x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 46-4744124 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
201 Santa Monica Blvd., 5th Floor, Santa Monica, CA | 90401 |
(Address of principal executive offices) | (Zip Code) |
Large Accelerated Filer | ¨ | Accelerated Filer | ¨ |
Non-Accelerated Filer | ¨ | Smaller Reporting Company | x |
(Do not check if a smaller reporting company) | Emerging Growth Company | ¨ |
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Item 2. | ||
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Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
October 31, 2017 | July 31, 2017 | ||||||
Assets | (unaudited) | ||||||
Current assets | |||||||
Cash and cash equivalents | $ | 5,903 | $ | 6,873 | |||
Accounts receivable | — | 3,750 | |||||
Deferred financing costs | 146 | — | |||||
Prepaid expenses and other current assets | 729 | 164 | |||||
Total current assets | 6,778 | 10,787 | |||||
Other assets | |||||||
Computer equipment, net of accumulated depreciation | 2 | 3 | |||||
Patents and patent applications, net of accumulated amortization | 17 | 18 | |||||
Total assets | $ | 6,797 | $ | 10,808 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,265 | $ | 580 | |||
Accrued liabilities | 2,094 | 1,432 | |||||
Accrued salaries and wages | 653 | 1,701 | |||||
Deferred revenue | 337 | 254 | |||||
Total current liabilities | 4,349 | 3,967 | |||||
Long-term liabilities | |||||||
Other long-term liabilities | 200 | 200 | |||||
Deferred revenue | 2,202 | 2,307 | |||||
Total long-term liabilities | 2,402 | 2,507 | |||||
Total liabilities | 6,751 | 6,474 | |||||
Stockholders' equity | |||||||
Common stock; par value $0.001; 200,000,000 shares authorized; 2,037,888 shares issued and outstanding at October 31, 2017 and 2,026,608 shares issued and outstanding at July 31, 2017 | 2 | 2 | |||||
Additional paid-in capital | 60,282 | 58,937 | |||||
Accumulated deficit | (60,238 | ) | (54,605 | ) | |||
Total stockholders' equity | 46 | 4,334 | |||||
Total liabilities and stockholders' equity | $ | 6,797 | $ | 10,808 |
For the Three Months Ended October 31, | |||||||
2017 | 2016 | ||||||
Revenues | |||||||
Royalty and licensing revenue | $ | — | $ | 1,121 | |||
Treatment investment revenue | 22 | — | |||||
Total revenue | 22 | 1,121 | |||||
Operating expenses | |||||||
General and administrative | 4,020 | 1,216 | |||||
Research and development | 1,608 | 442 | |||||
Selling expenses | — | 42 | |||||
Total operating expenses | 5,628 | 1,700 | |||||
Loss from operations | (5,606 | ) | (579 | ) | |||
Other income (expense) | |||||||
Interest income (expense), net | 7 | (2 | ) | ||||
Loss on settlement of accrued liability | (33 | ) | — | ||||
Loss on foreign exchange | (1 | ) | (20 | ) | |||
Total other expense | (27 | ) | (22 | ) | |||
Net loss | $ | (5,633 | ) | $ | (601 | ) | |
Loss per share of common stock: | |||||||
Basic and diluted | $ | (2.77 | ) | $ | (0.30 | ) | |
Weighted average common stock outstanding | |||||||
Basic and diluted | 2,032,433 | 1,992,433 |
For the Three Months Ended | |||||||
October 31, 2017 | October 31, 2016 | ||||||
Cash flows used in operating activities | |||||||
Net loss | $ | (5,633 | ) | $ | (601 | ) | |
Adjustments to reconcile net loss to net cash used by operating activities: | |||||||
Depreciation and amortization | 1 | 1 | |||||
Stock based compensation from issuance of options | 1,212 | 181 | |||||
Loss on settlement of accrued liability | 33 | — | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 3,750 | (387 | ) | ||||
Deferred financing costs | (146 | ) | — | ||||
Prepaid expenses and other current assets | (564 | ) | (7 | ) | |||
Accounts payable | 685 | 502 | |||||
Accrued liabilities | 762 | — | |||||
Accrued salaries and wages | (1,048 | ) | 15 | ||||
Deferred revenue | (22 | ) | — | ||||
Net cash used in operating activities | (970 | ) | (296 | ) | |||
Net decrease in cash and cash equivalents | (970 | ) | (296 | ) | |||
Cash and cash equivalents, beginning of period | 6,873 | 1,481 | |||||
Cash and cash equivalents, end of period | $ | 5,903 | $ | 1,185 | |||
Supplemental disclosure | |||||||
Interest paid during the period | $ | — | $ | — | |||
Taxes paid during the period | $ | — | $ | — | |||
Non-Cash Transactions | |||||||
Cashless exercise of stock option | — | — | |||||
Issuance of common stock as settlement of accrued liability | $ | 100 | $ | — |
(in thousands) | OORT | 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 | — | (22 | ) | — | (22 | ) | ||||||||||
Balance as of October 31, 2017 | $ | — | $ | 939 | $ | 1,600 | $ | 2,539 |
(in thousands) | OORT | BED | Other Opioid Treatments | Total | ||||||||||||
Current portion | $ | — | $ | 337 | $ | — | $ | 337 | ||||||||
Long-term portion | — | 602 | 1,600 | 2,202 | ||||||||||||
Total | $ | — | $ | 939 | $ | 1,600 | $ | 2,539 |
2017 | 2016 | |||||
Market value of stock on measurement date | $ | 36.79 | $7.52 to $8.71 | |||
Risk-free interest rate | 1.47 | % | 0.88% to 1.75% | |||
Dividend yield | — | % | — | % | ||
Volatility factor | 96 | % | 114% to 348% | |||
Term | 2.12 | 3.03 to 10.00 years |
Number of Shares | Weighted- average Exercise Price | Weighted- average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in Thousands) | |||||||||
Outstanding at July 31, 2017 | 3,770,000 | $ | 8.13 | 6.87 | $ | 19,140 | ||||||
Exercised | (10,000 | ) | $ | 10.00 | ||||||||
Forfeited | (572,000 | ) | $ | 11.51 | ||||||||
Outstanding at October 31, 2017 | 3,188,000 | $ | 7.52 | 6.97 | $ | 98,409 | ||||||
Exercisable at October 31, 2017 | 2,894,378 | $ | 7.34 | 6.81 | $ | 89,873 |
Number of Shares | Weighted Average Grant Date Fair Value Per Share | |||||
Non-vested at July 31, 2017 | 339,871 | $ | 7.93 | |||
Vested | (46,249 | ) | $ | 9.46 | ||
Non-vested at October 31, 2017 | 293,622 | $ | 7.94 |
For the Three Months Ended October 31, 2017 | ||
Market value of stock on measurement date | $27.56 to $49.93 | |
Risk-free interest rate | 2.05% to 2.42% | |
Dividend yield | — | % |
Volatility factor | 327% to 329% | |
Term | 10.00 years |
Number of Shares | Weighted- average Exercise Price | Weighted- average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in Thousands) | |||||||||
Outstanding at July 31, 2017 | — | |||||||||||
Total Options authorized | 400,000 | |||||||||||
Granted | (206,500 | ) | $ | 38.03 | ||||||||
Expired | — | |||||||||||
Forfeited | — | |||||||||||
Options available at October 31, 2017 | 193,500 | |||||||||||
Outstanding at October 31, 2017 | 206,500 | $ | 38.03 | 9.87 | $ | 535 | ||||||
Exercisable at October 31, 2017 | — |
Number of Shares | Weighted Average Grant Date Fair Value Per Share | |||||
Non-vested at July 31, 2017 | — | |||||
Granted | (206,500 | ) | $ | 38.82 | ||
Vested | — | |||||
Non-vested at October 31, 2017 | 206,500 | $ | 38.82 |
Number of Shares | Weighted- average Exercise Price | Weighted- average Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||
Outstanding at July 31, 2017 | 768,800 | $ | 12.50 | 3.04 | $ | 1,184 | ||||||
Forfeited | (55,000 | ) | $ | 15.00 | ||||||||
Outstanding at October 31, 2017 | 713,800 | $ | 12.31 | 2.99 | $ | 18,617 | ||||||
Exercisable at October 31, 2017 | 713,800 | $ | 12.31 | 2.99 | $ | 18,617 |
a. | On December 18, 2014, the Company entered into a consulting agreement with Torreya (the "2014 Agreement"), a financial advisory firm, under which Torreya agreed to provide financial advisory services with regard to a licensing agreement. In exchange for these services, the Company incurred fixed fees of $225 thousand during the years ended July 31, 2016. 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, as compared to approximately $318 thousand during fiscal year 2016. |
b. | On November 19, 2015, the Company issued 14,327 shares 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 three-month period ended October 31, 2017. |
c. | In October 2016, the Company in-licensed a heroin vaccine from Walter Reed Army Institute of Research ("Walter Reed"). 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 three-month period ended October 31, 2017, the Company paid $60 thousand in cash to Walter Reed, 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’s headquarters through August 31, 2017 was located on the 12th Floor of 401 Wilshire Blvd., Santa Monica, CA 90401 and was leased for $5,056 per month. The lease with Premier Business Centers, LLC (“Premier”), was terminated by the Company effective September 30, 2017. On May 29, 2017, the Company entered into a Sublease (the “Sublease”) with Standish Management, LLC to sublease 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 will end on August 31, 2018. The monthly rent for August 2017 was $5,000 and the monthly rent for the duration of the term is $9,000, plus any related operating expenses and taxes. Commencing September 1, 2017, the Company’s headquarters are located at this location. |
