Opiant Pharmaceuticals Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 10-KxANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission file number: 001-38193 OPIANT PHARMACEUTICALS, INC.(Exact name of Registrant as specified in its charter) Delaware 46-4744124(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 201 Santa Monica Blvd., Suite 500, Santa Monica, CA 90401(Address of principal executive offices) (Zip Code)Registrant’s telephone number, including area code:(310)-598-5410Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of exchange on which registeredCommon Stock, par value $0.001 per share Nasdaq Stock Market LLCSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes þ No ¨Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232. 405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes þ No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and willnot be contained herein, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form 10-K. ¨Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or anemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growthcompany” in Rule 12b-2 of the Exchange Act.Large accelerated filer ¨Accelerated filer ¨Non-accelerated filer ¨Smaller reporting company þ Emerging growth company ¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ As of June 30, 2018, the aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, computed by referenceto the closing price of the shares of common stock on the NASDAQ Capital Market was approximately $39,182,880.As of March 15, 2019, the registrant had 3,925,361 shares of common stock issued and outstanding. TABLE OF CONTENTS PagePART I Item 1.Business.1Item 1A.Risk Factors.14Item 1B.Unresolved Staff Comments.32Item 2.Properties.33Item 3.Legal Proceedings34Item 4.Mine Safety Disclosures.36 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities37Item 6.Selected Financial Data.40Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.41Item 7A.Quantitative and Qualitative Disclosures About Market Risk56Item 8.Financial Statements and Supplementary Data.57Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.89Item 9A.Controls and Procedures.90Item 9B.Other Information.91 PART III Item 10.Directors, Executive Officers and Corporate Governance.92Item 11.Executive Compensation.92Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.92Item 13.Certain Relationships and Related Transactions, and Director Independence.92Item 14.Principal Accounting Fees and Services.92 PART IV Item 15.Exhibits, Financial Statement Schedules.93Item 16.Form 10-K Summary101SIGNATURES iCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the SecuritiesAct of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-lookingstatements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words suchas “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,”“forecast,” “potential,” “continue”, negatives thereof or similar expressions. These forward-looking statements are found at various places throughout thisReport and include information concerning: possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plansand objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results; and any otherstatements that are not historical facts.We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results orconditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy orcompleteness of any of these forward-looking statements.From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in ourpresentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in anyother reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statementsrepresent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many ofthose factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-lookingstatements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to adifferent extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, whichspeak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report andattributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in thisReport.Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of newinformation, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.For discussion of factors that we believe could cause our actual results to differ materially from expected and historical results see “Item 1A — RiskFactors” below.iiPART I Item 1. Business. Change in Fiscal YearOn December 8, 2017, the Board of Directors of Opiant Pharmaceuticals, Inc. (“we”, “our” or the “Company”), acting pursuant to Section 5.1 of theCompany’s Bylaws, approved a resolution changing the Company’s fiscal year end from July 31 to December 31. We made this change to align our fiscalyear end with other companies within our industry. Certain information contained in this section will align with the Company's financial statement reportingfor the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017.Our Company We are a specialty pharmaceutical company developing medicines for addictions and drug overdose. We were incorporated in the State of Nevada inJune 2005 as Madrona Ventures, Inc. and, in September 2009, we changed our name to Lightlake Therapeutics Inc. In January 2016, we again changed ourname to Opiant Pharmaceuticals, Inc.On October 2, 2017, we changed our state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan ofMerger, dated October 2, 2017 whereby we merged with and into our recently formed, wholly-owned Delaware subsidiary, Opiant Pharmaceuticals, Inc.Pursuant to the Agreement and Plan of Merger, (i) we merged with and into our Delaware subsidiary, (ii) our separate corporate existence in Nevada ceased toexist, (iii) our Delaware subsidiary became the surviving corporation, (iv) each share of our common stock, $0.001 par value per share (the “Common Stock”),outstanding immediately prior to the effective time was converted into one fully-paid and non-assessable share of common stock of Opiant Pharmaceuticals,Inc., a Delaware corporation, $0.001 par value per share, and (v) the certificate of incorporation and bylaws of our Delaware subsidiary were adopted as ourcertificate of incorporation and bylaws at the effective time of the merger. The merger and the Agreement and Plan of Merger were approved by our Board ofDirectors (the “Board”) and stockholders representing a majority of outstanding Common Stock. We developed NARCAN® (naloxone hydrochloride) Nasal Spray (“NARCAN®”), a treatment to reverse opioid overdose. This product wasconceived and developed by us, licensed to Adapt Pharma Operations Limited (“Adapt”), an Ireland based pharmaceutical company in December 2014 andapproved by the U.S. Food and Drug Administration (“FDA”) in November 2015. It was originally marketed by Adapt. In October 2018, EmergentBioSolutions, Inc. ("EBS") completed its acquisition of Adapt.Our current pipeline includes medicines in development for Opioid Overdose Reversal (“OOR”), Alcohol Use Disorder (“AUD”), Opioid UseDisorder (“OUD”), and Acute Cannabinoid Overdose (“ACO”). We are also pursuing other treatment opportunities within the addiction and drug overdosefield.We have not had a bankruptcy, receivership or similar proceeding. We are required to comply with all regulations, rules and directives ofgovernmental authorities and agencies applicable to the clinical testing and manufacturing and sale of pharmaceutical products.Principal Products or Services and Markets Opioid Overdose Reversal Naloxone is a medicine that can reverse opioid overdose and until November 2015, was only approved by the FDA as an injection. Administered asa nasal spray, naloxone can be used more widely to prevent opioid overdose deaths. In December 2014, we entered into a license agreement with Adapt (the “Adapt Agreement”). The Adapt Agreement has no set duration but may beterminated, among other ways, by Adapt/EBS in its sole discretion, either in its entirety or in respect of one or more countries, at any time by providing 60days prior notice to us. Pursuant to the Adapt Agreement, Adapt received our global license to develop and commercialize our intranasal naloxone OpioidOverdose Reversal Treatment Product. In exchange for licensing our treatment to Adapt/EBS, we could receive total potential regulatory and sales milestonepayments of more than $55 million, plus up to double-digit percentage royalties on net sales. In February 2015, Adapt received “Fast Track” designation bythe FDA and in July 2015, Adapt submitted a NDA to the FDA for NARCAN®. In November 2015, NARCAN® was approved by the FDA for the emergencytreatment of a known or suspected opioid overdose. In May 2016, Adapt submitted a new drug submission ("NDS") for NARCAN® to Health Canada. InOctober 2016, Health Canada approved Adapt’s naloxone hydrochloride nasal spray to treat opioid overdose, to be marketed as NARCAN®.1In December 2015, we received a $2 million milestone payment from Adapt. This milestone payment was triggered by the FDA approval ofNARCAN®. In March 2016, we announced the receipt of a $2.5 million milestone payment from Adapt. This milestone payment was triggered by the firstcommercial sale of NARCAN® in the U.S. In April 2016, August 2016 and November 2016, we received $105,097, $234,498 and $524,142 in royaltypayments due from Adapt from commercial sales of NARCAN in the U.S during the first quarter, second quarter and third quarter, respectively, of Adapt’sfiscal year. In October 2016, one of our patents for NARCAN® became listed in the FDA publication, Approved Drug Products with Therapeutic EquivalenceEvaluations, commonly known as the Orange Book, patent number 9468747, which patent expires on March 16, 2035. On December 13, 2016 (the “SWK Closing Date”), we entered into a Purchase and Sale Agreement (the “SWK Purchase Agreement”) with SWKFunding LLC (“SWK”) pursuant to which we sold, and SWK purchased, our right to receive, commencing on October 1, 2016, all Royalties (as defined in theSWK Purchase Agreement) arising from the sale by Adapt, pursuant to the Adapt Agreement, of NARCAN® or any other product, up to (i) $20,625,000 andthen the Residual Royalty thereafter or (ii) $26,250,000 (the "Capped Royalty Amount"), if Adapt has received in excess of $25,000,000 of cumulative NetSales (as defined in the SWK Purchase Agreement) for any two consecutive fiscal quarters during the period from October 1, 2016 through September 30,2017 from the sale of NARCAN® (the “Earn Out Milestone”), and then the Residual Royalty thereafter. The Residual Royalty is defined in the SWKPurchase Agreement as follows: (i) if the Earn Out Milestone is paid, then SWK shall receive 10% of all Royalties; provided, however, if no generic version ofNARCAN®N is commercialized prior to the sixth anniversary of the SWK Closing Date, then SWK shall receive 5% of all Royalties after such date, and (ii) ifthe Earn Out Milestone is not paid, then SWK shall receive 7.86% of all Royalties; provided, however, that if no generic version of NARCAN® iscommercialized prior to the sixth anniversary of the SWK Closing Date, then SWK shall receive 3.93% of all Royalties after such date. Under the SWKPurchase Agreement, we received an upfront purchase price of $13,750,000 less $40,000 of legal fees on the SWK Closing Date, and received an additional$3,750,000 from SWK on August 10, 2017 when the Earn Out Milestone was achieved (the “Purchase Price”).As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Purchase Agreement had been met.Consequently, the Company recognized 90% of the milestone payments and royalties earned during the five months ended December 31, 2017, after theCapped Royalty Amount was met, amounting to $11,696,676.In addition, on December 13, 2016, in connection with the SWK Purchase Agreement, we entered into Amendment No. 1 to the Adapt Agreement(the “Adapt Amendment”) which amends the terms of the Adapt Agreement relating to the grant of a commercial sublicense outside of the U.S and diligenceefforts for commercialization of our intranasal naloxone opioid overdose reversal treatment (“OORT”). Under the terms of the Adapt Amendment, Adapt/EBSis required to use commercially reasonable efforts to commercialize OORT in the United States In the event that Adapt/EBS wishes to grant a commercialsublicense to a third party in the European Union or the United Kingdom, we have agreed to negotiate an additional amendment to the Adapt Agreement toinclude reduced financial terms with respect to the commercial sublicense in such territory. Under such terms, we would receive an escalating double-digitpercentage of all net revenue received by Adapt/EBS from a commercial sublicensee in the European Union or the United Kingdom. Net revenue received byAdapt/EBS from a commercial sublicensee in European Union or the United Kingdom would be included in determining sales-based milestones due to us. In January 2017, the FDA approved the 2mg formulation of NARCAN® for opioid-dependent patients expected to be at risk for severe opioidwithdrawal in situations where there is a low risk for accidental or intentional opioid exposure by household contacts. In March 2017, the U.S. Patent and Trademark Office (“USPTO”) issued U.S. Patent Numbers 9,480,644 and 9,561,177 covering methods of use forNARCAN®. In December 2018, the USPTO issued U.S. Patent, No. 10,085,937, covering methods of use for the four-milligram formulation of NARCAN® forthe treatment of opioid overdose. These patents are listed in the FDA publication, Approved Drug Products with Therapeutic Equivalence Evaluations,commonly known as the Orange Book, and expire on March 16, 2035.OPNT003 - Intranasal Nalmefene for OOR On February 12, 2018, we announced positive data from a Phase 1 clinical study of our product candidate OPNT003 (intranasal nalmefene) andprovided an update at a meeting held on February 8, 2018 with the FDA regarding our planned development program. OPNT003 is in development as apotent long-acting opioid antagonist for the treatment of opioid overdose. Based on feedback from the FDA in connection with this meeting, we intend topursue a 505(b)(2) development path, with the potential to submit a NDA for the drug and intranasal delivery device combination in 2020. Nalmefene for2injection was previously approved by the FDA for treating suspected or confirmed opioid overdose. The 505(b)(2) pathway allows companies to rely in parton the FDA’s findings of safety and efficacy for a previously approved product and to supplement these findings with a more limited set of their own studiesto satisfy FDA requirements, as opposed to conducting the full array of preclinical and clinical studies that would typically be required.Data generated in a Phase 1 study completed under a clinical trial agreement with the National Institute on Drug Abuse (“NIDA”) provided the basisfor the FDA meeting. These preliminary data demonstrate that our intranasal nalmefene formulation containing a proprietary absorption enhancer (Intravail®,from Aegis Therapeutics) resulted in rapid increases in plasma levels with an onset faster than an intramuscular injection and a comparatively long half-life(6.7-7.8 hours). Naloxone, the only FDA medication currently approved to treat opioid overdose, has a half-life of approximately 2 hours.We have full commercial rights to OPNT003 and we were awarded a grant of approximately $7.4 million from the National Institutes of Health(“NIH”). The grant provides us with additional resources for the ongoing development of OPNT003. The grant includes approximately $2.6 million to befunded for the period ending March 31, 2019, with the balance to be funded over the subsequent two years, subject to available funds and satisfactoryprogress on the development of OPNT003. We have also received a contract for approximately $4.6 million from the Biological Advance Research andDevelopment Agency (“BARDA”) to fund development of this project through NDA submission. The Contract will provide approximately$611,000 for theproject through September 30, 2019, with the balance to be funded over the following two years, subject to satisfactory project progress, availability of fundsand certain other conditions. In 2017, NIH leadership called for the development of a stronger, longer-acting formulations of antagonists to counteract thevery high potency synthetic opioids that are now claiming thousands of lives each year.Synthetic opioids, such as fentanyl, are now responsible for more overdose deaths than either heroin or prescription opioids, with over 28,000fatalities linked to synthetic opioids in 2017. Fentanyl and derivatives, such as carfentanil, are especially dangerous because of a long half-life of seven toten hours that may require continuous monitoring of overdose victims and repeated dosing with naloxone to initially resuscitate a patient and to preventrelapse. A long-acting opioid overdose reversal drug may reduce this burden.An easy-to-use nasal formulation of nalmefene with a rapid onset and long duration of action would be suitable for non-medically trained persons toadminister. If approved by the FDA, OPNT003 may also be especially useful in rural areas, where a rapidly growing number of overdoses are occurring, andwhere access to emergency medical response may be delayed by hours. In addition, since high potency synthetic opioids, such as fentanyl, can beweaponized, OPNT003 may also be suitable as an antidote in a civilian mass casualty event. OPNT001 - Intranasal Naloxone for Eating DisordersBulimia Nervosa ("BN") is a serious and potentially life-threatening eating disorder mainly affecting females. BN is characterized by binge eatingimmediately followed by purging and other compensatory behaviors. Patients are at greater risk of other psychiatric disorders including depression, anxietyand substance abuse. Company analysis estimates that there are 1 million patients with BN, yet fluoxetine is currently the only FDA approved medication totreat BN. However, the remission rate with fluoxetine, both alone and combination with psychotherapy, ranges only between 19-41%.The compulsive bingeing characteristic of BN has features in common with other addictive disorders, providing the basis for using opioidantagonists to mitigate their frequency.In 2017 we initiated a Phase 2 clinical trial to evaluate OPNT001, nasal naloxone, as a potential treatment for BN. The Phase 2 randomized, double-blind, placebo-controlled study evaluated the safety and tolerability of OPNT001, as well as its impact on various clinical outcomes, including changes ineating behavior. The primary endpoint of the study is a reduction in binge eating days. The study includes a total of 86 patients across 19 clinical sites inthe United Kingdom. Patient enrollment was completed on September 4, 2018.On November 2, 2018, we announced the last patient, last visit was complete and we therefore expect to report results from this trial in the firstquarter of 2019. See Note 17, Subsequent Events for discussion on results of the trial reported in February of 2019. We have, in the past, and continue to review possible treatments for Binge Eating Disorder (“BED”). BED is the most common eating disorder in theU.S. Approximately 8 million Americans are diagnosed with BED and it is associated with obesity, yet Vyvanse (lisdexamfetamine dimesylate) is the onlyFDA approved pharmacotherapy. We consider OPNT001 to be a potentially3suitable medicine for BED. It has a well-known safety profile and has the potential to block the reward that patients experience from bingeing.OPNT002 - Nasal Naltrexone for Alcohol Use Disorder ("AUD") We are developing OPNT002, nasal naltrexone for AUD. Alcohol triggers the release of naturally occurring endorphins, which then bind to theopioid receptors in the brain, leading to dopamine release in the brain's reward center. Opioid antagonists are anticipated to reduce heavy drinking becausethey block these opioid receptors, which results in dampening of alcohol-induced dopamine release and reward. Naltrexone is currently approved by the FDAfor the treatment of AUD as a tablet and depot injection. However, in contrast to current naltrexone formulations OPNT002 will be taken nasally on an "asneeded" basis, in anticipation of drinking or once drinking has started in order to reduce alcohol intake. We anticipate that taking our product on an as-needed basis could improve patient compliance and enable a patient to regain control of their drinking, especially in situations where heavy drinking isotherwise habitual. Furthermore, we expect patients to have high rates of adherence, because they will not be required to abstain and potentially go throughdetoxification and withdrawal prior to initiating OPNT002 therapy, unlike the typical situation with existing medicines for AUD.We have generated encouraging Phase 1 clinical data demonstrating rapid intranasal absorption of OPNT002, which confirms its suitability for useon an as needed basis. High levels of naltrexone can be delivered within minutes, which is very important during a period of craving. The Company has alsoreceived feedback from the FDA on the proposed 505(b)(2) development plan, which accepts a harm reduction-based primary endpoint rather than a primaryendpoint based on abstinence.There are approximately 16.3 million people in the U.S. who suffer from some form of AUD. According to the National Institute on Alcohol Abuseand Alcoholism, only 6.7% of these individuals receive treatment. Feedback from our primary market research strongly supports nasal naltrexone as acompelling product that could also be used in a primary care setting as well as by addiction specialists and in addiction treatment centers.OPNT004 - Drinabant Injection for Acute Cannabinoid Overdose ("ACO")On December 26, 2018, we entered into an exclusive global licensing agreement with Sanofi for the development and commercialization ofdrinabant for the treatment of acute cannabinoid overdose ("ACO"). We intend to develop drinabant, a selective, high affinity cannabinoid CB-1 receptorantagonist, as an injectable for administration in an emergency department setting.ACO is most frequently linked to the ingestion of “edibles” containing large quantities of delta9-tetrahydrocannabinol (THC) and syntheticcannabinoids (often referred to as “K2” and “Spice”) that are more potent and less expensive than marijuana. Edibles, sold as brownies, cookies and candies,pose particular risks for children, who can consume these by accident. Based on 2014 rates from the National Emergency Department sample and UnitedStates Census Bureau figures, we estimate that ACO resulted in more than one million emergency department visits in the United States in 2016. With anincreasing number of states legalizing marijuana for personal and recreational use, ACO rates are expected to rise. Features of ACO produced by edibles andsynthetic cannabinoids can include psychosis, panic and anxiety, feelings of paranoia, agitation, visual and auditory hallucinations, nausea, vomiting andcardiac arrhythmias. These symptoms often require emergency medical attention and can take hours to days to resolve. There are currently no FDA approvedtreatments for ACO.Opioid Use Disorder OUD is a major global health issue, particularly in the United States, where opioid misuse, in particular involving opioid painkillers and subsequentaddiction, has become widespread. Given the increase in prevalence, OUD has now been classified in the United States as a public health crisis. Asprescription opioid painkillers have become more difficult to obtain due to tighter controls for distribution and prescribing, and abuse deterrent formulationshave become available, there has been an increase in heroin use, which is cheaper and often easier to obtain than painkillers. At the same time, theavailability and abuse of syntetic opiods, including fentanyl and its derivatives (fentanyl has been estimated to be at least 50 times more potent than heroin)has become more widespread, further driving the recent increase in deaths from opioid overdose in the US.Current FDA approved treatments for opioid addiction are methadone-based and buprenorphine-based substitution therapies, and the use ofnaltrexone (an opioid antagonist), available as both a tablet and depot injection. Most substitution therapies, are opioid-based treatments, which for manypatients is undesirable, and there is frequently diversion and misuse of these treatments amongst patients with OUD. With respect to naltrexone basedtherapies, patients must undergo detoxification before initiating treatment, which for many patients severely limits compliance and willingness to undergothis method of treatment. Therefore,4being able to provide a vaccine to patients that potentially provides specific immunity against heroin and its metabolites without the need for priordetoxification and enabling patients to remain opioid-free is an attractive solution. In October 2016, we in-licensed OPNT005, a heroin vaccine from Walter Reed Army Institute of Research (“WRAIR”). This is an early stage pre-clinical asset and requires further pre-clinical research before human testing. In October 2018, researchers at the U.S. Military HIV Research Program at theWRAIR and SUNY Upstate Medical University in Syracuse, NY, were awarded a grant by NIH to advance OPNT005, through Phase 1/2a clinical trials toassess its safety and efficacy. On October 2, 2017, we announced a collaboration with Titan Pharmaceuticals, Inc. (“Titan”) to explore development of a novel approach to theprevention of opioid relapse and overdose in individuals with opioid use disorder. Other ActivitiesOn June 22, 2017, we entered into a license agreement with Aegis Therapeutics LLC ("Aegis") (the “Aegis License Agreement”) and a related supplyagreement (the “Supply Agreement”) pursuant to which we were granted an exclusive license (the “License”) to Aegis’ proprietary chemically synthesizabledelivery enhancement and stabilization agents, including, but not limited to, Aegis’ Intravail® absorption enhancement agents, ProTek® and HydroGel®(collectively, the “Technology”) to exploit (a) the Compounds (as such are defined in the Aegis License Agreement) and (b) a product containing aCompound and formulated using the Technology (“Product”), in each case of (a) and (b) for any and all purposes. The Aegis License Agreement restricts ourability to manufacture any Aegis excipients included in the Technology (“Excipients”), except for certain instances of supply failure, supply shortage ortermination of the Supply Agreement, and we shall obtain all supply of such Excipients from Aegis under the Supply Agreement. The Aegis LicenseAgreement also restricts Aegis’s ability to compete with us worldwide with respect to the Exploitation (as defined in the Aegis License Agreement) of anytherapeutic containing a Compound or derivative or active metabolite of a Compound without our prior written consent. The effective date of the AegisLicense Agreement and the Supply Agreement is January 1, 2017. As consideration for the grant of the License, we agreed to pay Aegis two upfront payments, of which we may elect to pay up to 50% by issuing ourCommon Stock to Aegis, with the number of shares to be issued equal to 75% of the average closing price of our Common Stock over the 20 trading dayspreceding the date of payment. The Aegis License Agreement also provides for (A) additional developmental milestone payments for each Productcontaining a different Compound equal to up to an aggregate of $1.8 million, (B) additional commercialization milestone payments for each Productcontaining a different Compound equal to up to an aggregate of $5.0 million, and (C) single low digit royalties on the Annual Net Sales (as defined in theAegis License Agreement) of all Products during the Royalty Term (as defined in the Aegis License Agreement) according to a tiered royalty rate based onAnnual Net Sales of the Products by us, our sublicensees and affiliates. We shall also pay to Aegis a sublicense fee based on a sublicense rate to be negotiatedin good faith by the parties. The Aegis License Agreement contains customary representations and warranties, ownership, patent rights, confidentiality,indemnification and insurance provisions. The Aegis License Agreement shall expire upon the expiration of our obligation to pay royalties under such AegisLicense Agreement; provided, however, that we shall have the right to terminate the License granted on a product-by-product or country-by-country basisupon 30 days’ prior written notice to Aegis. Under the terms of the Supply Agreement, Aegis shall deliver to us any preclinical, clinical and commercial supply of the Excipients, which Aegissources from various contract manufacturers. The Supply Agreement has a term of 20 years but shall terminate automatically in the event of expiration ortermination of the Aegis License Agreement or at any time upon the written agreement of both parties. The Supply Agreement contains customary provisionsrelating to pricing for such