Stockholders' Equity

9 Months Ended

Apr. 30, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity

6.           Stockholders’ Equity

Common Stock

Pursuant to an agreement dated September 1, 2015, the Company 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 issued 13,697 shares of the Company’s common stock pursuant to the agreement described in Note 7. 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 on December 18, 2015 and 9,000 shares of common stock on March 21, 2016 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 and $94,500 respectively. In addition, the Company agreed to issue 11,000 shares of common stock by June 30, 2016 and 13,000 shares of common stock by September 30, 2016. At April 30, 2016, the Company had recorded $121,760 of stock-based compensation for the additional 24,000 shares to be issued by September 30, 2016.

On February 1, 2016, the Company issued 5,500 shares of the Company’s common stock to a consultant for consulting services. The shares issued in this transaction were valued using the stock price at issuance date and amounted to $57,750.

On February 8, 2016, the Company issued 10,746 shares of the Company’s common stock pursuant to the agreement described in Note 7. The shares issued in this transaction were valued using the stock price at issuance date and amounted to $106,385.

On March 8, 2016, the Company issued 3,582 shares of common stock to a consultant as a result of the first commercial sale of NARCAN® Nasal Spray by Adapt Pharma Operations Limited in the U.S. The shares issued in this transaction were valued using the stock price at issuance date and amounted to $32,775.

On March 25, 2016, the Company issued 15,715 shares of common stock as a result of the cashless exercise of 30,000 options.

On April 26, 2016, the Company issued 50,000 shares of common stock pursuant to the agreement described in Note 7. The shares issued in this transaction were valued using the stock price at issuance date and amounted to $431,500.

Stock Options

As required by the Stock Compensation Topic, ASC 718, the Company 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, the Company 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 April 30, 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 nine months ended April 30, 2016.

The Company also recognized stock based compensation expense of $121,055 in connection with vested options granted in prior periods.

The assumptions used in the valuation for all of the options granted for the nine months ended April 30, 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 nine months ended April 30, 2016 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
Exercised		(30,000)		5.00
Outstanding at April 30, 2016		4,565,000	$	8.77	$	7.68	$	5,969,725
Exercisable at April 30, 2016		4,277,500	$	8.37	$	8.07	$	5,969,725

A summary of the status of the Company’s non-vested options as of April 30, 2016 and changes during the nine months ended April 30, 2016 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		(1,450,000)		7.01
Non-vested at April 30, 2016		25,000	$	3.85

At April 30, 2016, there was $44,352 of unrecognized compensation costs related to non-vested stock options.

Warrants

Warrant activity for the nine months ended April 30, 2016 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		–				–		–
Expired		(119,767)		35.14		–		–
Outstanding at April 30, 2016		1,218,785	$	17.99		3.11	$	34,144
Exercisable at April 30, 2016		493,785	$	22.39		5.22	$	34,144