UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest reported)           August 29, 2006
                                           -------------------------------------

                            Advanced Biotherapy, Inc.
                            -------------------------
             (Exact name of registrant as specified in its chapter)

           Delaware                    0-26323                   51-0402415
      ------------------           ----------------        ---------------------
(State or other jurisdiction of      (Commission                (IRS Employer
        incorporation)               File Number)            Identification No.)

141 West Jackson Boulevard, Suite 2182
Chicago, Illinois                                                60604
-------------------------------                                  -----
(Address of principal executive                                 (Zip Code)
offices)

Registrant's telephone number, including area code   (312) 427-1912
                                                   --------------------


Page 1 of 7
<PAGE>

Item 1.01.  Entry Into a Material Definitive Agreement.

      On August 28, 2006,  the  Registrant (or "Company") and Richard P. Kiphart
("Noteholder"),  a director of the Company,  entered  into a Share  Purchase and
Debt Restructure Agreement ("Agreement"). The parties entered into the Agreement
for the purpose,  among  others,  to  restructure  the  Company's  long-term and
short-term  debt into equity and to sell Company  common stock to the Noteholder
for cash to be used for working capital and possible  acquisitions.  The closing
of the transactions ("Transactions") contemplated by the Agreement is subject to
satisfaction of certain  conditions which have not been satisfied as of the date
of this Form 8-K, but are expected to be completed in approximately thirty days.

      The  Company's  subordinated  convertible  debt  due  September  30,  2004
("2000-2004 Convertible Notes") in the approximate aggregate principal amount of
$7,805 as of June 30, 2006, subordinated  convertible pay-in-kind notes due June
1, 2006 ("2002-2006  Convertible Notes") in the approximate  aggregate principal
amount of  $4,740,466  as of June 30, 2006,  and term notes due June 30, 2006 in
the approximate  aggregate  principal  amount of $245,637,  have matured and the
Company  lacks funds to repay those  notes.  The  Company  also has  outstanding
subordinated  convertible  pay-in-kind  notes due September 30, 2007 ("2003-2007
Convertible Notes"), in the approximate aggregate principal amount of $1,095,413
as of June 30, 2006,  subordinated  convertible  pay-in-kind notes due September
30, 2009 ("2005-2009  Convertible Notes") in the approximate aggregate principal
amount of 267,213 as of June 30, 2006, and other  outstanding  promissory  notes
(collectively,  "Demand Notes") in the approximate aggregate principal amount of
$15,746, as of June 30, 2006, respectively.

      A. Sale of  Company  Shares.  Subject to the terms and  conditions  of the
Agreement,  the Company agreed to sell an aggregate of 433,333,333  shares ("New
Shares") of Company common stock,  $0.001 par value,  at $0.015 per share to the
Noteholder,  certain family members of the  Noteholder,  Christopher  Capps (the
Company's new President and Chief Executive Officer) and other prospective board
members,  for the aggregate sum of $6,500,000 ("New  Capital").  The Company has
received  $1.1 million of the New Capital from the  Noteholder as of the date of
this Form 8-K for which the  Noteholder  acquired  73,333.333  shares of Company
common  stock.  The balance of the New Capital  will be paid to the Company upon
the Company filing an amendment to its Certificate of Incorporation  ("Amendment
to  Certificate")  that  increases  the number of  authorized  shares of Company
common stock from  200,000,000  to  2,000,000,000  shares of common stock.  Such
Amendment has been approved by the  Company's  board of directors.  Holders of a
majority  of the  outstanding  common  stock have agreed to vote in favor of the
Amendment.  The Company  expects to file the Amendment to  Certificate  with the
Delaware  Secretary  of State on the 20th day  after the  Company's  Information
Statement has been mailed to its  stockholders  notifying  them about the action
taken by written  consent of the holders of a majority of outstanding  shares of
common  stock to approve the  Amendment to  Certificate,  and the action to file
such  Amendment.  The mailing of the  Information  Statement to  stockholders is
expected to be made on or about September 11th.

