Goodwill and Intangible Assets

6 Months Ended

Jan. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 11 – Goodwill and Intangible Assets 

Goodwill and Intangible Assets

The change in the carrying amount of goodwill and other intangible assets for the year ended July 31, 2018 and six-month period ended January 31, 2019, is as follows:

	Total			Goodwill		Other Intangibles, net
Balance as of July 31, 2018	$	3,187,757		$	—	$	3,187,757
Acquisition of Veneto - "First Closing"		8,919,585			8,883,982		35,603
Acquisition of Veneto - "Second Closing"		23,403,948			16,293.948		7,110,000
Purchase of intangible assets		26,488			—		26,488
Acquisition of Regentys		16,996,438			13,485,758		3,510,680
Acquisition of Olaregen		12,797,737			8,027,737		4,770,000
Close of Grainland Pharmacy		(88,311	)		—		(88,311	)
Amortization of Veneto developed software/technology		(39,000	)		—		(39,000	)
Amortization of Veneto referral base		(65,333	)		—		(65,333	)
Amortization of Veneto non-compete agreement		(200,833	)		—		(200,833	)
Amortization of Olaregen non-compete agreement		(17,315	)		—		(17,315	)
Balance as of January 31, 2019	$	64,921,161		$	46,691,425	$	18,229,736

Intangible assets are generally amortized on a straight-line basis over the useful lives of the assets. The Company is currently not amortizing the in-process research and development until it becomes commercially viable and placed in service. At the time when the intangible assets are placed in service the Company will determine a useful life. As noted in Note 10, the non-compete agreement acquired in conjunction with the Olaregen acquisition is currently being amortized over a 3 year useful life.

Goodwill represents the excess of the purchase price over the fair market value of net assets acquired. Goodwill for HDS was $13.4 million as of the date of the acquisition. When the acquisition transaction closed in January 2017, HDS was a development-stage entity and its liabilities exceeded the aggregate value of its assets. Utilizing discounted cash flow (DCF) valuation methodology, Generex determined that HDS has forecasted losses throughout the reasonably foreseeable future with a nominal terminal value. In addition, there was a high degree of uncertainty as to the future cash flows of HDS. Therefore, the Company concluded that the implied goodwill arising out of the acquisition was zero and should be properly characterized as fully impaired as of July 31, 2018.