materials, forecasts, delivery, inspection, indemnification, insurance and representations, warranties and covenants. The SupplyAgreement includes technology transfer provisions for the transfer of all materials and know-how specific to the manufacturing of the Excipients that isnecessary or useful for us to manufacture such Excipients. We do not have the right to manufacture such Excipients except in the event that Aegis is unableto supply and sell any portion of the material to us (subject to a 60-day cure period).On July 14, 2017, we entered into a Research and Development Agreement (the “Renaissance Agreement”) with Renaissance Lakewood, LLC(“Renaissance”). Under the Renaissance Agreement, Renaissance will perform product development work on a naltrexone multi-dose nasal product for thetreatment of AUD (the "Renaissance Product") as provided in a proposal agreed upon by the parties. We will bear the costs of all development services,including all raw materials and packaging components, in connection with the performance of the development work under the Renaissance Agreement andin accordance with financials agreed upon through the proposal. Renaissance will conduct quality control and testing, including non-stability, stability, in-use, raw material, and packaging component testing as part of the services provided to us under the Renaissance Agreement. We will own all formulationsprovided to Renaissance and any formulations developed in connection with the Renaissance Agreement. Renaissance will own all know-how developed inconnection with the performance of the services that is not solely related to a product. We have the right to seek patent protection on any invention or know-how that relates solely to a product developed under5the Renaissance Agreement or any our formulation, excluding general manufacturing or product development know-how of Renaissance. We have agreed toindemnify Renaissance in connection with claims arising out of any clinical trials, ownership, testing, use, application, consumption, distribution, marketingor sale of the Renaissance Product, or any violation or infringement of any patent, copyright or trademark from the use of our designated formula, componentor artwork related to the Renaissance Product irrespective of whether we had knowledge of such infringement or violation. The Renaissance Agreement iseffective until terminated by either party in accordance with its terms. We or Renaissance may terminate the project under a proposal to the RenaissanceAgreement due to unforeseen circumstances in the development. The Renaissance Agreement may be terminated by us, with or without cause, upon 45 days’written notice. There are also mutual customary termination provisions relating to uncured breaches of material provisions. Renaissance may terminate theRenaissance Agreement in the event of bankruptcy of us or our failure for a period of 180 consecutive days to use commercially reasonable efforts toundertake or further activities to advance the possibility of the commercialization of a Renaissance Product. On September 10, 2018, we entered into a development and manufacturing agreement for OPNT003 (intranasal nalmefene), a potent, long-actingopioid antagonist for the treatment of opioid overdose with Consort Medical plc ("Consort"), a leading contract development and manufacturingorganization. Under this agreement, Aesica and Bespak, wholly-owned subsidiaries of Consort, will work with us to produce a pre-filled delivery nasal spraywith nalmefene. As part of the agreement, Aesica will supply Opiant with clinical samples and registration batches for the purposes of performing clinicalstudies and obtaining regulatory approvals. Further, upon approval by the FDA, Aesica and Bespak will manufacture and supply the commercial device forus.In November 2016, Opiant Pharmaceuticals UK Limited (“OPUK”) was incorporated under the Companies Act of 2006 as a private company. OPUKis a wholly-owned subsidiary of the Company and Dr. Roger Crystal, the Chief Executive Officer and a director of the Company, and David O'Toole, theChief Financial Officer and Secretary, of the Company, serve as the sole directors of OPUK. Competition The specialty pharmaceutical industry is intensely competitive and is characterized by rapid technological progress. Certain pharmaceutical andbiopharmaceutical companies and academic and research organizations currently engage in, or have engaged in, efforts related to the discovery anddevelopment of new medicines for the treatment of substance use, addictive and eating disorders. Significant levels of research in chemistry andbiotechnology occur in universities and other nonprofit research institutions. These entities have become increasingly active in seeking patent protectionand licensing revenues for their research results. They also compete with us in recruiting skilled scientific talent. Some of these companies are larger andbetter-funded than us and there are no assurances that we can effectively compete with these competitors. Potential competitors include EmergentBioSolutions Inc., Amphastar, Indivior PLC, Alkermes PLC, H. Lundbeck A/S, Teva, Shire PLC, Orexo AB, BioDelivery Services International, Inc., BraeburnPharmaceuticals, Inc., INSYS Therapeutics, and BioCorRx, Inc. With respect to NARCAN®, we face competition from other treatments, including injectable naloxone, auto-injectors and improvised nasal kits.Amphastar Pharmaceuticals, Inc. competes with NARCAN® with their naloxone injection. Kaléo competes with NARCAN® with their auto-injector knownas EVZIO™ (naloxone HCl injection) Auto-Injector. In 2015, Indivior PLC received a Complete Response Letter from the FDA with respect to a naloxonenasal spray. Between 2016 and 2018, TEVA has filed ANDAs with the FDA seeking regulatory approval to market a generic version of NARCAN® before theexpiration of the ‘253, '747, '177, '965, '644, and '226 patents, and in 2018 Perrigo UK FINCO Limited Partnership ("Perrigo") filed an ANDA with the FDAseeking regulatory approval to market a generic version of NARCAN before the expiration of the '253, '747, '177, '965, and '838 patents. AlthoughNARCAN® was the first FDA-approved naloxone nasal spray for the emergency reversal of opioid overdoses and has advantages over certain othertreatments, we expect the treatment to face additional competition. For example, during 2018, both INSYS Therapeutics, Inc. and Orexo AB have announcedthe development of novel naloxone nasal spray formulations intended for use in opioid overdose reversal. Patents and Proprietary Information We have obtained and intend to actively seek to obtain, when appropriate, protection for our products and proprietary technology by means ofUnited States and foreign patents, trademarks and contractual arrangements. In addition, we rely upon trade secrets and contractual agreements to protectcertain of our proprietary technology and products. We have issued United States patents and pending United States patent applications, as well as pendingforeign patent applications or issued foreign patents, relating to our marketed products and product candidates. We also have United States and foreignpatent applications pending relating to novel product concepts. There can be no assurance that our patent applications will issue as patents or, with respect toour issued patents, that they will provide us with significant protection. The following provides a general description of our patent portfolio and is notintended to represent an assessment of claim limitations or claim scope:6Product Group Patent No. Description Patent Expiration Publication No.NARCAN® Nasal 10,085,937 IN naloxone for treatment of opioid overdose March 16, 2035 US20170071851NARCAN® Nasal 9,211,253 IN naloxone for treatment of opioid overdose March 16, 2035 US20150258019NARCAN® Nasal 9,468,747 IN naloxone for treatment of opioid overdose March 16, 2035 US20160184294NARCAN® Nasal 9,480,644 IN naloxone for treatment of opioid overdose March 16, 2035 US20160166503NARCAN® Nasal 9,561,177 IN naloxone for treatment of opioid overdose March 16, 2035 US20160303041NARCAN® Nasal 9,629,965 IN naloxone for treatment of opioid overdose March 16, 2035 US20170043107NARCAN® Nasal 9,707,226 IN naloxone for treatment of opioid overdose March 16, 2035 US20170151231NARCAN® Nasal 9,775,838 IN naloxone for treatment of opioid overdose March 16, 2035 US20170239241NARCAN® Nasal 2,538,682 IN naloxone for treatment of opioid overdose March 16, 2035 UKNARCAN® Nasal 2,942,611 IN naloxone for treatment of opioid overdose March 16, 2035 CanadaIn addition to the patents and applications listed above, we have several pending, unpublished applications drawn to formulations, devices, andtreatments of disorders, as well as additional continuation and divisional applications claiming the benefit of priority of applications listed above. Research and Development During the year ended December 31, 2018, the five months ended December 31, 2017, and the fiscal year ended July 31, 2017, we incurred researchand development expenses of $8.5 million, $2.5 million and $3.2 million, respectively.Regulation Government Regulation and Product ApprovalGovernment authorities in the United States, at the federal, state, and local levels, and in other countries and jurisdictions, including the EuropeanUnion, extensively regulate, among other things, the research, development, testing, product approval, manufacture, quality control, safety, effectiveness,manufacturing changes, packaging, storage, record-keeping, labeling, promotion, advertising, sales, distribution, marketing, and import and export of drugsand biologic products. All of our foreseeable product candidates are expected to be regulated as drugs. In particular, therapeutic product candidates forhuman use are subject to rigorous preclinical and clinical testing and other requirements of the Federal Food, Drug and Cosmetic Act (“FFDCA”),implemented by the FDA, as well as similar statutory and regulatory requirements of foreign countries. The processes for obtaining regulatory approval in theUnited States. and in foreign countries and jurisdictions, along with ongoing compliance with applicable statutes and regulations and other regulatoryauthorities both pre- and post-commercialization, are a significant factor in the production and marketing of our products and our R&D activities and requirethe expenditure of substantial time and financial resources. Any failure by us or our collaborators, licensors or licensees to obtain, or any delay in obtaining,regulatory approvals or in complying with other regulatory requirements could adversely affect the commercialization of product candidates then beingdeveloped by us and our ability to receive product or royalty revenues.The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicablestatutes and regulations, require the expenditure of substantial time and financial resources. In the United States, the FDA regulates drugs under the FFDCAand the FDA's implementing regulations. Failure to comply with the applicable U.S. requirements at any time during the product development process,approval process, or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA's refusal toapprove pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls, product seizures, total or7partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.The process required by the FDA before a drug may be marketed in the United States generally involves the following:•completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices regulations;•submission to the FDA of an Investigational New Drug ("IND"), which must become effective before human clinical studies may begin;•approval by an independent IRB, at each clinical site before each trial may be initiated;•performance of adequate and well-controlled human clinical studies according to Good Clinical Practice("GCP") regulations, to establish the safety and efficacy of the proposed drug for its intended use;•preparation and submission to the FDA of an NDA;•satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product, or components thereof, are producedto assess compliance with current Good Manufacturing Practice ("cGMP") to assure that the facilities, methods, and controls are adequate topreserve the drug's identity, strength, quality, and purity; and•FDA review and approval of the NDA.The testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our productcandidates (or those of our collaborators or licensees) will be granted on a timely basis, if at all.An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinicaldata or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinicalstudy, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical study lends itself to an efficacyevaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by theFDA, unless the FDA raises concerns or questions related to a proposed clinical study and places the study on a clinical hold within that 30-day time period.In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin. Clinical holds also may be imposedby the FDA at any time before or during clinical studies due to safety concerns or non-compliance, and may be imposed on all product candidates within acertain pharmaceutical class. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical studies of a certain duration orfor a certain dose.All clinical studies must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. Theseregulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical study. Further, aninternal review board ("IRB") must review and approve the plan for any clinical study before it commences at any institution, and the IRB must conductcontinuing review and re-approve the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in theclinical study are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical study andthe consent form that must be provided to each clinical study subject or his or her legal representative and must monitor the clinical study until completed.Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, amongother things, the objectives of the clinical study, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subjectsafety. Study sites are subject to inspection for compliance with GCP.Information about certain clinical trials must be submitted within specific timeframes to the NIH, for public dissemination on theirClinicalTrials.gov website.Human clinical studies are typically conducted in three sequential phases that may overlap or be combined:•Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance,absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severeor life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may beconducted in patients.•Phase 2. Involves clinical studies in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate theefficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule.8•Phase 3. Clinical studies are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population atgeographically dispersed clinical study sites. These clinical studies are intended to establish the overall risk/benefit relationship of the productand provide an adequate basis for product labeling.Progress reports detailing the results of the clinical studies must be submitted at least annually to the FDA and safety reports must be submitted tothe FDA and the investigators for serious and unexpected suspected adverse events. Phase 1, Phase 2 and Phase 3 testing may not be completed successfullywithin any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinical study at any time on various grounds, including a findingthat the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical studyat its institution if the clinical study is not being conducted in accordance with the IRB's requirements or if the drug has been associated with unexpectedserious harm to patients.U.S. Review and Approval ProcessesAssuming successful completion of the required clinical testing, the results of product development, preclinical studies and clinical studies, alongwith descriptions of the manufacturing process, analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to theFDA as part of an NDA for a new drug, requesting approval to market the product.The submission of an NDA is subject to the payment of a substantial application user fee although a waiver of such fee may be obtained undercertain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliatesubmits for review. The sponsor of an approved NDA is also subject to annual program user fees.In addition, under the Pediatric Research Equity Act of 2003, an NDA application (or supplements to an application) for a new active ingredient,new indication, new dosage form, new dosing regimen, or new route of administration must contain data that are adequate to assess the safety andeffectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatricsubpopulation for which the product is safe and effective, unless the applicant has obtained a waiver or deferral.In 2012, the FDASIA amended the FDCA to require that a sponsor who is planning to submit a marketing application for a drug that includes a newactive ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan ("PSP"), withinsixty days of an End-of-Phase II meeting or as may be agreed between the sponsor and the FDA. The initial PSP must include an outline of the pediatric studyor studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justificationfor not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to providedata from pediatric studies along with supporting information. The FDA may, on its own initiative or at the request of the applicant, grant deferrals forsubmission of data or full or partial waivers. The FDA and the sponsor must reach agreement on the PSP. A sponsor can submit amendments to an agreed uponinitial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical studies,and/or other clinical development programs.The FDA also may require submission of a Risk Evaluation and Mitigation Strategy ("REMS") to mitigate any identified or suspected serious risks.The REMS could include medication guides, physician communication plans, assessment plans, and elements to assure safe use, such as restricteddistribution methods, patient registries, or other risk minimization tools.The FDA reviews all NDAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDAmay request additional information rather than accept an application for filing. In this event, the application must be re-submitted with the additionalinformation. The re-submitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDAbegins an in-depth substantive review to determine whether the product is safe and effective for its intended use.The FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether the application should be approvedand under what conditions. An advisory committee is a panel of experts, including clinicians and other scientific experts, who provide advice andrecommendations when requested by the FDA. The FDA is not bound by the recommendation of an advisory committee, but it considers suchrecommendations when making decisions.9Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure clinical data supporting the submissionwere developed in compliance with GCP.The approval process is lengthy and difficult and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied, ormay require additional clinical data or other data and information. Even if such data and information are submitted, the FDA may ultimately decide that theNDA does not satisfy the criteria for approval. Data obtained from clinical studies are not always conclusive and the FDA may interpret data differently thanan applicant interprets the same data.After the FDA's evaluation of an application, the FDA may issue an approval letter, or, in some cases, a complete response letter to indicate that thereview cycle is complete and that the application is not ready for approval. A complete response letter generally contains a statement of specific conditionsthat must be met to secure final approval of the application and may require additional clinical or preclinical testing for the FDA to reconsider theapplication. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical studies.Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition forapproval. If a complete response letter is issued, the applicant may either resubmit the application, addressing all of the deficiencies identified in the letter, orwithdraw the application or request an opportunity for a hearing.Even with submission of additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria forapproval. If and when those conditions have been met to the FDA's satisfaction, the FDA will typically issue an approval letter. An approval letter authorizescommercial marketing of the drug with specific prescribing information for specific indications.If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use mayotherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings orprecautions be included in the product labeling. In addition, the FDA may require post-approval studies, including Phase 4 clinical studies, to further assesssafety and effectiveness after approval and may require testing and surveillance programs to monitor the safety of approved products that have beencommercialized. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additionallabeling claims, are subject to further testing requirements and FDA review and approval.Abbreviated New Drug Applications ("ANDAs") and Section 505(b)(2) New Drug ApplicationsMost drug products obtain FDA marketing approval pursuant to an NDA for innovator products, or an ANDA for generic products. Relevant toANDAs, the Hatch-Waxman amendments to the FDCA established a statutory procedure for submission and FDA review and approval of ANDAs for genericversions of branded drugs previously approved by the FDA (such previously approved drugs are also referred to as listed drugs). Because the safety andefficacy of listed drugs have already been established by the brand company (sometimes referred to as the innovator), the FDA does not require ademonstration of safety and efficacy of generic products. However, a generic manufacturer is typically required to conduct bioequivalence studies of its testproduct against the listed drug. The bioequivalence studies for orally administered, systemically available drug products assess the rate and extent to whichthe API is absorbed into the bloodstream from the drug product and becomes available at the site of action. Bioequivalence is established when there is anabsence of a significant difference in the rate and extent for absorption of the generic product and the listed drug. In addition to the bioequivalence data, anANDA must contain patent certifications and chemistry, manufacturing, labeling and stability data.The third alternative is a special type of NDA, commonly referred to as a Section 505(b)(2) NDA, which enables the applicant to rely, in part, on theFDA's findings of safety and efficacy of an existing product, or published literature, in support of its application. Section 505(b)(2) NDAs often provide analternate path to FDA approval for new or improved formulations or new uses of previously approved products. Section 505(b)(2) permits the filing of anNDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant hasnot obtained a right of reference. The applicant may rely upon the FDA's findings with respect to certain preclinical or clinical studies conducted for anapproved product. The FDA may also require companies to perform additional studies or measurements to support the change from the approved product. TheFDA may then approve the new product candidate for certain label indications for which the referenced product has been approved, as well as for any newindication sought by the Section 505(b)(2) applicant.In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA certain patents of theapplicant or that are held by third parties whose claims cover the applicant's product. Upon approval of an NDA, each of the patents listed in the applicationfor the drug is then published in the Orange Book. Any subsequent10applicant who files an ANDA seeking approval of a generic equivalent version of a drug listed in the Orange Book or a 505(b)(2) NDA referencing a druglisted in the Orange Book must make one of the following certifications to the FDA concerning patents: (1) the patent information concerning the referencelisted drug product has not been submitted to the FDA; (2) any such patent that was filed has expired; (3) the date on which such patent will expire; or (4)such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. This lastcertification is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to each owner of the patent that is thesubject of the certification and to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers. The applicant may also elect to submita "section viii" statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather thancertify to a listed method-of-use patent.If the reference NDA holder or patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receiptof the paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the paragraphIV certification expiration of the patent, settlement of the lawsuit or a decision in the infringement case that is favorable to the applicant. The ANDA or505(b) (2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the branded reference drug hasexpired as described in further detail below. Thus approval of a Section 505(b)(2) NDA or ANDA can be stalled until all the listed patents claiming thereferenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the OrangeBook for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30months, settlement of the lawsuit or a decision in the infringement case that is favorable to the ANDA or Section 505(b)(2) applicant.Post-Approval RequirementsDrugs manufactured or distributed pursuant to FDA approvals are subject to extensive and continuing regulation by the FDA, including, amongother things, requirements relating to recordkeeping (including certain electronic record and signature requirements), periodic reporting, product samplingand distribution, advertising and promotion and reporting of certain adverse experiences, deviations, and other problems with the product. After approval,most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also arecontinuing, annual user fee requirements for any marketed products, as well as new application fees for supplemental applications with clinical data.The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Products maybe promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce thelaws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject tosignificant liability. Further, manufacturers must continue to comply with cGMP requirements, which are extensive and require considerable time, resourcesand ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior FDA approval before beingimplemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to furtherFDA review and approval. Manufacturers and certain other entities involved in the manufacturing and distribution of approved products are required to register theirestablishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies forcompliance with cGMP and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing,sterilization, packaging, labeling, storage and shipment of the product.Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations alsorequire investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any thirdparty manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area ofproduction and quality control to maintain cGMP compliance.The FDA may impose a number of post-approval requirements as a condition of approval of an application. For example, the FDA may requirepostmarketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product's safety and effectiveness aftercommercialization.The FDA may withdraw a product approval if compliance with regulatory requirements is not maintained or if problems occur after the productreaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency,problems with manufacturing processes, or failure to comply11with regulatory requirements, may result in restrictions on the product or even complete withdrawal of the product from the market.Potential implications include required revisions to the approved labeling to add new safety information; imposition of post-market studies orclinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include,among other things:•restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;•warning letters or holds on post-approval clinical trials;•refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;•product seizure or detention, or refusal to permit the import or export of products; or•injunctions or the imposition of civil or criminal penalties.In addition, the distribution of prescription drugs is subject to the Prescription Drug Marketing Act ("PDMA"), which regulates the distribution ofthe products and product samples at the federal level, and sets minimum standards for the registration and regulation of distributors by the states. Both thePDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing theapproval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations, guidance, and policies are oftenrevised or reinterpreted by the agency in ways that may significantly affect our business and our product candidates. It is impossible to predict whetherfurther legislative or FDA regulation or policy changes will be enacted or implemented and what the impact of such changes, if any, may be.Pharmaceutical Coverage, Pricing and ReimbursementIn the United States, sales of any products for which we (or our collaborators or licensees) may receive regulatory approval for commercial sale willdepend in part on the availability of coverage and reimbursement from third-party payors. Third-party payors include government authorities, managed careproviders, private health insurers and other organizations.Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval. The processfor determining whether a payor will provide coverage for a drug may be separate from the process for setting the reimbursement rate that the payor will payfor the product. Some of the additional requirements and restrictions on coverage and reimbursement levels imposed by third-party payors influence thepurchase of healthcare services and products. Third-party payors may limit coverage to specific drugs on an approved list, or formulary, which might not include all of the FDA-approved drugsfor a particular indication, or place drugs at certain formulary levels that result in lower reimbursement levels and higher cost-sharing obligation imposed onpatients. Moreover, a payor's decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequatethird-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in productdevelopment. Further, one payor's determination to provide coverage does not assure that other payors will also provide coverage and reimbursement for theproduct, and the level of coverage and reimbursement may differ significantly from payor to payor. Third-party payors are increasingly challenging the priceand examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain andmaintain coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies inorder to demonstrate the medical necessity and cost-effectiveness of any products, in addition to the costs required to obtain regulatory approvals. Ourproduct candidates may not be considered medically necessary or cost-effective. If third-party payors do not consider a product to be cost-effective comparedto other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not besufficient to allow a company to sell its products at a profit.The United States government and state legislatures have shown significant interest in implementing cost containment programs to limit the growthof government-paid healthcare costs, including price controls, restrictions on reimbursement and coverage and requirements for substitution of genericproducts for branded prescription drugs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existingcontrols and measures, could exclude or limit our drugs and product candidates from coverage and limit payments for pharmaceuticals.12In addition, we expect that the increased emphasis on managed care and cost containment measures in the United States by third-party payors andgovernment authorities to continue and will place pressure on pharmaceutical pricing and coverage. Coverage policies and third-party reimbursement ratesmay change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval,less favorable coverage policies and reimbursement rates may be implemented in the future.EmployeesAs of March 15, 2019, we had 16 full-time employees and no part-time employees. In addition, we have a number of outside consultants that are noton our payroll.13ITEM 1A. RISK FACTORSAn investment in our securities involves a high degree of risk. Prior to making a decision about investing in our securities, you should carefullyconsider all of the information in this Report on Form 10-K, including our consolidated financial statements and related notes. The risks and uncertaintieswe have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may alsoaffect our operations. The occurrence of any of these known or unknown risks might cause you to lose all or part of your investment. Risks Related to our Business, Financial Condition and Capital Requirements With the exception of the fiscal year ended July 31, 2017 and the five month transition period ended December 31, 2017, we have historically generatedlimited revenue to date and expect to incur significant operating losses for the foreseeable future. As of December 31, 2018, we have an accumulated deficit of $74.4 million. The likelihood of our future success must be considered in light of theexpenses, difficulties, complications and delays often encountered in connection with the clinical trials that will be conducted and on the development ofnew solutions to common addictions and related disorders. These potential challenges include, but are not limited to, unanticipated clinical trial delays, poordata, changes in the regulatory and competitive landscape and additional costs and expenses that may exceed current budget estimates. In order to completecertain clinical trials and otherwise operate pursuant to our current business strategy, we anticipate that we will incur increased operating expenses. Inaddition, we expect to incur significant losses for the foreseeable future and we also expect to experience negative cash flow for the foreseeable future as wefund the operating losses and capital expenditures. We recognize that if we are unable to generate sufficient revenues or source funding, we will not be ableto continue operations as currently contemplated, complete planned clinical trials and/or achieve profitability. Our failure to achieve or maintainprofitability will also negatively impact the value of our securities. If we are unsuccessful in addressing these risks, then the Company will most likely fail.We may not succeed in completing the development of our product candidates, commercializing our products, and generating significant revenues. Our current pipeline includes medicines in development for OOR, AUD, OUD, ACO and additional treatment applications. Our products havegenerated limited revenues. Our ability to generate significant revenues and achieve profitability depends on our ability to successfully complete thedevelopment of our product candidates, obtain market approval, successfully launch our products and generate significant revenues. On December 15, 2014,we and Adapt entered into the Adapt Agreement, as amended by the Adapt Amendment entered into between the parties on December 13, 2016, that providesAdapt, now a subsidiary of EBS, with a global license to develop and commercialize our intranasal naloxone Opioid Overdose Reversal Treatment Product,now known as NARCAN®. The loss for any reason of Adapt/EBS as a key partner could have a significant and adverse impact on our business. If we areunable to retain Adapt/EBS as a partner on commercially acceptable terms, we may not be able to commercialize NARCAN® as planned and we mayexperience delays in or suspension of the marketing of NARCAN®. The future success of our business cannot be determined at this time, and we do not anticipate generating significant revenues from product sales forthe foreseeable future. Notwithstanding the foregoing, we expect to generate revenues from NARCAN®, for which we are dependent on many factors,including the performance of our licensing partner Adapt/EBS and competition in the market. In addition, we have no experience in commercializing on ourown and face a number of challenges with respect to commercialization efforts, including, among other challenges: •having inadequate financial or other resources to complete the development of our product candidates;•the inability to manufacture our products in commercial quantities, at an adequate quality, at an acceptable cost or in collaboration with thirdparties;•experiencing delays or unplanned expenditures in product development, clinical testing or manufacturing;•the inability to establish adequate sales, marketing and distribution channels;•healthcare professionals and patients may not accept our treatments;•we may not be aware of possible complications from the continued use of our products since we have limited clinical experience with respect tothe actual use of our products;•technological breakthroughs in reversing opioid overdoses and treating patients with AUD, OUD and ACO may reduce the demand for ourproducts;•changes in the market for reversing opioid overdoses and treating patients with AUD, OUD and ACO, new alliances between existing marketparticipants and the entrance of new market participants may interfere with our market penetration efforts;•third-party payors may not agree to reimburse patients for any or all of the purchase price of our products, which may adversely affect patients’willingness to purchase our products;14•uncertainty as to market demand may result in inefficient pricing of our products;•we may face third party claims of intellectual property infringement;•we may fail to obtain or maintain regulatory approvals for our products in our markets or may face adverse regulatory or legal actions relating toour products even if regulatory approval is obtained; and•we our dependent upon the results of clinical studies relating to our products and the products of our competitors. If data from a clinical trial isunfavorable, we would be reluctant to advance the specific product for the indication for which it was being developed.If we are unable to meet any one or more of these challenges successfully, our ability to effectively commercialize our products could be limited,which in turn could have a material adverse effect on our business, financial condition and results of operations. Given our lack of sufficient revenue and cash flow, we may need to raise additional capital, which may be unavailable to us or, even if consummated, maycause dilution or place significant restrictions on our ability to operate. Since we may be unable to generate sufficient revenue or cash flow to fund our operations for the foreseeable future, we may need to seek additionalequity or debt financing to provide the capital required to maintain or expand our operations. We may also need additional funding to continue thedevelopment of our product candidates, build our sales and marketing capabilities, promote brand identity or develop or acquire complementarytechnologies, assets and companies, as well as for working capital requirements and other operating and general corporate purposes. Besides the Controlled Equity Offering Sales Agreement dated October 13, 2017, we do not currently have any arrangements or credit facilities inplace as a source of funds, and there can be no assurance that we will be able to raise sufficient additional capital if needed on acceptable terms, or at all. Ifsuch financing is not available on satisfactory terms, or is not available at all, we may be required to delay, scale back or eliminate the development of ourproduct candidates and other business opportunities and our ability to achieve our business objectives, our competitiveness and our operations and financialcondition may be materially adversely affected. Our inability to fund our business could thus lead to the loss of your investment. If we raise additional capital by issuing equity securities and/or equity-linked securities, the percentage ownership of our existing stockholders maybe reduced, and accordingly these stockholders may experience substantial dilution. We may also issue equity securities and/or equity-linked securities thatprovide for rights, preferences and privileges senior to those of Common Stock. Given our need for cash and that equity and equity-linked issuances are verycommon types of fundraising for companies like us, the risk of dilution is particularly significant for our stockholders. Debt financing, if obtained, may involve agreements that include liens on our assets and covenants limiting or restricting our ability to take specificactions such as incurring additional debt. Debt financing could also be required to be repaid regardless of our operating results. If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our products or togrant licenses on terms that are not favorable to us.We depend on third parties in connection with our pre-clinical studies and clinical trials, which may result in costs and delays that prevent us fromobtaining regulatory approval or successfully commercializing our product candidates.We engage third parties to perform various aspects of our pre-clinical studies and clinical trials. For instance, on September 10, 2018, we entered intoa development and manufacturing agreement for OPNT003 (intranasal nalmefene), a potent, long-acting opioid antagonist for the treatment of opioidoverdose with Consort Medical plc ("Consort"), a leading contract development and manufacturing organization. Under this agreement, Aesica and Bespak,wholly-owned subsidiaries of Consort, will work with us to produce a pre-filled delivery nasal spray with nalmefene. As part of the agreement, Aesica willsupply Opiant with clinical samples and registration batches for the purposes of performing clinical studies and obtaining regulatory approvals. We dependon these third parties to perform these activities on a timely basis in accordance with the protocol, good laboratory practices, good clinical practices, andother regulatory requirements. Our reliance on these third parties for pre-clinical and clinical development activities reduces our control over these activities.Accordingly, if these parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, our pre-clinical studies andclinical trials may be extended, delayed, terminated or our data may be rejected by the FDA. For example, if Consort were to cease to be able to supply thedevice to us, our OPNT003 program would be delayed until we obtained an alternative source, which could take a considerable length of time. If there aredelays in testing or obtaining regulatory approvals as a result of a third party’s failure to perform, our drug discovery and development costs will likelyincrease, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.15Further, upon approval by the FDA, Aesica and Bespak will manufacture and supply the commercial device for us. Third parties’ abilities toadequately and timely manufacture and supply our product candidates is dependent on the operation of their facilities which may be impacted by, amongother things:•availability, performance, or contamination of raw materials and components used in the manufacturing process, particularly those forwhich we have no other source or supplier;•capacity of our facility and those of contract manufacturer;•the performance of information technology systems;•compliance with regulatory requirements;•inclement weather and natural disasters;•changes in forecasts of future demand for product components;•timing and actual number of production runs for product components;•potential facility contamination by microorganisms or viruses;•updating of manufacturing specifications; and•product quality success rates and yields.If the efficient manufacture and supply of our product candidates is interrupted, we may experience delayed shipments or supply constraints, whichmay materially impact our ongoing and future pre-clinical studies and clinical trials.Any contract manufacturer must undergo a potentially lengthy FDA approval process, as well as other regulatory approval processes, and are subjectto continued review by the FDA and other regulatory authorities. It is a multi-year process to build and license a new manufacturing facility and it can takesignificant time to qualify and license a contract manufacturer.If regulatory authorities determine that we or our contract manufacturer or certain of our third-party service providers have violated regulations or ifthey restrict, suspend or revoke our prior approvals, they could prohibit us from manufacturing our products or conducting clinical trials or selling ourmarketed products until we or the affected third-party service providers comply, or indefinitely. Because our third-party service providers are subject to theFDA and, potentially, in the future, foreignregulatory authorities, alternative qualified third-party service providers may not be available on a timely basis or at all. If we or our third-party serviceproviders cease or interrupt production or if our third-party service providers fail to supply materials, products or services to us, we may experience delayedshipments, and supply constraints for our products. Our current and future operations substantially depend on our Chief Executive Officer and our ability to hire other key personnel, the loss of any of whomcould disrupt our business operations. Our business depends and will continue to depend in substantial part on the continued service of Dr. Roger Crystal, the Company’s Chief ExecutiveOfficer. The loss of the services of Dr. Crystal would significantly impede implementation and execution of our business strategy and may result in the failureto reach our goals. Our future viability and ability to achieve sales and profits will also depend on our ability to attract, train, retain and motivate highly qualifiedpersonnel in the diverse areas required for continuing operations. There is a risk that we will be unable to attract, train, retain or motivate qualified personnel,both near term or in the future, and the failure to do so may severely damage its prospects.Our employment agreements with our named executive officers may require us to pay severance benefits to any of those persons who are terminated inconnection with a change in control of us which could harm our financial condition or results.Certain of our executive officers are parties to employment agreements that contain change in control and severance provisions providing foraggregate cash payments of up to approximately $3.5 million for severance and other benefits and acceleration of vesting of stock options with a value ofapproximately $2.4 million, in the event of a termination of employment in connection with a change of control of the Company. The accelerated vesting ofoptions could result in dilution to our existing stockholders and harm the market price of our Common Stock. The payment of these severance benefits couldharm our financial conditions and results. In addition, these potential severance payments may discourage or prevent third parties from seeking a businesscombination with us.Under the Company's agreement with Adapt/EBS, they have the right to license third-party intellectual property which may result in a reduction of ourpotential royalty and milestone payments.16Under the Company's license agreement, with Adapt/EBS (the "Adapt Agreement"), Adapt/EBS may seek to license certain intellectual property heldby a third-party that Adapt/EBS reasonably determines would be infringed upon through the performance of the Adapt Agreement or that Adapt/EBSotherwise determines is necessary or desirable for Adapt/EBS to perform its obligations under the Adapt Agreement. On March 18, 2019, the Company andAdapt/EBS entered into an amendment to the Adapt Agreement that clarifies the circumstances under which Adapt/EBS may enter into such licenses anddeduct a material amount, as provided in the Adapt Agreement, of any upfront payment, milestones or royalties paid to such third-party from any regulatorymilestone payments, sales-based milestone payments, and royalty payments payable to the Company under the Adapt Agreement. Following the execution ofthe amendment, in most situations, in order to exercise its right to deduct any payments with respect thereto, Adapt/EBS will need the consent of theCompany that the licensing arrangement is acceptable.Some of our programs are partially supported by government grant awards, which may not be available to us in the future.We have received funding under grant award programs funded by governmental agencies, such as the NIDA and BARDA. To fund a portion of ourfuture research and development programs, we may apply for additional grant funding from these or similar governmental agencies. However, funding bythese governmental agencies may be significantly reduced or eliminated in the future for a number of reasons. For example, some programs are subject to ayearly appropriations process in Congress. In addition, we may not receive full funding under current or future grants because of budgeting constraints of theagency administering the program or unsatisfactory progress on the study being funded. Therefore, we cannot assure you that we will receive any future grantfunding from any government agencies, or, that if received, we will receive the full amount of the particular grant award. Any such reductions could delay thedevelopment of our product candidates and the introduction of new products.Exposure to United Kingdom political developments, including the outcome of the referendum on membership in the European Union, could be costly anddifficult to comply with and could seriously harm our business.We have based a significant portion of our non-U.S. operations in the United Kingdom. In June 2016, a referendum was passed in the UnitedKingdom to leave the European Union, commonly referred to as “Brexit.” This decision created an uncertain political and economic environment in theUnited Kingdom and other European Union countries, even though the formal process for leaving the European Union may take years to complete. Thisformal process began in March 2017, when the United Kingdom served notice to the European Council under Article 50 of the Treaty of Lisbon. The long-term nature of the United Kingdom’s relationship with the European Union is unclear and there is considerable uncertainty when any relationship will beagreed and implemented. Without further agreement, the United Kingdom will formally leave the European Union in March 2019. The political andeconomic instability created by Brexit has caused and may continue to cause significant volatility in global financial markets and uncertainty regarding theregulation of pharmaceuticals in the United Kingdom. In particular, Brexit could lead to legal uncertainty and potentially divergent national laws andregulations, including those related to the pricing of pharmaceuticals, as the United Kingdom determines which European Union laws to replicate or replace.If the United Kingdom were to significantly alter its regulations affecting the pricing of pharmaceuticals, we could face significant new costs. As a result,Brexit could impair our ability to transact business in the European Union and the United Kingdom. Brexit could also have the effect of disrupting the freemovement of goods, services, capital, and people between the United Kingdom, the European Union, and elsewhere. The full effect of Brexit is uncertain anddepends on any agreements the United Kingdom may make to retain access to European Union markets. Consequently, no assurance can be given about theimpact of the outcome and our business, including operational and tax policies, may be seriously harmed or require reassessment if our European operationsor presence become a significant part of our business.Risks Related to our Intellectual Property If we are unable to obtain and maintain patent protection for our products and product candidates, or if the scope of the patent protection obtained is notsufficiently broad, our competitors could develop and commercialize products and product candidates that are similar or identical to ours, and our abilityto successfully commercialize our products and product candidates may be adversely affected.Our commercial success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries withrespect to our products and product candidates. We seek to protect our proprietary position by filing patent applications in the United States and abroadrelated to our products and product candidates that are important to our business, as appropriate. We cannot be certain that patents will be issued or grantedwith respect to applications that are currently pending or that we may apply for in the future with respect to one or more of our products and productcandidates, or that issued or granted patents will not later be found to be invalid and/or unenforceable.17The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patentapplications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and developmentoutput before it is too late to obtain patent protection. Although we may enter into non-disclosure and confidentiality agreements with parties who haveaccess to patentable aspects of our research and development output, such as our employees, distribution partners, consultants, advisors and other thirdparties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seekpatent protection.The patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent yearsbeen the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.Our pending and future patent applications may not result in patents being issued, and even if issued, the patents may not meaningfully protect our productsor product candidates, effectively prevent competitors and third parties from commercializing competitive products or otherwise provide us with anycompetitive advantage. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.Changes in either the patent laws, implementing regulations or interpretation of the patent laws in the U.S. and other countries may also diminish thevalue of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of theU.S., and many companies have encountered significant difficulties in protecting and defending such rights in foreign jurisdictions.We cannot be certain that our patents and patent rights will be effective in protecting our products, product candidates and technologies. Failure toprotect such assets may have a material adverse effect on our business, operations, financial condition and prospects.We may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their intellectual propertyrights, or seeking to challenge the validity of our patents.Our future success is also dependent in part on the strength of our intellectual property, trade secrets and know-how, which have been developedfrom years of research and development, and on our ability, and the ability of our future collaborators, to develop, manufacture, market and sell our productsand product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation or other violation of thepatents and other intellectual property rights of third parties.In addition to the litigation with TEVA and Perrigo discussed below, we may be exposed to, or be threatened with, adversarial proceedings oradditional future litigation by third parties regarding intellectual property rights with respect to our current and any future product candidates andtechnology, including interference or derivation proceedings, post grant review and inter partes review before the USPTO or similar adversarial proceedingsor litigation in other jurisdictions seeking to challenge the validity of our intellectual property rights, claiming that the Company has misappropriated thetrade secrets of others, or claiming that our technologies, products or activities infringe the intellectual property rights of others.There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology andpharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and reexamination proceedings before the USPTO, andcorresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist inthe fields in which we are developing product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the riskincreases that our product candidates may be subject to claims of infringement of the intellectual property rights of third parties. We actively track third-partyapplications with claims that, if valid, could be construed to read upon the use our NARCAN® product(s) for the treatment of opioid overdose, or otherproducts and indications. Certain of these applications could be granted in the future. Third parties may assert infringement claims against us based onexisting patents or patents that may be granted in the future including, perhaps, the aforementioned allowed patent application, regardless of their merit.There is a risk that third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us. Even if we believesuch claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holdersof any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, oruntil such patents expire or are finally determined to be invalid or unenforceable. Similarly, if any third-party patents were held by a court of competentjurisdiction to cover aspects of our compositions, formulations, or methods of treatment, prevention or use, the holders of any such patents may be able toblock our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires or is finallydetermined to be invalid or unenforceable. In either case, such a license may not be available on18commercially reasonable terms, or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to thesame technologies licensed to us. Some claimants may have substantially greater resources than we do and may be able to sustain the costs of complexintellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely onextracting royalties and settlements by enforcing patent rights may target us. Furthermore, even in the absence of litigation, we may need to obtain licensesfrom third parties to advance our research or to enable the commercialization of our product candidates. We may fail to obtain any of these licenses at areasonable cost or on reasonable terms, if at all. In such an event, we would be unable to further practice our technologies or develop and commercialize anyof our product candidates at issue, which could harm our business significantly.Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop andcommercialize one or more of our product candidates, if approved. Defense of these claims, regardless of their merit, would involve substantial litigationexpense and would be a substantial diversion of management and employee time and resources from our business. Third parties making such claims mayhave the ability to dedicate substantially greater resources to these legal actions than we or our licensors or collaborators can. In the event of a successfulclaim of infringement, misappropriation or other violation against us, we may have to pay substantial damages, including treble damages and attorneys' feesfor willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or requiresubstantial time and monetary expenditure.Similarly, we or our licensors or collaborators may initiate such proceedings or litigation against third parties, e.g., to challenge the validity or scopeof intellectual property rights controlled by third parties. In order to successfully challenge the validity of any U.S. patent in federal court, we would need toovercome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any suchUnited States patent claim, there is no assurance that a court would invalidate the claims of any such United States patent.Patent litigation and other proceedings may also absorb significant management time. The cost to us of any patent litigation or other proceeding,even if resolved in our favor, could be substantial. During the course of any patent or other intellectual property litigation or other proceeding, there could bepublic announcements of the results of hearings, rulings on motions, and other interim proceedings or developments and if securities analysts or investorsregard these announcements as negative, the perceived value of our product candidates or intellectual property could be diminished. Accordingly, the marketprice of our common stock may decline. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have amaterial adverse effect on our business, ability to compete in the marketplace, financial condition, results of operations and growth prospects.We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming andunsuccessful.Competitors may infringe, misappropriate or otherwise violate our patents, trademarks, copyrights or other intellectual property, or those of ourlicensors. To counter infringement, misappropriation, unauthorized use or other violations, we may be required to file legal claims, which can be expensiveand time consuming and divert the time and attention of our management and scientific personnel.For example, within the last 24 months, we along with Adapt (collectively, the “Plaintiffs”) have filed six separate complaints for patentinfringement against Teva Pharmaceuticals Industries Ltd. (“Teva Ltd.”) and Teva Pharmaceuticals USA, Inc., a wholly owned subsidiary of Teva Ltd. (“TevaUSA” and, together with Teva Ltd., “Teva”) in the United States District Court for the District of New Jersey arising from Teva USA’s filing of ANDA with theFDA seeking regulatory approval to market a generic version of NARCAN before the expiration of the Company’s patents. Additionally, on October 25,2018, Plaintiffs filed a similar complaint for patent infringement against Perrigo UK FINCO Limited Partnership (“Perrigo”) in the United States District Courtfor the District of New Jersey arising from Perrigo’s ANDA filing with the FDA.For more information about these litigation matters, see Part I, Item 3: Legal Proceedings. We maintain full confidence in our intellectual propertyportfolio related to NARCAN® and expect that the Company’s patents will continue to be vigorously defended from any infringement. However, there canbe no assurances that we will be successful with respect to these litigation matters or any other litigation matters which may arise in the ordinary course of ourbusiness. Such a failure may have a material impact on our business, results of operations and financial condition in the future.We may not be able to prevent, alone or with our licensees or any future licensors, infringement, misappropriation or other violations of ourintellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Any claims we assert againstperceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in a patentinfringement proceeding, there is a risk that a court19will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using theinvention at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that wedo not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention. An adverse outcomein a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors, and may curtail orpreclude our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could adversely affect ourcompetitive business position, business prospects and financial condition. Similarly, if we assert trademark infringement claims, a court may determine thatthe marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to themarks in question. In this case, we could ultimately be forced to cease use of such trademarks.In any infringement, misappropriation or other intellectual property litigation, any award of monetary damages we receive may not be commerciallyvaluable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some ofour confidential information could be compromised by disclosure during litigation. Moreover, there can be no assurance that we will have sufficient financialor other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in suchclaims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit wereceive as a result of the proceedings.We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.Filing, prosecuting and defending patents covering NARCAN®, and any future product candidates in all countries throughout the world would beprohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.Further, licensing partners may not prosecute patents in certain jurisdictions in which we may obtain commercial rights, thereby precluding the possibility oflater obtaining patent protection in these countries. Consequently, we may not be able to prevent third parties from practicing our inventions in all countriesoutside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitorsmay use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringingproducts to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with ourproduct candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legalsystems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual propertyprotection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing ofcompeting products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or notsuccessful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of beinginvalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may notprevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts toenforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property thatwe develop or license. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that wewill be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our product candidates. Accordingly, our efforts toprotect our intellectual property rights in such countries may be inadequate, which may have an adverse effect on our ability to successfully commercializeour product candidates in all of our expected significant foreign markets.Additionally, the requirements for patentability may differ in certain countries, particularly developing countries. For example, unlike othercountries, China has a heightened requirement for patentability, and specifically requires a detailed description of medical uses of a claimed drug. In India,unlike the United States, there is no link between regulatory approval of a drug and its patent status. Furthermore, generic or biosimilar drug manufacturers orother competitors may challenge the scope, validity or enforceability of our or our licensors’ patents, requiring us or our licensees or any future licensors toengage in complex, lengthy and costly litigation or other proceedings. In addition, certain countries in Europe and developing countries, including Chinaand India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we and ourlicensees or any future licensors may have limited remedies if patents are infringed or if we or our licensees or any future licensors are compelled to grant alicense to a third party, which could20materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our and our licensees’ or any futurelicensors’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from theintellectual property that we own or license.We may be subject to claims that we or our employees, consultants, contractors or advisors have infringed, misappropriated or otherwise violated theintellectual property of a third party, or claiming ownership of what we regard as our own intellectual property.Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitorsor potential competitors. Although we try to ensure that our employees do not use the intellectual property and other proprietary information, know-how ortrade secrets of others in their work for us, we may be subject to claims that we or these employees have used or disclosed such intellectual property or otherproprietary information. Litigation may be necessary to defend against these claims.In addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual propertyto execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in factdevelops intellectual property that we regard as our own. To the extent that we fail to obtain such assignments, such assignments do not contain a self-executing assignment of intellectual property rights or such assignments are breached, we may be forced to bring claims against third parties, or defendclaims they may bring against us, to determine the ownership of what we regard as our intellectual property. If we fail in prosecuting or defending any suchclaims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Such intellectual property rights could beawarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license maynot be available on commercially reasonable terms or at all. Even if we are successful in prosecuting or defending against such claims, litigation could resultin substantial costs and be a distraction to our management and scientific personnel.Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and otherrequirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with theserequirements.Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over thelifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, feepayment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late feeor by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent orpatent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonmentor lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure toproperly legalize and submit formal documents. If we or our licensors fail to maintain the patents and patent applications covering our products, ourcompetitors might be able to enter the market, which would have a material adverse effect on our business, financial conditions, results of operations andgrowth prospects.If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our businesswould be harmed.In addition to seeking patents for some of our technology and products, we also rely on trade secrets, including unpatented know-how, technologyand other proprietary information, in seeking to develop and maintain a competitive position. We seek to protect these trade secrets, in part, by enteringinto non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, independent contractors,advisors, corporate collaborators, outside scientific collaborators, contract manufacturers, suppliers and other third parties. We also enter into confidentialityand invention or patent assignment agreements with employees and certain consultants. We also seek to preserve the integrity and confidentiality of our data,trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information technology systems.Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies willbe effective.21 Since our inception, we have sought to contract with manufacturers to supply commercial quantities of pharmaceutical formulations and products. As aresult, we have disclosed, under confidentiality agreements, various aspects of our technology with potential manufacturers and suppliers. We believe thatthese disclosures, while necessary for our business, may have resulted and may result in the attempt by potential manufacturers and suppliers to improperlyassert ownership claims to our technology in an attempt to gain an advantage in negotiating manufacturing and supplier rights.We cannot guarantee that our trade secrets and other proprietary and confidential information will not be disclosed or that competitors will nototherwise gain access to our trade secrets. Any party with whom we have executed such an agreement may breach that agreement and disclose our proprietaryinformation, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegallydisclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts bothwithin and outside the United States may be less willing or unwilling to protect trade secrets. Further, if any of our trade secrets were to be lawfully obtainedor independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology orinformation, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed bya competitor, our business and competitive position could be harmed.Trade secrets and know-how can be difficult to protect as trade secrets and know-how will over time be disseminated within the industry throughindependent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company or academic toindustry scientific positions. If we fail to prevent material disclosure of the know-how, trade secrets and other intellectual property related to our technologiesto third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business,results of operations and financial condition. Even if we are able to adequately protect our trade secrets and proprietary information, our trade secrets couldotherwise become known or could be independently discovered by our competitors. For example, competitors could purchase our products and attempt toreplicate some or all of the competitive advantages we derive from our development efforts, design around our protected technology or develop their owncompetitive technologies that fall outside of our intellectual property rights. If any of our trade secrets were to be lawfully obtained or independentlydeveloped by a competitor, in the absence of patent protection, we would have no right to prevent them, or those to whom they communicate, from using thattechnology or information to compete with us.We may not be able to prevent misappropriation of our intellectual property, trade secrets or confidential information, particularly in countrieswhere the laws may not protect those rights as fully as in the United States. Furthermore, because of the substantial amount of discovery required inconnection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this typeof litigation.Intellectual property rights do not necessarily address all potential threats to our business.Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivationaction in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objectionsagainst such grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit thescope of the allowed or granted claims thus attacked, or may lose the allowed or granted claims altogether. In addition, the degree of future protectionafforded by our intellectual property rights is uncertain because even granted intellectual property rights have limitations, and may not adequately protectour business. The following examples are illustrative:•others may be able to make formulations that are similar to our NARCAN® or other formulations but that are not covered by the claims of our patentrights;•the patents of third parties may have an adverse effect on our business;•we or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by theissued patent or pending patent application that we own or have exclusively licensed;•we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;•others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectualproperty rights;•it is possible that our pending patent applications will not lead to issued patents;•issued patents that we may own or that we exclusively license in the future may not provide us with any competitive advantage, or may be heldinvalid or unenforceable, as a result of legal challenges by our competitors;22•our competitors might conduct research and development activities in countries where we do not have patent rights and then use the informationlearned from such activities to develop competitive products for sale in our major commercial markets;•third parties performing manufacturing or testing for us using our product candidates or technologies could use the intellectual property of otherswithout obtaining a proper license;•we may not develop additional proprietary technologies that are patentable; and•the patents of others may have an adverse effect on our business.Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects.The expiration or loss of patent protection may adversely affect our future revenues and operating earnings.We rely on patent, trademark, trade secret and other intellectual property protection in the discovery, development, manufacturing and sale of ourproducts and product candidates. In particular, patent protection is important in the development and eventual commercialization of our products andproduct candidates. Patents covering our products and product candidates normally provide market exclusivity, which is important in order for our productsand product candidates to become profitable.Certain of our patents will expire in the next 16 years. While we are seeking additional patent coverage which may protect the technologyunderlying these patents, there can be no assurances that such additional patent protection will be granted, or if granted, that these patents will not beinfringed upon or otherwise held enforceable. Even if we are successful in obtaining a patent, patents have a limited lifespan. In the U.S., the naturalexpiration of a utility patent typically is generally 20 years after it is filed. Various extensions may be available; however, the life of a patent, and theprotection it affords, is limited. Without patent protection, our products and product candidates, we may be open to competition from generic versions ofsuch methods and devicesRisks Related to the Commercialization of our Products We may be exposed to product liability risks, and clinical and preclinical liability risks, which could place a substantial financial burden upon us shouldwe be sued. Our business exposes us to potential product liability and other liability risks that are inherent in the testing, manufacturing and marketing ofpharmaceutical formulations and products. We cannot be sure that claims will not be asserted against us. A successful liability claim or series of claimsbrought against us could have a material adverse effect on our business, financial condition and results of operations. We cannot give assurances that we will be able to continue to obtain or maintain adequate product liability insurance on acceptable terms, if at all,or that such insurance will provide adequate coverage against potential liabilities. Claims or losses in excess of any product liability insurance coverage thatwe may obtain could have a material adverse effect on our business, financial condition and results of operations. Our products may have undesirable side effects which may delay or prevent marketing approval, or, if approval is received, require it to be taken off themarket, require it to include safety warnings or otherwise limit sales of the product. Unforeseen side effects from our products and product candidates could arise either during clinical development or, if approved, after the productshave been marketed. This could cause regulatory approvals for, or market acceptance of, the products to be harder and more costly to obtain. To date, no serious adverse events have been attributed to our products and product candidates. The results of our planned or any future clinicaltrials may show that our products and product candidates cause undesirable or unacceptable side effects, which could interrupt, delay or halt clinical trials,and result in delay of, or failure to obtain, marketing approval from the FDA and other regulatory authorities, or result in marketing approval from the FDAand other regulatory authorities with restrictive label warnings. If our product candidates receive marketing approval and we or others later identifyundesirable or unacceptable side effects caused by the use of our products: •regulatory authorities may withdraw their approval of the products, which would force us to remove its products from the market;•regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication, or field alerts to physicians,pharmacies and others;23•we may be required to change instructions regarding the way the products are administered, conduct additional clinical trials or change thelabeling of the products;•we may be subject to limitations on how it may promote the products;•sales of the products may decrease significantly;•we may be subject to litigation or product liability claims; and•our reputation may suffer.Any of these events could prevent us or our potential future collaborators from achieving or maintaining market acceptance of the products or couldsubstantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenues from the sale ofour products. We currently have no marketing and sales organization and have no experience marketing pharmaceutical products. If we are unable to establish our ownmarketing and sales capabilities, or enter into agreements with third parties to market and sell our products after approval, we may not be able to generateproduct revenues. We do not have a sales organization for the marketing, sales and distribution of any pharmaceutical products. In order to commercialize our productsor any other product candidates we may develop or acquire in the future, we must develop these capabilities on our own or make arrangements with thirdparties for the marketing, sales and distribution of its products. The establishment and development of our own sales force will be expensive and timeconsuming and could delay any product launch, and we cannot be certain that it would be able to successfully develop this capability. As a result, we mayseek one or more partners to handle some or all of the sales, marketing and distribution of our products. There also may be certain markets within the UnitedStates and elsewhere for our products for which we may seek a co-promotion arrangement. However, we may not be able to enter into arrangements with thirdparties to sell our products on favorable terms, or at all. In the event, we are unable to develop its own marketing and sales force or collaborate with a thirdparty marketing and sales organization, we will not be able to commercialize our products or any other product candidates that we develop, which willnegatively impact our ability to generate product revenues. Furthermore, whether we commercialize products on our own or rely on a third party to do so, ourability to generate revenue would be dependent on the effectiveness of the sales force. In addition, to the extent we rely on third parties to commercialize ourapproved products, we would likely receive less revenues than if we commercialized these products ourselves. The market for our products is rapidly changing and competitive, and new drugs, which may be developed by others, could impair our ability to maintainand grow our business and remain competitive. The pharmaceutical industry is subject to rapid and substantial technological change. Developments by others may render our technologies andproducts noncompetitive or obsolete. We also may be unable to keep pace with technological developments and other market factors. Technologicalcompetition from medical device, pharmaceutical and biotechnology companies, universities, governmental entities and others diversifying into the field isintense and is expected to increase. Many of these entities have significantly greater research and development capabilities and budgets than we do, as wellas substantially more marketing, manufacturing, financial and managerial resources. These entities represent significant competition for us. Our reliance on collaborations with third parties to develop and commercialize our products, such as the Adapt Agreement to develop and commercialize,NARCAN® is subject to inherent risks and may result in delays in product development and lost or reduced revenues, restricting our ability tocommercialize our products and adversely affecting our profitability. With respect to the products we have licensed, we depend upon collaborations with third parties to develop these product candidates and alsodepend substantially upon third parties to commercialize these products. As a result, our ability to develop, obtain regulatory approval of, manufacture andcommercialize our existing and possibly future product candidates depends upon our ability to maintain existing, and enter into and maintain new,contractual and collaborative arrangements with others. We also engage, and intend in the future to continue to engage, contract manufacturers and clinicaltrial investigators. In addition, although not a primary component of our current strategy, the identification of new compounds or product candidates for developmenthas led us in the past, and may continue to require us, to enter into license or other collaborative agreements with others, including other pharmaceuticalcompanies and research institutions. Such collaborative agreements for the acquisition of new compounds or product candidates would typically require usto pay license fees, make milestone payments and/or pay royalties. Furthermore, these agreements may result in our revenues being lower than if wedeveloped our product candidates and in our loss of control over the development of our product candidates.Contractors or collaborators may have the right to terminate their agreements with us or reduce their payments to us under those agreements onlimited or no notice and for no reason or reasons outside of our control. For example, we may be unable to maintain our relationship with Adapt/EBS on acommercially reasonable basis, if at all, as the Adapt Agreement may be terminated24by Adapt/EBS in its sole discretion, either in its entirety or in respect of one or more countries, at any time by providing 60 days prior notice to us. Inaddition, Adapt/EBS may have similar or more established relationships with our competitors or larger customers which may negatively impact ourrelationship with Adapt/EBS. Moreover, the loss for any reason of Adapt/EBS as a key partner could have a materially significant and adverse impact on ourbusiness. If we are unable to retain Adapt/EBS as a partner on commercially acceptable terms, we may not be able to commercialize NARCAN® and we mayexperience delays in or suspension of the marketing of our products. The same could apply to other product candidates we may develop or acquire in thefuture. Our dependence upon third parties to assist with the development and commercialization of our product candidates may adversely affect our ability togenerate profits or acceptable profit margins and our ability to develop and deliver such products on a timely and competitive