of clinical
trials or ultimate regulatory approval cannot be regarded as actual predictions of when Generex will obtain regulatory approval
for any “phase” of clinical trials or when it will obtain ultimate regulatory approval by a particular regulatory
agency. Generex claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities
Litigation Reform Act. Additional information on these and other risks, uncertainties and factors is included in Generex’s
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8- K and other documents filed with the SEC.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date:
February 23, 2021
GENEREX
BIOTECHNOLOGY CORPORATION
/s/Joseph
Moscato
By:
Joseph Moscato, CEO, President