Income Taxes

12 Months Ended

Jul. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Note 5 - Income Taxes:

The Company has incurred losses since inception, which have generated net operating loss (“NOL”) carryforwards. The NOL carryforwards arise from both United States and Canadian sources. Pre-tax (losses) arising from domestic operations (United States) were $(1,374,725) and $(677,616) for the years ended July 31, 2016 and 2015, respectively. Pre-tax (losses) arising from foreign operations (Canada) were $(504,101) and $(1,515,741) for the years ended July 31, 2016 and 2015, respectively. As of July 31, 2016, the Company has NOL carryforwards in Generex Biotechnology Corporation of approximately $201 million, which expire in 2018 through 2036, in Generex Pharmaceuticals Inc. of approximately $32 million, which expire in 2017 through 2036, and in Antigen Express, Inc. of approximately $29 million, which expire in 2026 through 2036. These loss carryforwards are subject to limitation due to the acquisition of Antigen and may be limited in future years due to certain structural ownership changes which have occurred over the last several years related to the Company’s equity and convertible debenture financing transactions.

For the years ended July 31, 2016 and 2015, the Company’s effective tax rate differs from the federal statutory rate principally due to net operating losses and other temporary differences for which no benefit was recorded.

Deferred income taxes consist of the following:

	July 31,
	2016			2015
Net operating loss carryforwards	$	86,895,338		$	86,370,251
Other temporary differences		150,004			338,000
Intangible assets		—			108,022
Total Deferred Tax Assets		87,045,342			86,816,273
Valuation Allowance		(86,678,987	)		(86,816,273	)
Deferred Tax Liabilities
Intangible assets		(366,355	)		—
Other temporary differences		—			—
Total Deferred Tax Liabilities		—			—
Net Deferred Income Taxes	$	—		$	—

A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the years ended July 31, 2016 and 2015 is as follows:

	July 31,
	2016			2015
Federal statutory rate		(34.0	)%		(34.0	)%
Increase (decrease) in income taxes resulting from:
Imputed interest income on intercompany receivables from foreign subsidiaries		4			4
Non-deductible or non-taxable items		(3	)		(24	)
Other temporary differences		26			170
Change in valuation allowance		7			(116	)
Effective tax rate		—	%		—	%

As of July 31, 2016, the Company had no tax benefits which have not been fully allowed for, and no adjustment to its financial position, results of operations or cash flows was required. The Company does not expect that unrecognized tax benefits will increase within the next twelve months. The Company records interest and penalties related to tax matters within other expense on the accompanying consolidated statement of operations. These amounts are not material to the consolidated financial statements for the periods presented. Generally, tax years 2013 to 2016 remain open to examination by the Internal Revenue Agency or other tax jurisdictions to which the Company is subject. The Company’s Canadian tax returns are subject to examination by federal and provincial taxing authorities in Canada. Generally, tax years 2008 to 2016 remain open to examination by the Canada Revenue Agency or other tax jurisdictions to which the Company is subject.