basis. Additionally, our AegisLicense Agreement shall expire upon the expiration of our obligation to pay royalties under the Aegis License Agreement; provided, however, that we shallhave the right to terminate the License granted on a product-by-product or country-by-country basis upon 30 days’ prior written notice to Aegis. If our current or future licensees exercise termination rights they may have, or if these license agreements terminate because of delays in obtainingregulatory approvals, or for other reasons, and we are not able to establish replacement or additional research and development collaborations or licensingarrangements, we may not be able to develop and/or commercialize our product candidates. Moreover, any future collaborations or license arrangements wemay enter into may not be on terms favorable to us.A further risk we face with the collaborations is that business combinations and changes in the collaborator or their business strategy may adverselyaffect their willingness or ability to complete their obligations to us. Our current or any future collaborations or license arrangements ultimately may not be successful. Our agreements with collaborators typicallyallows them discretion in electing whether to pursue various development, regulatory, commercialization and other activities, such as the Adapt Agreement. If any collaborator were to breach its agreement with us or otherwise fail to conduct collaborative activities in a timely or successful manner, the pre-clinical or clinical development or commercialization of the affected product candidate or research program would be delayed or terminated. Other risks associated with our collaborative and contractual arrangements with others include the following: •we may not have day-to-day control over the activities of our contractors or collaborators;•our collaborators may fail to defend or enforce patents they own on compounds or technologies that are incorporated into the products we developwith them;•third parties may not fulfill their regulatory or other obligations; and•we may not realize the contemplated or expected benefits from collaborative or other arrangements; and disagreements may arise regarding abreach of the arrangement, the interpretation of the agreement, ownership of proprietary rights, clinical results or regulatory approvals.These factors could lead to delays in the development of our product candidates and/or the commercialization of our products or reduction in themilestone payments we receive, or could result in us not being able to commercialize our products. Further, disagreements with our contractors orcollaborators could require or result in litigation or arbitration, which would be time-consuming and expensive. Our ultimate success may depend upon thesuccess and performance on the part of these third parties. If we fail to maintain these relationships or establish new relationships as required, development ofour product candidates and/or the commercialization of our products will be delayed or may never be realized.Our product pipeline includes pre-clinical product candidates, such as a vaccine for heroin addiction. We may not be successful in completing the pre-clinical work required for these product candidates, the clinical trials necessary for obtaining market approval, or being able to commercially launchthese product candidates.In October 2016, we licensed a vaccine to treat heroin addiction from the Walter Reed Army Institute of Research ("WRAIR"). This is an early-stageasset and requires significant additional pre-clinical research and development before human testing may be initiated. We plan to work closely with scientistsat WRAIR in order to advance the program into the clinic and determine if this vaccine is safe and effective in a patient population. As a result, we may beunable to obtain sufficient pre-clinical data to apply for, or gain, the requisite authorizations to commence human clinical testing on either this asset or otherpre-clinical assets we may pursue. However, even if we are successful moving a pre-clinical program into humans, the ultimate success of any developmentprogram is uncertain. If we obtain positive clinical data for either this or other pre-clinical assets25we may develop, there will be a significant time lag before the asset gains regulatory approval or commercialization may begin, if ever.We are exposed to product liability, non-clinical and clinical liability risks which could place a substantial financial burden upon us should lawsuits befiled against us. Our business exposes us to potential product liability and other liability risks that are inherent in the testing, manufacturing and marketing ofpharmaceutical formulations and products. We expect that such claims are likely to be asserted against us at some point. In addition, the use in our clinicaltrials of pharmaceutical formulations and products and the subsequent sale of these formulations or products by us or our potential collaborators may causeus to bear a portion of or all product liability risks. Any claim under any existing insurance policies or any insurance policies secured in the future may besubject to certain exceptions, and may not be honored fully, in part, in a timely manner, or at all, and may not cover the full extent of liability we mayactually face. Therefore, a successful liability claim or series of claims brought against us could have a material adverse effect on our business, financialcondition and results of operations. Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation tosuffer. In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information andthat of our customers, suppliers and business partners and personally identifiable information of our customers and employees, in our data centers and on ournetworks. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our securitymeasures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or otherdisruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any suchaccess, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information,and regulatory penalties, disrupt our operations and the products we provide to customers, and damage our reputation, and cause a loss of confidence in ourproducts, which could adversely affect our business/operating margins, revenues and competitive position.Risks Related to Government Regulation of our Industry Legislative or regulatory reform of the healthcare system may affect our ability to sell our products profitably. In both the U.S. and certain foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the healthcare systemin ways that could impact our ability to sell future products and profitability. On March 23, 2010, President Obama signed into law the Patient Protection andAffordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, “PPACA”), which includes a number of health carereform provisions and requires most U.S. citizens to have health insurance. The new law, among other things, imposes a significant annual fee on companiesthat manufacture or import branded prescription drug products, addresses a new methodology by which rebates owed by manufacturers under the MedicaidDrug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increases the minimum Medicaid rebates owed bymanufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations,and establishes a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiatedprices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to becovered under Medicare Part D. Substantial new provisions affecting compliance also have been added, which may require modification of business practiceswith health care practitioners. In the coming years, additional changes could be made to governmental healthcare programs that could significantly impact the success of ourfuture products, and we could be adversely affected by current and future health care reforms.We are subject to intense regulation from the U.S. Government and such other governments and quasi-official regulatory bodies where our products areand product candidates may be sold. Both before and after regulatory approval to market a particular product candidate, including our product candidates, the manufacturing, labeling,packaging, adverse event reporting, storage, advertising, promotion, distribution and record keeping related to the product are subject to extensive, ongoingregulatory requirements, including, without limitation, submissions of safety and other post-marketing information and reports, registration, as well ascontinued compliance with (“cGMP”) requirements and good clinical practice requirements for any clinical trials we conduct post-approval. As a result, weare subject to a number of governmental and other regulatory risks, which include:26 •clinical development is a long, expensive and uncertain process; delay and failure can occur at any stage of our clinical trials;•our clinical trials are dependent on patient enrollment and regulatory approvals; we do not know whether our planned trials will begin on time, orat all, or will be completed on schedule, or at all;•the FDA or other regulatory authorities may not approve a clinical trial protocol or may place a clinical trial on hold;•we rely on third parties, such as consultants, contract research organizations, medical institutions and clinical investigators, to conduct clinicaltrials for our drug candidates and if we or any of our third-party contractors fail to comply with applicable regulatory requirements, such as cGMPrequirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the European Medicines Agency orcomparable foreign regulatory authorities may require us to perform additional clinical trials;•if the clinical development process is completed successfully, our ability to derive revenues from the sale of our product candidates will dependon us first obtaining FDA or other comparable foreign regulatory approvals, each of which are subject to unique risks and uncertainties;•there is no assurance that we will receive FDA or corollary foreign approval for any of our product candidates for any indication; we are subject togovernment regulation for the commercialization of our product candidates•we have not received regulatory approval in the United States for the commercial sale of any of our product candidates;•even if one or more of our product candidates does obtain approval, regulatory authorities may approve such product candidate for fewer or morelimited indications than our requests, may not approve the price we intend to charge for our products, may grant approval contingent on theperformance of costly post-marketing clinical trials or may approve with a label that does not include the labeling claims necessary or desirablefor the successful commercialization of that product candidate;•undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials andcould result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities;•later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with ourthird-party manufacturers or manufacturing processes, or failure to comply with the regulatory requirements of FDA and other applicable UnitedStatesc and foreign regulatory authorities could subject us to administrative or judicially imposed sanctions;•the FDA's policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval ofour drug candidates, and if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, orif we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained; and•we may be liable for contamination or other harm caused by hazardous materials used in the operations of our business.In addition, our operations are also subject to various federal and state fraud and abuse, physician payment transparency and privacy and securitylaws, including, without limitation: •The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or providingremuneration to induce the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as theMedicare or Medicaid programs. This statute has been applied to pharmaceutical manufacturer marketing practices, educational programs, pricingpolicies and relationships with healthcare providers. A person or entity does not need to have actual knowledge of this statute or specific intent toviolate it to have committed a violation;•Federal civil and criminal false claims laws and civil monetary penalty laws, including civil whistleblower or qui tam actions that prohibit, amongother things, knowingly presenting, or causing to be present, claims for payment or approval to the federal government that are false or fraudulent,knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowinglyconcealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government.The government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes afalse or fraudulent claim for purposes of the false claims statutes;•The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing regulations, which created federal criminal lawsthat prohibit, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcarematters;•HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, also imposes certain regulatory and contractualrequirements regarding the privacy, security and transmission of individually identifiable health information;•Federal “sunshine” requirements imposed by the PPACA on drug manufacturers regarding any “transfer of value” made or distributed tophysicians and teaching hospitals, and any ownership and investment interests held by such27physicians and their immediate family members. Failure to submit the required information may result in civil monetary penalties of up anaggregate of $150,000 per year (and up to an aggregate of $1 million per year for “knowing failures”), for all payments, transfers of value orownership or investment interests not reported in an annual submission, and may result in liability under other federal laws or regulations; and•State and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or servicesreimbursed by any third-party payor, including commercial insurers; state laws that require drug manufacturers to comply with the industry'svoluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict paymentsthat may be made to healthcare providers; state laws that require drug manufacturers to report information related to payments and other transfersof value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of certainhealth information, many of which differ from each other in significant ways and often are not preempted by HIPAA.Many of our business practices are subject to scrutiny by regulatory and government enforcement authorities, as well as to lawsuits brought by privatecitizens under federal and state laws. Failure to comply with applicable law or an adverse decision in lawsuits may result in adverse consequences to us.The laws governing our conduct in the U.S., and the conduct of collaborators, licensors or licensees on whom the success of our business relies, areenforceable by administrative, civil, and criminal penalties. Violations of laws such as the Federal Food, Drug, and Cosmetic Act, the Social Security Act(including the Anti-Kickback Statute), and the Federal False Claims Act, and any regulations promulgated under the authority of the preceding, may result ina range of enforcement action including jail sentences, fines integrity oversight and reporting obligations and/or exclusion from federal and state healthcareprograms, as may be determined by Medicare, Medicaid and the Department of Health and Human Services and other regulatory authorities as well as by thecourts in response to actions brought by the Department of Justice. FDA regulates drugs throughout the development process, from preclinical and clinicaltrials through approval and postmarketing requirements. Failure to fully comply with FDA law may cause the FDA to issue inspectional observations,untitled or warning letters, bring an enforcement action, suspend or withdraw an approved product from the market, require a recall or institute fines or civilfines, or could result in disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which (whether applied directly to us or toour collaborators, licensors, or licensees) could harm our reputation and our business. There can be no assurance that our activities, or those of ourcollaborators, licensors or licensees, will not come under the scrutiny of regulators and other government authorities or that our practices will not be found toviolate applicable laws, rules and regulations or prompt lawsuits by private citizen "relators" under federal or state false claims laws.Laws impacting the U.S. healthcare system are subject to a great deal of uncertainty, which may result in adverse consequences to our business.28There have been a number of legislative and regulatory proposals to change the healthcare system, reduce the costs of healthcare and changemedical reimbursement policies. Doctors, clinics, hospitals and other users of our products may decline to purchase our products to the extent there isuncertainty regarding coverage from government or commercial payors. Further proposed legislation, regulation and policy changes affecting third-partyreimbursement are likely. Among other things, Congress has in the past proposed changes to and the repeal of the PPACA, and lawsuits have been broughtchallenging aspects of the law at various points. There have been repeated recent attempts by Congress to repeal or replace the PPACA. Some of theprovisions of the PPACA have yet to be implemented, and there have been legal and political challenges to certain aspects of the PPACA. Since January2017, President Trump has signed two executive orders and other directives designed to delay, circumvent, or loosen certain requirements mandated by thePPACA. Concurrently, Congress has considered legislation that would repeal and replace all or part of the PPACA. While Congress has previously beensuccessful at passing comprehensive repeal legislation through both Chambers of Congress, it had then been vetoed by former President Obama and fullrepeal legislation is unlikely in the current political climate. However, Congress has passed two bills affecting the implementation of certain taxes under thePPACA. The Tax Cuts and Jobs Act passed in December of 2017 included a provision that would repeal one of the primary pillars of the law, the PPACA’sindividual mandate penalty that essentially assessed a monetary penalty or fine on certain individuals who fail to maintain qualifying health coverage for allor part of a year. Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed theimplementation of certain fees mandated by the PPACA, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, theannual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices.Moreover, the Bipartisan Budget Act of 2018 among other things, amends the PPACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans,commonly referred to as the “donut hole”. Congress may consider other legislation to repeal or replace elements of the PPACA on a provision-by-provisionbasis. In addition, there have been recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things,control drug costs, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reformgovernment program reimbursement methodologies for products. We are unable to predict what legislation or regulation, if any, relating to the health careindustry or third-party coverage and reimbursement may be enacted in the future at the state or federal level, or what effect such legislation or regulation mayhave on us. Denial of coverage and reimbursement of our products, or the revocation or changes to coverage and reimbursement policies, could have amaterial adverse effect on our business, results of operations and financial condition.We are planning to pursue the FDA 505(b)(2) pathway for our product candidates, and if we are not able to successfully do so, seeking approval of theseproduct candidates through the 505(b)(1) NDA pathway would require full reports of investigations of safety and effectiveness. Although we find thefeedback received from the FDA to date generally encouraging toward our interest in pursuing the 505(b)(2) pathway for the treatment of AUD and opioidoverdose, such feedback is preliminary only and includes a number of comments and recommendations that we will need to address in our drugdevelopment program to meet FDA standards for approval. In addition, our nasally delivered product candidates will include a drug delivery device, andthat constituent part will be evaluated by the FDA, as will the combination products as a whole, under our NDA. Even if we are able to pursue the 505(b)(2), we could be subject to legal challenges and regulatory changes which might result in extensive delays or result in our 505(b)(2) application beingunsuccessful.Section 505(b)(2) of the FDA permits the filing of an NDA where at least some of the information required for approval comes from studies that werenot conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if applicable to us, would allow anNDA we submit to the FDA to rely in part on data in the public domain or the FDA's prior conclusions regarding the safety and effectiveness of approvedcompounds, which could expedite the development program for a product candidate by potentially decreasing the amount of clinical data that we wouldneed to generate in order to obtain FDA approval. We plan to pursue this pathway for our product candidates. If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as anticipated, we would need to reconsider our plans and might notbe able to commercialize our product candidates in a cost-efficient manner, or at all. If we were to pursue approval under the 505(b)(1) NDA pathway, wewould be subject to more extensive requirements and risks.In addition, medical products containing a combination of new drugs, biological products, or medical devices are regulated as “combinationproducts” in the United States. Each constituent part of a combination product is subject to the requirements established by the FDA for that type ofconstituent part, whether a new drug, biologic, or device. In order to facilitate pre-market review of combination products, the FDA designates one of itscenters to have primary jurisdiction for the pre-market review and regulation of the overall product based upon a determination by FDA of the primary modeof action of the combination product, and typically one application (e.g., for a drug/device combination product assigned to CDER, an NDA - either under505(b)(1) or 505(b)(2)) will be made.29When evaluating products that utilize a specific drug delivery system or device, the FDA will evaluate the characteristics of that delivery system andits functionality, as well as the potential for undesirable interactions between the drug and the delivery system, including the potential to negatively impactthe safety or effectiveness of the drug. The FDA review process can be more complicated for combination products, and may result in delays, particularly ifnovel delivery systems are involved. We rely on third parties for the design and manufacture of the delivery systems for our products, and in some cases forthe right to refer to their data on file with the FDA or other regulators. Quality or design concerns with the delivery system, or commercial disputes with thesethird-parties, could delay or prevent regulatory approval and commercialization of our product candidates.In some instances over the last few years, certain brand-name pharmaceutical companies and others have objected to the FDA's interpretation ofSection 505(b)(2) and legally challenged decisions by the agency. If an FDA decision or action relative to our product candidate, or the FDA's interpretationof Section 505(b)(2) more generally, is successfully challenged, it could result in delays or even prevent the FDA from approving a 505(b)(2) application forour product candidates.The pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patentrights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. A claim by the applicant that a patent is invalid or will not beinfringed is subject to challenge by the patent holder, requirements may give rise to patent litigation and mandatory delays in approval (i.e., a 30-month stay)of a 505(b)(2) application. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of,or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, theapproval of the new product. However, even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers andresponds to the petition.Even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to accelerated productdevelopment or earlier approval. Even if approved pursuant to the Section 505(b)(2) regulatory pathway, a drug may be subject to the same post-approvallimitations, conditions and requirements as any other drug.Clinical trials for our product candidates have in some cases or may in the future be conducted outside the United States and not under an IND, and wherethis is the case, the FDA may not accept data from such trials.Although the FDA may accept data from clinical trials conducted outside the United States and not under an IND in support of research or marketingapplications for our product candidates, this is subject to certain conditions set out in 21 C.F.R. § 312.120. For example, such foreign clinical trials should beconducted in accordance with GCP, including review and approval by an independent ethics committee and obtaining the informed consent from subjects ofthe clinical trials. The FDA must also be able to validate the data from the study through an onsite inspection if the agency deems it necessary. The foreignclinical data should also be applicable to the United States population and United States medical practice. Other factors that may affect the acceptance offoreign clinical data include differences in clinical conditions, study populations or regulatory requirements between the United States and the foreigncountry.Risks Related to Ownership of our Common Stock The price of our Common Stock could be highly volatile due to a number of factors, which could lead to losses by investors and costly securities litigation. Our Common Stock closed as high as $24.40 and as low as $5.35 per share between January 1, 2016 and August 28, 2017 on the OTCQB. OnOctober 2, 2017 we changed our state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan of Merger, datedOctober 2, 2017, whereby we merged with and into our recently formed, wholly-owned Delaware subsidiary. On August 24, 2017, we received approval forup-listing to the Nasdaq Capital Market and our Common Stock began trading on the Nasdaq Capital Market on August 29, 2017. Our Common Stock closedas high as $50.50 and as low as $12.89 per share between August 29, 2017 and March 15, 2019. On March 15, 2019 the closing price of our Common Stock,as reported on the Nasdaq Capital Market was $14.70. Historically, the over-the-counter markets for securities, such as our Common Stock, have experiencedextreme price fluctuations. Some of the factors leading to this volatility include, but are not limited to:•fluctuations in our operating results;•announcements of product releases by us or our competitors;•announcements of acquisitions and/or partnerships by us or our competitors; and•general market conditions.Although shares of our Common Stock currently trade on the Nasdaq Capital Market under the symbol “OPNT”, there30is no assurance that our stock will not continue to be volatile while listed on the Nasdaq Capital Market in the future. We do not anticipate declaring any cash dividends on our Common Stock. We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay anydividends in the foreseeable future, but will review this policy from time to time as circumstances dictate. Certain of our executive officers and directors control the direction of our business by means of a significant collective ownership of our Common Stock.The concentrated beneficial ownership of our Common Stock may prevent other stockholders from influencing significant corporate decisions. Dr. Roger Crystal, our Chief Executive Officer and a director, Dr. Gabrielle Silver, Lead Independent Director, Dr. Michael Sinclair, a director, AnnMacDougall, a director, Thomas T. Thomas, a director, David O'Toole, our Chief Financial Officer and Dr. Phil Skolnick, our Chief Scientific Officercollectively beneficially own approximately 37% of our outstanding Common Stock as of December 31, 2018. As a result, such executive officers anddirectors effectively control the Company and have the ability to exert substantial influence over all matters requiring approval by our stockholders,including the election and removal of directors, amendments to our Certificate of Incorporation, and any proposed merger, consolidation or sale of all orsubstantially all our assets and other corporate transactions. This concentration of ownership could be disadvantageous to other stockholders with differinginterests from such executive officers and directors. Anti-takeover provisions in our charter documents and under Delaware law could prevent or delay transactions that our stockholders may favor and mayprevent stockholders from changing the direction of our business or management. After giving effect to our merger into our wholly-owned Delaware subsidiary, provisions of our Certificate of Incorporation, as amended and restated,and Bylaws may discourage, delay or prevent a merger or acquisition that our stockholders may consider favorable, including transactions in whichstockholders might otherwise receive a premium for their shares, and may also frustrate or prevent any attempt by stockholders to change our direction ormanagement. For example, these provisions: •prohibit stockholder action by written consent;•establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on bystockholders at stockholder meetings;•establish a staggered board of directors such that all members of the Board are not elected at one time;•allow only the Board to fill any vacancy in the Board by reason of death, resignation or otherwise, or if the number of directors shall be increased;and•require a vote of a majority of the shares of our outstanding stock entitled to vote at an election of directors to remove a director.Compliance with changing corporate governance and public disclosure regulations may result in additional expense.Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure,including the Sarbanes-Oxley Act of 2002, and any new Securities and Exchange Commission regulations will require an increased amount of managementattention and external resources. We intend to continue to invest all reasonably necessary resources to comply with evolving standards, which may result inincreased general and administrative expense and a diversion of management time and attention from revenue-generating activities to compliance activities.Our Common Stock is thinly traded on the Nasdaq Capital Market exchange and no assurances can be made about stock performance, liquidity, ormaintenance of our Nasdaq listing.Historically, our Common Stock was quoted on the OTCQB, which provided significantly less liquidity than a securities exchange (such as the NewYork Stock Exchange or the Nasdaq Stock Market). On August 24, 2017, our Common Stock was approved for trading on the Nasdaq Capital Market.Beginning on August 29, 2017, our Common Stock began trading on the Nasdaq Capital Market under the symbol “OPNT”. Although currently listed on theNasdaq Capital Market, there can be no assurance that we will continue to meet the Nasdaq Capital Market’s minimum listing requirements or that of anyother national exchange. In addition, there can be no assurances that a liquid market will be created for our Common Stock. If we are unable to maintainlisting on the Nasdaq Capital Market or if a liquid market for our Common Stock does not develop, our common stock may remain thinly traded.31Item 1B. Unresolved Staff Comments. This information is not required for smaller reporting companies. 32Item 2. Properties. The Company does not currently own any physical property.On May 29, 2017, we entered into a Sublease (the “Sublease”) with Standish Management, LLC to sublease approximately 1,500 square feet ofoffice space located at 201 Santa Monica Boulevard, Suite 500, Santa Monica, CA 90401. Per the terms of the Sublease, the term commenced on August 1,2017 and as of September 1, 2018 is on a month to month basis. Commencing September 1, 2017, our headquarters are located at this location. Our headquarters through August 31, 2017 were located on the 12th Floor of 401 Wilshire Blvd., Santa Monica, California 90401. We terminatedour lease with Premier Office Centers, LLC effective September 30, 2017.On April 20, 2017, we entered into an Office Service Agreement (the “Office Service Agreement”) with Regus and leased approximately 1,000square feet of office space at 83 Baker Street, London, England, W1U 6AG. The original term of the lease expired May 31, 2018 and effective June 1, 2018either party may terminate the lease with a 90 day advance notice. 33Item 3. Legal Proceedings.On September 15, 2016, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “September 2016 NoticeLetter”), that Teva USA had filed the Teva ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN® before the expirationof the ’253 patent. The ’253 patent is listed with respect to NARCAN® in the FDA’s Approved Drug Products with Therapeutic Equivalents Evaluationspublication (commonly referred to as the “Orange Book”) and expires on March 16, 2035. Teva’s September 2016 Notice Letter asserts that its genericproduct will not infringe the ’253 patent and/or that the ’253 patent is invalid or unenforceable. On October 21, 2016, the Plaintiffs filed a complaint forpatent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with theFDA with respect to the ’253 patent. On January 3, 2017, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “January 2017 Notice Letter”),that Teva USA is seeking regulatory approval to market a generic version of NARCAN® before the expiration of the ’747 patent. The ’747 patent is listedwith respect to NARCAN® in the FDA’s Orange Book and expires on March 16, 2035. Teva’s January 2017 Notice Letter asserts that its generic product willnot infringe the ’747 patent or that the ’747 patent is invalid or unenforceable. On February 8, 2017, the Plaintiffs filed a complaint for patent infringementagainst Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with the FDA with respect tothe ’747 patent. On March 17, 2017, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “March 2017 Notice Letter”),that Teva USA is seeking regulatory approval to market a generic version of NARCAN before the expiration of the ’177 patent. The ’177 patent is listed withrespect to NARCAN® in the FDA’s Orange Book and expires on March 16, 2035. Teva’s March 2017 Notice Letter asserts that its generic product will notinfringe the ’177 patent and/or that the ’177 patent is invalid or unenforceable. On April 26, 2017, the Plaintiffs filed a complaint for patent infringementagainst Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with the FDA with respect tothe ’177 patent. On June 2, 2017, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “June 2017 Notice Letter”), thatTeva USA is seeking regulatory approval to market a generic version of NARCAN® before the expiration of the ’965 patent. The ’965 patent is listed withrespect to NARCAN® in the FDA’s Orange Book and expires on March 16, 2035. Teva’s June 2017 Notice Letter asserts that its generic product will notinfringe the ’965 patent and/or that the ’965 patent is invalid or unenforceable. On July 12, 2017, the Plaintiffs filed a complaint for patent infringementagainst Teva in the United States District Court for the District of New Jersey arising from Teva USA’s filing of the Teva ANDA with the FDA with respect tothe ’965 patent.On February 27, 2018, the Company and Adapt received notice from Teva, pursuant to 21 U.S.C. § 355(j)(2)(B)(ii) (the “February 2018 NoticeLetter”), that Teva had filed an ANDA with the FDA seeking regulatory approval to market a generic version of NARCAN® 2 mg/spray Nasal Spray beforethe expiration of the ‘644 patent and the ‘226 patent. The ‘644 and ‘226 patents are listed with respect to Adapt’s New Drug Application No. 208411 forNARCAN 2 mg/spray Nasal Spray in the FDA’s Orange Book and each patent expires on March 16, 2035. The Company is the record owner of the ‘644patent and the Company and Adapt are joint record owners of the ‘226 patent. Teva’s Notice Letter asserts that the commercial manufacture, use or sale of itsgeneric drug product described in its ANDA will not infringe the ‘644 patent or the ‘226 patent, or that the ‘644 patent and ‘226 patent are invalid orunenforceable.On September 14, 2018, the Company and Adapt Pharma, Inc. (also “Adapt”) received notice from Perrigo UK FINCO Limited Partnership(“Perrigo”), pursuant to 21 U.S.C. ß 355(j)(2)(B)(ii) (the “Notice Letter”), that Perrigo had filed an ANDA with the FDA seeking regulatory approval to marketa generic version of NARCAN® (naloxone hydrochloride) Nasal Spray before the expiration of U.S. Patent Nos. 9,211,253 (the “‘253 Patent” ), 9,468,747(the “‘747 Patent” ), 9,561,177 (the “‘177 Patent” ), 9,629,965 (the “‘965 Patent” ) and 9,775,838 (the “‘838 Patent” ). The ‘253, ‘747, ‘177, ‘965 and ‘838patents are listed with respect to NARCAN® in the FDA's Orange Book and expires on March 16, 2035. Perrigo's Notice Letter asserts that its generic productwill not infringe the ‘253, ‘747, ‘177, ‘965 and ‘838 patents or that the ‘253, ‘747, ‘177, ‘965 and ‘838 patents are invalid or unenforceable. Pursuant to anExclusive License Agreement, entered into on December 14, 2014, as amended, the Company has exclusively licensed the ‘253, ‘747, ‘177, ‘965 and ‘838patents to Adapt.On October 25, 2018, Emergent BioSolutions’ Adapt subsidiaries and Opiant (collectively, the “Plaintiffs”) filed a complaint for patent infringementagainst Perrigo in the United States District Court for the District of New Jersey arising from Perrigo’s ANDA filing with the FDA. As a result of timely filingthe lawsuit in accordance with the Hatch-Waxman Act, a 30-month stay of approval will be imposed by the FDA on Perrigo’s ANDA, which is expected toremain in effect until March 2021 absent an earlier judgment, unfavorable to the Plaintiffs, by the Court. The Plaintiffs seek, among other relief, an order thatthe effective date of FDA approval of the ANDA be a date no earlier than the expiration of each of the Patents-In-Suit, as well as34equitable relief enjoining Perrigo from infringing these patents, and monetary relief as a result of any such infringement. Emergent BioSolution Inc.continues to vigorously enforce the intellectual property portfolio related to NARCAN® Nasal Spray.In each of the complaints described above, the Plaintiffs seek, among other relief, an order that the effective date of FDA approval of the Teva orPerrigo ANDA be a date not earlier than the expiration of the applicable patent, as well as equitable relief enjoining Teva and Perrigo from making, using,offering to sell, selling, or importing the product that is the subject of the Teva or Perrigo ANDA until after the expiration of the applicable patent, andmonetary relief as a result of any such infringement.On or about February 19, 2019, Emergent BioSolutions’ Adapt subsidiaries and Opiant received notice from a company called Nalox-1Pharmaceuticals LLC that it had filed fifteen petitions for inter partes review of U.S. Patent Nos. 9,211,253, 9,468,747, 9,561,177, 9,629,965, and 9,775,838(IPR Nos. 2019-00685, 2019-00686, 2019-00687, 2019-00688, 2019-00689, 2019-00690, 2019-00691, 2019-00692, 2019-00693, 2019-00694, 2019-00695, 2019-00696, 2019-00697, 2019-00698, 2019-00699) with the Patent Trial and Appeal Board of the United States Patent and Trademark Office.Nalox-1’s Petitions assert that each of the foregoing patents are invalid as obvious in view of prior art. An initial response to the Petitions is due three monthsfrom the filing date of the petitions. Opiant continues to be confident in the intellectual property portfolio related to NARCAN Nasal Spray.Except as described above, the Company is currently not involved in any litigation that the Company believes could have a materially adverseeffect on the Company’s financial condition or results of operations. Except as described above, there is no action, suit, proceeding, inquiry or investigationbefore or by any court, public board, government agency, self-regulatory organization or other body pending or, to the knowledge of the executive officers ofthe Company or any of the Company’s subsidiaries, threatened against or affecting the Company, the Company’s Common Stock, any of the Company’ssubsidiaries or the Company’s or the Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have amaterial adverse effect.35Item 4. Mine Safety Disclosures. Not applicable.36PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information From April 2007 through January 2016, our Common Stock was listed for quotation on the OTCQB under the symbol “LLTP”. From February 2016,following our name change to Opiant Pharmaceuticals, Inc., until August 28, 2017, our Common Stock was listed for quotation on the OTCQB under thesymbol “OPNT”. Beginning on August 29, 2017, our Common Stock began trading on the Nasdaq Capital Market under the symbol “OPNT.” Price Range of Common Stock The following table shows, for the periods indicated, the high and low sale prices per share of our Common Stock as reported by Nasdaq. High LowFiscal Year 2017 First quarter ended October 31, 2016 $8.89 $7.01Second quarter ended January 31, 2017 $8.40 $5.01Third quarter ended April 30, 2017 $9.06 $6.32Fourth quarter ended July 31, 2017 $15.29 $5.00 Transition Period August 1, 2017 - December 31, 2017 $51.90 $11.51 Year Ended 2018 First quarter ended March 31, 2018 $32.28 $18.37Second quarter ended June 30, 2018 $21.10 $13.28Third quarter ended September 30, 2018 $29.55 $12.75Fourth quarter ended December 31, 2018 $20.00 $12.02 Approximate Number of Equity Security HoldersAs of March 15, 2019, there were approximately 46 stockholders of record. Because shares of our Common Stock are held by depositories, brokersand other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record. Dividends We have not declared or paid any cash dividends on our Common Stock, and we do not anticipate declaring or paying cash dividends for theforeseeable future. We are not subject to any legal restrictions respecting the payment of dividends, except that we may not pay dividends if the paymentwould render us insolvent. Any future determination as to the payment of cash dividends on our Common Stock will be at the discretion of our Board andwill depend on our financial condition, operating results, capital requirements and other factors that the Board considers to be relevant.Securities Authorized for Issuance under Equity Compensation PlansThe following table sets forth certain information regarding our equity compensation plans as of December 31, 2018:37Plan Category Number of securitiesto be issued uponexercise ofoutstanding options Weighted-average exercise price ofoutstandingoptions Number of securities remaining available forfuture issuance underequity compensationplans Equity compensation plans approved bysecurity holders 343,550 $28.97 157,881 Equity compensation plans not approved bysecurity holders 2,885,500 $7.30 — Total 3,229,050 157,881 Unregistered Sales of Equity Securities The following represents a summary of the Company’s unregistered issuances of its equity securities during the last three years. Each of theissuances were made pursuant to Section 4(a)(2) of the Securities Act. These issuances qualified for exemption under Section 4(2) since they did not involve apublic offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of theoffering, manner of the offering and number of shares offered. The Company did not undertake an offering in which the Company sold a high number ofshares to a high number of investors. In addition, the investors had the necessary investment intent as required by Section 4(2) because they agreed to andreceived share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that theseshares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, theCompany has met the requirements to qualify for exemption under Section 4(2) of the Securities Act for these transactions.Year Ended 2018 - Common StockOn April 19, 2018, the Company issued 37,866 shares of its Common Stock pursuant to the LOI dated November 19, 2015 (see Note 10 -Commitments). The Company received no proceeds from the issuance of these shares.On September 5, 2018, the Company issued 160,000 shares of its Common Stock to the Valour Fund, LLC, as a result of Valour's exercise of itsoption to change its interest in certain product revenues for Common Stock of the Company (see Note 8 - Deferred Revenue).On December 18, 2018, the Company issued 6,498 shares of its Common Stock to Torreya Partners (Europe) LLP (“Torreya”). These shares wereissued as payment in full for a $100 thousand accrued liability owed by the Company to Torreya pursuant to that certain Supplemental Engagement Letterbetween the Company and Torreya, dated September 8, 2017 (the "Supplemental Agreement").Transition Period: August 1, 2017 - December 31, 2017 - Common StockOn September 8, 2017, we entered into an agreement (the “Supplemental Agreement”) with Torreya, which modifies and supplements theEngagement Letter dated December 18, 2014 (the “2014 Agreement”) between the Company and Torreya regarding the engagement of Torreya to providefinancial advisory services with respect to the licensing of the intellectual and property rights to develop and commercialize certain Products (as defined inthe 2014 Agreement) with Adapt. The Supplemental Agreement amends the total consideration to be paid by the Company under the 2014 Agreement from“3.75% of Total Consideration” to, include, among other consideration, shares of Common Stock equal to an aggregate value of $300,000, to be issued by usto Torreya in three equal installments over a 16-month period commencing September 2017. Payments in the form of shares of Common Stock will be adefined 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 thepayment. On September 23, 2017, the Company issued 3,283 shares to the Torreya in relation to the Supplemental Agreement. This issuance of CommonStock to Torreya was made pursuant to Section 4(a)(2) of38the Securities Act. On December 22, 2017, the Company issued 3,455 shares to the Torreya in relation to the Supplemental Agreement. This issuance ofCommon Stock to Torreya was made pursuant to Section 4(a)(2) of the Securities Act.On September 11, 2017, we issued 7,997 shares of Common Stock as a result of the cashless exercise of 10,000 option shares by a consultant. Thenon-statutory stock option was granted to the consultant, in exchange for services rendered, on July 15, 2015, was fully vested on the date of grant and hadan exercise price of $10.00 per share. We claimed exemption from registration under the Securities Act for the grant of the option and issuance of CommonStock to the consultant under Rule 701 promulgated under the Securities Act (“Rule 701”), in that the option was granted, and the shares of Common Stockwere subsequently issued, pursuant to a written contract relating to compensation, as provided by Rule 701.Fiscal Year 2017 - Common StockOn June 22, 2017, in consideration for the grant of the License under the License Agreement with Aegis, we agreed to pay Aegis two immaterialupfront payments, of which we may elect to pay up to 50% by issuing our Common Stock to Aegis, with the number of shares to be issued equal to 75% ofthe average closing price of our Common Stock over the 20 trading days preceding the date of payment.On March 16, 2017, we issued 10,745 shares of Common Stock pursuant to a binding letter of intent to agree to negotiate and enter into anexclusive license agreement and collaboration agreement (the “LOI”) with a pharmaceutical company with certain desirable proprietary information. Per theterms of the LOI, we were obligated to issue these shares upon the one year anniversary of our receipt of a milestone payment from Adapt for the firstcommercial sale of our product, NARCAN®, in the U.S.On March 13, 2017, pursuant to the Third Miles Amendment, and in partial consideration for Mr. Miles’ continued service to us as an advisorthrough December 31, 2017, we issued Mr. Miles 1,875 shares of Common Stock; and (ii) granted to Mr. Miles a warrant to purchase 45,000 shares ofCommon Stock (the “Miles Warrant”). The Miles Warrant, which is fully vested on the date of grant, has an exercise price of $10.00, an expiration date ofthree years from the date of grant and may be exercised solely by payment of cash.The issuances described above qualified for exemption under Section 4(2) since it did not involve a public offering. The offering was not a “publicoffering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number ofshares offered. The Company did not undertake an offering in which the Company sold a high number of shares to a high number of investors. Based on ananalysis of the above factors, we believe the Company has met the requirements to qualify for exemption under Section 4(2) of the Securities Act for thistransaction.Purchases of Equity Securities by the Issuer and Affiliated PurchasersWe did not repurchase any of our securities during any of the periods presented in this report.39Item 6. Selected Financial Data. The Company is not required to provide the information required by this Item because the Company is a smaller reporting company. 40Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of the results of operations and financial condition for the year ended December 31, 2018, five month period endedDecember 31, 2017 and year ended July 31, 2017 and financial condition as of December 31, 2018, December 31, 2017 and July 31, 2017 and should beread in conjunction with the “Cautionary Note Regarding Forward-Looking Statements” contained in Part 1 of this report on Form 10-K (this "Report"),the “Risk Factors” contained in Item 1A of this Report, our consolidated financial statements and the notes thereto contained in Item 8 of this Report, andthe other information appearing elsewhere in, or incorporated by reference into this Report.OverviewOn December 8, 2017, the Board of Directors, acting pursuant to Section 5.1 of the Company’s Bylaws, approved a resolution changing theCompany’s fiscal year end from July 31 to December 31. We made this change to align our fiscal year end with other companies within our industry.Information contained in this section covers the reporting periods for the year ended December 31, 2018, the five months ended December 31, 2017 and thefiscal year ended July 31, 2017.We are a specialty pharmaceutical company developing medicines for addictions and drug overdose. We developed NARCAN® (naloxonehydrochloride) Nasal Spray ("NARCAN®"), a treatment to reverse opioid overdose. This product was conceived and developed by us, licensed to AdaptPharma Operations Limited (“Adapt”), an Ireland based pharmaceutical company in December 2014 and approved by the U.S. Food and Drug Administration(“FDA”) in November 2015. It is marketed by Adapt. In October 2018, Emergent BioSolutions, Inc. (“EBS”) completed its acquisition of Adapt.We have not consistently attained profitable operations and have historically depended upon obtaining sufficient financing to fund our operations.We anticipate if revenues are not sufficient then additional funding will be required in the form of debt financing and/or equity financing from the sale of ourCommon Stock and/or financings from the sale of interests in our prospective products and/or royalty transactions. However, we may not be able to generatesufficient revenues or raise sufficient funding to fund our operations. We have not had a bankruptcy, receivership or similar proceeding. We are required to comply with all regulations, rules and directives ofgovernmental authorities and agencies applicable to the clinical testing and manufacturing and sale of pharmaceutical products.On October 2, 2017, we changed our state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement and Plan ofMerger, dated October 2, 2017, whereby we merged with and into our recently formed, wholly-owned Delaware subsidiary, Opiant Pharmaceuticals, Inc.Pursuant to the Agreement and Plan of Merger, (i) we merged with and into our Delaware subsidiary, (ii) our separate corporate existence in Nevada ceased toexist, (iii) our Delaware subsidiary became the surviving corporation, (iv) each share of our Common Stock outstanding immediately prior to the effectivetime was converted into one fully-paid and non-assessable share of common stock of Opiant Pharmaceuticals, Inc., a Delaware corporation, $0.001 par valueper share, and (v) the certificate of incorporation and bylaws of our Delaware subsidiary were adopted as our certificate of incorporation and bylaws at theeffective time of the merger. The merger and the Agreement and Plan of Merger were approved by our Board and stockholders representing a majority ofoutstanding Common Stock. We developed NARCAN®, a treatment to reverse opioid overdoses, which was conceived, licensed, developed, approved by the FDA andcommercialized in less than three years. We plan to replicate this relatively low cost, successful business strategy primarily through developing nasal opioidantagonists in the field of developing pharmacological treatments for substance use, addictive, and eating disorders. We aim to identify and progress drugdevelopment opportunities with the potential to file additional New Drug Application (“NDAs”) with the FDA within three years. We also plan to identifyand progress drug development opportunities with potentially larger markets, potentially larger addressable patient populations and greater revenuepotential. In addition, we plan to invest in long-term development opportunities by identifying early stage product candidates with novel modes of action. Our current pipeline includes medicines in development for Opioid Overdose Reversal (“OOR”), Alcohol Use Disorder (“AUD”), Opioid UseDisorder (“OUD”) and Acute Cannabinoid Overdose (“ACO”). We are also pursuing other treatment opportunities within the addiction and drug overdosefield.41Results of Operations Comparison of the year ended December 31, 2018 compared to the year ended December 31, 2017.The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. Accordingly, the following presentation and discussionof the results of operations for the year ended December 31, 2018, which has been audited, will be compared to the unaudited results of operations for theyear end December 31, 2017 to allow comparable year-over-year analysis and discussion of results of operation. For the Year Ended Increase(Decrease)(in thousands)December 31,2018December 31, 2017 Amount (unaudited) Revenue: Royalty and licensing revenue$13,262$15,447$(2,185) Treatment investment revenue 251 105 146Grant and contract revenue 469 — 469Total revenue 13,982 15,552 (1,570)Operating expenses: General and administrative 11,264 10,313 951 Research and development 8,479 4,857 3,622 Royalty expense 1,491 1,408 83 License fees 13,725 — 13,725 Selling expense 214 851 (637)Total operating expenses 35,173 17,429 17,744Loss from operations (21,191) (1,877) (19,314)Other income (expense), net 46 68 (22)Loss before provision of income taxes (21,145) (1,809) (19,336)Provision for income taxes 51 797 746Net loss$(21,196)$(2,606)$(18,590)Net Revenue During the year ended December 31, 2018, we recorded net revenue of $14.0 million, which represents a decrease of approximately $1.6 million from the$15.6 million of net revenue recorded during the year ended December 31, 2017. The $1.6 million year-over-year decrease in net revenue was due primarilyto a $2.2 million decrease in revenue related to NARCAN® sales and related milestone payments for the comparable periods. The $2.2 million decrease waspartially offset by an increase in Grant and Contract revenue of $500 thousand and an increase in investment treatment revenue of $100 thousand for thecomparable periods.General and Administrative Expenses For the year ended December 31, 2018 general and administrative expenses totaled $11.3 million, which represents an increase of approximately $1.0million as compared to $10.3 million of general and administrative expenses incurred during the year ended December 31, 2017. The increase is attributableto an increase in stock based compensation expense of $1.6 million and a $0.7 million increase in external marketing research, and investor relations,partially offset by a $1.3 million decrease in personnel expense and other corporate overhead expense for the year ended December 31, 2018 as compared tothe year ended December 31, 2017.42Research and Development During the year ended December 31, 2018 we recorded research and development expenses totaling $8.5 million, which represents an increase of $3.6million as compared to the $4.9 million of research and development expenses incurred during the year ended December 31, 2017. The increase in researchand development expenses is attributed to a $1.5 million increase for third party expenses associated with our research and development programs, $1.5million increase for stock-based compensation expense and $0.6 million related to increased personnel and related expense.Royalty ExpensesRoyalty expenses were approximately $1.5 million and $1.4 million for the years ended December 31, 2018 and 2017, respectively and are relatedto NARCAN® sales and related milestone payments we receive. License FeesWe recorded $13.7 million