      B.  Adjustment of Conversion  Price of  Convertible  Notes and Other Debt.
Pursuant to the Agreement,  the Company agreed to adjust the conversion price of
all outstanding Convertible Notes, including,  without limitation, the 2002-2006
Convertible Notes, the 2003-2007 Convertible Notes and the 2005-2009 Convertible
Notes, and agreed to adjust the conversion price of certain  convertible  Demand
Notes,  and agreed to permit the holders of the Company's  other Demand Notes to
exchange  those notes,  in each case,  for one (1) share of Company common stock
for each $0.015 amount of indebtedness.

      C.  Conversion  of Company  Debt into  Equity.  The  Noteholder  agreed to
convert  all of his  Convertible  Notes and Demand  Notes into  shares of common
stock at the same $0.015 per share  conversion  price.  Subject to the filing of
the Amendment to  Certificate in accordance  with the Agreement,  the Noteholder
will receive  approximately  360,980,730 shares of the Company common stock upon
conversion of his Convertible  Notes and Demand Notes. The other holders ("Other
Holders") of Convertible  Notes,  Demand Notes and certain  indebtedness owed by
the Company have agreed to convert the entire principal amount thereof, together
with accrued interest thereon, into shares of Company common stock, at the price
of $0.015 per share,  all effective as of the closing of the  Transactions.  The
Other Holders will receive  approximately  35,318,000  shares of Company  common
stock upon such conversions.

Page 2 of 7
<PAGE>

      D. Stockholder Rights Offering. The Noteholder agreed to cause the Company
to commence a stockholder  rights  offering  ("Rights  Offering")  for shares of
Company common stock, to be offered to the Company's stockholders, excluding the
Noteholder,  his affiliates and related parties, at a price of $0.015 per share.
The Rights  Offering will provide that each  stockholder  will have the right to
purchase  up to ten (10) shares of Company  common  stock for each one (1) share
then held by such  stockholder,  at $0.015 per share.  The  Rights  Offering  is
subject to the registration rules and regulations of the Securities and Exchange
Commission and applicable state securities  agencies,  as more  specifically set
forth in the Agreement. It is expected that the Company also will include in its
registration  statement  to be filed with  respect to the  Rights  Offering  the
shares of  Company  common  stock to be issued  to former  officers  to whom the
Company owed accrued salary and certain holders of accounts payable, as provided
in  the  Agreement,  as  well  as  holders  of  shares  entitled  to  piggy-back
registration rights previously granted by the Company.

      E. Fairness  Opinion.  As a condition of the closing of the  Transactions,
the Board of Directors will receive a written opinion from Gemini  Partners,  an
independent investment banking firm, that the total consideration to be received
by the Company in the Transaction  contemplated by the Agreement is fair, from a
financial point of view, to the Company's stockholders.

      F. Special  Committee.  The Agreement  provides for the  appointment  of a
special committee  consisting of three directors whose responsibility will be to
oversee,  monitor and enforce  compliance of the Agreement by the Noteholder and
the Company. The Special Committee,  among other powers, has the right to review
and discuss with  management  compliance  by the Company and the  Noteholder  of
their respective  obligations  under the Agreement;  to investigate,  review and
analyze  any matter  brought to its  attention;  to engage  advisors,  including
attorneys,  accountants and other  consultants to assist in the discharge of the
Committee's responsibilities, including enforcement of the Agreement; to approve
and  execute  any  modification  or  amendment  of the  Agreement,  as it  deems
reasonable or appropriate;  and to take such other actions as it deems necessary
or appropriate in connection with the Agreement.  The Company is responsible for
the fees and expenses of the Special Committee,  including its outside advisors.
The Special Committee will initially be comprised of three members of the Board:
Thomas J. Pernice,  Dr. Joseph Bellanti,  and Keith Gregg. The membership,  term
and  termination of the Special  Committee are described in the  Agreement.  The
Company agrees to indemnify and hold harmless  members of the Special  Committee
against claims by the Noteholder or any stockholder of the Company.

      In the  Agreement,  the  Noteholder  agreed to a release of certain claims
against the Company and its  directors,  officers  and  representatives  arising
prior to the closing of the Transactions.

