Stockholders' Equity

3 Months Ended

Oct. 31, 2020

Equity [Abstract]

Stockholders' Equity

Note 9 - Stockholders’ Equity

Common Stock

Stock compensation expense

During the three months ended October 31, 2020, the Company recognized $1,210,859 of expense related to the vesting of stock options. In October 2020, the Company issued 51,130 shares of common stock to vendors for services valued at $0.215 per share, or $10,993.

Sale of common stock 

On November 25, 2019, the Company entered an Equity Purchase Agreement with Oasis Capital, LLC (“Oasis”) to purchase up to $40,000,000 of the Company’s stock at 92% of the market price for the period of five (5) consecutive trading days immediately subject to a put notice on such date on which the Purchase Price is calculated in accordance with the terms and conditions of the agreement (subject to certain limitations) from time to time over a 36-month period. During September 2020 and October 2020, Oasis purchased 2,100,000 shares of common stock in three tranches for an aggregate price of $356,710.

Issuance of common stock in a PIPE deal, net of fees and exercise of warrants

On August 4, 2020, the Company and three institutional accredited investors (each a “Buyer” and, collectively, the “Buyers”) entered into a securities purchase agreement pursuant to which the Company sold and issued to the Buyers an aggregate of 5,102,040 shares of the Company’s common stock, par value $0.001 per share, and received net proceeds of $1,850,000 after deducting commissions and attorney’s fees of $150,000.

Pursuant to the Securities Purchase Agreement, the Company issued to the Buyers (i) Series A Warrants to purchase 5,102,040 shares of Common Stock in the aggregate (the “Series A Warrants”) with an initial exercise price equal to $0.392 per share (the “Series A/B Exercise Price”), (ii) Series B Warrants to purchase 15,306,122 shares of Common Stock in the aggregate (the “Series B Warrants”) with an initial exercise price equal to the Series A/B Exercise Price; (iii) Series C Warrants to purchase the number of shares of Common Stock equal to Maximum Eligibility Number (as defined therein) (the “Series C Warrants”) at an initial exercise price equal to $0.539 per share; and (iv) Series D Warrants to purchase the number of shares Common Stock equal to the Maximum Eligibility Number (as defined therein) (the “Series D Warrants” and together with the Series A Warrants, the Series B Warrants and the Series C Warrants, the “Warrants” and the Warrants together with the Common Shares and the shares of Common Stock underlying the Warrants, the “Securities”) at an exercise price equal to $0.001 per share, in each case, subject to adjustment and beneficial ownership limitations set forth therein. Subject to the satisfaction or waiver of certain conditions set forth in the Series A Warrants, the Company may force the Buyers to exercise the Series A Warrants in full on the twenty second (22nd) trading day (the “Forced Exercise Date”) after the effectiveness of the Company’s registration statement that registers all of the Common Shares and shares underlying the Warrants. The exercise price set forth in each of the Series A Warrants, the Series B Warrants and Series C Warrants is subject to adjustment on certain trigger dates as provided in each such Warrant. The holders of the Series A Warrants, Series B Warrants and Series C Warrants shall be allowed a cashless exercise if a registration statement registering the Securities is not effective within 180 days following the issuance of such Warrants. On certain interim reset dates (“Interim Reset Date(s)” and second trigger dates (“Second Trigger Date(s)”) as set forth in the Series D Warrants, the Series D Warrants will become exercisable into a number of shares of Common Stock that would have been issued on the issuance date and upon exercise of the Series A Warrants and Series B Warrants had the purchase price per share and exercise price of the Series A Warrants and Series B Warrants been equal to the applicable reset price as set forth in the Series D Warrant; or the right to use the applicable exercise price, or adjustment right (as the case may be) calculated using the Black-Scholes Option Pricing Model pursuant to the Securities Purchase Agreement. The Buyers have the potential right to have these Warrants settled in cash equal to the Black Scholes value of any remaining unexercised warrant. 

As a result, of an Interim Reset Date on September 28, 2020, and Second Trigger Date on October 12, 2020, the additional warrants were issued and the exercise price adjusted as follows: (i) 5,112,463 additional Series A Warrants were issued to purchase 10,214,503 in the aggregate shares of Common Stock with a “reset” exercise price equal to $0.1958 per share (the “Series A/B Reset Exercise Price”), (ii) 15,337,389 additional Series B Warrants to purchase 30,643,509 shares of Common Stock in the aggregate with a reset exercise price equal to the Series A/B Exercise Price; (iii) 9,142,973 additional Series C Warrants to purchase the number of shares of Common Stock to purchase 19,347,053 shares of Common Stock in the aggregate at a reset exercise price equal to $0.28149 per share; and (iv) the Buyers exercised 9,142,973 Series D Warrants and purchased 9,142,973 shares of Common Stock at $0.001 per share (See Note 12 – Warrants).

