Income Taxes

12 Months Ended

Jul. 31, 2018

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 gain or (loss) arising from domestic operations (United States) were $35,948,698 and $(76,823,599) for the years ended July 31, 2018 and 2017, respectively. Pre-tax (losses) arising from foreign operations (Canada) were $(150,394) and $(869,116) for the years ended July 31, 2018 and 2017, respectively. As of July 31, 2018, the Company has NOL carryforwards in Generex Biotechnology Corporation of approximately $199 million, which expire in 2019 through 2037, in Generex Pharmaceuticals Inc. of approximately $35.4 million, which expire in 2024 through 2038, and in Antigen Express, Inc. of approximately $36.7 million, which expire in 2019 through 2038. 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, 2018 and 2017, 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,
	2018			2017
Net operating loss carryforwards	$	59,296,530		$	88,428,273
Other temporary differences		(102,273	)		4,132,264
Intangible assets		2,518,572			—
Total Deferred Tax Assets		61,712,829	)		92,560,537
Valuation Allowance		(61,712,829	)		(92,560,537	)
Deferred Tax Liabilities
Intangible assets		(—)			(—)
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, 2018 and 2017 is as follows: 

	July 31,
	2018			2017
Federal statutory rate		(26.5	)%		(34.0	)%
Increase (decrease) in income taxes resulting from:
Imputed interest income on intercompany receivables from foreign subsidiaries		—			—
Non-deductible or non-taxable items		28.5			27
Other temporary differences		.9			(1	)
Tax rate change		(88.7	)		—
Change in valuation allowance		85.8			8
Effective tax rate		—	%		—	%

As of July 31, 2018, 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 years presented. Generally, tax years 2015 to 2018 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 2010 to 2018 remain open to examination by the Canada Revenue Agency or other tax jurisdictions to which the Company is subject.