      G. Restrictive  Period.  In accordance with the Agreement,  the Noteholder
agreed,  for a period of one (1) year from the closing of the Transactions,  not
to approve, or permit the Company to approve, any merger or consolidation of the
Company  unless  the  Company  shall  be  the  surviving  corporation,   or  any
transaction  which enables  Company  stockholders to exercise  appraisal  rights
under Delaware law, or any exchange, reclassification or cancellation of Company
shares of common  stock,  including a reverse  stock  split,  provided  that the
one-year  restrictive  period may be shortened upon approval by the holders of a
majority  of the  outstanding  shares of  Company  common  stock not held by the
Noteholder and his affiliates, or upon approval by the Special Committee.

      H. Stock Options. The Company intends to grant stock options to members of
the Board of  Directors  and members of its  Advisory  Board and  certain  other
contract  personnel  promptly  following  the closing with the grant amounts and
other terms to be mutually approved by the Special Committee and the Noteholder.

Page 3 of 7
<PAGE>

      Item 3.02. Unregistered Sales of Equity Securities.


            The New Shares are being sold pursuant to the exceptions provided by
Section 4(2) of the Securities Act of 1933, as amended ("Act") and Regulation D,
promulgated  thereunder.  The Noteholder and the other individuals who acquired,
or acquire,  New Shares are or will be each an  "accredited"  investor,  as that
term is defined in Rule 501 in Regulation D of the Act. No general  solicitation
or advertising  was employed by the Company,  or anyone else associated with the
Company in connection with the placement of the New Shares.  No commissions were
paid.  The  certificates  representing  the New  Shares  will  bear  appropriate
restrictive  legends.  All of the shares being  acquired by the  Noteholder  and
Other Holders pursuant to conversion or other exchange are being issued pursuant
to an exemption under the Act and applicable  securities  laws. All certificates
representing  the shares of common  stock to be issued to  Noteholder  and Other
Holders will bear appropriate restrictive legends.

            According to the Noteholder, the Noteholder and the other individual
purchasers  of New Shares used, or will use,  personal  funds to acquire the New
Shares.

      Item 5.01. Changes in Control of Registrant.

            Upon receipt by the Company of the New Capital,  the Noteholder will
acquire from the Company shares of Company common stock  constituting a majority
of the issued and outstanding  shares of Company common stock, which will result
in a change in control with  respect to the stock  ownership of the Company such
that the Noteholder  will hold the majority of the issued and outstanding of the
Company common stock. As a result of his share ownership, the Noteholder will be
able to elect all of the directors  who comprise the Board of  Directors,  which
represents  a change in the  majority  control  of the  Board.  Pursuant  to the
Agreement,  the  Noteholder  will  acquire  approximately  83% of the issued and
outstanding  shares of the Company after taking into account the New Capital and
conversion of all Company  Convertible  Notes,  Demand Notes, and other approved
Company indebtedness into shares of Company common stock.

      Item 5.02.  Departure  of Directors  or  Principal  Officers;  Election of
Directors; Appointment of Principal Officers.

            The Board of  Directors  approved  the  appointment  of  Richard  P.
Kiphart  as the new  Chairman  of the  Board,  Christopher  W.  Capps as the new
President and Chief  Executive  Officer,  and Thomas J. Pernice as Secretary and
Treasurer.  These appointments are effective as of August 28, 2006. There are no
written employment agreements between the Company and such officers/directors.

            Since June, 2002,  Richard P. Kiphart (65) has served as a member of
the Company's Board of Directors.  He currently  serves as Chairman of the Board
of Saflink  (SFLK  Nasdaq) and a member of the Board of  Directors of First Data
Corp.  (FDC-NYSE).  Mr.  Kiphart  is the  Head  of  Corporate  Finance  for  the
Investment  Firm of William Blair & Company,  L.L.C.  Mr.  Kiphart has been with
William Blair for over 36 years.  Mr.  Kiphart  received his B.A. from Dartmouth
College and his M.B.A. from Harvard Business School.

            Since  September  2005,  Christopher  W.  Capps  (24) has  served as
President and CEO of KVG Partners, a private equity firm. Mr. Capps received his
B.A. in History from Southern Methodist University.

