10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-38193

OPIANT PHARMACEUTICALS, INC.

(Exact name of Registrant as specified in its charter) 

Delaware	46-4744124
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
201 Santa Monica Blvd., Suite 500,Santa Monica, CA	90401
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(310)-598-5410

Securities registered pursuant to Section 12(b) of the Act:

Title of each className of exchange on which registered

Common Stock, par value $0.001 per share                     Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ¨    No  þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ¨   No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ   No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232. 405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  þ   No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained herein, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer  ¨
Non-accelerated filer  ¨	Smaller reporting company  þ
	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ¨    No  þ

As of June 30, 2018, the aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, computed by reference to the closing price of the shares of common stock on the NASDAQ Capital Market was approximately $39,182,880.

As of March 15, 2019, the registrant had 3,925,361 shares of common stock issued and outstanding.  

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	14
Item 1B.	Unresolved Staff Comments.	32
Item 2.	Properties.	33
Item 3.	Legal Proceedings	34
Item 4.	Mine Safety Disclosures.	36
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	37
Item 6.	Selected Financial Data.	40
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	41
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 8.	Financial Statements and Supplementary Data.	57
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	89
Item 9A.	Controls and Procedures.	90
Item 9B.	Other Information.	91
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	92
Item 11.	Executive Compensation.	92
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	92
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	92
Item 14.	Principal Accounting Fees and Services.	92
PART IV
Item 15.	Exhibits, Financial Statement Schedules.	93
Item 16.	Form 10-K Summary	101
SIGNATURES

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue”, negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning: possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results; and any other statements that are not historical facts.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

For discussion of factors that we believe could cause our actual results to differ materially from expected and historical results see “Item 1A — Risk Factors” below.

ii

PART I

Item 1. Business. 

Change in Fiscal Year

On December 8, 2017, the Board of Directors of Opiant Pharmaceuticals, Inc. (“we”, “our” or the “Company”), acting pursuant to Section 5.1 of the Company’s Bylaws, approved a resolution changing the Company’s fiscal year end from July 31 to December 31. We made this change to align our fiscal year end with other companies within our industry. Certain information contained in this section will align with the Company's financial statement reporting for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017.

Our Company

We are a specialty pharmaceutical company developing medicines for addictions and drug overdose. We were incorporated in the State of Nevada in June 2005 as Madrona Ventures, Inc. and, in September 2009, we changed our name to Lightlake Therapeutics Inc. In January 2016, we again changed our name to Opiant Pharmaceuticals, Inc.

On October 2, 2017, we changed our state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan of Merger, dated October 2, 2017 whereby we merged with and into our recently formed, wholly-owned Delaware subsidiary, Opiant Pharmaceuticals, Inc. Pursuant to the Agreement and Plan of Merger, (i) we merged with and into our Delaware subsidiary, (ii) our separate corporate existence in Nevada ceased to exist, (iii) our Delaware subsidiary became the surviving corporation, (iv) each share of our common stock, $0.001 par value per share (the “Common Stock”), outstanding immediately prior to the effective time was converted into one fully-paid and non-assessable share of common stock of Opiant Pharmaceuticals, Inc., a Delaware corporation, $0.001 par value per share, and (v) the certificate of incorporation and bylaws of our Delaware subsidiary were adopted as our certificate of incorporation and bylaws at the effective time of the merger. The merger and the Agreement and Plan of Merger were approved by our Board of Directors (the “Board”) and stockholders representing a majority of outstanding Common Stock.

We developed NARCAN® (naloxone hydrochloride) Nasal Spray (“NARCAN®”), a treatment to reverse opioid overdose. This product was conceived and developed by us, licensed to Adapt Pharma Operations Limited (“Adapt”), an Ireland based pharmaceutical company in December 2014 and approved by the U.S. Food and Drug Administration (“FDA”) in November 2015. It was originally marketed by Adapt. In October 2018, Emergent BioSolutions, Inc. ("EBS") completed its acquisition of Adapt.

Our current pipeline includes medicines in development for Opioid Overdose Reversal (“OOR”), Alcohol Use Disorder (“AUD”), Opioid Use Disorder (“OUD”), and Acute Cannabinoid Overdose (“ACO”). We are also pursuing other treatment opportunities within the addiction and drug overdose field.

We have not had a bankruptcy, receivership or similar proceeding. We are required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the clinical testing and manufacturing and sale of pharmaceutical products.

Principal Products or Services and Markets

Opioid Overdose Reversal

Naloxone is a medicine that can reverse opioid overdose and until November 2015, was only approved by the FDA as an injection. Administered as a nasal spray, naloxone can be used more widely to prevent opioid overdose deaths.

In December 2014, we entered into a license agreement with Adapt (the “Adapt Agreement”). The Adapt Agreement has no set duration but may be terminated, among other ways, by Adapt/EBS in its sole discretion, either in its entirety or in respect of one or more countries, at any time by providing 60 days prior notice to us. Pursuant to the Adapt Agreement, Adapt received our global license to develop and commercialize our intranasal naloxone Opioid Overdose Reversal Treatment Product. In exchange for licensing our treatment to Adapt/EBS, we could receive total potential regulatory and sales milestone payments of more than $55 million, plus up to double-digit percentage royalties on net sales. In February 2015, Adapt received “Fast Track” designation by the FDA and in July 2015, Adapt submitted a NDA to the FDA for NARCAN®. In November 2015, NARCAN® was approved by the FDA for the emergency treatment of a known or suspected opioid overdose. In May 2016, Adapt submitted a new drug submission ("NDS") for NARCAN® to Health Canada. In October 2016, Health Canada approved Adapt’s naloxone hydrochloride nasal spray to treat opioid overdose, to be marketed as NARCAN®.

1

In December 2015, we received a $2 million milestone payment from Adapt. This milestone payment was triggered by the FDA approval of NARCAN®. In March 2016, we announced the receipt of a $2.5 million milestone payment from Adapt. This milestone payment was triggered by the first commercial sale of NARCAN® in the U.S. In April 2016, August 2016 and November 2016, we received $105,097, $234,498 and $524,142 in royalty payments due from Adapt from commercial sales of NARCAN in the U.S during the first quarter, second quarter and third quarter, respectively, of Adapt’s fiscal year.

In October 2016, one of our patents for NARCAN® became listed in the FDA publication, Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book, patent number 9468747, which patent expires on March 16, 2035.

On December 13, 2016 (the “SWK Closing Date”), we entered into a Purchase and Sale Agreement (the “SWK Purchase Agreement”) with SWK Funding LLC (“SWK”) pursuant to which we sold, and SWK purchased, our right to receive, commencing on October 1, 2016, all Royalties (as defined in the SWK Purchase Agreement) arising from the sale by Adapt, pursuant to the Adapt Agreement, of NARCAN® or any other product, up to (i) $20,625,000 and then the Residual Royalty thereafter or (ii) $26,250,000 (the "Capped Royalty Amount"), if Adapt has received in excess of $25,000,000 of cumulative Net Sales (as defined in the SWK Purchase Agreement) for any two consecutive fiscal quarters during the period from October 1, 2016 through September 30, 2017 from the sale of NARCAN® (the “Earn Out Milestone”), and then the Residual Royalty thereafter. The Residual Royalty is defined in the SWK Purchase Agreement as follows: (i) if the Earn Out Milestone is paid, then SWK shall receive 10% of all Royalties; provided, however, if no generic version of NARCAN®N is commercialized prior to the sixth anniversary of the SWK Closing Date, then SWK shall receive 5% of all Royalties after such date, and (ii) if the Earn Out Milestone is not paid, then SWK shall receive 7.86% of all Royalties; provided, however, that if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the SWK Closing Date, then SWK shall receive 3.93% of all Royalties after such date. Under the SWK Purchase Agreement, we received an upfront purchase price of $13,750,000 less $40,000 of legal fees on the SWK Closing Date, and received an additional $3,750,000 from SWK on August 10, 2017 when the Earn Out Milestone was achieved (the “Purchase Price”).

As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Purchase Agreement had been met. Consequently, the Company recognized 90% of the milestone payments and royalties earned during the five months ended December 31, 2017, after the Capped Royalty Amount was met, amounting to $11,696,676.

In addition, on December 13, 2016, in connection with the SWK Purchase Agreement, we entered into Amendment No. 1 to the Adapt Agreement (the “Adapt Amendment”) which amends the terms of the Adapt Agreement relating to the grant of a commercial sublicense outside of the U.S and diligence efforts for commercialization of our intranasal naloxone opioid overdose reversal treatment (“OORT”). Under the terms of the Adapt Amendment, Adapt/EBS is required to use commercially reasonable efforts to commercialize OORT in the United States In the event that Adapt/EBS wishes to grant a commercial sublicense to a third party in the European Union or the United Kingdom, we have agreed to negotiate an additional amendment to the Adapt Agreement to include reduced financial terms with respect to the commercial sublicense in such territory. Under such terms, we would receive an escalating double-digit percentage of all net revenue received by Adapt/EBS from a commercial sublicensee in the European Union or the United Kingdom. Net revenue received by Adapt/EBS from a commercial sublicensee in European Union or the United Kingdom would be included in determining sales-based milestones due to us.

In January 2017, the FDA approved the 2mg formulation of NARCAN® for opioid-dependent patients expected to be at risk for severe opioid withdrawal in situations where there is a low risk for accidental or intentional opioid exposure by household contacts.

In March 2017, the U.S. Patent and Trademark Office (“USPTO”) issued U.S. Patent Numbers 9,480,644 and 9,561,177 covering methods of use for NARCAN®. In December 2018, the USPTO issued U.S. Patent, No. 10,085,937, covering methods of use for the four-milligram formulation of NARCAN® for the treatment of opioid overdose. These patents are listed in the FDA publication, Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book, and expire on March 16, 2035.

OPNT003 - Intranasal Nalmefene for OOR

On February 12, 2018, we announced positive data from a Phase 1 clinical study of our product candidate OPNT003 (intranasal nalmefene) and provided an update at a meeting held on February 8, 2018 with the FDA regarding our planned development program. OPNT003 is in development as a potent long-acting opioid antagonist for the treatment of opioid overdose. Based on feedback from the FDA in connection with this meeting, we intend to pursue a 505(b)(2) development path, with the potential to submit a NDA for the drug and intranasal delivery device combination in 2020. Nalmefene for

2

injection was previously approved by the FDA for treating suspected or confirmed opioid overdose. The 505(b)(2) pathway allows companies to rely in part on the FDA’s findings of safety and efficacy for a previously approved product and to supplement these findings with a more limited set of their own studies to satisfy FDA requirements, as opposed to conducting the full array of preclinical and clinical studies that would typically be required.

Data generated in a Phase 1 study completed under a clinical trial agreement with the National Institute on Drug Abuse (“NIDA”) provided the basis for the FDA meeting. These preliminary data demonstrate that our intranasal nalmefene formulation containing a proprietary absorption enhancer (Intravail®, from Aegis Therapeutics) resulted in rapid increases in plasma levels with an onset faster than an intramuscular injection and a comparatively long half-life (6.7-7.8 hours). Naloxone, the only FDA medication currently approved to treat opioid overdose, has a half-life of approximately 2 hours.

We have full commercial rights to OPNT003 and we were awarded a grant of approximately $7.4 million from the National Institutes of Health (“NIH”). The grant provides us with additional resources for the ongoing development of OPNT003. The grant includes approximately $2.6 million to be funded for the period ending March 31, 2019, with the balance to be funded over the subsequent two years, subject to available funds and satisfactory progress on the development of OPNT003. We have also received a contract for approximately $4.6 million from the Biological Advance Research and Development Agency (“BARDA”) to fund development of this project through NDA submission. The Contract will provide approximately$611,000 for the project through September 30, 2019, with the balance to be funded over the following two years, subject to satisfactory project progress, availability of funds and certain other conditions. In 2017, NIH leadership called for the development of a stronger, longer-acting formulations of antagonists to counteract the very high potency synthetic opioids that are now claiming thousands of lives each year.

Synthetic opioids, such as fentanyl, are now responsible for more overdose deaths than either heroin or prescription opioids, with over 28,000 fatalities linked to synthetic opioids in 2017. Fentanyl and derivatives, such as carfentanil, are especially dangerous because of a long half-life of seven to ten hours that may require continuous monitoring of overdose victims and repeated dosing with naloxone to initially resuscitate a patient and to prevent relapse. A long-acting opioid overdose reversal drug may reduce this burden.

An easy-to-use nasal formulation of nalmefene with a rapid onset and long duration of action would be suitable for non-medically trained persons to administer. If approved by the FDA, OPNT003 may also be especially useful in rural areas, where a rapidly growing number of overdoses are occurring, and where access to emergency medical response may be delayed by hours. In addition, since high potency synthetic opioids, such as fentanyl, can be weaponized, OPNT003 may also be suitable as an antidote in a civilian mass casualty event.

OPNT001 - Intranasal Naloxone for Eating Disorders

Bulimia Nervosa ("BN") is a serious and potentially life-threatening eating disorder mainly affecting females.  BN is characterized by binge eating immediately followed by purging and other compensatory behaviors.  Patients are at greater risk of other psychiatric disorders including depression, anxiety and substance abuse. Company analysis estimates that there are 1 million patients with BN, yet fluoxetine is currently the only FDA approved medication to treat BN.  However, the remission rate with fluoxetine, both alone and combination with psychotherapy, ranges only between 19-41%.

The compulsive bingeing characteristic of BN has features in common with other addictive disorders, providing the basis for using opioid antagonists to mitigate their frequency.

In 2017 we initiated a Phase 2 clinical trial to evaluate OPNT001, nasal naloxone, as a potential treatment for BN. The Phase 2 randomized, double-blind, placebo-controlled study evaluated the safety and tolerability of OPNT001, as well as its impact on various clinical outcomes, including changes in eating behavior. The primary endpoint of the study is a reduction in binge eating days. The study includes a total of 86 patients across 19 clinical sites in the United Kingdom. Patient enrollment was completed on September 4, 2018.

On November 2, 2018, we announced the last patient, last visit was complete and we therefore expect to report results from this trial in the first quarter of 2019. See Note 17, Subsequent Events for discussion on results of the trial reported in February of 2019.

We have, in the past, and continue to review possible treatments for Binge Eating Disorder (“BED”). BED is the most common eating disorder in the U.S. Approximately 8 million Americans are diagnosed with BED and it is associated with obesity, yet Vyvanse (lisdexamfetamine dimesylate) is the only FDA approved pharmacotherapy. We consider OPNT001 to be a potentially

3

suitable medicine for BED. It has a well-known safety profile and has the potential to block the reward that patients experience from bingeing.

OPNT002 - Nasal Naltrexone for Alcohol Use Disorder ("AUD")

We are developing OPNT002, nasal naltrexone for AUD. Alcohol triggers the release of naturally occurring endorphins, which then bind to the opioid receptors in the brain, leading to dopamine release in the brain's reward center.  Opioid antagonists are anticipated to reduce heavy drinking because they block these opioid receptors, which results in dampening of alcohol-induced dopamine release and reward. Naltrexone is currently approved by the FDA for the treatment of AUD as a tablet and depot injection. However, in contrast to current naltrexone formulations OPNT002 will be taken nasally on an "as needed" basis, in anticipation of drinking or once drinking has started in order to reduce alcohol intake.  We anticipate that taking our product on an as-needed basis could improve patient compliance and enable a patient to regain control of their drinking, especially in situations where heavy drinking is otherwise habitual. Furthermore, we expect patients to have high rates of adherence, because they will not be required to abstain and potentially go through detoxification and withdrawal prior to initiating OPNT002 therapy, unlike the typical situation with existing medicines for AUD.

We have generated encouraging Phase 1 clinical data demonstrating rapid intranasal absorption of OPNT002, which confirms its suitability for use on an as needed basis. High levels of naltrexone can be delivered within minutes, which is very important during a period of craving.  The Company has also received feedback from the FDA on the proposed 505(b)(2) development plan, which accepts a harm reduction-based primary endpoint rather than a primary endpoint based on abstinence.

There are approximately 16.3 million people in the U.S. who suffer from some form of AUD. According to the National Institute on Alcohol Abuse and Alcoholism, only 6.7% of these individuals receive treatment. Feedback from our primary market research strongly supports nasal naltrexone as a compelling product that could also be used in a primary care setting as well as by addiction specialists and in addiction treatment centers.

OPNT004 - Drinabant Injection for Acute Cannabinoid Overdose ("ACO")

On December 26, 2018, we entered into an exclusive global licensing agreement with Sanofi for the development and commercialization of drinabant for the treatment of acute cannabinoid overdose ("ACO"). We intend to develop drinabant, a selective, high affinity cannabinoid CB-1 receptor antagonist, as an injectable for administration in an emergency department setting.

ACO is most frequently linked to the ingestion of “edibles” containing large quantities of delta9-tetrahydrocannabinol (THC) and synthetic cannabinoids (often referred to as “K2” and “Spice”) that are more potent and less expensive than marijuana.  Edibles, sold as brownies, cookies and candies, pose particular risks for children, who can consume these by accident.  Based on 2014 rates from the National Emergency Department sample and United States Census Bureau figures, we estimate that ACO resulted in more than one million emergency department visits in the United States in 2016.  With an increasing number of states legalizing marijuana for personal and recreational use, ACO rates are expected to rise.  Features of ACO produced by edibles and synthetic cannabinoids can include psychosis, panic and anxiety, feelings of paranoia, agitation, visual and auditory hallucinations, nausea, vomiting and cardiac arrhythmias. These symptoms often require emergency medical attention and can take hours to days to resolve. There are currently no FDA approved treatments for ACO.

Opioid Use Disorder

OUD is a major global health issue, particularly in the United States, where opioid misuse, in particular involving opioid painkillers and subsequent addiction, has become widespread. Given the increase in prevalence, OUD has now been classified in the United States as a public health crisis. As prescription opioid painkillers have become more difficult to obtain due to tighter controls for distribution and prescribing, and abuse deterrent formulations have become available, there has been an increase in heroin use, which is cheaper and often easier to obtain than painkillers. At the same time, the availability and abuse of syntetic opiods, including fentanyl and its derivatives (fentanyl has been estimated to be at least 50 times more potent than heroin) has become more widespread, further driving the recent increase in deaths from opioid overdose in the US.

Current FDA approved treatments for opioid addiction are methadone-based and buprenorphine-based substitution therapies, and the use of naltrexone (an opioid antagonist), available as both a tablet and depot injection. Most substitution therapies, are opioid-based treatments, which for many patients is undesirable, and there is frequently diversion and misuse of these treatments amongst patients with OUD. With respect to naltrexone based therapies, patients must undergo detoxification before initiating treatment, which for many patients severely limits compliance and willingness to undergo this method of treatment. Therefore,

4

being able to provide a vaccine to patients that potentially provides specific immunity against heroin and its metabolites without the need for prior detoxification and enabling patients to remain opioid-free is an attractive solution.

In October 2016, we in-licensed OPNT005, a heroin vaccine from Walter Reed Army Institute of Research (“WRAIR”). This is an early stage pre-clinical asset and requires further pre-clinical research before human testing. In October 2018, researchers at the U.S. Military HIV Research Program at the WRAIR and SUNY Upstate Medical University in Syracuse, NY, were awarded a grant by NIH to advance OPNT005, through Phase 1/2a clinical trials to assess its safety and efficacy.

On October 2, 2017, we announced a collaboration with Titan Pharmaceuticals, Inc. (“Titan”) to explore development of a novel approach to the prevention of opioid relapse and overdose in individuals with opioid use disorder.

Other Activities

On June 22, 2017, we entered into a license agreement with Aegis Therapeutics LLC ("Aegis") (the “Aegis License Agreement”) and a related supply agreement (the “Supply Agreement”) pursuant to which we were granted an exclusive license (the “License”) to Aegis’ proprietary chemically synthesizable delivery enhancement and stabilization agents, including, but not limited to, Aegis’ Intravail® absorption enhancement agents, ProTek® and HydroGel® (collectively, the “Technology”) to exploit (a) the Compounds (as such are defined in the Aegis License Agreement) and (b) a product containing a Compound and formulated using the Technology (“Product”), in each case of (a) and (b) for any and all purposes. The Aegis License Agreement restricts our ability to manufacture any Aegis excipients included in the Technology (“Excipients”), except for certain instances of supply failure, supply shortage or termination of the Supply Agreement, and we shall obtain all supply of such Excipients from Aegis under the Supply Agreement. The Aegis License Agreement also restricts Aegis’s ability to compete with us worldwide with respect to the Exploitation (as defined in the Aegis License Agreement) of any therapeutic containing a Compound or derivative or active metabolite of a Compound without our prior written consent. The effective date of the Aegis License Agreement and the Supply Agreement is January 1, 2017.

As consideration for the grant of the License, we agreed to pay Aegis two upfront payments, of which we may elect to pay up to 50% by issuing our Common Stock to Aegis, with the number of shares to be issued equal to 75% of the average closing price of our Common Stock over the 20 trading days preceding the date of payment. The Aegis License Agreement also provides for (A) additional developmental milestone payments for each Product containing a different Compound equal to up to an aggregate of $1.8 million, (B) additional commercialization milestone payments for each Product containing a different Compound equal to up to an aggregate of $5.0 million, and (C) single low digit royalties on the Annual Net Sales (as defined in the Aegis License Agreement) of all Products during the Royalty Term (as defined in the Aegis License Agreement) according to a tiered royalty rate based on Annual Net Sales of the Products by us, our sublicensees and affiliates. We shall also pay to Aegis a sublicense fee based on a sublicense rate to be negotiated in good faith by the parties. The Aegis License Agreement contains customary representations and warranties, ownership, patent rights, confidentiality, indemnification and insurance provisions. The Aegis License Agreement shall expire upon the expiration of our obligation to pay royalties under such Aegis License Agreement; provided, however, that we shall have the right to terminate the License granted on a product-by-product or country-by-country basis upon 30 days’ prior written notice to Aegis.

Under the terms of the Supply Agreement, Aegis shall deliver to us any preclinical, clinical and commercial supply of the Excipients, which Aegis sources from various contract manufacturers. The Supply Agreement has a term of 20 years but shall terminate automatically in the event of expiration or termination of the Aegis License Agreement or at any time upon the written agreement of both parties. The Supply Agreement contains customary provisions relating to pricing for such materials, forecasts, delivery, inspection, indemnification, insurance and representations, warranties and covenants. The Supply Agreement includes technology transfer provisions for the transfer of all materials and know-how specific to the manufacturing of the Excipients that is necessary or useful for us to manufacture such Excipients. We do not have the right to manufacture such Excipients except in the event that Aegis is unable to supply and sell any portion of the material to us (subject to a 60-day cure period).

On July 14, 2017, we entered into a Research and Development Agreement (the “Renaissance Agreement”) with Renaissance Lakewood, LLC (“Renaissance”). Under the Renaissance Agreement, Renaissance will perform product development work on a naltrexone multi-dose nasal product for the treatment of AUD (the "Renaissance Product") as provided in a proposal agreed upon by the parties. We will bear the costs of all development services, including all raw materials and packaging components, in connection with the performance of the development work under the Renaissance Agreement and in accordance with financials agreed upon through the proposal. Renaissance will conduct quality control and testing, including non-stability, stability, in-use, raw material, and packaging component testing as part of the services provided to us under the Renaissance Agreement. We will own all formulations provided to Renaissance and any formulations developed in connection with the Renaissance Agreement. Renaissance will own all know-how developed in connection with the performance of the services that is not solely related to a product. We have the right to seek patent protection on any invention or know-how that relates solely to a product developed under

5

the Renaissance Agreement or any our formulation, excluding general manufacturing or product development know-how of Renaissance. We have agreed to indemnify Renaissance in connection with claims arising out of any clinical trials, ownership, testing, use, application, consumption, distribution, marketing or sale of the Renaissance Product, or any violation or infringement of any patent, copyright or trademark from the use of our designated formula, component or artwork related to the Renaissance Product irrespective of whether we had knowledge of such infringement or violation. The Renaissance Agreement is effective until terminated by either party in accordance with its terms. We or Renaissance may terminate the project under a proposal to the Renaissance Agreement due to unforeseen circumstances in the development. The Renaissance Agreement may be terminated by us, with or without cause, upon 45 days’ written notice. There are also mutual customary termination provisions relating to uncured breaches of material provisions. Renaissance may terminate the Renaissance Agreement in the event of bankruptcy of us or our failure for a period of 180 consecutive days to use commercially reasonable efforts to undertake or further activities to advance the possibility of the commercialization of a Renaissance Product.

On September 10, 2018, we entered into a development and manufacturing agreement for OPNT003 (intranasal nalmefene), a potent, long-acting opioid antagonist for the treatment of opioid overdose with Consort Medical plc ("Consort"), a leading contract development and manufacturing organization. Under this agreement, Aesica and Bespak, wholly-owned subsidiaries of Consort, will work with us to produce a pre-filled delivery nasal spray with nalmefene. As part of the agreement, Aesica will supply Opiant with clinical samples and registration batches for the purposes of performing clinical studies and obtaining regulatory approvals. Further, upon approval by the FDA, Aesica and Bespak will manufacture and supply the commercial device for us.

In November 2016, Opiant Pharmaceuticals UK Limited (“OPUK”) was incorporated under the Companies Act of 2006 as a private company. OPUK is a wholly-owned subsidiary of the Company and Dr. Roger Crystal, the Chief Executive Officer and a director of the Company, and David O'Toole, the Chief Financial Officer and Secretary, of the Company, serve as the sole directors of OPUK.

Competition

The specialty pharmaceutical industry is intensely competitive and is characterized by rapid technological progress. Certain pharmaceutical and biopharmaceutical companies and academic and research organizations currently engage in, or have engaged in, efforts related to the discovery and development of new medicines for the treatment of substance use, addictive and eating disorders. Significant levels of research in chemistry and biotechnology occur in universities and other nonprofit research institutions. These entities have become increasingly active in seeking patent protection and licensing revenues for their research results. They also compete with us in recruiting skilled scientific talent. Some of these companies are larger and better-funded than us and there are no assurances that we can effectively compete with these competitors. Potential competitors include Emergent BioSolutions Inc., Amphastar, Indivior PLC, Alkermes PLC, H. Lundbeck A/S, Teva, Shire PLC, Orexo AB, BioDelivery Services International, Inc., Braeburn Pharmaceuticals, Inc., INSYS Therapeutics, and BioCorRx, Inc.

With respect to NARCAN®, we face competition from other treatments, including injectable naloxone, auto-injectors and improvised nasal kits. Amphastar Pharmaceuticals, Inc. competes with NARCAN® with their naloxone injection. Kaléo competes with NARCAN® with their auto-injector known as EVZIO™ (naloxone HCl injection) Auto-Injector. In 2015, Indivior PLC received a Complete Response Letter from the FDA with respect to a naloxone nasal spray. Between 2016 and 2018, TEVA has filed ANDAs with the FDA seeking regulatory approval to market a generic version of NARCAN® before the expiration of the ‘253, '747, '177, '965, '644, and '226 patents, and in 2018 Perrigo UK FINCO Limited Partnership ("Perrigo") filed an ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN before the expiration of the '253, '747, '177, '965, and '838 patents. Although NARCAN® was the first FDA-approved naloxone nasal spray for the emergency reversal of opioid overdoses and has advantages over certain other treatments, we expect the treatment to face additional competition. For example, during 2018, both INSYS Therapeutics, Inc. and Orexo AB have announced the development of novel naloxone nasal spray formulations intended for use in opioid overdose reversal.

Patents and Proprietary Information

We have obtained and intend to actively seek to obtain, when appropriate, protection for our products and proprietary technology by means of United States and foreign patents, trademarks and contractual arrangements. In addition, we rely upon trade secrets and contractual agreements to protect certain of our proprietary technology and products. We have issued United States patents and pending United States patent applications, as well as pending foreign patent applications or issued foreign patents, relating to our marketed products and product candidates. We also have United States and foreign patent applications pending relating to novel product concepts. There can be no assurance that our patent applications will issue as patents or, with respect to our issued patents, that they will provide us with significant protection. The following provides a general description of our patent portfolio and is not intended to represent an assessment of claim limitations or claim scope:

6

ProductGroup	Patent No.	Description	Patent Expiration	Publication No.
NARCAN® Nasal	10,085,937	IN naloxone for treatment of opioid overdose	March 16, 2035	US20170071851
NARCAN® Nasal	9,211,253	IN naloxone for treatment of opioid overdose	March 16, 2035	US20150258019
NARCAN® Nasal	9,468,747	IN naloxone for treatment of opioid overdose	March 16, 2035	US20160184294
NARCAN® Nasal	9,480,644	IN naloxone for treatment of opioid overdose	March 16, 2035	US20160166503
NARCAN® Nasal	9,561,177	IN naloxone for treatment of opioid overdose	March 16, 2035	US20160303041
NARCAN® Nasal	9,629,965	IN naloxone for treatment of opioid overdose	March 16, 2035	US20170043107
NARCAN® Nasal	9,707,226	IN naloxone for treatment of opioid overdose	March 16, 2035	US20170151231
NARCAN® Nasal	9,775,838	IN naloxone for treatment of opioid overdose	March 16, 2035	US20170239241
NARCAN® Nasal	2,538,682	IN naloxone for treatment of opioid overdose	March 16, 2035	UK
NARCAN® Nasal	2,942,611	IN naloxone for treatment of opioid overdose	March 16, 2035	Canada

In addition to the patents and applications listed above, we have several pending, unpublished applications drawn to formulations, devices, and treatments of disorders, as well as additional continuation and divisional applications claiming the benefit of priority of applications listed above. 

Research and Development

During the year ended December 31, 2018, the five months ended December 31, 2017, and the fiscal year ended July 31, 2017, we incurred research and development expenses of $8.5 million, $2.5 million and $3.2 million, respectively.

Regulation

Government Regulation and Product Approval

Government authorities in the United States, at the federal, state, and local levels, and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, product approval, manufacture, quality control, safety, effectiveness, manufacturing changes, packaging, storage, record-keeping, labeling, promotion, advertising, sales, distribution, marketing, and import and export of drugs and biologic products. All of our foreseeable product candidates are expected to be regulated as drugs. In particular, therapeutic product candidates for human use are subject to rigorous preclinical and clinical testing and other requirements of the Federal Food, Drug and Cosmetic Act (“FFDCA”), implemented by the FDA, as well as similar statutory and regulatory requirements of foreign countries. The processes for obtaining regulatory approval in the United States. and in foreign countries and jurisdictions, along with ongoing compliance with applicable statutes and regulations and other regulatory authorities both pre- and post-commercialization, are a significant factor in the production and marketing of our products and our R&D activities and require the expenditure of substantial time and financial resources. Any failure by us or our collaborators, licensors or licensees to obtain, or any delay in obtaining, regulatory approvals or in complying with other regulatory requirements could adversely affect the commercialization of product candidates then being developed by us and our ability to receive product or royalty revenues.

The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources. In the United States, the FDA regulates drugs under the FFDCA and the FDA's implementing regulations. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process, or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA's refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls, product seizures, total or

7

partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. The process required by the FDA before a drug may be marketed in the United States generally involves the following:

• completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices regulations;

• submission to the FDA of an Investigational New Drug ("IND"), which must become effective before human clinical studies may begin;

• approval by an independent IRB, at each clinical site before each trial may be initiated;

• performance of adequate and well-controlled human clinical studies according to Good Clinical Practice

("GCP") regulations, to establish the safety and efficacy of the proposed drug for its intended use;

• preparation and submission to the FDA of an NDA;

• satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practice ("cGMP") to assure that the facilities, methods, and controls are adequate to preserve the drug's identity, strength, quality, and purity; and

• FDA review and approval of the NDA.

The testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates (or those of our collaborators or licensees) will be granted on a timely basis, if at all.

An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical study lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical study and places the study on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical studies due to safety concerns or non-compliance, and may be imposed on all product candidates within a certain pharmaceutical class. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical studies of a certain duration or for a certain dose.

All clinical studies must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical study. Further, an internal review board ("IRB") must review and approve the plan for any clinical study before it commences at any institution, and the IRB must conduct continuing review and re-approve the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical study are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical study and the consent form that must be provided to each clinical study subject or his or her legal representative and must monitor the clinical study until completed. Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, among other things, the objectives of the clinical study, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety. Study sites are subject to inspection for compliance with GCP.

Information about certain clinical trials must be submitted within specific timeframes to the NIH, for public dissemination on their ClinicalTrials.gov website.

Human clinical studies are typically conducted in three sequential phases that may overlap or be combined:

• Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients.

• Phase 2. Involves clinical studies in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule.

8

• Phase 3. Clinical studies are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical study sites. These clinical studies are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling.

Progress reports detailing the results of the clinical studies must be submitted at least annually to the FDA and safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events. Phase 1, Phase 2 and Phase 3 testing may not be completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinical study at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical study at its institution if the clinical study is not being conducted in accordance with the IRB's requirements or if the drug has been associated with unexpected serious harm to patients.

U.S. Review and Approval Processes

Assuming successful completion of the required clinical testing, the results of product development, preclinical studies and clinical studies, along with descriptions of the manufacturing process, analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA for a new drug, requesting approval to market the product.

The submission of an NDA is subject to the payment of a substantial application user fee although a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliate submits for review. The sponsor of an approved NDA is also subject to annual program user fees.

In addition, under the Pediatric Research Equity Act of 2003, an NDA application (or supplements to an application) for a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of administration must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the applicant has obtained a waiver or deferral.

In 2012, the FDASIA amended the FDCA to require that a sponsor who is planning to submit a marketing application for a drug that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan ("PSP"), within sixty days of an End-of-Phase II meeting or as may be agreed between the sponsor and the FDA. The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. The FDA and the sponsor must reach agreement on the PSP. A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical studies, and/or other clinical development programs.

The FDA also may require submission of a Risk Evaluation and Mitigation Strategy ("REMS") to mitigate any identified or suspected serious risks. The REMS could include medication guides, physician communication plans, assessment plans, and elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization tools.

The FDA reviews all NDAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA may request additional information rather than accept an application for filing. In this event, the application must be re-submitted with the additional information. The re-submitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review to determine whether the product is safe and effective for its intended use.

The FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions. An advisory committee is a panel of experts, including clinicians and other scientific experts, who provide advice and recommendations when requested by the FDA. The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations when making decisions.

9

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure clinical data supporting the submission were developed in compliance with GCP.

The approval process is lengthy and difficult and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied, or may require additional clinical data or other data and information. Even if such data and information are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical studies are not always conclusive and the FDA may interpret data differently than an applicant interprets the same data.

After the FDA's evaluation of an application, the FDA may issue an approval letter, or, in some cases, a complete response letter to indicate that the review cycle is complete and that the application is not ready for approval. A complete response letter generally contains a statement of specific conditions that must be met to secure final approval of the application and may require additional clinical or preclinical testing for the FDA to reconsider the application. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical studies. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the application, addressing all of the deficiencies identified in the letter, or withdraw the application or request an opportunity for a hearing.

Even with submission of additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA's satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require post-approval studies, including Phase 4 clinical studies, to further assess safety and effectiveness after approval and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Abbreviated New Drug Applications ("ANDAs") and Section 505(b)(2) New Drug Applications

Most drug products obtain FDA marketing approval pursuant to an NDA for innovator products, or an ANDA for generic products. Relevant to ANDAs, the Hatch-Waxman amendments to the FDCA established a statutory procedure for submission and FDA review and approval of ANDAs for generic versions of branded drugs previously approved by the FDA (such previously approved drugs are also referred to as listed drugs). Because the safety and efficacy of listed drugs have already been established by the brand company (sometimes referred to as the innovator), the FDA does not require a demonstration of safety and efficacy of generic products. However, a generic manufacturer is typically required to conduct bioequivalence studies of its test product against the listed drug. The bioequivalence studies for orally administered, systemically available drug products assess the rate and extent to which the API is absorbed into the bloodstream from the drug product and becomes available at the site of action. Bioequivalence is established when there is an absence of a significant difference in the rate and extent for absorption of the generic product and the listed drug. In addition to the bioequivalence data, an ANDA must contain patent certifications and chemistry, manufacturing, labeling and stability data.

The third alternative is a special type of NDA, commonly referred to as a Section 505(b)(2) NDA, which enables the applicant to rely, in part, on the FDA's findings of safety and efficacy of an existing product, or published literature, in support of its application. Section 505(b)(2) NDAs often provide an alternate path to FDA approval for new or improved formulations or new uses of previously approved products. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference. The applicant may rely upon the FDA's findings with respect to certain preclinical or clinical studies conducted for an approved product. The FDA may also require companies to perform additional studies or measurements to support the change from the approved product. The FDA may then approve the new product candidate for certain label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.

In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA certain patents of the applicant or that are held by third parties whose claims cover the applicant's product. Upon approval of an NDA, each of the patents listed in the application for the drug is then published in the Orange Book. Any subsequent

10

applicant who files an ANDA seeking approval of a generic equivalent version of a drug listed in the Orange Book or a 505(b)(2) NDA referencing a drug listed in the Orange Book must make one of the following certifications to the FDA concerning patents: (1) the patent information concerning the reference listed drug product has not been submitted to the FDA; (2) any such patent that was filed has expired; (3) the date on which such patent will expire; or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. This last certification is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers. The applicant may also elect to submit a "section viii" statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent.

If the reference NDA holder or patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the paragraph IV certification expiration of the patent, settlement of the lawsuit or a decision in the infringement case that is favorable to the applicant. The ANDA or 505(b) (2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the branded reference drug has expired as described in further detail below. Thus approval of a Section 505(b)(2) NDA or ANDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that is favorable to the ANDA or Section 505(b)(2) applicant.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to extensive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping (including certain electronic record and signature requirements), periodic reporting, product sampling and distribution, advertising and promotion and reporting of certain adverse experiences, deviations, and other problems with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products, as well as new application fees for supplemental applications with clinical data.

The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. Further, manufacturers must continue to comply with cGMP requirements, which are extensive and require considerable time, resources and ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Manufacturers and certain other entities involved in the manufacturing and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the product.

Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

The FDA may impose a number of post-approval requirements as a condition of approval of an application. For example, the FDA may require postmarketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product's safety and effectiveness after commercialization.

The FDA may withdraw a product approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, problems with manufacturing processes, or failure to comply

11

with regulatory requirements, may result in restrictions on the product or even complete withdrawal of the product from the market.

Potential implications include required revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

• restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

• warning letters or holds on post-approval clinical trials;

• refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;

• product seizure or detention, or refusal to permit the import or export of products; or

• injunctions or the imposition of civil or criminal penalties.

In addition, the distribution of prescription drugs is subject to the Prescription Drug Marketing Act ("PDMA"), which regulates the distribution of the products and product samples at the federal level, and sets minimum standards for the registration and regulation of distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations, guidance, and policies are often revised or reinterpreted by the agency in ways that may significantly affect our business and our product candidates. It is impossible to predict whether further legislative or FDA regulation or policy changes will be enacted or implemented and what the impact of such changes, if any, may be.

Pharmaceutical Coverage, Pricing and Reimbursement

In the United States, sales of any products for which we (or our collaborators or licensees) may receive regulatory approval for commercial sale will depend in part on the availability of coverage and reimbursement from third-party payors. Third-party payors include government authorities, managed care providers, private health insurers and other organizations.

Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval. The process for determining whether a payor will provide coverage for a drug may be separate from the process for setting the reimbursement rate that the payor will pay for the product. Some of the additional requirements and restrictions on coverage and reimbursement levels imposed by third-party payors influence the purchase of healthcare services and products.

Third-party payors may limit coverage to specific drugs on an approved list, or formulary, which might not include all of the FDA-approved drugs for a particular indication, or place drugs at certain formulary levels that result in lower reimbursement levels and higher cost-sharing obligation imposed on patients. Moreover, a payor's decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Further, one payor's determination to provide coverage does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement may differ significantly from payor to payor. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain and maintain coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of any products, in addition to the costs required to obtain regulatory approvals. Our product candidates may not be considered medically necessary or cost-effective. If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit.

The United States government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and coverage and requirements for substitution of generic products for branded prescription drugs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could exclude or limit our drugs and product candidates from coverage and limit payments for pharmaceuticals.

12

In addition, we expect that the increased emphasis on managed care and cost containment measures in the United States by third-party payors and government authorities to continue and will place pressure on pharmaceutical pricing and coverage. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Employees

As of March 15, 2019, we had 16 full-time employees and no part-time employees. In addition, we have a number of outside consultants that are not on our payroll.

13

ITEM 1A.  RISK FACTORS

An investment in our securities involves a high degree of risk. Prior to making a decision about investing in our securities, you should carefully consider all of the information in this Report on Form 10-K, including our consolidated financial statements and related notes. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence of any of these known or unknown risks might cause you to lose all or part of your investment.

Risks Related to our Business, Financial Condition and Capital Requirements

With the exception of the fiscal year ended July 31, 2017 and the five month transition period ended December 31, 2017, we have historically generated limited revenue to date and expect to incur significant operating losses for the foreseeable future.

As of December 31, 2018, we have an accumulated deficit of $74.4 million. The likelihood of our future success must be considered in light of the expenses, difficulties, complications and delays often encountered in connection with the clinical trials that will be conducted and on the development of new solutions to common addictions and related disorders. These potential challenges include, but are not limited to, unanticipated clinical trial delays, poor data, changes in the regulatory and competitive landscape and additional costs and expenses that may exceed current budget estimates. In order to complete certain clinical trials and otherwise operate pursuant to our current business strategy, we anticipate that we will incur increased operating expenses. In addition, we expect to incur significant losses for the foreseeable future and we also expect to experience negative cash flow for the foreseeable future as we fund the operating losses and capital expenditures. We recognize that if we are unable to generate sufficient revenues or source funding, we will not be able to continue operations as currently contemplated, complete planned clinical trials and/or achieve profitability. Our failure to achieve or maintain profitability will also negatively impact the value of our securities. If we are unsuccessful in addressing these risks, then the Company will most likely fail.

We may not succeed in completing the development of our product candidates, commercializing our products, and generating significant revenues.

Our current pipeline includes medicines in development for OOR, AUD, OUD, ACO and additional treatment applications. Our products have generated limited revenues. Our ability to generate significant revenues and achieve profitability depends on our ability to successfully complete the development of our product candidates, obtain market approval, successfully launch our products and generate significant revenues. On December 15, 2014, we and Adapt entered into the Adapt Agreement, as amended by the Adapt Amendment entered into between the parties on December 13, 2016, that provides Adapt, now a subsidiary of EBS, with a global license to develop and commercialize our intranasal naloxone Opioid Overdose Reversal Treatment Product, now known as NARCAN®. The loss for any reason of Adapt/EBS as a key partner could have a significant and adverse impact on our business. If we are unable to retain Adapt/EBS as a partner on commercially acceptable terms, we may not be able to commercialize NARCAN® as planned and we may experience delays in or suspension of the marketing of NARCAN®.

The future success of our business cannot be determined at this time, and we do not anticipate generating significant revenues from product sales for the foreseeable future. Notwithstanding the foregoing, we expect to generate revenues from NARCAN®, for which we are dependent on many factors, including the performance of our licensing partner Adapt/EBS and competition in the market. In addition, we have no experience in commercializing on our own and face a number of challenges with respect to commercialization efforts, including, among other challenges:

• having inadequate financial or other resources to complete the development of our product candidates;

• the inability to manufacture our products in commercial quantities, at an adequate quality, at an acceptable cost or in collaboration with third parties;

• experiencing delays or unplanned expenditures in product development, clinical testing or manufacturing;

• the inability to establish adequate sales, marketing and distribution channels;

• healthcare professionals and patients may not accept our treatments;

• we may not be aware of possible complications from the continued use of our products since we have limited clinical experience with respect to the actual use of our products;

• technological breakthroughs in reversing opioid overdoses and treating patients with AUD, OUD and ACO may reduce the demand for our products;

• changes in the market for reversing opioid overdoses and treating patients with AUD, OUD and ACO, new alliances between existing market participants and the entrance of new market participants may interfere with our market penetration efforts;

• third-party payors may not agree to reimburse patients for any or all of the purchase price of our products, which may adversely affect patients’ willingness to purchase our products;

14

• uncertainty as to market demand may result in inefficient pricing of our products;

• we may face third party claims of intellectual property infringement;

• we may fail to obtain or maintain regulatory approvals for our products in our markets or may face adverse regulatory or legal actions relating to our products even if regulatory approval is obtained; and

• we our dependent upon the results of clinical studies relating to our products and the products of our competitors. If data from a clinical trial is unfavorable, we would be reluctant to advance the specific product for the indication for which it was being developed.

If we are unable to meet any one or more of these challenges successfully, our ability to effectively commercialize our products could be limited, which in turn could have a material adverse effect on our business, financial condition and results of operations.

Given our lack of sufficient revenue and cash flow, we may need to raise additional capital, which may be unavailable to us or, even if consummated, may cause dilution or place significant restrictions on our ability to operate.

Since we may be unable to generate sufficient revenue or cash flow to fund our operations for the foreseeable future, we may need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations. We may also need additional funding to continue the development of our product candidates, build our sales and marketing capabilities, promote brand identity or develop or acquire complementary technologies, assets and companies, as well as for working capital requirements and other operating and general corporate purposes.

Besides the Controlled Equity Offering Sales Agreement dated October 13, 2017, we do not currently have any arrangements or credit facilities in place as a source of funds, and there can be no assurance that we will be able to raise sufficient additional capital if needed on acceptable terms, or at all. If such financing is not available on satisfactory terms, or is not available at all, we may be required to delay, scale back or eliminate the development of our product candidates and other business opportunities and our ability to achieve our business objectives, our competitiveness and our operations and financial condition may be materially adversely affected. Our inability to fund our business could thus lead to the loss of your investment.

If we raise additional capital by issuing equity securities and/or equity-linked securities, the percentage ownership of our existing stockholders may be reduced, and accordingly these stockholders may experience substantial dilution. We may also issue equity securities and/or equity-linked securities that provide for rights, preferences and privileges senior to those of Common Stock. Given our need for cash and that equity and equity-linked issuances are very common types of fundraising for companies like us, the risk of dilution is particularly significant for our stockholders.

Debt financing, if obtained, may involve agreements that include liens on our assets and covenants limiting or restricting our ability to take specific actions such as incurring additional debt. Debt financing could also be required to be repaid regardless of our operating results.

If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our products or to grant licenses on terms that are not favorable to us.

We depend on third parties in connection with our pre-clinical studies and clinical trials, which may result in costs and delays that prevent us from obtaining regulatory approval or successfully commercializing our product candidates.

We engage third parties to perform various aspects of our pre-clinical studies and clinical trials. For instance, on September 10, 2018, we entered into a development and manufacturing agreement for OPNT003 (intranasal nalmefene), a potent, long-acting opioid antagonist for the treatment of opioid overdose with Consort Medical plc ("Consort"), a leading contract development and manufacturing organization. Under this agreement, Aesica and Bespak, wholly-owned subsidiaries of Consort, will work with us to produce a pre-filled delivery nasal spray with nalmefene. As part of the agreement, Aesica will supply Opiant with clinical samples and registration batches for the purposes of performing clinical studies and obtaining regulatory approvals. We depend on these third parties to perform these activities on a timely basis in accordance with the protocol, good laboratory practices, good clinical practices, and other regulatory requirements. Our reliance on these third parties for pre-clinical and clinical development activities reduces our control over these activities. Accordingly, if these parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, our pre-clinical studies and clinical trials may be extended, delayed, terminated or our data may be rejected by the FDA. For example, if Consort were to cease to be able to supply the device to us, our OPNT003 program would be delayed until we obtained an alternative source, which could take a considerable length of time. If there are delays in testing or obtaining regulatory approvals as a result of a third party’s failure to perform, our drug discovery and development costs will likely increase, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.

15

Further, upon approval by the FDA, Aesica and Bespak will manufacture and supply the commercial device for us. Third parties’ abilities to adequately and timely manufacture and supply our product candidates is dependent on the operation of their facilities which may be impacted by, among other things:

• availability, performance, or contamination of raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier;

• capacity of our facility and those of contract manufacturer;

• the performance of information technology systems;

• compliance with regulatory requirements;

• inclement weather and natural disasters;

• changes in forecasts of future demand for product components;

• timing and actual number of production runs for product components;

• potential facility contamination by microorganisms or viruses;

• updating of manufacturing specifications; and

• product quality success rates and yields.

If the efficient manufacture and supply of our product candidates is interrupted, we may experience delayed shipments or supply constraints, which may materially impact our ongoing and future pre-clinical studies and clinical trials.

Any contract manufacturer must undergo a potentially lengthy FDA approval process, as well as other regulatory approval processes, and are subject to continued review by the FDA and other regulatory authorities. It is a multi-year process to build and license a new manufacturing facility and it can take significant time to qualify and license a contract manufacturer.

If regulatory authorities determine that we or our contract manufacturer or certain of our third-party service providers have violated regulations or if they restrict, suspend or revoke our prior approvals, they could prohibit us from manufacturing our products or conducting clinical trials or selling our marketed products until we or the affected third-party service providers comply, or indefinitely. Because our third-party service providers are subject to the FDA and, potentially, in the future, foreign

regulatory authorities, alternative qualified third-party service providers may not be available on a timely basis or at all. If we or our third-party service providers cease or interrupt production or if our third-party service providers fail to supply materials, products or services to us, we may experience delayed shipments, and supply constraints for our products.

Our current and future operations substantially depend on our Chief Executive Officer and our ability to hire other key personnel, the loss of any of whom could disrupt our business operations.

Our business depends and will continue to depend in substantial part on the continued service of Dr. Roger Crystal, the Company’s Chief Executive Officer. The loss of the services of Dr. Crystal would significantly impede implementation and execution of our business strategy and may result in the failure to reach our goals.