e. | On June 1, 2017 (the “LYL Effective Date”), the Company and LYL Holdings Inc. (“LYL”) entered into an amendment (the “LYL Amendment”) to that certain Amended and Restated Consulting Agreement, dated October 25, 2016 and effective as of July 17, 2013 (the “LYL Agreement”), to provide for the Company’s right to buyback the Interest (as defined in the LYL Agreement) from LYL. Pursuant to the LYL Amendment, from the LYL Effective Date until 4.5 years after July 17, 2013 (the “LYL Interest Buyback Expiration Date”), the Company shall have the right to buyback all or any portion of the Interest from LYL upon written notice to LYL (the “LYL Interest Buyback Notice”), at the price of $500,000 per 5.0% of Interest (the “LYL Interest Buyback Amount”); provided, that in the event the LYL Interest Buyback Notice is provided within 3.25 years of the LYL Effective Date, the Company shall pay LYL 1.8 times the LYL Interest Buyback Amount within ten business days of providing the LYL Interest Buyback Notice; provided, further, that in the event the LYL Interest Buyback Notice is provided after 3.25 years after the Effective Date and on or prior to the LYL Interest Buyback Expiration Date, the Company shall pay LYL 3.15 times the LYL Interest Buyback Amount within ten business days of providing the LYL Interest Buyback Notice. In consideration for LYL entering into the LYL Amendment, the Company and LYL agree that, upon the Company’s receipt after the LYL Effective Date of at least $3 million from (i) SWK pursuant to the SWK Agreement and/or (ii) Adapt pursuant to that certain license agreement, dated as of December 15, 2014, by and between the Company and Adapt, as amended (the "Adapt Agreement"), fifty percent of all actual amounts received by the Company from SWK shall 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 (“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. |
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 |
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 represents the date on which Mr. Pollack's seven-day revocation period expired. |
1. | Decrease the number of shares of Common Stock which we are authorized to issue from 1,000,000,000 to 200,000,000 shares; |
2. | The Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan; |
3. | The change of our domicile from the State of Nevada to the State of Delaware through the merger with and into Opiant Pharmaceuticals, Inc., our newly-organized, wholly-owned subsidiary organized under the laws of the State of Delaware; and |
4. | The establishment of a classified board of directors. |
(in thousands) | Increase (Decrease) | |||||||||||
October 31, 2017 | October 31, 2016 | Amount | Percentage | |||||||||
Revenue: | ||||||||||||
Royalty and licensing revenue | $ | — | $ | 1,121 | $ | (1,121 | ) | — | % | |||
Treatment investment revenue | 22 | — | 22 | — | % | |||||||
Total revenue | 22 | 1,121 | (1,099 | ) | (98.0 | )% | ||||||
Operating expenses: | ||||||||||||
General and administrative | 4,020 | 1,216 | 2,804 | 230.6 | % | |||||||
Research and development | 1,608 | 442 | 1,166 | 263.8 | % | |||||||
Selling expenses | — | 42 | (42 | ) | — | % | ||||||
Total operating expenses | 5,628 | 1,700 | 3,928 | 231.1 | % | |||||||
Loss from operations | (5,606 | ) | (579 | ) | (5,027 | ) | (868.2 | )% | ||||
Other income (expense): | ||||||||||||
Interest income (expense), net | 7 | (2 | ) | 9 | 450.0 | % | ||||||
Loss on foreign exchange | (1 | ) | (20 | ) | 19 | 95.0 | % | |||||
Loss on settlement of accrued liability | (33 | ) | — | (33 | ) | — | % | |||||
Total other expense | (27 | ) | (22 | ) | (5 | ) | (22.7 | )% | ||||
Net loss | $ | (5,633 | ) | $ | (601 | ) | $ | (5,032 | ) | (837.3 | )% |
For the Three Months Ended | |||||||||
(in thousands) | October 31, 2017 | October 31, 2016 | |||||||
Cash Flows from Continuing Operations: | |||||||||
Net cash used in operating activities | (970 | ) | (296 | ) | |||||
Cash flows from investing activities | — | — | |||||||
Cash flows from financing activities | — | — | |||||||
Net decrease in cash and cash equivalents | $ | (970 | ) | $ | (296 | ) |
Exhibit Number | Description of Document |
2.1 | |
3(i).1 | |
3(i).2 | |
3(i).3 | |
3(i).4 | |
3(ii).1 | |
4.1 | |
10.1 | |
10.2 | |
10.3 | |
10.4+ | |
10.5 | |
10.6* | |
10.7* | |
10.8* | |
Exhibit Number | Description of Document |
31.1* | |
31.2* | |
32.1** | |
32.2** | |
101.INS* | XBRL Instance Document. |
101.SCH* | XBRL Taxonomy Extension Schema Document. |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith |
** | The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Opiant Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing. |
+ | Confidential Treatment Granted. Confidential Materials omitted and filed separately with the Securities and Exchange Commission. |
OPIANT PHARMACEUTICALS, INC. | |||
Date: December 4, 2017 | By: | /s/ Dr. Roger Crystal | |
Name: Dr. Roger Crystal | |||
Title: Chief Executive Officer and Director | |||
(Principal Executive Officer) |
Date: December 4, 2017 | By: | /s/ David D. O'Toole | |
Name: David D. O'Toole | |||
Title: Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
(a) | 25% of the Options become exercisable on the first anniversary of the Grant Date (the “Initial Vesting Date”), and |
(b) | 1/48 of the Options become exercisable on such date every month thereafter through the fourth anniversary of the Grant Date (such date, the “Final Vesting Date”). |
Enclosures: | Incentive Stock Option Agreement 2017 Long-Term Incentive Plan Prospectus for the 2017 Long-Term Incentive Plan Exercise Form | OPTIONEE Date: |
(i) | notice, in such manner and form as the Administrator may require from time to time, specifying the number of Shares to be purchased under the Options; and |
(ii) | full payment of the Exercise Price for the Shares or properly executed, irrevocable instructions, in such manner and form as the Administrator may require from time to time, to effectuate a broker-assisted cashless exercise, each in accordance with Section 2(d) of this Agreement. |
(i) | delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the Administrator in its discretion; |
(ii) | a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm designated or approved by the Administrator; |
(iii) | subject to such limits as the Administrator may impose from time to time, tender (via actual delivery or attestation) to the Company of other shares of Common Stock of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price; |
(iv) | any other method approved by the Administrator; or |
(v) | any combination of the foregoing. |
Enclosures: | Nonstatutory Stock Option Agreement Prospectus for the 2017 Long-Term Incentive Plan Exercise Form | OPTIONEE Date: |
(i) | notice, in such manner and form as the Administrator may require from time to time, specifying the number of Shares to be purchased under the Options; |
(ii) | full payment of the Exercise Price for the Shares or properly executed, irrevocable instructions, in such manner and form as the Administrator may require from time to time, to effectuate a broker-assisted cashless exercise, each in accordance with Section 2(d) of this Agreement; and |
(iii) | full payment of applicable withholding taxes pursuant to Section 7 of this Agreement. |
(i) | delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the Administrator in its discretion; |
(ii) | a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm designated or approved by the Administrator; |
(iii) | subject to such limits as the Administrator may impose from time to time, tender (via actual delivery or attestation) to the Company of other shares of Common Stock of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price; |
(iv) | subject to such limits as the Administrator may impose from time to time, net share settlement; |
(v) | any other method approved by the Administrator; or |
(vi) | any combination of the foregoing. |
1. | The 83(b) Election is irrevocable. The 83(b) Election is a voluntary election that is available to you. It is your decision whether to file an 83(b) Election. |
2. | If you choose to make an 83(b) Election, the 83(b) Election Form must be filed with the Internal Revenue Service within 30 days of the Grant Date; no exceptions to this deadline are made. You should send the election to the internal revenue service center located at the address to which you send your federal income tax return (IRS form 1040) based on your place of residence. The election should be sent via certified mail with return receipt requested or a delivery service that provides proof of delivery. |