            Since April 2001, Thomas J. Pernice (44) has served as the Treasurer
and  Secretary  of the  Company and as a member of the Board of  Directors.  Mr.
Pernice has served as a senior  executive  in  government  and industry for more
than 22 years.  He is Chief  Executive  Officer  and  Founder of Modena  Holding
Corporation  since  1999,  an  innovative  consulting  company  specializing  in
business  development  strategies,  mergers and  acquisitions  and finance,  and
specializing in strategic  communications  and government  relations for private
and public  companies.  Modena has strategic  alliances  with the DCI Group,  an
international  public  relations  firm based in  Washington,  D.C.,  The Abraham
Group, a strategic  consulting  practice founded by former U.S. Energy Secretary
Spencer Abraham also based in Washington, D.C., and also advises Mullin-TBG, the
nation's leading provider of deferred executive  compensation  services.  He has
served  for more than  nine  years as a  Presidential  appointee  in three  U.S.
Presidential Administrations;  first as a White House Staff member in the Reagan
Administration,  a Senior White House staff member in the Bush 41 Administration
and most recently as a Senior Advisor in the Bush 43  Administration to the U.S.
Department  of  Energy.  After  his  public  service  in  the  Reagan  and  Bush
Administrations,  Mr.  Pernice  served for eight years as Vice  President in the
Office of the  Chairman for the  conglomerate  of publicly  and  privately  held
business interests of David H. Murdock.

Page 4 of 7
<PAGE>

            Mr. Pernice earned a Bachelor of Arts degree in Broadcast Journalism
from the University of Southern California in 1984.

FORWARD-LOOKING STATEMENTS

      This Form 8-K and other reports we file with the  Securities  and Exchange
Commission ("SEC") contain  forward-looking  statements relating to, among other
things, the Transaction,  and our future performance,  our business,  and future
events.   All  statements   other  than  statements  of  historical   facts  are
forward-looking  statements,   including,  without  limitation,  any  statements
regarding future performance.  Some of these  forward-looking  statements may be
identified  by the  use  of  words  in  the  statements  such  as  "anticipate,"
"estimate,"  "could" "expect,"  "project,"  "intend," "plan," "believe," "seek,"
"should,"  "may,"  "assume,"  "continue,"  variations  of such words and similar
expressions.  These  statements  are not  guarantees of future  performance  and
involve  certain risks,  uncertainties,  and  assumptions  that are difficult to
predict. We caution you that our performance and results could differ materially
from what is expressed,  implied, or forecast by our forward-looking statements.
Future  operating  results  and the  Company's  stock price may be affected by a
number of factors,  including,  without limitation: (i) availability of capital;
(ii)   opportunities  for  joint  ventures  and  corporate   partnering;   (iii)
opportunities for mergers and acquisitions to acquire  non-biotechnology revenue
generating  businesses,  or to expand the  Company's  biotechnology  base;  (iv)
regulatory  approvals of  preclinical  and  clinical  trials;  (v)  intellectual
property matters  (patents);  and (vi) competition.  Factors that could cause or
contribute to such differences  include, but are not limited to, those discussed
in the  section  entitled  "Item  1.  Business,"  and all  subsections  therein,
including,  without limitation, the subsections entitled,  Technical Background,
Government Regulation, Federal Drug Administration Regulation,  Competition, and
Factors  That May Affect the  Company,  and the  section  entitled  "Market  for
Registrant's Common Stock and Related Stockholder Matters," all contained in the
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
2005. Given these risks and uncertainties,  any or all of these  forward-looking
statements may prove to be incorrect. Therefore, you should not rely on any such
forward-looking statements. Except as required under federal securities laws and
the rules and  regulations  of the SEC, we do not intend to update  publicly any
forward-looking statements to reflect actual results or changes in other factors
affecting such forward-looking statements.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(c)      Exhibits.

Designation                       Description of Exhibit

10.17                             Share Purchase and Debt Restructure Agreement

99.1                              Press Release dated August 29, 2006

Page 5 of 7
<PAGE>

                                   Signatures

      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 hereunto duly authorized.

