Note 13. Subsequent Events

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 “Agreement”). The Agreement shall not be effective or enforceable until after the seven-day revocation period ends on September 12, 2017 without Mr. Pollack’s revocation (the “Agreement Effective Date”).

Mr. Pollack will receive (i) a payment equal to $1,130,815 relating to certain accrued obligations, payable in a cash lump sum within three business days following the Agreement Effective Date; and (ii) a separation payment equal to $1,442,500, payable in one or two installments in accordance with the terms set forth. Mr. Pollack will retain previously granted options to purchase, in the aggregate, 948,000 shares of common stock, $0.001 par value per share of the Company, which options are currently each fully vested and exercisable. Except as set forth in the Agreement, all other options held by Mr. Pollack will be forfeited. Additionally, for a period of no more than 12 months following the Separation Date, Mr. Pollack will cooperate as an advisor 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 Agreement.

On September 12, 2017, the Company hired David D. O’Toole to succeed Kevin Pollack as the Chief Financial Officer. Mr. O’Toole is entitled to an annual base salary of $360,000 and an annual target bonus equal to 40% of his annual base salary. Mr. O’Toole received a one-time signing bonus equal to $45,000 on September 29, 2017. Furthermore, Mr. O’Toole was granted an incentive stock option to purchase 150,000 shares of the Company’s common stock, par value $0.001 per share with an exercise price per share no less than the fair market value of a share of Common Stock on the date of grant, pursuant to the Company’s 2017 Long-Term Incentive Plan. The shares of Common Stock underlying Mr. O’Toole’s option shall vest and become exercisable over a four-year period commencing on the September 12, 2017, subject to Mr. O’Toole’s continued employment with the Company or its affiliate through each such vesting date.

On September 8, 2017, the Company and Torreya entered into a revised engagement to provide financial advisory services with respect to the licensing of the intellectual and property rights to develop and commercialize certain products with Adapt. The revised engagement amends total consideration as follows: (i) an aggregate of $300,000 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 of the Company, $0.001 par value per share (“Common Stock”), equal to an aggregate value of $300,000, to be issued by the Company to Torreya in three equal instalments over a 16-month period; (iii) if the Earn Out Milestone Payment (as defined in the SWK Agreement) is paid under the SWK Agreement, $140,625, or $3.75% of the Earn Out Milestone Payment, 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 (as defined in the SWK Agreement), if the Earn Out Milestone Payment 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 10 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 $100,000 of fees owed by the Company to Torreya. The Company also paid Torreya $240,625 in cash on September 23, 2017 as payment for fees owed, which had been recorded as an accrued liability by the Company as of July 31, 2017.

On September 8, 2017, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”) At the Annual Meeting, the following proposals, among others, were approved:

Decrease the number of shares of Common Stock which the Company is authorized to issue from 1,000,000,000 to 200,000,000 shares;

The Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan;

The change of domicile of the Company from the State of Nevada to the State of Delaware through the merger of the Company with and into Opiant Pharmaceuticals, Inc., a newly-organized, wholly-owned subsidiary of the Company organized under the laws of the State of Delaware; and

The establishment of a classified board of directors.

On September 11, 2017, the Company issued 7,997 shares of its Common Stock in relation to the cashless exercise of an option that was granted in July 2015. The option was for 10,000 shares of the Company’s Common Stock at an exercise price of $10.00 per share, with the fair value of the option having been fully expensed prior to the year ended July 31, 2017. The cashless exercise was calculated using the per share price of $49.93, which represents the closing price of the Company’s Common Stock on September 8, 2017, which was the last trading day prior to the option being exercised.