Our future viability and ability to achieve sales and profits will also depend on our ability to attract, train, retain and motivate highly qualified personnel in the diverse areas required for continuing operations. There is a risk that we will be unable to attract, train, retain or motivate qualified personnel, both near term or in the future, and the failure to do so may severely damage its prospects.

Our employment agreements with our named executive officers may require us to pay severance benefits to any of those persons who are terminated in connection with a change in control of us which could harm our financial condition or results.

Certain of our executive officers are parties to employment agreements that contain change in control and severance provisions providing for aggregate cash payments of up to approximately $3.5 million for severance and other benefits and acceleration of vesting of stock options with a value of approximately $2.4 million, in the event of a termination of employment in connection with a change of control of the Company. The accelerated vesting of options could result in dilution to our existing stockholders and harm the market price of our Common Stock. The payment of these severance benefits could harm our financial conditions and results. In addition, these potential severance payments may discourage or prevent third parties from seeking a business combination with us.

Under the Company's agreement with Adapt/EBS, they have the right to license third-party intellectual property which may result in a reduction of our potential royalty and milestone payments.

16

Under the Company's license agreement, with Adapt/EBS (the "Adapt Agreement"), Adapt/EBS may seek to license certain intellectual property held by a third-party that Adapt/EBS reasonably determines would be infringed upon through the performance of the Adapt Agreement or that Adapt/EBS otherwise determines is necessary or desirable for Adapt/EBS to perform its obligations under the Adapt Agreement. On March 18, 2019, the Company and Adapt/EBS entered into an amendment to the Adapt Agreement that clarifies the circumstances under which Adapt/EBS may enter into such licenses and deduct a material amount, as provided in the Adapt Agreement, of any upfront payment, milestones or royalties paid to such third-party from any regulatory milestone payments, sales-based milestone payments, and royalty payments payable to the Company under the Adapt Agreement. Following the execution of the amendment, in most situations, in order to exercise its right to deduct any payments with respect thereto, Adapt/EBS will need the consent of the Company that the licensing arrangement is acceptable.

Some of our programs are partially supported by government grant awards, which may not be available to us in the future.

We have received funding under grant award programs funded by governmental agencies, such as the NIDA and BARDA. To fund a portion of our future research and development programs, we may apply for additional grant funding from these or similar governmental agencies. However, funding by these governmental agencies may be significantly reduced or eliminated in the future for a number of reasons. For example, some programs are subject to a yearly appropriations process in Congress. In addition, we may not receive full funding under current or future grants because of budgeting constraints of the agency administering the program or unsatisfactory progress on the study being funded. Therefore, we cannot assure you that we will receive any future grant funding from any government agencies, or, that if received, we will receive the full amount of the particular grant award. Any such reductions could delay the development of our product candidates and the introduction of new products.

Exposure to United Kingdom political developments, including the outcome of the referendum on membership in the European Union, could be costly and difficult to comply with and could seriously harm our business.

We have based a significant portion of our non-U.S. operations in the United Kingdom. In June 2016, a referendum was passed in the United Kingdom to leave the European Union, commonly referred to as “Brexit.” This decision created an uncertain political and economic environment in the United Kingdom and other European Union countries, even though the formal process for leaving the European Union may take years to complete. This formal process began in March 2017, when the United Kingdom served notice to the European Council under Article 50 of the Treaty of Lisbon. The long-term nature of the United Kingdom’s relationship with the European Union is unclear and there is considerable uncertainty when any relationship will be agreed and implemented. Without further agreement, the United Kingdom will formally leave the European Union in March 2019. The political and economic instability created by Brexit has caused and may continue to cause significant volatility in global financial markets and uncertainty regarding the regulation of pharmaceuticals in the United Kingdom. In particular, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations, including those related to the pricing of pharmaceuticals, as the United Kingdom determines which European Union laws to replicate or replace. If the United Kingdom were to significantly alter its regulations affecting the pricing of pharmaceuticals, we could face significant new costs. As a result, Brexit could impair our ability to transact business in the European Union and the United Kingdom. Brexit could also have the effect of disrupting the free movement of goods, services, capital, and people between the United Kingdom, the European Union, and elsewhere. The full effect of Brexit is uncertain and depends on any agreements the United Kingdom may make to retain access to European Union markets. Consequently, no assurance can be given about the impact of the outcome and our business, including operational and tax policies, may be seriously harmed or require reassessment if our European operations or presence become a significant part of our business.

Risks Related to our Intellectual Property

If we are unable to obtain and maintain patent protection for our products and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and product candidates that are similar or identical to ours, and our ability to successfully commercialize our products and product candidates may be adversely affected.

Our commercial success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries with respect to our products and product candidates. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our products and product candidates that are important to our business, as appropriate. We cannot be certain that patents will be issued or granted with respect to applications that are currently pending or that we may apply for in the future with respect to one or more of our products and product candidates, or that issued or granted patents will not later be found to be invalid and/or unenforceable.

17

The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Although we may enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, distribution partners, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

The patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued, and even if issued, the patents may not meaningfully protect our products or product candidates, effectively prevent competitors and third parties from commercializing competitive products or otherwise provide us with any competitive advantage. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.

Changes in either the patent laws, implementing regulations or interpretation of the patent laws in the U.S. and other countries may also diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the U.S., and many companies have encountered significant difficulties in protecting and defending such rights in foreign jurisdictions.

We cannot be certain that our patents and patent rights will be effective in protecting our products, product candidates and technologies. Failure to protect such assets may have a material adverse effect on our business, operations, financial condition and prospects.

We may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their intellectual property rights, or seeking to challenge the validity of our patents.

Our future success is also dependent in part on the strength of our intellectual property, trade secrets and know-how, which have been developed from years of research and development, and on our ability, and the ability of our future collaborators, to develop, manufacture, market and sell our products and product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation or other violation of the patents and other intellectual property rights of third parties.

In addition to the litigation with TEVA and Perrigo discussed below, we may be exposed to, or be threatened with, adversarial proceedings or additional future litigation by third parties regarding intellectual property rights with respect to our current and any future product candidates and technology, including interference or derivation proceedings, post grant review and inter partes review before the USPTO or similar adversarial proceedings or litigation in other jurisdictions seeking to challenge the validity of our intellectual property rights, claiming that the Company has misappropriated the trade secrets of others, or claiming that our technologies, products or activities infringe the intellectual property rights of others.

There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and reexamination proceedings before the USPTO, and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the intellectual property rights of third parties. We actively track third-party applications with claims that, if valid, could be construed to read upon the use our NARCAN® product(s) for the treatment of opioid overdose, or other products and indications. Certain of these applications could be granted in the future. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future including, perhaps, the aforementioned allowed patent application, regardless of their merit. There is a risk that third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us. Even if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable. Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our compositions, formulations, or methods of treatment, prevention or use, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires or is finally determined to be invalid or unenforceable. In either case, such a license may not be available on

18

commercially reasonable terms, or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. Some claimants may have substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or to enable the commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In such an event, we would be unable to further practice our technologies or develop and commercialize any of our product candidates at issue, which could harm our business significantly.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates, if approved. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of management and employee time and resources from our business. Third parties making such claims may have the ability to dedicate substantially greater resources to these legal actions than we or our licensors or collaborators can. In the event of a successful claim of infringement, misappropriation or other violation against us, we may have to pay substantial damages, including treble damages and attorneys' fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.

Similarly, we or our licensors or collaborators may initiate such proceedings or litigation against third parties, e.g., to challenge the validity or scope of intellectual property rights controlled by third parties. In order to successfully challenge the validity of any U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such United States patent claim, there is no assurance that a court would invalidate the claims of any such United States patent.

Patent litigation and other proceedings may also absorb significant management time. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. During the course of any patent or other intellectual property litigation or other proceeding, there could be public announcements of the results of hearings, rulings on motions, and other interim proceedings or developments and if securities analysts or investors regard these announcements as negative, the perceived value of our product candidates or intellectual property could be diminished. Accordingly, the market price of our common stock may decline. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our business, ability to compete in the marketplace, financial condition, results of operations and growth prospects.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.

Competitors may infringe, misappropriate or otherwise violate our patents, trademarks, copyrights or other intellectual property, or those of our licensors. To counter infringement, misappropriation, unauthorized use or other violations, we may be required to file legal claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.

For example, within the last 24 months, we along with Adapt (collectively, the “Plaintiffs”) have filed six separate complaints for patent infringement against Teva Pharmaceuticals Industries Ltd. (“Teva Ltd.”) and Teva Pharmaceuticals USA, Inc., a wholly owned subsidiary of Teva Ltd. (“Teva USA” and, together with Teva Ltd., “Teva”) in the United States District Court for the District of New Jersey arising from Teva USA’s filing of ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN before the expiration of the Company’s patents. Additionally, on October 25, 2018, Plaintiffs filed a similar complaint for patent infringement against Perrigo UK FINCO Limited Partnership (“Perrigo”) in the United States District Court for the District of New Jersey arising from Perrigo’s ANDA filing with the FDA.

For more information about these litigation matters, see Part I, Item 3: Legal Proceedings. We maintain full confidence in our intellectual property portfolio related to NARCAN® and expect that the Company’s patents will continue to be vigorously defended from any infringement. However, there can be no assurances that we will be successful with respect to these litigation matters or any other litigation matters which may arise in the ordinary course of our business. Such a failure may have a material impact on our business, results of operations and financial condition in the future.

We may not be able to prevent, alone or with our licensees or any future licensors, infringement, misappropriation or other violations of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in a patent infringement proceeding, there is a risk that a court

19

will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention. An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors, and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition. Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

In any infringement, misappropriation or other intellectual property litigation, any award of monetary damages we receive may not be commercially valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

Filing, prosecuting and defending patents covering NARCAN®, and any future product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Further, licensing partners may not prosecute patents in certain jurisdictions in which we may obtain commercial rights, thereby precluding the possibility of later obtaining patent protection in these countries. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our product candidates. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign markets.

Additionally, the requirements for patentability may differ in certain countries, particularly developing countries. For example, unlike other countries, China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug. In India, unlike the United States, there is no link between regulatory approval of a drug and its patent status. Furthermore, generic or biosimilar drug manufacturers or other competitors may challenge the scope, validity or enforceability of our or our licensors’ patents, requiring us or our licensees or any future licensors to engage in complex, lengthy and costly litigation or other proceedings. In addition, certain countries in Europe and developing countries, including China and India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we and our licensees or any future licensors may have limited remedies if patents are infringed or if we or our licensees or any future licensors are compelled to grant a license to a third party, which could

20

materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our and our licensees’ or any future licensors’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license.

We may be subject to claims that we or our employees, consultants, contractors or advisors have infringed, misappropriated or otherwise violated the intellectual property of a third party, or claiming ownership of what we regard as our own intellectual property.

Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees do not use the intellectual property and other proprietary information, know-how or trade secrets of others in their work for us, we may be subject to claims that we or these employees have used or disclosed such intellectual property or other proprietary information. Litigation may be necessary to defend against these claims.

In addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. To the extent that we fail to obtain such assignments, such assignments do not contain a self-executing assignment of intellectual property rights or such assignments are breached, we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our management and scientific personnel.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we or our licensors fail to maintain the patents and patent applications covering our products, our competitors might be able to enter the market, which would have a material adverse effect on our business, financial conditions, results of operations and growth prospects.

If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.

In addition to seeking patents for some of our technology and products, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, in seeking to develop and maintain a competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, independent contractors, advisors, corporate collaborators, outside scientific collaborators, contract manufacturers, suppliers and other third parties. We also enter into confidentiality and invention or patent assignment agreements with employees and certain consultants. We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information technology systems. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.

21

     Since our inception, we have sought to contract with manufacturers to supply commercial quantities of pharmaceutical formulations and products. As a result, we have disclosed, under confidentiality agreements, various aspects of our technology with potential manufacturers and suppliers. We believe that these disclosures, while necessary for our business, may have resulted and may result in the attempt by potential manufacturers and suppliers to improperly assert ownership claims to our technology in an attempt to gain an advantage in negotiating manufacturing and supplier rights.

We cannot guarantee that our trade secrets and other proprietary and confidential information will not be disclosed or that competitors will not otherwise gain access to our trade secrets. Any party with whom we have executed such an agreement may breach that agreement and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts both within and outside the United States may be less willing or unwilling to protect trade secrets. Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our business and competitive position could be harmed.

Trade secrets and know-how can be difficult to protect as trade secrets and know-how will over time be disseminated within the industry through independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company or academic to industry scientific positions. If we fail to prevent material disclosure of the know-how, trade secrets and other intellectual property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition. Even if we are able to adequately protect our trade secrets and proprietary information, our trade secrets could otherwise become known or could be independently discovered by our competitors. For example, competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, design around our protected technology or develop their own competitive technologies that fall outside of our intellectual property rights. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, in the absence of patent protection, we would have no right to prevent them, or those to whom they communicate, from using that technology or information to compete with us.

We may not be able to prevent misappropriation of our intellectual property, trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

Intellectual property rights do not necessarily address all potential threats to our business.

Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objections against such grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked, or may lose the allowed or granted claims altogether. In addition, the degree of future protection afforded by our intellectual property rights is uncertain because even granted intellectual property rights have limitations, and may not adequately protect our business. The following examples are illustrative:

• others may be able to make formulations that are similar to our NARCAN® or other formulations but that are not covered by the claims of our patent rights;

• the patents of third parties may have an adverse effect on our business;

• we or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

• we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;

• others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

• it is possible that our pending patent applications will not lead to issued patents;

• issued patents that we may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;

22

• our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

• third parties performing manufacturing or testing for us using our product candidates or technologies could use the intellectual property of others without obtaining a proper license;

• we may not develop additional proprietary technologies that are patentable; and

• the patents of others may have an adverse effect on our business.

Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects.

The expiration or loss of patent protection may adversely affect our future revenues and operating earnings.

We rely on patent, trademark, trade secret and other intellectual property protection in the discovery, development, manufacturing and sale of our products and product candidates. In particular, patent protection is important in the development and eventual commercialization of our products and product candidates. Patents covering our products and product candidates normally provide market exclusivity, which is important in order for our products and product candidates to become profitable.

Certain of our patents will expire in the next 16 years. While we are seeking additional patent coverage which may protect the technology underlying these patents, there can be no assurances that such additional patent protection will be granted, or if granted, that these patents will not be infringed upon or otherwise held enforceable. Even if we are successful in obtaining a patent, patents have a limited lifespan. In the U.S., the natural expiration of a utility patent typically is generally 20 years after it is filed. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent protection, our products and product candidates, we may be open to competition from generic versions of such methods and devices

Risks Related to the Commercialization of our Products

We may be exposed to product liability risks, and clinical and preclinical liability risks, which could place a substantial financial burden upon us should we be sued.

Our business exposes us to potential product liability and other liability risks that are inherent in the testing, manufacturing and marketing of pharmaceutical formulations and products. We cannot be sure that claims will not be asserted against us. A successful liability claim or series of claims brought against us could have a material adverse effect on our business, financial condition and results of operations.

We cannot give assurances that we will be able to continue to obtain or maintain adequate product liability insurance on acceptable terms, if at all, or that such insurance will provide adequate coverage against potential liabilities. Claims or losses in excess of any product liability insurance coverage that we may obtain could have a material adverse effect on our business, financial condition and results of operations.

Our products may have undesirable side effects which may delay or prevent marketing approval, or, if approval is received, require it to be taken off the market, require it to include safety warnings or otherwise limit sales of the product.

Unforeseen side effects from our products and product candidates could arise either during clinical development or, if approved, after the products have been marketed. This could cause regulatory approvals for, or market acceptance of, the products to be harder and more costly to obtain.

To date, no serious adverse events have been attributed to our products and product candidates. The results of our planned or any future clinical trials may show that our products and product candidates cause undesirable or unacceptable side effects, which could interrupt, delay or halt clinical trials, and result in delay of, or failure to obtain, marketing approval from the FDA and other regulatory authorities, or result in marketing approval from the FDA and other regulatory authorities with restrictive label warnings. If our product candidates receive marketing approval and we or others later identify undesirable or unacceptable side effects caused by the use of our products:

• regulatory authorities may withdraw their approval of the products, which would force us to remove its products from the market;

• regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication, or field alerts to physicians, pharmacies and others;

23

• we may be required to change instructions regarding the way the products are administered, conduct additional clinical trials or change the labeling of the products;

• we may be subject to limitations on how it may promote the products;

• sales of the products may decrease significantly;

• we may be subject to litigation or product liability claims; and

• our reputation may suffer.

Any of these events could prevent us or our potential future collaborators from achieving or maintaining market acceptance of the products or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues from the sale of our products.

We currently have no marketing and sales organization and have no experience marketing pharmaceutical products. If we are unable to establish our own marketing and sales capabilities, or enter into agreements with third parties to market and sell our products after approval, we may not be able to generate product revenues.

We do not have a sales organization for the marketing, sales and distribution of any pharmaceutical products. In order to commercialize our products or any other product candidates we may develop or acquire in the future, we must develop these capabilities on our own or make arrangements with third parties for the marketing, sales and distribution of its products. The establishment and development of our own sales force will be expensive and time consuming and could delay any product launch, and we cannot be certain that it would be able to successfully develop this capability. As a result, we may seek one or more partners to handle some or all of the sales, marketing and distribution of our products. There also may be certain markets within the United States and elsewhere for our products for which we may seek a co-promotion arrangement. However, we may not be able to enter into arrangements with third parties to sell our products on favorable terms, or at all. In the event, we are unable to develop its own marketing and sales force or collaborate with a third party marketing and sales organization, we will not be able to commercialize our products or any other product candidates that we develop, which will negatively impact our ability to generate product revenues. Furthermore, whether we commercialize products on our own or rely on a third party to do so, our ability to generate revenue would be dependent on the effectiveness of the sales force. In addition, to the extent we rely on third parties to commercialize our approved products, we would likely receive less revenues than if we commercialized these products ourselves.

The market for our products is rapidly changing and competitive, and new drugs, which may be developed by others, could impair our ability to maintain and grow our business and remain competitive.

The pharmaceutical industry is subject to rapid and substantial technological change. Developments by others may render our technologies and products noncompetitive or obsolete. We also may be unable to keep pace with technological developments and other market factors. Technological competition from medical device, pharmaceutical and biotechnology companies, universities, governmental entities and others diversifying into the field is intense and is expected to increase. Many of these entities have significantly greater research and development capabilities and budgets than we do, as well as substantially more marketing, manufacturing, financial and managerial resources. These entities represent significant competition for us.

Our reliance on collaborations with third parties to develop and commercialize our products, such as the Adapt Agreement to develop and commercialize, NARCAN® is subject to inherent risks and may result in delays in product development and lost or reduced revenues, restricting our ability to commercialize our products and adversely affecting our profitability.

With respect to the products we have licensed, we depend upon collaborations with third parties to develop these product candidates and also depend substantially upon third parties to commercialize these products. As a result, our ability to develop, obtain regulatory approval of, manufacture and commercialize our existing and possibly future product candidates depends upon our ability to maintain existing, and enter into and maintain new, contractual and collaborative arrangements with others. We also engage, and intend in the future to continue to engage, contract manufacturers and clinical trial investigators.

In addition, although not a primary component of our current strategy, the identification of new compounds or product candidates for development has led us in the past, and may continue to require us, to enter into license or other collaborative agreements with others, including other pharmaceutical companies and research institutions. Such collaborative agreements for the acquisition of new compounds or product candidates would typically require us to pay license fees, make milestone payments and/or pay royalties. Furthermore, these agreements may result in our revenues being lower than if we developed our product candidates and in our loss of control over the development of our product candidates.

Contractors or collaborators may have the right to terminate their agreements with us or reduce their payments to us under those agreements on limited or no notice and for no reason or reasons outside of our control. For example, we may be unable to maintain our relationship with Adapt/EBS on a commercially reasonable basis, if at all, as the Adapt Agreement may be terminated

24

by Adapt/EBS in its sole discretion, either in its entirety or in respect of one or more countries, at any time by providing 60 days prior notice to us. In addition, Adapt/EBS may have similar or more established relationships with our competitors or larger customers which may negatively impact our relationship with Adapt/EBS. Moreover, the loss for any reason of Adapt/EBS as a key partner could have a materially significant and adverse impact on our business. If we are unable to retain Adapt/EBS as a partner on commercially acceptable terms, we may not be able to commercialize NARCAN® and we may experience delays in or suspension of the marketing of our products. The same could apply to other product candidates we may develop or acquire in the future. Our dependence upon third parties to assist with the development and commercialization of our product candidates may adversely affect our ability to generate profits or acceptable profit margins and our ability to develop and deliver such products on a timely and competitive basis. Additionally, our Aegis License Agreement shall expire upon the expiration of our obligation to pay royalties under the Aegis License Agreement; provided, however, that we shall have the right to terminate the License granted on a product-by-product or country-by-country basis upon 30 days’ prior written notice to Aegis.

If our current or future licensees exercise termination rights they may have, or if these license agreements terminate because of delays in obtaining regulatory approvals, or for other reasons, and we are not able to establish replacement or additional research and development collaborations or licensing arrangements, we may not be able to develop and/or commercialize our product candidates. Moreover, any future collaborations or license arrangements we may enter into may not be on terms favorable to us.

A further risk we face with the collaborations is that business combinations and changes in the collaborator or their business strategy may adversely affect their willingness or ability to complete their obligations to us.

Our current or any future collaborations or license arrangements ultimately may not be successful. Our agreements with collaborators typically allows them discretion in electing whether to pursue various development, regulatory, commercialization and other activities, such as the Adapt Agreement.

If any collaborator were to breach its agreement with us or otherwise fail to conduct collaborative activities in a timely or successful manner, the pre-clinical or clinical development or commercialization of the affected product candidate or research program would be delayed or terminated.

Other risks associated with our collaborative and contractual arrangements with others include the following:

• we may not have day-to-day control over the activities of our contractors or collaborators;

• our collaborators may fail to defend or enforce patents they own on compounds or technologies that are incorporated into the products we develop with them;

• third parties may not fulfill their regulatory or other obligations; and

• we may not realize the contemplated or expected benefits from collaborative or other arrangements; and disagreements may arise regarding a breach of the arrangement, the interpretation of the agreement, ownership of proprietary rights, clinical results or regulatory approvals.

These factors could lead to delays in the development of our product candidates and/or the commercialization of our products or reduction in the milestone payments we receive, or could result in us not being able to commercialize our products. Further, disagreements with our contractors or collaborators could require or result in litigation or arbitration, which would be time-consuming and expensive. Our ultimate success may depend upon the success and performance on the part of these third parties. If we fail to maintain these relationships or establish new relationships as required, development of our product candidates and/or the commercialization of our products will be delayed or may never be realized.

Our product pipeline includes pre-clinical product candidates, such as a vaccine for heroin addiction. We may not be successful in completing the pre-clinical work required for these product candidates, the clinical trials necessary for obtaining market approval, or being able to commercially launch these product candidates.

In October 2016, we licensed a vaccine to treat heroin addiction from the Walter Reed Army Institute of Research ("WRAIR"). This is an early-stage asset and requires significant additional pre-clinical research and development before human testing may be initiated. We plan to work closely with scientists at WRAIR in order to advance the program into the clinic and determine if this vaccine is safe and effective in a patient population. As a result, we may be unable to obtain sufficient pre-clinical data to apply for, or gain, the requisite authorizations to commence human clinical testing on either this asset or other pre-clinical assets we may pursue. However, even if we are successful moving a pre-clinical program into humans, the ultimate success of any development program is uncertain. If we obtain positive clinical data for either this or other pre-clinical assets

25

we may develop, there will be a significant time lag before the asset gains regulatory approval or commercialization may begin, if ever.

We are exposed to product liability, non-clinical and clinical liability risks which could place a substantial financial burden upon us should lawsuits be filed against us.

Our business exposes us to potential product liability and other liability risks that are inherent in the testing, manufacturing and marketing of pharmaceutical formulations and products. We expect that such claims are likely to be asserted against us at some point. In addition, the use in our clinical trials of pharmaceutical formulations and products and the subsequent sale of these formulations or products by us or our potential collaborators may cause us to bear a portion of or all product liability risks. Any claim under any existing insurance policies or any insurance policies secured in the future may be subject to certain exceptions, and may not be honored fully, in part, in a timely manner, or at all, and may not cover the full extent of liability we may actually face. Therefore, a successful liability claim or series of claims brought against us could have a material adverse effect on our business, financial condition and results of operations.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, suppliers and business partners and personally identifiable information of our customers and employees, in our data centers and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disrupt our operations and the products we provide to customers, and damage our reputation, and cause a loss of confidence in our products, which could adversely affect our business/operating margins, revenues and competitive position.

Risks Related to Government Regulation of our Industry

Legislative or regulatory reform of the healthcare system may affect our ability to sell our products profitably.

In both the U.S. and certain foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the healthcare system in ways that could impact our ability to sell future products and profitability. On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, “PPACA”), which includes a number of health care reform provisions and requires most U.S. citizens to have health insurance. The new law, among other things, imposes a significant annual fee on companies that manufacture or import branded prescription drug products, addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, and establishes a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D. Substantial new provisions affecting compliance also have been added, which may require modification of business practices with health care practitioners.

In the coming years, additional changes could be made to governmental healthcare programs that could significantly impact the success of our future products, and we could be adversely affected by current and future health care reforms.

We are subject to intense regulation from the U.S. Government and such other governments and quasi-official regulatory bodies where our products are and product candidates may be sold.

Both before and after regulatory approval to market a particular product candidate, including our product candidates, the manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, distribution and record keeping related to the product are subject to extensive, ongoing regulatory requirements, including, without limitation, submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with (“cGMP”) requirements and good clinical practice requirements for any clinical trials we conduct post-approval. As a result, we are subject to a number of governmental and other regulatory risks, which include:

26

• clinical development is a long, expensive and uncertain process; delay and failure can occur at any stage of our clinical trials;

• our clinical trials are dependent on patient enrollment and regulatory approvals; we do not know whether our planned trials will begin on time, or at all, or will be completed on schedule, or at all;

• the FDA or other regulatory authorities may not approve a clinical trial protocol or may place a clinical trial on hold;

• we rely on third parties, such as consultants, contract research organizations, medical institutions and clinical investigators, to conduct clinical trials for our drug candidates and if we or any of our third-party contractors fail to comply with applicable regulatory requirements, such as cGMP requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the European Medicines Agency or comparable foreign regulatory authorities may require us to perform additional clinical trials;

• if the clinical development process is completed successfully, our ability to derive revenues from the sale of our product candidates will depend on us first obtaining FDA or other comparable foreign regulatory approvals, each of which are subject to unique risks and uncertainties;

• there is no assurance that we will receive FDA or corollary foreign approval for any of our product candidates for any indication; we are subject to government regulation for the commercialization of our product candidates

• we have not received regulatory approval in the United States for the commercial sale of any of our product candidates;

• even if one or more of our product candidates does obtain approval, regulatory authorities may approve such product candidate for fewer or more limited indications than our requests, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials or may approve with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate;

• undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities;

• later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with the regulatory requirements of FDA and other applicable United Statesc and foreign regulatory authorities could subject us to administrative or judicially imposed sanctions;

• the FDA's policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates, and if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained; and

• we may be liable for contamination or other harm caused by hazardous materials used in the operations of our business.

In addition, our operations are also subject to various federal and state fraud and abuse, physician payment transparency and privacy and security laws, including, without limitation:

• The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or providing remuneration to induce the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare or Medicaid programs. This statute has been applied to pharmaceutical manufacturer marketing practices, educational programs, pricing policies and relationships with healthcare providers. A person or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation;

• Federal civil and criminal false claims laws and civil monetary penalty laws, including civil whistleblower or qui tam actions that prohibit, among other things, knowingly presenting, or causing to be present, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government. The government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes;

• The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing regulations, which created federal criminal laws that prohibit, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, also imposes certain regulatory and contractual requirements regarding the privacy, security and transmission of individually identifiable health information;

• Federal “sunshine” requirements imposed by the PPACA on drug manufacturers regarding any “transfer of value” made or distributed to physicians and teaching hospitals, and any ownership and investment interests held by such

27

physicians and their immediate family members. Failure to submit the required information may result in civil monetary penalties of up an aggregate of $150,000 per year (and up to an aggregate of $1 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws or regulations; and

• State and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require drug manufacturers to comply with the industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of certain health information, many of which differ from each other in significant ways and often are not preempted by HIPAA.

Many of our business practices are subject to scrutiny by regulatory and government enforcement authorities, as well as to lawsuits brought by private citizens under federal and state laws. Failure to comply with applicable law or an adverse decision in lawsuits may result in adverse consequences to us.

The laws governing our conduct in the U.S., and the conduct of collaborators, licensors or licensees on whom the success of our business relies, are enforceable by administrative, civil, and criminal penalties. Violations of laws such as the Federal Food, Drug, and Cosmetic Act, the Social Security Act (including the Anti-Kickback Statute), and the Federal False Claims Act, and any regulations promulgated under the authority of the preceding, may result in a range of enforcement action including jail sentences, fines integrity oversight and reporting obligations and/or exclusion from federal and state healthcare programs, as may be determined by Medicare, Medicaid and the Department of Health and Human Services and other regulatory authorities as well as by the courts in response to actions brought by the Department of Justice. FDA regulates drugs throughout the development process, from preclinical and clinical trials through approval and postmarketing requirements. Failure to fully comply with FDA law may cause the FDA to issue inspectional observations, untitled or warning letters, bring an enforcement action, suspend or withdraw an approved product from the market, require a recall or institute fines or civil fines, or could result in disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which (whether applied directly to us or to our collaborators, licensors, or licensees) could harm our reputation and our business. There can be no assurance that our activities, or those of our collaborators, licensors or licensees, will not come under the scrutiny of regulators and other government authorities or that our practices will not be found to violate applicable laws, rules and regulations or prompt lawsuits by private citizen "relators" under federal or state false claims laws.

Laws impacting the U.S. healthcare system are subject to a great deal of uncertainty, which may result in adverse consequences to our business.

28

There have been a number of legislative and regulatory proposals to change the healthcare system, reduce the costs of healthcare and change medical reimbursement policies. Doctors, clinics, hospitals and other users of our products may decline to purchase our products to the extent there is uncertainty regarding coverage from government or commercial payors. Further proposed legislation, regulation and policy changes affecting third-party reimbursement are likely. Among other things, Congress has in the past proposed changes to and the repeal of the PPACA, and lawsuits have been brought challenging aspects of the law at various points. There have been repeated recent attempts by Congress to repeal or replace the PPACA. Some of the provisions of the PPACA have yet to be implemented, and there have been legal and political challenges to certain aspects of the PPACA. Since January 2017, President Trump has signed two executive orders and other directives designed to delay, circumvent, or loosen certain requirements mandated by the PPACA. Concurrently, Congress has considered legislation that would repeal and replace all or part of the PPACA. While Congress has previously been successful at passing comprehensive repeal legislation through both Chambers of Congress, it had then been vetoed by former President Obama and full repeal legislation is unlikely in the current political climate. However, Congress has passed two bills affecting the implementation of certain taxes under the PPACA. The Tax Cuts and Jobs Act passed in December of 2017 included a provision that would repeal one of the primary pillars of the law, the PPACA’s individual mandate penalty that essentially assessed a monetary penalty or fine on certain individuals who fail to maintain qualifying health coverage for all or part of a year. Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain fees mandated by the PPACA, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Moreover, the Bipartisan Budget Act of 2018 among other things, amends the PPACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. Congress may consider other legislation to repeal or replace elements of the PPACA on a provision-by-provision basis. In addition, there have been recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, control drug costs, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. We are unable to predict what legislation or regulation, if any, relating to the health care industry or third-party coverage and reimbursement may be enacted in the future at the state or federal level, or what effect such legislation or regulation may have on us. Denial of coverage and reimbursement of our products, or the revocation or changes to coverage and reimbursement policies, could have a material adverse effect on our business, results of operations and financial condition.

We are planning to pursue the FDA 505(b)(2) pathway for our product candidates, and if we are not able to successfully do so, seeking approval of these product candidates through the 505(b)(1) NDA pathway would require full reports of investigations of safety and effectiveness. Although we find the feedback received from the FDA to date generally encouraging toward our interest in pursuing the 505(b)(2) pathway for the treatment of AUD and opioid overdose, such feedback is preliminary only and includes a number of comments and recommendations that we will need to address in our drug development program to meet FDA standards for approval.  In addition, our nasally delivered product candidates will include a drug delivery device, and that constituent part will be evaluated by the FDA, as will the combination products as a whole, under our NDA. Even if we are able to pursue the 505(b)(2), we could be subject to legal challenges and regulatory changes which might result in extensive delays or result in our 505(b)(2) application being unsuccessful.

Section 505(b)(2) of the FDA permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if applicable to us, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA's prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the development program for a product candidate by potentially decreasing the amount of clinical data that we would need to generate in order to obtain FDA approval. We plan to pursue this pathway for our product candidates.  

If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as anticipated, we would need to reconsider our plans and might not be able to commercialize our product candidates in a cost-efficient manner, or at all. If we were to pursue approval under the 505(b)(1) NDA pathway, we would be subject to more extensive requirements and risks.

In addition, medical products containing a combination of new drugs, biological products, or medical devices are regulated as “combination products” in the United States. Each constituent part of a combination product is subject to the requirements established by the FDA for that type of constituent part, whether a new drug, biologic, or device. In order to facilitate pre-market review of combination products, the FDA designates one of its centers to have primary jurisdiction for the pre-market review and regulation of the overall product based upon a determination by FDA of the primary mode of action of the combination product, and typically one application (e.g., for a drug/device combination product assigned to CDER, an NDA - either under 505(b)(1) or 505(b)(2)) will be made.

29

When evaluating products that utilize a specific drug delivery system or device, the FDA will evaluate the characteristics of that delivery system and its functionality, as well as the potential for undesirable interactions between the drug and the delivery system, including the potential to negatively impact the safety or effectiveness of the drug.  The FDA review process can be more complicated for combination products, and may result in delays, particularly if novel delivery systems are involved.  We rely on third parties for the design and manufacture of the delivery systems for our products, and in some cases for the right to refer to their data on file with the FDA or other regulators.  Quality or design concerns with the delivery system, or commercial disputes with these third-parties, could delay or prevent regulatory approval and commercialization of our product candidates.

In some instances over the last few years, certain brand-name pharmaceutical companies and others have objected to the FDA's interpretation of Section 505(b)(2) and legally challenged decisions by the agency. If an FDA decision or action relative to our product candidate, or the FDA's interpretation of Section 505(b)(2) more generally, is successfully challenged, it could result in delays or even prevent the FDA from approving a 505(b)(2) application for our product candidates.

The pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. A claim by the applicant that a patent is invalid or will not be infringed is subject to challenge by the patent holder, requirements may give rise to patent litigation and mandatory delays in approval (i.e., a 30-month stay) of a 505(b)(2) application. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. However, even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition.

Even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to accelerated product development or earlier approval.  Even if approved pursuant to the Section 505(b)(2) regulatory pathway, a drug may be subject to the same post-approval limitations, conditions and requirements as any other drug.

Clinical trials for our product candidates have in some cases or may in the future be conducted outside the United States and not under an IND, and where this is the case, the FDA may not accept data from such trials.

Although the FDA may accept data from clinical trials conducted outside the United States and not under an IND in support of research or marketing applications for our product candidates, this is subject to certain conditions set out in 21 C.F.R. § 312.120. For example, such foreign clinical trials should be conducted in accordance with GCP, including review and approval by an independent ethics committee and obtaining the informed consent from subjects of the clinical trials. The FDA must also be able to validate the data from the study through an onsite inspection if the agency deems it necessary. The foreign clinical data should also be applicable to the United States population and United States medical practice. Other factors that may affect the acceptance of foreign clinical data include differences in clinical conditions, study populations or regulatory requirements between the United States and the foreign country.

Risks Related to Ownership of our Common Stock

The price of our Common Stock could be highly volatile due to a number of factors, which could lead to losses by investors and costly securities litigation.

Our Common Stock closed as high as $24.40 and as low as $5.35 per share between January 1, 2016 and August 28, 2017 on the OTCQB. On October 2, 2017 we changed our state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan of Merger, dated October 2, 2017, whereby we merged with and into our recently formed, wholly-owned Delaware subsidiary. On August 24, 2017, we received approval for up-listing to the Nasdaq Capital Market and our Common Stock began trading on the Nasdaq Capital Market on August 29, 2017. Our Common Stock closed as high as $50.50 and as low as $12.89 per share between August 29, 2017 and March 15, 2019. On March 15, 2019 the closing price of our Common Stock, as reported on the Nasdaq Capital Market was $14.70. Historically, the over-the-counter markets for securities, such as our Common Stock, have experienced extreme price fluctuations. Some of the factors leading to this volatility include, but are not limited to:

• fluctuations in our operating results;

• announcements of product releases by us or our competitors;

• announcements of acquisitions and/or partnerships by us or our competitors; and

• general market conditions.

Although shares of our Common Stock currently trade on the Nasdaq Capital Market under the symbol “OPNT”, there

30

is no assurance that our stock will not continue to be volatile while listed on the Nasdaq Capital Market in the future.

We do not anticipate declaring any cash dividends on our Common Stock.

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any dividends in the foreseeable future, but will review this policy from time to time as circumstances dictate.

Certain of our executive officers and directors control the direction of our business by means of a significant collective ownership of our Common Stock. The concentrated beneficial ownership of our Common Stock may prevent other stockholders from influencing significant corporate decisions.

Dr. Roger Crystal, our Chief Executive Officer and a director, Dr. Gabrielle Silver, Lead Independent Director, Dr. Michael Sinclair, a director, Ann MacDougall, a director, Thomas T. Thomas, a director, David O'Toole, our Chief Financial Officer and Dr. Phil Skolnick, our Chief Scientific Officer collectively beneficially own approximately 37% of our outstanding Common Stock as of December 31, 2018. As a result, such executive officers and directors effectively control the Company and have the ability to exert substantial influence over all matters requiring approval by our stockholders, including the election and removal of directors, amendments to our Certificate of Incorporation, and any proposed merger, consolidation or sale of all or substantially all our assets and other corporate transactions. This concentration of ownership could be disadvantageous to other stockholders with differing interests from such executive officers and directors.

Anti-takeover provisions in our charter documents and under Delaware law could prevent or delay transactions that our stockholders may favor and may prevent stockholders from changing the direction of our business or management.

After giving effect to our merger into our wholly-owned Delaware subsidiary, provisions of our Certificate of Incorporation, as amended and restated, and Bylaws may discourage, delay or prevent a merger or acquisition that our stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares, and may also frustrate or prevent any attempt by stockholders to change our direction or management. For example, these provisions:

• prohibit stockholder action by written consent;

• establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings;

• establish a staggered board of directors such that all members of the Board are not elected at one time;

• allow only the Board to fill any vacancy in the Board by reason of death, resignation or otherwise, or if the number of directors shall be increased; and

• require a vote of a majority of the shares of our outstanding stock entitled to vote at an election of directors to remove a director.

Compliance with changing corporate governance and public disclosure regulations may result in additional expense.

Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, and any new Securities and Exchange Commission regulations will require an increased amount of management attention and external resources. We intend to continue to invest all reasonably necessary resources to comply with evolving standards, which may result in increased general and administrative expense and a diversion of management time and attention from revenue-generating activities to compliance activities.

Our Common Stock is thinly traded on the Nasdaq Capital Market exchange and no assurances can be made about stock performance, liquidity, or maintenance of our Nasdaq listing.

Historically, our Common Stock was quoted on the OTCQB, which provided significantly less liquidity than a securities exchange (such as the New York Stock Exchange or the Nasdaq Stock Market). On August 24, 2017, our Common Stock was approved for trading on the Nasdaq Capital Market. Beginning on August 29, 2017, our Common Stock began trading on the Nasdaq Capital Market under the symbol “OPNT”. Although currently listed on the Nasdaq Capital Market, there can be no assurance that we will continue to meet the Nasdaq Capital Market’s minimum listing requirements or that of any other national exchange. In addition, there can be no assurances that a liquid market will be created for our Common Stock. If we are unable to maintain listing on the Nasdaq Capital Market or if a liquid market for our Common Stock does not develop, our common stock may remain thinly traded.

31

Item 1B. Unresolved Staff Comments.

This information is not required for smaller reporting companies.

32

Item 2.  Properties.

The Company does not currently own any physical property.

On May 29, 2017, we entered into a Sublease (the “Sublease”) with Standish Management, LLC to sublease approximately 1,500 square feet of office space located at 201 Santa Monica Boulevard, Suite 500, Santa Monica, CA 90401. Per the terms of the Sublease, the term commenced on August 1, 2017 and as of September 1, 2018 is on a month to month basis. Commencing September 1, 2017, our headquarters are located at this location.

Our headquarters through August 31, 2017 were located on the 12th Floor of 401 Wilshire Blvd., Santa Monica, California 90401. We terminated our lease with Premier Office Centers, LLC effective September 30, 2017.

On April 20, 2017, we entered into an Office Service Agreement (the “Office Service Agreement”) with Regus and leased approximately 1,000 square feet of office space at 83 Baker Street, London, England, W1U 6AG. The original term of the lease expired May 31, 2018 and effective June 1, 2018 either party may terminate the lease with a 90 day advance notice.

33

Item 3.  Legal Proceedings.

On September 15, 2016, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “September 2016 Notice Letter”), that Teva USA had filed the Teva ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN® before the expiration of the ’253 patent. The ’253 patent is listed with respect to NARCAN® in the FDA’s Approved Drug Products with Therapeutic Equivalents Evaluations publication (commonly referred to as the “Orange Book”) and expires on March 16, 2035. Teva’s September 2016 Notice Letter asserts that its generic product will not infringe the ’253 patent and/or that the ’253 patent is invalid or unenforceable. On October 21, 2016, the Plaintiffs filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with the FDA with respect to the ’253 patent.

On January 3, 2017, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “January 2017 Notice Letter”), that Teva USA is seeking regulatory approval to market a generic version of NARCAN® before the expiration of the ’747 patent. The ’747 patent is listed with respect to NARCAN® in the FDA’s Orange Book and expires on March 16, 2035. Teva’s January 2017 Notice Letter asserts that its generic product will not infringe the ’747 patent or that the ’747 patent is invalid or unenforceable. On February 8, 2017, the Plaintiffs filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with the FDA with respect to the ’747 patent.

On March 17, 2017, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “March 2017 Notice Letter”), that Teva USA is seeking regulatory approval to market a generic version of NARCAN before the expiration of the ’177 patent. The ’177 patent is listed with respect to NARCAN® in the FDA’s Orange Book and expires on March 16, 2035. Teva’s March 2017 Notice Letter asserts that its generic product will not infringe the ’177 patent and/or that the ’177 patent is invalid or unenforceable. On April 26, 2017, the Plaintiffs filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with the FDA with respect to the ’177 patent.

On June 2, 2017, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “June 2017 Notice Letter”), that Teva USA is seeking regulatory approval to market a generic version of NARCAN® before the expiration of the ’965 patent. The ’965 patent is listed with respect to NARCAN® in the FDA’s Orange Book and expires on March 16, 2035. Teva’s June 2017 Notice Letter asserts that its generic product will not infringe the ’965 patent and/or that the ’965 patent is invalid or unenforceable. On July 12, 2017, the Plaintiffs filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with the FDA with respect to the ’965 patent.

On February 27, 2018, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “February 2018 Notice Letter”), that Teva had filed an ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN® 2 mg/spray Nasal Spray before the expiration of the ‘644 patent and the ‘226 patent. The ‘644 and ‘226 patents are listed with respect to Adapt’s New Drug Application No. 208411 for NARCAN 2 mg/spray Nasal Spray in the FDA’s Orange Book and each patent expires on March 16, 2035. The Company is the record owner of the ‘644 patent and the Company and Adapt are joint record owners of the ‘226 patent. Teva’s Notice Letter asserts that the commercial manufacture, use or sale of its generic drug product described in its ANDA will not infringe the ‘644 patent or the ‘226 patent, or that the ‘644 patent and ‘226 patent are invalid or unenforceable.

On September 14, 2018, the Company and Adapt Pharma, Inc. (also “Adapt”) received notice from Perrigo UK FINCO Limited Partnership (“Perrigo”), pursuant to 21 U.S.C. ß 355(j)(2)(B)(ii) (the “Notice Letter”), that Perrigo had filed an ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN® (naloxone hydrochloride) Nasal Spray before the expiration of U.S. Patent Nos. 9,211,253 (the “‘253 Patent” ), 9,468,747 (the “‘747 Patent” ), 9,561,177 (the “‘177 Patent” ), 9,629,965 (the “‘965 Patent” ) and 9,775,838 (the “‘838 Patent” ). The ‘253, ‘747, ‘177, ‘965 and ‘838 patents are listed with respect to NARCAN® in the FDA's Orange Book and expires on March 16, 2035. Perrigo's Notice Letter asserts that its generic product will not infringe the ‘253, ‘747, ‘177, ‘965 and ‘838 patents or that the ‘253, ‘747, ‘177, ‘965 and ‘838 patents are invalid or unenforceable. Pursuant to an Exclusive License Agreement, entered into on December 14, 2014, as amended, the Company has exclusively licensed the ‘253, ‘747, ‘177, ‘965 and ‘838 patents to Adapt.

On October 25, 2018, Emergent BioSolutions’ Adapt subsidiaries and Opiant (collectively, the “Plaintiffs”) filed a complaint for patent infringement against Perrigo in the United States District Court for the District of New Jersey arising from Perrigo’s ANDA filing with the FDA. As a result of timely filing the lawsuit in accordance with the Hatch-Waxman Act, a 30-month stay of approval will be imposed by the FDA on Perrigo’s ANDA, which is expected to remain in effect until March 2021 absent an earlier judgment, unfavorable to the Plaintiffs, by the Court. The Plaintiffs seek, among other relief, an order that the effective date of FDA approval of the ANDA be a date no earlier than the expiration of each of the Patents-In-Suit, as well as

34

equitable relief enjoining Perrigo from infringing these patents, and monetary relief as a result of any such infringement. Emergent BioSolution Inc. continues to vigorously enforce the intellectual property portfolio related to NARCAN^® Nasal Spray.

In each of the complaints described above, the Plaintiffs seek, among other relief, an order that the effective date of FDA approval of the Teva or Perrigo ANDA be a date not earlier than the expiration of the applicable patent, as well as equitable relief enjoining Teva and Perrigo from making, using, offering to sell, selling, or importing the product that is the subject of the Teva or Perrigo ANDA until after the expiration of the applicable patent, and monetary relief as a result of any such infringement.

On or about February 19, 2019, Emergent BioSolutions’ Adapt subsidiaries and Opiant received notice from a company called Nalox-1 Pharmaceuticals LLC that it had filed fifteen petitions for inter partes review of U.S. Patent Nos. 9,211,253, 9,468,747, 9,561,177, 9,629,965, and 9,775,838 (IPR Nos. 2019-00685, 2019-00686, 2019-00687, 2019-00688, 2019-00689, 2019-00690, 2019-00691, 2019-00692, 2019-00693, 2019-00694, 2019-00695, 2019-00696, 2019-00697, 2019-00698, 2019-00699) with the Patent Trial and Appeal Board of the United States Patent and Trademark Office. Nalox-1’s Petitions assert that each of the foregoing patents are invalid as obvious in view of prior art.  An initial response to the Petitions is due three months from the filing date of the petitions. Opiant continues to be confident in the intellectual property portfolio related to NARCAN Nasal Spray.

Except as described above, the Company is currently not involved in any litigation that the Company believes could have a materially adverse effect on the Company’s financial condition or results of operations. Except as described above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or other body pending or, to the knowledge of the executive officers of the Company or any of the Company’s subsidiaries, threatened against or affecting the Company, the Company’s Common Stock, any of the Company’s subsidiaries or the Company’s or the Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

35

Item 4.  Mine Safety Disclosures.

Not applicable.

36

PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

From April 2007 through January 2016, our Common Stock was listed for quotation on the OTCQB under the symbol “LLTP”. From February 2016, following our name change to Opiant Pharmaceuticals, Inc., until August 28, 2017, our Common Stock was listed for quotation on the OTCQB under the symbol “OPNT”. Beginning on August 29, 2017, our Common Stock began trading on the Nasdaq Capital Market under the symbol “OPNT.”

Price Range of Common Stock

The following table shows, for the periods indicated, the high and low sale prices per share of our Common Stock as reported by Nasdaq.

	High		Low
Fiscal Year 2017
First quarter ended October 31, 2016	$	8.89	$	7.01
Second quarter ended January 31, 2017	$	8.40	$	5.01
Third quarter ended April 30, 2017	$	9.06	$	6.32
Fourth quarter ended July 31, 2017	$	15.29	$	5.00
Transition Period
August 1, 2017 - December 31, 2017	$	51.90	$	11.51
Year Ended 2018
First quarter ended March 31, 2018	$	32.28	$	18.37
Second quarter ended June 30, 2018	$	21.10	$	13.28
Third quarter ended September 30, 2018	$	29.55	$	12.75
Fourth quarter ended December 31, 2018	$	20.00	$	12.02

Approximate Number of Equity Security Holders

As of March 15, 2019, there were approximately 46 stockholders of record. Because shares of our Common Stock are held by depositories, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.

Dividends

We have not declared or paid any cash dividends on our Common Stock, and we do not anticipate declaring or paying cash dividends for the foreseeable future. We are not subject to any legal restrictions respecting the payment of dividends, except that we may not pay dividends if the payment would render us insolvent. Any future determination as to the payment of cash dividends on our Common Stock will be at the discretion of our Board and will depend on our financial condition, operating results, capital requirements and other factors that the Board considers to be relevant.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth certain information regarding our equity compensation plans as of December 31, 2018:

37

Plan Category	Number of securities to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders	343,550	$	28.97	157,881
Equity compensation plans not approved by security holders	2,885,500	$	7.30	—
Total	3,229,050			157,881

Unregistered Sales of Equity Securities

The following represents a summary of the Company’s unregistered issuances of its equity securities during the last three years. Each of the issuances were made pursuant to Section 4(a)(2) of the Securities Act. These issuances qualified for exemption under Section 4(2) since they did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. The Company did not undertake an offering in which the Company sold a high number of shares to a high number of investors. In addition, the investors had the necessary investment intent as required by Section 4(2) because they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, the Company has met the requirements to qualify for exemption under Section 4(2) of the Securities Act for these transactions.