Deemed dividend related to issuance of warrants containing derivative liabilities

As a result of the excess warrant liability recorded relative to the total proceeds received in connection with the Securities Purchase Agreement (see Note 8), this led to a full discount ascribed to the common stock. Accordingly, the Company then immediately recorded a deemed dividend of $1,850,000 to accrete the common stock to the value received in this transaction by increasing Additional Paid-in Capital and reducing accumulated deficit by $1,850,000. As a result of the excess warrant liability for the warrants granted relative to total proceeds received in connection with pursuant to the Securities Purchase Agreement (see Note 8) it was determined to be immediately beneficial upon initial closing date and, as a result, the Company recorded a deemed dividend of $1,850,000 increasing Additional Paid-in Capital and reducing the Accumulated Deficit by $1,850,000.

Issuance of common stock payable

During the three months ended October 31, 2020 and 2019, 3,529,415 and 296,793 shares of common stock payable were issued to settle outstanding obligations, valued at $1,472,826 and $921,895, respectively. As of October 31, 2020 and July 31, 2020, the value of the remaining shares to be issued was $8,483,393 and $10,079,449, respectively.

	Common Stock Payable
Balance as of July 31, 2020	$	10,079,449
Issuance of common stock payable		(1,472,826	)
Change in fair value of common stock payable		(123,230	)
Balance as of October 31, 2020	$	8,483,393

Conversion of debt to equity

During the three months ended October 31, 2020 and 2019, the Company issued 5,860,255 and 1,164,190 shares of common stock for the conversion of $1,127,842 and $1,736,837 of debt, respectively. As a result of the debt conversions during the three months ended October 31, 2020 and 2019, $538,084 and $1,911,487 of derivative liabilities were reduced, respectively.

Issuance of common stock for acquisitions

In August 2019, the Company issued 400,000 and 560,000 shares of common stock valued at $2.50 per share for the acquisition of MediSource and Pantheon, respectively.

Cancellation of shares

On September 12, 2019, 20,375,900 outstanding shares of common stock were cancelled by the Company held by Joe Moscato TTEE Friends of Generex Biotechnology Investment Trust U/A/D 4/2/2019, a trust formed for the benefit the Company and any 80% controlled subsidiary of the Company by several shareholders contributing in the aggregate 33,175,900 shares of the Company’s Common Stock and 8,293,975 shares of  NGIO commons shares (the “Friends of Generex Trust”), similar to the Stock Control Agreement previously entered into by the same shareholders on December 1, 2018 filed in an 8-K filed on December 3, 2019, incorporated herein by reference.

Non-controlling Interest

Regentys

Pursuant to the Company’s acquisition of Regentys on January 7, 2019 to acquire a 51% interest, the Company was issued 12,048,161 shares of Regentys common stock. As of January 31, 2020, Regentys had a total of 18,623,278 shares of common stock and 2,793,192 Series A voting preferred stock for a total of 21,416,470 total voting shares outstanding. As such, there are 9,368,309 of shares that belong to non-controlling interest shareholders which represents a 43.74% non-controlling interest. 

Olaregen

Pursuant to the Company’s acquisition of Olaregen on January 7, 2019 to acquire a 51% interest, the Company was issued 3,282,632 shares of Olaregen common stock from Olaregen shareholders. In May 2019, the Company issued 4,000,000 shares of common stock contributed and provided by the Friends of Generex Trust and a $2 million note payable for the acquisition of 592,683 shares of Series A Preferred Stock of Olaregen pursuant to a Stock Purchase Agreement entered into January 14, 2019 subject to the approval of the Board of Directors of Olaregen and consummated on May 10, 2019. The provided shares by the Friends of Generex Trust were already issued and outstanding and did not result in any expense of the Company. Since these shares were transferred, to the shareholders of Olaregen, by an existing shareholder to settle an obligation of the Company, the value of the shares provided by the Friends of the Generex Trust to settle the debt was reflected in the financial statements as an addition to contributed (paid-in) capital.

On February 14, 2020, the remaining stockholders of Olaregen exchanged all of its outstanding shares for 5,950,000 shares of Generex common stock and 2,765,000 shares of NGIO. After this transaction Olaregen became a 100% owned subsidiary.

Veneto

On November 1, 2018, the Company completed its second closing of Veneto Holdings, L.L.C. (“Veneto”) which granted the Company Rapport Services, LLC (“Rapport”) through the ownership of the units of Class B membership interests providing control of Rapport as only the Class B Member is entitled to elect the nominees to the Board of Managers, which constitute a one percent (1%) ownership in Rapport. The remaining interests represent a 99% non-controlling interest. 

NuGenerex Immuno-Oncology, Inc.

On July 14, 2020, NGIO entered into a purchase agreement with an investor Oasis Capital, LLC (“Oasis”) pursuant to which Oasis has agreed to purchase from the Company up to $50,000,000 of common stock at 92% of the market price for the period of five (5) consecutive trading days immediately subject to a put notice on such date on which the purchase price is calculated in accordance with the terms and conditions of the agreement (subject to certain limitations) from time to time over a 36-month period. NGIO also issued to Oasis 300,000 shares of its common stock under the Oasis Capital Agreement as a commitment fee in connection with a registration statement. This transfer has been accounted through common stock and additional paid in capital which has no net effect on equity.

As of October 31, 2020, 400,300,000 shares of NGIO are issued and outstanding of which 36,296,849 shares belong to non-controlling interest shareholders which represents a 9.07% non-controlling interest.