                                  ADVANCED BIOTHERAPY, INC.
                                  (Registrant)

Date: August 29, 2006             By: /s/Thomas J. Pernice
                                      ------------------------------------------
                                      Thomas J. Pernice, Secretary and Treasurer

Page 6 of 7
<PAGE>

                                INDEX TO EXHIBITS

Exhibit                           Description

10.17                             Share Purchase and Debt Restructure Agreement

99.1                              Press Release dated 08/29/2006

Page 7 of 7
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UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest reported)           August 29, 2006
                                           -------------------------------------

                            Advanced Biotherapy, Inc.
                            -------------------------
             (Exact name of registrant as specified in its chapter)

           Delaware                    0-26323                   51-0402415
      ------------------           ----------------        ---------------------
(State or other jurisdiction of      (Commission                (IRS Employer
        incorporation)               File Number)            Identification No.)

141 West Jackson Boulevard, Suite 2182
Chicago, Illinois                                                60604
-------------------------------                                  -----
(Address of principal executive                                 (Zip Code)
offices)

Registrant's telephone number, including area code   (312) 427-1912
                                                   --------------------

Page 1 of 7
Item 1.01.  Entry Into a Material Definitive Agreement.

      On August 28, 2006,  the  Registrant (or "Company") and Richard P. Kiphart
("Noteholder"),  a director of the Company,  entered  into a Share  Purchase and
Debt Restructure Agreement ("Agreement"). The parties entered into the Agreement
for the purpose,  among  others,  to  restructure  the  Company's  long-term and
short-term  debt into equity and to sell Company  common stock to the Noteholder
for cash to be used for working capital and possible  acquisitions.  The closing
of the transactions ("Transactions") contemplated by the Agreement is subject to
satisfaction of certain  conditions which have not been satisfied as of the date
of this Form 8-K, but are expected to be completed in approximately thirty days.

      The  Company's  subordinated  convertible  debt  due  September  30,  2004
("2000-2004 Convertible Notes") in the approximate aggregate principal amount of
$7,805 as of June 30, 2006, subordinated  convertible pay-in-kind notes due June
1, 2006 ("2002-2006  Convertible Notes") in the approximate  aggregate principal
amount of  $4,740,466  as of June 30, 2006,  and term notes due June 30, 2006 in
the approximate  aggregate  principal  amount of $245,637,  have matured and the
Company  lacks funds to repay those  notes.  The  Company  also has  outstanding
subordinated  convertible  pay-in-kind  notes due September 30, 2007 ("2003-2007
Convertible Notes"), in the approximate aggregate principal amount of $1,095,413
as of June 30, 2006,  subordinated  convertible  pay-in-kind notes due September
30, 2009 ("2005-2009  Convertible Notes") in the approximate aggregate principal
amount of 267,213 as of June 30, 2006, and other  outstanding  promissory  notes
(collectively,  "Demand Notes") in the approximate aggregate principal amount of
$15,746, as of June 30, 2006, respectively.

      A. Sale of  Company  Shares.  Subject to the terms and  conditions  of the
Agreement,  the Company agreed to sell an aggregate of 433,333,333  shares ("New
Shares") of Company common stock,  $0.001 par value,  at $0.015 per share to the
Noteholder,  certain family members of the  Noteholder,  Christopher  Capps (the
Company's new President and Chief Executive Officer) and other prospective board
members,  for the aggregate sum of $6,500,000 ("New  Capital").  The Company has
received  $1.1 million of the New Capital from the  Noteholder as of the date of
this Form 8-K for which the  Noteholder  acquired  73,333.333  shares of Company
common  stock.  The balance of the New Capital  will be paid to the Company upon
the Company filing an amendment to its Certificate of Incorporation  ("Amendment
to  Certificate")  that  increases  the number of  authorized  shares of Company
common stock from  200,000,000  to  2,000,000,000  shares of common stock.  Such
Amendment has been approved by the  Company's  board of directors.  Holders of a
majority  of the  outstanding  common  stock have agreed to vote in favor of the
Amendment.  The Company  expects to file the Amendment to  Certificate  with the
Delaware  Secretary  of State on the 20th day  after the  Company's  Information
Statement has been mailed to its  stockholders  notifying  them about the action
taken by written  consent of the holders of a majority of outstanding  shares of
common  stock to approve the  Amendment to  Certificate,  and the action to file
such  Amendment.  The mailing of the  Information  Statement to  stockholders is
expected to be made on or about September 11th.