Year Ended 2018 - Common Stock

On April 19, 2018, the Company issued 37,866 shares of its Common Stock pursuant to the LOI dated November 19, 2015 (see Note 10 - Commitments). The Company received no proceeds from the issuance of these shares.

On September 5, 2018, the Company issued 160,000 shares of its Common Stock to the Valour Fund, LLC, as a result of Valour's exercise of its option to change its interest in certain product revenues for Common Stock of the Company (see Note 8 - Deferred Revenue).

On December 18, 2018, the Company issued 6,498 shares of its Common Stock to Torreya Partners (Europe) LLP (“Torreya”). These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Agreement").

Transition Period: August 1, 2017 - December 31, 2017 - Common Stock

On September 8, 2017, we entered into an agreement (the “Supplemental Agreement”) with Torreya, which modifies and supplements the Engagement Letter dated December 18, 2014 (the “2014 Agreement”) between the Company and Torreya regarding the engagement of Torreya to provide financial advisory services with respect to the licensing of the intellectual and property rights to develop and commercialize certain Products (as defined in the 2014 Agreement) with Adapt. The Supplemental Agreement amends the total consideration to be paid by the Company under the 2014 Agreement from “3.75% of Total Consideration” to, include, among other consideration, shares of Common Stock equal to an aggregate value of $300,000, to be issued by us to Torreya in three equal installments over a 16-month period commencing September 2017. Payments in the form of shares of Common Stock will be a defined number of shares calculated based upon the average closing price of the Common Stock for the 10 trading days prior to the relevant date for the payment. On September 23, 2017, the Company issued 3,283 shares to the Torreya in relation to the Supplemental Agreement. This issuance of Common Stock to Torreya was made pursuant to Section 4(a)(2) of

38

the Securities Act. On December 22, 2017, the Company issued 3,455 shares to the Torreya in relation to the Supplemental Agreement. This issuance of Common Stock to Torreya was made pursuant to Section 4(a)(2) of the Securities Act.

On September 11, 2017, we issued 7,997 shares of Common Stock as a result of the cashless exercise of 10,000 option shares by a consultant. The non-statutory stock option was granted to the consultant, in exchange for services rendered, on July 15, 2015, was fully vested on the date of grant and had an exercise price of $10.00 per share. We claimed exemption from registration under the Securities Act for the grant of the option and issuance of Common Stock to the consultant under Rule 701 promulgated under the Securities Act (“Rule 701”), in that the option was granted, and the shares of Common Stock were subsequently issued, pursuant to a written contract relating to compensation, as provided by Rule 701.

Fiscal Year 2017 - Common Stock

On June 22, 2017, in consideration for the grant of the License under the License Agreement with Aegis, we agreed to pay Aegis two immaterial upfront payments, of which we may elect to pay up to 50% by issuing our Common Stock to Aegis, with the number of shares to be issued equal to 75% of the average closing price of our Common Stock over the 20 trading days preceding the date of payment.

On March 16, 2017, we issued 10,745 shares of Common Stock pursuant to a binding letter of intent to agree to negotiate and enter into an exclusive license agreement and collaboration agreement (the “LOI”) with a pharmaceutical company with certain desirable proprietary information. Per the terms of the LOI, we were obligated to issue these shares upon the one year anniversary of our receipt of a milestone payment from Adapt for the first commercial sale of our product, NARCAN®, in the U.S.

On March 13, 2017, pursuant to the Third Miles Amendment, and in partial consideration for Mr. Miles’ continued service to us as an advisor through December 31, 2017, we issued Mr. Miles 1,875 shares of Common Stock; and (ii) granted to Mr. Miles a warrant to purchase 45,000 shares of Common Stock (the “Miles Warrant”). The Miles Warrant, which is fully vested on the date of grant, has an exercise price of $10.00, an expiration date of three years from the date of grant and may be exercised solely by payment of cash.

The issuances described above qualified for exemption under Section 4(2) since it did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. The Company did not undertake an offering in which the Company sold a high number of shares to a high number of investors. Based on an analysis of the above factors, we believe the Company has met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any of our securities during any of the periods presented in this report.

39

Item 6. Selected Financial Data.

The Company is not required to provide the information required by this Item because the Company is a smaller reporting company.  

40

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the results of operations and financial condition for the year ended December 31, 2018, five month period ended December 31, 2017 and year ended July 31, 2017 and financial condition as of December 31, 2018, December 31, 2017 and July 31, 2017 and should be read in conjunction with the “Cautionary Note Regarding Forward-Looking Statements” contained in Part 1 of this report on Form 10-K (this "Report"), the “Risk Factors” contained in Item 1A of this Report, ourconsolidated financial statements and the notes thereto contained in Item 8 of this Report, and the other information appearing elsewhere in, or incorporated by reference into this Report.

Overview

On December 8, 2017, the Board of Directors, acting pursuant to Section 5.1 of the Company’s Bylaws, approved a resolution changing the Company’s fiscal year end from July 31 to December 31. We made this change to align our fiscal year end with other companies within our industry. Information contained in this section covers the reporting periods for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017.

We are a specialty pharmaceutical company developing medicines for addictions and drug overdose. We developed NARCAN® (naloxone hydrochloride) Nasal Spray ("NARCAN®"), a treatment to reverse opioid overdose. This product was conceived and developed by us, licensed to Adapt Pharma Operations Limited (“Adapt”), an Ireland based pharmaceutical company in December 2014 and approved by the U.S. Food and Drug Administration (“FDA”) in November 2015. It is marketed by Adapt. In October 2018, Emergent BioSolutions, Inc. (“EBS”) completed its acquisition of Adapt.

We have not consistently attained profitable operations and have historically depended upon obtaining sufficient financing to fund our operations. We anticipate if revenues are not sufficient then additional funding will be required in the form of debt financing and/or equity financing from the sale of our Common Stock and/or financings from the sale of interests in our prospective products and/or royalty transactions. However, we may not be able to generate sufficient revenues or raise sufficient funding to fund our operations.

We have not had a bankruptcy, receivership or similar proceeding. We are required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the clinical testing and manufacturing and sale of pharmaceutical products.

On October 2, 2017, we changed our state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan of Merger, dated October 2, 2017, whereby we merged with and into our recently formed, wholly-owned Delaware subsidiary, Opiant Pharmaceuticals, Inc. Pursuant to the Agreement and Plan of Merger, (i) we merged with and into our Delaware subsidiary, (ii) our separate corporate existence in Nevada ceased to exist, (iii) our Delaware subsidiary became the surviving corporation, (iv) each share of our Common Stock outstanding immediately prior to the effective time was converted into one fully-paid and non-assessable share of common stock of Opiant Pharmaceuticals, Inc., a Delaware corporation, $0.001 par value per share, and (v) the certificate of incorporation and bylaws of our Delaware subsidiary were adopted as our certificate of incorporation and bylaws at the effective time of the merger. The merger and the Agreement and Plan of Merger were approved by our Board and stockholders representing a majority of outstanding Common Stock.

We developed NARCAN®, a treatment to reverse opioid overdoses, which was conceived, licensed, developed, approved by the FDA and commercialized in less than three years. We plan to replicate this relatively low cost, successful business strategy primarily through developing nasal opioid antagonists in the field of developing pharmacological treatments for substance use, addictive, and eating disorders. We aim to identify and progress drug development opportunities with the potential to file additional New Drug Application (“NDAs”) with the FDA within three years. We also plan to identify and progress drug development opportunities with potentially larger markets, potentially larger addressable patient populations and greater revenue potential. In addition, we plan to invest in long-term development opportunities by identifying early stage product candidates with novel modes of action.

Our current pipeline includes medicines in development for Opioid Overdose Reversal (“OOR”), Alcohol Use Disorder (“AUD”), Opioid Use Disorder (“OUD”) and Acute Cannabinoid Overdose (“ACO”). We are also pursuing other treatment opportunities within the addiction and drug overdose field.

41

Results of Operations 

Comparison of the year ended December 31, 2018 compared to the year ended December 31, 2017.

The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. Accordingly, the following presentation and discussion of the results of operations for the year ended December 31, 2018, which has been audited, will be compared to the unaudited results of operations for the year end December 31, 2017 to allow comparable year-over-year analysis and discussion of results of operation.

	For the Year Ended							Increase (Decrease)
(in thousands)	December 31, 2018			December 31, 2017				Amount
					(unaudited)
Revenue:
Royalty and licensing revenue	$	13,262		$	15,447		$	(2,185	)
Treatment investment revenue		251			105			146
Grant and contract revenue		469			—			469
Total revenue		13,982			15,552			(1,570	)
Operating expenses:
General and administrative		11,264			10,313			951
Research and development		8,479			4,857			3,622
Royalty expense		1,491			1,408			83
License fees		13,725			—			13,725
Selling expense		214			851			(637	)
Total operating expenses		35,173			17,429			17,744
Loss from operations		(21,191	)		(1,877	)		(19,314	)
Other income (expense), net		46			68			(22	)
Loss before provision of income taxes		(21,145	)		(1,809	)		(19,336	)
Provision for income taxes		51			797			746
Net loss	$	(21,196	)	$	(2,606	)	$	(18,590	)

Net Revenue

     During the year ended December 31, 2018, we recorded net revenue of $14.0 million, which represents a decrease of approximately $1.6 million from the $15.6 million of net revenue recorded during the year ended December 31, 2017. The $1.6 million year-over-year decrease in net revenue was due primarily to a $2.2 million decrease in revenue related to NARCAN® sales and related milestone payments for the comparable periods. The $2.2 million decrease was partially offset by an increase in Grant and Contract revenue of $500 thousand and an increase in investment treatment revenue of $100 thousand for the comparable periods.

General and Administrative Expenses

     For the year ended December 31, 2018 general and administrative expenses totaled $11.3 million, which represents an increase of approximately $1.0 million as compared to $10.3 million of general and administrative expenses incurred during the year ended December 31, 2017. The increase is attributable to an increase in stock based compensation expense of $1.6 million and a $0.7 million increase in external marketing research, and investor relations, partially offset by a $1.3 million decrease in personnel expense and other corporate overhead expense for the year ended December 31, 2018 as compared to the year ended December 31, 2017.

42

Research and Development

    During the year ended December 31, 2018 we recorded research and development expenses totaling $8.5 million, which represents an increase of $3.6 million as compared to the $4.9 million of research and development expenses incurred during the year ended December 31, 2017. The increase in research and development expenses is attributed to a $1.5 million increase for third party expenses associated with our research and development programs, $1.5 million increase for stock-based compensation expense and $0.6 million related to increased personnel and related expense.

Royalty Expenses

Royalty expenses were approximately $1.5 million and $1.4 million for the years ended December 31, 2018 and 2017, respectively and are related to NARCAN® sales and related milestone payments we receive.

 License Fees

We recorded $13.7 million in expense associated with license fees incurred during the year ended December 31, 2018. The license fees relate to the License Agreement with Adapt of which $5.6 million was paid during 2018, and $8.1 million is a liability at December 31, 2018. (see Note 9 - License Fees Payable). There were no license fees for the year ended December 31, 2017.

Selling Expenses

Selling expenses decreased by approximately $0.6 million to $0.2 million for the year ended December 31, 2018 compared to December 31, 2017. The decrease is attributable to reduced selling expense associated with NARCAN® sales and related milestone payments for the comparable periods.

Other Income (Expense)

The following table details our Other Income (Expense):

	For the Year Ended
(in thousands)	December 31, 2018			December 31, 2017			Variance
				(unaudited)
Other income (expense)
Interest income, net	$	145		$	34		$	111
Gain (loss) on foreign exchange	(48		)	48			(96		)
Loss on settlement of liability	(50		)	(14		)	(36		)
Total other income	$	47		$	68		$	(21	)

43

Comparison of the five month period ended December 31, 2017 compared to the five month period ended December 31, 2016.

The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. Accordingly, the following presentation and discussion of the results of operations for the five month period ended December 31, 2017, which has been audited, will be compared to the unaudited results of operations for the five month period ended December 31, 2016 to allow comparable period-over-period analysis and discussion of results of operation.

	For the Five Month Period Ended						Increase (Decrease)
(in thousands)	December 31, 2017		December 31, 2016				Amount		Percentage
				(unaudited)
Revenue:
Royalty and licensing revenue	$	11,697	$	14,831		$	(3,134	)	(21.1	)%
Treatment investment revenue		65		—			65		—	%
Total revenue		11,762		14,831			(3,069	)	(20.7	)%
Operating expenses:
General and administrative		5,887		1,854			4,033		217.5	%
Research and development		2,486		709			1,777		250.6	%
Selling expenses		439		730			(291	)	(39.9	)%
Royalty expenses		1,408		—			1,408		—	%
Total operating expenses		10,220		3,293			6,927		210.4	%
Income from operations		1,542		11,538			(9,996	)	(86.6	)%
Other income (expense), net		7		(23	)		30		130.4	%
Income before provision of income taxes		1,549		11,515			(9,966	)	(86.5	)%
Provision for income taxes		169		—			169		—	%
Net income	$	1,380	$	11,515		$	(10,135	)	(88.0	)%

Net Revenue

During the five month period ended December 31, 2017, we recorded net revenue of $11.8 million, which represents a decrease of $3.1 million, or 20.7%, from the $14.8 million of net revenue recorded during the five month period ended December 31, 2016. The $3.1 million year-over-year decrease in net revenue was due primarily to the $13.75 million received under the Purchase Agreement with SWK, $500 thousand received from Adapt triggered by the Heath Canada's approval of NARCAN® and $600 thousand of net revenue arising from the sale, by Adapt, of NARCAN® during the five month period ended December 2016, offset with the recognition of net revenue of $11.7 million arising from NARCAN® sales and milestone payments during the five month period ended December 31, 2017.

The following table summarizes our royalty and licensing net revenue for five month periods ended December 31, 2017 and 2016:

		For the Five Month Period Ended
(in thousands)		December 31, 2017		December 31, 2016		Variance
				(unaudited)
Royalties related to SWK Purchase Agreement	$	—	$	13,710	$	(13,710	)
Royalties and milestones related to Adapt Agreement		11,697		1,121		10,576
	$	11,697	$	14,831	$	(3,134	)

44

General and Administrative Expenses

For the five month period ended December 31, 2017, general and administrative expenses totaled $5.9 million, which represents an increase of $4.0 million, or 217.5%, as compared to the $1.9 million of general and administrative expenses incurred during the five month period ended December 31, 2016. The primary reason for the significant increase in general and administrative expenses was attributed to $1.1 million increase associated with stock based compensation, $1.0 million increase in severance payments, $1.0 million increase associated with professional fees and services, and $800 thousand increase associated with employee salaries and compensation largely attributed to increased headcount during the five month period ended December 31, 2017 as compared to the five month period ended December 31, 2016.

Selling Expenses

Our selling expenses for the five month periods ended December 31, 2017 and 2016 were $0.4 million and $0.7 million, respectively. The $0.3 million decrease in selling expenses is due entirely to lower selling expenses during the five month period ended December 31, 2017 as related to the sale of Royalties to SWK (see Note 13 - Sale of Royalties).

Research and Development

During the five month period ended December 31, 2017, we recorded research and development expenses totaling $2.5 million, which represents an increase of $1.8 million, or 250.6%, as compared to the $0.7 million of research and development expenses incurred during the five month period ended December 31, 2016. The increase in research and development expenses is attributed to a $1.2 million increase in payments to third party expenses associated with research and development program, $0.4 million attributed to stock based compensation expense associated with research and development employees and $0.2 million related to the increased headcount for research and development.

Other Income (Expense)

The following table details our Other Income (Expense):

		For the Five Month Period Ended
(in thousands)		December 31, 2017			December 31, 2016			Variance
					(unaudited)
Interest income	$	10		$	—		$	10
Interest expense		—			(4	)		4
Gain (loss) on foreign exchange rates		10			(19	)		29
Loss on settlement of liability		(13	)		—			(13	)
Net interest income (expense)	$	7		$	(23	)	$	30

Net Income

Net income for the five months ended December 31, 2017 was $1.4 million, which represents a decrease of $10.1 million from the $11.5 million net income for the five month period ended December 31, 2016. The decrease in net income was caused primarily by a decrease in net revenue of $3.1 million during the five month period ended December 31, 2017, as compared to the five month period ended December 31, 2016. In addition, for the five months ended December 31, 2017, there was a $4.0 million increase in general and administrative expenses, a $1.8 million increase in research and development expenses, and a $1.4 million increase in royalty expense as compared to the five month period ended December 31, 2016.

45

Results of Operations 

Comparison of the year ended July 31, 2017 compared to the year ended July 31, 2016.

	Fiscal Year Ended						Increase (Decrease)
(in thousands)	July 31, 2017		July 31, 2016				Amount		Percentage
Revenue:
Royalty and licensing revenue	$	18,406		5,098		$	13,308		261.0	%
Treatment investment revenue		40		4,800			(4,760	)	(99.2	)%
Total revenue		18,446		9,898			8,548		86.4	%
Operating expenses:
General and administrative		6,530		14,509			(7,979	)	(55.0	)%
Research and development		3,172		2,809			363		12.9	%
Selling expenses		1,651		318			1,333		419.2	%
Total operating expenses		11,353		17,636			(6,283	)	(35.6	)%
Income from operations		7,093		(7,738	)		14,831		(191.7	)%
Other income (expense), net		38		(76	)		114		(150.0	)%
Income before provision of income taxes		7,131		(7,814	)		14,945		(191.3	)%
Provision for income taxes		550		—			550		—	%
Net income	$	6,581	$	(7,814	)	$	14,395		(184.2	)%

Net Revenue

During the fiscal year ended July 31, 2017, we recorded net revenue of $18.4 million, which represents an increase of $8.5 million, or 86%, from the $9.9 million of net revenue recorded during the fiscal year ended July 31, 2016. The $8.5 million year-over-year increase in net revenue was due primarily to the recognition of net revenue of $17.5 million from the sale to SWK of our right to receive, commencing on October 1, 2016, Royalties (as defined in the SWK Purchase Agreement) arising from the sale, by Adapt, of our NARCAN® (naloxone hydrochloride) Nasal Spray. The $17.5 million of net revenue recorded in relation to the SWK Purchase Agreement consists of an initial payment of $13.7 million made by SWK to us in December 2016 and an additional payment of $3.8 million earned by us as of July 31, 2017 with the funds being received by us in August 2017. The $3.8 million payment was earned by us because net sales of our NARCAN® product exceeded $25 million, in the aggregate, for the calendar quarters ended March 31, 2017 and June 30, 2017. Fiscal year 2016 royalty and licensing net revenue consisted entirely of royalties received by us from Adapt in relation to sales of our NARCAN® product and included (i) a $2 million milestone payment made by Adapt to us related to the FDA’s approval of NARCAN® for the emergency treatment of known or suspected opioid overdose and (ii) a $2.5 million milestone payment from Adapt that was due to us upon the first commercial sale of NARCAN® in the U.S.

The following table summarizes our royalty and licensing net revenue for fiscal years ended July 31, 2017 and 2016:

		Fiscal Year Ended
(in thousands)		July 31, 2017		July 31, 2016		Variance
Royalties related to SWK Purchase Agreement	$	17,460	$	—	$	17,460
Royalties related to Adapt Agreement		946		5,098		(4,152	)
	$	18,406	$	5,098	$	13,308

46

The $13.3 million increase in royalty and licensing net revenue was partially offset by the $4.8 million decrease in treatment investment net revenue, as fiscal year 2017 treatment investment net revenue was $40,000 as compared to the $4.8 million recorded during fiscal year 2016. The $40,000 of fiscal year 2017 treatment investment net revenue was related entirely to our BED program, while the entire $4.8 million of fiscal year 2016 treatment investment net revenue was related to the sale of OORT Net Profit interests. Treatment investment net revenue related to the sale of OORT Net Profit interests was zero during fiscal year 2017 because we had recognized all net revenue related to the sale of OORT Net Profit interests during the fiscal year ended July 31, 2016. The revenue from these sales was recognized during the year ended July 31, 2016 because either the investment did not contain an option to exchange OORT Net Profit interests for shares of our Common Stock or the product was approved by the FDA and marketed, which negated the investor’s option to exchange OORT Net Profit interests for shares of our Common Stock, and the research and development work related to the product was completed as of July 31, 2016.

General and Administrative Expenses

Fiscal year 2017 general and administrative expenses totaled $6.5 million, which represents a decrease of $8.0 million, or 55.0%, as compared to the $14.5 million of general and administrative expenses incurred during fiscal year 2016. The primary reason for the significant reduction in general and administrative expenses was the $9.4 million reduction in stock based compensation expense during fiscal year 2017 as compared to fiscal year 2016. Stock based compensation expense totaled $1.1 million during fiscal year 2017, while fiscal year 2016 stock based compensation was $10.5 million. Stock based compensation expense for fiscal year 2016 included $9.2 million of expense related to options granted to four of our directors during 2016, with the entire value of these options being expensed during fiscal year 2016. The $9.4 million reduction in fiscal year 2017 stock based compensation expense was partially offset by $0.2 million paid to certain OORT investors per the terms of their amended agreements during the fiscal year ended July 31, 2017.

Selling Expenses

Our selling expenses for the fiscal years ended July 31, 2017 and 2016 were $1.7 million and $0.3 million, respectively. The $1.3 million increase in fiscal year 2017 selling expenses as compared to fiscal year 2016 is due entirely to additional selling expenses during fiscal year 2017 as related to the sale of Royalties to SWK (see Note 13 – Sale of Royalties).

Research and Development

During the year ended July 31, 2017, we recorded research and development expenses totaling $3.2 million, which represents an increase of $0.4 million, or 12.9%, as compared to the $2.8 million of research and development expenses incurred during the year ended July 31, 2016. The increase in fiscal year 2017 research and development expenses, as compared to fiscal year 2016, is due primarily to expenses incurred related to our BN project and the hiring of our Chief Scientific Officer in February 2017. Partially offsetting the increase in these expenses was the decrease in stock based compensation expense during fiscal year 2017, which decreased by $0.4 million as compared to fiscal year 2016. This decrease was the result of less stock based compensation expense related to options granted prior to fiscal year 2017.

Other Income (Expense)

The following table details our Other Income (Expense):

		Fiscal Year Ended
(in thousands)		July 31, 2017			July 31, 2016			Variance
Interest income	$	24		$	1		$	23
Interest expense		(4	)		(12	)		8
Gain (loss) on foreign exchange rates		18			(65	)		83
Net interest income (expense)	$	38		$	(76	)	$	114

Net Income

Net income for the year ended July 31, 2017 was $6.6 million, which represents an increase of $14.4 million from the $7.8 million net loss for the year ended July 31, 2016. The increase in net income was caused primarily by an increase in net

47

revenue of $8.5 million as compared to fiscal year 2016. In addition, fiscal year 2017 general and administrative expenses decreased by $8.0 million as compared to fiscal year 2016. The increase in net revenue, and the decrease in general and administrative expenses, were the primary reasons for the significant increase in net income for the year ended July 31, 2017 as compared to the year ended July 31, 2016.

Liquidity and Capital Resources

Our cash balance at December 31, 2018 was $24.6 million, which represents an increase of $16.5 million from the $8.1 million cash balance at December 31, 2017. Our working capital was $19.5 million as of December 31, 2018.

On September 27, 2018, the Company completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares of its Common stock (including 105,882 shares purchased by Cantor Fitzgerald on September 28, 2018 upon the exercise in full of its right to purchase up to an additional 105,882 shares to cover over-allotments) at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting sales commissions.

In addition, during 2018 The Company sold 239,270 shares of Common Stock for gross proceeds of $4.31 million and received net proceeds of $4.18 million, after sales commissions.

The following table sets forth the primary sources and uses of cash for each of the periods:

		Year ended			Five months ended			Year ended
(in thousands)		December 31, 2018			December 31, 2017			July 31, 2017
Net cash provided by (used in)
Operating activities	$	(523	)	$	(3,840	)	$	5,556
Financing activities		17,021			5,083			(165	)
Net increase in cash and cash equivalents	$	16,498		$	1,243		$	5,391

Cash (used in) provided by operating activities

During the year ended December 31, 2018, net cash used in operating activities was $0.5 million, which was due to net loss of $21.2 million mostly offset by the non-cash expenses of $5.8 million for stock compensation expense and $0.8 million related to stock issued for services, and net cash changes in assets and liabilities of $14.1 million.

During the five month period ended December 31, 2017, net cash used in operating activities was $3.8 million, which was primarily due to an increase in accounts receivable of $7.9 million and an increase in prepaid and other current assets of $0.6 million, offset with net income of $1.4 million, an increase in non-cash items as adjustments for stock based compensation of $1.8 million, and an increase of royalty payable for $1.4 million.

During the year ended July 31, 2017, net cash provided by operating activities was $5.6 million, which was primarily due to net income of $6.6 million, as well as non-cash items of stock based compensation of warrants and options of $1.5 million and an increase in accounts payable and accrued liabilities of $2.1 million, offset with an increase of accounts receivable of $3.4 million and a decrease in accrued salaries and wages of $1.2 million.

Cash (used in) provided by financing activities

During the year ended December 31, 2018, net cash provided by financing activities was $17.0 million primarily from net proceeds received from sale of Common Stock.

During the five month period ended December 31, 2017, net cash provided by financing activities was $5.1 million which was due to proceeds from the exercise of warrants offset with a payments of $0.2 million associated with deferred financing costs.

During the year ended July 31, 2017, net cash used in financing activities was $0.2 million which was due to the repayment of note payable.

48

Plan of Operation

In 2017 we initiated a Phase 2 clinical trial to evaluate OPNT001, nasal naloxone, as a potential treatment for BN. The Phase 2 randomized, double-blind, placebo-controlled study evaluated the safety and tolerability of OPNT001, as well as its impact on various clinical outcomes, including changes in eating behavior. The primary endpoint of the study is a reduction in binge eating days. The study includes a total of 86 patients across 19 clinical sites in the United Kingdom. Patient enrollment was completed on September 4, 2018. On November 2, 2018, we announced the last patient, last visit and we therefore expect to report top-line data from this trial in the first quarter of 2019. See Note 17, Subsequent Events for discussion on results of the trial reported in February of 2019.

On February 12, 2018, we announced positive data from a Phase 1 clinical study of our product candidate OPNT003 (intranasal nalmefene) and provided an update on a meeting held February 8, 2018 with the FDA regarding our planned development program. OPNT003 is in development as a long-lasting opioid antagonist for the treatment of opioid overdose. Based on feedback from the FDA in connection with this meeting, we intend to pursue a 505(b)(2) development path, with a potential to submit a NDA for the drug and intranasal delivery device combination in 2020. Nalmefene for injection was previously approved by the FDA for treating suspected or confirmed opioid overdose. The 505(b)(2) pathway allows companies to rely in part on the FDA’s findings of safety and efficacy for a previously approved product and to supplement these findings with a more limited set of their own studies to satisfy FDA requirements, as opposed to conducting the full array of preclinical and clinical studies that would typically be required.

We have full commercial rights to OPNT003 and will receive approximately $7.4 million from the National Institute of Health ("NIH") and approximately $4.6 million from the BARDA, subject to available funds and satisfactory progress on OPNT003, to fund development of this project through NDA submission.

During the year ended July 31, 2017, we received $17.46 million in milestone and royalty payments under the SWK Purchase Agreement. In addition, for the five months ended December 31, 2017, we earned $11.7 million in royalties and milestones directly under the Adapt Agreement. In December 31, 2017, we also received $5.3 million from the exercise of warrants by two stockholders.

On October 13, 2017 we entered into a Controlled Equity Offering Sales Agreement (the "Sales Agreement") with Cantor Fitzgerald & Co., as agent ("Cantor Fitzgerald"), pursuant to which we may offer and sell, from time to time through Cantor Fitzgerald, shares of our Common Stock. During the year ended December 31, 2018, we sold 239,270 shares of Common Stock under the Sales Agreement for gross proceeds of $4.31 million and received net proceeds of $4.18 million after deducting sales commissions .

In addition, on September 27, 2018, we completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares our Common stock at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting sales commissions.

After considering the proceeds received during the year ended December 31, 2018, we believe that we have sufficient capital resources to sustain operations through at least the next 12 months from the date of the filing of this Report.

Net Profit Interests

We have entered into agreements with certain investors whereby, in exchange for funding for the research, development, marketing and commercialization of a product relating to our treatment to reverse opioid overdoses (the “Opioid Overdose Reversal Treatment Product”), we provided such investors with an interest in any pre-tax profits received by us that were derived from the sale of the Opioid Overdose Reversal Treatment Product less any and all expenses incurred by and payments made by us in connection with the Opioid Overdose Reversal Treatment Product, including but not limited to an allocation of our overhead devoted by us to product-related activities, which allocation shall be determined in good faith by us (the “OORT Net Profit”).

A summary of the investor agreements is below, and categorized by investor:

Potomac Construction Limited (“Potomac”)

On April 16, 2013, we entered into an agreement with Potomac (as clarified by the letter agreement dated October 15, 2014 (“Potomac Agreement No. 1”)) for funding from Potomac for the research, development, marketing and commercialization of the Opioid Overdose Reversal Treatment Product in the amount of $600 thousand, in exchange for a 6.0% interest in the OORT

49

Net Profit in perpetuity. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us certain buyback rights that have expired as of December 31, 2018.

On May 30, 2013, we entered into a new agreement with Potomac (as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 2”)) for additional funding from Potomac in the amount of $150 thousand for the research, development, marketing and commercialization of the Opioid Overdose Reversal Treatment Product, in exchange for an additional 1.5% interest in the OORT Net Profit in perpetuity. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us certain buyback rights that expired as of December 31, 2018.

On September 9, 2014, we entered into a new agreement with Potomac (as clarified by that certain letter agreement dated October 15, 2014, “Potomac Agreement No. 3”) for additional funding from Potomac in the amount of $500 thousand for use by us for any purpose, in exchange for an additional 0.98% interest in the OORT Net Profit in perpetuity. During the year ended July 31, 2016, we recognized $500 thousand as revenue because Potomac’s option to receive shares of our Common Stock pursuant to the agreement terminated by its terms. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us the right, during the period from April 12, 2017 until September 30, 2019, to buyback all or any portion of the interest at the price of $500 thousand for the full 0.98% interest (the “Potomac Interest No. 3 Buyback Amount”); provided, that in the event we exercise this right within 3.25 years of the date of the investment, we will pay Potomac 1.8 times the Potomac Interest No. 3 Buyback Amount; provided, further, that in the event we exercise this right after 3.25 years of the date of the investment and no later than September 30, 2019, we will pay Potomac 3.15 times the Potomac Interest No. 3 Buyback Amount.

On October 31, 2014, we entered into a new agreement with Potomac (as clarified by that certain letter agreement dated October 31, 2014 (“Potomac Agreement No. 4”) for additional funding from Potomac in the amount of $500 thousand for use by us for any purpose, in exchange for an additional 0.98% interest in the OORT Net Profit in perpetuity. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us the right, during the period from April 12, 2017 until November 28, 2019, to buyback all or any portion of the interest at the price of $500 thousand for the full 0.98% interest (the “Potomac Interest No. 4 Buyback Amount”); provided, that in the event we exercise this right within 3.25 years of the date of the investment, we will pay Potomac 1.8 times the Potomac Interest No. 4 Buyback Amount; provided, further, that in the event we exercise this right after 3.25 years of the date of the investment and on or prior to November 28, 2019, we will pay Potomac 3.15 times the Potomac Interest No. 4 Buyback Amount. During the year ended July 31, 2016, we recognized $500 thousand as revenue because its option to receive 50,000 shares of our Common Stock in exchange for its entire interest terminated by its terms.

On December 8, 2015, we entered into a new agreement with Potomac (“Potomac Agreement No. 5”) for additional funding in the amount of $500 thousand for use by us for any purpose, in exchange for an additional 0.75% interest in the OORT Net Profit in perpetuity. During the year ended July 31, 2016, we recognized $500 thousand as revenue because the investment did not contain any option to exchange the 0.75% interest for shares of our Common Stock. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us the right, during the period from April 12, 2017 until December 17, 2020, to buyback all or any portion of the interest at the price of $500 thousand for the full 0.75% interest (the “Potomac Interest No. 5 Buyback Amount”); provided, that in the event we exercise this right within 3.25 years of the date of the investment, we will pay Potomac 1.8 times the Potomac Interest No. 5 Buyback Amount; provided, further, that in the event we exercise this right within after 3.25 years of the date of the Investment and on or prior to December 17, 2020, we will pay Potomac 3.15 times the Potomac Interest No. 5 Buyback Amount.

In consideration for Potomac entering into the Amendments dated April 17, 2017 described above, upon our receipt of at least $3 million from (i) SWK under the SWK Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by us from SWK will be used in determining the Net Profit (as defined in the Potomac Agreements).

Ernst Welmers (“Welmers”)

On May 15, 2014, we entered into an agreement with Welmers (the “Welmers Agreement”) and received funding from Welmers in the amount of $300 thousand for use by us for any purpose, in exchange for a 1.5% interest in the OORT Net Profit in perpetuity. On June 1, 2017, we entered into an amendment with Welmers whereby Welmers granted us certain buyback rights that have expired as of December 31, 2018. In consideration for Welmers entering into the Welmers Amendment, upon our receipt of at least $3 million from (i) SWK under the SWK Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by us from SWK will be used in determining the Net Profit (as defined in the Welmers Agreement).

Valour Fund, LLC (“Valour”)

On July 22, 2014, we received a $3.0 million commitment from a foundation (the “Foundation”) which later assigned its interest to Valour, from which we had the right to make capital calls from the Foundation for the research, development,

50

marketing, commercialization and any other activities connected to the Opioid Overdose Reversal Treatment Product, certain operating expenses and any other purpose consistent with the goals of the Foundation. In exchange for funds invested by the Foundation, Valour currently owns a 6.0% interest in the OORT Net Profit in perpetuity. On July 28, 2014, we received an initial investment of $111.5 thousand from the Foundation in exchange for a 0.22294% interest. On August 13, 2014, September 8, 2014, November 13, 2014 and February 17, 2015, we made capital calls of $422.0 thousand, $444.5 thousand, $1.034 million, and $988.0 thousand, respectively, from the Foundation in exchange for 0.844687%, 0.888906%, 2.067228% and 1.976085% interests, respectively, in the OORT Net Profit. The Opioid Overdose Reversal Treatment Product was approved by the FDA on November 18, 2015, and, as a result of such approval occurring prior to July 22, 2016, the option to exchange its interest for shares of our Common Stock at an exchange rate of 10 shares for every dollar of its investment terminated by its terms.

LYL Holdings Inc. (“LYL”)

On June 1, 2017 (the “LYL Effective Date”), we entered into an amendment with LYL (the “LYL Amendment”) to the Amended and Restated Consulting Agreement, dated October 25, 2016 and effective as of July 17, 2013 (the “LYL Agreement”). Pursuant to the LYL Amendment, LYL granted us certain buyback provisions that have expired as of December 31, 2018. In consideration for LYL entering into the LYL Amendment, upon our receipt after the LYL Effective Date of at least $3 million from (i) SWK under the SWK Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by us from SWK will be used in determining the Net Profit (as defined in the LYL Agreement).

Binge Eating Disorder (BED)

We have entered into agreements with Potomac whereby, in exchange for funding for any purpose, we have provided Potomac with an interest in our BED treatment product (the “BED Treatment Product”) and pay Potomac a percentage of the pre-tax profit generated from the BED Treatment Product after the deduction of all expenses incurred by and payments made by us in connection with the BED Treatment Product, including but not limited to an allocation of our overhead (the “BED Net Profit”).

A summary of the investor agreements is below:

On December 17, 2013, we entered into an agreement with Potomac for additional funding in the amount of $250 thousand for use by us for any purpose. In exchange for this additional funding, we agreed to provide Potomac with a 0.5% interest in the BED Treatment Product and pay Potomac 0.5% of the BED Net Profit in perpetuity. During the year ended July 31, 2017, we recognized approximately $40 thousand as revenue because Potomac’s option to receive 31,250 shares of our Common Stock in exchange for its entire 2013 Investor Interest of 0.5% terminated by its terms.

On September 17, 2014, we entered into an agreement with Potomac for additional funding in the amount of $500 thousand. In exchange for this funding, we agreed to provide Potomac with an additional 1.0% interest in our BED Treatment Product and pay Potomac an additional 1.0% of the BED Net Profit in perpetuity. Because the BED Treatment Product was not approved by the FDA by September 17, 2017, the investor had a 60 day option to exchange its entire 1.0% interest for 62,500 shares of our Common Stock. The option expired unexercised.

On July 20, 2015, we entered into an agreement with Potomac for additional funding in the amount of $250 thousand. In exchange for this funding, we agreed to provide Potomac with an additional 0.50% interest in our BED Treatment Product and pay Potomac an additional 0.5% of the BED Net Profit in perpetuity. If the BED Treatment Product is not introduced to the market and not approved by the FDA or an equivalent body in Europe and not marketed by July 20, 2018, Potomac will have a 60 day option to exchange its 0.5% interest for 25,000 shares of our Common Stock. The option expired unexercised.

Other Activities

In September 2015, we received a $1.6 million commitment from the Foundation which later assigned its interest to Valour, from which we had the right to make capital calls from the Foundation for the research, development, any other activities connected to our opioid antagonist treatments for addictions and related disorders that materially rely on certain studies funded by the Foundation’s investment, excluding the Opioid Overdose Reversal Treatment Product (the “Certain Studies Products”), certain operating expenses, and any other purpose consistent with the goals of the Foundation. In exchange for funds invested by the Foundation, Valour currently owns a 2.13% interest in any pre-tax revenue received by us that was derived from the sale of the Certain Studies Products less any and all expenses incurred by and payments made by us in connection with the Certain Studies Products (the “Certain Studies Products Net Revenue”). Additionally, we may buyback, in whole or in part, the 2.13% interest from Valour within 2.5 years or after 2.5 years of the initial investment at a price of two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. If an aforementioned treatment is not introduced to the market by September 22, 2018, Valour will have a 60-day option to exchange its 2.13% interest for shares of our Common Stock at an

51

exchange rate of one-tenth of a share for every dollar of its investment. In October 2015, December 2015 and May 2016, we made capital calls of $618 thousand, $716 thousand, and $267 thousand from the Foundation in exchange for 0.824%, 0.954% and 0.355333% interests in the aforementioned treatments, respectively. During September 2018 Valour elected to exchange its interest for stock and accordingly we issued 160,000 shares of our Common Stock to Valour.

On March 13, 2017, we entered into a third amendment (the “Third Miles Amendment”) to the Senior Advisor Agreement with Brad Miles, dated January 22, 2013 (the “Initial Miles Agreement”), as previously amended on February 24, 2015 (the “First Miles Amendment”) and March 19, 2015 (the “Second Miles Amendment” and, together with the Initial Miles Agreement, the First Miles Amendment and the Third Miles Amendment, the “Miles Agreement”). As provided by the Third Miles Amendment, and in consideration for Mr. Miles’ continued service to us as an advisor through December 31, 2017, we: (i) paid Mr. Miles $107.8 thousand in cash and issued Mr. Miles 1,875 shares of Common Stock; (ii) granted to Mr. Miles the right to receive, subject to adjustment under the Third Miles Amendment, 1.25% of the Net Profit (as defined by the Third Miles Amendment) generated from the Product (as defined by the Third Miles Amendment) from the Effective Date (as defined by the Third Miles Amendment) (which amounts shall be paid quarterly per the terms of the Third Amendment), and, in the event of a Divestiture (as defined by the Third Miles Amendment), 1.25% of the net proceeds of such sale, subject to adjustments and, in the event of sale of the Company, the Fair Market Value (as defined by the Third Miles Amendment) of the Product; (iii) will pay Mr. Miles $17 thousand per calendar quarter during 2017; and (iv) granted to Mr. Miles a warrant to purchase 45,000 shares of our Common Stock (the “Miles Warrant”). The Miles Warrant, which is fully vested on the date of grant, has an exercise price of $10.00, an expiration date of three years from the date of grant and may be exercised solely by payment of cash. Additionally, pursuant to the Third Amendment, from the Effective Date until the fourth anniversary of the Effective Date, Miles granted us the right to buyback the 1.25% interest or any portion thereof at a price of $187.5 thousand for the full 1.25% interest (the “Miles Buyback Amount”); provided, however, that, in the event we exercise this right within 2.5 years after the Effective Date, we will pay Mr. Miles two times the Miles Buyback Amount; provided, further, that, in the event we exercise such right after 2.5 years after the Effective Date and prior to the four year anniversary of the Effective Date, we will pay Mr. Miles 3.5 times the Miles Buyback Amount.

We valued the Miles Warrant using the Black-Scholes option pricing model, which resulted in a value of approximately $229.4 thousand. We recorded the entire $229.4 thousand as a non-recurring, and non-cash, expense during the year ended July 31, 2017. Furthermore, we paid Mr. Miles $51 thousand in cash compensation, which represents payment in full for the first three calendar quarters of 2017.

On June 1, 2017 (the “Welmers Effective Date”), we entered into an amendment to the Welmers Agreement with Welmers to provide for our right to buyback the 1.5% OORT Net Profit interest from Welmers. As provided under the Welmers Amendment, from June 1, 2017 until May 27, 2019, Welmers granted us the right to buyback all or any portion of the interest at the price of $300 thousand for the full 1.5% interest (the “Welmers Interest Buyback Amount”); provided, that in the event we exercise this right within 3.25 years of the date of the investment, we will pay Welmers 1.8 times the Welmers Interest Buyback Amount; provided, further, that in the event we exercise this right after 3.25 years of the date of the Investment and on or prior to May 27, 2019, we will pay Welmers 3.15 times the Welmers Interest Buyback Amount. In consideration for Welmers entering into the Welmers Amendment, we paid Welmers $30 thousand. Furthermore, we granted Welmers the right to receive 0.375% of the Net Profit (as defined in the Welmers Agreement) generated from DAVINCI (as defined in the Welmers Amendment) (the “DAVINCI Interest”). In the event that we are sold, Welmers will receive 0.375% of the net proceeds of such sale, after the deduction of all expenses and costs related to such sale. Additionally, from the Welmers Effective Date until June 1, 2021, Welmers granted us the right to buyback all or any portion of the DAVINCI Interest at the price of $56.25 thousand for the full 0.375% DAVINCI Interest (the “Welmers DAVINCI Interest Buyback Amount”); provided, that in the event we exercise this right within 2.5 years of the Welmers Effective Date, we will pay Welmers two times the Welmers DAVINCI Interest Buyback Amount; provided, further, that, in the event we exercise this right after 2.5 years of the Welmers Effective Date and on or prior to June 1, 2021, we will pay Welmers 3.5 times the Welmers DAVINCI Interest Buyback Amount.

Royalty Payable

We entered into various agreements and subsequently received funding from investors for use by us for any purpose. In exchange for this funding, we agreed to provide investors with interest in the OORT Net Profit generated from the Opioid Overdose Reversal Treatment Product in perpetuity. At December 31, 2017, we determined an OORT Net Profit as a result of NARCAN® sales by Adapt. There was no OORT Net Profit prior to December 31, 2017. The following table sets forth the

52

royalty payable to our Net Profit Partners at December 31, 2018:

(in thousands)	Net Profit %		December 31, 2018
Potomac	10.2%	$	422
LYL	5.0%		206
Welmers	1.5%		62
Foundation	6.0%		248
Pendergast	1.0%		60
Royalty payable	23.7%	$	998

On February 28, 2018, we were notified that Adapt, now a Subsidiary of Emergent BioSolutions ("EBS"), had entered into a license agreement with a Third Party (as defined in the License Agreement) with regard to one or more patents pursuant to which Adapt invoked its right under Section 5.5 of that certain License Agreement, dated as of December 15, 2014 (the "Initial License Agreement"), by and between us and Adapt, as amended (the "License Agreement"), to offset 50% of the payments paid to such Third Party from the amounts payable by Adapt to us under the License Agreement, and SWK under the SWK Purchase Agreement. On March 1, 2018, we received net milestone payments of $6.1 million, which was net of a License Fee payment made by us under Section 5.5 of the License Agreement of $5.6 million. In accordance with the License Agreement, Adapt may enter into such a licensing arrangement and exercise its right to deduct any payments with respect thereto at any time without our consent.

As provided in Amendment No. 2 to the License Agreement, which the parties entered into on March 18, 2019 (see Note 17, Subsequent Events), EBS made certain payments in October of 2018 to the Third Party Licensee and will be allowed to reduce the royalties and milestones that we would be due under the License Agreement by a maximum of $9.0 million. Under the SWK Purchase Agreement, we retain 90% of the royalties payable under the License Agreement, with SWK entitled to 10%. The maximum amount payable by us is therefore $8.1 million (90% of $9 million), of which we have recorded $5.4 million as a current liability and $2.7 million as a long-term liability at December 31, 2018. As provided in Amendment No. 2, EBS will be allowed to reduce the royalties and milestones we would be due under the License Agreement during the year ending December 31, 2019 by a maximum of $2.0 million each quarter. As provided in the License Agreement, if net Narcan Sales (as defined in the License Agreement) exceed $200 million in any calendar year, we and SWK will be due a milestone payment of $15.0 million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to us and SWK, EBS may deduct $2.5 million from the $13.5 million (90% of $15.0 million) milestone payable to the Company.

Critical Accounting Policies and Estimates

We believe that the following critical policies affect our significant judgments and estimates used in preparation of our consolidated financial statements.

We prepare our consolidated financial statements in conformity with generally accepted accounting principles in the United States. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that these estimates are reasonable and have been discussed with the Board; however, actual results could differ from those estimates.

We issue restricted stock to consultants for various services and employees for compensation. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is measurable more reliably measurable. The value of the Common Stock is measured at the earlier of: (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.

We issue options and warrants to consultants, directors, and officers as compensation for services. These options and warrants are valued using the Black-Scholes model, which focuses on the current stock price and the volatility of moves to predict the likelihood of future stock moves. This method of valuation is typically used to accurately price stock options and warrants based on the price of the underlying stock.

53

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, we estimate fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. 

Fair value estimates used in preparation of the consolidated financial statements are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts payable, note payable and due to related parties. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand.

Revenue Recognition

In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services.

On January 1, 2018, we adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and determined the new guidance does not change our policy of revenue recognition. Our primary source of revenue is through the recognition of royalty and milestone payments from Adapt. Milestone revenue is recognized upon successful accomplishment of certain sales targets set forth in the Adapt Agreement. Royalty revenue is determined based on the agreed upon royalty rate applied to NARCAN sales reported by Adapt.There are no performance obligations by us and we are paid accordingly by the royalty report provided by Adapt on a quarterly basis. There is no disaggregation of revenue given that the licensing revenue is based on one agreement, and the nature and timing of revenue is predicated on the sales of NARCAN reported to us by Adapt each quarter. In regards to treatment revenue, we received certain investments from investors in return for an interest in its existing treatments. Investors carry an option to exchange investment into shares of our stock. Revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. (See Note 8 to the Consolidated Financial Statements - Deferred Revenue).

In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. We evaluated our grant with NIH and contract with BARDA and determined that they fall within the scope of ASU 958, and revenue should be recognized in accordance with Topic 958 guidance. Accordingly, we recognize revenue from our grants and contracts in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.

Licensing Agreement

Pursuant to the Adapt Agreement, we provided a global license to develop and commercialize our intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®. We receive payments upon reaching various sales and regulatory milestones, as well as royalty payments for commercial sales of NARCAN® generated by Adapt. During the year ended December 31, 2018 we recognized royalty revenue of $13,262,321, and for the five months ended December 31, 2017 we recognized royalty and milestone revenue of $11,696,676 related to this agreement.

Sale of Royalties

During the year ended December 31, 2018 and the five month period ended December 31, 2017, we did not recognize any revenue associated with sale of royalties.

Under the SWK Purchase Agreement, we received an upfront purchase price of $13,750,000, less $40,000 of legal fees, and recognized an additional $3,750,000 when certain milestones were achieved during the fiscal year ended July 31, 2017.

54

During the fiscal year ended July 31, 2017, we recognized proceeds of $17,500,000 as revenue associated with the SWK Purchase Agreement immediately as a result of (i) the executed agreement constituting persuasive evidence of an arrangement, (ii) the Company having no current or future performance obligations, (iii) the total consideration being fixed and known at the time of its execution and there being no rights of return, and (iv) the cash having been received and non-refundable.

Treatment Investments

With respect to investments in interests in treatments, if an agreement provides an option that allows the investor in the treatment to convert an interest in a treatment into shares of our Common Stock, then revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement are reviewed and evaluated under ASC 606. In the event the investor chooses to convert interests into shares of Common Stock, that transaction will be accounted for similar to a sale of shares of Common Stock for cash. 

Effect of Inflation

Inflation did not have a significant impact on our net sales, revenues, or income from continuing operations in 2017 and 2018.

Off-Balance Sheet Arrangements

None.

Recent Accounting Pronouncements

We have reviewed accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. We have carefully considered the new pronouncements that alter previous generally accepted accounting principles and do not believe that any new or modified principles will have a material impact on our reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. Those standards have been addressed in the notes to the audited financial statement and in this, Report, filed on Form 10-K for the year ended December 31, 2018 (See Note 3 - Summary of Significant Accounting Policies).

55

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

The Company is not required to provide the information required by this Item because the Company is a smaller reporting company. 

56

Item 8.  Financial Statements and Supplementary Data.