3. | You must deliver a copy of the 83(b) Election Form to the Corporate Secretary or other designated officer of the Company as soon as practicable after you receive proof that the original was received by the Internal Revenue Service. Irrespective of the fact that a copy of your 83(b) Election Form is to be delivered to the Company, you remain solely responsible for properly filing the original with the Internal Revenue Service. |
4. | In addition to making the filing under Item 2 above, you must attach a copy of your 83(b) Election Form to your federal tax return for the taxable year that includes the Grant Date. Applicable state law also may require you to attach a copy of the 83(b) Election Form to any state income tax returns that you file for that taxable year. |
5. | If you make an 83(b) Election and later forfeit the Award Shares, you will not be entitled to a refund of the taxes paid with respect to the gross income you recognized under the 83(b) Election. |
6. | You must consult your personal tax advisor before making an 83(b) Election. You may not rely on this information, the Company, or any of the Company’s officers, directors, or employees for tax or legal advice regarding the Award Shares or the 83(b) Election. The election form attached to these instructions is intended as a sample only. It must be tailored to your circumstances and may not be relied upon without consultation with a personal tax advisor. |
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 us by others within those entities, particularly during the period in which this 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 report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this 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 |
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. |
By: | /s/ Dr. Roger Crystal |
Dr. Roger Crystal | |
Chief Executive Officer | |
(Principal Executive Officer) |
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 us by others within those entities, particularly during the period in which this 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 report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this 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 |
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. |
By: | /s/ David O'Toole |
David O'Toole | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
By: | /s/ Dr. Roger Crystal |
Dr. Roger Crystal | |
Chief Executive Officer | |
(Principal Executive Officer) |
By: | /s/ David O'Toole |
David O'Toole | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Oct. 31, 2017 |
Dec. 01, 2017 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 31, 2017 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | OPIANT PHARMACEUTICALS, INC. | |
Entity Central Index Key | 0001385508 | |
Current Fiscal Year End Date | --07-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | OPNT | |
Entity Common Stock, Shares Outstanding | 2,067,888 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Oct. 31, 2017 |
Jul. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock issued (in shares) | 2,037,888 | 2,026,608 |
Common stock outstanding (in shares) | 2,037,888 | 2,026,608 |
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | |
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Oct. 31, 2017 |
Oct. 31, 2016 |
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Revenues | ||
Royalty and licensing revenue | $ 0 | $ 1,121 |
Treatment investment revenue | 22 | 0 |
Total revenue | 22 | 1,121 |
Operating expenses | ||
General and administrative | 4,020 | 1,216 |
Research and development | 1,608 | 442 |
Selling expenses | 0 | 42 |
Total operating expenses | 5,628 | 1,700 |
Loss from operations | (5,606) | (579) |
Other income (expense) | ||
Interest income (expense), net | 7 | (2) |
Loss on settlement of accrued liability | (33) | 0 |
Loss on foreign exchange | (1) | (20) |
Total other expense | (27) | (22) |
Net loss | $ (5,633) | $ (601) |
Loss per share of common stock: | ||
Basic and diluted (in dollars per share) | $ (2.77) | $ (0.30) |
Weighted average common stock outstanding | ||
Basic and diluted (in shares) | 2,032,433 | 1,992,433 |
Description of Business |
3 Months Ended |
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Oct. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Opiant Pharmaceuticals, Inc. (the “Company”), a Delaware corporation, is a specialty pharmaceutical company which develops pharmacological treatments for substance use, addictive and eating disorders. The Company also has developed a treatment to reverse opioid overdoses, which is now known as NARCAN® (naloxone hydrochloride) Nasal Spray ("NARCAN"). The Company's fiscal year end is July 31. 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. 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. |
Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended |
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Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed 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 SEC for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated balance sheet at July 31, 2017 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company's financial position as of October 31, 2017 and July 31, 2017, results of its operations for the three months ended October 31, 2017 and 2016 and cash flows for the three months ended October 31, 2017 and 2016. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. These classifications have no effect on the previously reported net loss of loss per share. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Opiant Pharmaceuticals UK Limited, a company incorporated on November 4, 2016 under the England and Wales Companies Act of 2006. Intercompany balances and transactions are eliminated upon consolidation. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended July 31, 2017 included in the Company's Annual Report on Form 10-K filed with the SEC on October 13, 2017. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates included in the financial statements include the valuation of: deferred income tax assets, liability and equity instruments, stock-based compensation, acquired intangibles, contingent earn-out consideration, and allowances for accounts receivable and inventory. Going Concern Assessment With the implementation of the Financial Accounting Standards Board's new standard on going concern, Accounting Standard Update, or ASU No. 2014-15, beginning with the year ended July 31, 2017 and all annual and interim periods thereafter, the Company will assess going concern uncertainty in its financial statements to determine if it has sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the financial statements are issued or available to be issued, which is referred to as the “look-forward period” as defined by ASU No. 2014-15. As part of this assessment, based on conditions that are known and reasonably knowable to the Company, the Company will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, and its ability to delay or curtail expenditures or programs, if necessary, among other factors. Based on this assessment, as necessary or applicable, the Company makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and it has the proper authority to execute them within the look-forward period in accordance with ASU No. 2014-15. Based upon the above assessment, 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. 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 approximately $5.9 million and $6.9 million at October 31, 2017 and July 31, 2017, respectively. The Company maintains cash balances at financial institutions insured up to $250 thousand by the Federal Deposit Insurance Corporation. Balances in the UK are insured up to £85 thousand by the Financial Services Compensation Scheme (UK Equivalent). Although the Company’s cash balances exceeded these insured amounts at various times during the three months ended October 31, 2017, the Company has not experienced any losses on its deposits of cash and cash equivalents for the periods presented. Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Deferred Financing Costs |
3 Months Ended |
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Oct. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Financing Costs | Deferred Financing Costs During the three months ended October 31, 2017, the Company incurred approximately $146 thousand of legal, accounting, and filing fees related to the Company's current fund raising efforts. These expenses will be offset against the future proceeds, if any, of the Company's next financing. The Company recorded the $146 thousand as deferred financing costs as of October 31, 2017. |
