Stockholders' Equity

3 Months Ended

Oct. 31, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

Common Stock

Pursuant to an agreement dated September 1, 2015, Lightlake issued 10,000 shares in exchange for services rendered by a consultant. The shares issued in this transaction were valued using the stock price at issuance date and amounted to $80,500.

On October 6, 2015, the Company entered into an amendment to an agreement to use certain technology owned by Aegis Therapeutics, LLC. This amendment had an effective date of May 19, 2015 and allowed the Company to evaluate Aegis’ Technology until August 17, 2015. The amendment also provided an opportunity for the Company to elect to further extend the period of time during which the Company could evaluate Aegis’ Technology until February 13, 2016. In exchange for electing to further extend this period of time, the Company paid Aegis $75,000 and issued 13,697 shares of the Company’s common stock. The shares issued in this transaction were using the stock price at issuance date and amounted to $106,152.

Stock Options

As required by the Stock Compensation Topic, ASC 718, Lightlake measures and recognizes compensation expense for all share based payment awards made to the officers and directors based on estimated fair values at the grant date and over the requisite service period.

On October 27, 2015, Lightlake granted 1,437,500 cashless stock options to the board of directors and a senior executive of the Company. These options have an exercise price of $7.25, a term of 10 years and vested immediately. Each stock option is fully vested on the date of grant, but may only be exercised between the following dates: (i) the first to occur of: (A) the commencement of three trials on or subsequent to October 23, 2015; or (B) (1) the approval by the U.S. Food and Drug Administration of the New Drug Application with respect to the opioid overdose reversal treatment, and (2) the commencement of two trials on or subsequent to October 23, 2015; and (ii) the expiration date. The Company has valued these options using the Black-Scholes option pricing model which resulted in a fair market value of $10,062,500 which have been fully recognized as expense for the three months ended October 31, 2015.

Lightlake also recognized stock based compensation expense of $29,679 in connection with vested options granted in prior periods.

The assumptions used in the valuation for all of the options granted for the three months ended October 31, 2015 were as follows:

Market value of stock on measurement date	$	7.00
Risk-free interest rate		2.05	%
Dividend yield		0	%
Volatility factor		373	%
Term		10 years

Stock option activity for three months ended October 31, 2015 is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at July 31, 2015		3,157,500		9.42		7.58
Granted		1,437,500		7.25
Forfeited/expired/cancelled		-		-
Outstanding at October 31, 2015		4,595,000		8.74		8.16	$	1,335,000
Exercisable at October 31, 2015		2,860,416		8.88		7.84	$	1,335,000

A summary of the status of Lightlake’s non-vested options as of October 31, 2015 and changes during the three months ended October 31, 2015 are presented below:

Non-vested options	Number of Options		Weighted Average Grant Date Fair Value
Non-vested at July 31, 2015		37,500	$	3.85
Granted		1,437,500		7.00
Vested		(1,441,667)		7.00
Non-vested at October 31, 2015		33,333	$	3.85

At October 31, 2015, there was $95,471 of unrecognized compensation costs related to non-vested stock options.

Warrants

Warrant activity for the three months ended October 31, 2015 is presented in the table below:

	Number of Shares		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at July 31, 2015		1,338,552	$	19.53		3.55	$	-
Issued		-				-		-
Exercised		-				-		-
Outstanding at October 31, 2015		1,338,552	$	19.53		3.30	$	-
Exercisable at October 31, 2015		613,522	$	24.88		4.63	$	-