Opiant Pharmaceuticals, Inc.

Index to Consolidated Financial Statements

	Page Number
Report of Independent Registered Public Accounting Firm	58
Consolidated Balance Sheets as of December 31, 2018, December 31, 2017 and July 31, 2017	59
Consolidated Statement of Operations for the Year Ended December 31, 2018, the Five Months Ended December 31, 2017 and for the Year Ended July 31, 2017	60
Consolidated Statements of Stockholders' Equity for the Year Ended December 31, 2018, the Five Months Ended December 31, 2017 and for the Year Ended July 13, 2017	61
Consolidated Statements of Cash Flows for the Year Ended December 31, 2018, the Five Months Ended December 31, 2017 and for the Year Ended July 31, 2017	63
Notes to Consolidated Financial Statements	65

57

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

To the Shareholders and Board of Directors of

Opiant Pharmaceuticals, Inc.

Santa Monica, California

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Opiant Pharmaceuticals, Inc. and its subsidiary (collectively, the “Company”) as of December 31, 2018, December 31, 2017 and July 31, 2017, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2018, and July 31, 2017, and for the five month transition period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, December 31, 2017, and July 31, 2017, and the results of their operations and their cash flows for the years ended December 31, 2018, and July 31, 2017, and for the five month transition period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ MaloneBailey, LLP

www.malonebailey.com

We have served as the Company’s auditor since 2013.

Houston, Texas

March 21, 2019

58

Opiant Pharmaceuticals, Inc.

Consolidated Balance Sheets

	December 31, 2018			December 31, 2017			July 31, 2017
Assets
Current assets
Cash and cash equivalents	$	24,613,638		$	8,115,903		$	6,872,555
Accounts receivable	4,489,317			11,696,676			3,750,000
Prepaid expenses and other current assets	267,623			733,328			164,887
Deferred financing costs	—			209,042			—
Total current assets	29,370,578			20,754,949			10,787,442
Other assets
Computer equipment, net	—			1,183			2,753
Patents and patent applications, net	15,746			17,118			17,690
Total assets	$	29,386,324		$	20,773,250		$	10,807,885
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable and accrued liabilities	1,132,960			3,156,992			2,211,971
License fees payable	5,400,000			—			—
Accrued salaries and wages	1,083,644			713,489			1,701,359
Royalty payable	998,305			1,408,012			—
Deferred revenue	1,212,149			378,700			253,619
Total current liabilities	9,827,058			5,657,193			4,166,949
Long-term liabilities
Deferred revenue	—			2,115,805			2,306,527
License fees payable, net of current portion	2,700,000			—			—
Total liabilities	12,527,058			7,772,998			6,473,476
Stockholders' equity
Common stock; par value $0.001; 200,000,000 shares authorized;
3,845,361, 2,535,766 and 2,026,608 shares issued and outstanding at December 31, 2018, 2017, and July 31, 2017, respectively.	3,846			2,536			2,026
Additional paid-in capital	91,276,086			66,223,066			58,937,112
Accumulated deficit	(74,420,666		)	(53,225,350		)	(54,604,729		)
Total stockholders' equity	16,859,266			13,000,252			4,334,409
Total liabilities and stockholders' equity	$	29,386,324		$	20,773,250		$	10,807,885

The accompanying notes are an integral part of these consolidated financial statements.

59

Opiant Pharmaceuticals, Inc.

Consolidated Statements of Operations

		For the Year Ended December 31,			For the Five Months Ended December 31,			For the Year Ended July 31,
		2018			2017			2017
Revenues
Royalty and licensing revenue	$	13,262,321		$	11,696,676		$	18,406,142
Treatment investment revenue		250,549			65,641			39,854
Grant and contract revenue		469,307			—			—
Total Revenue		13,982,177			11,762,317			18,445,996
Operating expenses
General and administrative		11,263,804			5,887,135			6,530,533
Research and development		8,478,817			2,486,514			3,171,599
Royalty expenses		1,491,099			1,408,012			—
License fees		13,725,000			—			—
Selling expenses		213,897			438,625			1,651,099
Total operating expenses		35,172,617			10,220,286			11,353,231
Income (loss) from operations		(21,190,440	)		1,542,031			7,092,765
Other income (expense)
Interest income, net		144,696			10,401			19,966
Gain (loss) on foreign exchange		(48,306	)		10,027			18,356
Loss on settlement of liability		(49,983	)		(13,917	)		—
Total other income		46,407			6,511			38,322
Income (loss) before provision for income taxes		(21,144,033	)		1,548,542			7,131,087
Provision for income taxes		51,283			169,163			550,474
Net income (loss)	$	(21,195,316	)	$	1,379,379		$	6,580,613
Income (loss) per share of common stock:
Basic	$	(7.10	)	$	0.66		$	3.27
Diluted	$	(7.10	)	$	0.31		$	2.94
Weighted average common stock outstanding
Basic		2,985,335			2,077,663			2,014,540
Diluted		2,985,335			4,393,138			2,235,851

The accompanying notes are an integral part of these consolidated financial statements. 

60

Opiant Pharmaceuticals, Inc.

Consolidated Statements of Stockholders' Equity

	Common Stock			Additional Paid-In Capital			Accumulated Deficit			Total
	Shares	Amount
Balance at July 31, 2016	1,992,433	$	1,992	$	56,478,394		$	(61,185,342	)	$	(4,704,956	)
Reconciling adjustment to record shares issued in prior year for the conversion of debt into common stock in relation to 1:100 reverse stock split	6,228	6		(6		)	—			—
Stock issued for services	27,947	28		190,399			—			190,427
Stock based compensation from issuance of options	—	—		1,277,139			—			1,277,139
Stock based compensation from issuance of warrants	—	—		229,360			—			229,360
Forgiveness of related party debt	—	—		761,826			—			761,826
Net income	—	—		—			6,580,613			6,580,613
Balance at July 31, 2017	2,026,608	$	2,026	$	58,937,112		$	(54,604,729	)	$	4,334,409
Cashless exercise of options	145,630	146		(146		)	—			—
Exercise of warrants	356,790	357		5,292,519			—			5,292,876
Stock issued as settlement of liability	6,738	7		213,910			—			213,917
Stock based compensation from issuance of options	—	—		1,779,671			—			1,779,671
Net income	—	—		—			1,379,379			1,379,379
Balance at December 31, 2017	2,535,766	$	2,536	$	66,223,066		$	(53,225,350	)	$	13,000,252
Exercise of stock options	50,497	50		(50		)	—			—
Exercise of warrants	3,400	3		33,997			—			34,000
Stock issued for services	44,664	45		882,187			—			882,232
Stock issued to net profit partner	160,000	160		1,599,840			—			1,600,000
Stock based compensation	—	—		5,760,432			—			5,760,432

61

Issuance of common stock for cash, net of issuance costs	1,051,034	1,052		16,776,614		$	—		16,777,666
Net Loss	—	—		—		(21,195,316		)	(21,195,316		)
Balance at December 31, 2018	3,845,361	$	3,846	$	91,276,086	$	(74,420,666	)	$	16,859,266

The accompanying notes are an integral part of these consolidated financial statements.

62

Opiant Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

	For the Year Ended			For the Five Months Ended			For the Year Ended
	December 31, 2018			December 31, 2017			July 31, 2017
Cash flows provided by (used in) operating activities
Net income (loss)	$	(21,195,316	)	$	1,379,379		$	6,580,613
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization	2,556			2,142			5,140
Issuance of common stock for services	732,249			—			190,427
Stock based compensation from issuance of options	5,760,432			1,779,671			1,277,139
Loss on settlement of liability	49,983			13,917			—
Stock based compensation from issuance of warrants	—			—			229,360
Changes in assets and liabilities:
Accounts receivable	7,207,359			(7,946,676		)	(3,437,502		)
Prepaid expenses and other current assets	465,705			(568,441		)	(102,483		)
Accounts payable and accrued expenses	(1,924,032		)	1,145,021			2,071,387
License fees payable	8,100,000			—			—
Accrued salaries and wages	370,155			(987,870		)	(1,218,065		)
Royalty payable	(409,707		)	1,408,012			—
Deferred revenue	317,644			(65,641		)	(39,854		)
Net cash provided by (used in) operating activities	(522,972		)	(3,840,486		)	5,556,162
Cash flows provided by (used in) financing activities
Proceeds from warrant exercise	34,000			5,292,876			—
Deferred financing costs	(166,419		)	(209,042		)	—
Proceeds from sale of common stock	17,153,126			—			—
Repayment of note payable	—			—			(165,000		)
Net cash provided by (used in) financing activities	17,020,707			5,083,834			(165,000		)
Net increase  in cash and cash equivalents	16,497,735			1,243,348			5,391,162
Cash and cash equivalents, beginning of period	8,115,903			6,872,555			1,481,393
Cash and cash equivalents, end of period	$	24,613,638		$	8,115,903		$	6,872,555
Supplemental disclosure
Interest paid during the period	$	—		$	—		$	4,828
Taxes paid during the period	$	174,000		$	619,225		$	—
Non-Cash Financing Transactions

63

Cashless exercise of options	$	50	$	146	$	—
Issuance of common stock to net profit partner	$	1,600,000	$	—	—
Issuance of common stock as settlement of liability	$	100,000	$	200,000	$	—
Forgiveness of related party of debt	$	—	$	—	$	761,826
Reconciling adjustment to record shares issued in prior year for the conversion of debt into common stock and rounding in relation to 1-for-100 reverse stock split	$	—	$	—	$	6
Offset of deferred financing costs against APIC	$	209,042	$	—	$	—

The accompanying notes are an integral part of these consolidated financial statements. 

64

Opiant Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements

For the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017

Note 1.    Organization and Basis of Presentation

Opiant Pharmaceuticals, Inc. (the “Company”), a Nevada corporation, is a specialty pharmaceutical company developing medicines for addictions and drug overdose. The Company was incorporated in the State of Nevada on June 21, 2005 as Madrona Ventures, Inc. and, on September 16, 2009, the Company changed its name to Lightlake Therapeutics Inc. On January 28, 2016, the Company again changed its name to Opiant Pharmaceuticals, Inc. The Company also has developed a treatment to reverse opioid overdoses, which is now known as NARCAN®.

On October 2, 2017, the Company changed its state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan of Merger, dated October 2, 2017, whereby the Company merged with and into its recently formed, wholly-owned Delaware subsidiary, Opiant Pharmaceuticals, Inc. Pursuant to the Agreement and Plan of Merger, (i) the Company merged with and into its Delaware subsidiary, (ii) the Company's separate corporate existence in Nevada ceased to exist,(iii) the Company's Delaware subsidiary became the surviving corporation, (iv) each share of the Company's common stock, $0.001 par value per share ("Common Stock"), outstanding immediately prior to the effective time was converted into one fully-paid and non-assessable share of Common Stock of Opiant Pharmaceuticals, Inc., a Delaware corporation, and (v) the certificate of incorporation and bylaws of the Company's Delaware subsidiary were adopted as the Company's certificate of incorporation and bylaws at the effective time of the merger. The merger and the Agreement and Plan of Merger were approved by the Company's Board of Directors (the "Board") and stockholders representing a majority of the Company's outstanding Common Stock.

On December 8, 2017, the Board of Directors, acting pursuant to Section 5.1 of the Company’s Bylaws, approved a resolution changing the Company’s fiscal year-end from July 31 to December 31. The Company made this change to align its fiscal year end with other companies within its industry.

Note 2.    Liquidity and Financial Condition

The Company had a net loss of $21.2 million for the year ended December 31, 2018 and has an accumulated deficit of $74.4 million at December 31, 2018. The Company has $19.5 million of working capital at December 31, 2018. The Company has financed its operations from sale of common stock, and through non-equity cash investments by a number of investors, in exchange for an interest in any pre-tax profits received by the Company that was derived from the sale of the Opioid Overdose Reversal Treatment Product less any and all expenses incurred by and payments made by the Company in connection with the Opioid Overdose Reversal Treatment Product ("OORT") (see Note 8 – Deferred Revenue).

On September 27, 2018, the Company completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares of its Common stock (including 105,882 shares purchased by Cantor Fitzgerald upon the exercise in full of its right to purchase up to an additional 105,882 shares to cover over-allotments) at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting sales commissions.

In addition, during the year ended December 31, 2018, the Company sold 239,270 shares of Common Stock under the Sales Agreement entered into with Cantor Fitzgerald for gross proceeds of $4.31 million and received net proceeds of $4.18 million, after sales commissions.

The Company believes that it has sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing.

Note 3.     Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”).

Principles of Consolidation

65

 The consolidated financial statements have been prepared in accordance with GAAP and include the accounts for the Company and its wholly-owned subsidiary, Opiant Pharmaceuticals UK Limited. All inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents were $24.6 million, $8.1 million and $6.9 million at December 31, 2018, December 31, 2017 and July 31, 2017, respectively. The Company maintains cash balances at financial institutions insured up to $250,000 by the Federal Deposit Insurance Corporation ("FDIC") and as of December 31, 2018 maintains the majority of its cash balances in money market funds not insured by the FDIC. The Company also transfers certain daily available cash balances to an overnight account which earns interest and the amounts are not insured by the FDIC. Balances in the United Kingdom are insured up to £85,000 by the Financial Services Compensation Scheme (United Kingdom Equivalent). Although the Company’s cash balances exceeded these insured amounts, the Company has not experienced any losses on its cash and cash equivalents for the periods presented.

Accounts Receivable

The Company routinely assesses the recoverability of receivables to determine their collectability by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. The Company determines its allowance for doubtful accounts by considering such factors as the length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations to the Company and the condition of the general economy and the industry as a whole.

The Company has evaluated its accounts receivable history and determined that no allowance for doubtful accounts is required for the year ended December 31, 2018 and the periods ended December 31, 2017 and July 31, 2017. At December 31, 2018 and 2017 the Company's accounts receivable were primarily concentrated with one party, Adapt. At July 31, 2017, 100% of the Company's accounts receivable was concentrated with one party, SWK (see Note 5 - Accounts Receivable).

Long-Lived Assets

The Company follows ASC 360, Property, Plant, and Equipment, for its fixed assets. Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method over estimated useful lives (3 to7 years). The Company’s capitalizes all asset purchases greater than $2,500 having a useful life greater than one year. The Company follows ASC 350, Intangibles – Goodwill and Other for its intellectual property asset. Intellectual property consists of patents which are stated at their fair value acquisition cost. Amortization is calculated by the straight-line method over their estimated useful lives (20 years). The Company recorded depreciation and amortization of $2,556 for the year ended December 31, 2018, $2,142 for the five months ended December 31, 2017 and $5,140 and for the year ended July 31, 2017.

Long-lived assets such as property and equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. The Company did not recognize any impairment losses for any years presented.

Earnings (Loss) per Share

The Company follows ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of shares of Common Stock outstanding during the respective period presented in the Company’s accompanying consolidated financial statements.

66

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of Common Stock equivalents (primarily outstanding options and warrants).

Common Stock equivalents represent the dilutive effect of the assumed exercise of outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the Common Stock equivalents are considered dilutive based upon the Company’s net income position at the calculation date.

At December 31, 2018, dilutive common stock equivalents have not been included because it would be anti-dilutive. At December 31, 2018, potentially dilutive common stock equivalents are 3,582,560 which consist of options and warrants. The following table illustrates the dilutive effect of the assumed exercise of the Company’s outstanding stock options and warrants, using the treasury stock method, as of December 31, 2017 and July 31, 2017, respectively:

	Year Ended			Five Months ended		Year Ended
Numerator:	December 31, 2018			December 31, 2017		July 31, 2017
Net Income (loss)	$	(21,195,316	)	$	1,379,379	$	6,580,613
Denominator:
Denominator for basic income (loss) per share - weighted average shares	2,985,335			2,077,663		2,014,540
Effect of dilutive securities:
Equity incentive plans	—			2,315,475		221,311
Denominator for diluted income (loss) per share	2,985,335			4,393,138		2,235,851
Income (loss) per share - Basic	$	(7.10	)	$	0.66	$	3.27
Income (loss) per share - Diluted	$	(7.10	)	$	0.31	$	2.94

Research and Development Costs

The Company follows ASC 730, Research and Development, and expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Transactions occur in British Pounds and management has adopted ASC 830, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Stock-Based Compensation

ASC 718 Compensation – Stock Compensation prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the

67

equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

The Company had stock-based compensation of $5.7 million, $1.8 million, and $1.7 million for the year ended December 31, 2018, the five months ended December 31, 2017 and for the year ended July 31, 2017, respectively. 

Fair Value of Financial Instruments

ASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1)market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). 

The three levels of the fair value hierarchy are described below: 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

The carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The fair value of the Company’s note payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. 

As of December 31, 2018, December 31, 2017 and July 31, 2017, the Company did not have any financial liabilities measured and recorded at fair value on the Company’s balance sheets on a recurring basis.

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Related party balances as of December 31, 2018, December 31, 2017 and July 31, 2017 were zero. The Company uses office space free of charge from related parties (see Note 4 - Related Party Transactions).

Revenue Recognition

The Company generates a large majority of revenue from the agreement with Adapt. During the year ended December 31, 2018 and the five months ended December 31, 2017 the Company recognized 95% and 99%, respectively of revenue from its agreement with Adapt.

In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services.

On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company's policy of revenue recognition. The Company's primary source of revenue is through the recognition of royalty and milestone payments from Adapt. Milestone revenue is recognized upon successful accomplishment of certain sales targets set forth in the Adapt Agreement. Royalty revenue is determined based on the agreed upon royalty rate applied to NARCAN sales reported by Adapt.There are no performance obligations by the Company and the Company recognizes revenue according to the royalty report provided by Adapt on quarterly basis.

68

In regards to treatment revenue, the Company received certain investments from investors in return for an interest in its existing treatments. Investors carry an option to exchange investment into shares of the Company. Revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Once the option has expired, the Company determined its performance obligations under the agreement which typically is to perform R&D services related to treatments and recognizes revenue over a period of time which is usually the expected research and development period. The treatment revenue is disaggregated by program treatments. (See Note 8 to the Consolidated Financial Statements - Deferred Revenue).

In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. The Company has evaluated its grant with NIH and contract with BARDA and determined they are non-exchange transactions and fall withing the scope of ASU 958, and revenue should be recognized in accordance with Topic 958 guidance. Accordingly, the Company recognizes revenue from its grant and contract in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.

Licensing Agreement

Pursuant to the Adapt Agreement, the Company provided a global license to develop and commercialize the Company’s intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®.

On December 15, 2014, the Company entered into a License Agreement with Adapt. Pursuant to the License Agreement, we provided a global license to develop and commercialize our intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®. In addition, on the SWK Closing Date, in connection with the SWK Purchase Agreement, as disclosed below, we entered into the Adapt Amendment which amends the terms of the License Agreement relating to the grant of a commercial sublicense outside of the United States and diligence efforts for commercialization of our Opioid Overdose Reversal Treatment Product. Under the terms of the Adapt Amendment, Adapt is required to use commercially reasonable efforts to commercialize the Opioid Overdose Reversal Treatment Product in the United States In the event that Adapt wishes to grant a commercial sublicense to a third party in the European Union or the United Kingdom, we have agreed to negotiate an additional amendment to the License Agreement to include reduced financial terms with respect to the commercial sublicense.

The Company also receives payments upon reaching various sales and regulatory milestones, as well as royalty payments for commercial sales of NARCAN® generated by Adapt. During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized royalty and milestone revenue of $13.3 million and $11.7 million, respectively.

Interest in Treatments

With respect to investments in interests in treatments, if an agreement provides an option that allows the investor in the treatment to convert an interest in a treatment into shares of Common Stock of the Company, then revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement are reviewed and evaluated under ASC 606. In the event the investor chooses to convert interests into shares of Common Stock, that transaction will be accounted for similar to a sale of shares of Common Stock for cash.

Sale of Royalties

Under the SWK Purchase Agreement, the Company received an upfront purchase price of $13,750,000 less $40,000 of legal fees, and recognized an additional $3,750,000 when certain milestones were achieved during the fiscal year ended July 31, 2017.

During the fiscal year ended July 31, 2017, the Company recognized total proceeds of $17,460,000 as revenue associated with the SWK Purchase Agreement immediately as a result of (i) the executed agreement constituting persuasive evidence of an arrangement, (ii) the Company having no current or future performance obligations, (iii) the total consideration being fixed and known at the time of its execution and there being no rights of return, and (iv) the cash having been received and non-refundable.

69

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

In June 2018, the FASB issued ASU No. 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting," ("ASU 2018-07"), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 is effective for financial statements issued for annual periods beginning after December 15, 2018, and for the interim periods therein. The adoption of ASU 2018-07 is not expected to have a significant impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (ASU No. 2018-15). The new standard describes the accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement (CCA). Under the new guidance, customers will assess if a CCA includes a software license and if a CCA does include a software license, implementation and set-up costs will be accounted for consistent with existing internal-use software implementation guidance. Implementation costs associated with a CCA that does not include a software license would be expensed to operating expenses. The standard also provides classification guidance on these implementation costs as well as additional quantitative and qualitative disclosures. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim periods. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company is assessing this standard and currently believes it will not have any material impact on the consolidated financial statements.

In 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This new standard permits entities to reclassify to retained earnings the tax effects stranded in accumulated other comprehensive income ("AOCI") as a result of U.S. tax reform. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company has evaluated the impact and timing of the this standard and has concluded it will not impact the consolidated financial statements.

In 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.The standard requires that an employer report the service cost component in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of operating profit. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted this ASU effective January 1, 2018 and has concluded it will not impact the consolidated financial statements.

     In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842) The new standard requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The standard is effective on January 1, 2019, with early adoption permitted. The Company adopted the new standard on January 1, 2019, and there is no impact from the adoption of this standard as the current office leases are less than 12 months.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” ("ASU 2016-18”). The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The purpose of Update No. 2016-18 is to clarify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents. The Company adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financial statements.

In October 2016, the FASB issued updated guidance related to the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory. This guidance is effective for the first quarter of tax year 2018. The Company has adopted the guidance and determined that there is no impact on its consolidated financial statements.

70

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230)” (“ASU 2016-15”), which seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. For public entities, Update 2016-15 becomes effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning December 15, 2016, and interim periods within those fiscal years. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The guidance provided an entity-wide accounting policy election to account for forfeitures as they occur. The Company has elected to record forfeitures as they occur. The Company has evaluated the requirements of the new guidance and has determined that the impact is not material to its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2017-17") to simplify the presentation of deferred income taxes.ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company has adopted the provisions of Update 2016-15 and determined that there is no impact on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." The amendments in this ASU are intended to provide guidance on the responsibility of reporting entity management. Specifically, this ASU provides guidance to management related to evaluating whether there is substantial doubt about the reporting entity’s ability to continue as a going concern and about related financial statement note disclosures. Although the presumption that a reporting entity will continue to operate as a going concern is fundamental to the preparation of financial statements, prior to the issuance of this ASU, there was no guidance in United States generally accepted accounting principles (United States GAAP) related to the concept. Due to the lack of guidance in United States GAAP, practitioners and their clients often faced challenges in determining whether, when, and how a reporting entity should disclose the relevant information in its financial statements. As a result, the FASB issued this guidance to require management evaluation and potential financial statement disclosures. This ASU is effective for financial statements with periods ending after December 15, 2016. The Company adopted the ASU during 2017 and performed going concern evaluations for its 2018 and 2017 year-end financial statements.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its consolidated financial statements.

Note 4.    Related Party Transactions

The Company uses office space provided by Dr. Phil Skolnick, the Company’s Chief Scientific Officer, free of charge.

On March 31, 2017, Dr. Michael Sinclair and Dr. Roger Crystal, the Company’s Chief Executive Officer, each voluntarily entered into separate employment agreement acknowledgements whereby they elected to forfeit, unconditionally and irrevocably, $175,498 and $586,328, respectively, of certain owed amounts pursuant to their respective existing employment agreements, representing 35% of the total compensation currently owed to each of Dr. Sinclair and Dr. Crystal on such date. As the debt forgiven was owed to a related party, the Company recognized the amount forgiven as an equity transaction recorded in additional paid-in capital.

Furthermore, on March 31, 2017, pursuant to their respective employment agreement acknowledgements, Dr. Sinclair and Dr. Crystal each voluntarily elected to forfeit, unconditionally and irrevocably, 680,000 and 825,000 shares of common stock, par value $0.001 per share (“Common Stock”), of the Company underlying stock options and warrants previously issued by the Company, respectively, representing approximately 55% of the total number of options and warrants previously issued by the Company to each of Dr. Sinclair and Dr. Crystal.

During the fiscal year ended July 31, 2017, the Company did not borrow any funds from related parties, nor did it have any outstanding related party debt and/or accrued and unpaid interest owed to related parties as of July 31, 2017.

71

Note 5.     Accounts Receivable

As of December 31, 2018 the Company had accounts receivable of $4,489,317 of which $4,484,433 relates to royalty revenue from the sales of NARCAN®.

As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Agreement had been met (see Note 2 - Liquidity and Financial Condition). As a result, 90% of any succeeding milestone payments and royalties due from Adapt/EBS will revert to the Company while the remaining 10% will be paid to SWK directly by Adapt/EBS. As of December 31, 2017, the Company recognized accounts receivable of $11,696,676, which is equivalent to 90% of the milestone payments and royalties earned during the five months ended December 31, 2017.

The Company had accounts receivable of $3,750,000 as of July 31, 2017, with the entire amount being related to the Earn Out Milestone from SWK. As provided under the Company’s agreement with SWK, the Company was to receive a milestone payment in the amount of $3,750,000 if Adapt had received in excess of $25,000,000 of cumulative Net Sales for any two consecutive fiscal quarters during the period from October 1, 2016 through September 30, 2017 from the sale of

NARCAN®. This milestone was achieved as of July 31, 2017, therefore the Company recorded the $3,750,000 as an account receivable, with the actual cash payment being received by the Company on August 9, 2017.

Note 6.     Prepaid Expenses and Other Current Assets

As of December 31, 2018, the Company had approximately $268 thousand recorded as prepaid expenses and other current assets. Of this amount approximately $74 thousand is for research and development supplies related to product development work being performed by Renaissance Lakewood, LLC ("Renaissance") (see Note 10 - Commitments), and the remaining $194 thousand is for prepaid expenses such as rent, insurance, and software licenses.

As of December 31, 2017, the Company had approximately $0.7 million recorded as prepaid expenses and other current assets. Approximately $0.4 million was related to a deposit made by the Company to Renaissance in August 2017. As provided under the agreement with Renaissance, the Company was obligated to make this deposit to fund the initial costs of the product development work to be performed by Renaissance on behalf of the Company. As of December 31, 2017, no work had been performed, nor had any costs been incurred, in relation to this project.

During the five months ended December 31, 2017, the Company purchased approximately $0.1 million of research and development supplies related to the above referenced product development work being performed by Renaissance. As provided under the agreement with Renaissance, the Company is obligated to pay for all supplies and materials that are needed to complete this product development work. These supplies were delivered on October 16, 2017 and approximately $25 thousand in supplies have been used as of December 31, 2018. The remaining balance consists primarily of prepaid expenses such as rent, insurance, and software licenses.

The Company had recorded approximately $0.2 million as prepaid expenses and other current assets at July 31, 2017 that consists primarily of prepaid expenses such as rent, insurance, and software licenses.

Note 7.     Deferred Financing Costs

During the five months ended December 31, 2017, the Company incurred approximately $0.2 million of legal, accounting, and filing fees related to the Company's fund raising efforts. The Company recorded the $0.2 million as deferred financing costs as of December 31, 2017. These expenses were offset against net proceeds received from the Company's financings during 2018.

Note 8.    Deferred Revenue

On December 17, 2013, the Company entered into an agreement with an investor, Potomac, and subsequently received additional funding totaling $250 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 0.5% interest in the Company’s BED treatment product (the “BED Treatment Product”) and pay the investor 0.5% of the BED Net Profit in perpetuity (the “2013 0.5% Investor Interest”). “BED Net Profit” is defined as the pre-tax profit generated from the BED Treatment Product after the deduction of all expenses incurred by and payments made by the Company in connection with the BED Treatment Product, including but not limited to an allocation of Company overhead. If the BED Treatment Product was not approved by the FDA by December 17, 2016, the investor had a 60-day option to exchange its entire 0.5% Investor Interest for 31,250 shares of Common Stock of the Company. On February 17, 2017, the investor’s option to receive the shares of Common Stock terminated by its terms, which resulted in the Company beginning to recognize revenue in relation to this agreement in February 2017. The Company estimates that sufficient research and development will be completed by December 31, 2020 to allow the Company to advance the program into final registration studies. Therefore, the Company recognized revenue on a straight-line basis over the expected completion date. During the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017, the Company recognized approximately $58 thousand, $36 thousand and $39.9 thousand of revenue relating to the agreement, respectively.

On September 17, 2014, the Company entered into an agreement with an investor, Potomac, and subsequently received funding totaling $500 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 1.0% interest in the Company’s BED Treatment Product and pay the investor 1.0% of the BED Net Profit generated from the BED Treatment Product in perpetuity (the “1.0% Investor Interest”). “BED Net Profit” is defined as the pre-tax profit generated from the BED Treatment Product after the deduction of all expenses incurred by and payments made by the Company in connection with the BED Treatment Product, including but not limited to an allocation of Company overhead. If the BED Treatment Product is not approved by the FDA by September 17, 2017, the investor will have a 60-day option to exchange its entire 1.0% Investor Interest for 62,500 shares of Common Stock of the Company. On November 15, 2017, the investor’s option to receive the shares of Common Stock terminated by its terms, which resulted in the Company beginning to recognize revenue in relation to this agreement in November 2017. The Company estimates that sufficient research and development will be completed by December 31, 2020 to allow the Company to advance the program into final registration studies. Therefore, the Company recognized revenue on straight-line basis over the expected completion date.

72

During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized approximately $156,863 and $29,400 of revenue related to this agreement. The Company recognized no revenue for the fiscal year ended July 31, 2017.

On July 20, 2015, the Company entered into an agreement with an investor, Potomac, and subsequently received funding from an individual investor in the amount of $250 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 0.5% interest in the BED Net Profit (the “2015 0.5% Investor Interest”) generated from the BED Treatment Product in perpetuity. The investor also has rights with respect to the 2015 0.5% Investor Interest if the BED Treatment Product is sold or the Company is sold. If the product is not introduced to the market and not approved by the FDA or an equivalent body in Europe and not marketed by July 20, 2018, the investor will have a 60-day option to exchange the 2015 0.5%Investor Interest for 25,000 shares of Common Stock of the Company. The Investor did not elect to exchange their interest for shares of Common Stock as described above and the Company commenced recognizing revenue in September 2018. For the year ended December 31, 2018 the Company recognized $35,714 of revenue related to this agreement.

On September 22, 2015, the Company received a $1.6 millioncommitment from the Foundation which later assigned its interest to Valour in October 2016, from which the Company had the right to make capital calls from the Foundation for the research, development, any other activities connected to the Company’s opioid antagonist treatments for addictions and related disorders that materially rely on certain studies funded by the Foundation’s investment, excluding the Opioid Overdose Reversal Treatment Product (the “Certain Studies Products”), certain operating expenses, and any other purpose consistent with the goals of the Foundation. In exchange for funds invested by the Foundation, Valour currently owns 2.1333% interest in the Certain Studies Products Net Profit (the “ 2.1333% Interest”). The “Certain Studies Net Profit” is defined as any pre-tax revenue received by the Company that was derived from the sale of the Certain Studies Products less any and all expenses incurred by and payments made by the Company in connection with the Certain Studies Products, including but not limited to an allocation of Company overhead based on the proportionate time, expenses and resources devoted by the Company to Certain Studies Product-related activities, which allocation shall be determined in good faith by the Company. Valour also has rights with respect to its up to a 2.1333% Interest if the Certain Studies Product is sold or the Company is sold. Additionally, the Company may buy back, in whole or in part, the 2.1333% Interest from Valour within 2.5 years or after 2.5 years of the initial investment at a price of two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. If an aforementioned treatment is not introduced to the market by September 22, 2018, Valour will have a 60-day option to exchange its 2.1333% Interest for shares of the Common Stock of the Company at an exchange rate of one-tenth of a share for every dollar of its investment. On October 2, 2015, December 23, 2015, and May 28, 2016, the Company made capital calls of approximately $618 thousand , $715.5 thousand, and $266.5 thousand from the Foundation in exchange for 0.824%, 0.954% and 0.355333% interests in the aforementioned treatments, respectively. The Company will defer recording revenue until such time as Valour’s option expires or milestones are achieved that eliminates Valour’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement will be reviewed and evaluated under Accounting Standards Codification (ASC) 606. In the event Valour chooses to exchange its 2.1333% Interest, in whole or in part, for shares of Common Stock of the Company, that transaction will be accounted for similar to a sale of shares of Common Stock for cash. During September 2018 Valour elected to exchange its interest for shares of Common Stock and accordingly the Company issued 160,000 shares of its Common Stock to Valour.

On April 17, 2018, the Company was awarded a grant of approximately $7.4 million from the National Institutes of Health’s National Institute on Drug Abuse, ("NIDA"). The grant provides the Company with additional resources for the ongoing development of OPNT003 (intranasal nalmefene), a long-lasting opioid antagonist for the treatment of opioid overdose. The grant includes approximately $2.6 million to be funded for the period ending March 31, 2019, with the balance to be funded over the subsequent two years, subject to available funds and satisfactory progress on the development of OPNT003. Government grants are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. The Company recognizes revenues from grants in the period during which the related costs were incurred, provided that the conditions under which the grants were provided had been met and only perfunctory obligations were outstanding. During the year ended December 31, 2018 the Company received cash of $1.0 million and recognized revenue of $432 thousand related to this grant.

The following is a summary of the Company’s deferred revenue activity for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017:

73

(in thousands)	NIH Grant				BED			Other Opioid Treatments			Total
Balance as of July 31, 2016		$	—		$	1,000		$	1,600		$	2,600
Recognized as revenue		—			(39		)	—			(39		)
Balance as of July 31, 2017		—			961			1,600			2,561
Recognized as revenue		—			(66		)	—			(66		)
Balance as of December 31, 2017		—			895			1,600			2,495
Cash Received NIH		1,000			—			—			1,000
Converted to Equity		—			—			(1,600		)	(1,600		)
Recognized as revenue		(432		)	(251		)	—			(683		)
Balance as of December 31, 2018		$	568		$	644		$	—		$	1,212

As of December 31, 2018, the Company had recorded approximately $1,212 thousand of its deferred revenue as a current liability because the Company expects to recognize that amount as revenue during the next 12 months. Current and long-term deferred revenue are detailed in the following table:

Deferred Revenue (in thousands)	NIH Grant			BED		Other Opioid Treatments		Total
Current portion		$	568	$	644	$	—	$	1,212
Long-term portion		—		—		—		—
Total		$	568	$	644	$	—	$	1,212

Note 9.     License Fee Payable

On February 28, 2018, the Company was notified that Adapt, now a Subsidiary of Emergent BioSolutions ("EBS"), had entered into a license agreement with a Third Party (as defined in the License Agreement) with regard to one or more patents pursuant to which Adapt invoked its right under Section 5.5 of the License Agreement, dated as of December 15, 2014, by and between the Company and Adapt, as amended (the "License Agreement"), to offset 50% of certain payments paid to such Third Party from the amounts payable by Adapt to the Company under the License Agreement and SWK under the SWK Purchase Agreement. On March 1, 2018, the Company received net milestone payments of $6.1 million, which was net of 50% of a license fee payment Adapt made to the Third Party. Adapt reduced such milestone payment by $6.25 million pursuant to Section 5.5 of the License Agreement. The portion of the milestone payment that the Company would have otherwise received was reduced by $5.6 million.

As provided in Amendment No. 2 to the License Agreement, which the parties entered into on March 18, 2019 (see Note 17, Subsequent Events), Adapt has made has made and will in the future make payments to the Third Party Licensee and will be allowed to reduce the royalties and milestones that the Company would be due under the License Agreement by a maximum of $9.0 million in relation to such payments. Under the SWK Purchase Agreement, the Company retains 90% of the royalties payable under the License Agreement, with SWK entitled to 10%. The maximum amount payable by the Company is therefore $8.1 million (90% of $9 million), of which the Company has recorded $5.4 million as a current liability and $2.7 million as a long-term liability at December 31, 2018. As provided in Amendment No. 2, Adapt will be allowed to reduce the royalties and milestones that the Company would be due under the License Agreement during the year ending December 31, 2019 by a maximum of $1.8 million each quarter. As provided in the License Agreement, if Net Narcan Sales (as defined in the License Agreement) exceed $200 million in any calendar year, the Company and SWK will be due a milestone of $15.0 million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to the Company and SWK, Adapt may deduct $2.7 million from the $13.5 million (90% of $15.0 million) milestone payable to the Company.

Note 10. Royalty Payable

The Company entered into various agreements and subsequently received funding from investors for use by the Company for the research and development its OORT Product. In exchange for this funding, the Company agreed to provide investors with interest in the OORT Net Profit generated from its OORT Product in perpetuity. At December 31, 2018 and 2017, the Company determined an OORT Net Profit as a result of NARCAN® sales by Adapt. There was no OORT Net Profit

74

prior to December 31, 2017. The following table sets forth the royalty payable to certain investors as of December 31, 2018 and December 31, 2017:

(in thousands)	Net Profit %		December 31, 2018		December 31, 2017
Potomac	10.2%	$	422	$	860
LYL	5.0%		206		421
Welmers	1.5%		62		127
Foundation	6.0%		248		—
Pendergast	1.0%		60		—
Royalty payable	23.7%	$	998	$	1,408

Note 11. Commitments and Contingencies

Commitments

The Company has entered into various agreements related to its business activities. The following is a summary of the Company’s commitments:

a. On December 18, 2014, the Company entered into a consulting agreement (the "2014 Agreement") with Torreya Partners LLP ("Torreya"), a financial advisory firm, under which Torreya agreed to provide financial advisory services with regard to a licensing agreement. The Company is also required to pay an additional fee equivalent to 3.75% of all amounts received by the Company in excess of $3.0 million, in perpetuity. Total fees incurred by the Company to this consultant pursuant to this agreement during the fiscal year ended July 31, 2017 amounted to approximately $963.6 thousand.

On April 25, 2016, the Company entered into a consulting agreement with Torreya, under which Torreya agreed to provide financial advisory services for financing activities. In exchange for these services, the Company is required to pay a fee on all funding received by the Company as a result of assistance provided by the consultant. Torreya’s fee will be equal to 5% of gross funding received by the Company up to $20 million plus 3.5% of any proceeds received in excess of $20 million. Total fees incurred by the Company to this consultant pursuant to this agreement during the fiscal year ended July 31, 2017 amounted to $687.5 thousand. As of July 31, 2017, the Company had recorded an accrued liability of approximately $928.5 thousand relating to fees owed to Torreya.

On September 8, 2017, the Company and Torreya entered into the Supplemental Engagement Letter to provide financial advisory services with respect to the licensing of the intellectual and property rights to develop and commercialize certain products with Adapt Pharma Operations Limited, an Ireland based pharmaceutical company ("Adapt"). The revised engagement amends total consideration as follows: (i) an aggregate of $300 thousand in cash payments to be paid by the Company to Torreya in three equal installments over a 16-month period; (ii) shares of Common Stock, equal to an aggregate value of $300 thousand, to be issued by the Company to Torreya in three equal installments over a 16-month period; (iii) if the Earn Out Milestone Payment is paid under the SWK Purchase Agreement, approximately $140.6 thousand, or 3.75% of the Earn Out Milestone Payment (as defined in the SWK Purchase Agreement), shall be paid by the Company to Torreya within 15 days of the date that the Earn Out Milestone (as defined in the SWK Purchase Agreement) has been paid to the Company; (iv) once SWK has received the Capped Royalty Amount, if the Earn Out Milestone Payment (as defined in the SWK Agreement) is paid, Torreya shall receive 3.375%of the Total Consideration (as defined in the 2014 Agreement) received thereafter or 3.5625% of the Total Consideration received thereafter if no generic version of NARCAN is commercialized prior to the sixth anniversary of the Closing Date (as defined in the SWK Agreement) as per the terms of the SWK Agreement; and (v) once SWK has received the Capped Royalty Amount, if

75

the Earn Out Milestone Payment has not been paid, Torreya shall receive 3.45525% of the Total Consideration received thereafter or 3.602625% of the Total Consideration received thereafter if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing Date as per the terms of the SWK Purchase Agreement. Payments made by the Company in the form of shares of Common Stock will be a defined number of shares calculated based upon the average closing price of the Common Stock for the ten trading days prior to the relevant date for the payment.

On September 23, 2017, the Company issued 3,283 shares of its Common Stock to Torreya as payment for $100 thousand of fees owed by the Company to Torreya. The Company valued these shares at $40.58 per share, or approximately $133 thousand in the aggregate, which represents the closing price of the Company's Common Stock on September 22, 2017. The Company also paid Torreya approximately $240.6 thousand in cash in September 2017 as payment for fees owed. On December 22, 2017, the Company issued 3,455 shares as payment for $100 thousand of fees owed by the Company to Torreya. The Company valued these shares at $24.95 per share, or approximately $81 thousand in the aggregate, which represents the closing price of the Company's Common Stock on December 22, 2017. The Company also paid Torreya $100 thousand in cash in December 2017 as payment for fees owed.

Both the $200 thousand of fees paid via the issuance of Common Stock and the $340.6 thousand of fees paid in cash had been recorded as accrued liabilities as of July 31, 2017.

During the five-month period ended December 31, 2017, the Company incurred approximately $439 thousand in aggregate fees related to Torreya. As of December 31, 2017, the Company had an accrued liability of $639 thousand owed to Torreya.

During the year ended December 31, 2018, the Company incurred approximately $447 thousand in aggregate fees related to Torreya. In addition during December 2018 the Company paid Torreya $100 thousand in cash and issued 6,498 shares of Common Stock representing a total of $200 thousand of fees owed by the Company to Torreya which had been recorded as accrued liability as of December 31, 2017. As of December 31, 2018 the Company has an accrued liability of $151 thousand owed to Torreya.

b. On November 19, 2015, the Company issued 14,327shares of unregistered Common Stock upon the execution of a binding letter of intent to agree to negotiate and enter into an exclusive license agreement and collaboration agreement (“LOI”) with a pharmaceutical company with certain desirable proprietary information. The shares issued in this transaction were valued using the stock price at issuance date and amounted to approximately $120.3 thousand. Pursuant to the LOI, the Company is obligated to issue up to an additional 92,634 shares of unregistered Common Stock upon the occurrence of various milestones. A total of 3,582 shares had been issued as of July 31, 2016 due to achievement of certain milestones. On November 10, 2016, the Company issued an additional 14,327 shares of the unregistered Common Stock pursuant to the LOI. The shares issued in this transaction were valued using the stock price at issuance date and amounted to approximately $85.1 thousand. On March 16, 2017, the Company issued an additional 10,745 shares of unregistered Common Stock pursuant to the LOI. The Company was obligated to issue these shares upon the one year anniversary of receipt by the Company of a milestone payment from Adapt for the first commercial sale of the Company’s product, NARCAN®, in the U.S. The shares issued on March 16, 2017 were valued on the date of issuance using the March 16, 2017 closing price of the Company’s Common Stock of $7.75 per share, which resulted in an aggregate value of approximately $83.3 thousand. The Company expensed the entire $83.3 thousand as non-cash expense during the fiscal year ended July 31, 2017. There were no share issuances, nor any expenses incurred, by the Company in relation to this LOI during the five months ended December 31, 2017.

As of March 31, 2018, the Company was required to issue an additional 37,866 shares of its unregistered Common Stock pursuant to the LOI. The Company was obligated to issue these shares on the receipt of cumulative royalty payments of $2 million from Adapt and milestone payments from Adapt with respect to first achieving the milestones of the first $30 million, $40 million, $55 million and $75 million of Net NARCAN® Sales. The shares that were issuable as of March 31, 2018, were valued using the March 29, 2018 closing stock price of the Company's Common Stock of $19.18 per share, which resulted in an aggregate value of approximately $726 thousand. On April 19, 2018 the Company issued 37,866 shares of Common Stock. For the year ended December 31, 2018 the Company recorded total non-cash expense of $776 thousand, of which $726 thousand was recorded to research and development expense and $50 thousand was recorded to loss on settlement of liability in other expense.

76

c. In October 2016, the Company in-licensed a heroin vaccine from Walter Reed Army Institute of Research ("WRAIR"). In consideration for the license the Company agreed to pay a royalty of 3% of net sales if the Company commercializes the vaccine, or 4% if the vaccine is sublicensed. In addition, the Company agreed to pay a minimum annual royalty of $10 thousand, as well as fixed payments of up to approximately $715.7 thousand if all of the specified milestones are met. During the five months ended December 31, 2017, the Company paid $60 thousand in cash to WRAIR, of which $50 thousand was a non-recurring "execution" fee and the remaining $10 thousand was the minimum annual royalty for the period of September 2017 through August 2018. The $10 thousand minimum annual royalty was recorded as a prepaid expense and is being expensed at the rate of $833 per month, beginning in September 2017 and ending in August 2018.

d. The Company has a Sublease with Standish Management, LLC to sublease office space on a month-to-month basis, located at 201 Santa Monica Boulevard, Suite 500, Santa Monica, CA 90401, which is the Company's headquarters. The Company also has an Office Service Agreement to lease office space at 83 Baker Street, London, England, W1U 6AG. Effective May 31, 2018 either party is able to terminate the Office Service Agreement by providing three months advance written notice of termination. During the year ended December 31, 2018, the five months ended December 31, 2017, and the year ended July 31, 2017 the Company incurred approximately $321 thousand, $150 thousand, and $123 thousand, respectively of rent expense.

e. On June 1, 2017 (the “LYL Effective Date”), the Company entered into an amendment with LYL (the “LYL Amendment”) to the Amended and Restated Consulting Agreement, dated October 25, 2016 and effective as of July 17, 2013 (the “LYL Agreement”). Pursuant to the LYL Amendment, LYL granted the Company certain buyback provisions that have expired as of December 31, 2018. In consideration for LYL entering into the LYL Amendment, upon the Company's receipt after the LYL Effective Date of at least $3 million from (i) SWK under the SWK Purchase Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by the Company from SWK will be used in determining the Net Profit (as defined in the LYL Agreement).

f. On June 22, 2017, the Company entered into a license agreement (the "License Agreement") and a related supply agreement (the “Supply Agreement”) with Aegis Therapeutics LLC ("Aegis") pursuant to which the Company was granted an exclusive license (the “License”) to Aegis’ proprietary chemically synthesizable delivery enhancement and stabilization agents, including, but not limited to, Aegis’ Intravail® absorption enhancement agents, ProTek® and HydroGel® (collectively, the “Technology”) to exploit (a) the Compounds (as such are defined in the License Agreement) and (b) a product containing a Compound and formulated using the Technology (“Aegis Product”), in each case of (a) and (b) for any and all purposes. The License Agreement restricts the Company's ability to manufacture any Aegis excipients included in the Technology (“Excipients”), except for certain instances of supply failure, supply shortage or termination of the Supply Agreement, and the Company shall obtain all supply of such Excipients from Aegis under the Supply Agreement. The License Agreement also restricts Aegis’s ability to compete with the Company worldwide with respect to the Exploitation (as defined in the License Agreement) of any therapeutic containing a Compound or derivative or active metabolite of a Compound without the Company's prior written consent. The effective date of the License Agreement and the Supply Agreement is January 1, 2017.

As consideration for the grant of the License, the Company paid Aegis two immaterial upfront payments, of which the Company paid 50% by issuing the Company's Common Stock to Aegis, with the number of shares issued equal to 75% of the average closing price of the Company's Common Stock over the 20 trading days preceding the date of payment. The License Agreement also provides for (A) additional developmental milestone payments for each Product containing a different Compound equal to up to an aggregate of $1.8 million, (B) additional commercialization milestone payments for each Aegis Product containing a different Compound equal to up to an aggregate of $5.0 million, and (C) single low digit royalties on the Annual Net Sales (as defined in the License Agreement) of all Aegis Products during the Royalty Term (as defined in the License Agreement) according to a tiered royalty rate based on Annual Net Sales of the Aegis Products by the Company, the Company's sublicensees and affiliates. The Company shall also pay to Aegis a sublicense fee based on a sublicense rate negotiated in good faith by the parties. The License Agreement contains customary representations and warranties, ownership, patent rights, confidentiality, indemnification and insurance provisions. The License Agreement shall expire upon the expiration of the Company's obligation to pay royalties under such License Agreement; provided, however, that the Company shall have the right to terminate the License granted on a product-by-product or country-by-country basis upon 30 days’ prior written notice to Aegis.

Under the terms of the Supply Agreement, Aegis shall deliver to the Company any preclinical, clinical and commercial supply of the Excipients, which Aegis sources from various contract manufacturers. The Supply Agreement has a term of 20 years but shall terminate automatically in the event of expiration or termination of the License Agreement or at any time upon the written agreement of both parties. The Supply Agreement contains customary provisions relating to pricing for such materials, forecasts, delivery, inspection, indemnification, insurance and representations, warranties and covenants. The Supply Agreement includes technology transfer provisions for the transfer of all materials and know-how

77

specific to the manufacturing of the Excipients that is necessary or useful for the Company to manufacture such Excipients. The Company does not have the right to manufacture such Excipients except in the event that Aegis is unable to supply and sell any portion of the material to the Company (subject to a 60-day cure period).