Prepaid Expenses and Other Current Assets |
3 Months Ended |
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Oct. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets As of October 31, 2017, the Company had approximately $729 thousand recorded as prepaid expenses and other current assets. Approximately $418 thousand was related to a deposit made by the Company to Renaissance Lakewood, LLC ("Renaissance") (see Note 8 - Commitments) in August 2017. Per the terms of its 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 October 31, 2017, no work had been performed, nor had any costs been incurred, in relation to this project. The Company has recorded the $418 thousand as a prepaid expense as of October 31, 2017 because it is estimated that these funds will be used within 12 months of this reporting date. During the three months ended October 31, 2017, the Company purchased approximately $100 thousand 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, with none of these supplies having been used as of October 31, 2017. The Company recorded the $100 thousand as a prepaid expense as of October 31, 2017 because it is estimated that these supplies will be used within 12 months of this reporting date. The remaining balance consists primarily of prepaid expenses such as rent, insurance, and software licenses. |
Related Party Transactions |
3 Months Ended |
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Oct. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company uses office space provided by Dr. Michael Sinclair, the Executive Chairman of the Board and Dr. Phil Skolnick, the Company’s Chief Scientific Officer, free of charge. During the fiscal year ended July 31, 2017 and the three months ended October 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 October 31, 2017. |
Deferred Revenue |
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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, 2019 to allow the Company to advance the program into final registration studies. Therefore, the Company will be recognizing revenue in the amount of approximately $7.2 thousand per month through December 31, 2019. During the fiscal year ended July 31, 2017, the Company recognized approximately $39.9 thousand of revenue related to this agreement. During the three-month period ended October 31, 2017, the Company recognized approximately $21.7 thousand of revenue in relation to this agreement. On May 15, 2014, the Company entered into an agreement and subsequently received funding from an investor, Ernst Welmers, in the amount of $300 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 1.5% interest (the “2014 1.5% Investor Interest”) in the OORT Net Profit generated from the Opioid Overdose Reversal Treatment Product in perpetuity. The investor also has rights with respect to the 2014 1.5% Investor Interest if the Opioid Overdose Reversal Treatment Product is sold or the Company is sold. If the Opioid Overdose Reversal Treatment Product was not approved by the FDA by May 15, 2016, the investor would have had a 60-day option to exchange its 2014 1.5% Investor Interest for 37,500 shares of Common Stock of the Company. The Opioid Overdose Reversal Treatment Product was approved by the FDA on November 18, 2015, and, as a result, the investor did not realize the option to exchange its 2014 1.5% Investor Interest for shares of Common Stock of the Company. During the year ended July 31, 2016, the Company recognized $300 thousand as revenue because the investor’s option to receive the shares of Common Stock terminated by its terms, and the research and development work related to the Opioid Overdose Reversal Treatment Product was completed as of July 31, 2016. On July 22, 2014, the Company received a $3.0 million commitment from a foundation (the “Foundation”) which later assigned its invest to Valour Fund, LLC (“Valour”) in October 2016, from which the Company had the right to make capital calls from the Foundation for the research, development, 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 (the “6.0% Fund Interest”) generated from the Opioid Overdose Reversal Treatment Product in perpetuity. Valour also has rights with respect to the 6.0% Fund Interest if the Opioid Overdose Reversal Treatment Product is sold or the Company is sold. Additionally, the Company may buy back, in whole or in part, the 6.0% Fund Interest within 2.5 years or after 2.5 years of the July 22, 2014 initial investment date at a price of two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. If the Opioid Overdose Reversal Treatment Product was not approved by the FDA or an equivalent body in Europe for marketing and was not actually marketed by July 22, 2016, the Foundation would have had a 60-day option to receive shares of the Company’s Common Stock in lieu of the 6.0% Fund Interest in the Opioid Overdose Reversal Treatment Product at an exchange rate of 10 shares for every dollar of its investment. On July 28, 2014, the Company received an initial investment of approximately $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, the Company made capital calls of approximately $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, the investor did not realize the option to exchange its 6.0% Fund Interest for shares of Common Stock of the Company. During the year ended July 31, 2016, the Company recognized $3.0 million as revenue because the option to receive the shares of Common Stock terminated by its terms, and the research and development work related to the Opioid Overdose Reversal Treatment Product was completed as of July 31, 2016. On September 9, 2014, the Company entered into an agreement with an investor, Potomac, and subsequently received funding from an individual investor in the amount of $500 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 0.98% interest in the OORT Net Profit (the “September 2014 0.98% Investor Interest”) generated from the Opioid Overdose Reversal Treatment Product in perpetuity. The investor also has rights with respect to the 0.98% Investor Interest if the Opioid Overdose Reversal Treatment Product is sold or the Company is sold. Additionally, the Company may buy back, in whole or in part, the September 2014 0.98% Investor Interest (i) within 2.5 years or (ii) after 2.5 years, but no later than four years, of the September 9, 2014 initial investment date, at a price equal to two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. If the Opioid Overdose Reversal Treatment Product was not introduced to the market and not approved by the FDA or an equivalent body in Europe and not marketed within 24 months of the September 9, 2014 initial investment date, the investor would have had a 60-day option to exchange the September 2014 0.98% Interest for 50,000 shares of Common Stock of the Company. The Opioid Overdose Reversal Treatment Product was approved by the FDA on November 18, 2015 and, as a result, the investor did not realize the option to exchange the September 2014 0.98% Interest for 50,000 shares of Common Stock of the Company. During the year ended July 31, 2016, the Company recognized $500 thousand as revenue because the option to receive the shares of Common Stock terminated by its terms, and the research and development work related to the Opioid Overdose Reversal Treatment Product was completed as of July 31, 2016. 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. As of October 31, 2017, no revenue had been recognized in relation to this agreement. On October 31, 2014, the Company entered into an agreement with an investor, Potomac, and subsequently received funding from an individual investor in the amount of $500 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 0.98% interest in the OORT Net Profit (the “October 2014 0.98% Investor Interest”) generated from the Opioid Overdose Reversal Treatment Product in perpetuity. The investor also has rights with respect to its 0.98% interest if the Opioid Overdose Reversal Treatment Product is sold or the Company is sold. Additionally, the Company may buy back, in whole or in part, the October 2014 0.98% Investor Interest from the investor (i) within 2.5 years or (ii) after 2.5 years, but no later than four years, of the October 31, 2014 investment date at a price equal to two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. If the Opioid Overdose Reversal Treatment Product was not introduced to the market and was not approved by the FDA or an equivalent body in Europe and not marketed by October 31, 2016, the investor would have had a 60-day option to exchange its October 2014 0.98% Interest for 50,000 shares of Common Stock of the Company. The Opioid Overdose Reversal Treatment Product was approved by the FDA on November 18, 2015 and, as a result, the investor did not realize the option to exchange its October 2014 0.98% Interest for 50,000 shares of Common Stock of the Company. During the year ended July 31, 2016, the Company recognized $500 thousand as revenue because the option to receive the shares of Common Stock terminated by its terms, and the research and development work related to the Opioid Overdose Reversal Treatment Product was completed as of July 31, 2016. 