Stockholder's Equity

Common Stock

During the year ended December 31, 2018

During the year ended December 31, 2018, the Company issued 50,497 shares of its Common Stock in relation to the cashless exercise of stock options that were granted outside of the Company's 2017 Long-Term Incentive Stock Plan (the "2017 Plan"). A total of 95,000 stock options were exercised with exercise prices between $7.25 and $10.00 per share.

During the year ended December 31, 2018, the Company issued 3,400 shares of its Common Stock as a result of the exercise of stock purchase warrants with an exercise price of $10.00 per share for total proceeds of $34,000.

During the year ended December 31, 2018 the Company issued 38,166 shares of its Common stock with an aggregate value of $782 thousand for services provided to the Company.

On September 5, 2018, the Company also issued 160,000 shares of Common Stock to Valour Fund, LLC, as a result of Valour's exercise of its option to exchange its interest in certain product revenues for Common Stock of the Company.

On December 18, 2018, the Company issued 6,498 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter").

During October 2017 the Company entered into a Controlled Equity Offering sales agreement (the "Sales Agreement") with Cantor Fitzgerald & Co., as agent ("Cantor Fitzgerald"), pursuant to which the Company may offer and sell, from time to time through Cantor Fitzgerald, shares of Common Stock having an aggregate offering price as set forth in the Sales Agreement and a related prospectus supplement filed with the SEC on March 19, 2018. The Company agreed to pay Cantor Fitzgerald a cash commission of 3.0% of the aggregate gross proceeds from each sale of shares under the Sales Agreement. During the twelve months ended December 31, 2018 the Company sold 239,270 shares of Common Stock for gross proceeds of $4.31 million and received net proceeds of $4.18 million after deducting sales commissions.

On September 27, 2018, the Company also completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares its Common stock (including 105,882 shares purchased by Cantor Fitzgerald upon the exercise in full of its right to purchase up to an additional 105,882 shares to cover over-allotments) at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting sales commissions.

During the five months ended December 31, 2017

During the five months ended December 31, 2017, the Company issued 145,630 shares of its Common Stock in relation to the cashless exercise of stock options that were granted outside of the Company's 2017 Long-Term Incentive Stock Plan (the "2017 Plan"). These options were for 217,500 shares of Common Stock with exercise prices between $5.00 and $15.00 per share.

During the five months ended December 31, 2017, the Company issued 345,000 shares of its Common Stock in relation to the exercise of stock purchase warrants with an exercise price of $15.00 per share for total proceeds of $5,175,000.

During the five months ended December 31, 2017, the Company issued 11,790 shares of its Common Stock in relation to the exercise of stock purchase warrants, with an exercise price of $10.00 per share. The Company received proceeds of $57,900 relating to the warrant exercises during the five months ended December 31, 2017 and the balance of $60,000 on January 16, 2018.

On September 23, 2017, the Company issued 3,283 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter"). The Company valued these shares at $40.58 per share, or approximately $133 thousand in the aggregate, which represents the closing price of the Company's Common Stock on September 22, 2017. The Company recognized a loss on the settlement of the accrued liability of $33 thousand.

On December 22, 2017, the Company issued 3,455 shares of its Common Stock to Torreya. These shares were issued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letter between the Company and Torreya, dated September 8, 2017 (the "Supplemental Engagement Letter"). The Company valued these shares at $24.95 per share, or approximately $81 thousand in the aggregate, which represents the closing price of the Company's Common Stock on December 22, 2017. The Company recognized a gain on the settlement of the liability of $19 thousand.

During the year ended July 31, 2017

During the year ended July 31, 2017, the Company issued 2,875 unregistered shares of the Company’s Common Stock to consultants in exchange for services provided by the consultants. The shares issued were valued using the stock price on the issuance date, ranging from $7.52 to $7.75. The Company recorded a non-cash expense of $22,051.

During the year ended July 31, 2017, the Company issued 25,072 shares of unregistered Common Stock pursuant to the LOI described in Note 10 – Commitments. Under the terms of the LOI, the Company was obligated to issue these shares on the one year anniversary of the LOI and upon the one year anniversary of receipt, by the Company, of a milestone payment from Adapt for the first commercial sale of the Company’s product, NARCAN® , in the U.S. The shares issued in this transaction were valued using the stock price on the issuance dates ranging from $5.94 to $7.75 per share. The Company recorded the aggregate fair value of $168,376 as non-cash expense during the year ended July 31, 2017.

The Company made a reconciling adjustment to record the issuance of 6,228 shares of unregistered Common Stock that were issued in fiscal years prior to both 2017 and 2016. Of this total, 6,168 were issued in relation to a conversion of debt into shares of the Company’s common stock. The remaining 60 shares were issued in relation to the Company’s one-for-one hundred reverse stock split of its Common Stock (the “1:100 Reverse Stock Split”) that was effected in December 2014. The 6,228 shares are on a post-split basis and after recording this adjustment the number of shares of the Company’s common stock listed as outstanding on the accompanying Consolidated Statement of Stockholders' Equity (Deficit) reconciles to the actual number of shares outstanding as of July 31, 2017.

Stock Options

On September 8, 2017, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”), at which time the 2017 Plan was approved by stockholder vote. The 2017 Plan allows the Company to grant both incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”) to purchase a maximum of 400,000 shares of the Company's Common Stock. Under the terms of the 2017 Plan, ISOs may only be granted to Company employees and directors, while NSOs may be granted to employees, directors, advisors, and consultants. The Board has the authority to determine to whom options will be granted, the number of options, the term, and the exercise price. Options are to be granted at an exercise price not less than fair value for an ISO or an NSO. The vesting period is normally over a period of four years from the vesting date. The contractual term of an option is no longer than ten years.

