Stockholders' Equity

6 Months Ended

Jan. 31, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

 

Common Stock

Pursuant to an agreement dated September 1, 2015, Opiant 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 (“Aegis’ Technology”). 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.

On November 19, 2015, the Company issued 14,327 shares of 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 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 $120,347. Pursuant to the letter of intent, the Company is obligated to issue up to an additional 92,634 common shares upon the occurrence of various milestones.

On December 16, 2015, the Company entered into a services agreement with a term of one year. Pursuant to the agreement, the Company issued 7,000 shares of common stock 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 $64,050. In addition, the Company agreed to issue 9,000 shares of common stock by March 31, 2016, 11,000 shares of common stock by June 30, 2016 and 13,000 shares of common stock by September 30, 2016. At January 31, 2016, the Company had recorded $85,434 of stock-based compensation for the additional 33,000 shares to be issued by September 30, 2016.

Stock Options

As required by the Stock Compensation Topic, ASC 718, Opiant 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, Opiant 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 FDA 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. As of January 31, 2016, the conditions for exercisability were met and the options were fully exercisable. 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 six months ended January 31, 2016.

Opiant also recognized stock based compensation expense of $103,891 in connection with vested options granted in prior periods.

The assumptions used in the valuation for all of the options granted for the six months ended January 31, 2016 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 six months ended January 31, 2016 is presented in the table below:

					Weighted-
					average
			Weighted-		Remaining
			average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(years)		Value
Outstanding at July 31, 2015		3,157,500		9.42		7.58
Granted		1,437,500		7.25
Forfeited/expired/cancelled		–		–
Outstanding at January 31, 2016		4,595,000		8.74		7.91	$	9,768,125
Exercisable at January 31, 2016		4,302,083		8.34		8.30	$	9,768,125

A summary of the status of Opiant’s non-vested options as of January 31, 2016 and changes during the three months ended January 31, 2016 are presented below:

			Weighted Average
	Number of		Grant Date
Non-vested options	Options		Fair Value
Non-vested at July 31, 2015		37,500	$	3.85
Granted		1,437,500		7.00
Vested		(1,445,834)		7.00
Non-vested at January 31, 2016		29,166	$	3.85

At January 31, 2016, there was $95,583 of unrecognized compensation costs related to non-vested stock options.

Warrants

Warrant activity for the three months ended January 31, 2016 is presented in the table below:

					Weighted-
			Weighted-		average
			average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term (years)		Value
Outstanding at July 31, 2015		1,338,552	$	19.53		3.55	$	–
Issued		–				–		–
Expired		(90,167)		30.27		–		–
Outstanding at January 31, 2016		1,248,385	$	17.49		3.06	$	–
Exercisable at January 31, 2016		523,385	$	23.95		5.17	$	–