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. As of October 31, 2017, no revenue had been recognized in relation to this agreement. On September 22, 2015, the Company received a $1.6 million commitment 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) 605. 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. As of October 31, 2017, no revenue had been recognized in relation to this agreement. On December 8, 2015, the Company entered into an agreement with an investor, Potomac, to receive $500 thousand for use by the Company for any purpose, which $500 thousand was invested by December 18, 2015. In exchange for this funding, the Company granted the investor a 0.75% interest in the OORT Net Profit (the “0.75% Investor Interest”) generated from the Opioid Overdose Reversal Treatment Product in perpetuity. The investor also has rights with respect to its 0.75% Investor Interest if the Opioid Overdose Reversal Treatment Product is sold or the Company is sold. Additionally, the Company may buy back, in whole or in part, the 0.75% Investor Interest, from the investor (i) within 2.5 years or (ii) after 2.5 years, but no later than four years, of the December 8, 2015 initial investment date, at a price of two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. Such buyback can be for a portion of the 0.75% Investor Interest rather than for the entire interest. The investor also had an option to invest an additional $1.0 million by February 29, 2016 for use by the Company for any purpose in exchange for a 1.50% interest in the OORT Net Profit. If such investment were made, then the investor also would have rights with respect to its 1.50% interest if the Opioid Overdose Reversal Treatment Product was sold or the Company was sold. This investor option expired unexercised. During the year ended July 31, 2016, the Company recognized $500 thousand as revenue because the investment did not contain any option to exchange the 0.75% Investor Interest for shares of Common Stock of the Company, and the research and development work related to the Opioid Overdose Reversal Treatment Product was completed as of July 31, 2016. The following is a summary of the Company’s deferred revenue activity as of October 31, 2017:
As of October 31, 2017, the Company had recorded approximately $337 thousand of its deferred revenue as a current liability because the Company expects to recognize that amount as revenue during the next 12 months. The remaining $2.2 million was recorded as a long-term liability as of October 31, 2017, as detailed in the following table:
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Common Stock During the three months ended October 31, 2017, the Company issued 11,280 shares of Common Stock. On September 11, 2017, the Company issued 7,997 shares of its Common Stock in relation to the cashless exercise of a stock option that was granted outside of the Company's 2017 Long-Term Incentive Stock Plan (the "2017 Plan"). The option was for 10,000 shares of Common Stock with an exercise price of $10.00 per share. There was no expense to be recorded in relation to this stock option exercise. On September 23, 2017, the Company issued 3,283 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 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. 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. Pre-2017 Non-Qualified Stock Options As of October 31, 2017, the Company had granted Pre-2017 Non-Qualified Stock Options to purchase, in the aggregate, 3,188,000 shares of the Company's Common Stock. During the three months ended October 31, 2017, the Company did not grant any Pre-2017 Non-Qualified Stock Options. On September 5, 2017, the Company accepted, effective September 11, 2017, 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. Pursuant to the terms of Mr. Pollack's Separation Agreement, Mr. Pollack agreed to forfeit previously granted options to purchase, in the aggregate, 572,000 shares of the Company's Common Stock. These options were fully vested and exercisable at the time of forfeiture. On September 11, 2017, an option holder exercised 10,000 Pre-2017 Non-Qualified Stock Options at an exercise price of $10.00 per share. This option was exercised on a cashless basis and resulted in the Company issuing 7,997 shares of its Common Stock to the option holder. On September 30, 2017, the Company remeasured two prior period Pre-2017 Non-Qualified Stock Option grants made to a consultant, as September 30, 2017 represented the final vesting date of these two option grants. The Company valued these options using the Black-Scholes-Merton ("Black-Scholes") option pricing model, which resulted in the Company recording approximately $92.3 thousand of non-cash expense during the three months ended October 31, 2017. These two option grants have been fully expensed as of October 31, 2017. During the three months ended October 31, 2016, the Company granted Pre-2017 Non-Qualified Stock Options to purchase a total of 50,000 shares of its Common Stock exercisable on a cashless basis to two employees. These options had an exercise price of $10.00 and a term of 10 years. These options vest as follows: 1,388 shares vest upon each of the first through twentieth month anniversaries of the grant date and 1,390 shares vest upon each of the twenty-first through thirty-sixth month anniversaries of the grant date. The Company valued these options using the Black-Scholes option pricing model which resulted in a fair market value of approximately $425 thousand, in the aggregate, as of the date of grant. The assumptions used in the valuation of the Pre-2017 Non-Qualified Stock Options for the three months ended October 31, 2017 and 2016 are as follows:
Stock option activity for the Pre-2017 Non-Qualified Stock Options for the three months ended October 31, 2017 is presented in the table below:
A summary of the status of the Company’s non-vested Pre-2017 Non-Qualified Stock Options as of October 31, 2017 and changes during the three months ended October 31, 2017 are presented below:
During the three months ended October 31, 2017 and 2016, the Company recognized approximately $420 thousand and $181 thousand, respectively, of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. As of October 31, 2017, there was approximately $1.3 million of unrecognized compensation costs related to non-vested Pre-2017 Non-Qualified Stock Options. The 2017 Plan On September 8, 2017, the Company granted an option to its Controller to purchase 40,000 shares of the Company’s Common Stock at an exercise price of $49.93 per share, which represents the per share closing price of the Company’s Common Stock on the date of grant. This option was issued under the 2017 Plan and has a ten year term. The option vests as follows: 25% on the one year anniversary of the grant date and then 1/48th of the option shares vest on such date every month thereafter through the fourth anniversary of the grant date. The Company valued this option using the Black-Scholes option pricing model and estimated the fair value on the grant date to be approximately $1.99 million. During the three months ended October 31, 2017, the Company recognized approximately $196 thousand of expense related to this option grant. On September 12, 2017, the Company granted an option to David D. O’Toole, the Company's Chief Financial Officer, to purchase 150,000 shares of the Company’s Common Stock at an exercise price of $36.00 per share, which represents the closing price of the Company’s Common Stock on the date of grant. This option was issued under the Company’s 2017 Plan and has a ten year term. The option vests as follows: 25% on the one year anniversary of the grant date and then 1/48th of the option shares vest on such date every month thereafter through the fourth anniversary of the grant date. The Company valued this option using the Black-Scholes option pricing model and estimated the fair value on the grant date to be approximately $5.4 million. During the three-month period ended October 31, 2017, the Company recognized approximately $530 thousand of expense related to this option grant. On September 18, 2017, the Company granted an option to a consultant to purchase 15,000 shares of the Company’s