WORCESTER, Mass., May 20, 2009 (GLOBE NEWSWIRE) -- On May 15, 2009, Generex Biotechnology Corporation (Nasdaq:GNBT) (www.generex.com) announced the consummation of a $5,000,000 registered direct offering of shares of the Company's common stock to selected accredited investors at $0.33 per share. The amount of the offering was the maximum permitted by paragraph 8 of the February 27, 2009 forbearance and amendment agreements signed by the Company with the holders of the Company's 8% senior secured convertible notes. Pursuant to that paragraph, although the conversion price of the note holders' warrants to acquire Company common stock was reduced, the number of shares of the Company's common stock issuable pursuant to the exercise of those warrants was not increased such that the offering will not increase the amount of dilution under those warrants. The offering was a discounted offering of the Company's common stock, with no warrant coverage, and was the first utilization of the Company's extant shelf registration statement. The stock issued in the offering represented approximately 9.24% of the issued and outstanding shares of the Company's common stock immediately prior to the offering. 80% of the offering was subscribed for by new investors in Generex. The remaining 20% of the offering was subscribed for by high net worth long-time investors in the Company. The net proceeds of the offering (approximately $4,800,000 after fees and expenses (the placement agent's fee was 2%)) will be used, among other things, to fund the continuing global Phase 3 clinical trial of Generex Oral-lyn(tm), the Company's proprietary oral insulin spray product, and the Antigen Express, Inc. (www.antigenexpress.com) synthetic vaccines development programs for cancers and influenzas. Antigen Express is the Company's wholly-owned immunotherapeutics vaccines subsidiary.
"We are encouraged that we have been able to raise additional funding on such favorable terms despite difficult market conditions and the strictures imposed upon us by the notes," said Anna Gluskin, Generex's President & Chief Executive Officer. "We consider the significant participation by new investors to Generex to be indicative of support for the Company and positive expectations for our product development and commercialization programs."
The final installment payment of approximately $1,300,000 (subject to voluntary note holder conversions after the date hereof) under the Company's outstanding 8% senior secured convertible notes is due July 1, 2009 (subject to a final calculation on June 1, 2009, Generex has pre-paid the June 1, 2009 installment payment in shares of the Company's common stock). Upon satisfaction of the Company's liabilities under the notes, Generex will be entitled to the return of an aggregate of $3,000,000 in cash presently collateralizing a letter of credit provided as security to the note holders which will further strengthen the Company's cash position.
About Generex Biotechnology Corporation
Generex is engaged in the research, development and commercialization of drug delivery systems and technologies. Generex has developed a proprietary platform technology for the delivery of drugs into the human body through the oral cavity (with no deposit in the lungs). The Company's proprietary liquid formulations allow drugs typically administered by injection to be absorbed into the body by the lining of the inner mouth using the Company's proprietary RapidMist(tm) device. The Company's flagship product, oral insulin (Generex Oral-lyn(tm)), which is available for sale in India and Ecuador for the treatment of subjects with Type-1 and Type-2 diabetes, is in Phase III clinical trials at several sites around the world. Antigen Express, Inc. is a wholly owned subsidiary of Generex. The core platform technologies of Antigen Express comprise immunotherapeutics for the treatment of malignant, infectious, allergic, and autoimmune diseases. For more information, visit the Generex website at www.generex.com or the Antigen Express website at www.antigenexpress.com.
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Safe Harbor Statement
This release and oral statements made from time to time by Generex representatives in respect of the same subject matter may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by introductory words such as "expects," "plans," "intends," "believes," "will," "estimates," "forecasts," "projects," or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Forward-looking statements frequently are used in discussing potential product applications, potential collaborations, product development activities, clinical studies, regulatory submissions and approvals, and similar operating matters. Many factors may cause actual results to differ from forward-looking statements, including inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known and others of which are not. Known risks and uncertainties 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 cannot be regarded as actual predictions of when Generex will obtain regulatory approval for any "phase" of clinical trials. Generex claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act.