Income Taxes

9 Months Ended

Apr. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 15 – 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 loss arising from domestic operations (United States) were ($26,903,655) and ($34,291,142) for the nine months ended April 30, 2021 and the year ended July 31, 2020, respectively. Pre-tax (loss)/income arising from foreign operations (Canada) were ($6,708) and $59,049 for the nine months ended April 30, 2021 and the year ended July 31, 2020, respectively.

As of April 30, 2021, the Company has NOL carryforwards in Generex Biotechnology Corporation of approximately $230.4 million, of which $189.4 million will expire in 2021 through 2038, and $41.0 million will not expire. Generex Pharmaceuticals Inc. has NOL carryforwards of approximately $34.4 million, which expire in 2026 through 2041. NGIO has NOL carryforwards of approximately $35.7 which will expire in 2021 through 2038. Regentys Corporation has NOL carryforwards of approximately $6.8 million, of which $5.0 million will expire in 2033 through 2038 and $1.8 million will not expire. Olaregen Therapeutics, Inc. has NOL carryforwards of $4.8 million which will not expire. Veneto has NOL carryforwards of $11.4 million which will not expire. Some of these loss carryforwards are subject to limitation due to the acquisition of Regentys, Olaregen and NGIO 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.

As of April 30, 2021, 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 has deferred tax assets of $78 million with a full allowance equal to the to the amount of the deferred tax asset. 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 2017 to 2020 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 2012 to 2020 remain open to examination by the Canada Revenue Agency or other tax jurisdictions to which the Company is subject.

On March 27, 2020, the CARES Act was enacted and signed into law in the U.S. in response to the COVID-19 pandemic. One of the provisions of this law is the temporary suspension of the 80% limitation on the utilization of net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021. Additionally, the CARES Act allows The Company to carryback net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021 to the five previous periods if the company has taxable income in the carryback years. Neither of these modifications are expected to apply to the Company due to the sustained history of losses.