Common Stock at an exercise price of $27.56 per share, which represents the closing price of the Company’s Common Stock on the date of grant. This option was issued under the Company’s 2017 Plan and has a ten year term. The option vests as follows: 1/3rd on the one year anniversary of the grant date and then 1/36th of the option shares vest on such date every month thereafter through the third anniversary of the grant date. The Company valued this option using the Black-Scholes option pricing model and estimated the fair value on the grant date to be approximately $413 thousand. The Company remeasured this option as of October 31, 2017 and estimated its value to be $576 thousand. During the three months ended October 31, 2017, the Company recognized approximately $66 thousand of expense related to this option grant. On October 24, 2017, the Company granted an option to an employee to purchase 1,500 shares of the Company’s Common Stock at an exercise price of $29.02 per share, which represents closing price of the Company’s Common Stock on the date of grant. This option was issued under the Company’s 2017 Plan and has a ten year term. The option vests as follows: 25% on the one year anniversary of the grant date and then 1/48th of the option shares vest on such date every month thereafter through the fourth anniversary of the grant date. The Company valued this option using the Black-Scholes option pricing model and estimated the fair value on the date of grant to be $43.5 thousand. The Company will begin expensing this option in November 2017. The assumptions used in the valuation of options granted under the 2017 Plan during the three months ended October 31, 2017 are as follows:
Stock option activity for options granted under the 2017 Plan during the three months ended October 31, 2017 is presented in the table below:
A summary of the status of the Company’s non-vested options granted under the 2017 Plan as of October 31, 2017 and changes during the three months ended October 31, 2017 are presented in the following table:
During the three months ended October 31, 2017, the Company recognized approximately $792 thousand of non-cash expense related to vested options granted during this period. As of October 31, 2017, there was approximately $7.2 million of unrecognized compensation costs related to non-vested stock options that were granted under the 2017 Plan. Warrants During the three-month period ended October 31, 2017, the Company did not issue any warrants. On September 5, 2017, the Company accepted, effective September 11, 2017, 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. Pursuant to the terms of Mr. Pollack's Separation Agreement, he agreed to forfeit a previously issued warrant to purchase 55,000 shares of the Company's Common Stock. This warrant was fully vested and exercisable at the time of forfeiture. Warrant activity for the three months ended October 31, 2017 is presented in the table below:
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Commitments |
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Oct. 31, 2017 | |||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Commitments | Commitments The Company has entered into various agreements related to its business activities. The following is a summary of the Company’s commitments:
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, while no such fees were incurred by the Company during fiscal year 2016. 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 Agreement, approximately $140.6 thousand, or 3.75% of the Earn Out Milestone Payment (as defined in the SWK 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 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 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 on September 23, 2017 as payment for fees owed. Both the $100 thousand of fees paid via the issuance of common stock and the$240.6 thousand of fees paid in cash had been recorded as accrued liabilities as of July 31, 2017. During the three-month period ended October 31, 2017, the Company did not incur any fees related to Torreya. As of October 31, 2017, the Company had an accrued liability of $400 thousand owed to Torreya, of which $200 thousand was categorized as a current liability because it was due and payable to Torreya within 12 months of October 31, 2017. The remaining $200 thousand was categorized as a long-term liability as of October 31, 2017 because it was not due and payable to Torreya until December 2018.
On April 20, 2017, the Company entered into an Office Service Agreement (the “Office Service Agreement”) with Regus to lease office space at 83 Baker Street, London, England, W1U 6AG. Per the terms of the Office Service Agreement, the first month’s rent is £2,473 with monthly rental payments of £7,521 thereafter. The Company was required to pay a security deposit of £15,042, which is the equivalent of two months of rent. The Office Service Agreement commenced on May 22, 2017 and terminates on May 31, 2018, with either party being able to terminate this agreement as of May 31, 2018 by providing written notice three months in advance of the termination date of May 31, 2018. The Company had also leased office space in Euston Tower, L32 to L34, 286 Euston Road, London, England, NW1 3DP for a total of €1,932 for the initial five-month term ended March 31, 2017. In March 2017, the Company extended the term of the lease through July 2017 with the monthly rent remaining the same. The Company’s lease was with Euston Tower Serviced Offices Ltd. and was terminated as of July 31, 2017. During the three months ended October 31, 2017, the Company incurred approximately $71 thousand of rent expense as compared to approximately $22 thousand during the three months ended October 31, 2016.
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 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 Products during the Royalty Term (as defined in the License Agreement) according to a tiered royalty rate based on Annual Net Sales of the 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. For the three months ended October 31, 2017, the Company recorded $150 thousand in expense associated with the License Agreement. 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).
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 three months ended October 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 October 31, 2017, the Company has recorded an accrued liability of approximately $962 thousand, which represents the amount the Company must pay to Mr. Pollack no later than September 14, 2018. |
Sale of Royalties |
3 Months Ended |
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Oct. 31, 2017 | |
Sale Of Royalties [Abstract] | |
Sale of Royalties | Sale of Royalties On December 13, 2016, the Company entered into the SWK 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 Agreement) arising from the sale by Adapt, pursuant to the Adapt Agreement of NARCAN or any other intranasal naloxone opioid overdose reversal treatment (the "Product"), up to (i) $20.625 million and then the Residual Royalty thereafter or (ii) the Earn Out Milestone, and then the Residual Royalty (as defined below) thereafter. The Residual Royalty is defined in the SWK 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 SWK Agreement, the Company received an upfront purchase price of $13.75 million less $40 thousand of legal fees at Closing, and will receive an additional $3.75 million if the Earn Out Milestone is achieved (the “Purchase Price”). The SWK 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 SWK Agreement, to cure any breach of or default under any Product Agreement by the Company. Under the SWK Agreement, the Company granted SWK a security interest in the Purchased Assets in the event that the transfer contemplated by the SWK Agreement is held not to be a sale. The SWK 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 SWK 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 SWK 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 SWK 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 $3.75 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. On December 15, 2014, in connection with the SWK Agreement, the Company and Adapt entered into the Adapt Agreement which provides Adapt with a global license to develop and commercialize the Product in exchange for the Company receiving potential development and sales milestone payments that could exceed $20 million in the aggregate plus certain royalties. |
Subsequent Events |
3 Months Ended |