Prior to adopting the 2017 Plan, the Company did not have a formal long-term incentive stock plan. Prior to the implementation of the 2017 Plan, the Company had discretion to provide designated employees of the Company and its affiliates, certain consultants, and advisors who perform services for the Company and its affiliates, and non-employee members of the Board and its affiliates with the opportunity to receive grants of non-qualified stock options (the "Pre-2017 Non-Qualified Stock Options"). All of the Pre-2017 Non-Qualified Stock Option Grants were intended to qualify as non-qualified stock options. There were no Pre-2017 Non-Qualified Stock Option Grants that were intended to qualify as incentive stock options.

No Non-Qualified Stock Options were issued for the year ended December 31, 2018 or the five month transition period ended December 31, 2017. The assumptions used in the valuation for the Pre-2017 Non-Qualified Stock Options for the five months ended December 31, 2017 and for the year ended July 31, 2017 were as follows:



	December 31, 2017			July 31, 2017
Market value of stock on measurement date	$	36.79		$5.61 to 13.00
Risk-free interest rate	1.47		%	0.88-2.55%
Dividend yield	0		%	0	%
Volatility factor	96		%	76-348%
Term	2.12 years			2.28-10 years

Stock option activity for the Pre-2017 Non-Qualified Stock Options for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 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, 2016	4,635,000		8.79	7.39	$	2,731,250
Granted	320,000		9.38
Expired	(5,000	)	10.00
Forfeited	(1,180,000	)	11.03
Outstanding at July 31, 2017	3,770,000		8.13	6.87	$	19,139,625
Exercised	(217,500	)	10.22
Forfeited	(572,000	)	11.51
Outstanding at December 31, 2017	2,980,500		7.33	7.06	$	46,606,210
Exercised	(95,000	)	8.24
Forfeited	—		—
Outstanding at December 31, 2018	2,885,500		7.30	6.04	$	20,633,100
Exercisable at December 31, 2018	2,747,150		7.20	6.01	$	19,928,663

A summary of the status of the Company's non-vested Pre-2017 Non-Qualified Stock Options as of December 31, 2018 and changes during the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 are presented below:



Non-vested options	Number of Options		Weighted Average Grant Date Fair Value
Non-vested at July 31, 2016	90,833		$	7.27
Granted	320,000		7.70
Vested	(70,962	)	6.70
Non-vested at July 31, 2017	339,871		$	7.93

Vested	(50,969	)	9.29
Non-vested at December 31, 2017	288,902		$	7.87

Vested	(150,552	)	7.92
Non-vested at December 31, 2018	138,350		$	7.84

During the year ended December 31, 2018 the Company recognized approximately $0.9 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. During the five months ended December 31, 2017, the Company recognized approximately $0.6 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. During the year ended July 31, 2017 the Company recognized approximately $1.3 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. At December 31, 2018, there was $0.2 million of unrecognized compensation costs related to non-vested stock options.

The 2017 Plan

The assumptions used in the valuation of options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 are as follows:



	Year Ended 12/31/18		Five Months Ended 12/31/17
Market value of stock on measurement date	$14.31 to $24.84		$18.16 to $49.93
Risk-free interest rate	2.47 % to 3.05%		2.06 % to 2.47%
Dividend yield	—	%	—	%
Volatility factor	121% to 324%		324% to 329%
Term (years)	5.5 to 10.0		10.00

Stock option activity for options granted under the 2017 Plan during the year ended December 31, 2018 and the five months ended December 31, 2017 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, 2017	—
Total options authorized	400,000
Granted	(214,000	)	$	37.62
Expired	—
Forfeited	40,000		$	49.93
Outstanding at December 31, 2017	174,000		$	34.78	9.71	$	14,430
Exercisable at December 31, 2017	—
Annual additional options authorized	101,431
Granted	(196,550	)	$	23.26
Expired	—
Forfeited	27,000		$	24.84
Options available at December 31, 2018	157,881
Outstanding at December 31, 2018	343,550		$	28.97	8.95	$	840

A summary of the status of the Company’s non-vested options granted under the 2017 Plan as of December 31, 2018 and changes during the year ended December 31, 2018 and the five months ended December 31, 2017 are presented in the following table:



	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Non-vested at July 31, 2017 and 2016	—
Granted	214,000		$	37.62
Forfeited	(40,000	)	$	49.93
Non-vested at December 31, 2017	174,000		$	34.78
Granted	196,550		$	23.26
Forfeited	(27,000	)	$	24.84
Non-vested at December 31, 2018	288,047		$	27.62
Vested at December 31, 2018	55,503		$	34.66

During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized approximately $4.9 million and $1.2 million of non-cash expense related to vested options granted during these periods. As of December 31, 2018, there was approximately $3.6 million of unrecognized compensation costs related to non-vested stock options that were granted under the 2017 Plan.

Warrants

Warrant activity for the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 is presented in the table below:



	Number of Warrants		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at July 31, 2016	1,215,385		$	17.90	2.86	$	—
Granted	45,000		10.00
Expired	(166,585	)	$	46.37
Forfeited	(325,000	)	15
Outstanding at July 31, 2017	768,800		$	12.50	3.04	$	1,184,000
Exercised	(356,790	)	14.83
Forfeited	(55,000	)	$	15.00
Outstanding at December 31, 2017	357,010		$	9.78	5.57	$	4,708,020
Exercised	(3,400	)	$	10.00
Outstanding at December 31, 2018	353,610		$	9.78	4.60	$	1,651,165