in expense associated with license fees incurred during the year ended December 31, 2018. The license fees relate to theLicense Agreement with Adapt of which $5.6 million was paid during 2018, and $8.1 million is a liability at December 31, 2018. (see Note 9 - License FeesPayable). There were no license fees for the year ended December 31, 2017.Selling ExpensesSelling expenses decreased by approximately $0.6 million to $0.2 million for the year ended December 31, 2018 compared to December 31, 2017.The decrease is attributable to reduced selling expense associated with NARCAN® sales and related milestone payments for the comparable periods.Other Income (Expense) The following table details our Other Income (Expense): For the Year Ended (in thousands) December 31, 2018 December 31, 2017 Variance (unaudited) Other income (expense) Interest income, net $145 $34 $111Gain (loss) on foreign exchange (48) 48 (96)Loss on settlement of liability (50) (14) (36)Total other income $47 $68 $(21) 43Comparison of the five month period ended December 31, 2017 compared to the five month period ended December 31, 2016.The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. Accordingly, the following presentation and discussionof the results of operations for the five month period ended December 31, 2017, which has been audited, will be compared to the unaudited results ofoperations for the five month period ended December 31, 2016 to allow comparable period-over-period analysis and discussion of results of operation. For the Five Month Period Ended Increase (Decrease)(in thousands)December 31, 2017December 31, 2016 Amount Percentage (unaudited) Revenue: Royalty and licensing revenue$11,697$14,831$(3,134) (21.1)% Treatment investment revenue 65 — 65 — %Total revenue 11,762 14,831 (3,069) (20.7)%Operating expenses: General and administrative 5,887 1,854 4,033 217.5 % Research and development 2,486 709 1,777 250.6 % Selling expenses 439 730 (291) (39.9)% Royalty expenses 1,408 — 1,408 — %Total operating expenses 10,220 3,293 6,927 210.4 %Income from operations 1,542 11,538 (9,996) (86.6)%Other income (expense), net 7 (23) 30 130.4 %Income before provision of income taxes 1,549 11,515 (9,966) (86.5)%Provision for income taxes 169 — 169 — %Net income$1,380$11,515$(10,135) (88.0)%Net Revenue During the five month period ended December 31, 2017, we recorded net revenue of $11.8 million, which represents a decrease of $3.1 million, or20.7%, from the $14.8 million of net revenue recorded during the five month period ended December 31, 2016. The $3.1 million year-over-year decrease innet revenue was due primarily to the $13.75 million received under the Purchase Agreement with SWK, $500 thousand received from Adapt triggered by theHeath Canada's approval of NARCAN® and $600 thousand of net revenue arising from the sale, by Adapt, of NARCAN® during the five month period endedDecember 2016, offset with the recognition of net revenue of $11.7 million arising from NARCAN® sales and milestone payments during the five monthperiod ended December 31, 2017. The following table summarizes our royalty and licensing net revenue for five month periods ended December 31, 2017 and 2016: For the Five Month Period Ended (in thousands) December 31, 2017 December 31, 2016 Variance (unaudited) Royalties related to SWK Purchase Agreement$— $13,710 $(13,710)Royalties and milestones related to Adapt Agreement 11,697 1,121 10,576 $11,697 $14,831 $(3,134)44General and Administrative Expenses For the five month period ended December 31, 2017, general and administrative expenses totaled $5.9 million, which represents an increase of $4.0million, or 217.5%, as compared to the $1.9 million of general and administrative expenses incurred during the five month period ended December 31, 2016.The primary reason for the significant increase in general and administrative expenses was attributed to $1.1 million increase associated with stock basedcompensation, $1.0 million increase in severance payments, $1.0 million increase associated with professional fees and services, and $800 thousand increaseassociated with employee salaries and compensation largely attributed to increased headcount during the five month period ended December 31, 2017 ascompared to the five month period ended December 31, 2016. Selling Expenses Our selling expenses for the five month periods ended December 31, 2017 and 2016 were $0.4 million and $0.7 million, respectively. The $0.3million decrease in selling expenses is due entirely to lower selling expenses during the five month period ended December 31, 2017 as related to the sale ofRoyalties to SWK (see Note 13 - Sale of Royalties). Research and Development During the five month period ended December 31, 2017, we recorded research and development expenses totaling $2.5 million, which represents anincrease of $1.8 million, or 250.6%, as compared to the $0.7 million of research and development expenses incurred during the five month period endedDecember 31, 2016. The increase in research and development expenses is attributed to a $1.2 million increase in payments to third party expensesassociated with research and development program, $0.4 million attributed to stock based compensation expense associated with research and developmentemployees and $0.2 million related to the increased headcount for research and development. Other Income (Expense) The following table details our Other Income (Expense): For the Five Month Period Ended (in thousands) December 31, 2017 December 31, 2016 Variance (unaudited) Interest income$10 $— $10 Interest expense — (4) 4 Gain (loss) on foreign exchange rates 10 (19) 29 Loss on settlement of liability (13) — (13) Net interest income (expense)$7 $(23) $30 Net Income Net income for the five months ended December 31, 2017 was $1.4 million, which represents a decrease of $10.1 million from the $11.5 million netincome for the five month period ended December 31, 2016. The decrease in net income was caused primarily by a decrease in net revenue of $3.1 millionduring the five month period ended December 31, 2017, as compared to the five month period ended December 31, 2016. In addition, for the five monthsended December 31, 2017, there was a $4.0 million increase in general and administrative expenses, a $1.8 million increase in research and developmentexpenses, and a $1.4 million increase in royalty expense as compared to the five month period ended December 31, 2016. 45Results of Operations Comparison of the year ended July 31, 2017 compared to the year ended July 31, 2016. Fiscal Year Ended Increase (Decrease)(in thousands)July 31, 2017July 31, 2016 Amount Percentage Revenue: Royalty and licensing revenue$18,406 5,098$13,308 261.0 % Treatment investment revenue 40 4,800 (4,760) (99.2)%Total revenue 18,446 9,898 8,548 86.4 %Operating expenses: General and administrative 6,530 14,509 (7,979) (55.0)% Research and development 3,172 2,809 363 12.9 % Selling expenses 1,651 318 1,333 419.2 %Total operating expenses 11,353 17,636 (6,283) (35.6)%Income from operations 7,093 (7,738) 14,831 (191.7)%Other income (expense), net 38 (76) 114 (150.0)%Income before provision of income taxes 7,131 (7,814) 14,945 (191.3)%Provision for income taxes 550 — 550 — %Net income$6,581$(7,814)$14,395 (184.2)%Net Revenue During the fiscal year ended July 31, 2017, we recorded net revenue of $18.4 million, which represents an increase of $8.5 million, or 86%, from the$9.9 million of net revenue recorded during the fiscal year ended July 31, 2016. The $8.5 million year-over-year increase in net revenue was due primarily tothe recognition of net revenue of $17.5 million from the sale to SWK of our right to receive, commencing on October 1, 2016, Royalties (as defined in theSWK Purchase Agreement) arising from the sale, by Adapt, of our NARCAN® (naloxone hydrochloride) Nasal Spray. The $17.5 million of net revenuerecorded in relation to the SWK Purchase Agreement consists of an initial payment of $13.7 million made by SWK to us in December 2016 and an additionalpayment of $3.8 million earned by us as of July 31, 2017 with the funds being received by us in August 2017. The $3.8 million payment was earned by usbecause net sales of our NARCAN® product exceeded $25 million, in the aggregate, for the calendar quarters ended March 31, 2017 and June 30, 2017.Fiscal year 2016 royalty and licensing net revenue consisted entirely of royalties received by us from Adapt in relation to sales of our NARCAN® productand included (i) a $2 million milestone payment made by Adapt to us related to the FDA’s approval of NARCAN® for the emergency treatment of known orsuspected opioid overdose and (ii) a $2.5 million milestone payment from Adapt that was due to us upon the first commercial sale of NARCAN® in the U.S. The following table summarizes our royalty and licensing net revenue for fiscal years ended July 31, 2017 and 2016: Fiscal Year Ended (in thousands) July 31, 2017 July 31, 2016 Variance Royalties related to SWK Purchase Agreement$17,460 $— $17,460 Royalties related to Adapt Agreement 946 5,098 (4,152) $18,406 $5,098 $13,308 46The $13.3 million increase in royalty and licensing net revenue was partially offset by the $4.8 million decrease in treatment investment netrevenue, as fiscal year 2017 treatment investment net revenue was $40,000 as compared to the $4.8 million recorded during fiscal year 2016. The $40,000 offiscal year 2017 treatment investment net revenue was related entirely to our BED program, while the entire $4.8 million of fiscal year 2016 treatmentinvestment net revenue was related to the sale of OORT Net Profit interests. Treatment investment net revenue related to the sale of OORT Net Profit interestswas zero during fiscal year 2017 because we had recognized all net revenue related to the sale of OORT Net Profit interests during the fiscal year ended July31, 2016. The revenue from these sales was recognized during the year ended July 31, 2016 because either the investment did not contain an option toexchange OORT Net Profit interests for shares of our Common Stock or the product was approved by the FDA and marketed, which negated the investor’soption to exchange OORT Net Profit interests for shares of our Common Stock, and the research and development work related to the product was completedas of July 31, 2016.General and Administrative ExpensesFiscal year 2017 general and administrative expenses totaled $6.5 million, which represents a decrease of $8.0 million, or 55.0%, as compared to the$14.5 million of general and administrative expenses incurred during fiscal year 2016. The primary reason for the significant reduction in general andadministrative expenses was the $9.4 million reduction in stock based compensation expense during fiscal year 2017 as compared to fiscal year 2016. Stockbased compensation expense totaled $1.1 million during fiscal year 2017, while fiscal year 2016 stock based compensation was $10.5 million. Stock basedcompensation expense for fiscal year 2016 included $9.2 million of expense related to options granted to four of our directors during 2016, with the entirevalue of these options being expensed during fiscal year 2016. The $9.4 million reduction in fiscal year 2017 stock based compensation expense waspartially offset by $0.2 million paid to certain OORT investors per the terms of their amended agreements during the fiscal year ended July 31, 2017.Selling ExpensesOur selling expenses for the fiscal years ended July 31, 2017 and 2016 were $1.7 million and $0.3 million, respectively. The $1.3 million increase infiscal year 2017 selling expenses as compared to fiscal year 2016 is due entirely to additional selling expenses during fiscal year 2017 as related to the sale ofRoyalties to SWK (see Note 13 – Sale of Royalties).Research and DevelopmentDuring the year ended July 31, 2017, we recorded research and development expenses totaling $3.2 million, which represents an increase of $0.4million, or 12.9%, as compared to the $2.8 million of research and development expenses incurred during the year ended July 31, 2016. The increase in fiscalyear 2017 research and development expenses, as compared to fiscal year 2016, is due primarily to expenses incurred related to our BN project and the hiringof our Chief Scientific Officer in February 2017. Partially offsetting the increase in these expenses was the decrease in stock based compensation expenseduring fiscal year 2017, which decreased by $0.4 million as compared to fiscal year 2016. This decrease was the result of less stock based compensationexpense related to options granted prior to fiscal year 2017.Other Income (Expense) The following table details our Other Income (Expense): Fiscal Year Ended (in thousands) July 31, 2017 July 31, 2016 Variance Interest income$24 $1 $23 Interest expense (4) (12) 8 Gain (loss) on foreign exchange rates 18 (65) 83 Net interest income (expense)$38 $(76) $114 Net Income Net income for the year ended July 31, 2017 was $6.6 million, which represents an increase of $14.4 million from the $7.8 million net loss for theyear ended July 31, 2016. The increase in net income was caused primarily by an increase in net47revenue of $8.5 million as compared to fiscal year 2016. In addition, fiscal year 2017 general and administrative expenses decreased by $8.0 million ascompared to fiscal year 2016. The increase in net revenue, and the decrease in general and administrative expenses, were the primary reasons for thesignificant increase in net income for the year ended July 31, 2017 as compared to the year ended July 31, 2016.Liquidity and Capital ResourcesOur cash balance at December 31, 2018 was $24.6 million, which represents an increase of $16.5 million from the $8.1 million cash balance atDecember 31, 2017. Our working capital was $19.5 million as of December 31, 2018. On September 27, 2018, the Company completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares of itsCommon stock (including 105,882 shares purchased by Cantor Fitzgerald on September 28, 2018 upon the exercise in full of its right to purchase up to anadditional 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 fromthe offering after deducting sales commissions.In addition, during 2018 The Company sold 239,270 shares of Common Stock for gross proceeds of $4.31 million and received net proceeds of$4.18 million, after sales commissions.The following table sets forth the primary sources and uses of cash for each of the periods: Year ended Five months ended Year ended(in thousands) December 31, 2018 December 31, 2017 July 31, 2017Net cash provided by (used in) Operating activities$(523)$(3,840)$5,556Financing activities 17,021 5,083 (165)Net increase in cash and cash equivalents$16,498$1,243$5,391Cash (used in) provided by operating activitiesDuring the year ended December 31, 2018, net cash used in operating activities was $0.5 million, which was due to net loss of $21.2 million mostlyoffset by the non-cash expenses of $5.8 million for stock compensation expense and $0.8 million related to stock issued for services, and net cash changes inassets and liabilities of $14.1 million.During the five month period ended December 31, 2017, net cash used in operating activities was $3.8 million, which was primarily due to anincrease in accounts receivable of $7.9 million and an increase in prepaid and other current assets of $0.6 million, offset with net income of $1.4 million, anincrease in non-cash items as adjustments for stock based compensation of $1.8 million, and an increase of royalty payable for $1.4 million. During the year ended July 31, 2017, net cash provided by operating activities was $5.6 million, which was primarily due to net income of $6.6million, as well as non-cash items of stock based compensation of warrants and options of $1.5 million and an increase in accounts payable and accruedliabilities of $2.1 million, offset with an increase of accounts receivable of $3.4 million and a decrease in accrued salaries and wages of $1.2 million. Cash (used in) provided by financing activitiesDuring the year ended December 31, 2018, net cash provided by financing activities was $17.0 million primarily from net proceeds received fromsale of Common Stock. During the five month period ended December 31, 2017, net cash provided by financing activities was $5.1 million which was due to proceeds fromthe exercise of warrants offset with a payments of $0.2 million associated with deferred financing costs.During the year ended July 31, 2017, net cash used in financing activities was $0.2 million which was due to the repayment of note payable.48Plan of OperationIn 2017 we initiated a Phase 2 clinical trial to evaluate OPNT001, nasal naloxone, as a potential treatment for BN. The Phase 2 randomized, double-blind, placebo-controlled study evaluated the safety and tolerability of OPNT001, as well as its impact on various clinical outcomes, including changes ineating behavior. The primary endpoint of the study is a reduction in binge eating days. The study includes a total of 86 patients across 19 clinical sites inthe United Kingdom. Patient enrollment was completed on September 4, 2018. On November 2, 2018, we announced the last patient, last visit and wetherefore expect to report top-line data from this trial in the first quarter of 2019. See Note 17, Subsequent Events for discussion on results of the trial reportedin February of 2019.On February 12, 2018, we announced positive data from a Phase 1 clinical study of our product candidate OPNT003 (intranasal nalmefene) andprovided an update on a meeting held February 8, 2018 with the FDA regarding our planned development program. OPNT003 is in development as a long-lasting opioid antagonist for the treatment of opioid overdose. Based on feedback from the FDA in connection with this meeting, we intend to pursue a505(b)(2) development path, with a potential to submit a NDA for the drug and intranasal delivery device combination in 2020. Nalmefene for injection waspreviously approved by the FDA for treating suspected or confirmed opioid overdose. The 505(b)(2) pathway allows companies to rely in part on the FDA’sfindings of safety and efficacy for a previously approved product and to supplement these findings with a more limited set of their own studies to satisfy FDArequirements, as opposed to conducting the full array of preclinical and clinical studies that would typically be required.We have full commercial rights to OPNT003 and will receive approximately $7.4 million from the National Institute of Health ("NIH") andapproximately $4.6 million from the BARDA, subject to available funds and satisfactory progress on OPNT003, to fund development of this project throughNDA submission.During the year ended July 31, 2017, we received $17.46 million in milestone and royalty payments under the SWK Purchase Agreement. Inaddition, for the five months ended December 31, 2017, we earned $11.7 million in royalties and milestones directly under the Adapt Agreement. InDecember 31, 2017, we also received $5.3 million from the exercise of warrants by two stockholders.On October 13, 2017 we entered into a Controlled Equity Offering Sales Agreement (the "Sales Agreement") with Cantor Fitzgerald & Co., as agent("Cantor Fitzgerald"), pursuant to which we may offer and sell, from time to time through Cantor Fitzgerald, shares of our Common Stock. During the yearended December 31, 2018, we sold 239,270 shares of Common Stock under the Sales Agreement for gross proceeds of $4.31 million and received netproceeds of $4.18 million after deducting sales commissions .In addition, on September 27, 2018, we completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares ourCommon stock at a price of $17.00 per share. The Company received approximately $13.0 million of net proceeds from the offering after deducting salescommissions.After considering the proceeds received during the year ended December 31, 2018, we believe that we have sufficient capital resources to sustainoperations through at least the next 12 months from the date of the filing of this Report.Net Profit InterestsWe have entered into agreements with certain investors whereby, in exchange for funding for the research, development, marketing andcommercialization of a product relating to our treatment to reverse opioid overdoses (the “Opioid Overdose Reversal Treatment Product”), we provided suchinvestors with an interest in any pre-tax profits received by us that were derived from the sale of the Opioid Overdose Reversal Treatment Product less anyand all expenses incurred by and payments made by us in connection with the Opioid Overdose Reversal Treatment Product, including but not limited to anallocation of our overhead devoted by us to product-related activities, which allocation shall be determined in good faith by us (the “OORT Net Profit”).A summary of the investor agreements is below, and categorized by investor:Potomac Construction Limited (“Potomac”)On April 16, 2013, we entered into an agreement with Potomac (as clarified by the letter agreement dated October 15, 2014 (“Potomac AgreementNo. 1”)) for funding from Potomac for the research, development, marketing and commercialization of the Opioid Overdose Reversal Treatment Product inthe amount of $600 thousand, in exchange for a 6.0% interest in the OORT49Net Profit in perpetuity. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us certain buyback rights that haveexpired as of December 31, 2018.On May 30, 2013, we entered into a new agreement with Potomac (as clarified by that certain letter agreement dated October 15, 2014 (“PotomacAgreement No. 2”)) for additional funding from Potomac in the amount of $150 thousand for the research, development, marketing and commercialization ofthe Opioid Overdose Reversal Treatment Product, in exchange for an additional 1.5% interest in the OORT Net Profit in perpetuity. On April 12, 2017, weentered into an amendment with Potomac whereby Potomac granted us certain buyback rights that expired as of December 31, 2018.On September 9, 2014, we entered into a new agreement with Potomac (as clarified by that certain letter agreement dated October 15, 2014,“Potomac Agreement No. 3”) for additional funding from Potomac in the amount of $500 thousand for use by us for any purpose, in exchange for anadditional 0.98% interest in the OORT Net Profit in perpetuity. During the year ended July 31, 2016, we recognized $500 thousand as revenue becausePotomac’s option to receive shares of our Common Stock pursuant to the agreement terminated by its terms. On April 12, 2017, we entered into anamendment with Potomac whereby Potomac granted us the right, during the period from April 12, 2017 until September 30, 2019, to buyback all or anyportion of the interest at the price of $500 thousand for the full 0.98% interest (the “Potomac Interest No. 3 Buyback Amount”); provided, that in the eventwe exercise this right within 3.25 years of the date of the investment, we will pay Potomac 1.8 times the Potomac Interest No. 3 Buyback Amount; provided,further, that in the event we exercise this right after 3.25 years of the date of the investment and no later than September 30, 2019, we will pay Potomac 3.15times the Potomac Interest No. 3 Buyback Amount.On October 31, 2014, we entered into a new agreement with Potomac (as clarified by that certain letter agreement dated October 31, 2014 (“PotomacAgreement No. 4”) for additional funding from Potomac in the amount of $500 thousand for use by us for any purpose, in exchange for an additional 0.98%interest in the OORT Net Profit in perpetuity. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us the right, duringthe period from April 12, 2017 until November 28, 2019, to buyback all or any portion of the interest at the price of $500 thousand for the full 0.98% interest(the “Potomac Interest No. 4 Buyback Amount”); provided, that in the event we exercise this right within 3.25 years of the date of the investment, we will payPotomac 1.8 times the Potomac Interest No. 4 Buyback Amount; provided, further, that in the event we exercise this right after 3.25 years of the date of theinvestment and on or prior to November 28, 2019, we will pay Potomac 3.15 times the Potomac Interest No. 4 Buyback Amount. During the year ended July31, 2016, we recognized $500 thousand as revenue because its option to receive 50,000 shares of our Common Stock in exchange for its entire interestterminated by its terms.On December 8, 2015, we entered into a new agreement with Potomac (“Potomac Agreement No. 5”) for additional funding in the amount of $500thousand for use by us for any purpose, in exchange for an additional 0.75% interest in the OORT Net Profit in perpetuity. During the year ended July 31,2016, we recognized $500 thousand as revenue because the investment did not contain any option to exchange the 0.75% interest for shares of our CommonStock. On April 12, 2017, we entered into an amendment with Potomac whereby Potomac granted us the right, during the period from April 12, 2017 untilDecember 17, 2020, to buyback all or any portion of the interest at the price of $500 thousand for the full 0.75% interest (the “Potomac Interest No. 5Buyback Amount”); provided, that in the event we exercise this right within 3.25 years of the date of the investment, we will pay Potomac 1.8 times thePotomac Interest No. 5 Buyback Amount; provided, further, that in the event we exercise this right within after 3.25 years of the date of the Investment and onor prior to December 17, 2020, we will pay Potomac 3.15 times the Potomac Interest No. 5 Buyback Amount.In consideration for Potomac entering into the Amendments dated April 17, 2017 described above, upon our receipt of at least $3 million from (i)SWK under the SWK Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by us from SWK will be used indetermining the Net Profit (as defined in the Potomac Agreements).Ernst Welmers (“Welmers”)On May 15, 2014, we entered into an agreement with Welmers (the “Welmers Agreement”) and received funding from Welmers in the amount of$300 thousand for use by us for any purpose, in exchange for a 1.5% interest in the OORT Net Profit in perpetuity. On June 1, 2017, we entered into anamendment with Welmers whereby Welmers granted us certain buyback rights that have expired as of December 31, 2018. In consideration for Welmersentering into the Welmers Amendment, upon our receipt of at least $3 million from (i) SWK under the SWK Agreement and/or (ii) Adapt under the AdaptAgreement, fifty percent of all actual amounts received by us from SWK will be used in determining the Net Profit (as defined in the Welmers Agreement).Valour Fund, LLC (“Valour”)On July 22, 2014, we received a $3.0 million commitment from a foundation (the “Foundation”) which later assigned its interest to Valour, fromwhich we had the right to make capital calls from the Foundation for the research, development,50marketing, commercialization and any other activities connected to the Opioid Overdose Reversal Treatment Product, certain operating expenses and anyother purpose consistent with the goals of the Foundation. In exchange for funds invested by the Foundation, Valour currently owns a 6.0% interest in theOORT Net Profit in perpetuity. On July 28, 2014, we received an initial investment of $111.5 thousand from the Foundation in exchange for a 0.22294%interest. On August 13, 2014, September 8, 2014, November 13, 2014 and February 17, 2015, we made capital calls of $422.0 thousand, $444.5 thousand,$1.034 million, and $988.0 thousand, respectively, from the Foundation in exchange for 0.844687%, 0.888906%, 2.067228% and 1.976085% interests,respectively, in the OORT Net Profit. The Opioid Overdose Reversal Treatment Product was approved by the FDA on November 18, 2015, and, as a result ofsuch approval occurring prior to July 22, 2016, the option to exchange its interest for shares of our Common Stock at an exchange rate of 10 shares for everydollar of its investment terminated by its terms.LYL Holdings Inc. (“LYL”)On June 1, 2017 (the “LYL Effective Date”), we entered into an amendment with LYL (the “LYL Amendment”) to the Amended and RestatedConsulting Agreement, dated October 25, 2016 and effective as of July 17, 2013 (the “LYL Agreement”). Pursuant to the LYL Amendment, LYL granted uscertain buyback provisions that have expired as of December 31, 2018. In consideration for LYL entering into the LYL Amendment, upon our receipt afterthe LYL Effective Date of at least $3 million from (i) SWK under the SWK Agreement and/or (ii) Adapt under the Adapt Agreement, fifty percent of all actualamounts received by us from SWK will be used in determining the Net Profit (as defined in the LYL Agreement).Binge Eating Disorder (BED)We have entered into agreements with Potomac whereby, in exchange for funding for any purpose, we have provided Potomac with an interest in ourBED treatment product (the “BED Treatment Product”) and pay Potomac a percentage of