For the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017, the Company recorded $350 thousand, $150 thousand and $200 thousand, respectively in expense associated with the License Agreement.

g. On July 14, 2017, Renaissance Lakewood, LLC (“Renaissance”) and the Company entered into a Research and Development Agreement (the “Renaissance Agreement”). Under the Renaissance Agreement, Renaissance will perform product development work on a naltrexone multi-dose nasal product for the treatment of alcohol use disorder pursuant to the terms set forth in a proposal agreed upon by the parties. The Company will bear the costs of all development services, including all raw materials and packaging components, in connection with the performance of the development work under the Renaissance Agreement and in accordance with financials agreed upon through the proposal. Renaissance will conduct quality control and testing, including non-stability, stability, in-use, raw material, and packaging component testing as part of the services provided to the Company under the Renaissance Agreement. The Company will own all formulations provided to Renaissance and any formulations developed in connection with the Renaissance Agreement. Renaissance will own all know-how developed in connection with the performance of the services that is not solely related to a product. The Company has the right to seek patent protection on any invention or know-how that relates solely to a product developed under the Renaissance Agreement or any our formulation, excluding general manufacturing or product development know-how of Renaissance. The Renaissance Agreement is effective until terminated by either party in accordance with its terms.  The Company or Renaissance may terminate the project under a proposal to the Renaissance Agreement due to unforeseen circumstances in the development.  The Renaissance Agreement may be terminated by the Company, with or without cause, upon 45 days written notice.  There are also mutual customary termination provisions relating to uncured breaches of material provisions. See Note 6 - Prepaid Expenses and Other Current Assets.

h. On September 5, 2017, the Company accepted, effective September 11, 2017 (the “Separation Date”), the resignation of Kevin Pollack as (i) the Company’s Chief Financial Officer, Treasurer and Secretary, and (ii) a director of Opiant Pharmaceuticals UK Limited, a wholly owned subsidiary of the Company. On September 5, 2017, the Company and Mr. Pollack entered into a Separation Agreement and General Release (the “Separation Agreement”), with such agreement becoming effective on September 12, 2017 (the "Separation Agreement Effective Date"), which represented the date on which Mr. Pollack's seven-day revocation period expired.

Pursuant to the terms of the Separation Agreement, Mr. Pollack received (i) a payment equal to approximately $1.13 million relating to certain accrued obligations, payable in a cash lump sum within three business days following the Separation Agreement Effective Date; and (ii) a separation payment equal to approximately $1.44 million, payable in one or two installments in accordance with the terms set forth therein. Mr. Pollack also retained previously granted options to purchase, in the aggregate, 948,000 shares of Common Stock of the Company, which options are fully vested and exercisable. Except as set forth in the Separation Agreement, all other options held by Mr. Pollack were forfeited. Additionally, for a period of no more than 12 months following the Separation Date, Mr. Pollack will cooperate as an adviser with the Company in connection with matters arising out of Mr. Pollack’s service with the Company, in accordance with the terms set forth in the Separation Agreement.

During the five months ended December 31, 2017, the Company paid Mr. Pollack approximately $1.61 million in cash pursuant to the terms of the Separation Agreement. In addition, as of December 31, 2017, the Company has recorded an accrued liability of approximately $962 thousand. During September 2018, the Company made the final payment due to Mr. Pollack.

i. On September 7, 2018, the Company entered into a Development Agreement ("Development Agreement") and an Agreement for Reimbursement of Capital Expenditure and Service Fees ("Reimbursement Agreement") with Aesica Queenborough Limited ("Aesica"), a wholly owned subsidiary of Consort Medical plc, related to the Company’s product OPNT003 (intranasal nalmefene), a potent long acting opioid antagonist for the treatment of opioid overdose. As part of the Development Agreement, Aesica and Bespak, wholly owned subsidiaries of Consort, will supply the Company with clinical samples and registration batches for the purpose of performing clinical studies and obtaining regulatory approvals. Further, as part of the Development Agreement, the Company and Aesica agreed that, upon approval by the U.S. FDA, Aesica and Bespak will manufacture and supply the commercial device for the Company upon mutually agreed terms. Under the terms of the Reimbursement Agreement, the Company has agreed to reimburse Aesica for certain service, tooling, equipment and facility alteration expenses incurred by Aesica under certain

78

circumstances, including termination of the Development Agreement and the failure to complete a definitive manufacturing and supply agreement.

Contingencies

The Company may be subject to various legal proceedings and claims that arise in the ordinary course of business. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in both the probability determination and as to whether an exposure can be reasonably estimated. If any legal matter, that may arise, were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s would reflect any potential claim in the consolidated financial statements for that reporting period.

Note 12. Stockholder's Equity

Common Stock

During the year ended December 31, 2018

During the year ended December 31, 2018, the Company issued 50,497 shares of its Common Stock in relation to the cashless exercise of stock options that were granted outside of the Company's 2017 Long-Term Incentive Stock Plan (the "2017 Plan"). A total of 95,000 stock options were exercised with exercise prices between $7.25 and $10.00 per share.

During the year ended December 31, 2018, the Company issued 3,400 shares of its Common Stock as a result of the exercise of stock purchase warrants with an exercise price of $10.00 per share for total proceeds of $34,000.

During the year ended December 31, 2018 the Company issued 38,166 shares of its Common stock with an aggregate value of $782 thousand for services provided to the Company.

On September 5, 2018, the Company also issued 160,000 shares of Common Stock to Valour Fund, LLC, as a result of Valour's exercise of its option to exchange its interest in certain product revenues for Common Stock of the Company.

On December 18, 2018, the Company issued 6,498 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter").

During October 2017 the Company entered into a Controlled Equity Offering sales agreement (the "Sales Agreement") with Cantor Fitzgerald & Co., as agent ("Cantor Fitzgerald"), pursuant to which the Company may offer and sell, from time to time through Cantor Fitzgerald, shares of Common Stock having an aggregate offering price as set forth in the Sales Agreement and a related prospectus supplement filed with the SEC on March 19, 2018. The Company agreed to pay Cantor Fitzgerald a cash commission of 3.0% of the aggregate gross proceeds from each sale of shares under the Sales Agreement. During the twelve months ended December 31, 2018 the Company sold 239,270 shares of Common Stock for gross proceeds of $4.31 million and received net proceeds of $4.18 million after deducting sales commissions.

On September 27, 2018, the Company also completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares its Common stock (including 105,882 shares purchased by Cantor Fitzgerald upon the exercise in full of its right to purchase up to an additional 105,882 shares to cover over-allotments) at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting sales commissions.

During the five months ended December 31, 2017

During the five months ended December 31, 2017, the Company issued 145,630 shares of its Common Stock in relation to the cashless exercise of stock options that were granted outside of the Company's 2017 Long-Term Incentive Stock Plan (the "2017 Plan"). These options were for 217,500 shares of Common Stock with exercise prices between $5.00 and $15.00 per share.

During the five months ended December 31, 2017, the Company issued 345,000 shares of its Common Stock in relation to the exercise of stock purchase warrants with an exercise price of $15.00 per share for total proceeds of $5,175,000.

79

During the five months ended December 31, 2017, the Company issued 11,790 shares of its Common Stock in relation to the exercise of stock purchase warrants, with an exercise price of $10.00 per share. The Company received proceeds of $57,900 relating to the warrant exercises during the five months ended December 31, 2017 and the balance of $60,000 on January 16, 2018.

On September 23, 2017, the Company issued 3,283 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter"). The Company valued these shares at $40.58 per share, or approximately $133 thousand in the aggregate, which represents the closing price of the Company's Common Stock on September 22, 2017. The Company recognized a loss on the settlement of the accrued liability of $33 thousand.

On December 22, 2017, the Company issued 3,455 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter"). The Company valued these shares at $24.95 per share, or approximately $81 thousand in the aggregate, which represents the closing price of the Company's Common Stock on December 22, 2017. The Company recognized a gain on the settlement of the liability of $19 thousand.    

During the year ended July 31, 2017

During the year ended July 31, 2017, the Company issued 2,875 unregistered shares of the Company’s Common Stock to consultants in exchange for services provided by the consultants. The shares issued were valued using the stock price on the issuance date, ranging from $7.52 to $7.75. The Company recorded a non-cash expense of $22,051.

During the year ended July 31, 2017, the Company issued 25,072 shares of unregistered Common Stock pursuant to the LOI described in Note 10 – Commitments. Under the terms of the LOI, the Company was obligated to issue these shares on the one year anniversary of the LOI and upon the one year anniversary of receipt, by the Company, of a milestone payment from Adapt for the first commercial sale of the Company’s product, NARCAN® , in the U.S. The shares issued in this transaction were valued using the stock price on the issuance dates ranging from $5.94 to $7.75 per share. The Company recorded the aggregate fair value of $168,376 as non-cash expense during the year ended July 31, 2017.

The Company made a reconciling adjustment to record the issuance of 6,228 shares of unregistered Common Stock that were issued in fiscal years prior to both 2017 and 2016. Of this total, 6,168 were issued in relation to a conversion of debt into shares of the Company’s common stock. The remaining 60 shares were issued in relation to the Company’s one-for-one hundred reverse stock split of its Common Stock (the “1:100 Reverse Stock Split”) that was effected in December 2014. The 6,228 shares are on a post-split basis and after recording this adjustment the number of shares of the Company’s common stock listed as outstanding on the accompanying Consolidated Statement of Stockholders' Equity (Deficit) reconciles to the actual number of shares outstanding as of July 31, 2017.

Stock Options

On September 8, 2017, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”), at which time the 2017 Plan was approved by stockholder vote. The 2017 Plan allows the Company to grant both incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”) to purchase a maximum of 400,000 shares of the Company's Common Stock. Under the terms of the 2017 Plan, ISOs may only be granted to Company employees and directors, while NSOs may be granted to employees, directors, advisors, and consultants. The Board has the authority to determine to whom options will be granted, the number of options, the term, and the exercise price. Options are to be granted at an exercise price not less than fair value for an ISO or an NSO. The vesting period is normally over a period of four years from the vesting date. The contractual term of an option is no longer than ten years.

Prior to adopting the 2017 Plan, the Company did not have a formal long-term incentive stock plan. Prior to the implementation of the 2017 Plan, the Company had discretion to provide designated employees of the Company and its affiliates, certain consultants, and advisors who perform services for the Company and its affiliates, and non-employee members of the Board and its affiliates with the opportunity to receive grants of non-qualified stock options (the "Pre-2017 Non-Qualified Stock Options"). All of the Pre-2017 Non-Qualified Stock Option Grants were intended to qualify as non-qualified stock options. There were no Pre-2017 Non-Qualified Stock Option Grants that were intended to qualify as incentive stock options.

80

No Non-Qualified Stock Options were issued for the year ended December 31, 2018 or the five month transition period ended December 31, 2017. The assumptions used in the valuation for the Pre-2017 Non-Qualified Stock Options for the five months ended December 31, 2017 and for the year ended July 31, 2017 were as follows:

	December 31, 2017			July 31, 2017
Market value of stock on measurement date	$	36.79		$5.61 to 13.00
Risk-free interest rate	1.47		%	0.88-2.55%
Dividend yield	0		%	0	%
Volatility factor	96		%	76-348%
Term	2.12 years			2.28-10 years

Stock option activity for the Pre-2017 Non-Qualified Stock Options for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 is presented in the table below: 

	Number of Shares		Weighted- average Exercise Price	Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2016	4,635,000		8.79	7.39	$	2,731,250
Granted	320,000		9.38
Expired	(5,000	)	10.00
Forfeited	(1,180,000	)	11.03
Outstanding at July 31, 2017	3,770,000		8.13	6.87	$	19,139,625
Exercised	(217,500	)	10.22
Forfeited	(572,000	)	11.51
Outstanding at December 31, 2017	2,980,500		7.33	7.06	$	46,606,210
Exercised	(95,000	)	8.24
Forfeited	—		—
Outstanding at December 31, 2018	2,885,500		7.30	6.04	$	20,633,100
Exercisable at December 31, 2018	2,747,150		7.20	6.01	$	19,928,663

A summary of the status of the Company's non-vested Pre-2017 Non-Qualified Stock Options as of December 31, 2018 and changes during the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 are presented below:

Non-vested options	Number of Options		Weighted Average Grant Date Fair Value
Non-vested at July 31, 2016	90,833		$	7.27
Granted	320,000		7.70
Vested	(70,962	)	6.70
Non-vested at July 31, 2017	339,871		$	7.93
Vested	(50,969	)	9.29
Non-vested at December 31, 2017	288,902		$	7.87
Vested	(150,552	)	7.92
Non-vested at December 31, 2018	138,350		$	7.84

81

During the year ended December 31, 2018 the Company recognized approximately $0.9 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. During the five months ended December 31, 2017, the Company recognized approximately $0.6 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. During the year ended July 31, 2017 the Company recognized approximately $1.3 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. At December 31, 2018, there was $0.2 million of unrecognized compensation costs related to non-vested stock options. 

The 2017 Plan

The assumptions used in the valuation of options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 are as follows:

	Year Ended 12/31/18		Five Months Ended 12/31/17
Market value of stock on measurement date	$14.31 to $24.84		$18.16 to $49.93
Risk-free interest rate	2.47 % to 3.05%		2.06 % to 2.47%
Dividend yield	—	%	—	%
Volatility factor	121% to 324%		324% to 329%
Term (years)	5.5 to 10.0		10.00

Stock option activity for options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2017	—
Total options authorized	400,000
Granted	(214,000	)	$	37.62
Expired	—
Forfeited	40,000		$	49.93
Outstanding at December 31, 2017	174,000		$	34.78	9.71	$	14,430
Exercisable at December 31, 2017	—
Annual additional options authorized	101,431
Granted	(196,550	)	$	23.26
Expired	—
Forfeited	27,000		$	24.84
Options available at December 31, 2018	157,881
Outstanding at December 31, 2018	343,550		$	28.97	8.95	$	840

A summary of the status of the Company’s non-vested options granted under the 2017 Plan as of December 31, 2018 and changes during the year ended December 31, 2018 and the five months ended December 31, 2017 are presented in the following table:

82

	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Non-vested at July 31, 2017 and 2016	—
Granted	214,000		$	37.62
Forfeited	(40,000	)	$	49.93
Non-vested at December 31, 2017	174,000		$	34.78
Granted	196,550		$	23.26
Forfeited	(27,000	)	$	24.84
Non-vested at December 31, 2018	288,047		$	27.62
Vested at December 31, 2018	55,503		$	34.66

During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized approximately $4.9 million and $1.2 million of non-cash expense related to vested options granted during these periods. As of December 31, 2018, there was approximately $3.6 million of unrecognized compensation costs related to non-vested stock options that were granted under the 2017 Plan.

Warrants

Warrant activity for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 is presented in the table below:

	Number of Warrants		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2016	1,215,385		$	17.90	2.86	$	—
Granted	45,000		10.00
Expired	(166,585	)	$	46.37
Forfeited	(325,000	)	15
Outstanding at July 31, 2017	768,800		$	12.50	3.04	$	1,184,000
Exercised	(356,790	)	14.83
Forfeited	(55,000	)	$	15.00
Outstanding at December 31, 2017	357,010		$	9.78	5.57	$	4,708,020
Exercised	(3,400	)	$	10.00
Outstanding at December 31, 2018	353,610		$	9.78	4.60	$	1,651,165

83

Note 13. Sale of Royalties

On December 13, 2016, the Company entered into the SWK Purchase Agreement with SWK pursuant to which the Company sold, and SWK purchased, the Company’s right to receive, commencing on October 1, 2016, all Royalties (as defined in the SWK Purchase Agreement) arising from the sale by Adapt, pursuant to the Adapt Agreement of NARCAN or any other intranasal naloxone opioid overdose reversal treatment, up to (i) $20,625,000 million and then the Residual Royalty thereafter or (ii)$26,250,000, if Adapt has received in excess of $25,000,000 of cumulative Net Sales for any two consecutive fiscal quarters during the period from October 1, 2016 through September 30, 2017 from the sale of NARCAN® (the “Earn Out Milestone”), and then the Residual Royalty thereafter. The Residual Royalty is defined in the Purchase Agreement as follows: (i) if the Earn Out Milestone is paid, then SWK will receive 10% of all Royalties; provided, however, if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing, then SWK shall receive 5% of all Royalties after such date, and (ii) if the Earn Out Milestone is not paid, then SWK will receive 7.86% of all Royalties; provided, however, that if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing, then SWK will receive 3.93% of all Royalties after such date. Under the Purchase Agreement, the Company received an upfront purchase price of $13,750,000 less $40,000 of legal fees at Closing, and will receive an additional $3,750,000 if the Earn Out Milestone is achieved (the “Purchase Price”). The Purchase Agreement also grants SWK (i) the right to receive the statements produced by Adapt pursuant to Section 5.6 of the Adapt Agreement and (ii) the right, to the extent possible under the Purchase Agreement, to cure any breach of or default under any Product Agreement by the Company. Under the Purchase Agreement, the Company granted SWK a security interest in the Purchased Assets in the event that the transfer contemplated by the Purchase Agreement is held not to be a sale. The Purchase Agreement also contains other representations, warranties, covenants and indemnification obligations that are customary for a transaction of this nature. Absent fraud by the Company, the Company’s indemnification obligations under the Purchase Agreement shall not exceed, individually or in the aggregate, an amount equal to the Purchase Price plus an annual rate of return of 12% (compounded monthly) as of any date of determination, with a total indemnification cap not to exceed 150% of the Purchase Price, less all Royalties received by SWK, without duplication, under the Purchase Agreement prior to and through resolution of the applicable claim. All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

During the fiscal year ended July 31, 2017, the Company recognized $17.46 million as revenue because (i) the executed agreement constituted persuasive evidence of an arrangement, (ii) the Company had no current or future performance obligations, (iii) the total consideration was fixed and known at the time of its execution and there were no rights of return, (iv) the $13.71 million cash proceeds received in December 2016 were non-refundable, and (v) the $3,750,000 million Earn Out Milestone that was accrued as an account receivable as of July 31, 2017, and subsequently paid to the Company on August 9, 2017, was earned as of July 31, 2017.

As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Purchase Agreement has been met. After December 31, 2017, SWK's share of the royalty and milestone payments are reduced to 10% of amounts earned from Adapt.

Note 14. Potomac Amendment

On April 12, 2017 (the “Potomac Effective Date”), the Company and Potomac Construction Limited (“Potomac”) entered into an amendment (the “Potomac Amendment”) to the following investment agreements with Potomac to provide for (in the case of Potomac Agreement No. 1 and Potomac Agreement No. 2 ), or modify (in the case of Potomac Agreement No. 3, Potomac Agreement No. 4 and Potomac Agreement No. 5 (each as defined below)), the Company’s right to buyback the Interest (as defined in each Potomac Amendment) in each Potomac Agreement (as defined below) from Potomac: (i) that certain Investment Agreement, dated as of April 16, 2013, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 1”); (ii) that certain Investment Agreement, dated as of May 30, 2013, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 2”); (iii) that certain Investment Agreement, dated as of September 9, 2014, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 3”); (iv) that certain Investment Agreement, dated as of October 31, 2014, as clarified by that certain letter agreement dated October 31, 2014 (“Potomac Agreement No. 4”); and (v) that certain Investment Agreement, dated as of December 8, 2015 (“Potomac Agreement No. 5”) ((i)–(v) collectively, the “Potomac Agreements” and, each, a “Potomac Agreement”).

As of December 31, 2018, the buyback provisions under the Potomac Amendment for the Potomac Agreement No. 1 and Potomac Agreement No. 2 have expired.

Pursuant to the Potomac Amendment, from the Potomac Effective Date until September 30, 2019, the five year anniversary of the date of the Investment (as defined in Potomac Agreement No. 3) (the “Potomac Interest No. 3 Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Interest (as defined in Potomac

84

Agreement No. 3) from Potomac upon written notice to Potomac (the “Potomac Interest No. 3 Buyback Notice”), at the price of $500,000 per 0.98% of Interest (the “Potomac Interest No. 3 Buyback Amount”); provided, that in the event the Potomac Interest No. 3 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No. 3 Buyback Amount within ten business days of providing the Potomac Interest No. 3 Buyback Notice; provided, further, that in the event the Potomac Interest No. 3 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 3 Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Interest No. 3 Buyback Amount within ten business days of providing the Potomac Interest No. 3 Buyback Notice.

Pursuant to the Potomac Amendment, from the Potomac Effective Date until November 28, 2019, the five year anniversary of the date of the Investment (as defined in Potomac Agreement No. 4) (the “Potomac Interest No. 4 Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Interest (as defined in Potomac Agreement No. 4) from Potomac upon written notice to Potomac (the “Potomac Interest No. 4 Buyback Notice”), at the price of $500,000 per 0.98% of Interest (the “Potomac Interest No. 4 Buyback Amount”); provided, that in the event the Potomac Interest No. 4 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No. 4 Buyback Amount within ten business days of providing the Potomac Interest No. 4 Buyback Notice; provided, further, that in the event the Potomac Interest No. 4 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 4 Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Interest No. 4 Buyback Amount within ten business days of providing the Potomac Interest No. 4 Buyback Notice.

Pursuant to the Potomac Amendment, from the Potomac Effective Date until December 17, 2020, the five year anniversary of the date of the Investment (as defined in Potomac Agreement No. 5) (the “Potomac Interest No. 5 Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Interest (as defined in Potomac Agreement No. 5) from Potomac upon written notice to Potomac (the “Potomac Interest No. 5 Buyback Notice”), at the price of $500,000 per 0.75% of Interest (the “Potomac Interest No. 5 Buyback Amount”); provided, that in the event the Potomac Interest No. 5 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No. 5 Buyback Amount within ten business days of providing the Potomac Interest No. 5 Buyback Notice; provided, further, that in the event the Potomac Interest No. 5 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 5 Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Interest No. 5 Buyback Amount within ten business days of providing the Potomac Interest No. 5 Buyback Notice.

Pursuant to the Potomac Amendment, if the Additional Investment (as defined in Potomac Agreement No. 5) is funded by Potomac, then, from the date of funding of such Additional Investment until the five year anniversary of such funding date (the “Potomac Additional Interest Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Additional Interest (as defined in Potomac Agreement No. 5) upon written notice to Potomac (the “Potomac Additional Interest Buyback Notice”), at the price of $500,000 per 0.75% of Additional Interest (the “Potomac Additional Interest Buyback Amount”); provided, that in the event the Potomac Additional Interest Buyback Notice is provided within 3.25 years of the date of the Additional Investment, the Company shall pay Potomac 1.8 times the Potomac Additional Interest Buyback Amount within ten business days of providing the Potomac Additional Interest Buyback Notice; provided, further, that in the event the Potomac Additional Interest Buyback Notice is provided after 3.25 years of the date of the Additional Investment and on or prior to the Potomac Additional Interest Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Additional Interest Buyback Amount within ten business days of providing the Potomac Additional Interest Buyback Notice. However, Potomac opted, at its sole discretion, not to make the $1,000,000 Additional Investment, and the deadline for Potomac to make the Additional Investment has passed.

In consideration for Potomac entering into the Potomac Amendment, the Company agreed to pay Potomac, within 15 business days of the Potomac Effective Date, $159,500. The Company recorded the $159,500 payment to Potomac as a non-recurring general and administrative expense during the year ended July 31, 2017.

Furthermore, the Company granted Potomac the right to receive 2.5525% of the Net Profit (as defined in the Potomac Agreements) generated from DAVINCI (as defined in the Potomac Amendment). In the event that the Company is sold, Potomac will receive 2.5525% of the net proceeds of such sale, after the deduction of all expenses and costs related to such sale. Additionally, from the Potomac Effective Date until the four year anniversary of the Potomac Effective Date (the “Potomac DAVINCI Interest Buyback Expiration Date”), the Company may buyback all or any portion of the DAVINCI Interest (as defined in the Potomac Amendment) upon written notice to Potomac (the “Potomac DAVINCI Interest Buyback Notice), at the price of $382,875 per 2.5525% of DAVINCI Interest (the “Potomac DAVINCI Interest Buyback Amount”); provided, that in the event the Potomac DAVINCI Interest Buyback Notice is provided within 2.5 years of the Potomac

85

Effective Date, the Company shall pay Potomac two times the Potomac DAVINCI Interest Buyback Amount within ten business days of providing the Potomac DAVINCI Interest Buyback Notice; provided, further, that, in the event the Potomac DAVINCI Interest Buyback Notice is provided after 2.5 years of the Potomac Effective Date and on or prior to the Potomac DAVINCI Interest Buyback Expiration Date, the Company will pay Potomac 3.5 times the Potomac DAVINCI Interest Buyback Amount within ten business days of providing the Potomac DAVINCI Interest Buyback Notice.

Furthermore, pursuant to the Potomac Amendment, the Company and Potomac agree that, upon the Company’s receipt after the Potomac Effective Date of at least $3 million from (i) SWK pursuant to the Purchase Agreement with SWK, or (ii) Adapt pursuant to the Adapt Agreement, fifty percent of all actual amounts received by the Company from SWK shall be used in determining the Net Profit.

Note 15. Income Taxes

The Company recognizes deferred tax assets and liabilities using the asset and liability method. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. This method requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2018, the Company’s deferred tax assets relate to net operating loss (“NOL”) carryforwards that were derived from operating losses and stock based compensation from prior years. A full valuation allowance has been applied to the Company’s deferred tax assets. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized. At December 31, 2018, the Company had federal and state net operating loss carry forwards, which are available to offset future taxable income, of 5,753,943. The Company’s NOL carryforwards can be carried forward to offset future taxable income for a period of 20 years for each tax year’s loss. These NOL carryforwards begin to expire in 2026. No provision was made for federal income taxes as the Company has significant NOLs. All of the Company's income tax years remained open for examination by taxing authorities. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate to the net loss before provision for income taxes for the following reasons:

	December 31, 2018			December 31, 2017			July 31, 2017
Net loss before taxes at statutory rate	$	(6,015,352	)	$	919,111		$	2,992,311
Permanent items	1,471,275			4,056			5,828
Temporary items	2,444,934			(698,380		)	385,910
Income tax expense at statutory rate	(2,099,143		)	224,787			3,384,049
Valuation allowance	2,150,426			(55,624		)	(2,833,575		)
Income tax expense per books	$	51,283		$	169,163		$	550,474

Net deferred tax assets consist of the following components as of: 

	December 31, 2018			December 31, 2017			July 31, 2017
Net operating loss carryover at statutory rate	$	5,753,943		$	2,869,510		$	4,936,604
Stock-based compensation expense	4,939,759			7,404,037			9,922,093
Fixed asset depreciation	—			(353		)	(2,470		)
Intangibles amortization	(1,148		)	(1,012		)	—
Other	2,046,961			(290,775		)	—
Total	$	12,739,515		$	9,981,407		$	14,856,227
Valuation allowance	$	(12,739,515	)	$	(9,981,407	)	$	(14,856,227	)
Net deferred tax asset	$	—		$	—		$	—

The Company had no uncertain tax positions at December 31, 2018, December 31, 2017 and July 31, 2017.

On December 22, 2017, H.R. 1, formally known as the Tax Cut and Jobs Act (the "Act") was enacted into law. The Act provides for significant tax law changes and modifications with varying effective dates. The major change that affects the Company is reducing the corporate income tax rate from 35% to 21%. In connection with the Company’s initial analysis of the impact of the Tax Act, no discrete net tax benefit or expense in the period ended December 31, 2017 is recorded. This is

86

primarily due to the change in valuation allowance offsets a net benefit or expense for the corporate rate reduction. Open federal tax years are July 31, 2015, July 31, 2016, July 31, 2017, and December 31, 2017. Open state tax years are July 31, 2014, July 31, 2015, July 31, 2016, July 31, 2017 and December 31, 2017.

Note 16.     Comparative Financials (Unaudited)

The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. The unaudited consolidated results of operations for the year ended December 31, 2017 is as follows:

	For the Year Ended
(in thousands)	December 31, 2017
		(unaudited)
Revenue:
Royalty and licensing revenue	$	15,447
Treatment investment revenue		105
Grant and contract revenue		—
Total revenue		15,552
Operating expenses:
General and administrative		10,313
Research and development		4,857
Royalty expense		1,408
Selling expense		851
Total operating expenses		17,429
Income from operations		(1,877	)
Other income, net		68
Income before provision of income taxes		(1,809	)
Provision for income taxes		797
Net loss	$	(2,606	)

Note 17.     Subsequent Events

On January 3, 2019 and January 15, 2019, the Company granted options to employees to purchase in aggregate 76,500 and 13,200 shares of the Company’s Common Stock at an exercise price of $13.61 and $14.62 per share, respectively, which represents the per share closing price of the Company’s Common Stock on the dates of grant. These options were issued under the 2017 Plan and have a ten year term. The options vest as follows: 1/48th of the option shares vest every month on the anniversary of the grant date.

From January 1, 2019 through March 15, 2019, the Company issued a total of 80,000 shares of Common Stock in connection with stock option exercises. As a result of the stock option exercises, the Company received aggregate proceeds of $601,250.

On February 21, 2019, the Company announced that its Phase 2 clinical trial evaluating OPNT001, a naloxone nasal spray for the treatment of bulimia nervosa did not meet the primary endpoint of reducing the number of binging days from baseline to week eight. Key secondary endpoints were also not met. Based on these results, the Company will not devote additional resources to the development of OPNT001.

On March 18, 2019, the Company and Adapt entered into Amendment No. 2 to the License Agreement. Amendment No. 2 sets forth the timing and amounts that Adapt is allowed to deduct going forward from royalties and milestones payable to the Company and SWK in relation to payments that Adapt has paid or will pay under a license agreement with a Third Party (as defined in the License Agreement), as further discussed in Note 9. Licensee Fee Payable. As provided in Amendment No. 2, going forward Adapt may only deduct a maximum of $9.0 million from royalties and milestones payable to the Company and

87

SWK under the License Agreement in regards to the Third Party license agreement entered into by Adapt on or around February 28, 2018. Under Amendment No. 2, with respect to $6.5 million of the $9 million, Adapt may only deduct a maximum of $2.0 million in any one calendar quarter from the royalties payable to the Company under the License Agreement and SWK under the SWK Purchase Agreement. As provided in the License Agreement, if Net Narcan Sales (as defined in the License Agreement) exceeds $200 million in any calendar year, the Company and SWK will be due a milestone of $15.0 million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to the Company and SWK, Adapt may deduct $2.5 million from this $15.0 million milestone, along with any outstanding balance of the $6.5 million that has not already been deducted in previous quarters.

Amendment No. 2 also amended Section 5.5 of the License Agreement to provide that Adapt may still enter into Third Party licensing arrangements; however, in order to exercise its right to deduct any payments with respect thereto, with certain specified exceptions, after March 18, 2019, Adapt will need the consent of the Company that the licensing arrangement is acceptable under the provisions of Amendment No. 2 (in particular the amended Section 5.5 set forth therein). In all instances, any Third Party licensing arrangement and associated deductions taken by Adapt must comply with the provisions of Section 5.5 as amended by Amendment No. 2.

88

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

89

Item 9A.  Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, with the time periods specified in the SEC's rules and forms, and is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our Principal Executive Officer and Principal Financial Officer, and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and the disposition of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP and that receipts and expenditures are being made only in accordance with authorizations of our management and Board, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management conducted an evaluation of the effectiveness of our control over financial reporting based on the 2013 framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2018.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this Annual Report. 

Changes in Internal Controls over Financial Reporting

There were no significant changes to our internal controls over financial reporting that occurred during the year ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

90

Item 9B. Other Information.

None.

91

PART III

Item 10.  Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders. The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by this Annual Report on Form 10-K.

Item 11.  Executive Compensation.

The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders. The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by this Annual Report on Form 10-K.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders. The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by this Annual Report on Form 10-K.

Item 13.  Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders. The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by this Annual Report on Form 10-K.

Item 14.  Principal Accounting Fees and Services.

The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders. The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by this Annual Report on Form 10-K.

92

PART IV

Item 15.  Exhibits, Financial Statement Schedules.

Exhibit
Number	Exhibit Description
2.1	Agreement and Plan of Merger, dated October 2, 2017, between Opiant Pharmaceuticals, Inc., a Nevada corporation, and Opiant Pharmaceuticals, Inc., a Delaware corporation (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on October 6, 2017).
3(i).1	First Amended and Restated Certificate of Incorporation of Opiant Pharmaceuticals, Inc., a Delaware corporation, filed on October 2, 2017 (incorporated herein by reference to Exhibit 3(i).4 to the Company’s Current Report on Form 8-K filed on October 6, 2017).
3(i).2	Nevada Articles of Merger, filed October 2, 2017 (incorporated herein by reference to Exhibit 3(i).2 to the Company’s Current Report on Form 8-K filed on October 6, 2017).
3(i).3	Delaware Certificate of Merger, filed October 2, 2017 (incorporated herein by reference to Exhibit 3(i).3 to the Company’s Current Report on Form 8-K filed on October 6, 2017).
3(ii).1	Bylaws of Opiant Pharmaceuticals, Inc., a Delaware corporation (incorporated herein by reference to Exhibit 3(ii).1 to the Company’s Current Report on Form 8-K filed on October 6, 2017).
4.1	Specimen Common Stock Certificate of Opiant Pharmaceuticals, Inc., a Delaware corporation (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 6, 2017).
10.1+	License Agreement, dated as of December 15, 2014, by and between the Company and Adapt Pharma Operations Limited (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 5, 2018).
10.2+	Amendment No. 1 to License Agreement, dated as of December 13, 2016, by and between the Company and Adapt Pharma Operations Limited (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 19, 2017).
10.3+	Amended and Restated Material Transfer, Option and Research License Agreement, dated as of April 26, 2016, by and between the Company and Aegis Therapeutics, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on June 8, 2016).
10.4+	Letter Agreement, dated as of April 26, 2016, by and between the Company and Aegis Therapeutics, LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on June 8, 2016).
10.5+	License Agreement, dated as of June 22, 2017, by and between the Company and Aegis Therapeutics, LLC (incorporated by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K filed on October 13, 2017).
10.6+	Supply Agreement, dated as of June 22, 2017, by and between the Company and Aegis Therapeutics, LLC (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K filed on October 13, 2017).
10.7+	Research and Development Agreement, dated as of July 14, 2017, by and between the Company and Renaissance Lakewood, LLC (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K filed on October 13, 2017).
10.8+	Purchase and Sale Agreement, dated as of December 13, 2016, by and between the Company and SWK Funding LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on March 15, 2017).

93

10.9+†	Separation Agreement and General Release, dated as of September 5, 2017, by and between the Company and Kevin Pollack (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed on October 13, 2017).
10.10†	Employment Agreement, dated as of January 11, 2018, by and between the Company and Dr. Roger Crystal (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2018).
10.11†	Employment Agreement Acknowledgement, dated as of March 31, 2017, by and between the Company and Dr. Roger Crystal (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 6, 2017).
10.12†	Employment Agreement, dated as of January 11, 2018, by and between the Company and Dr. Phil Skolnick (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2018).
10.13†	Employment Agreement, dated as of January 11, 2018, by and between the Company and David O'Toole (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2018).
10.14†	Director Agreement, dated as of December 31, 2012, by and between the Company and Geoffrey Wolf (incorporated herein by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on October 29, 2013).
10.15†	Director Agreement, dated as of May 5, 2016, by and between the Company and Ann MacDougall (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 11, 2016).
10.16†	Director Agreement, dated as of May 5, 2016, by and between the Company and Dr. Gabrielle Silver (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 11, 2016).
10.17†	Director Agreement, dated as of November 4, 2016, by and between the Company and Thomas T. Thomas (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 10, 2016).

94

10.18†	Senior Advisor Agreement, dated as of January 22, 2013, by and between the Company and Brad Miles (incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on March 15, 2017).
10.19†	First Amendment to Senior Advisor Agreement, dated as of February 24, 2015, by and between the Company and Brad Miles (incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed on March 15, 2017).
10.20†	Second Amendment to Senior Advisor Agreement, dated as of March 19, 2015, by and between the Company and Brad Miles (incorporated herein by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on March 15, 2017).
10.21†	Third Amendment to Senior Advisor Agreement, dated as of March 13, 2017, by and between the Company and Brad Miles (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on June 14, 2017).
10.22	Sublease, effective as of August 1, 2017, by and between the Company and Standish Management, LLC, as amended by that certain letter agreement, dated as of August 1, 2017 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 5, 2017).
10.23	Engagement Letter, dated December 18, 2014, by and between the Company and Torreya Partners (Europe) LLP (incorporated herein by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.24	Supplemental Engagement Letter, dated as of September 8, 2017, by and between the Company and Torreya Partners (Europe) LLP (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 14, 2017).
10.25	Investment Agreement, dated as of April 16, 2013, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.26	Letter Agreement, dated as of October 15, 2014, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.27	Investment Agreement, dated as of May 30, 2013, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.28	Letter Agreement, dated as of October 15, 2014, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.29	Investment Agreement, dated as of December 20, 2013, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.30	Investment Agreement, dated as of September 9, 2014, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.31	Letter Agreement, dated as of October 15, 2014, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).

95

10.32	Investment Agreement, dated as of September 17, 2014, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.33	Investment Agreement, dated as of October 31, 2014, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.34	Letter Agreement, dated as of October 31, 2014, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.35	Investment Agreement, dated as of July 20, 2015, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.36	Investment Agreement, dated as of December 8, 2015, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.37	Amendment to Investment Agreement, dated as of April 12, 2017, by and between the Company and Potomac Construction Limited (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 18, 2017).
10.38	Investment Agreement, dated as of May 15, 2014, by and between the Company and Ernst Welmers (incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.39	Letter Agreement, dated as of October 15, 2014, by and between the Company and Ernst Welmers (incorporated herein by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.40	Amendment to Investment Agreement, dated as of June 1, 2017, by and between the Company and Ernst Welmers (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 2, 2017).
10.41	Amended and Restated Interest Agreement, dated as of October 24, 2016, by and between the Company and Valour Fund, LLC (incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.42	Amended and Restated Interest Agreement, dated as of October 24, 2016, by and between the Company and Valour Fund, LLC (incorporated herein by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.43†	Amended and Restated Consulting Agreement, dated as of October 25, 2016, by and between the Company and LYL Holdings Inc. (incorporated herein by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.44†	Amendment to Amended and Restated Consulting Agreement, dated as of June 1, 2017, by and between the Company and LYL Holdings Inc. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 2, 2017).
10.45†	Regulatory and Strategic Advisor Consultancy Agreement, dated as of September 1, 2015, by and between the Company and Mary Pendergast (incorporated herein by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed on October 28, 2016).
10.46†	Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.52 to the Company's Annual Report on Form 10-K filed on October 13, 2017).

96

10.47†	Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Dr. Michael Sinclair (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 29, 2015).
10.48†	Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Dr. Roger Crystal (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 29, 2015).
10.49†	Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Kevin Pollack (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 29, 2015).
10.50†	Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Geoffrey Wolf (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on October 29, 2015).
10.51†	Controlled Equity OfferingSM Sales Agreement, dated October 13, 2017, by and between Opiant Pharmaceuticals, Inc. and Cantor Fitzgerald & Co. (incorporated herein by reference to Exhibit 1.2 to the Company’s Registration Statement on Form S-3 filed on October 13, 2017)
10.52†	Forms of Incentive Stock Option Notice and Incentive Stock Option Agreement under the Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed on December 4, 2017).
10.53†	Forms of Nonstatutory Stock Option Notice and Nonstatutory Stock Option Agreement under the Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q filed on December 4, 2017).
10.54†	Form of Restricted Stock Agreement under the Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q filed on December 4, 2017).
10.55†	Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Dr. Michael Sinclair (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.56†	Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Dr. Michael Sinclair (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.57†	Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Dr. Michael Sinclair (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.58†	Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Dr. Roger Crystal (incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.59†	Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Dr. Roger Crystal (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.60†	Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Kevin Pollack (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.61†	Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Kevin Pollack (incorporated by reference to Exhibit 10.9 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).

97

10.62†	Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Kevin Pollack (incorporated by reference to Exhibit 10.10 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.63†	Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Kevin Pollack (incorporated by reference to Exhibit 10.11 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.64†	Stock Option Grant Agreement, dated December 31, 2012, by and between the Registrant and Geoffrey Wolf (incorporated by reference to Exhibit 10.13 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.65†	Warrant Agreement, dated December 31, 2012, by and between the Registrant and Geoffrey Wolf (incorporated by reference to Exhibit 10.14 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.66†	Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Geoffrey Wolf (incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.67†	Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Geoffrey Wolf (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.68†	Stock Option Grant Agreement, dated November 12, 2014, by and between the Registrant and Arvind Agrawal (incorporated by reference to Exhibit 10.18 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.69†	Stock Option Grant Agreement, dated November 12, 2014, by and between the Registrant and Arvind Agrawal (incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.70†	Stock Option Grant Agreement, dated October 27, 2015, by and between the Registrant and Arvind Agrawal (incorporated by reference to Exhibit 10.20 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.71†	Stock Option Grant Agreement, dated January 22, 2013, by and between the Registrant and Brad Miles (incorporated by reference to Exhibit 10.21 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.72†	Warrant Agreement, dated March 19, 2015, by and between the Registrant and Brad Miles (incorporated by reference to Exhibit 10.22 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.73†	Stock Option Grant Agreement, dated March 19, 2015, by and between the Registrant and Brad Miles (incorporated by reference to Exhibit 10.23 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.74†	Stock Option Grant Agreement, dated March 19, 2015, by and between the Registrant and Brad Miles (incorporated by reference to Exhibit 10.24 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.75†	Stock Option Grant Agreement, dated October 6, 2016, by and between the Registrant and Jenny Lee (incorporated by reference to Exhibit 10.25 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.76†	Stock Option Grant Agreement, dated October 6, 2016, by and between the Registrant and Quan Vu (incorporated by reference to Exhibit 10.26 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.77†	Stock Option Grant Agreement, dated December 24, 2016, by and between the Registrant and Quan Vu (incorporated by reference to Exhibit 10.27 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).

98

10.78†	Stock Option Grant Agreement, dated February 6, 2017, by and between the Registrant and Dr. Phil Skolnick (incorporated by reference to Exhibit 10.28 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.79†	Stock Option Grant Agreement, dated November 4, 2016, by and between the Registrant and Thomas T. Thomas (incorporated by reference to Exhibit 10.29 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.80†	Stock Option Grant Agreement, dated May 17, 2016, by and between the Registrant and Dr. Gabrielle Silver (incorporated by reference to Exhibit 10.30 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.81†	Stock Option Grant Agreement, dated May 17, 2016, by and between the Registrant and Ann MacDougall (incorporated by reference to Exhibit 10.31 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.82†	Letter Agreement, dated as of November 12, 2014, by and between the Registrant and Arvind Agrawal (incorporated by reference to Exhibit 10.41 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.83†	Warrant Agreement, dated as of March 13, 2017, by and between the Registrant and Brad Miles (incorporated by reference to Exhibit 10.43 to the Company's Registration Statement on Form S-8 filed on November 27, 2017).
10.84†	Executive Employment Agreement, dated January 11, 2018, by and between Dr. Roger Crystal and the Registrant (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 16, 2018).
10.85†	Executive Employment Agreement, dated January 11, 2018, by and between Mr. David O’Toole and the Registrant (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed January 16, 2018).
10.86†	Executive Employment Agreement, dated January 11, 2018, by and between Dr. Phil Skolnick and the Registrant (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed January 16, 2018).
10.87*	Amendment No. 2 to License Agreement, dated March 18, 2019, by and between Registrant and Adapt Pharma Operations Limited.
10.88†	Director Agreement, effective June 12, 2018, by and between the Registrant and Richard Daly (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed June 12, 2018).
10.89†	Development and Manufacturing Agreement between the Registrant and Aesica Queensborough Limited dated September 7, 2018 (incorporated by reference to Exhibit 10.84 of the Company’s Current Report on Form 8-K filed September 10, 2018).
10.90†	Agreement for Reimbursement of Capital Expenditures and Service Fees between the Registrant and Aesica Queensborough Limited dated September 7, 2018 (incorporated by reference to Exhibit 10.85 of the Company’s Current Report on Form 8-K filed September 10, 2018).
10.91†	Contract between the Registrant and Biomedical Advanced Research and Development Authority dated September 19, 2018 (incorporated by reference to Exhibit 10.86 of the Company’s Current Report on Form 8-K/A filed December 4, 2018).
10.92†	Director Agreement, effective October 29, 2018, by and between Opiant Pharmaceuticals, Inc. and Craig A. Collard (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed October 29, 2018).
10.93†	License Agreement between the Registrant and Sanofi dated December 21, 2018 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 28, 2018).

99

21.1	Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K filed on October 13, 2017).
23.1*	Consent of MaloneBailey, LLP, Independent Registered Public Accounting Firm.
31.1*	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from the Opiant Pharmaceuticals, Inc. Form 10-K for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2018, December 31, 2017, and July 31, 2017, (ii) Consolidated Statements of Operations for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, (iii) Consolidated Statement of Stockholders' Equity (Deficit) for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, (iv) Consolidated Statements of Cash Flows for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, and (v) Notes to Consolidated Financial Statements.

+ Confidential Treatment Granted. Confidential Materials omitted and filed separately with the Securities and Exchange Commission.

† Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a) (3) of Form 10-K.

* File herewith

** In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed 

100

Item 16.  Form 10-K Summary

None

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized. 

		Opiant Pharmaceuticals, Inc.
Date:	March 21, 2019	By:	/s/ Dr. Roger Crystal
			Dr. Roger Crystal
			Chief Executive Officer

In accordance with the Exchange Act, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 21, 2019. 

By:	/s/ Dr. Roger Crystal	Director & Chief Executive Officer
	Dr. Roger Crystal	(Principal Executive Officer)
By:	/s/ David D. O'Toole	Chief Financial Officer
	David D. O'Toole	(Principal Financial and Accounting Officer)
By:	/s/ Dr. Michael Sinclair	Director
	Dr. Michael Sinclair
By:	/s/ Thomas T. Thomas	Director
	Thomas T. Thomas
By:	/s/ Dr.Gabrielle Silver	Lead Independent Director
	Dr. Gabrielle Silver
By:	/s/ Ann MacDougall	Director
	Ann MacDougall
By:	/s/ Richard J. Daly	Director
	Richard J. Daly
By:	/s/ Craig Collard	Director
	Craig Collard

101

EX-10.87

Exhibit 10.87

AMENDMENT NO. 2 TO LICENSE AGREEMENT

This Amendment No. 2 to License Agreement (this “Amendment”) is made as of March 18, 2019, by and between Opiant Pharmaceuticals Inc. (formerly known as Lightlake Therapeutics Inc.), a Delaware corporation (“Opiant”), and Adapt Pharma Operations Limited, an Irish limited company (“Adapt”). Opiant and Adapt are sometimes referred to herein individually as a “Party” and collectively as the “Parties”. Capitalized terms used but not defined herein have the meanings given to them in the License Agreement (as defined below).

RECITALS

WHEREAS, the Parties entered into a License Agreement, dated as of December 15, 2014 (including the exhibits and schedules thereto, and as amended by that certain Amendment No. 1 to License Agreement, dated December 6, 2016, the “License Agreement”), pursuant to which Opiant licenses to Adapt certain intellectual property rights to develop and commercialize Products in accordance with the terms and conditions set forth therein;

WHEREAS, Section 11.9 of the License Agreement provides that no amendment or modification to the License Agreement shall be binding upon the Parties unless in writing and duly executed by authorized representations of both Parties;

WHEREAS, Adapt has entered into an agreement with a Third Party, titled Exclusive Patent License Agreement and dated February 27, 2018, a copy of which has been provided to Opiant’s counsel (the “Third Party License”), pursuant to which Adapt has made, and expects to make, certain payments to such Third Party;

WHEREAS, the Parties wish to memorialize their agreement regarding the treatment under the License Agreement of such payments pursuant to the Third Party License; and

WHEREAS, in connection with such agreement, the Parties desire to amend the License Agreement in the manner specified in this Amendment.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:

1.Third Party License. The Parties agree that, anything to the contrary contained in the License Agreement or otherwise notwithstanding, Adapt shall be entitled to make the following deductions from royalties payable pursuant to Section 5.4 of the License Agreement and, as applicable pursuant to the sub-paragraphs below, the unpaid Annual Net Sales-Based Milestone Payment under Section 5.3.1 of the License Agreement, after the date of this Amendment:

(a)Adapt shall deduct six million five hundred thousand dollars ($6,500,000) (the “Initial Deductible Amount”) from royalties payable pursuant to Section 5.4 of the License Agreement after the date of this Amendment; provided, however, that (i) Adapt shall not deduct more than two million dollars ($2,000,000) from the royalty payment in respect of any single Calendar Quarter, and (ii) if the Annual Net Sales-Based Milestone Payment of fifteen million

Exhibit 10.87

dollars ($15,000,000) due upon achievement of Net Sales of two hundred million dollars ($200,000,000) becomes payable in accordance with Section 5.3.1 of the License Agreement before the full Initial Deductible Amount has been deducted from royalty payments, the remaining balance of the Initial Deductible Amount shall be deducted from such Annual Net Sales-Based Milestone Payment.

(b)Adapt shall deduct an additional two million five hundred thousand dollars ($2,500,000) (the “Additional Deductible Amount”) upon the Annual Net Sales-Based Milestone Payment of fifteen million dollars ($15,000,000) due upon achievement of Net Sales of two hundred million dollars ($200,000,000) becoming payable by Adapt in accordance with Section 5.3.1 of the License Agreement. The Additional Deductible Amount shall be deducted from such Annual Net Sales-Based Milestone Payment made by Adapt.

(c)Adapt agrees that no deductions other than the Initial Deductible Amount and the Additional Deductible Amount will be taken after the date of this Amendment from payments made by Adapt under the License Agreement in relation to payments made under or in respect of the Third Party License. With respect to the initial deduction, in the amount of six million two hundred fifty thousand ($6,250,000), from the Annual Net Sales-Based Milestone paid to Opiant on or about February 28, 2018, based on the initial payment under the Third Party License (the “Initial Deduction”), Opiant, for itself and on behalf of its Affiliates, predecessors, successors, and assigns (i) accepts such Initial Deduction and (ii) irrevocably waives and foregoes any actual or potential objection or claim related to such Initial Deduction, including, without limitation any actual or potential claim that such Initial Deduction constituted or constitutes a breach of the License Agreement.