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Oct. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On November 30, 2017, Mr. Geoffrey Wolf resigned as a member of the Board, and any committees of the Board, as well as any officer or other positions Mr. Wolf held with the Company, effective November 30, 2017. Mr. Wolf resigned as a result of a dispute between Mr. Wolf and the Company regarding the Company’s historical failure to register shares underlying certain options and warrants previously granted to Mr. Wolf, which registration was remedied on November 27, 2017 by the Company filing a registration statement on Form S-8 with the SEC. At the time of his resignation, a dispute also had arisen between the Company and Mr. Wolf regarding potential violations of Company policy. Mr. Wolf disputes any allegation that he violated any Company policy. On November 30, 2017, Mr. Wolf exercised an outstanding warrant to purchase 30,000 shares of Common Stock at an exercise price of $15.00. The Company received $450,000 in proceeds as a result of Mr. Wolf's warrant exercise. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying condensed 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 SEC for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated balance sheet at July 31, 2017 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company's financial position as of October 31, 2017 and July 31, 2017, results of its operations for the three months ended October 31, 2017 and 2016 and cash flows for the three months ended October 31, 2017 and 2016. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. These classifications have no effect on the previously reported net loss of loss per share. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Opiant Pharmaceuticals UK Limited, a company incorporated on November 4, 2016 under the England and Wales Companies Act of 2006. Intercompany balances and transactions are eliminated upon consolidation. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended July 31, 2017 included in the Company's Annual Report on Form 10-K filed with the SEC on October 13, 2017. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates included in the financial statements include the valuation of: deferred income tax assets, liability and equity instruments, stock-based compensation, acquired intangibles, contingent earn-out consideration, and allowances for accounts receivable and inventory. |
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. |
Recently Issued Accounting Pronouncements | The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Deferred Revenue (Tables) |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Revenue Activity | The following is a summary of the Company’s deferred revenue activity as of October 31, 2017:
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Deferred Revenue, by Arrangement | The remaining $2.2 million was recorded as a long-term liability as of October 31, 2017, as detailed in the following table:
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Stockholders' Equity (Tables) |
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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 three months ended October 31, 2017 are as follows:
The assumptions used in the valuation of the Pre-2017 Non-Qualified Stock Options for the three months ended October 31, 2017 and 2016 are as follows:
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Schedule of Options and Warrants Outstanding | Warrant activity for the three months ended October 31, 2017 is presented in the table below:
Stock option activity for options granted under the 2017 Plan during the three months ended October 31, 2017 is presented in the table below:
Stock option activity for the Pre-2017 Non-Qualified Stock Options for the three months ended October 31, 2017 is presented in the table below:
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Schedule of Nonvested Share Activity | A summary of the status of the Company’s non-vested options granted under the 2017 Plan as of October 31, 2017 and changes during the three months ended October 31, 2017 are presented in the following table:
A summary of the status of the Company’s non-vested Pre-2017 Non-Qualified Stock Options as of October 31, 2017 and changes during the three months ended October 31, 2017 are presented below:
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Description of Business (Details) - $ / shares |
Oct. 02, 2017 |
Oct. 31, 2017 |
Jul. 31, 2017 |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Opiant Pharmaceuticals, Inc. | |||
Business Acquisition [Line Items] | |||
Shares issued upon merger (in shares) | 1 |
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
Oct. 31, 2017 |
Jul. 31, 2017 |
Oct. 31, 2016 |
Jul. 31, 2016 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 5,903 | $ 6,873 | $ 1,185 | $ 1,481 |
Deferred Financing Costs (Details) - USD ($) $ in Thousands |
Oct. 31, 2017 |
Jul. 31, 2017 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred financing costs | $ 146 | $ 0 |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Aug. 31, 2017 |
Oct. 31, 2017 |
Jul. 31, 2017 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid expenses and other current assets | $ 729 | $ 164 | |
Long-term Purchase Commitment [Line Items] | |||
Payments for Prepaid Research and Development Supplies | 100 | ||
Cost to purchase research and development supplies | 100 | ||
Research and Development Arrangement | |||
Long-term Purchase Commitment [Line Items] | |||
Payments to acquire in-process research and development | $ 418 | $ 418 |
Deferred Revenue - Summary of Deferred Revenue Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Oct. 31, 2017 |
Jul. 31, 2017 |
|
Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | $ 2,561 | $ 2,600 |
Recognized as revenue | (22) | (39) |
Balance at end of period | 2,539 | 2,561 |
OORT | ||
Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | 0 | 0 |
Recognized as revenue | 0 | 0 |
Balance at end of period | 0 | 0 |
BED | ||
Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | 961 | 1,000 |
Recognized as revenue | (22) | (39) |
Balance at end of period | 939 | 961 |
Other Opioid Treatments | ||
Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | 1,600 | 1,600 |
Recognized as revenue | 0 | 0 |
Balance at end of period | $ 1,600 | $ 1,600 |
Deferred Revenue - Summary Current vs. Long Term Deferred Revenue (Details) - USD ($) $ in Thousands |
Oct. 31, 2017 |
Jul. 31, 2017 |
Jul. 31, 2016 |
---|---|---|---|
Deferred Revenue Arrangement [Line Items] | |||
Current portion | $ 337 | $ 254 | |
Long-term portion | 2,202 | 2,307 | |
Total | 2,539 | 2,561 | $ 2,600 |
OORT | |||
Deferred Revenue Arrangement [Line Items] | |||
Current portion | 0 | ||
Long-term portion | 0 | ||
Total | 0 | 0 | 0 |
BED | |||
Deferred Revenue Arrangement [Line Items] | |||
Current portion | 337 | ||
Long-term portion | 602 | ||
Total | 939 | 961 | 1,000 |
Other Opioid Treatments | |||
Deferred Revenue Arrangement [Line Items] | |||
Current portion | 0 | ||
Long-term portion | 1,600 | ||
Total | $ 1,600 | $ 1,600 | $ 1,600 |
Stockholders' Equity - Stock Options (Details) - 2017 Plan - shares |
3 Months Ended | ||
---|---|---|---|
Oct. 24, 2017 |
Oct. 31, 2017 |
Sep. 08, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
Employee Stock Option | |||
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 |
Stockholders' Equity - Schedule of Pre-2017 Non-Qualified Stock Options Valuation Assumptions (Details) - Pre-2017 Non-Qualified Stock Options - Employee Stock Option - $ / shares |
3 Months Ended | |
---|---|---|
Oct. 31, 2017 |
Oct. 31, 2016 |
|
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% | |
Dividend yield | 0.00% | 0.00% |
Volatility factor | 96.00% | |
Term | 2 years 1 month 13 days | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market value of stock on measurement date (in dollars per share) | $ 8.71 | |
Risk-free interest rate | 1.75% | |
Volatility factor | 348.00% | |
Term | 10 years | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market value of stock on measurement date (in dollars per share) | $ 7.52 | |
Risk-free interest rate | 0.88% | |
Volatility factor | 114.00% | |
Term | 3 years 11 days |
Stockholders' Equity - Schedule of Pre-2017 Non-Qualified Stock Options Nonvested Share Activity (Details) - Employee Stock Option - Pre-2017 Non-Qualified Stock Options |
3 Months Ended |
---|---|
Oct. 31, 2017
$ / shares
shares
| |
Number of Shares | |
Non-vested, beginning balance (in shares) | shares | 339,871 |
Vested (in shares) | shares | (46,249) |
Non-vested, ending balance (in shares) | shares | 293,622 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested, beginning balance (in dollars per share) | $ / shares | $ 7.93 |
Vested (in dollars per share) | $ / shares | 9.46 |
Non-vested, ending balance (in dollars per share) | $ / shares | $ 7.94 |
