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Generex given "going concern" warning by auditor
By Ted A. Knutson
Washington, March 16 - Generex Biotechnology Corp. faces "substantial doubt" as to its ability to continue as a going concern, according to its auditor.
The company also reported an accumulated deficit of $143.9 million as of Jan. 31, according to a 10-Q filing Thursday with the Securities and Exchange Commission.
However it also said it believes it will be able to obtain the financing it needs to keep operating.
For the quarter ended Jan. 31, the company's operating loss shrank to $5.18 million from an operating loss of $5.56 million in the year-ago period. Over the same period, revenue fell to $43,750 from $76,750.
The company's net loss increased to $14.40 million, or $0.23 per share, for the quarter from a net loss of $6.30 million, or $0.18 per share, in the year-ago period.
The company said it will continue to require substantial funds to continue research and development, including preclinical studies and clinical trials of the company's product candidates, and to commence sales and marketing efforts, if the Food and Drug Administration or other regulatory approvals are obtained.
"Our auditors expressed substantial doubt about our ability to continue as a going concern given our recurring net losses, negative cash flows from operations and working capital deficiency. ....While we believe that we will be successful in obtaining the necessary financing to fund our operations, there are no assurances that such additional funding will be achieved and that we will succeed in our future operations," the company said in a statement.
Generex is a Toronto-based company working on drug delivery systems and technologies.
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