      B.  Adjustment of Conversion  Price of  Convertible  Notes and Other Debt.
Pursuant to the Agreement,  the Company agreed to adjust the conversion price of
all outstanding Convertible Notes, including,  without limitation, the 2002-2006
Convertible Notes, the 2003-2007 Convertible Notes and the 2005-2009 Convertible
Notes, and agreed to adjust the conversion price of certain  convertible  Demand
Notes,  and agreed to permit the holders of the Company's  other Demand Notes to
exchange  those notes,  in each case,  for one (1) share of Company common stock
for each $0.015 amount of indebtedness.

      C.  Conversion  of Company  Debt into  Equity.  The  Noteholder  agreed to
convert  all of his  Convertible  Notes and Demand  Notes into  shares of common
stock at the same $0.015 per share  conversion  price.  Subject to the filing of
the Amendment to  Certificate in accordance  with the Agreement,  the Noteholder
will receive  approximately  360,980,730 shares of the Company common stock upon
conversion of his Convertible  Notes and Demand Notes. The other holders ("Other
Holders") of Convertible  Notes,  Demand Notes and certain  indebtedness owed by
the Company have agreed to convert the entire principal amount thereof, together
with accrued interest thereon, into shares of Company common stock, at the price
of $0.015 per share,  all effective as of the closing of the  Transactions.  The
Other Holders will receive  approximately  35,318,000  shares of Company  common
stock upon such conversions.

Page 2 of 7
D. Stockholder Rights Offering. The Noteholder agreed to cause the Company
to commence a stockholder  rights  offering  ("Rights  Offering")  for shares of
Company common stock, to be offered to the Company's stockholders, excluding the
Noteholder,  his affiliates and related parties, at a price of $0.015 per share.
The Rights  Offering will provide that each  stockholder  will have the right to
purchase  up to ten (10) shares of Company  common  stock for each one (1) share
then held by such  stockholder,  at $0.015 per share.  The  Rights  Offering  is
subject to the registration rules and regulations of the Securities and Exchange
Commission and applicable state securities  agencies,  as more  specifically set
forth in the Agreement. It is expected that the Company also will include in its
registration  statement  to be filed with  respect to the  Rights  Offering  the
shares of  Company  common  stock to be issued  to former  officers  to whom the
Company owed accrued salary and certain holders of accounts payable, as provided
in  the  Agreement,  as  well  as  holders  of  shares  entitled  to  piggy-back
registration rights previously granted by the Company.

      E. Fairness  Opinion.  As a condition of the closing of the  Transactions,
the Board of Directors will receive a written opinion from Gemini  Partners,  an
independent investment banking firm, that the total consideration to be received
by the Company in the Transaction  contemplated by the Agreement is fair, from a
financial point of view, to the Company's stockholders.

      F. Special  Committee.  The Agreement  provides for the  appointment  of a
special committee  consisting of three directors whose responsibility will be to
oversee,  monitor and enforce  compliance of the Agreement by the Noteholder and
the Company. The Special Committee,  among other powers, has the right to review
and discuss with  management  compliance  by the Company and the  Noteholder  of
their respective  obligations  under the Agreement;  to investigate,  review and
analyze  any matter  brought to its  attention;  to engage  advisors,  including
attorneys,  accountants and other  consultants to assist in the discharge of the
Committee's responsibilities, including enforcement of the Agreement; to approve
and  execute  any  modification  or  amendment  of the  Agreement,  as it  deems
reasonable or appropriate;  and to take such other actions as it deems necessary
or appropriate in connection with the Agreement.  The Company is responsible for
the fees and expenses of the Special Committee,  including its outside advisors.
The Special Committee will initially be comprised of three members of the Board:
Thomas J. Pernice,  Dr. Joseph Bellanti,  and Keith Gregg. The membership,  term
and  termination of the Special  Committee are described in the  Agreement.  The
Company agrees to indemnify and hold harmless  members of the Special  Committee
against claims by the Noteholder or any stockholder of the Company.

      In the  Agreement,  the  Noteholder  agreed to a release of certain claims
against the Company and its  directors,  officers  and  representatives  arising
prior to the closing of the Transactions.