2.Omnibus Amendment to the License Agreement. Each instance of “Sublicense” in the License Agreement is hereby deleted and replaced with “sublicense”. In addition, the row containing “Sublicense” in the cross-reference table at the end of Article I of the License Agreement is hereby deleted.

3.Amendment to Section 1.30 of the License Agreement. Section 1.30 of the License Agreement is hereby deleted in its entirety and replaced with the following:

“1.30 “Generic Product” means, with respect to a Product, any intranasal product in an intranasal device that (i) is sold by a Third Party under an (A) Abbreviated New Drug Application (ANDA) in the United States; (B) in the European Union, pursuant to a provision of Articles 10, 10a or 10b of Parliament and Council Directive 2001/83/EC as amended (including an application under Article 6.1 of Parliament and Council Regulation (EC) No 726/2004 that relies for its content on any such provision), or (C) in any other country or jurisdiction, pursuant to all equivalents of such provisions; (ii) contains naloxone as the primary active ingredient; and (iii) is approved in reliance, in whole or in part, on the prior approval of such Product. A Product licensed or produced by Adapt or its Affiliates or Commercial Sublicensees (i.e., an authorized generic product) will not constitute a Generic Product.”

Exhibit 10.87

4.Amendment to Section 1.45 of the License Agreement. The first paragraph of Section 1.45 of the license agreement (ending with a colon) is hereby deleted and replaced with the following:

“1.45 “Net Sales” means, with respect to a Product for any period, the total amount billed or invoiced on sales of such Product during such period by Adapt, its Affiliates, or Sublicensees on behalf of Adapt or its Affiliates to Third Parties, and the total amount of money or other consideration received by Adapt or its Affiliates from sales of such Product (including sales of Product as an authorized generic product) or Generic Product by Sublicensees or Specified Sublicensee, less the following normal and customary bona-fide deductions and allowances actually taken:”

5.Amendment to Section 1.61 of the License Agreement. Section 1.61 of the License Agreement is hereby deleted in its entirety and replaced with the following:

“1.61 “Sublicensee” means a Person, other than an Affiliate, that is granted a sublicense by Adapt, or an Affiliate of Adapt, under the license granted in Section 4.1, but excluding Specified Sublicensees.”

6.Amendment to Article I of the License Agreement. Article I of the License Agreement is hereby amended by adding the following immediately following Section 1.60 of the License Agreement:

“1.60A    “Specified Sublicensee” means a Third Party that Adapt or an Affiliate grants a non-exclusive sublicense, a covenant not to sue, or other right, under any Patent in furtherance of any settlement, compromise or other resolution of any claim by Adapt or its Affiliate that such Third Party has infringed any Patent.”

7.Amendments to Section 4.3.1 of the License Agreement.

(a)Section 4.3.1 of the License Agreement is hereby amended by adding the words “or Specified Sublicensees” immediately following the words “tiers of Sublicensees” in the first sentence thereof.

(b)Section 4.3.1 of the License Agreement is hereby further amended by adding the words “to a Sublicensee” immediately after the words “With respect to any such Sublicense,” in the fourth sentence thereof.

8.Amendment to Section 4.3.2 of the License Agreement. Section 4.3.2 of the License Agreement is hereby amended by adding the following to the end thereof:

“provided, however, that notwithstanding the foregoing, any sublicense granted by Adapt to a Specified Sublicensee shall survive termination of this Agreement in accordance with the terms of the applicable agreement with such Specified Sublicensee”

9.Amendment to Section 4.6.1 of the License Agreement. Section 4.6.1 of the License Agreement is hereby amended by adding the following at the end thereof:

Exhibit 10.87

“provided, however, that the foregoing shall not limit or preclude Adapt or its Affiliate from granting a sublicense to any Specified Sublicensee”

10.Amendment to Section 10.3 of the License Agreement. Section 10.3 of the License Agreement is hereby amended by adding the words “or Specified Sublicensee” after each occurrence of the word “Sublicensee” in the final sentence thereof.

11.Amendment to Section 10.6.1 of the License Agreement. Section 10.6.1 of the License Agreement is hereby amended by adding the words “subject to Section 4.3.2,” at the beginning thereof.

12.Amendment to Section 5.5 of the License Agreement.  Section 5.5 of the License Agreement is hereby deleted in its entirety and replaced with the following:

“5.5    Third Party Licenses.

5.5.1    If, during the Term, Adapt elects, in its sole discretion, to seek a license under any Patent of a Third Party that (i) Adapt reasonably determines would be infringed by the Exploitation, in any part of the Territory, of any Product then under Development or being Commercialized by Adapt, its Affiliates or its Sublicensees, or that Adapt determines could be listed in the FDA’s Orange Book in respect of one or more Products (including Products in Development), or that claims an invention that Adapt determines could facilitate the Development of one or more new Product(s) (any of the foregoing, “Core IP”) or (ii) that Adapt otherwise reasonably determines is necessary or desirable for Adapt, its Affiliates or Sublicensees to Exploit the Products, then, in either case, Adapt shall be solely responsible for the negotiation and execution of the corresponding license agreement (a “Third Party License Agreement”).

5.5.2    Adapt may, but shall not be obligated to, provide Opiant with a copy of any Third Party License Agreement before entering into such agreement, in which event Adapt shall concurrently notify Opiant in writing if Adapt regards any Patent(s) to be licensed under such Third Party License Agreement as Core IP. In the event that Adapt provides Opiant with a copy of any Third Party License Agreement, the Parties will discuss the same in good faith for a period of up to ten (10) Business Days from the date on which such Third Party License Agreement is provided to Opiant. Not later than fifteen (15) Business Days after the date on which such Third Party License Agreement is provided to Opiant, Opiant shall notify Adapt in writing (a) whether or not, in Opiant’s good faith determination, the license contemplated thereby would meet the criteria set forth in either or both of clause (i) or clause (ii) of Section 5.5.1, (b) if Adapt has notified Opiant that it regards one or more of the Patent(s) subject to such license as Core IP, whether or not, in Opiant’s good faith determination, such Patent(s) constitute Core IP, and (c) whether and to what extent, in Opiant’s good faith determination, payments that would be owing by Adapt to the Third Party under the Third Party License Agreement constitute Eligible Payments within the meaning of Section 5.5.3. If Opiant notifies Adapt within such fifteen

Exhibit 10.87

(15) Business Day period that it agrees that the license contemplated by such Third Party License Agreement would meet the criteria set forth in either or both of clause (i) or clause (ii) of Section 5.5.1, or if Opiant fails to provide its written determination to Adapt within such fifteen (15) Business Day period, the applicable Third Party License Agreement, in the form provided to Opiant, shall be deemed an “Accepted Third Party License Agreement”. If Opiant notifies Adapt within such fifteen (15) Business Day period that payments that would be owing by Adapt to the Third Party under the Third Party License Agreement constitute Eligible Payments, then fifty percent (50%) of such Eligible Payments explicitly identified by Opiant as appropriate shall be deemed “Accepted Section 5.5 Deductions.” If Opiant fails to provide its written determination to Adapt within such fifteen (15) Business Day period, then fifty percent (50%) of all Eligible Payments under such Third Party License shall be deemed Accepted Section 5.5 Deductions. If Opiant further indicates in such notice that it agrees that one or more of the Patent(s) subject to such license constitute Core IP, or if Adapt has notified Opiant that Adapt regards one or more of the Patent(s) subject to such license as Core IP and Opiant fails to notify Adapt within such fifteen (15) Business Day period, whether or not it agrees that such Patent(s) constitute Core IP, then such Patent(s) shall be deemed “Accepted Core IP”. For the sake of clarity, Opiant’s determination as to whether or not any license proposed by Adapt meets the criteria of either or both of clause (i) or clause (ii) of Section 5.5.1 shall not affect in any way Adapt’s right to enter into any agreement in respect of such license, except that under no circumstances shall Adapt make any deductions from payments owed to Opiant in relation to any Third Party License Agreement except as expressly provided for in Section 5.5.3 below.

5.5.3    Any amounts due under any Third Party License Agreement will be borne by Adapt; provided, however, that (i) if such Third Party License Agreement is an Accepted Third Party License Agreement with Accepted Section 5.5 Deductions, Adapt shall be entitled to deduct such Accepted Section 5.5 Deductions paid to such Third Party from the Regulatory Milestones payable by Adapt pursuant to Section 5.2, the Sales-Based Milestones payable by Adapt pursuant to Section 5.3 and the royalties payable by Adapt pursuant to Section 5.4, or (ii) either (A) if such Third Party License Agreement is in furtherance of a settlement of a Patent infringement claim against Adapt or its Affiliates as evidenced by a written claim of infringement received by a Third Party, or (B) to the extent that royalty payments are made by Adapt under such Third Party License Agreement based on sales of Products, Adapt shall be entitled to deduct up to fifty percent (50%) of all Eligible Payments made to such Third Party under such Third Party License Agreement and referred to in this clause (ii) from the Regulatory Milestones payable by Adapt pursuant to Section 5.2, the Sales-Based Milestones payable by Adapt pursuant to Section 5.3 and the royalties payable by Adapt pursuant to Section 5.4. “Eligible Payments” means any one-time license fee payment that serves as the exclusive source of monetary consideration, upfront payment, milestones or royalties paid to the applicable Third Party under a Third Party License Agreement on account of rights relating to Products. For the avoidance of doubt, with respect to Accepted

Exhibit 10.87

Third Party License Agreements that do not fall within clause (ii) of this Section 5.5.3, Adapt shall only be entitled to deduct Accepted Section 5.5 Deductions. Also for the avoidance of doubt, the term “milestone(s)” as used in this Section 5.5.3 refers to development, regulatory, launch or sales events or achievements relating to and on account of the Products that trigger a payment under the Third Party License Agreement. To the extent that, in any Calendar Quarter with respect to a royalty payment or with respect to milestone payment in the event of a milestone, Adapt was not able to deduct the entire amount of the above percentage of any and all amounts paid to such Third Party in such Calendar Quarter or from such regulatory or sales-based milestone payment, Adapt shall be entitled to carry forward such remaining amounts and deduct them from the royalties due in subsequent Calendar Quarters or a subsequent regulatory or sales-based milestone payment; provided that in no event shall reductions pursuant to this Section 5.5.3 result in royalties on Product of less than (x) one and one half percent (1.5%) of Net Sales in any Calendar Quarter in the case of reductions associated with Accepted Core IP or reductions associated with payments contemplated by clause (ii) of this Section 5.5.3 in respect of Core IP or (y) two and one half percent (2.5%) of Net Sales in any Calendar Quarter in the case of reductions associated with any other license contemplated by this Section 5.5.”

5.5.4. To the extent that Adapt enters into a Third Party License Agreement that it has not provided to Opiant in advance of execution under Section 5.5.2 above and that is anticipated to result in deductions under clause (ii) of Section 5.5.3 above, Adapt shall provide Opiant with a copy of the Third Party License Agreement within ten (10) Business Days of execution of the Third Party License Agreement.

13.Amendment to Section 11.8.2 of the License Agreement. Section 11.8.2 of the License Agreement is hereby amended by replacing the address for notice of Opiant set forth therein with the following:

If to Opiant, to:

Opiant Pharmaceuticals, Inc.
201 Santa Monica Blvd., Suite 500
Santa Monica, CA 90401
Attention: CEO and CFOWith a copy (which shall not constitute notice) to:

Wilson Sonsini Goodrich & Rosati, P.C.
12235 El Camino Real
San Diego, CA 92130-3002
Attention: Martin J. Waters
Facsimile: 1-858-350-2399

Exhibit 10.87

14.References in the License Agreement. All references in the License Agreement to “this Agreement” shall mean the License Agreement as amended by this Amendment.

15.Limitation of Amendment and Affirmation of License Agreement. Except as expressly provided herein, this Amendment shall not be deemed to be a waiver or modification of any term, condition or covenant of the License Agreement. Any conflict between the terms herein and in the License Agreement shall be governed by the terms of this Amendment. Except as expressly amended hereby, all terms and conditions set forth in the License Agreement are hereby affirmed by the Parties and shall remain in full force and effect.

16.Incorporation by Reference. The provisions of Sections 11.3.1, 11.4, 11.5, 11.6, 11.7, 11.8, 11.10, 11.11, 11.12, 11.13, 11.14, 11.16 and 11.18 of the License Agreement are hereby incorporated by this reference, mutatis mutandis, as if the provisions were fully set forth herein.

[Signature page follows]

IN WITNESS WHEREOF, this Amendment is hereby executed by the authorized representatives of the Parties as of the date first written above.

OPIANT PHARMACEUTICALS, INC.
By: /s/ David D. O'Toole Name: David D O'Toole
Title: Chief Financial Officer

ADAPT PHARMA OPERATIONS LIMITED
By: /s/ David Brabazon Name: David Brabazon
Title: Chief Financial Officer

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements on Form S-3 (File No. 333-220976) and Form- S-8 (File Nos. 333-221759 and 333-224239) of our report dated March 21, 2019 with respect to the audited consolidated financial statements of Opiant Pharmaceuticals, Inc. included in the Annual Report on Form 10 K for the year ended December 31, 2018.

We also consent to the references to us under the heading “Experts” in such Registration Statements.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

March 21, 2019

EX-31.11

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE

SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Dr. Roger Crystal, Chief Executive Officer of Opiant Pharmaceuticals, Inc., certify that:

1.   I have reviewed this Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc.; 

2.   Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report; 

3.   Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Annual Report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and

d) Disclosed in this Annual Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 21, 2019

By:	/s/ Dr. Roger Crystal
Dr. Roger Crystal
Chief Executive Officer

EX-31.21

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE

SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, David O'Toole, Chief Financial Officer of Opiant Pharmaceuticals, Inc., certify that:

1.   I have reviewed this Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc.;

2.   Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;

3.   Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over  financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

e) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Annual Report is being prepared;

f) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

g) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and

h) Disclosed in this Annual Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

c) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

d) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 21, 2019
	By:	/s/ David O'Toole
	David O'Toole
	Chief Financial Officer

EX-32.11

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc. (the “Company") for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Dr. Roger Crystal, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 21, 2019

By:	/s/ Dr. Roger Crystal
Dr. Roger Crystal
Chief Executive Officer

This certification accompanies each Report pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of ss.18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.21

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc. (the “Company") for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), David O'Toole as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 21, 2019

By:	/s/ David O'Toole
David O'Toole
Chief Financial Officer

This certification accompanies each Report pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of ss.18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Mar. 15, 2019	Jun. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	OPIANT PHARMACEUTICALS, INC.
Entity Central Index Key	0001385508
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 39,182,880
Trading Symbol	OPNT
Entity Common Stock, Shares Outstanding		3,925,361

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017
Current assets
Cash and cash equivalents	$ 24,613,638	$ 8,115,903	$ 6,872,555
Accounts receivable	4,489,317	11,696,676	3,750,000
Prepaid expenses and other current assets	267,623	733,328	164,887
Deferred financing costs	0	209,042	0
Total current assets	29,370,578	20,754,949	10,787,442
Other assets
Computer equipment, net	0	1,183	2,753
Patents and patent applications, net	15,746	17,118	17,690
Total assets	29,386,324	20,773,250	10,807,885
Current liabilities
Accounts payable and accrued liabilities	1,132,960	3,156,992	2,211,971
License fees payable	5,400,000	0	0
Accrued salaries and wages	1,083,644	713,489	1,701,359
Royalty payable	998,305	1,408,012	0
Deferred revenue	1,212,149	378,700	253,619
Total current liabilities	9,827,058	5,657,193	4,166,949
Long-term liabilities
Deferred revenue	0	2,115,805	2,306,527
License fees payable, net of current portion	2,700,000	0	0
Total liabilities	12,527,058	7,772,998	6,473,476
Stockholders' equity
Common stock; par value $0.001; 200,000,000 shares authorized; 3,845,361, 2,535,766 and 2,026,608 shares issued and outstanding at December 31, 2018, 2017, and July 31, 2017, respectively.	3,846	2,536	2,026
Additional paid-in capital	91,276,086	66,223,066	58,937,112
Accumulated deficit	(74,420,666)	(53,225,350)	(54,604,729)
Total stockholders' equity	16,859,266	13,000,252	4,334,409
Total liabilities and stockholders' equity	$ 29,386,324	$ 20,773,250	$ 10,807,885

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Common stock authorized (in shares)	200,000,000	200,000,000	200,000,000
Common stock issued (in shares)	3,845,361	2,535,766	2,026,608
Common stock outstanding (in shares)	3,845,361	2,535,766	2,026,608

XML

Consolidated Statements of Operations - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Revenues
Royalty and licensing revenue	$ 11,696,676	$ 13,262,321	$ 18,406,142
Treatment investment revenue	65,641	250,549	39,854
Grant and contract revenue	0	469,307	0
Total Revenue	11,762,317	13,982,177	18,445,996
Operating expenses
General and administrative	5,887,135	11,263,804	6,530,533
Research and development	2,486,514	8,478,817	3,171,599
Royalty expenses	1,408,012	1,491,099	0
License fees	0	13,725,000	0
Selling expenses	438,625	213,897	1,651,099
Total operating expenses	10,220,286	35,172,617	11,353,231
Income (loss) from operations	1,542,031	(21,190,440)	7,092,765
Other income (expense)
Interest income, net	10,401	144,696	19,966
Gain (loss) on foreign exchange	10,027	(48,306)	18,356
Loss on settlement of liability	(13,917)	(49,983)	0
Total other income	6,511	46,407	38,322
Income (loss) before provision for income taxes	1,548,542	(21,144,033)	7,131,087
Provision for income taxes	169,163	51,283	550,474
Net income (loss)	$ 1,379,379	$ (21,195,316)	$ 6,580,613
Income (loss) per share of common stock:
Basic (in shares)	$ 0.66	$ (7.10)	$ 3.27
Diluted (in shares)	$ 0.31	$ (7.10)	$ 2.94
Weighted average common stock outstanding
Basic (in dollars per share)	2,077,663	2,985,335	2,014,540
Diluted (in dollars per share)	4,393,138	2,985,335	2,235,851

XML

Consolidated Statements of Stockholders' Equity - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning Balance (in shares) at Jul. 31, 2016		1,992,433
Beginning Balance at Jul. 31, 2016	$ (4,704,956)	$ 1,992	$ 56,478,394	$ (61,185,342)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reconciling adjustment to record shares issued in prior year for the conversion of debt into common stock in relation to 1:100 reverse stock split (in shares)		6,228
Reconciling adjustment to record shares issued in prior year for the conversion of debt into common stock in relation to 1:100 reverse stock split	0	$ 6	(6)
Stock issued for services (in shares)		27,947
Stock issued for services	190,427	$ 28	190,399
Stock based compensation from issuance of options	1,277,139		1,277,139
Stock based compensation from issuance of warrants	229,360		229,360
Forgiveness of related party debt	761,826		761,826
Net income (loss)	6,580,613			6,580,613
Ending Balance (in shares) at Jul. 31, 2017		2,026,608
Ending Balance at Jul. 31, 2017	4,334,409	$ 2,026	58,937,112	(54,604,729)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock based compensation from issuance of options	1,779,671		1,779,671
Exercise of stock options (in shares)		145,630
Exercise of stock options	0	$ 146	(146)
Exercise of warrants (in shares)		356,790
Exercise of warrants	5,292,876	$ 357	5,292,519
Stock issued as settlement of liability (in shares)		6,738
Stock issued as settlement of liability	213,917	$ 7	213,910
Net income (loss)	1,379,379			1,379,379
Ending Balance (in shares) at Dec. 31, 2017		2,535,766
Ending Balance at Dec. 31, 2017	13,000,252	$ 2,536	66,223,066	(53,225,350)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock issued for services (in shares)		44,664
Stock issued for services	882,232	$ 45	882,187
Stock Issued During Period, Shares, Issued to Net Profit Partners		160,000
Stock Issued During Period, Value, Issued to Net Profit Partners	1,600,000	$ 160	1,599,840
Stock based compensation from issuance of options	5,760,432		5,760,432
Exercise of stock options (in shares)		50,497
Exercise of stock options	0	$ 50	(50)
Exercise of warrants (in shares)		3,400
Exercise of warrants	34,000	$ 3	33,997
Issuance of common stock for cash, net of issuance costs (in shares)		1,051,034
Issuance of common stock for cash, net of issuance costs	16,777,666	$ 1,052	16,776,614
Net income (loss)	(21,195,316)			(21,195,316)
Ending Balance (in shares) at Dec. 31, 2018		3,845,361
Ending Balance at Dec. 31, 2018	$ 16,859,266	$ 3,846	$ 91,276,086	$ (74,420,666)

XML

Consolidated Statements of Stockholders' Equity (Parenthetical)	12 Months Ended
	Dec. 31, 2017
Statement of Stockholders' Equity [Abstract]
Stock split conversion ratio	0.01

XML

Consolidated Statements of Cash Flows - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Cash flows provided by (used in) operating activities
Net loss	$ 1,379,379	$ (21,195,316)	$ 6,580,613
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization	2,142	2,556	5,140
Issuance of common stock for services	0	732,249	190,427
Stock based compensation from issuance of options	1,779,671	5,760,432	1,277,139
Loss on settlement of liability	13,917	49,983	0
Stock based compensation from issuance of warrants	0	0	229,360
Changes in assets and liabilities:
Accounts receivable	(7,946,676)	7,207,359	(3,437,502)
Prepaid expenses and other current assets	(568,441)	465,705	(102,483)
Accounts payable and accrued expenses	1,145,021	(1,924,032)	2,071,387
License fees payable	0	8,100,000	0
Accrued salaries and wages	(987,870)	370,155	(1,218,065)
Royalty payable	1,408,012	(409,707)	0
Deferred revenue	(65,641)	317,644	(39,854)
Net cash provided by (used in) operating activities	(3,840,486)	(522,972)	5,556,162
Cash flows provided by (used in) financing activities
Proceeds from warrant exercise	5,292,876	34,000	0
Deferred financing costs	(209,042)	(166,419)	0
Proceeds from sale of common stock	0	17,153,126	0
Repayment of note payable	0	0	(165,000)
Net cash provided by (used in) financing activities	5,083,834	17,020,707	(165,000)
Net increase in cash and cash equivalents	1,243,348	16,497,735	5,391,162
Cash and cash equivalents, beginning of period	6,872,555	8,115,903	1,481,393
Cash and cash equivalents, end of period	8,115,903	24,613,638	6,872,555
Supplemental disclosure
Interest paid during the period	0	0	4,828
Taxes paid during the period	619,225	174,000	0
Non-Cash Financing Transactions
Cashless exercise of options	146	50	0
Issuance of common stock to net profit partner	0	1,600,000	0
Issuance of common stock as settlement of liability	200,000	100,000	0
Forgiveness of related party of debt	0	0	761,826
Reconciling adjustment to record shares issued in prior year for the conversion of debt into common stock and rounding in relation to 1-for-100 reverse stock split	0	0	6
Offset of deferred financing costs against APIC	$ 0	$ 209,042	$ 0

XML

Consolidated Statements of Cash Flows (Parentheticals)	12 Months Ended
	Dec. 31, 2017
Statement of Cash Flows [Abstract]
Stock split conversion ratio	0.01

XML

Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

Opiant Pharmaceuticals, Inc. (the “Company”), a Nevada corporation, is a specialty pharmaceutical company developing medicines for addictions and drug overdose. The Company was incorporated in the State of Nevada on June 21, 2005 as Madrona Ventures, Inc. and, on September 16, 2009, the Company changed its name to Lightlake Therapeutics Inc. On January 28, 2016, the Company again changed its name to Opiant Pharmaceuticals, Inc. The Company also has developed a treatment to reverse opioid overdoses, which is now known as NARCAN®.

On October 2, 2017, the Company changed its state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan of Merger, dated October 2, 2017, whereby the Company merged with and into its recently formed, wholly-owned Delaware subsidiary, Opiant Pharmaceuticals, Inc. Pursuant to the Agreement and Plan of Merger, (i) the Company merged with and into its Delaware subsidiary, (ii) the Company's separate corporate existence in Nevada ceased to exist,(iii) the Company's Delaware subsidiary became the surviving corporation, (iv) each share of the Company's common stock, $0.001 par value per share ("Common Stock"), outstanding immediately prior to the effective time was converted into one fully-paid and non-assessable share of Common Stock of Opiant Pharmaceuticals, Inc., a Delaware corporation, and (v) the certificate of incorporation and bylaws of the Company's Delaware subsidiary were adopted as the Company's certificate of incorporation and bylaws at the effective time of the merger. The merger and the Agreement and Plan of Merger were approved by the Company's Board of Directors (the "Board") and stockholders representing a majority of the Company's outstanding Common Stock.

On December 8, 2017, the Board of Directors, acting pursuant to Section 5.1 of the Company’s Bylaws, approved a resolution changing the Company’s fiscal year-end from July 31 to December 31. The Company made this change to align its fiscal year end with other companies within its industry.

XML

Liquidity and Financial Condition

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity and Financial Condition

Liquidity and Financial Condition

The Company had a net loss of $21.2 million for the year ended December 31, 2018 and has an accumulated deficit of $74.4 million at December 31, 2018. The Company has $19.5 million of working capital at December 31, 2018. The Company has financed its operations from sale of common stock, and through non-equity cash investments by a number of investors, in exchange for an interest in any pre-tax profits received by the Company that was derived from the sale of the Opioid Overdose Reversal Treatment Product less any and all expenses incurred by and payments made by the Company in connection with the Opioid Overdose Reversal Treatment Product ("OORT") (see Note 8 – Deferred Revenue).

On September 27, 2018, the Company completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares of its Common stock (including 105,882 shares purchased by Cantor Fitzgerald upon the exercise in full of its right to purchase up to an additional 105,882 shares to cover over-allotments) at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting sales commissions.

In addition, during the year ended December 31, 2018, the Company sold 239,270 shares of Common Stock under the Sales Agreement entered into with Cantor Fitzgerald for gross proceeds of $4.31 million and received net proceeds of $4.18 million, after sales commissions.

The Company believes that it has sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”).

Principles of Consolidation

 The consolidated financial statements have been prepared in accordance with GAAP and include the accounts for the Company and its wholly-owned subsidiary, Opiant Pharmaceuticals UK Limited. All inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents were $24.6 million, $8.1 million and $6.9 million at December 31, 2018, December 31, 2017 and July 31, 2017, respectively. The Company maintains cash balances at financial institutions insured up to $250,000 by the Federal Deposit Insurance Corporation ("FDIC") and as of December 31, 2018 maintains the majority of its cash balances in money market funds not insured by the FDIC. The Company also transfers certain daily available cash balances to an overnight account which earns interest and the amounts are not insured by the FDIC. Balances in the United Kingdom are insured up to £85,000 by the Financial Services Compensation Scheme (United Kingdom Equivalent). Although the Company’s cash balances exceeded these insured amounts, the Company has not experienced any losses on its cash and cash equivalents for the periods presented.

Accounts Receivable

The Company routinely assesses the recoverability of receivables to determine their collectability by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. The Company determines its allowance for doubtful accounts by considering such factors as the length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations to the Company and the condition of the general economy and the industry as a whole.

The Company has evaluated its accounts receivable history and determined that no allowance for doubtful accounts is required for the year ended December 31, 2018 and the periods ended December 31, 2017 and July 31, 2017. At December 31, 2018 and 2017 the Company's accounts receivable were primarily concentrated with one party, Adapt. At July 31, 2017, 100% of the Company's accounts receivable was concentrated with one party, SWK (see Note 5 - Accounts Receivable).

Long-Lived Assets

The Company follows ASC 360, Property, Plant, and Equipment, for its fixed assets. Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method over estimated useful lives (3 to7 years). The Company’s capitalizes all asset purchases greater than $2,500 having a useful life greater than one year. The Company follows ASC 350, Intangibles – Goodwill and Other for its intellectual property asset. Intellectual property consists of patents which are stated at their fair value acquisition cost. Amortization is calculated by the straight-line method over their estimated useful lives (20 years). The Company recorded depreciation and amortization of $2,556 for the year ended December 31, 2018, $2,142 for the five months ended December 31, 2017 and $5,140 and for the year ended July 31, 2017.

Long-lived assets such as property and equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. The Company did not recognize any impairment losses for any years presented.

Earnings (Loss) per Share

The Company follows ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of shares of Common Stock outstanding during the respective period presented in the Company’s accompanying consolidated financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of Common Stock equivalents (primarily outstanding options and warrants).

Common Stock equivalents represent the dilutive effect of the assumed exercise of outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the Common Stock equivalents are considered dilutive based upon the Company’s net income position at the calculation date.

At December 31, 2018, dilutive common stock equivalents have not been included because it would be anti-dilutive. At December 31, 2018, potentially dilutive common stock equivalents are 3,582,560 which consist of options and warrants. The following table illustrates the dilutive effect of the assumed exercise of the Company’s outstanding stock options and warrants, using the treasury stock method, as of December 31, 2017 and July 31, 2017, respectively:

	Year Ended			Five Months ended		Year Ended
Numerator:	December 31, 2018			December 31, 2017		July 31, 2017
Net Income (loss)	$	(21,195,316	)	$	1,379,379	$	6,580,613
Denominator:
Denominator for basic income (loss) per share - weighted average shares	2,985,335			2,077,663		2,014,540
Effect of dilutive securities:
Equity incentive plans	—			2,315,475		221,311
Denominator for diluted income (loss) per share	2,985,335			4,393,138		2,235,851
Income (loss) per share - Basic	$	(7.10	)	$	0.66	$	3.27
Income (loss) per share - Diluted	$	(7.10	)	$	0.31	$	2.94

Research and Development Costs

The Company follows ASC 730, Research and Development, and expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Transactions occur in British Pounds and management has adopted ASC 830, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Stock-Based Compensation

ASC 718 Compensation – Stock Compensation prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

The Company had stock-based compensation of $5.7 million, $1.8 million, and $1.7 million for the year ended December 31, 2018, the five months ended December 31, 2017 and for the year ended July 31, 2017, respectively. 

Fair Value of Financial Instruments

ASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1)market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). 

The three levels of the fair value hierarchy are described below: 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

The carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The fair value of the Company’s note payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. 

As of December 31, 2018, December 31, 2017 and July 31, 2017, the Company did not have any financial liabilities measured and recorded at fair value on the Company’s balance sheets on a recurring basis.

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Related party balances as of December 31, 2018, December 31, 2017 and July 31, 2017 were zero. The Company uses office space free of charge from related parties (see Note 4 - Related Party Transactions).

Revenue Recognition

The Company generates a large majority of revenue from the agreement with Adapt. During the year ended December 31, 2018 and the five months ended December 31, 2017 the Company recognized 95% and 99%, respectively of revenue from its agreement with Adapt.

In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services.

On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company's policy of revenue recognition. The Company's primary source of revenue is through the recognition of royalty and milestone payments from Adapt. Milestone revenue is recognized upon successful accomplishment of certain sales targets set forth in the Adapt Agreement. Royalty revenue is determined based on the agreed upon royalty rate applied to NARCAN sales reported by Adapt.There are no performance obligations by the Company and the Company recognizes revenue according to the royalty report provided by Adapt on quarterly basis.

In regards to treatment revenue, the Company received certain investments from investors in return for an interest in its existing treatments. Investors carry an option to exchange investment into shares of the Company. Revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Once the option has expired, the Company determined its performance obligations under the agreement which typically is to perform R&D services related to treatments and recognizes revenue over a period of time which is usually the expected research and development period. The treatment revenue is disaggregated by program treatments. (See Note 8 to the Consolidated Financial Statements - Deferred Revenue).

In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. The Company has evaluated its grant with NIH and contract with BARDA and determined they are non-exchange transactions and fall withing the scope of ASU 958, and revenue should be recognized in accordance with Topic 958 guidance. Accordingly, the Company recognizes revenue from its grant and contract in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.

Licensing Agreement

Pursuant to the Adapt Agreement, the Company provided a global license to develop and commercialize the Company’s intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®.

On December 15, 2014, the Company entered into a License Agreement with Adapt. Pursuant to the License Agreement, we provided a global license to develop and commercialize our intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®. In addition, on the SWK Closing Date, in connection with the SWK Purchase Agreement, as disclosed below, we entered into the Adapt Amendment which amends the terms of the License Agreement relating to the grant of a commercial sublicense outside of the United States and diligence efforts for commercialization of our Opioid Overdose Reversal Treatment Product. Under the terms of the Adapt Amendment, Adapt is required to use commercially reasonable efforts to commercialize the Opioid Overdose Reversal Treatment Product in the United States In the event that Adapt wishes to grant a commercial sublicense to a third party in the European Union or the United Kingdom, we have agreed to negotiate an additional amendment to the License Agreement to include reduced financial terms with respect to the commercial sublicense.

The Company also receives payments upon reaching various sales and regulatory milestones, as well as royalty payments for commercial sales of NARCAN® generated by Adapt. During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized royalty and milestone revenue of $13.3 million and $11.7 million, respectively.

Interest in Treatments

With respect to investments in interests in treatments, if an agreement provides an option that allows the investor in the treatment to convert an interest in a treatment into shares of Common Stock of the Company, then revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement are reviewed and evaluated under ASC 606. In the event the investor chooses to convert interests into shares of Common Stock, that transaction will be accounted for similar to a sale of shares of Common Stock for cash.

Sale of Royalties

Under the SWK Purchase Agreement, the Company received an upfront purchase price of $13,750,000 less $40,000 of legal fees, and recognized an additional $3,750,000 when certain milestones were achieved during the fiscal year ended July 31, 2017.

During the fiscal year ended July 31, 2017, the Company recognized total proceeds of $17,460,000 as revenue associated with the SWK Purchase Agreement immediately as a result of (i) the executed agreement constituting persuasive evidence of an arrangement, (ii) the Company having no current or future performance obligations, (iii) the total consideration being fixed and known at the time of its execution and there being no rights of return, and (iv) the cash having been received and non-refundable.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

In June 2018, the FASB issued ASU No. 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting," ("ASU 2018-07"), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 is effective for financial statements issued for annual periods beginning after December 15, 2018, and for the interim periods therein. The adoption of ASU 2018-07 is not expected to have a significant impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (ASU No. 2018-15). The new standard describes the accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement (CCA). Under the new guidance, customers will assess if a CCA includes a software license and if a CCA does include a software license, implementation and set-up costs will be accounted for consistent with existing internal-use software implementation guidance. Implementation costs associated with a CCA that does not include a software license would be expensed to operating expenses. The standard also provides classification guidance on these implementation costs as well as additional quantitative and qualitative disclosures. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim periods. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company is assessing this standard and currently believes it will not have any material impact on the consolidated financial statements.

In 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This new standard permits entities to reclassify to retained earnings the tax effects stranded in accumulated other comprehensive income ("AOCI") as a result of U.S. tax reform. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company has evaluated the impact and timing of the this standard and has concluded it will not impact the consolidated financial statements.

In 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.The standard requires that an employer report the service cost component in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of operating profit. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted this ASU effective January 1, 2018 and has concluded it will not impact the consolidated financial statements.

     In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842) The new standard requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The standard is effective on January 1, 2019, with early adoption permitted. The Company adopted the new standard on January 1, 2019, and there is no impact from the adoption of this standard as the current office leases are less than 12 months.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” ("ASU 2016-18”). The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The purpose of Update No. 2016-18 is to clarify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents. The Company adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financial statements.

In October 2016, the FASB issued updated guidance related to the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory. This guidance is effective for the first quarter of tax year 2018. The Company has adopted the guidance and determined that there is no impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230)” (“ASU 2016-15”), which seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. For public entities, Update 2016-15 becomes effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning December 15, 2016, and interim periods within those fiscal years. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The guidance provided an entity-wide accounting policy election to account for forfeitures as they occur. The Company has elected to record forfeitures as they occur. The Company has evaluated the requirements of the new guidance and has determined that the impact is not material to its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2017-17") to simplify the presentation of deferred income taxes.ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company has adopted the provisions of Update 2016-15 and determined that there is no impact on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." The amendments in this ASU are intended to provide guidance on the responsibility of reporting entity management. Specifically, this ASU provides guidance to management related to evaluating whether there is substantial doubt about the reporting entity’s ability to continue as a going concern and about related financial statement note disclosures. Although the presumption that a reporting entity will continue to operate as a going concern is fundamental to the preparation of financial statements, prior to the issuance of this ASU, there was no guidance in United States generally accepted accounting principles (United States GAAP) related to the concept. Due to the lack of guidance in United States GAAP, practitioners and their clients often faced challenges in determining whether, when, and how a reporting entity should disclose the relevant information in its financial statements. As a result, the FASB issued this guidance to require management evaluation and potential financial statement disclosures. This ASU is effective for financial statements with periods ending after December 15, 2016. The Company adopted the ASU during 2017 and performed going concern evaluations for its 2018 and 2017 year-end financial statements.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its consolidated financial statements.

XML

Related Party Transactions

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company uses office space provided by Dr. Phil Skolnick, the Company’s Chief Scientific Officer, free of charge.

On March 31, 2017, Dr. Michael Sinclair and Dr. Roger Crystal, the Company’s Chief Executive Officer, each voluntarily entered into separate employment agreement acknowledgements whereby they elected to forfeit, unconditionally and irrevocably, $175,498 and $586,328, respectively, of certain owed amounts pursuant to their respective existing employment agreements, representing 35% of the total compensation currently owed to each of Dr. Sinclair and Dr. Crystal on such date. As the debt forgiven was owed to a related party, the Company recognized the amount forgiven as an equity transaction recorded in additional paid-in capital.

Furthermore, on March 31, 2017, pursuant to their respective employment agreement acknowledgements, Dr. Sinclair and Dr. Crystal each voluntarily elected to forfeit, unconditionally and irrevocably, 680,000 and 825,000 shares of common stock, par value $0.001 per share (“Common Stock”), of the Company underlying stock options and warrants previously issued by the Company, respectively, representing approximately 55% of the total number of options and warrants previously issued by the Company to each of Dr. Sinclair and Dr. Crystal.

During the fiscal year ended July 31, 2017, the Company did not borrow any funds from related parties, nor did it have any outstanding related party debt and/or accrued and unpaid interest owed to related parties as of July 31, 2017.

XML

Accounts Receivable

12 Months Ended

Dec. 31, 2018

Receivables [Abstract]

Accounts Receivable

Accounts Receivable

As of December 31, 2018 the Company had accounts receivable of $4,489,317 of which $4,484,433 relates to royalty revenue from the sales of NARCAN®.

As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Agreement had been met (see Note 2 - Liquidity and Financial Condition). As a result, 90% of any succeeding milestone payments and royalties due from Adapt/EBS will revert to the Company while the remaining 10% will be paid to SWK directly by Adapt/EBS. As of December 31, 2017, the Company recognized accounts receivable of $11,696,676, which is equivalent to 90% of the milestone payments and royalties earned during the five months ended December 31, 2017.

The Company had accounts receivable of $3,750,000 as of July 31, 2017, with the entire amount being related to the Earn Out Milestone from SWK. As provided under the Company’s agreement with SWK, the Company was to receive a milestone payment in the amount of $3,750,000 if Adapt had received in excess of $25,000,000 of cumulative Net Sales for any two consecutive fiscal quarters during the period from October 1, 2016 through September 30, 2017 from the sale of NARCAN®. This milestone was achieved as of July 31, 2017, therefore the Company recorded the $3,750,000 as an account receivable, with the actual cash payment being received by the Company on August 9, 2017.

XML

Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

As of December 31, 2018, the Company had approximately $268 thousand recorded as prepaid expenses and other current assets. Of this amount approximately $74 thousand is for research and development supplies related to product development work being performed by Renaissance Lakewood, LLC ("Renaissance") (see Note 10 - Commitments), and the remaining $194 thousand is for prepaid expenses such as rent, insurance, and software licenses.

As of December 31, 2017, the Company had approximately $0.7 million recorded as prepaid expenses and other current assets. Approximately $0.4 million was related to a deposit made by the Company to Renaissance in August 2017. As provided under the agreement with Renaissance, the Company was obligated to make this deposit to fund the initial costs of the product development work to be performed by Renaissance on behalf of the Company. As of December 31, 2017, no work had been performed, nor had any costs been incurred, in relation to this project.

During the five months ended December 31, 2017, the Company purchased approximately $0.1 million of research and development supplies related to the above referenced product development work being performed by Renaissance. As provided under the agreement with Renaissance, the Company is obligated to pay for all supplies and materials that are needed to complete this product development work. These supplies were delivered on October 16, 2017 and approximately $25 thousand in supplies have been used as of December 31, 2018. The remaining balance consists primarily of prepaid expenses such as rent, insurance, and software licenses.

The Company had recorded approximately $0.2 million as prepaid expenses and other current assets at July 31, 2017 that consists primarily of prepaid expenses such as rent, insurance, and software licenses.

XML

Deferred Financing Costs

12 Months Ended

Dec. 31, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Deferred Financing Costs

Deferred Financing Costs

During the five months ended December 31, 2017, the Company incurred approximately $0.2 million of legal, accounting, and filing fees related to the Company's fund raising efforts. The Company recorded the $0.2 million as deferred financing costs as of December 31, 2017. These expenses were offset against net proceeds received from the Company's financings during 2018.

XML

Deferred Revenue

12 Months Ended

Dec. 31, 2018

Deferred Revenue Disclosure [Abstract]

Deferred Revenue

Deferred Revenue

On December 17, 2013, the Company entered into an agreement with an investor, Potomac, and subsequently received additional funding totaling $250 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 0.5% interest in the Company’s BED treatment product (the “BED Treatment Product”) and pay the investor 0.5% of the BED Net Profit in perpetuity (the “2013 0.5% Investor Interest”). “BED Net Profit” is defined as the pre-tax profit generated from the BED Treatment Product after the deduction of all expenses incurred by and payments made by the Company in connection with the BED Treatment Product, including but not limited to an allocation of Company overhead. If the BED Treatment Product was not approved by the FDA by December 17, 2016, the investor had a 60-day option to exchange its entire 0.5% Investor Interest for 31,250 shares of Common Stock of the Company. On February 17, 2017, the investor’s option to receive the shares of Common Stock terminated by its terms, which resulted in the Company beginning to recognize revenue in relation to this agreement in February 2017. The Company estimates that sufficient research and development will be completed by December 31, 2020 to allow the Company to advance the program into final registration studies. Therefore, the Company recognized revenue on a straight-line basis over the expected completion date. During the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017, the Company recognized approximately $58 thousand, $36 thousand and $39.9 thousand of revenue relating to the agreement, respectively.

On September 17, 2014, the Company entered into an agreement with an investor, Potomac, and subsequently received funding totaling $500 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 1.0% interest in the Company’s BED Treatment Product and pay the investor 1.0% of the BED Net Profit generated from the BED Treatment Product in perpetuity (the “1.0% Investor Interest”). “BED Net Profit” is defined as the pre-tax profit generated from the BED Treatment Product after the deduction of all expenses incurred by and payments made by the Company in connection with the BED Treatment Product, including but not limited to an allocation of Company overhead. If the BED Treatment Product is not approved by the FDA by September 17, 2017, the investor will have a 60-day option to exchange its entire 1.0% Investor Interest for 62,500 shares of Common Stock of the Company. On November 15, 2017, the investor’s option to receive the shares of Common Stock terminated by its terms, which resulted in the Company beginning to recognize revenue in relation to this agreement in November 2017. The Company estimates that sufficient research and development will be completed by December 31, 2020 to allow the Company to advance the program into final registration studies. Therefore, the Company recognized revenue on straight-line basis over the expected completion date. During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized approximately $156,863 and $29,400 of revenue related to this agreement. The Company recognized no revenue for the fiscal year ended July 31, 2017.

On July 20, 2015, the Company entered into an agreement with an investor, Potomac, and subsequently received funding from an individual investor in the amount of $250 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 0.5% interest in the BED Net Profit (the “2015 0.5% Investor Interest”) generated from the BED Treatment Product in perpetuity. The investor also has rights with respect to the 2015 0.5% Investor Interest if the BED Treatment Product is sold or the Company is sold. If the product is not introduced to the market and not approved by the FDA or an equivalent body in Europe and not marketed by July 20, 2018, the investor will have a 60-day option to exchange the 2015 0.5%Investor Interest for 25,000 shares of Common Stock of the Company. The Investor did not elect to exchange their interest for shares of Common Stock as described above and the Company commenced recognizing revenue in September 2018. For the year ended December 31, 2018 the Company recognized $35,714 of revenue related to this agreement.

On September 22, 2015, the Company received a $1.6 millioncommitment from the Foundation which later assigned its interest to Valour in October 2016, from which the Company had the right to make capital calls from the Foundation for the research, development, any other activities connected to the Company’s opioid antagonist treatments for addictions and related disorders that materially rely on certain studies funded by the Foundation’s investment, excluding the Opioid Overdose Reversal Treatment Product (the “Certain Studies Products”), certain operating expenses, and any other purpose consistent with the goals of the Foundation. In exchange for funds invested by the Foundation, Valour currently owns 2.1333% interest in the Certain Studies Products Net Profit (the “ 2.1333% Interest”). The “Certain Studies Net Profit” is defined as any pre-tax revenue received by the Company that was derived from the sale of the Certain Studies Products less any and all expenses incurred by and payments made by the Company in connection with the Certain Studies Products, including but not limited to an allocation of Company overhead based on the proportionate time, expenses and resources devoted by the Company to Certain Studies Product-related activities, which allocation shall be determined in good faith by the Company. Valour also has rights with respect to its up to a 2.1333% Interest if the Certain Studies Product is sold or the Company is sold. Additionally, the Company may buy back, in whole or in part, the 2.1333% Interest from Valour within 2.5 years or after 2.5 years of the initial investment at a price of two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. If an aforementioned treatment is not introduced to the market by September 22, 2018, Valour will have a 60-day option to exchange its 2.1333% Interest for shares of the Common Stock of the Company at an exchange rate of one-tenth of a share for every dollar of its investment. On October 2, 2015, December 23, 2015, and May 28, 2016, the Company made capital calls of approximately $618 thousand , $715.5 thousand, and $266.5 thousand from the Foundation in exchange for 0.824%, 0.954% and 0.355333% interests in the aforementioned treatments, respectively. The Company will defer recording revenue until such time as Valour’s option expires or milestones are achieved that eliminates Valour’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement will be reviewed and evaluated under Accounting Standards Codification (ASC) 606. In the event Valour chooses to exchange its 2.1333% Interest, in whole or in part, for shares of Common Stock of the Company, that transaction will be accounted for similar to a sale of shares of Common Stock for cash. During September 2018 Valour elected to exchange its interest for shares of Common Stock and accordingly the Company issued 160,000 shares of its Common Stock to Valour.

On April 17, 2018, the Company was awarded a grant of approximately $7.4 million from the National Institutes of Health’s National Institute on Drug Abuse, ("NIDA"). The grant provides the Company with additional resources for the ongoing development of OPNT003 (intranasal nalmefene), a long-lasting opioid antagonist for the treatment of opioid overdose. The grant includes approximately $2.6 million to be funded for the period ending March 31, 2019, with the balance to be funded over the subsequent two years, subject to available funds and satisfactory progress on the development of OPNT003. Government grants are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. The Company recognizes revenues from grants in the period during which the related costs were incurred, provided that the conditions under which the grants were provided had been met and only perfunctory obligations were outstanding. During the year ended December 31, 2018 the Company received cash of $1.0 million and recognized revenue of $432 thousand related to this grant.

The following is a summary of the Company’s deferred revenue activity for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017:

(in thousands)	NIH Grant				BED			Other Opioid Treatments			Total
Balance as of July 31, 2016		$	—		$	1,000		$	1,600		$	2,600
Recognized as revenue		—			(39		)	—			(39		)
Balance as of July 31, 2017		—			961			1,600			2,561
Recognized as revenue		—			(66		)	—			(66		)
Balance as of December 31, 2017		—			895			1,600			2,495
Cash Received NIH		1,000			—			—			1,000
Converted to Equity		—			—			(1,600		)	(1,600		)
Recognized as revenue		(432		)	(251		)	—			(683		)
Balance as of December 31, 2018		$	568		$	644		$	—		$	1,212

As of December 31, 2018, the Company had recorded approximately $1,212 thousand of its deferred revenue as a current liability because the Company expects to recognize that amount as revenue during the next 12 months. Current and long-term deferred revenue are detailed in the following table:

Deferred Revenue (in thousands)	NIH Grant			BED		Other Opioid Treatments		Total
Current portion		$	568	$	644	$	—	$	1,212
Long-term portion		—		—		—		—
Total		$	568	$	644	$	—	$	1,212

XML

License Fee Payable

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

License Fee Payable

License Fee Payable

On February 28, 2018, the Company was notified that Adapt, now a Subsidiary of Emergent BioSolutions ("EBS"), had entered into a license agreement with a Third Party (as defined in the License Agreement) with regard to one or more patents pursuant to which Adapt invoked its right under Section 5.5 of the License Agreement, dated as of December 15, 2014, by and between the Company and Adapt, as amended (the "License Agreement"), to offset 50% of certain payments paid to such Third Party from the amounts payable by Adapt to the Company under the License Agreement and SWK under the SWK Purchase Agreement. On March 1, 2018, the Company received net milestone payments of $6.1 million, which was net of 50% of a license fee payment Adapt made to the Third Party. Adapt reduced such milestone payment by $6.25 million pursuant to Section 5.5 of the License Agreement. The portion of the milestone payment that the Company would have otherwise received was reduced by $5.6 million.

