Goodwill and Intangible Assets

9 Months Ended

Apr. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 12 – 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 nine-month period ended April 30, 2019, is as follows:

	Total			Goodwill		Other Intangibles, net
Balance as of July 31, 2018	$	3,187,757		$	—	$	3,187,757
Acquisition of Veneto (revaluation)		15,898,371			13,585,769		2,312,602
Purchase of intangible assets		26,488			—		26,488
Disposal of intangible assets		(62,091	)		—		(62,091	)
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		(39,700	)		—		(39,700	)
Amortization of Veneto referral base (initial valuation)		(333	)		—		(333	)
Amortization of Veneto non-compete agreement (initial valuation)		(311,667	)		—		(311,667	)
Amortization of Olaregen non-compete agreement		(81,525	)		—		(81,525	)
Balance as of April 30, 2019	$	48,323,164		$	35,099,264	$	13,223,900

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.

Goodwill represents the excess of the purchase price over the fair market value of net assets acquired. Goodwill for NGDx was $13.4 million as of the date of the acquisition. When the acquisition transaction closed in January 2017, NGDx 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 NGDx 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 NGDx. 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.

Goodwill for Veneto was $8,883,982 during first closing and $16,293,948 during the second closing for total goodwill of $25,177,930 pertaining to the acquisition. Based on the Amended Agreement (the “Amendment”) entered into on March 28, 2019 which stipulated that in lieu any cash payments, the Company would deliver shares of the Company’s common stock (the “Generex Shares”), the goodwill was revalued. Refer to Note 9 for additional details of the Amendment. Based on the updated analysis valuation, Veneto goodwill was deemed to have been $13,538,629 as of April 30, 2019.