Royalty Payable

The Company entered into various agreements and subsequently received funding from investors for use by the Company for the research and development its OORT Product. In exchange for this funding, the Company agreed to provide investors with interest in the OORT Net Profit generated from its OORT Product in perpetuity. At December 31, 2017, the Company determined an OORT Net Profit as a result of NARCAN sales by Adapt. There was no OORT Net Profit prior to December 31, 2017. The following table sets forth the royalty payable to certain investors at December 31, 2017:



(in thousands)	Net Profit %		December 31, 2017

Potomac	10.2%	$	860
LYL	5.0%		421
Welmers	1.5%		127
Royalty payable at December 31, 2017	16.7%	$	1,408

On February 28, 2018, the Company was notified that Adapt has entered into a license agreement with a Third Party (as defined in the Adapt Agreement) with regard to one or more patents pursuant to which Adapt has invoked its right under Section 5.5 of the Adapt Agreement to offset 50%, or $6,250,000, of the payment paid to such Third Party from the amounts payable by Adapt to the Company under the Adapt Agreement. As provided in the Net Profit Interest agreements, actual payments to the parties listed above will be reduced accordingly (see Note 17 - Subsequent Events).