As provided in Amendment No. 2 to the License Agreement, which the parties entered into on March 18, 2019 (see Note 17, Subsequent Events), Adapt has made has made and will in the future make payments to the Third Party Licensee and will be allowed to reduce the royalties and milestones that the Company would be due under the License Agreement by a maximum of $9.0 million in relation to such payments. Under the SWK Purchase Agreement, the Company retains 90% of the royalties payable under the License Agreement, with SWK entitled to 10%. The maximum amount payable by the Company is therefore $8.1 million (90% of $9 million), of which the Company has recorded $5.4 million as a current liability and $2.7 million as a long-term liability at December 31, 2018. As provided in Amendment No. 2, Adapt will be allowed to reduce the royalties and milestones that the Company would be due under the License Agreement during the year ending December 31, 2019 by a maximum of $1.8 million each quarter. As provided in the License Agreement, if Net Narcan Sales (as defined in the License Agreement) exceed $200 million in any calendar year, the Company and SWK will be due a milestone of $15.0 million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to the Company and SWK, Adapt may deduct $2.7 million from the $13.5 million (90% of $15.0 million) milestone payable to the Company.

XML

Royalty Payable

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Royalty Payable

Royalty Payable

The Company entered into various agreements and subsequently received funding from investors for use by the Company for the research and development its OORT Product. In exchange for this funding, the Company agreed to provide investors with interest in the OORT Net Profit generated from its OORT Product in perpetuity. At December 31, 2018 and 2017, the Company determined an OORT Net Profit as a result of NARCAN® sales by Adapt. There was no OORT Net Profit prior to December 31, 2017. The following table sets forth the royalty payable to certain investors as of December 31, 2018 and December 31, 2017:

(in thousands)	Net Profit %		December 31, 2018		December 31, 2017
Potomac	10.2%	$	422	$	860
LYL	5.0%		206		421
Welmers	1.5%		62		127
Foundation	6.0%		248		—
Pendergast	1.0%		60		—
Royalty payable	23.7%	$	998	$	1,408

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

The Company has entered into various agreements related to its business activities. The following is a summary of the Company’s commitments:

a. On December 18, 2014, the Company entered into a consulting agreement (the "2014 Agreement") with Torreya Partners LLP ("Torreya"), a financial advisory firm, under which Torreya agreed to provide financial advisory services with regard to a licensing agreement. The Company is also required to pay an additional fee equivalent to 3.75% of all amounts received by the Company in excess of $3.0 million, in perpetuity. Total fees incurred by the Company to this consultant pursuant to this agreement during the fiscal year ended July 31, 2017 amounted to approximately $963.6 thousand.

On April 25, 2016, the Company entered into a consulting agreement with Torreya, under which Torreya agreed to provide financial advisory services for financing activities. In exchange for these services, the Company is required to pay a fee on all funding received by the Company as a result of assistance provided by the consultant. Torreya’s fee will be equal to 5% of gross funding received by the Company up to $20 million plus 3.5% of any proceeds received in excess of $20 million. Total fees incurred by the Company to this consultant pursuant to this agreement during the fiscal year ended July 31, 2017 amounted to $687.5 thousand. As of July 31, 2017, the Company had recorded an accrued liability of approximately $928.5 thousand relating to fees owed to Torreya.

On September 8, 2017, the Company and Torreya entered into the Supplemental Engagement Letter to provide financial advisory services with respect to the licensing of the intellectual and property rights to develop and commercialize certain products with Adapt Pharma Operations Limited, an Ireland based pharmaceutical company ("Adapt"). The revised engagement amends total consideration as follows: (i) an aggregate of $300 thousand in cash payments to be paid by the Company to Torreya in three equal installments over a 16-month period; (ii) shares of Common Stock, equal to an aggregate value of $300 thousand, to be issued by the Company to Torreya in three equal installments over a 16-month period; (iii) if the Earn Out Milestone Payment is paid under the SWK Purchase Agreement, approximately $140.6 thousand, or 3.75% of the Earn Out Milestone Payment (as defined in the SWK Purchase Agreement), shall be paid by the Company to Torreya within 15 days of the date that the Earn Out Milestone (as defined in the SWK Purchase Agreement) has been paid to the Company; (iv) once SWK has received the Capped Royalty Amount, if the Earn Out Milestone Payment (as defined in the SWK Agreement) is paid, Torreya shall receive 3.375%of the Total Consideration (as defined in the 2014 Agreement) received thereafter or 3.5625% of the Total Consideration received thereafter if no generic version of NARCAN is commercialized prior to the sixth anniversary of the Closing Date (as defined in the SWK Agreement) as per the terms of the SWK Agreement; and (v) once SWK has received the Capped Royalty Amount, if the Earn Out Milestone Payment has not been paid, Torreya shall receive 3.45525% of the Total Consideration received thereafter or 3.602625% of the Total Consideration received thereafter if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing Date as per the terms of the SWK Purchase Agreement. Payments made by the Company in the form of shares of Common Stock will be a defined number of shares calculated based upon the average closing price of the Common Stock for the ten trading days prior to the relevant date for the payment.

On September 23, 2017, the Company issued 3,283 shares of its Common Stock to Torreya as payment for $100 thousand of fees owed by the Company to Torreya. The Company valued these shares at $40.58 per share, or approximately $133 thousand in the aggregate, which represents the closing price of the Company's Common Stock on September 22, 2017. The Company also paid Torreya approximately $240.6 thousand in cash in September 2017 as payment for fees owed. On December 22, 2017, the Company issued 3,455 shares as payment for $100 thousand of fees owed by the Company to Torreya. The Company valued these shares at $24.95 per share, or approximately $81 thousand in the aggregate, which represents the closing price of the Company's Common Stock on December 22, 2017. The Company also paid Torreya $100 thousand in cash in December 2017 as payment for fees owed.

Both the $200 thousand of fees paid via the issuance of Common Stock and the $340.6 thousand of fees paid in cash had been recorded as accrued liabilities as of July 31, 2017.

During the five-month period ended December 31, 2017, the Company incurred approximately $439 thousand in aggregate fees related to Torreya. As of December 31, 2017, the Company had an accrued liability of $639 thousand owed to Torreya.

During the year ended December 31, 2018, the Company incurred approximately $447 thousand in aggregate fees related to Torreya. In addition during December 2018 the Company paid Torreya $100 thousand in cash and issued 6,498 shares of Common Stock representing a total of $200 thousand of fees owed by the Company to Torreya which had been recorded as accrued liability as of December 31, 2017. As of December 31, 2018 the Company has an accrued liability of $151 thousand owed to Torreya.

b. On November 19, 2015, the Company issued 14,327shares of unregistered Common Stock upon the execution of a binding letter of intent to agree to negotiate and enter into an exclusive license agreement and collaboration agreement (“LOI”) with a pharmaceutical company with certain desirable proprietary information. The shares issued in this transaction were valued using the stock price at issuance date and amounted to approximately $120.3 thousand. Pursuant to the LOI, the Company is obligated to issue up to an additional 92,634 shares of unregistered Common Stock upon the occurrence of various milestones. A total of 3,582 shares had been issued as of July 31, 2016 due to achievement of certain milestones. On November 10, 2016, the Company issued an additional 14,327 shares of the unregistered Common Stock pursuant to the LOI. The shares issued in this transaction were valued using the stock price at issuance date and amounted to approximately $85.1 thousand. On March 16, 2017, the Company issued an additional 10,745 shares of unregistered Common Stock pursuant to the LOI. The Company was obligated to issue these shares upon the one year anniversary of receipt by the Company of a milestone payment from Adapt for the first commercial sale of the Company’s product, NARCAN®, in the U.S. The shares issued on March 16, 2017 were valued on the date of issuance using the March 16, 2017 closing price of the Company’s Common Stock of $7.75 per share, which resulted in an aggregate value of approximately $83.3 thousand. The Company expensed the entire $83.3 thousand as non-cash expense during the fiscal year ended July 31, 2017. There were no share issuances, nor any expenses incurred, by the Company in relation to this LOI during the five months ended December 31, 2017.

As of March 31, 2018, the Company was required to issue an additional 37,866 shares of its unregistered Common Stock pursuant to the LOI. The Company was obligated to issue these shares on the receipt of cumulative royalty payments of $2 million from Adapt and milestone payments from Adapt with respect to first achieving the milestones of the first $30 million, $40 million, $55 million and $75 million of Net NARCAN® Sales. The shares that were issuable as of March 31, 2018, were valued using the March 29, 2018 closing stock price of the Company's Common Stock of $19.18 per share, which resulted in an aggregate value of approximately $726 thousand. On April 19, 2018 the Company issued 37,866 shares of Common Stock. For the year ended December 31, 2018 the Company recorded total non-cash expense of $776 thousand, of which $726 thousand was recorded to research and development expense and $50 thousand was recorded to loss on settlement of liability in other expense.

c. In October 2016, the Company in-licensed a heroin vaccine from Walter Reed Army Institute of Research ("WRAIR"). In consideration for the license the Company agreed to pay a royalty of 3% of net sales if the Company commercializes the vaccine, or 4% if the vaccine is sublicensed. In addition, the Company agreed to pay a minimum annual royalty of $10 thousand, as well as fixed payments of up to approximately $715.7 thousand if all of the specified milestones are met. During the five months ended December 31, 2017, the Company paid $60 thousand in cash to WRAIR, of which $50 thousand was a non-recurring "execution" fee and the remaining $10 thousand was the minimum annual royalty for the period of September 2017 through August 2018. The $10 thousand minimum annual royalty was recorded as a prepaid expense and is being expensed at the rate of $833 per month, beginning in September 2017 and ending in August 2018.

d. The Company has a Sublease with Standish Management, LLC to sublease office space on a month-to-month basis, located at 201 Santa Monica Boulevard, Suite 500, Santa Monica, CA 90401, which is the Company's headquarters. The Company also has an Office Service Agreement to lease office space at 83 Baker Street, London, England, W1U 6AG. Effective May 31, 2018 either party is able to terminate the Office Service Agreement by providing three months advance written notice of termination. During the year ended December 31, 2018, the five months ended December 31, 2017, and the year ended July 31, 2017 the Company incurred approximately $321 thousand, $150 thousand, and $123 thousand, respectively of rent expense.

e. On June 1, 2017 (the “LYL Effective Date”), the Company entered into an amendment with LYL (the “LYL Amendment”) to the Amended and Restated Consulting Agreement, dated October 25, 2016 and effective as of July 17, 2013 (the “LYL Agreement”). Pursuant to the LYL Amendment, LYL granted the Company certain buyback provisions that have expired as of December 31, 2018. In consideration for LYL entering into the LYL Amendment, upon the Company's receipt after the LYL Effective Date of at least $3 million from (i) SWK under the SWK Purchase Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by the Company from SWK will be used in determining the Net Profit (as defined in the LYL Agreement).

f. On June 22, 2017, the Company entered into a license agreement (the "License Agreement") and a related supply agreement (the “Supply Agreement”) with Aegis Therapeutics LLC ("Aegis") pursuant to which the Company was granted an exclusive license (the “License”) to Aegis’ proprietary chemically synthesizable delivery enhancement and stabilization agents, including, but not limited to, Aegis’ Intravail® absorption enhancement agents, ProTek® and HydroGel® (collectively, the “Technology”) to exploit (a) the Compounds (as such are defined in the License Agreement) and (b) a product containing a Compound and formulated using the Technology (“Aegis Product”), in each case of (a) and (b) for any and all purposes. The License Agreement restricts the Company's ability to manufacture any Aegis excipients included in the Technology (“Excipients”), except for certain instances of supply failure, supply shortage or termination of the Supply Agreement, and the Company shall obtain all supply of such Excipients from Aegis under the Supply Agreement. The License Agreement also restricts Aegis’s ability to compete with the Company worldwide with respect to the Exploitation (as defined in the License Agreement) of any therapeutic containing a Compound or derivative or active metabolite of a Compound without the Company's prior written consent. The effective date of the License Agreement and the Supply Agreement is January 1, 2017.

As consideration for the grant of the License, the Company paid Aegis two immaterial upfront payments, of which the Company paid 50% by issuing the Company's Common Stock to Aegis, with the number of shares issued equal to 75% of the average closing price of the Company's Common Stock over the 20 trading days preceding the date of payment. The License Agreement also provides for (A) additional developmental milestone payments for each Product containing a different Compound equal to up to an aggregate of $1.8 million, (B) additional commercialization milestone payments for each Aegis Product containing a different Compound equal to up to an aggregate of $5.0 million, and (C) single low digit royalties on the Annual Net Sales (as defined in the License Agreement) of all Aegis Products during the Royalty Term (as defined in the License Agreement) according to a tiered royalty rate based on Annual Net Sales of the Aegis Products by the Company, the Company's sublicensees and affiliates. The Company shall also pay to Aegis a sublicense fee based on a sublicense rate negotiated in good faith by the parties. The License Agreement contains customary representations and warranties, ownership, patent rights, confidentiality, indemnification and insurance provisions. The License Agreement shall expire upon the expiration of the Company's obligation to pay royalties under such License Agreement; provided, however, that the Company shall have the right to terminate the License granted on a product-by-product or country-by-country basis upon 30 days’ prior written notice to Aegis.

Under the terms of the Supply Agreement, Aegis shall deliver to the Company any preclinical, clinical and commercial supply of the Excipients, which Aegis sources from various contract manufacturers. The Supply Agreement has a term of 20 years but shall terminate automatically in the event of expiration or termination of the License Agreement or at any time upon the written agreement of both parties. The Supply Agreement contains customary provisions relating to pricing for such materials, forecasts, delivery, inspection, indemnification, insurance and representations, warranties and covenants. The Supply Agreement includes technology transfer provisions for the transfer of all materials and know-how specific to the manufacturing of the Excipients that is necessary or useful for the Company to manufacture such Excipients. The Company does not have the right to manufacture such Excipients except in the event that Aegis is unable to supply and sell any portion of the material to the Company (subject to a 60-day cure period).

For the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017, the Company recorded $350 thousand, $150 thousand and $200 thousand, respectively in expense associated with the License Agreement.

g. On July 14, 2017, Renaissance Lakewood, LLC (“Renaissance”) and the Company entered into a Research and Development Agreement (the “Renaissance Agreement”). Under the Renaissance Agreement, Renaissance will perform product development work on a naltrexone multi-dose nasal product for the treatment of alcohol use disorder pursuant to the terms set forth in a proposal agreed upon by the parties. The Company will bear the costs of all development services, including all raw materials and packaging components, in connection with the performance of the development work under the Renaissance Agreement and in accordance with financials agreed upon through the proposal. Renaissance will conduct quality control and testing, including non-stability, stability, in-use, raw material, and packaging component testing as part of the services provided to the Company under the Renaissance Agreement. The Company will own all formulations provided to Renaissance and any formulations developed in connection with the Renaissance Agreement. Renaissance will own all know-how developed in connection with the performance of the services that is not solely related to a product. The Company has the right to seek patent protection on any invention or know-how that relates solely to a product developed under the Renaissance Agreement or any our formulation, excluding general manufacturing or product development know-how of Renaissance. The Renaissance Agreement is effective until terminated by either party in accordance with its terms.  The Company or Renaissance may terminate the project under a proposal to the Renaissance Agreement due to unforeseen circumstances in the development.  The Renaissance Agreement may be terminated by the Company, with or without cause, upon 45 days written notice.  There are also mutual customary termination provisions relating to uncured breaches of material provisions. See Note 6 - Prepaid Expenses and Other Current Assets.

h. On September 5, 2017, the Company accepted, effective September 11, 2017 (the “Separation Date”), the resignation of Kevin Pollack as (i) the Company’s Chief Financial Officer, Treasurer and Secretary, and (ii) a director of Opiant Pharmaceuticals UK Limited, a wholly owned subsidiary of the Company. On September 5, 2017, the Company and Mr. Pollack entered into a Separation Agreement and General Release (the “Separation Agreement”), with such agreement becoming effective on September 12, 2017 (the "Separation Agreement Effective Date"), which represented the date on which Mr. Pollack's seven-day revocation period expired.

Pursuant to the terms of the Separation Agreement, Mr. Pollack received (i) a payment equal to approximately $1.13 million relating to certain accrued obligations, payable in a cash lump sum within three business days following the Separation Agreement Effective Date; and (ii) a separation payment equal to approximately $1.44 million, payable in one or two installments in accordance with the terms set forth therein. Mr. Pollack also retained previously granted options to purchase, in the aggregate, 948,000 shares of Common Stock of the Company, which options are fully vested and exercisable. Except as set forth in the Separation Agreement, all other options held by Mr. Pollack were forfeited. Additionally, for a period of no more than 12 months following the Separation Date, Mr. Pollack will cooperate as an adviser with the Company in connection with matters arising out of Mr. Pollack’s service with the Company, in accordance with the terms set forth in the Separation Agreement.

During the five months ended December 31, 2017, the Company paid Mr. Pollack approximately $1.61 million in cash pursuant to the terms of the Separation Agreement. In addition, as of December 31, 2017, the Company has recorded an accrued liability of approximately $962 thousand. During September 2018, the Company made the final payment due to Mr. Pollack.

i. On September 7, 2018, the Company entered into a Development Agreement ("Development Agreement") and an Agreement for Reimbursement of Capital Expenditure and Service Fees ("Reimbursement Agreement") with Aesica Queenborough Limited ("Aesica"), a wholly owned subsidiary of Consort Medical plc, related to the Company’s product OPNT003 (intranasal nalmefene), a potent long acting opioid antagonist for the treatment of opioid overdose. As part of the Development Agreement, Aesica and Bespak, wholly owned subsidiaries of Consort, will supply the Company with clinical samples and registration batches for the purpose of performing clinical studies and obtaining regulatory approvals. Further, as part of the Development Agreement, the Company and Aesica agreed that, upon approval by the U.S. FDA, Aesica and Bespak will manufacture and supply the commercial device for the Company upon mutually agreed terms. Under the terms of the Reimbursement Agreement, the Company has agreed to reimburse Aesica for certain service, tooling, equipment and facility alteration expenses incurred by Aesica under certain circumstances, including termination of the Development Agreement and the failure to complete a definitive manufacturing and supply agreement.

Contingencies

The Company may be subject to various legal proceedings and claims that arise in the ordinary course of business. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in both the probability determination and as to whether an exposure can be reasonably estimated. If any legal matter, that may arise, were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s would reflect any potential claim in the consolidated financial statements for that reporting period.

XML

Stockholder's Equity

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholder's Equity

Common Stock

During the year ended December 31, 2018

During the year ended December 31, 2018, the Company issued 50,497 shares of its Common Stock in relation to the cashless exercise of stock options that were granted outside of the Company's 2017 Long-Term Incentive Stock Plan (the "2017 Plan"). A total of 95,000 stock options were exercised with exercise prices between $7.25 and $10.00 per share.

During the year ended December 31, 2018, the Company issued 3,400 shares of its Common Stock as a result of the exercise of stock purchase warrants with an exercise price of $10.00 per share for total proceeds of $34,000.

During the year ended December 31, 2018 the Company issued 38,166 shares of its Common stock with an aggregate value of $782 thousand for services provided to the Company.

On September 5, 2018, the Company also issued 160,000 shares of Common Stock to Valour Fund, LLC, as a result of Valour's exercise of its option to exchange its interest in certain product revenues for Common Stock of the Company.

On December 18, 2018, the Company issued 6,498 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter").

During October 2017 the Company entered into a Controlled Equity Offering sales agreement (the "Sales Agreement") with Cantor Fitzgerald & Co., as agent ("Cantor Fitzgerald"), pursuant to which the Company may offer and sell, from time to time through Cantor Fitzgerald, shares of Common Stock having an aggregate offering price as set forth in the Sales Agreement and a related prospectus supplement filed with the SEC on March 19, 2018. The Company agreed to pay Cantor Fitzgerald a cash commission of 3.0% of the aggregate gross proceeds from each sale of shares under the Sales Agreement. During the twelve months ended December 31, 2018 the Company sold 239,270 shares of Common Stock for gross proceeds of $4.31 million and received net proceeds of $4.18 million after deducting sales commissions.

On September 27, 2018, the Company also completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares its Common stock (including 105,882 shares purchased by Cantor Fitzgerald upon the exercise in full of its right to purchase up to an additional 105,882 shares to cover over-allotments) at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting sales commissions.

During the five months ended December 31, 2017

During the five months ended December 31, 2017, the Company issued 145,630 shares of its Common Stock in relation to the cashless exercise of stock options that were granted outside of the Company's 2017 Long-Term Incentive Stock Plan (the "2017 Plan"). These options were for 217,500 shares of Common Stock with exercise prices between $5.00 and $15.00 per share.

During the five months ended December 31, 2017, the Company issued 345,000 shares of its Common Stock in relation to the exercise of stock purchase warrants with an exercise price of $15.00 per share for total proceeds of $5,175,000.

During the five months ended December 31, 2017, the Company issued 11,790 shares of its Common Stock in relation to the exercise of stock purchase warrants, with an exercise price of $10.00 per share. The Company received proceeds of $57,900 relating to the warrant exercises during the five months ended December 31, 2017 and the balance of $60,000 on January 16, 2018.

On September 23, 2017, the Company issued 3,283 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter"). The Company valued these shares at $40.58 per share, or approximately $133 thousand in the aggregate, which represents the closing price of the Company's Common Stock on September 22, 2017. The Company recognized a loss on the settlement of the accrued liability of $33 thousand.

On December 22, 2017, the Company issued 3,455 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter"). The Company valued these shares at $24.95 per share, or approximately $81 thousand in the aggregate, which represents the closing price of the Company's Common Stock on December 22, 2017. The Company recognized a gain on the settlement of the liability of $19 thousand.    

During the year ended July 31, 2017

During the year ended July 31, 2017, the Company issued 2,875 unregistered shares of the Company’s Common Stock to consultants in exchange for services provided by the consultants. The shares issued were valued using the stock price on the issuance date, ranging from $7.52 to $7.75. The Company recorded a non-cash expense of $22,051.

During the year ended July 31, 2017, the Company issued 25,072 shares of unregistered Common Stock pursuant to the LOI described in Note 10 – Commitments. Under the terms of the LOI, the Company was obligated to issue these shares on the one year anniversary of the LOI and upon the one year anniversary of receipt, by the Company, of a milestone payment from Adapt for the first commercial sale of the Company’s product, NARCAN® , in the U.S. The shares issued in this transaction were valued using the stock price on the issuance dates ranging from $5.94 to $7.75 per share. The Company recorded the aggregate fair value of $168,376 as non-cash expense during the year ended July 31, 2017.

The Company made a reconciling adjustment to record the issuance of 6,228 shares of unregistered Common Stock that were issued in fiscal years prior to both 2017 and 2016. Of this total, 6,168 were issued in relation to a conversion of debt into shares of the Company’s common stock. The remaining 60 shares were issued in relation to the Company’s one-for-one hundred reverse stock split of its Common Stock (the “1:100 Reverse Stock Split”) that was effected in December 2014. The 6,228 shares are on a post-split basis and after recording this adjustment the number of shares of the Company’s common stock listed as outstanding on the accompanying Consolidated Statement of Stockholders' Equity (Deficit) reconciles to the actual number of shares outstanding as of July 31, 2017.

Stock Options

On September 8, 2017, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”), at which time the 2017 Plan was approved by stockholder vote. The 2017 Plan allows the Company to grant both incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”) to purchase a maximum of 400,000 shares of the Company's Common Stock. Under the terms of the 2017 Plan, ISOs may only be granted to Company employees and directors, while NSOs may be granted to employees, directors, advisors, and consultants. The Board has the authority to determine to whom options will be granted, the number of options, the term, and the exercise price. Options are to be granted at an exercise price not less than fair value for an ISO or an NSO. The vesting period is normally over a period of four years from the vesting date. The contractual term of an option is no longer than ten years.

Prior to adopting the 2017 Plan, the Company did not have a formal long-term incentive stock plan. Prior to the implementation of the 2017 Plan, the Company had discretion to provide designated employees of the Company and its affiliates, certain consultants, and advisors who perform services for the Company and its affiliates, and non-employee members of the Board and its affiliates with the opportunity to receive grants of non-qualified stock options (the "Pre-2017 Non-Qualified Stock Options"). All of the Pre-2017 Non-Qualified Stock Option Grants were intended to qualify as non-qualified stock options. There were no Pre-2017 Non-Qualified Stock Option Grants that were intended to qualify as incentive stock options.

No Non-Qualified Stock Options were issued for the year ended December 31, 2018 or the five month transition period ended December 31, 2017. The assumptions used in the valuation for the Pre-2017 Non-Qualified Stock Options for the five months ended December 31, 2017 and for the year ended July 31, 2017 were as follows:

	December 31, 2017			July 31, 2017
Market value of stock on measurement date	$	36.79		$5.61 to 13.00
Risk-free interest rate	1.47		%	0.88-2.55%
Dividend yield	0		%	0	%
Volatility factor	96		%	76-348%
Term	2.12 years			2.28-10 years

Stock option activity for the Pre-2017 Non-Qualified Stock Options for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 is presented in the table below: 

	Number of Shares		Weighted- average Exercise Price	Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2016	4,635,000		8.79	7.39	$	2,731,250
Granted	320,000		9.38
Expired	(5,000	)	10.00
Forfeited	(1,180,000	)	11.03
Outstanding at July 31, 2017	3,770,000		8.13	6.87	$	19,139,625
Exercised	(217,500	)	10.22
Forfeited	(572,000	)	11.51
Outstanding at December 31, 2017	2,980,500		7.33	7.06	$	46,606,210
Exercised	(95,000	)	8.24
Forfeited	—		—
Outstanding at December 31, 2018	2,885,500		7.30	6.04	$	20,633,100
Exercisable at December 31, 2018	2,747,150		7.20	6.01	$	19,928,663

A summary of the status of the Company's non-vested Pre-2017 Non-Qualified Stock Options as of December 31, 2018 and changes during the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 are presented below:

Non-vested options	Number of Options		Weighted Average Grant Date Fair Value
Non-vested at July 31, 2016	90,833		$	7.27
Granted	320,000		7.70
Vested	(70,962	)	6.70
Non-vested at July 31, 2017	339,871		$	7.93
Vested	(50,969	)	9.29
Non-vested at December 31, 2017	288,902		$	7.87
Vested	(150,552	)	7.92
Non-vested at December 31, 2018	138,350		$	7.84

During the year ended December 31, 2018 the Company recognized approximately $0.9 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. During the five months ended December 31, 2017, the Company recognized approximately $0.6 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. During the year ended July 31, 2017 the Company recognized approximately $1.3 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. At December 31, 2018, there was $0.2 million of unrecognized compensation costs related to non-vested stock options. 

The 2017 Plan

The assumptions used in the valuation of options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 are as follows:

	Year Ended 12/31/18		Five Months Ended 12/31/17
Market value of stock on measurement date	$14.31 to $24.84		$18.16 to $49.93
Risk-free interest rate	2.47 % to 3.05%		2.06 % to 2.47%
Dividend yield	—	%	—	%
Volatility factor	121% to 324%		324% to 329%
Term (years)	5.5 to 10.0		10.00

Stock option activity for options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2017	—
Total options authorized	400,000
Granted	(214,000	)	$	37.62
Expired	—
Forfeited	40,000		$	49.93
Outstanding at December 31, 2017	174,000		$	34.78	9.71	$	14,430
Exercisable at December 31, 2017	—
Annual additional options authorized	101,431
Granted	(196,550	)	$	23.26
Expired	—
Forfeited	27,000		$	24.84
Options available at December 31, 2018	157,881
Outstanding at December 31, 2018	343,550		$	28.97	8.95	$	840

A summary of the status of the Company’s non-vested options granted under the 2017 Plan as of December 31, 2018 and changes during the year ended December 31, 2018 and the five months ended December 31, 2017 are presented in the following table:

	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Non-vested at July 31, 2017 and 2016	—
Granted	214,000		$	37.62
Forfeited	(40,000	)	$	49.93
Non-vested at December 31, 2017	174,000		$	34.78
Granted	196,550		$	23.26
Forfeited	(27,000	)	$	24.84
Non-vested at December 31, 2018	288,047		$	27.62
Vested at December 31, 2018	55,503		$	34.66

During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized approximately $4.9 million and $1.2 million of non-cash expense related to vested options granted during these periods. As of December 31, 2018, there was approximately $3.6 million of unrecognized compensation costs related to non-vested stock options that were granted under the 2017 Plan.

Warrants

Warrant activity for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 is presented in the table below:

	Number of Warrants		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2016	1,215,385		$	17.90	2.86	$	—
Granted	45,000		10.00
Expired	(166,585	)	$	46.37
Forfeited	(325,000	)	15
Outstanding at July 31, 2017	768,800		$	12.50	3.04	$	1,184,000
Exercised	(356,790	)	14.83
Forfeited	(55,000	)	$	15.00
Outstanding at December 31, 2017	357,010		$	9.78	5.57	$	4,708,020
Exercised	(3,400	)	$	10.00
Outstanding at December 31, 2018	353,610		$	9.78	4.60	$	1,651,165

XML

Sale of Royalties

12 Months Ended

Dec. 31, 2018

Sale Of Royalties [Abstract]

Sale of Royalties

Sale of Royalties

On December 13, 2016, the Company entered into the SWK Purchase Agreement with SWK pursuant to which the Company sold, and SWK purchased, the Company’s right to receive, commencing on October 1, 2016, all Royalties (as defined in the SWK Purchase Agreement) arising from the sale by Adapt, pursuant to the Adapt Agreement of NARCAN or any other intranasal naloxone opioid overdose reversal treatment, up to (i) $20,625,000 million and then the Residual Royalty thereafter or (ii)$26,250,000, if Adapt has received in excess of $25,000,000 of cumulative Net Sales for any two consecutive fiscal quarters during the period from October 1, 2016 through September 30, 2017 from the sale of NARCAN® (the “Earn Out Milestone”), and then the Residual Royalty thereafter. The Residual Royalty is defined in the Purchase Agreement as follows: (i) if the Earn Out Milestone is paid, then SWK will receive 10% of all Royalties; provided, however, if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing, then SWK shall receive 5% of all Royalties after such date, and (ii) if the Earn Out Milestone is not paid, then SWK will receive 7.86% of all Royalties; provided, however, that if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing, then SWK will receive 3.93% of all Royalties after such date. Under the Purchase Agreement, the Company received an upfront purchase price of $13,750,000 less $40,000 of legal fees at Closing, and will receive an additional $3,750,000 if the Earn Out Milestone is achieved (the “Purchase Price”). The Purchase Agreement also grants SWK (i) the right to receive the statements produced by Adapt pursuant to Section 5.6 of the Adapt Agreement and (ii) the right, to the extent possible under the Purchase Agreement, to cure any breach of or default under any Product Agreement by the Company. Under the Purchase Agreement, the Company granted SWK a security interest in the Purchased Assets in the event that the transfer contemplated by the Purchase Agreement is held not to be a sale. The Purchase Agreement also contains other representations, warranties, covenants and indemnification obligations that are customary for a transaction of this nature. Absent fraud by the Company, the Company’s indemnification obligations under the Purchase Agreement shall not exceed, individually or in the aggregate, an amount equal to the Purchase Price plus an annual rate of return of 12% (compounded monthly) as of any date of determination, with a total indemnification cap not to exceed 150% of the Purchase Price, less all Royalties received by SWK, without duplication, under the Purchase Agreement prior to and through resolution of the applicable claim. All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

During the fiscal year ended July 31, 2017, the Company recognized $17.46 million as revenue because (i) the executed agreement constituted persuasive evidence of an arrangement, (ii) the Company had no current or future performance obligations, (iii) the total consideration was fixed and known at the time of its execution and there were no rights of return, (iv) the $13.71 million cash proceeds received in December 2016 were non-refundable, and (v) the $3,750,000 million Earn Out Milestone that was accrued as an account receivable as of July 31, 2017, and subsequently paid to the Company on August 9, 2017, was earned as of July 31, 2017.

As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Purchase Agreement has been met. After December 31, 2017, SWK's share of the royalty and milestone payments are reduced to 10% of amounts earned from Adapt.

XML

Potomac Amendment

12 Months Ended

Dec. 31, 2018

Investments, All Other Investments [Abstract]

Potomac Amendment

Potomac Amendment

On April 12, 2017 (the “Potomac Effective Date”), the Company and Potomac Construction Limited (“Potomac”) entered into an amendment (the “Potomac Amendment”) to the following investment agreements with Potomac to provide for (in the case of Potomac Agreement No. 1 and Potomac Agreement No. 2 ), or modify (in the case of Potomac Agreement No. 3, Potomac Agreement No. 4 and Potomac Agreement No. 5 (each as defined below)), the Company’s right to buyback the Interest (as defined in each Potomac Amendment) in each Potomac Agreement (as defined below) from Potomac: (i) that certain Investment Agreement, dated as of April 16, 2013, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 1”); (ii) that certain Investment Agreement, dated as of May 30, 2013, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 2”); (iii) that certain Investment Agreement, dated as of September 9, 2014, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 3”); (iv) that certain Investment Agreement, dated as of October 31, 2014, as clarified by that certain letter agreement dated October 31, 2014 (“Potomac Agreement No. 4”); and (v) that certain Investment Agreement, dated as of December 8, 2015 (“Potomac Agreement No. 5”) ((i)–(v) collectively, the “Potomac Agreements” and, each, a “Potomac Agreement”).

As of December 31, 2018, the buyback provisions under the Potomac Amendment for the Potomac Agreement No. 1 and Potomac Agreement No. 2 have expired.

Pursuant to the Potomac Amendment, from the Potomac Effective Date until September 30, 2019, the five year anniversary of the date of the Investment (as defined in Potomac Agreement No. 3) (the “Potomac Interest No. 3 Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Interest (as defined in Potomac Agreement No. 3) from Potomac upon written notice to Potomac (the “Potomac Interest No. 3 Buyback Notice”), at the price of $500,000 per 0.98% of Interest (the “Potomac Interest No. 3 Buyback Amount”); provided, that in the event the Potomac Interest No. 3 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No. 3 Buyback Amount within ten business days of providing the Potomac Interest No. 3 Buyback Notice; provided, further, that in the event the Potomac Interest No. 3 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 3 Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Interest No. 3 Buyback Amount within ten business days of providing the Potomac Interest No. 3 Buyback Notice.

Pursuant to the Potomac Amendment, from the Potomac Effective Date until November 28, 2019, the five year anniversary of the date of the Investment (as defined in Potomac Agreement No. 4) (the “Potomac Interest No. 4 Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Interest (as defined in Potomac Agreement No. 4) from Potomac upon written notice to Potomac (the “Potomac Interest No. 4 Buyback Notice”), at the price of $500,000 per 0.98% of Interest (the “Potomac Interest No. 4 Buyback Amount”); provided, that in the event the Potomac Interest No. 4 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No. 4 Buyback Amount within ten business days of providing the Potomac Interest No. 4 Buyback Notice; provided, further, that in the event the Potomac Interest No. 4 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 4 Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Interest No. 4 Buyback Amount within ten business days of providing the Potomac Interest No. 4 Buyback Notice.

Pursuant to the Potomac Amendment, from the Potomac Effective Date until December 17, 2020, the five year anniversary of the date of the Investment (as defined in Potomac Agreement No. 5) (the “Potomac Interest No. 5 Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Interest (as defined in Potomac Agreement No. 5) from Potomac upon written notice to Potomac (the “Potomac Interest No. 5 Buyback Notice”), at the price of $500,000 per 0.75% of Interest (the “Potomac Interest No. 5 Buyback Amount”); provided, that in the event the Potomac Interest No. 5 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No. 5 Buyback Amount within ten business days of providing the Potomac Interest No. 5 Buyback Notice; provided, further, that in the event the Potomac Interest No. 5 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 5 Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Interest No. 5 Buyback Amount within ten business days of providing the Potomac Interest No. 5 Buyback Notice.

Pursuant to the Potomac Amendment, if the Additional Investment (as defined in Potomac Agreement No. 5) is funded by Potomac, then, from the date of funding of such Additional Investment until the five year anniversary of such funding date (the “Potomac Additional Interest Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Additional Interest (as defined in Potomac Agreement No. 5) upon written notice to Potomac (the “Potomac Additional Interest Buyback Notice”), at the price of $500,000 per 0.75% of Additional Interest (the “Potomac Additional Interest Buyback Amount”); provided, that in the event the Potomac Additional Interest Buyback Notice is provided within 3.25 years of the date of the Additional Investment, the Company shall pay Potomac 1.8 times the Potomac Additional Interest Buyback Amount within ten business days of providing the Potomac Additional Interest Buyback Notice; provided, further, that in the event the Potomac Additional Interest Buyback Notice is provided after 3.25 years of the date of the Additional Investment and on or prior to the Potomac Additional Interest Buyback Expiration Date, the Company shall pay Potomac 3.15 times the Potomac Additional Interest Buyback Amount within ten business days of providing the Potomac Additional Interest Buyback Notice. However, Potomac opted, at its sole discretion, not to make the $1,000,000 Additional Investment, and the deadline for Potomac to make the Additional Investment has passed.

In consideration for Potomac entering into the Potomac Amendment, the Company agreed to pay Potomac, within 15 business days of the Potomac Effective Date, $159,500. The Company recorded the $159,500 payment to Potomac as a non-recurring general and administrative expense during the year ended July 31, 2017.

Furthermore, the Company granted Potomac the right to receive 2.5525% of the Net Profit (as defined in the Potomac Agreements) generated from DAVINCI (as defined in the Potomac Amendment). In the event that the Company is sold, Potomac will receive 2.5525% of the net proceeds of such sale, after the deduction of all expenses and costs related to such sale. Additionally, from the Potomac Effective Date until the four year anniversary of the Potomac Effective Date (the “Potomac DAVINCI Interest Buyback Expiration Date”), the Company may buyback all or any portion of the DAVINCI Interest (as defined in the Potomac Amendment) upon written notice to Potomac (the “Potomac DAVINCI Interest Buyback Notice), at the price of $382,875 per 2.5525% of DAVINCI Interest (the “Potomac DAVINCI Interest Buyback Amount”); provided, that in the event the Potomac DAVINCI Interest Buyback Notice is provided within 2.5 years of the Potomac Effective Date, the Company shall pay Potomac two times the Potomac DAVINCI Interest Buyback Amount within ten business days of providing the Potomac DAVINCI Interest Buyback Notice; provided, further, that, in the event the Potomac DAVINCI Interest Buyback Notice is provided after 2.5 years of the Potomac Effective Date and on or prior to the Potomac DAVINCI Interest Buyback Expiration Date, the Company will pay Potomac 3.5 times the Potomac DAVINCI Interest Buyback Amount within ten business days of providing the Potomac DAVINCI Interest Buyback Notice.

Furthermore, pursuant to the Potomac Amendment, the Company and Potomac agree that, upon the Company’s receipt after the Potomac Effective Date of at least $3 million from (i) SWK pursuant to the Purchase Agreement with SWK, or (ii) Adapt pursuant to the Adapt Agreement, fifty percent of all actual amounts received by the Company from SWK shall be used in determining the Net Profit.

XML

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recognizes deferred tax assets and liabilities using the asset and liability method. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. This method requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2018, the Company’s deferred tax assets relate to net operating loss (“NOL”) carryforwards that were derived from operating losses and stock based compensation from prior years. A full valuation allowance has been applied to the Company’s deferred tax assets. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized. At December 31, 2018, the Company had federal and state net operating loss carry forwards, which are available to offset future taxable income, of 5,753,943. The Company’s NOL carryforwards can be carried forward to offset future taxable income for a period of 20 years for each tax year’s loss. These NOL carryforwards begin to expire in 2026. No provision was made for federal income taxes as the Company has significant NOLs. All of the Company's income tax years remained open for examination by taxing authorities. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate to the net loss before provision for income taxes for the following reasons:

	December 31, 2018			December 31, 2017			July 31, 2017
Net loss before taxes at statutory rate	$	(6,015,352	)	$	919,111		$	2,992,311
Permanent items	1,471,275			4,056			5,828
Temporary items	2,444,934			(698,380		)	385,910
Income tax expense at statutory rate	(2,099,143		)	224,787			3,384,049
Valuation allowance	2,150,426			(55,624		)	(2,833,575		)
Income tax expense per books	$	51,283		$	169,163		$	550,474

Net deferred tax assets consist of the following components as of: 

	December 31, 2018			December 31, 2017			July 31, 2017
Net operating loss carryover at statutory rate	$	5,753,943		$	2,869,510		$	4,936,604
Stock-based compensation expense	4,939,759			7,404,037			9,922,093
Fixed asset depreciation	—			(353		)	(2,470		)
Intangibles amortization	(1,148		)	(1,012		)	—
Other	2,046,961			(290,775		)	—
Total	$	12,739,515		$	9,981,407		$	14,856,227
Valuation allowance	$	(12,739,515	)	$	(9,981,407	)	$	(14,856,227	)
Net deferred tax asset	$	—		$	—		$	—

The Company had no uncertain tax positions at December 31, 2018, December 31, 2017 and July 31, 2017.

On December 22, 2017, H.R. 1, formally known as the Tax Cut and Jobs Act (the "Act") was enacted into law. The Act provides for significant tax law changes and modifications with varying effective dates. The major change that affects the Company is reducing the corporate income tax rate from 35% to 21%. In connection with the Company’s initial analysis of the impact of the Tax Act, no discrete net tax benefit or expense in the period ended December 31, 2017 is recorded. This is primarily due to the change in valuation allowance offsets a net benefit or expense for the corporate rate reduction. Open federal tax years are July 31, 2015, July 31, 2016, July 31, 2017, and December 31, 2017. Open state tax years are July 31, 2014, July 31, 2015, July 31, 2016, July 31, 2017 and December 31, 2017.

XML

Comparative Financials (Unaudited)

12 Months Ended

Dec. 31, 2018

Comparative Financial Information Disclosure [Abstract]

Comparative Financials (Unaudited)

Comparative Financials (Unaudited)

The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. The unaudited consolidated results of operations for the year ended December 31, 2017 is as follows:

	For the Year Ended
(in thousands)	December 31, 2017
		(unaudited)
Revenue:
Royalty and licensing revenue	$	15,447
Treatment investment revenue		105
Grant and contract revenue		—
Total revenue		15,552
Operating expenses:
General and administrative		10,313
Research and development		4,857
Royalty expense		1,408
Selling expense		851
Total operating expenses		17,429
Income from operations		(1,877	)
Other income, net		68
Income before provision of income taxes		(1,809	)
Provision for income taxes		797
Net loss	$	(2,606	)

XML

Subsequent Events

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On January 3, 2019 and January 15, 2019, the Company granted options to employees to purchase in aggregate 76,500 and 13,200 shares of the Company’s Common Stock at an exercise price of $13.61 and $14.62 per share, respectively, which represents the per share closing price of the Company’s Common Stock on the dates of grant. These options were issued under the 2017 Plan and have a ten year term. The options vest as follows: 1/48th of the option shares vest every month on the anniversary of the grant date.

From January 1, 2019 through March 15, 2019, the Company issued a total of 80,000 shares of Common Stock in connection with stock option exercises. As a result of the stock option exercises, the Company received aggregate proceeds of $601,250.

On February 21, 2019, the Company announced that its Phase 2 clinical trial evaluating OPNT001, a naloxone nasal spray for the treatment of bulimia nervosa did not meet the primary endpoint of reducing the number of binging days from baseline to week eight. Key secondary endpoints were also not met. Based on these results, the Company will not devote additional resources to the development of OPNT001.

On March 18, 2019, the Company and Adapt entered into Amendment No. 2 to the License Agreement. Amendment No. 2 sets forth the timing and amounts that Adapt is allowed to deduct going forward from royalties and milestones payable to the Company and SWK in relation to payments that Adapt has paid or will pay under a license agreement with a Third Party (as defined in the License Agreement), as further discussed in Note 9. Licensee Fee Payable. As provided in Amendment No. 2, going forward Adapt may only deduct a maximum of $9.0 million from royalties and milestones payable to the Company and SWK under the License Agreement in regards to the Third Party license agreement entered into by Adapt on or around February 28, 2018. Under Amendment No. 2, with respect to $6.5 million of the $9 million, Adapt may only deduct a maximum of $2.0 million in any one calendar quarter from the royalties payable to the Company under the License Agreement and SWK under the SWK Purchase Agreement. As provided in the License Agreement, if Net Narcan Sales (as defined in the License Agreement) exceeds $200 million in any calendar year, the Company and SWK will be due a milestone of $15.0 million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to the Company and SWK, Adapt may deduct $2.5 million from this $15.0 million milestone, along with any outstanding balance of the $6.5 million that has not already been deducted in previous quarters.

Amendment No. 2 also amended Section 5.5 of the License Agreement to provide that Adapt may still enter into Third Party licensing arrangements; however, in order to exercise its right to deduct any payments with respect thereto, with certain specified exceptions, after March 18, 2019, Adapt will need the consent of the Company that the licensing arrangement is acceptable under the provisions of Amendment No. 2 (in particular the amended Section 5.5 set forth therein). In all instances, any Third Party licensing arrangement and associated deductions taken by Adapt must comply with the provisions of Section 5.5 as amended by Amendment No. 2.

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”).

Principles of Consolidation

 The consolidated financial statements have been prepared in accordance with GAAP and include the accounts for the Company and its wholly-owned subsidiary, Opiant Pharmaceuticals UK Limited. All inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

The Company routinely assesses the recoverability of receivables to determine their collectability by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. The Company determines its allowance for doubtful accounts by considering such factors as the length of time balances are past due, the Company’s previous loss history, the customer’s current ability to pay its obligations to the Company and the condition of the general economy and the industry as a whole.

Long-Lived Assets

The Company follows ASC 360, Property, Plant, and Equipment, for its fixed assets. Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method over estimated useful lives (3 to7 years). The Company’s capitalizes all asset purchases greater than $2,500 having a useful life greater than one year. The Company follows ASC 350, Intangibles – Goodwill and Other for its intellectual property asset. Intellectual property consists of patents which are stated at their fair value acquisition cost. Amortization is calculated by the straight-line method over their estimated useful lives (20 years). The Company recorded depreciation and amortization of $2,556 for the year ended December 31, 2018, $2,142 for the five months ended December 31, 2017 and $5,140 and for the year ended July 31, 2017.

Long-lived assets such as property and equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.

Earnings (Loss) per Share

The Company follows ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of shares of Common Stock outstanding during the respective period presented in the Company’s accompanying consolidated financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of Common Stock equivalents (primarily outstanding options and warrants).

Common Stock equivalents represent the dilutive effect of the assumed exercise of outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the Common Stock equivalents are considered dilutive based upon the Company’s net income position at the calculation date.

Research and Development Costs

The Company follows ASC 730, Research and Development, and expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Transactions occur in British Pounds and management has adopted ASC 830, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Stock-Based Compensation

ASC 718 Compensation – Stock Compensation prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Fair Value of Financial Instruments

ASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1)market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). 

The three levels of the fair value hierarchy are described below: 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

The carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The fair value of the Company’s note payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. 

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Revenue Recognition, Revenue from Contract with Customer

The Company generates a large majority of revenue from the agreement with Adapt. During the year ended December 31, 2018 and the five months ended December 31, 2017 the Company recognized 95% and 99%, respectively of revenue from its agreement with Adapt.

In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU amends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer of goods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services.

On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers using the modified retrospective method, and the Company determined the new guidance does not change the Company's policy of revenue recognition. The Company's primary source of revenue is through the recognition of royalty and milestone payments from Adapt. Milestone revenue is recognized upon successful accomplishment of certain sales targets set forth in the Adapt Agreement. Royalty revenue is determined based on the agreed upon royalty rate applied to NARCAN sales reported by Adapt.There are no performance obligations by the Company and the Company recognizes revenue according to the royalty report provided by Adapt on quarterly basis.

In regards to treatment revenue, the Company received certain investments from investors in return for an interest in its existing treatments. Investors carry an option to exchange investment into shares of the Company. Revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Once the option has expired, the Company determined its performance obligations under the agreement which typically is to perform R&D services related to treatments and recognizes revenue over a period of time which is usually the expected research and development period. The treatment revenue is disaggregated by program treatments. (See Note 8 to the Consolidated Financial Statements - Deferred Revenue).

Revenue Recognition, Deferred Revenue

In regards to treatment revenue, the Company received certain investments from investors in return for an interest in its existing treatments. Investors carry an option to exchange investment into shares of the Company. Revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Once the option has expired, the Company determined its performance obligations under the agreement which typically is to perform R&D services related to treatments and recognizes revenue over a period of time which is usually the expected research and development period. The treatment revenue is disaggregated by program treatments. (See Note 8 to the Consolidated Financial Statements - Deferred Revenue).

In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements, ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. The Company has evaluated its grant with NIH and contract with BARDA and determined they are non-exchange transactions and fall withing the scope of ASU 958, and revenue should be recognized in accordance with Topic 958 guidance. Accordingly, the Company recognizes revenue from its grant and contract in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.

Licensing Agreement

Pursuant to the Adapt Agreement, the Company provided a global license to develop and commercialize the Company’s intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®.

On December 15, 2014, the Company entered into a License Agreement with Adapt. Pursuant to the License Agreement, we provided a global license to develop and commercialize our intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®. In addition, on the SWK Closing Date, in connection with the SWK Purchase Agreement, as disclosed below, we entered into the Adapt Amendment which amends the terms of the License Agreement relating to the grant of a commercial sublicense outside of the United States and diligence efforts for commercialization of our Opioid Overdose Reversal Treatment Product. Under the terms of the Adapt Amendment, Adapt is required to use commercially reasonable efforts to commercialize the Opioid Overdose Reversal Treatment Product in the United States In the event that Adapt wishes to grant a commercial sublicense to a third party in the European Union or the United Kingdom, we have agreed to negotiate an additional amendment to the License Agreement to include reduced financial terms with respect to the commercial sublicense.