Stockholders' Equity - Schedule of 2017 Plan Valuation Assumptions (Details) - 2017 Plan - Employee Stock Option |
3 Months Ended |
---|---|
Oct. 31, 2017
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Market value of stock on measurement date (in dollars per share) | $ 27.56 |
Risk-free interest rate | 2.05% |
Volatility factor | 327.00% |
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 |
Risk-free interest rate | 2.42% |
Volatility factor | 329.00% |
Term | 10 years |
Stockholders' Equity - Schedule of 2017 Plan Options Outstanding (Details) - 2017 Plan - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Oct. 31, 2017 |
Jul. 31, 2017 |
|
Number of Shares | ||
Outstanding at beginning of period (in shares) | 0 | |
Total options authorized (in shares) | 400,000 | |
Options granted (in shares) | (206,500) | |
Expired (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Options available (in shares) | 193,500 | |
Outstanding at end of period (in shares) | 206,500 | 0 |
Exercisable (in shares) | 0 | |
Weighted- average Exercise Price | ||
Exercised (in dollars per share) | $ 38.03 | |
Outstanding (in dollars per share) | $ 38.03 | |
Weighted- average Remaining Contractual Term (years) | ||
Outstanding | 9 years 10 months 13 days | |
Aggregate Intrinsic Value (in Thousands) | ||
Outstanding | $ 535 |
Stockholders' Equity - Schedule of 2017 Nonvested Share Activity (Details) - Employee Stock Option - 2017 Plan |
3 Months Ended |
---|---|
Oct. 31, 2017
$ / shares
shares
| |
Number of Shares | |
Non-vested, beginning balance (in shares) | 0 |
Options granted (in shares) | (206,500) |
Vested (in shares) | 0 |
Non-vested, ending balance (in shares) | 206,500 |
Weighted Average Grant Date Fair Value Per Share | |
Granted (in dollars per share) | $ / shares | $ 38.82 |
Non-vested (in dollars per share) | $ / shares | $ 38.82 |
Stockholders' Equity - Warrants, Additional Information (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Sep. 05, 2017 |
Oct. 31, 2017 |
|
Warrant | ||
Class of Warrant or Right [Line Items] | ||
Warrants issued | $ 0 | |
Chief Financial Officer | ||
Class of Warrant or Right [Line Items] | ||
Warrants forfeited (in shares) | 55,000 |
Stockholders' Equity - Schedule of Warrants Outstanding (Details) - Warrant - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Oct. 31, 2017 |
Jul. 31, 2017 |
|
Number of Shares | ||
Outstanding at beginning of period (in shares) | 768,800 | |
Forfeited (in shares) | (55,000) | |
Outstanding at end of period (in shares) | 713,800 | 768,800 |
Exercisable (in shares) | 713,800 | |
Weighted- average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 12.50 | |
Forfeited (in dollars per share) | 15.00 | |
Outstanding at end of period (in dollars per share) | 12.31 | $ 12.50 |
Exercisable (in dollars per share) | $ 12.31 | |
Weighted- average Remaining Contractual Term (years) | ||
Outstanding | 2 years 11 months 27 days | 3 years 15 days |
Exercisable | 2 years 11 months 27 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 18,617 | $ 1,184 |
Exercisable | $ 18,617 |
Commitments - Section B (Details) - Letter Of Intent - USD ($) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 16, 2017 |
Nov. 10, 2016 |
Nov. 19, 2015 |
Oct. 31, 2017 |
Jul. 31, 2017 |
Jul. 31, 2016 |
|
Other Commitments [Line Items] | ||||||
Stock newly-issued during the period (in shares) | 14,327 | 14,327 | 0 | |||
Stock issued during the period | $ 83,300 | $ 85,100 | $ 120,300 | $ 0 | $ 83,300 | |
Additional stock issued during the period, upon milestones (in shares) | 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 |
Commitments - Section C (Details) - License Royalty Commitment - USD ($) |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Oct. 31, 2016 |
Oct. 31, 2017 |
Jul. 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 | ||
Minimum | |||
Other Commitments [Line Items] | |||
Payments for royalties | $ 10,000 | ||
Maximum | |||
Other Commitments [Line Items] | |||
Fixed milestone payments | $ 715,700 |
Commitments - Section D (Details) |
1 Months Ended | 2 Months Ended | 3 Months Ended | 5 Months Ended | ||
---|---|---|---|---|---|---|
Apr. 20, 2017
GBP (£)
|
Aug. 31, 2017
USD ($)
|
Oct. 31, 2017
USD ($)
|
Oct. 31, 2017
USD ($)
|
Oct. 31, 2016
USD ($)
|
Mar. 31, 2017
GBP (£)
|
|
Other Commitments [Line Items] | ||||||
Rent expense | $ | $ 71,000 | $ 22,000 | ||||
Premier Office Centers, LLC | ||||||
Other Commitments [Line Items] | ||||||
Monthly rent expense | $ | $ 5,056 | |||||
Standish Management, LLC | ||||||
Other Commitments [Line Items] | ||||||
Monthly rent expense | $ | $ 5,000 | $ 9,000 | ||||
Regus Management Group, LLC | ||||||
Other Commitments [Line Items] | ||||||
Monthly rent expense | £ 7,521 | |||||
Rent expense | 2,473 | |||||
Security deposit | £ 15,042 | |||||
Security deposit, period of rent equivalent | 2 months | |||||
Advance termination period | 3 months | |||||
Euston Tower Serviced Offices Ltd | ||||||
Other Commitments [Line Items] | ||||||
Rent expense | £ 1,932 | |||||
Term of contract | 5 months |
Commitments - Section E (Details) |
Jun. 01, 2017
USD ($)
|
May 28, 2016
USD ($)
|
Dec. 23, 2015
USD ($)
|
Dec. 08, 2015
USD ($)
|
Oct. 02, 2015
USD ($)
|
Sep. 22, 2015
USD ($)
|
Jul. 20, 2015
USD ($)
|
Feb. 17, 2015
USD ($)
|
Nov. 13, 2014
USD ($)
|
Oct. 31, 2014
USD ($)
|
Sep. 17, 2014
USD ($)
|
Sep. 09, 2014
USD ($)
|
Sep. 08, 2014
USD ($)
|
Aug. 13, 2014
USD ($)
|
May 15, 2014
USD ($)
|
Dec. 17, 2013
USD ($)
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Other Commitments [Line Items] | ||||||||||||||||
Proceeds from funding agreement (at least) | $ 266,500 | $ 715,500 | $ 500,000 | $ 618,000 | $ 1,600,000 | $ 250,000 | $ 988,000 | $ 1,034,000 | $ 500,000 | $ 500,000 | $ 500,000 | $ 444,500 | $ 422,000 | $ 300,000 | $ 250,000 | |
LYL Interest Buyback Agreement | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Other commitment, period | 4 years 6 months | |||||||||||||||
Price of right to buyback interest per five percent of interest | $ 500,000 | |||||||||||||||
Interest buyback advanced notice period | 3 years 3 months | |||||||||||||||
Interest buyback ratio, after notice period | 3.15 | |||||||||||||||
Interest buyback ratio, within notice period | 1.8 | |||||||||||||||
Payment period following buyback notice | 10 days | |||||||||||||||
Proceeds from funding agreement (at least) | $ 3,000,000 | |||||||||||||||
Percent of actual amounts received to determine net profit | 50.00% |
Commitments - Section F (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 22, 2017
USD ($)
trading_days
payment
|
Oct. 31, 2017
USD ($)
|
|
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 | |
License costs | $ 150 | |
Supply Agreement | ||
Other Commitments [Line Items] | ||
Other commitment, period | 20 years | |
Material cure period | 60 days |
Commitments - Section G (Details) - Research and Development Arrangement - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended |
---|---|---|
Aug. 31, 2017 |
Oct. 31, 2017 |
|
Long-term Purchase Commitment [Line Items] | ||
Termination notice period | 45 days | |
Payments to acquire in-process research and development | $ 418 | $ 418 |
Supplies expense | $ 100 |
Commitments - Section H (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Sep. 12, 2017
USD ($)
installment
shares
|
Sep. 05, 2017 |
Oct. 31, 2017
USD ($)
|
Jul. 31, 2017
USD ($)
|
|
Other Commitments [Line Items] | ||||
Accrued liabilities, current | $ 2,094 | $ 1,432 | ||
Accrued salaries and wages | 653 | $ 1,701 | ||
Separation Agreement | ||||
Other Commitments [Line Items] | ||||
Expiration period of resignation revocation | 7 days | |||
Payments for accrued obligations | $ 1,130 | |||
Other commitments, payment period | 3 days | |||
Payments for postemployment benefits | $ 1,440 | |||
Options granted (in shares) | shares | 948,000 | |||
Maximum period of advisement by former officer | 12 months | |||
Payments for other commitments | 1,610 | |||
Accrued salaries and wages | $ 962 | |||
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 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Nov. 30, 2017 |
Oct. 31, 2017 |
|
Common Stock | ||
Subsequent Event [Line Items] | ||
Stock newly-issued during the period (in shares) | 11,280 | |
Subsequent Event | Director | ||
Subsequent Event [Line Items] | ||
Proceeds from warrant exercises | $ 450 | |
Subsequent Event | Warrant | Director | ||
Subsequent Event [Line Items] | ||
Exercise price of warrants (in dollars per share) | $ 15.00 | |
Subsequent Event | Common Stock | Director | ||
Subsequent Event [Line Items] | ||
Stock newly-issued during the period (in shares) | 30,000 |
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