      G. Restrictive  Period.  In accordance with the Agreement,  the Noteholder
agreed,  for a period of one (1) year from the closing of the Transactions,  not
to approve, or permit the Company to approve, any merger or consolidation of the
Company  unless  the  Company  shall  be  the  surviving  corporation,   or  any
transaction  which enables  Company  stockholders to exercise  appraisal  rights
under Delaware law, or any exchange, reclassification or cancellation of Company
shares of common  stock,  including a reverse  stock  split,  provided  that the
one-year  restrictive  period may be shortened upon approval by the holders of a
majority  of the  outstanding  shares of  Company  common  stock not held by the
Noteholder and his affiliates, or upon approval by the Special Committee.

      H. Stock Options. The Company intends to grant stock options to members of
the Board of  Directors  and members of its  Advisory  Board and  certain  other
contract  personnel  promptly  following  the closing with the grant amounts and
other terms to be mutually approved by the Special Committee and the Noteholder.

Page 3 of 7
Item 3.02. Unregistered Sales of Equity Securities.

            The New Shares are being sold pursuant to the exceptions provided by
Section 4(2) of the Securities Act of 1933, as amended ("Act") and Regulation D,
promulgated  thereunder.  The Noteholder and the other individuals who acquired,
or acquire,  New Shares are or will be each an  "accredited"  investor,  as that
term is defined in Rule 501 in Regulation D of the Act. No general  solicitation
or advertising  was employed by the Company,  or anyone else associated with the
Company in connection with the placement of the New Shares.  No commissions were
paid.  The  certificates  representing  the New  Shares  will  bear  appropriate
restrictive  legends.  All of the shares being  acquired by the  Noteholder  and
Other Holders pursuant to conversion or other exchange are being issued pursuant
to an exemption under the Act and applicable  securities  laws. All certificates
representing  the shares of common  stock to be issued to  Noteholder  and Other
Holders will bear appropriate restrictive legends.

            According to the Noteholder, the Noteholder and the other individual
purchasers  of New Shares used, or will use,  personal  funds to acquire the New
Shares.

      Item 5.01. Changes in Control of Registrant.

            Upon receipt by the Company of the New Capital,  the Noteholder will
acquire from the Company shares of Company common stock  constituting a majority
of the issued and outstanding  shares of Company common stock, which will result
in a change in control with  respect to the stock  ownership of the Company such
that the Noteholder  will hold the majority of the issued and outstanding of the
Company common stock. As a result of his share ownership, the Noteholder will be
able to elect all of the directors  who comprise the Board of  Directors,  which
represents  a change in the  majority  control  of the  Board.  Pursuant  to the
Agreement,  the  Noteholder  will  acquire  approximately  83% of the issued and
outstanding  shares of the Company after taking into account the New Capital and
conversion of all Company  Convertible  Notes,  Demand Notes, and other approved
Company indebtedness into shares of Company common stock.

      Item 5.02.  Departure  of Directors  or  Principal  Officers;  Election of
Directors; Appointment of Principal Officers.

            The Board of  Directors  approved  the  appointment  of  Richard  P.
Kiphart  as the new  Chairman  of the  Board,  Christopher  W.  Capps as the new
President and Chief  Executive  Officer,  and Thomas J. Pernice as Secretary and
Treasurer.  These appointments are effective as of August 28, 2006. There are no
written employment agreements between the Company and such officers/directors.

            Since June, 2002,  Richard P. Kiphart (65) has served as a member of
the Company's Board of Directors.  He currently  serves as Chairman of the Board
of Saflink  (SFLK  Nasdaq) and a member of the Board of  Directors of First Data
Corp.  (FDC-NYSE).  Mr.  Kiphart  is the  Head  of  Corporate  Finance  for  the
Investment  Firm of William Blair & Company,  L.L.C.  Mr.  Kiphart has been with
William Blair for over 36 years.  Mr.  Kiphart  received his B.A. from Dartmouth
College and his M.B.A. from Harvard Business School.

            Since  September  2005,  Christopher  W.  Capps  (24) has  served as
President and CEO of KVG Partners, a private equity firm. Mr. Capps received his
B.A. in History from Southern Methodist University.