With respect to investments in interests in treatments, if an agreement provides an option that allows the investor in the treatment to convert an interest in a treatment into shares of Common Stock of the Company, then revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement are reviewed and evaluated under ASC 606. In the event the investor chooses to convert interests into shares of Common Stock, that transaction will be accounted for similar to a sale of shares of Common Stock for cash.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

In June 2018, the FASB issued ASU No. 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting," ("ASU 2018-07"), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 is effective for financial statements issued for annual periods beginning after December 15, 2018, and for the interim periods therein. The adoption of ASU 2018-07 is not expected to have a significant impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract" (ASU No. 2018-15). The new standard describes the accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement (CCA). Under the new guidance, customers will assess if a CCA includes a software license and if a CCA does include a software license, implementation and set-up costs will be accounted for consistent with existing internal-use software implementation guidance. Implementation costs associated with a CCA that does not include a software license would be expensed to operating expenses. The standard also provides classification guidance on these implementation costs as well as additional quantitative and qualitative disclosures. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim periods. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company is assessing this standard and currently believes it will not have any material impact on the consolidated financial statements.

In 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This new standard permits entities to reclassify to retained earnings the tax effects stranded in accumulated other comprehensive income ("AOCI") as a result of U.S. tax reform. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company has evaluated the impact and timing of the this standard and has concluded it will not impact the consolidated financial statements.

In 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.The standard requires that an employer report the service cost component in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of operating profit. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adopted this ASU effective January 1, 2018 and has concluded it will not impact the consolidated financial statements.

     In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842) The new standard requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use ("ROU") model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The standard is effective on January 1, 2019, with early adoption permitted. The Company adopted the new standard on January 1, 2019, and there is no impact from the adoption of this standard as the current office leases are less than 12 months.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” ("ASU 2016-18”). The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The purpose of Update No. 2016-18 is to clarify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents. The Company adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financial statements.

In October 2016, the FASB issued updated guidance related to the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory. This guidance is effective for the first quarter of tax year 2018. The Company has adopted the guidance and determined that there is no impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230)” (“ASU 2016-15”), which seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. For public entities, Update 2016-15 becomes effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning December 15, 2016, and interim periods within those fiscal years. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The guidance provided an entity-wide accounting policy election to account for forfeitures as they occur. The Company has elected to record forfeitures as they occur. The Company has evaluated the requirements of the new guidance and has determined that the impact is not material to its consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2017-17") to simplify the presentation of deferred income taxes.ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company has adopted the provisions of Update 2016-15 and determined that there is no impact on its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." The amendments in this ASU are intended to provide guidance on the responsibility of reporting entity management. Specifically, this ASU provides guidance to management related to evaluating whether there is substantial doubt about the reporting entity’s ability to continue as a going concern and about related financial statement note disclosures. Although the presumption that a reporting entity will continue to operate as a going concern is fundamental to the preparation of financial statements, prior to the issuance of this ASU, there was no guidance in United States generally accepted accounting principles (United States GAAP) related to the concept. Due to the lack of guidance in United States GAAP, practitioners and their clients often faced challenges in determining whether, when, and how a reporting entity should disclose the relevant information in its financial statements. As a result, the FASB issued this guidance to require management evaluation and potential financial statement disclosures. This ASU is effective for financial statements with periods ending after December 15, 2016. The Company adopted the ASU during 2017 and performed going concern evaluations for its 2018 and 2017 year-end financial statements.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its consolidated financial statements.

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table illustrates the dilutive effect of the assumed exercise of the Company’s outstanding stock options and warrants, using the treasury stock method, as of December 31, 2017 and July 31, 2017, respectively:

	Year Ended			Five Months ended		Year Ended
Numerator:	December 31, 2018			December 31, 2017		July 31, 2017
Net Income (loss)	$	(21,195,316	)	$	1,379,379	$	6,580,613
Denominator:
Denominator for basic income (loss) per share - weighted average shares	2,985,335			2,077,663		2,014,540
Effect of dilutive securities:
Equity incentive plans	—			2,315,475		221,311
Denominator for diluted income (loss) per share	2,985,335			4,393,138		2,235,851
Income (loss) per share - Basic	$	(7.10	)	$	0.66	$	3.27
Income (loss) per share - Diluted	$	(7.10	)	$	0.31	$	2.94

XML

Deferred Revenue (Tables)

12 Months Ended

Dec. 31, 2018

Deferred Revenue Disclosure [Abstract]

Schedule of Deferred Revenue Activity

The following is a summary of the Company’s deferred revenue activity for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017:

(in thousands)	NIH Grant				BED			Other Opioid Treatments			Total
Balance as of July 31, 2016		$	—		$	1,000		$	1,600		$	2,600
Recognized as revenue		—			(39		)	—			(39		)
Balance as of July 31, 2017		—			961			1,600			2,561
Recognized as revenue		—			(66		)	—			(66		)
Balance as of December 31, 2017		—			895			1,600			2,495
Cash Received NIH		1,000			—			—			1,000
Converted to Equity		—			—			(1,600		)	(1,600		)
Recognized as revenue		(432		)	(251		)	—			(683		)
Balance as of December 31, 2018		$	568		$	644		$	—		$	1,212

Deferred Revenue, by Arrangement

urrent and long-term deferred revenue are detailed in the following table:

Deferred Revenue (in thousands)	NIH Grant			BED		Other Opioid Treatments		Total
Current portion		$	568	$	644	$	—	$	1,212
Long-term portion		—		—		—		—
Total		$	568	$	644	$	—	$	1,212

XML

Royalty Payable (Tables)

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Schedule of Royalty Payable

The following table sets forth the royalty payable to certain investors as of December 31, 2018 and December 31, 2017:

(in thousands)	Net Profit %		December 31, 2018		December 31, 2017
Potomac	10.2%	$	422	$	860
LYL	5.0%		206		421
Welmers	1.5%		62		127
Foundation	6.0%		248		—
Pendergast	1.0%		60		—
Royalty payable	23.7%	$	998	$	1,408

XML

Stockholder's Equity (Tables)

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

Schedule of Assumptions Used in the Valuation

The assumptions used in the valuation of options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 are as follows:

	Year Ended 12/31/18		Five Months Ended 12/31/17
Market value of stock on measurement date	$14.31 to $24.84		$18.16 to $49.93
Risk-free interest rate	2.47 % to 3.05%		2.06 % to 2.47%
Dividend yield	—	%	—	%
Volatility factor	121% to 324%		324% to 329%
Term (years)	5.5 to 10.0		10.00

The assumptions used in the valuation for the Pre-2017 Non-Qualified Stock Options for the five months ended December 31, 2017 and for the year ended July 31, 2017 were as follows:

	December 31, 2017			July 31, 2017
Market value of stock on measurement date	$	36.79		$5.61 to 13.00
Risk-free interest rate	1.47		%	0.88-2.55%
Dividend yield	0		%	0	%
Volatility factor	96		%	76-348%
Term	2.12 years			2.28-10 years

Share-based Compensation, Stock Options, Activity

Stock option activity for the Pre-2017 Non-Qualified Stock Options for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 is presented in the table below: 

	Number of Shares		Weighted- average Exercise Price	Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2016	4,635,000		8.79	7.39	$	2,731,250
Granted	320,000		9.38
Expired	(5,000	)	10.00
Forfeited	(1,180,000	)	11.03
Outstanding at July 31, 2017	3,770,000		8.13	6.87	$	19,139,625
Exercised	(217,500	)	10.22
Forfeited	(572,000	)	11.51
Outstanding at December 31, 2017	2,980,500		7.33	7.06	$	46,606,210
Exercised	(95,000	)	8.24
Forfeited	—		—
Outstanding at December 31, 2018	2,885,500		7.30	6.04	$	20,633,100
Exercisable at December 31, 2018	2,747,150		7.20	6.01	$	19,928,663

Stock option activity for options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2017	—
Total options authorized	400,000
Granted	(214,000	)	$	37.62
Expired	—
Forfeited	40,000		$	49.93
Outstanding at December 31, 2017	174,000		$	34.78	9.71	$	14,430
Exercisable at December 31, 2017	—
Annual additional options authorized	101,431
Granted	(196,550	)	$	23.26
Expired	—
Forfeited	27,000		$	24.84
Options available at December 31, 2018	157,881
Outstanding at December 31, 2018	343,550		$	28.97	8.95	$	840

Schedule of Nonvested Share Activity

A summary of the status of the Company’s non-vested options granted under the 2017 Plan as of December 31, 2018 and changes during the year ended December 31, 2018 and the five months ended December 31, 2017 are presented in the following table:

	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Non-vested at July 31, 2017 and 2016	—
Granted	214,000		$	37.62
Forfeited	(40,000	)	$	49.93
Non-vested at December 31, 2017	174,000		$	34.78
Granted	196,550		$	23.26
Forfeited	(27,000	)	$	24.84
Non-vested at December 31, 2018	288,047		$	27.62
Vested at December 31, 2018	55,503		$	34.66

A summary of the status of the Company's non-vested Pre-2017 Non-Qualified Stock Options as of December 31, 2018 and changes during the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 are presented below:

Non-vested options	Number of Options		Weighted Average Grant Date Fair Value
Non-vested at July 31, 2016	90,833		$	7.27
Granted	320,000		7.70
Vested	(70,962	)	6.70
Non-vested at July 31, 2017	339,871		$	7.93
Vested	(50,969	)	9.29
Non-vested at December 31, 2017	288,902		$	7.87
Vested	(150,552	)	7.92
Non-vested at December 31, 2018	138,350		$	7.84

Share-based Compensation, Warrant Activity

Warrant activity for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 is presented in the table below:

	Number of Warrants		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2016	1,215,385		$	17.90	2.86	$	—
Granted	45,000		10.00
Expired	(166,585	)	$	46.37
Forfeited	(325,000	)	15
Outstanding at July 31, 2017	768,800		$	12.50	3.04	$	1,184,000
Exercised	(356,790	)	14.83
Forfeited	(55,000	)	$	15.00
Outstanding at December 31, 2017	357,010		$	9.78	5.57	$	4,708,020
Exercised	(3,400	)	$	10.00
Outstanding at December 31, 2018	353,610		$	9.78	4.60	$	1,651,165

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate to the net loss before provision for income taxes for the following reasons:

	December 31, 2018			December 31, 2017			July 31, 2017
Net loss before taxes at statutory rate	$	(6,015,352	)	$	919,111		$	2,992,311
Permanent items	1,471,275			4,056			5,828
Temporary items	2,444,934			(698,380		)	385,910
Income tax expense at statutory rate	(2,099,143		)	224,787			3,384,049
Valuation allowance	2,150,426			(55,624		)	(2,833,575		)
Income tax expense per books	$	51,283		$	169,163		$	550,474

Schedule of Deferred Tax Assets and Liabilities

Net deferred tax assets consist of the following components as of: 

	December 31, 2018			December 31, 2017			July 31, 2017
Net operating loss carryover at statutory rate	$	5,753,943		$	2,869,510		$	4,936,604
Stock-based compensation expense	4,939,759			7,404,037			9,922,093
Fixed asset depreciation	—			(353		)	(2,470		)
Intangibles amortization	(1,148		)	(1,012		)	—
Other	2,046,961			(290,775		)	—
Total	$	12,739,515		$	9,981,407		$	14,856,227
Valuation allowance	$	(12,739,515	)	$	(9,981,407	)	$	(14,856,227	)
Net deferred tax asset	$	—		$	—		$	—

XML

Comparative Financials (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Comparative Financial Information Disclosure [Abstract]

Condensed Financial Statements

The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. The unaudited consolidated results of operations for the year ended December 31, 2017 is as follows:

	For the Year Ended
(in thousands)	December 31, 2017
		(unaudited)
Revenue:
Royalty and licensing revenue	$	15,447
Treatment investment revenue		105
Grant and contract revenue		—
Total revenue		15,552
Operating expenses:
General and administrative		10,313
Research and development		4,857
Royalty expense		1,408
Selling expense		851
Total operating expenses		17,429
Income from operations		(1,877	)
Other income, net		68
Income before provision of income taxes		(1,809	)
Provision for income taxes		797
Net loss	$	(2,606	)

XML

Organization and Basis of Presentation (Details) - $ / shares	Oct. 02, 2017	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017	Mar. 31, 2017
Business Acquisition [Line Items]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Opiant Pharmaceuticals, Inc.
Business Acquisition [Line Items]
Conversion of stock, shares issued (in shares)	1

XML

Liquidity and Financial Condition (Details) - USD ($)		5 Months Ended	12 Months Ended
	Sep. 27, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Net Income (loss)		$ 1,379,379	$ (21,195,316)	$ (2,606,000)	$ 6,580,613
Accumulated deficit		$ 53,225,350	74,420,666	$ 53,225,350	$ 54,604,729
Working capital			$ 19,500,000
Sale of stock, number of shares issued (in shares)			239,270
Sale of stock, consideration received			$ 4,180,000
Sale of stock, gross proceeds			$ 4,310,000
Public Offering
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Sale of stock, number of shares issued (in shares)	811,764
Sale of stock, price per share (in dollars per share)	$ 17.00
Sale of stock, consideration received	$ 13,000,000
Over-Allotment Option
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Sale of stock, number of shares issued (in shares)	105,882

XML

Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017	Jul. 31, 2016
Accounting Policies [Abstract]
Cash and cash equivalents	$ 24,613,638	$ 8,115,903	$ 6,872,555	$ 1,481,393

XML

Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($)	Jul. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Concentration Risk [Line Items]
Allowance for doubtful accounts	$ 0	$ 0	$ 0
Accounts Receivable | Customer Concentration Risk | SWK Funding LLC
Concentration Risk [Line Items]
Percent of revenue recognized	100.00%

XML

Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Property, Plant and Equipment [Line Items]
Capitalized asset purchase price (greater than)		$ 2,500
Finite-lived intangible asset, useful life		20 years
Depreciation and amortization	$ 2,142	$ 2,556	$ 5,140
Impairment of long-lived assets	$ 0	$ 0	$ 0
Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life		3 years
Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life		7 years

XML

Summary of Significant Accounting Policies - Schedule of Earnings (Loss) Per Share (Details) - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017
Accounting Policies [Abstract]
Potentially dilutive common stock equivalents		3,582,560
Basic:
Net Income (loss)	$ 1,379,379	$ (21,195,316)	$ (2,606,000)	$ 6,580,613
Denominator:
Denominator for basic income (loss) per share - weighted average shares (in shares)	2,077,663	2,985,335		2,014,540
Effect of dilutive securities
Equity incentive plans (in shares)	2,315,475	0		221,311
Denominator for diluted income (loss) per share (in shares)	4,393,138	2,985,335		2,235,851
Income (loss) per share - Basic (in dollars per share)	$ 0.66	$ (7.10)		$ 3.27
Income (loss0 per share - Diluted (in dollars per share)	$ 0.31	$ (7.10)		$ 2.94

XML

Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Millions	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Accounting Policies [Abstract]
Share-based compensation	$ 1.8	$ 5.7	$ 1.7

XML

Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2016
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial liabilities, fair value	$ 0	$ 0	$ 0

XML

Summary of Significant Accounting Policies - Related Parties (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2016
Accounting Policies [Abstract]
Related party balance	$ 0	$ 0	$ 0

XML

Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($)		1 Months Ended	5 Months Ended	12 Months Ended
	Dec. 13, 2016	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017
Revenue Recognition, Milestone Method [Line Items]
Royalty and licensing revenue			$ 11,696,676	$ 13,262,321	$ 15,447,000	$ 18,406,142
SWK Purchase Agreement
Revenue Recognition, Milestone Method [Line Items]
Legal fees	$ 40,000				40,000
Milestone payment receivable under purchase agreement	3,750,000				3,750,000
Proceeds from royalties received		$ 13,710,000			17,460,000	$ 17,460,000
Upfront purchase price received under purchase agreement	$ 13,750,000				$ 13,750,000
Sales Revenue, Net [Member] | Adapt Agreement
Revenue Recognition, Milestone Method [Line Items]
Percent of revenue recognized			99.00%	95.00%

XML

Related Party Transactions (Details) - USD ($)	1 Months Ended
	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Oct. 02, 2017	Jul. 31, 2017
Related Party Transaction [Line Items]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Percentage of options and warrants	55.00%
Due to related parties					$ 0
Chairman of the Board
Related Party Transaction [Line Items]
Adjustments to additional paid in capital, other	$ 175,498
Related party transaction, penalty rate	35.00%
Share-based compensation forfeited (in shares)	680,000
Chief Executive Officer
Related Party Transaction [Line Items]
Adjustments to additional paid in capital, other	$ 586,328
Share-based compensation forfeited (in shares)	825,000

XML

Accounts Receivable (Details) - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2018	Jul. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 11,696,676		$ 4,489,317	$ 3,750,000
Royalty Revenue from Sales of NARCAN
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable			$ 4,484,433
SWK Purchase Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percent of milestone payments due	90.00%
Accounts receivable	$ 11,696,676			$ 3,750,000
Revenue recognition, percent recognized	90.00%
Milestone payment		$ 3,750,000
SWK Purchase Agreement | Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cumulative net sales milestone		$ 25,000,000
SWK Purchase Agreement | SWK Funding LLC
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percent of milestone payments due	10.00%

XML

Prepaid Expenses and Other Current Assets (Details) - USD ($)	1 Months Ended	5 Months Ended	12 Months Ended
	Aug. 31, 2017	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Long-term Purchase Commitment [Line Items]
Prepaid expenses and other current assets		$ 733,328	$ 267,623	$ 164,887
Prepaid expense			194,000
Payments for prepaid research and development supplies		$ 100,000
Research and Development Arrangement
Long-term Purchase Commitment [Line Items]
Payments to acquire in-process research and development	$ 400,000		74,000
Supplies expense			$ 25,000

XML

Deferred Financing Costs (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Deferred financing costs	$ 0	$ 209,042	$ 0

XML

Deferred Revenue - Narrative (Details)									1 Months Ended	5 Months Ended	11 Months Ended	12 Months Ended
	Sep. 05, 2018 shares	May 28, 2016 USD ($)	Dec. 23, 2015 USD ($)	Oct. 02, 2015 USD ($)	Sep. 22, 2015 USD ($)	Jul. 20, 2015 USD ($) shares	Sep. 17, 2014 USD ($) shares	Dec. 17, 2013 USD ($) shares	Sep. 30, 2018 shares	Dec. 31, 2017 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($)	Jul. 31, 2017 USD ($)	Apr. 17, 2018 USD ($)
Deferred Revenue Arrangement [Line Items]
Proceeds from funding agreement		$ 266,500	$ 715,500	$ 618,000	$ 1,600,000	$ 250,000	$ 500,000	$ 250,000
Interest in asset		0.35533%	0.954%	0.824%	2.1333%	0.50%	1.00%	0.50%
Number of shares issuable term					60 days	60 days	60 days	60 days
Number of shares issuable (in shares) | shares						25,000	62,500	31,250
Recognized as revenue										$ 66,000		$ 683,000		$ 39,000
Grants receivable															$ 7,400,000
Grant and contract revenue												432,000	$ 0
Deferred revenue, period increase (decrease)												1,000,000
Current portion										378,700		1,212,149	378,700	253,619
Long-term portion										2,115,805		$ 0	2,115,805	2,306,527
Scenario, Forecast
Deferred Revenue Arrangement [Line Items]
Grant and contract revenue											$ 2,600,000
Common Stock
Deferred Revenue Arrangement [Line Items]
Issuance of common stock for cash, net of issuance costs (in shares) | shares												1,051,034
Valour | Common Stock
Deferred Revenue Arrangement [Line Items]
Issuance of common stock for cash, net of issuance costs (in shares) | shares	160,000								160,000
Within 2.5 Years
Deferred Revenue Arrangement [Line Items]
Buyback term on ownership percentage					2 years 6 months
Buyback rate					2
After 2.5 Years
Deferred Revenue Arrangement [Line Items]
Buyback term on ownership percentage					2 years 6 months
Buyback rate					3.5
Research and Development Arrangement December 17, 2013
Deferred Revenue Arrangement [Line Items]
Recognized as revenue										36,000		$ 58,000		$ 39,900
Research and Development Arrangement September 17, 2014
Deferred Revenue Arrangement [Line Items]
Recognized as revenue										$ 29,400		156,863	$ 0
Research and Development Arrangement July 20, 2015
Deferred Revenue Arrangement [Line Items]
Recognized as revenue												$ 35,714

XML

Deferred Revenue - Summary of Deferred Revenue Activity (Details) - USD ($) $ in Thousands	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Movement in Deferred Revenue [Roll Forward]
Balance at beginning of period	$ 2,561	$ 2,495	$ 2,600
Cash Received NIH		1,000
Converted to Equity		(1,600)
Recognized as revenue	(66)	(683)	(39)
Balance at end of period	2,495	1,212	2,561
NIH Grant
Movement in Deferred Revenue [Roll Forward]
Balance at beginning of period	0	0	0
Cash Received NIH		1,000
Converted to Equity		0
Recognized as revenue	0	(432)	0
Balance at end of period	0	568	0
BED
Movement in Deferred Revenue [Roll Forward]
Balance at beginning of period	961	895	1,000
Cash Received NIH		0
Converted to Equity		0
Recognized as revenue	(66)	(251)	(39)
Balance at end of period	895	644	961
Other Opioid Treatments
Movement in Deferred Revenue [Roll Forward]
Balance at beginning of period	1,600	1,600	1,600
Cash Received NIH		0
Converted to Equity		(1,600)
Recognized as revenue	0	0	0
Balance at end of period	$ 1,600	$ 0	$ 1,600

XML

Deferred Revenue - Summary Current vs. Long Term Deferred Revenue (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017	Jul. 31, 2016
Deferred Revenue Arrangement [Line Items]
Current portion	$ 1,212,149	$ 378,700	$ 253,619
Long-term portion	0	2,115,805	2,306,527
Total	1,212,000	2,495,000	2,561,000	$ 2,600,000
NIH Grant
Deferred Revenue Arrangement [Line Items]
Current portion	568,000
Long-term portion	0
Total	568,000	0	0	0
BED
Deferred Revenue Arrangement [Line Items]
Current portion	644,000
Long-term portion	0
Total	644,000	895,000	961,000	1,000,000
Other Opioid Treatments
Deferred Revenue Arrangement [Line Items]
Current portion	0
Long-term portion	0
Total	$ 0	$ 1,600,000	$ 1,600,000	$ 1,600,000

XML

License Fee Payable (Details) - USD ($)	Mar. 18, 2019	Mar. 01, 2018	Dec. 31, 2018	Feb. 28, 2018	Dec. 31, 2017	Jul. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percent of counterparty payable offset by guarantor				50.00%
Proceeds from milestone payments		$ 6,100,000
License fee payment		5,600,000
License fees			$ 5,400,000		$ 0	$ 0
License fees			$ 2,700,000		$ 0	$ 0
Adapt
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Reduction in Milestone Payment		$ 6,250,000
Subsequent Event
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
License fees payable	$ 8,100,000
License fees	5,400,000
License fees	$ 2,700,000
Subsequent Event | License Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percent of royalties payable under license agreement	90.00%
Subsequent Event | Adapt | SWK Purchase Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	$ 6,500,000.0
Milestone payment to be received if requirements are met	2,700,000
Subsequent Event | Third Party Licensee
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	$ 9,000,000.0
Subsequent Event | SWK Funding LLC | SWK Purchase Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percent of royalties payable under license agreement	10.00%
Subsequent Event | EBS
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	$ 1,800,000
Subsequent Event | EBS | SWK Purchase Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	2,000,000.0
Milestone payment to be received if requirements are met	2,500,000
Subsequent Event | Narcan
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Minimum sales requirement for milestone payment	200,000,000
Milestone payment to be received if requirements are met	15,000,000
Subsequent Event | Narcan | License Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Milestone payment to be received if requirements are met	$ 13,500,000

XML

Royalty Payable (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Schedule of Royalties [Line Items]
Net Profit %	23.70%
Royalty payable	$ 998	$ 1,408
Potomac
Schedule of Royalties [Line Items]
Net Profit %	10.20%
Royalty payable	$ 422	860
LYL
Schedule of Royalties [Line Items]
Net Profit %	5.00%
Royalty payable	$ 206	421
Welmers
Schedule of Royalties [Line Items]
Net Profit %	1.50%
Royalty payable	$ 62	127
Foundation
Schedule of Royalties [Line Items]
Net Profit %	6.00%
Royalty payable	$ 248	0
Pendergast
Schedule of Royalties [Line Items]
Net Profit %	1.00%
Royalty payable	$ 60	$ 0

XML

Commitments and Contingencies - 2014 Agreement (Details)							1 Months Ended		2 Months Ended	5 Months Ended	12 Months Ended
	Dec. 22, 2017 USD ($) $ / shares shares	Dec. 21, 2017 USD ($)	Sep. 23, 2017 USD ($) shares	Sep. 22, 2017 USD ($) $ / shares	Sep. 08, 2017 USD ($) installment trading_days	Apr. 25, 2016	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($)	Oct. 22, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jul. 31, 2017 USD ($)
Other Commitments [Line Items]
Stock issued during period, value, issued for services											$ 882,232		$ 190,427
Stock issued during the period											16,777,666
2014 Consulting Agreement
Other Commitments [Line Items]
Additional consultant fee payable, percentage of perpetuity in excess of $3 million								3.75%		3.75%		3.75%
Sponsor fees												$ 963,600
2016 Consulting Agreement
Other Commitments [Line Items]
Sponsor fees												687,500
Percentage of gross funding up to $20 million						5.00%
Percentage of gross funding over $20 million						3.50%
Accrued liabilities, current								$ 928,500		$ 928,500		928,500
Advisory Services
Other Commitments [Line Items]
Sponsor fees							$ 100,000			439,000	447,000
Other commitment					$ 300,000
Number of installment payments | installment					3
Installment payment period					16 months
Stock issued during period, value, issued for services	$ 100,000	$ 81,000	$ 100,000	$ 133,000	$ 300,000
Milestone payment					$ 140,600
Milestone payment percentage					3.75%
Milestone payment period					15 days
Milestone payment percentage of total consideration with payment					3.375%
Milestone payment percentage of total consideration with payment and additional provision					3.5625%
Milestone period					6 years
Milestone payment percentage of total consideration without payment					3.45525%
Milestone payment percentage of total consideration without payment and with additional provision					3.60263%
Threshold trading days | trading_days					10
Stock issued during period for services (in shares) | shares	3,455		3,283
Share price of stock issued (in dollars per share) | $ / shares	$ 24.95			$ 40.58
Payments for other commitment fees			$ 240,600					100,000	$ 340,600
Accrued liabilities							$ 151,000	$ 639,000		$ 639,000	$ 151,000	$ 639,000	$ 200,000
Stock newly-issued during the period (in shares) | shares							6,498
Stock issued during the period	$ 81,000		$ 133,000				$ 200,000

XML

Commitments and Contingencies - Binding LOI (Details) - USD ($)						9 Months Ended	12 Months Ended
	Apr. 19, 2018	Mar. 31, 2018	Mar. 16, 2017	Nov. 10, 2016	Nov. 19, 2015	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Mar. 29, 2018	Jul. 31, 2016
Other Commitments [Line Items]
Stock issued during the period							$ 16,777,666
Market value of stock on measurement date (in dollars per share)									$ 19.18
Letter of Intent
Other Commitments [Line Items]
Stock newly-issued during the period (in shares)	37,866			14,327	14,327		0
Stock issued during the period			$ 83,300	$ 85,100	$ 120,300	$ 776,000	$ 0	$ 83,300
Additional stock issued during the period, upon milestones (in shares)		37,866	10,745		92,634
Shares issued (in shares)										3,582
Obligatory stock issuance period			1 year
Share price of stock issued (in dollars per share)			$ 7.75
Royalties received, threshold for share issuance		$ 2,000,000
Net product sales milestone one		30,000,000
Net product sales milestone two		40,000,000
Net product sales milestone three		55,000,000
Net product sales milestone four		$ 75,000,000
Common stock, value, to be issued									$ 726,000
Letter of Intent | Research and Development Expense
Other Commitments [Line Items]
Stock issued during the period						726,000
Letter of Intent | Other Expense
Other Commitments [Line Items]
Stock issued during the period						$ 50,000

XML

Commitments and Contingencies - Heroin Vaccine (Details) - License Royalty Commitment - USD ($)	1 Months Ended	12 Months Ended
	Oct. 31, 2016	Dec. 31, 2018	Dec. 31, 2017
Other Commitments [Line Items]
Percentage of royalty net sales	3.00%
Percentage of royalty sublicensed	4.00%
Payments for minimum annual royalty	$ 10,000
Payments for royalties		$ 60,000
Payments for royalties, execution fee		50,000
Royalty expense, monthly rate		833
Maximum
Other Commitments [Line Items]
Fixed milestone payments			$ 715,700
Minimum
Other Commitments [Line Items]
Payments for royalties		$ 10,000

XML

Commitments and Contingencies - Sublease Agreement (Details) - USD ($) $ in Thousands	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Standish Management, LLC
Other Commitments [Line Items]
Rent expense	$ 150	$ 321	$ 123

XML

Commitments and Contingencies - LYL Amendment (Details) - USD ($)	Jun. 01, 2017	May 28, 2016	Dec. 23, 2015	Oct. 02, 2015	Sep. 22, 2015	Jul. 20, 2015	Sep. 17, 2014	Dec. 17, 2013
Other Commitments [Line Items]
Proceeds from funding agreement (at least)		$ 266,500	$ 715,500	$ 618,000	$ 1,600,000	$ 250,000	$ 500,000	$ 250,000
LYL Interest Buyback Agreement
Other Commitments [Line Items]
Proceeds from funding agreement (at least)	$ 3,000,000

XML

Commitments and Contingencies - License Agreement (Details) $ in Thousands		5 Months Ended	12 Months Ended
	Jun. 22, 2017 USD ($) trading_days payment	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Jul. 31, 2017 USD ($)
License Agreement
Other Commitments [Line Items]
Upfront payments | payment	2
Percent of upfront payments which may be paid by issuing common stock	50.00%
Percent of average share price	75.00%
Threshold trading days | trading_days	20
Maximum additional product milestone payments	$ 1,800
Maximum additional commercialization milestone payments	$ 5,000
Termination advance notice period	30 days
Rent expense		$ 150	$ 350	$ 200
Supply Agreement
Other Commitments [Line Items]
Other commitment, period	20 years
Material cure period	60 days

XML

Commitments and Contingencies - Renaissance Agreement (Details)	12 Months Ended
	Dec. 31, 2018
Research and Development Arrangement
Long-term Purchase Commitment [Line Items]
Termination notice period	45 days

XML

Commitments and Contingencies - Seperation Agreement (Details)			12 Months Ended
	Sep. 12, 2017 USD ($) installment shares	Sep. 05, 2017	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jul. 31, 2017 USD ($)
Other Commitments [Line Items]
Accrued salaries and wages			$ 1,083,644	$ 713,489	$ 1,701,359
Separation Agreement
Other Commitments [Line Items]
Expiration period of resignation revocation		7 days
Payments for accrued obligations	$ 1,130,000
Other commitments, payment period	3 days
Payments for postemployment benefits	$ 1,440,000
Options granted (in shares) | shares	948,000
Maximum period of advisement by former officer	12 months
Payments for other commitments			1,610,000
Accrued salaries and wages			$ 962,000
Separation Agreement | Minimum
Other Commitments [Line Items]
Number of installment payments | installment	1
Separation Agreement | Maximum
Other Commitments [Line Items]
Number of installment payments | installment	2

XML

Stockholder's Equity - Common Stock (Details) - USD ($)										1 Months Ended			5 Months Ended	12 Months Ended
	Dec. 18, 2018	Sep. 27, 2018	Sep. 05, 2018	Jan. 16, 2018	Dec. 22, 2017	Dec. 21, 2017	Sep. 23, 2017	Sep. 22, 2017	Sep. 08, 2017	Dec. 31, 2018	Sep. 30, 2018	Oct. 31, 2017	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from warrant exercise													$ 5,292,876	$ 34,000	$ 0
Stock issued during period, value, issued for services														$ 882,232	$ 190,427
Sales commission percentage												3.00%
Sale of stock, number of shares issued (in shares)														239,270
Sale of stock, gross proceeds														$ 4,310,000
Sale of stock, consideration received														4,180,000
Stock issued during the period														$ 16,777,666
Stock issued in reverse stock splits (in shares)															60
Prior Period Adjustment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)															6,228
Stock issued, conversion of convertible securities (in shares)															6,168
Letter of Intent
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)															25,072
Share-based compensation															$ 168,376
Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued during period for services (in shares)															2,875
Stock issued during period, value, issued for services															$ 22,051
Advisory Services
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)										6,498
Stock issued during period for services (in shares)					3,455		3,283
Stock issued during period, value, issued for services					$ 100,000	$ 81,000	$ 100,000	$ 133,000	$ 300,000
Share price of stock issued (in dollars per share)					$ 24.95			$ 40.58
Stock issued during the period					$ 81,000		133,000			$ 200,000
Gain (loss) on settlement of accrued liability					$ 19,000		$ (33,000)
Exercise Price Range, $5.00 to $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options exercisable (in shares)										95,000			217,500	95,000
Exercise Price, $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from warrant exercise													$ 5,175,000	$ 34,000
Exercise Price, $10.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from warrant exercise				$ 60,000									$ 57,900
Public Offering
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Sale of stock, number of shares issued (in shares)		811,764
Sale of stock, consideration received		$ 13,000,000
Sale of stock, price per share (in dollars per share)		$ 17.00
Over-Allotment Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Sale of stock, number of shares issued (in shares)		105,882
Torreya
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accrued liabilities	$ 100,000
Minimum | Letter of Intent
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price of stock issued (in dollars per share)															$ 5.94
Minimum | Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price of stock issued (in dollars per share)															7.52
Minimum | Exercise Price Range, $5.00 to $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of options (in dollars per share)										$ 7.25			$ 5.00	$ 7.25
Maximum | Letter of Intent
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price of stock issued (in dollars per share)															7.75
Maximum | Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price of stock issued (in dollars per share)															$ 7.75
Maximum | Exercise Price Range, $5.00 to $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price of options (in dollars per share)										10.00			$ 15.00	$ 10.00
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)														1,051,034
Stock issued during period for services (in shares)	38,166													44,664	27,947
Stock issued during period, value, issued for services	$ 782,000													$ 45	$ 28
Stock issued during the period														$ 1,052
Stock issued, conversion of convertible securities (in shares)															6,228
Stock issued upon the exercise of options (in shares)													145,630	50,497
Common Stock | Exercise Price Range, $5.00 to $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)													145,630	50,497
Common Stock | Exercise Price, $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)													345,000	3,400
Common Stock | Exercise Price, $10.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)													11,790
Common Stock | Valour
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)			160,000								160,000
Common Stock | Torreya
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock newly-issued during the period (in shares)	6,498
Warrant | Exercise Price, $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Price of warrant (in dollars per share)										$ 10.00			$ 15.00	$ 10.00
Warrant | Exercise Price, $10.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Price of warrant (in dollars per share)													$ 10.00

XML

Stockholder's Equity - Stock Options (Details) - 2017 Plan - Employee Stock Option - shares	12 Months Ended
	Dec. 31, 2018	Sep. 08, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum shares authorized (in shares)		400,000
Award vesting period	4 years
Expiration period	10 years

XML

Stockholder's Equity - Schedule of Pre-2017 Non-Qualified Stock Options Valuation Assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Jul. 31, 2016	Mar. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market value of stock on measurement date (in dollars per share)			$ 19.18
Pre-2017 Non-Qualified Stock Options | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market value of stock on measurement date (in dollars per share)	$ 36.79
Risk-free interest rate	1.47%
Risk-free interest rate, minimum	0.88%	0.71%
Risk-free interest rate, maximum	2.55%	2.05%
Dividend yield	0.00%
Volatility factor	96.00%
Volatility factor, minimum	76.00%	124.00%
Volatility factor, maximum	348.00%	373.00%
Term (years)	2 years 1 month 13 days
Pre-2017 Non-Qualified Stock Options | Employee Stock Option | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market value of stock on measurement date (in dollars per share)	$ 5.61	$ 7.00
Term (years)	2 years 3 months 11 days	3 years
Pre-2017 Non-Qualified Stock Options | Employee Stock Option | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market value of stock on measurement date (in dollars per share)	$ 13	$ 10
Term (years)	10 years	10 years

XML

Stockholder's Equity - Schedule of Pre-2017 Non-Qualified Stock Options Outstanding (Details) - Pre-2017 Non-Qualified Stock Options - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017	Jul. 31, 2016
Number of Shares
Outstanding at beginning of period (in shares)	3,770,000	2,980,500	4,635,000
Granted (in shares)			320,000
Exercised (in shares)	(217,500)	(95,000)
Expired (in shares)			(5,000)
Forfeited (in shares)	(572,000)	0	(1,180,000)
Outstanding at end of period (in shares)	2,980,500	2,885,500	3,770,000	4,635,000
Exercisable (in shares)		2,747,150
Weighted- average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 8.13	$ 7.33	$ 8.79
Granted (in dollars per share)			9.38
Expired (in dollars per share)			10.00
Exercised (in dollars per share)	10.22	8.24
Forfeited (in dollars per share)	11.51	0.00	11.03
Outstanding at end of period (in dollars per share)	$ 7.33	7.30	$ 8.13	$ 8.79
Exercisable (in dollars per share)		$ 7.20
Weighted- average Remaining Contractual Term (years)
Outstanding	7 years 22 days	6 years 15 days	6 years 10 months 13 days	7 years 4 months 21 days
Exercisable		6 years 4 days
Aggregate Intrinsic Value (in Thousands)
Outstanding	$ 46,606,210	$ 20,633,100	$ 19,139,625	$ 2,731,250
Exercisable		$ 19,928,663

XML

Stockholder's Equity - Schedule of Pre-2017 Non-Qualified Stock Options Nonvested Share Activity (Details) - Pre-2017 Non-Qualified Stock Options - $ / shares	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Number of Shares
Non-vested, beginning balance (in shares)	339,871	288,902	90,833
Granted (in shares)			320,000
Vested (in shares)	(50,969)	(150,552)	(70,962)
Non-vested, ending balance (in shares)	288,902	138,350	339,871
Weighted Average Grant Date Fair Value Per Share
Non-vested, beginning balance (in dollars per share)	$ 7.93	$ 7.87	$ 7.27
Granted (in dollars per share)			7.70
Vested (in dollars per share)	9.29	7.92	6.70
Non-vested, ending balance (in dollars per share)	$ 7.87	$ 7.84	$ 7.93

XML

Stockholder's Equity - Stock Options, Additional Information (Details) - USD ($) $ in Millions	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Pre-2017 Non-Qualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs		$ 0.2
2017 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs		3.6
Employee Stock Option | Pre-2017 Non-Qualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 0.6	0.9	$ 1.3
Employee Stock Option | 2017 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 1.2	$ 4.9

XML

Stockholder's Equity - Schedule of 2017 Plan Valuation Assumptions (Details) - $ / shares	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Mar. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market value of stock on measurement date (in dollars per share)			$ 19.18
2017 Plan | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, minimum	2.06%	2.47%
Risk-free interest rate, maximum	2.47%	3.05%
Dividend yield	0.00%	0.00%
Volatility factor, minimum	324.00%	121.00%
Volatility factor, maximum	329.00%	324.00%
Term (years)	10 years
2017 Plan | Employee Stock Option | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market value of stock on measurement date (in dollars per share)	$ 18.16	$ 14.31
Term (years)		5 years 6 months
2017 Plan | Employee Stock Option | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market value of stock on measurement date (in dollars per share)	$ 49.93	$ 24.84
Term (years)		10 years

XML

Stockholder's Equity - Schedule of 2017 Plan Options Outstanding (Details) - 2017 Plan - USD ($) $ / shares in Units, $ in Thousands	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017	Sep. 08, 2017
Number of Shares
Outstanding at beginning of period (in shares)	0	174,000	0
Total options authorized (in shares)	400,000
Options granted (in shares)	(214,000)	(196,550)
Expired (in shares)	0	0
Forfeited (in shares)	(40,000)	(27,000)
Options available (in shares)		157,881
Outstanding at end of period (in shares)	174,000	343,550	0
Exercisable (in shares)	0
Weighted- average Exercise Price
Granted (in dollars per share)	$ 37.62	$ 23.26
Forfeited (in dollars per share)	49.93	24.84
Outstanding (in dollars per share)	$ 34.78	$ 28.97
Weighted- average Remaining Contractual Term (years)
Outstanding	9 years 8 months 16 days	8 years 11 months 12 days
Aggregate Intrinsic Value (in Thousands)
Outstanding	$ 14,430	$ 840
Employee Stock Option
Number of Shares
Total options authorized (in shares)				400,000
Aggregate Intrinsic Value (in Thousands)
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized		101,431

XML

Stockholder's Equity - Schedule of 2017 Nonvested Share Activity (Details) - 2017 Plan - $ / shares	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017
Number of Shares
Non-vested, beginning balance (in shares)	0	174,000	0
Options granted (in shares)	214,000	196,550
Forfeited (in shares)	(40,000)	(27,000)
Non-vested, ending balance (in shares)	174,000	288,047	0
Weighted Average Grant Date Fair Value Per Share
Granted (in dollars per share)	$ 37.62	$ 23.26
Forfeited (in dollars per share)	49.93	24.84
Non-vested (in dollars per share)	$ 34.78	$ 27.62
Vested (in shares)		55,503
Vested (in dollars per share)		$ 34.66

XML

Stockholder's Equity - Schedule of Warrants Outstanding (Details) - Warrant - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Jul. 31, 2017	Jul. 31, 2016
Number of Shares
Outstanding at beginning of period (in shares)	768,800	357,010	1,215,385
Expired (in shares)	(356,790)		(166,585)
Granted (in shares)			45,000
Forfeited (in shares)	(55,000)		(325,000)
Exercised (in dollars per share)		(3,400)
Outstanding at end of period (in shares)	357,010	353,610	768,800	1,215,385
Weighted- average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 12.50	$ 9.78	$ 17.90
Expired (in dollars per share)	14.83		46.37
Granted (in dollars per share)			10.00
Forfeited (in dollars per share)	15.00		15
Outstanding at end of period (in dollars per share)	$ 9.78	9.78	$ 12.50	$ 17.90
Exercisable (in dollars per share)		$ 10.00
Weighted- average Remaining Contractual Term (years)
Outstanding	5 years 6 months 26 days	4 years 7 months 6 days	3 years 15 days	2 years 10 months 10 days
Aggregate Intrinsic Value
Outstanding	$ 4,708,020	$ 1,651,165	$ 1,184,000	$ 0

XML

Sale of Royalties (Details) - USD ($)			1 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 13, 2016	Dec. 31, 2016	Dec. 31, 2017	Sep. 30, 2017	Jul. 31, 2017	Dec. 31, 2018
Schedule of Royalties [Line Items]
Accounts receivable	$ 11,696,676			$ 11,696,676		$ 3,750,000	$ 4,489,317
SWK Purchase Agreement
Schedule of Royalties [Line Items]
Upfront purchase price received under purchase agreement		$ 13,750,000		13,750,000
Legal fees		40,000		40,000
Milestone payment receivable under purchase agreement		$ 3,750,000		3,750,000
Agreement covenant, rate of return		12.00%
Agreement covenant, maximum indemnification cap		150.00%
Proceeds from royalties received			$ 13,710,000	17,460,000		17,460,000
Accounts receivable	$ 11,696,676			$ 11,696,676		$ 3,750,000
SWK Purchase Agreement | Minimum
Schedule of Royalties [Line Items]
Cumulative net sales milestone					$ 25,000,000
SWK Purchase Agreement | SWK Funding LLC
Schedule of Royalties [Line Items]
Royalty and licensing revenue		$ 26,250,000
Royalty revenue, percent received upon milestone payment	10.00%	10.00%
Milestone period		6 years
Percent received upon milestone payment, without commercialization		5.00%
Percent received without milestone payment		7.86%
Percent received without milestone payment, without commercialization		3.93%
SWK Purchase Agreement | SWK Funding LLC | Maximum
Schedule of Royalties [Line Items]
Royalty and licensing revenue		$ 20,625,000

XML

Potomac Amendment (Details)		5 Months Ended	12 Months Ended
	Apr. 12, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jul. 31, 2017 USD ($)
Investments, All Other Investments [Line Items]
General and administrative		$ 5,887,135	$ 11,263,804	$ 10,313,000	$ 6,530,533
Potomac Amendment
Investments, All Other Investments [Line Items]
Term of investment agreement	4 years
Price of right to buy back interest	$ 382,875
Percent of interest	2.5525%
Earliest period of notice	2 years 6 months
Payment ratio	2
Period of payment after notice	10 days
Latest period of notice, payment ratio	3.5
Payment period	15 days
General and administrative				$ 159,500	$ 159,500
Counterparty right of net profit percentage	2.5525%
Counterparty right of net proceeds upon divestiture	2.5525%
Minimum payment receivable	$ 3,000,000
Net profit determination, percent of actual amounts received	50.00%
Potomac Amendment Agreement 3
Investments, All Other Investments [Line Items]
Term of investment agreement	5 years
Price of right to buy back interest	$ 500,000
Percent of interest	0.98%
Earliest period of notice	3 years 3 months
Payment ratio	1.8
Period of payment after notice	10 days
Latest period of notice, payment ratio	3.15
Potomac Amendment Agreement 4
Investments, All Other Investments [Line Items]
Term of investment agreement	5 years
Price of right to buy back interest	$ 500,000
Percent of interest	0.98%
Earliest period of notice	3 years 3 months
Payment ratio	1.8
Period of payment after notice	10 days
Potomac Amendment Agreement 5
Investments, All Other Investments [Line Items]
Term of investment agreement	5 years
Price of right to buy back interest	$ 500,000
Percent of interest	0.75%
Earliest period of notice	3 years 3 months
Payment ratio	1.8
Period of payment after notice	10 days
Latest period of notice, payment ratio	3.15
Potomac Amendment Agreement 5, Additional
Investments, All Other Investments [Line Items]
Term of investment agreement	5 years
Price of right to buy back interest	$ 500,000
Percent of interest	0.75%
Earliest period of notice	3 years 3 months
Payment ratio	1.8
Period of payment after notice	10 days
Latest period of notice, payment ratio	3.15
Additional investment option	$ 1,000,000

XML

Income Taxes (Details) - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017	Jul. 31, 2016
Income Tax Disclosure [Abstract]
Operating loss carryforwards		$ 5,753,943
Income Tax Reconciliation
Net loss before taxes at statutory rate	$ 919,111	(6,015,352)			$ 2,992,311
Permanent items	4,056	1,471,275			5,828
Temporary items	(698,380)	2,444,934			385,910
Income tax expense at statutory rate	224,787	(2,099,143)			3,384,049
Valuation allowance	(55,624)	2,150,426			(2,833,575)
Income tax expense per books	169,163	51,283	$ 797,000	$ 550,474	550,474
Deferred Tax Assets Components
Net operating loss carryover at statutory rate	2,869,510	5,753,943	2,869,510		4,936,604
Stock-based compensation expense	7,404,037	4,939,759	7,404,037		9,922,093
Fixed asset depreciation	(353)	0	(353)		(2,470)
Intangibles amortization	(1,012)	(1,148)	(1,012)		0
Other		2,046,961
Other	(290,775)		(290,775)		0
Total	9,981,407	12,739,515	9,981,407		14,856,227
Valuation allowance	(9,981,407)	(12,739,515)	(9,981,407)		(14,856,227)
Net deferred tax asset	0	0	0		0
Unrecognized tax benefits	$ 0	$ 0	$ 0		$ 0

XML

Comparative Financials (Unaudited) (Details) - USD ($)	5 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jul. 31, 2017	Jul. 31, 2016
Revenue:
Royalty and licensing revenue	$ 11,696,676	$ 13,262,321	$ 15,447,000	$ 18,406,142
Treatment investment revenue	65,641	250,549	105,000	39,854
Grant and contract revenue		432,000	0
Total Revenue	11,762,317	13,982,177	15,552,000	18,445,996
Operating expenses:
General and administrative	5,887,135	11,263,804	10,313,000	6,530,533
Research and development	2,486,514	8,478,817	4,857,000	3,171,599
Royalty expense	1,408,012	1,491,099	1,408,012	0
Selling expense	438,625	213,897	851,000	1,651,099
Total operating expenses	10,220,286	35,172,617	17,429,000	11,353,231
Income (loss) from operations	1,542,031	(21,190,440)	(1,877,000)	7,092,765
Total other income	6,511	46,407	68,000	38,322
Income (loss) before provision for income taxes	1,548,542	(21,144,033)	(1,809,000)	7,131,087
Provision for income taxes	169,163	51,283	797,000	550,474	$ 550,474
Net income (loss)	$ 1,379,379	$ (21,195,316)	$ (2,606,000)	$ 6,580,613

XML

Subsequent Events (Details) - Subsequent Event - USD ($)				2 Months Ended
	Mar. 18, 2019	Jan. 15, 2019	Jan. 03, 2019	Feb. 22, 2019
Subsequent Event [Line Items]
Options granted (in shares)		13,200	76,500
Exercise of stock options (in shares)				80,000
Proceeds from stock options exercised				$ 601,250
Third Party Licensee
Subsequent Event [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	$ 9,000,000.0
Adapt | SWK Purchase Agreement
Subsequent Event [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	6,500,000.0
Milestone payment to be received if requirements are met	2,700,000
EBS
Subsequent Event [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	1,800,000
EBS | SWK Purchase Agreement
Subsequent Event [Line Items]
Maximum reduction in quarterly royalty payable payments in next twelve months	2,000,000.0
Milestone payment to be received if requirements are met	2,500,000
Narcan
Subsequent Event [Line Items]
Minimum sales requirement for milestone payment	200,000,000
Milestone payment to be received if requirements are met	$ 15,000,000
Employee Stock Option
Subsequent Event [Line Items]
Expiration period			10 years
Employee Stock Option | End of one year
Subsequent Event [Line Items]
Granted (in dollars per share)		$ 14.62	$ 13.61
Employee Stock Option | Monthly after year one
Subsequent Event [Line Items]
Award vesting rights, percentage			2.0833%