            Since April 2001, Thomas J. Pernice (44) has served as the Treasurer
and  Secretary  of the  Company and as a member of the Board of  Directors.  Mr.
Pernice has served as a senior  executive  in  government  and industry for more
than 22 years.  He is Chief  Executive  Officer  and  Founder of Modena  Holding
Corporation  since  1999,  an  innovative  consulting  company  specializing  in
business  development  strategies,  mergers and  acquisitions  and finance,  and
specializing in strategic  communications  and government  relations for private
and public  companies.  Modena has strategic  alliances  with the DCI Group,  an
international  public  relations  firm based in  Washington,  D.C.,  The Abraham
Group, a strategic  consulting  practice founded by former U.S. Energy Secretary
Spencer Abraham also based in Washington, D.C., and also advises Mullin-TBG, the
nation's leading provider of deferred executive  compensation  services.  He has
served  for more than  nine  years as a  Presidential  appointee  in three  U.S.
Presidential Administrations;  first as a White House Staff member in the Reagan
Administration,  a Senior White House staff member in the Bush 41 Administration
and most recently as a Senior Advisor in the Bush 43  Administration to the U.S.
Department  of  Energy.  After  his  public  service  in  the  Reagan  and  Bush
Administrations,  Mr.  Pernice  served for eight years as Vice  President in the
Office of the  Chairman for the  conglomerate  of publicly  and  privately  held
business interests of David H. Murdock.

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Mr. Pernice earned a Bachelor of Arts degree in Broadcast Journalism
from the University of Southern California in 1984.

FORWARD-LOOKING STATEMENTS

      This Form 8-K and other reports we file with the  Securities  and Exchange
Commission ("SEC") contain  forward-looking  statements relating to, among other
things, the Transaction,  and our future performance,  our business,  and future
events.   All  statements   other  than  statements  of  historical   facts  are
forward-looking  statements,   including,  without  limitation,  any  statements
regarding future performance.  Some of these  forward-looking  statements may be
identified  by the  use  of  words  in  the  statements  such  as  "anticipate,"
"estimate,"  "could" "expect,"  "project,"  "intend," "plan," "believe," "seek,"
"should,"  "may,"  "assume,"  "continue,"  variations  of such words and similar
expressions.  These  statements  are not  guarantees of future  performance  and
involve  certain risks,  uncertainties,  and  assumptions  that are difficult to
predict. We caution you that our performance and results could differ materially
from what is expressed,  implied, or forecast by our forward-looking statements.
Future  operating  results  and the  Company's  stock price may be affected by a
number of factors,  including,  without limitation: (i) availability of capital;
(ii)   opportunities  for  joint  ventures  and  corporate   partnering;   (iii)
opportunities for mergers and acquisitions to acquire  non-biotechnology revenue
generating  businesses,  or to expand the  Company's  biotechnology  base;  (iv)
regulatory  approvals of  preclinical  and  clinical  trials;  (v)  intellectual
property matters  (patents);  and (vi) competition.  Factors that could cause or
contribute to such differences  include, but are not limited to, those discussed
in the  section  entitled  "Item  1.  Business,"  and all  subsections  therein,
including,  without limitation, the subsections entitled,  Technical Background,
Government Regulation, Federal Drug Administration Regulation,  Competition, and
Factors  That May Affect the  Company,  and the  section  entitled  "Market  for
Registrant's Common Stock and Related Stockholder Matters," all contained in the
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
2005. Given these risks and uncertainties,  any or all of these  forward-looking
statements may prove to be incorrect. Therefore, you should not rely on any such
forward-looking statements. Except as required under federal securities laws and
the rules and  regulations  of the SEC, we do not intend to update  publicly any
forward-looking statements to reflect actual results or changes in other factors
affecting such forward-looking statements.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(c)      Exhibits.

Designation                       Description of Exhibit

10.17                             Share Purchase and Debt Restructure Agreement

99.1                              Press Release dated August 29, 2006

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Signatures

      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 hereunto duly authorized.

                                  ADVANCED BIOTHERAPY, INC.
                                  (Registrant)

Date: August 29, 2006             By: /s/Thomas J. Pernice
                                      ------------------------------------------
                                      Thomas J. Pernice, Secretary and Treasurer

Page 6 of 7
INDEX TO EXHIBITS

Exhibit                           Description

10.17                             Share Purchase and Debt Restructure Agreement

99.1                              Press Release dated 08/29/2006

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