the pre-tax profit generated from the BED Treatment Product afterthe deduction of all expenses incurred by and payments made by us in connection with the BED Treatment Product, including but not limited to anallocation of our overhead (the “BED Net Profit”).A summary of the investor agreements is below:On December 17, 2013, we entered into an agreement with Potomac for additional funding in the amount of $250 thousand for use by us for anypurpose. In exchange for this additional funding, we agreed to provide Potomac with a 0.5% interest in the BED Treatment Product and pay Potomac 0.5% ofthe BED Net Profit in perpetuity. During the year ended July 31, 2017, we recognized approximately $40 thousand as revenue because Potomac’s option toreceive 31,250 shares of our Common Stock in exchange for its entire 2013 Investor Interest of 0.5% terminated by its terms.On September 17, 2014, we entered into an agreement with Potomac for additional funding in the amount of $500 thousand. In exchange for thisfunding, we agreed to provide Potomac with an additional 1.0% interest in our BED Treatment Product and pay Potomac an additional 1.0% of the BED NetProfit in perpetuity. Because the BED Treatment Product was not approved by the FDA by September 17, 2017, the investor had a 60 day option to exchangeits entire 1.0% interest for 62,500 shares of our Common Stock. The option expired unexercised.On July 20, 2015, we entered into an agreement with Potomac for additional funding in the amount of $250 thousand. In exchange for this funding,we agreed to provide Potomac with an additional 0.50% interest in our BED Treatment Product and pay Potomac an additional 0.5% of the BED Net Profit inperpetuity. If the BED Treatment Product is not introduced to the market and not approved by the FDA or an equivalent body in Europe and not marketed byJuly 20, 2018, Potomac will have a 60 day option to exchange its 0.5% interest for 25,000 shares of our Common Stock. The option expired unexercised.Other ActivitiesIn September 2015, we received a $1.6 million commitment from the Foundation which later assigned its interest to Valour, from which we had theright to make capital calls from the Foundation for the research, development, any other activities connected to our opioid antagonist treatments foraddictions and related disorders that materially rely on certain studies funded by the Foundation’s investment, excluding the Opioid Overdose ReversalTreatment Product (the “Certain Studies Products”), certain operating expenses, and any other purpose consistent with the goals of the Foundation. Inexchange for funds invested by the Foundation, Valour currently owns a 2.13% interest in any pre-tax revenue received by us that was derived from the saleof the Certain Studies Products less any and all expenses incurred by and payments made by us in connection with the Certain Studies Products (the “CertainStudies Products Net Revenue”). Additionally, we may buyback, in whole or in part, the 2.13% interest from Valour within 2.5 years or after 2.5 years of theinitial investment at a price of two times or 3.5 times, respectively, the relevant investment amount represented by the interests to be bought back. If anaforementioned treatment is not introduced to the market by September 22, 2018, Valour will have a 60-day option to exchange its 2.13% interest for sharesof our Common Stock at an51exchange rate of one-tenth of a share for every dollar of its investment. In October 2015, December 2015 and May 2016, we made capital calls of $618thousand, $716 thousand, and $267 thousand from the Foundation in exchange for 0.824%, 0.954% and 0.355333% interests in the aforementionedtreatments, respectively. During September 2018 Valour elected to exchange its interest for stock and accordingly we issued 160,000 shares of our CommonStock to Valour.On March 13, 2017, we entered into a third amendment (the “Third Miles Amendment”) to the Senior Advisor Agreement with Brad Miles, datedJanuary 22, 2013 (the “Initial Miles Agreement”), as previously amended on February 24, 2015 (the “First Miles Amendment”) and March 19, 2015 (the“Second Miles Amendment” and, together with the Initial Miles Agreement, the First Miles Amendment and the Third Miles Amendment, the “MilesAgreement”). As provided by the Third Miles Amendment, and in consideration for Mr. Miles’ continued service to us as an advisor through December 31,2017, we: (i) paid Mr. Miles $107.8 thousand in cash and issued Mr. Miles 1,875 shares of Common Stock; (ii) granted to Mr. Miles the right to receive,subject to adjustment under the Third Miles Amendment, 1.25% of the Net Profit (as defined by the Third Miles Amendment) generated from the Product (asdefined by the Third Miles Amendment) from the Effective Date (as defined by the Third Miles Amendment) (which amounts shall be paid quarterly per theterms of the Third Amendment), and, in the event of a Divestiture (as defined by the Third Miles Amendment), 1.25% of the net proceeds of such sale, subjectto adjustments and, in the event of sale of the Company, the Fair Market Value (as defined by the Third Miles Amendment) of the Product; (iii) will pay Mr.Miles $17 thousand per calendar quarter during 2017; and (iv) granted to Mr. Miles a warrant to purchase 45,000 shares of our Common Stock (the “MilesWarrant”). The Miles Warrant, which is fully vested on the date of grant, has an exercise price of $10.00, an expiration date of three years from the date ofgrant and may be exercised solely by payment of cash. Additionally, pursuant to the Third Amendment, from the Effective Date until the fourth anniversaryof the Effective Date, Miles granted us the right to buyback the 1.25% interest or any portion thereof at a price of $187.5 thousand for the full 1.25% interest(the “Miles Buyback Amount”); provided, however, that, in the event we exercise this right within 2.5 years after the Effective Date, we will pay Mr. Milestwo times the Miles Buyback Amount; provided, further, that, in the event we exercise such right after 2.5 years after the Effective Date and prior to the fouryear anniversary of the Effective Date, we will pay Mr. Miles 3.5 times the Miles Buyback Amount.We valued the Miles Warrant using the Black-Scholes option pricing model, which resulted in a value of approximately $229.4 thousand. Werecorded the entire $229.4 thousand as a non-recurring, and non-cash, expense during the year ended July 31, 2017. Furthermore, we paid Mr. Miles $51thousand in cash compensation, which represents payment in full for the first three calendar quarters of 2017.On June 1, 2017 (the “Welmers Effective Date”), we entered into an amendment to the Welmers Agreement with Welmers to provide for our right tobuyback the 1.5% OORT Net Profit interest from Welmers. As provided under the Welmers Amendment, from June 1, 2017 until May 27, 2019, Welmersgranted us the right to buyback all or any portion of the interest at the price of $300 thousand for the full 1.5% interest (the “Welmers Interest BuybackAmount”); provided, that in the event we exercise this right within 3.25 years of the date of the investment, we will pay Welmers 1.8 times the WelmersInterest Buyback Amount; provided, further, that in the event we exercise this right after 3.25 years of the date of the Investment and on or prior to May 27,2019, we will pay Welmers 3.15 times the Welmers Interest Buyback Amount. In consideration for Welmers entering into the Welmers Amendment, we paidWelmers $30 thousand. Furthermore, we granted Welmers the right to receive 0.375% of the Net Profit (as defined in the Welmers Agreement) generated fromDAVINCI (as defined in the Welmers Amendment) (the “DAVINCI Interest”). In the event that we are sold, Welmers will receive 0.375% of the net proceedsof such sale, after the deduction of all expenses and costs related to such sale. Additionally, from the Welmers Effective Date until June 1, 2021, Welmersgranted us the right to buyback all or any portion of the DAVINCI Interest at the price of $56.25 thousand for the full 0.375% DAVINCI Interest (the“Welmers DAVINCI Interest Buyback Amount”); provided, that in the event we exercise this right within 2.5 years of the Welmers Effective Date, we will payWelmers two times the Welmers DAVINCI Interest Buyback Amount; provided, further, that, in the event we exercise this right after 2.5 years of the WelmersEffective Date and on or prior to June 1, 2021, we will pay Welmers 3.5 times the Welmers DAVINCI Interest Buyback Amount.Royalty PayableWe entered into various agreements and subsequently received funding from investors for use by us for any purpose. In exchange for this funding,we agreed to provide investors with interest in the OORT Net Profit generated from the Opioid Overdose Reversal Treatment Product in perpetuity. AtDecember 31, 2017, we 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 the52royalty payable to our Net Profit Partners at December 31, 2018:(in thousands) Net Profit % December 31, 2018 Potomac 10.2%$422LYL 5.0% 206Welmers 1.5% 62Foundation 6.0% 248Pendergast 1.0% 60Royalty payable 23.7%$998On February 28, 2018, we were notified that Adapt, now a Subsidiary of Emergent BioSolutions ("EBS"), had entered into a license agreement with aThird Party (as defined in the License Agreement) with regard to one or more patents pursuant to which Adapt invoked its right under Section 5.5 of thatcertain License Agreement, dated as of December 15, 2014 (the "Initial License Agreement"), by and between us and Adapt, as amended (the "LicenseAgreement"), to offset 50% of the payments paid to such Third Party from the amounts payable by Adapt to us under the License Agreement, and SWK underthe SWK Purchase Agreement. On March 1, 2018, we received net milestone payments of $6.1 million, which was net of a License Fee payment made by usunder Section 5.5 of the License Agreement of $5.6 million. In accordance with the License Agreement, Adapt may enter into such a licensing arrangementand exercise its right to deduct any payments with respect thereto at any time without our consent.As provided in Amendment No. 2 to the License Agreement, which the parties entered into on March 18, 2019 (see Note 17, Subsequent Events),EBS made certain payments in October of 2018 to the Third Party Licensee and will be allowed to reduce the royalties and milestones that we would be dueunder the License Agreement by a maximum of $9.0 million. Under the SWK Purchase Agreement, we retain 90% of the royalties payable under the LicenseAgreement, with SWK entitled to 10%. The maximum amount payable by us is therefore $8.1 million (90% of $9 million), of which we have recorded $5.4million as a current liability and $2.7 million as a long-term liability at December 31, 2018. As provided in Amendment No. 2, EBS will be allowed to reducethe royalties and milestones we would be due under the License Agreement during the year ending December 31, 2019 by a maximum of $2.0 million eachquarter. As provided in the License Agreement, if net Narcan Sales (as defined in the License Agreement) exceed $200 million in any calendar year, we andSWK will be due a milestone payment of $15.0 million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to us and SWK, EBS maydeduct $2.5 million from the $13.5 million (90% of $15.0 million) milestone payable to the Company.Critical Accounting Policies and Estimates We believe that the following critical policies affect our significant judgments and estimates used in preparation of our consolidated financialstatements. We prepare our consolidated financial statements in conformity with generally accepted accounting principles in the United States. These principalsrequire management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We believe thatthese estimates are reasonable and have been discussed with the Board; however, actual results could differ from those estimates. We issue restricted stock to consultants for various services and employees for compensation. Cost for these transactions are measured at the fairvalue of the consideration received or the fair value of the equity instruments issued, whichever is measurable more reliably measurable. The value of theCommon Stock is measured at the earlier of: (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments isreached or (ii) the date at which the counterparty's performance is complete.We issue options and warrants to consultants, directors, and officers as compensation for services. These options and warrants are valued using theBlack-Scholes model, which focuses on the current stock price and the volatility of moves to predict the likelihood of future stock moves. This method ofvaluation is typically used to accurately price stock options and warrants based on the price of the underlying stock. 53Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicatethat the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of theasset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. Ifthe carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference betweenthe carrying amount and fair value of the asset. When fair values are not available, we estimate fair value using the expected future cash flows discounted at arate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. Fair value estimates used in preparation of the consolidated financial statements are based upon certain market assumptions and pertinentinformation available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. Thesefinancial instruments include cash, accounts payable, note payable and due to related parties. Fair values were assumed to approximate carrying values forthese financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable ondemand. Revenue Recognition In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASUamends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer ofgoods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services.On January 1, 2018, we adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and determinedthe new guidance does not change our policy of revenue recognition. Our primary source of revenue is through the recognition of royalty and milestonepayments from Adapt. Milestone revenue is recognized upon successful accomplishment of certain sales targets set forth in the Adapt Agreement. Royaltyrevenue is determined based on the agreed upon royalty rate applied to NARCAN sales reported by Adapt.There are no performance obligations by us and weare paid accordingly by the royalty report provided by Adapt on a quarterly basis. There is no disaggregation of revenue given that the licensing revenue isbased on one agreement, and the nature and timing of revenue is predicated on the sales of NARCAN reported to us by Adapt each quarter. In regards totreatment revenue, we received certain investments from investors in return for an interest in its existing treatments. Investors carry an option to exchangeinvestment into shares of our stock. Revenue is deferred until such time that the option expires or milestones are achieved that eliminate the investor’s rightto exercise the option. (See Note 8 to the Consolidated Financial Statements - Deferred Revenue).In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements,ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return forresearch and development activities over a contractually defined period. We evaluated our grant with NIH and contract with BARDA and determined thatthey fall within the scope of ASU 958, and revenue should be recognized in accordance with Topic 958 guidance. Accordingly, we recognize revenue fromour grants and contracts in the period during which the related costs are incurred, provided that the conditions under which the grants and contracts wereprovided have been met and only perfunctory performance obligations are outstanding.Licensing Agreement Pursuant to the Adapt Agreement, we provided a global license to develop and commercialize our intranasal naloxone opioid overdose reversaltreatment, now known as NARCAN®. We receive payments upon reaching various sales and regulatory milestones, as well as royalty payments forcommercial sales of NARCAN® generated by Adapt. During the year ended December 31, 2018 we recognized royalty revenue of $13,262,321, and for thefive months ended December 31, 2017 we recognized royalty and milestone revenue of $11,696,676 related to this agreement.Sale of RoyaltiesDuring the year ended December 31, 2018 and the five month period ended December 31, 2017, we did not recognize any revenue associated withsale of royalties.Under the SWK Purchase Agreement, we received an upfront purchase price of $13,750,000, less $40,000 of legal fees, and recognized an additional$3,750,000 when certain milestones were achieved during the fiscal year ended July 31, 2017. 54During the fiscal year ended July 31, 2017, we recognized proceeds of $17,500,000 as revenue associated with the SWK Purchase Agreementimmediately as a result of (i) the executed agreement constituting persuasive evidence of an arrangement, (ii) the Company having no current or futureperformance obligations, (iii) the total consideration being fixed and known at the time of its execution and there being no rights of return, and (iv) the cashhaving been received and non-refundable.Treatment Investments With respect to investments in interests in treatments, if an agreement provides an option that allows the investor in the treatment to convert aninterest in a treatment into shares of our Common Stock, then revenue is deferred until such time that the option expires or milestones are achieved thateliminate the investor’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement are reviewed and evaluatedunder ASC 606. In the event the investor chooses to convert interests into shares of Common Stock, that transaction will be accounted for similar to a sale ofshares of Common Stock for cash. Effect of InflationInflation did not have a significant impact on our net sales, revenues, or income from continuing operations in 2017 and 2018.Off-Balance Sheet Arrangements None.Recent Accounting PronouncementsWe have reviewed accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in futureperiods. We have carefully considered the new pronouncements that alter previous generally accepted accounting principles and do not believe that any newor modified principles will have a material impact on our reported financial position or operations in the near term. The applicability of any standard issubject to the formal review of our financial management and certain standards are under consideration. Those standards have been addressed in the notes tothe audited financial statement and in this, Report, filed on Form 10-K for the year ended December 31, 2018 (See Note 3 - Summary of SignificantAccounting Policies).55Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company is not required to provide the information required by this Item because the Company is a smaller reporting company. 56Item 8. Financial Statements and Supplementary Data. Opiant Pharmaceuticals, Inc.Index to Consolidated Financial Statements PageNumber Report of Independent Registered Public Accounting Firm58 Consolidated Balance Sheets as of December 31, 2018, December 31, 2017 and July 31, 201759 Consolidated Statement of Operations for the Year Ended December 31, 2018, the Five Months Ended December 31, 2017 and for theYear Ended July 31, 201760 Consolidated Statements of Stockholders' Equity for the Year Ended December 31, 2018, the Five Months Ended December 31, 2017and for the Year Ended July 13, 201761 Consolidated Statements of Cash Flows for the Year Ended December 31, 2018, the Five Months Ended December 31, 2017 and for theYear Ended July 31, 201763 Notes to Consolidated Financial Statements6557REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors ofOpiant Pharmaceuticals, Inc.Santa Monica, CaliforniaOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Opiant Pharmaceuticals, Inc. and its subsidiary (collectively, the “Company”) asof December 31, 2018, December 31, 2017 and July 31, 2017, and the related consolidated statements of operations, stockholders’ equity, and cashflows for the years ended December 31, 2018, and July 31, 2017, and for the five month transition period ended December 31, 2017, and the relatednotes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2018, December 31, 2017, and July 31, 2017, and the results of their operations and their cashflows for the years ended December 31, 2018, and July 31, 2017, and for the five month transition period ended December 31, 2017, in conformitywith accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required toobtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of theCompany's internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for ouropinion. /s/ MaloneBailey, LLPwww.malonebailey.comWe have served as the Company’s auditor since 2013.Houston, TexasMarch 21, 201958Opiant Pharmaceuticals, Inc.Consolidated Balance Sheets December 31,2018 December 31,2017 July 31, 2017 Assets Current assets Cash and cash equivalents$24,613,638 $8,115,903 $6,872,555 Accounts receivable4,489,317 11,696,676 3,750,000 Prepaid expenses and other current assets267,623 733,328 164,887 Deferred financing costs— 209,042 — Total current assets29,370,578 20,754,949 10,787,442 Other assets Computer equipment, net— 1,183 2,753 Patents and patent applications, net15,746 17,118 17,690 Total assets$29,386,324 $20,773,250 $10,807,885 Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable and accrued liabilities1,132,960 3,156,992 2,211,971 License fees payable5,400,000 — — Accrued salaries and wages1,083,644 713,489 1,701,359 Royalty payable998,305 1,408,012 — Deferred revenue1,212,149 378,700 253,619 Total current liabilities9,827,058 5,657,193 4,166,949 Long-term liabilities Deferred revenue— 2,115,805 2,306,527 License fees payable, net of current portion2,700,000 — — Total liabilities12,527,058 7,772,998 6,473,476 Stockholders' equity Common stock; par value $0.001; 200,000,000 shares authorized; 3,845,361, 2,535,766 and 2,026,608 shares issued and outstanding at December 31, 2018,2017, and July 31, 2017, respectively.3,846 2,536 2,026 Additional paid-in capital91,276,086 66,223,066 58,937,112 Accumulated deficit(74,420,666) (53,225,350) (54,604,729) Total stockholders' equity16,859,266 13,000,252 4,334,409 Total liabilities and stockholders' equity$29,386,324 $20,773,250 $10,807,885 The accompanying notes are an integral part of these consolidated financial statements. 59Opiant Pharmaceuticals, Inc.Consolidated Statements of Operations For theYear EndedDecember 31, For theFive MonthsEndedDecember 31, For theYear EndedJuly 31, 2018 2017 2017 Revenues Royalty and licensing revenue$13,262,321$11,696,676$18,406,142 Treatment investment revenue 250,549 65,641 39,854 Grant and contract revenue 469,307 — — Total Revenue 13,982,177 11,762,317 18,445,996 Operating expenses General and administrative 11,263,804 5,887,135 6,530,533 Research and development 8,478,817 2,486,514 3,171,599 Royalty expenses 1,491,099 1,408,012 — License fees 13,725,000 — — Selling expenses 213,897 438,625 1,651,099 Total operating expenses 35,172,617 10,220,286 11,353,231 Income (loss) from operations (21,190,440) 1,542,031 7,092,765 Other income (expense) Interest income, net 144,696 10,401 19,966 Gain (loss) on foreign exchange (48,306) 10,027 18,356 Loss on settlement of liability (49,983) (13,917) — Total other income 46,407 6,511 38,322 Income (loss) before provision for income taxes (21,144,033) 1,548,542 7,131,087 Provision for income taxes 51,283 169,163 550,474 Net income (loss)$(21,195,316)$1,379,379$6,580,613 Income (loss) per share of common stock: Basic$(7.10)$0.66$3.27 Diluted$(7.10)$0.31$2.94 Weighted average common stock outstanding Basic 2,985,335 2,077,663 2,014,540 Diluted 2,985,335 4,393,138 2,235,851 The accompanying notes are an integral part of these consolidated financial statements. 60Opiant Pharmaceuticals, Inc.Consolidated Statements of Stockholders' Equity Common Stock AdditionalPaid-InCapital AccumulatedDeficit Total Shares Amount Balance at July 31, 20161,992,433 $1,992 $56,478,394 $(61,185,342) $(4,704,956) Reconciling adjustment to record shares issued in prioryear for the conversion of debt into common stock inrelation to 1:100 reverse stock split6,228 6 (6) — — Stock issued for services27,947 28 190,399 — 190,427 Stock based compensation from issuance of options— — 1,277,139 — 1,277,139 Stock based compensation from issuance of warrants— — 229,360 — 229,360 Forgiveness of related party debt— — 761,826 — 761,826 Net income— — — 6,580,613 6,580,613 Balance at July 31, 20172,026,608 $2,026 $58,937,112 $(54,604,729) $4,334,409 Cashless exercise of options145,630 146 (146) — — Exercise of warrants356,790 357 5,292,519 — 5,292,876 Stock issued as settlement of liability6,738 7 213,910 — 213,917 Stock based compensation from issuance of options— — 1,779,671 — 1,779,671 Net income— — — 1,379,379 1,379,379 Balance at December 31, 20172,535,766 $2,536 $66,223,066 $(53,225,350) $13,000,252 Exercise of stock options50,497 50 (50) — — Exercise of warrants3,400 3 33,997 — 34,000 Stock issued for services44,664 45 882,187 — 882,232 Stock issued to net profit partner160,000 160 1,599,840 — 1,600,000 Stock based compensation— — 5,760,432 — 5,760,432 61Issuance of common stock for cash, net of issuancecosts1,051,034 1,052 16,776,614 $— 16,777,666 Net Loss— — — (21,195,316) (21,195,316) Balance at December 31, 20183,845,361 $3,846 $91,276,086 $(74,420,666) $16,859,266The accompanying notes are an integral part of these consolidated financial statements.62Opiant Pharmaceuticals, Inc.Consolidated Statements of Cash Flows For theYear Ended For the Five MonthsEnded For theYear Ended December 31, 2018 December 31, 2017 July 31, 2017Cash flows provided by (used in) operating activities Net income (loss)$(21,195,316) $1,379,379 $6,580,613Adjustments to reconcile net loss to net cash used byoperating activities: Depreciation and amortization2,556 2,142 5,140Issuance of common stock for services732,249 — 190,427Stock based compensation from issuance ofoptions5,760,432 1,779,671 1,277,139Loss on settlement of liability49,983 13,917 —Stock based compensation from issuance ofwarrants— — 229,360Changes in assets and liabilities: Accounts receivable7,207,359 (7,946,676) (3,437,502)Prepaid expenses and other current assets465,705 (568,441) (102,483)Accounts payable and accrued expenses(1,924,032) 1,145,021 2,071,387License fees payable8,100,000 — —Accrued salaries and wages370,155 (987,870) (1,218,065)Royalty payable(409,707) 1,408,012 —Deferred revenue317,644 (65,641) (39,854)Net cash provided by (used in) operatingactivities(522,972) (3,840,486) 5,556,162Cash flows provided by (used in) financing activities Proceeds from warrant exercise34,000 5,292,876 —Deferred financing costs(166,419) (209,042) —Proceeds from sale of common stock17,153,126 — —Repayment of note payable— — (165,000)Net cash provided by (used in) financing activities17,020,707 5,083,834 (165,000)Net increase in cash and cash equivalents16,497,735 1,243,348 5,391,162Cash and cash equivalents, beginning of period8,115,903 6,872,555 1,481,393Cash and cash equivalents, end of period$24,613,638 $8,115,903 $6,872,555 Supplemental disclosure Interest paid during the period$— $— $4,828Taxes paid during the period$174,000 $619,225 $— Non-Cash Financing Transactions 63Cashless exercise of options$50 $146 $—Issuance of common stock to net profit partner$1,600,000 $— —Issuance of common stock as settlement of liability$100,000 $200,000 $—Forgiveness of related party of debt$— $— $761,826Reconciling adjustment to record shares issued inprior year for the conversion of debt into commonstock and rounding in relation to 1-for-100 reversestock split$— $— $6Offset of deferred financing costs against APIC$209,042 $— $—The accompanying notes are an integral part of these consolidated financial statements. 64Opiant Pharmaceuticals, Inc.Notes to Consolidated Financial StatementsFor the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017Note 1. Organization and Basis of PresentationOpiant Pharmaceuticals, Inc. (the “Company”), a Nevada corporation, is a specialty pharmaceutical company developing medicines for addictionsand drug overdose. The Company was incorporated in the State of Nevada on June 21, 2005 as Madrona Ventures, Inc. and, on September 16, 2009, theCompany changed its name to Lightlake Therapeutics Inc. On January 28, 2016, the Company again changed its name to Opiant Pharmaceuticals, Inc. TheCompany also has developed a treatment to reverse opioid overdoses, which is now known as NARCAN®.On October 2, 2017, the Company changed its state of incorporation from the State of Nevada to the State of Delaware pursuant to an Agreement andPlan of Merger, dated October 2, 2017, whereby the Company merged with and into its recently formed, wholly-owned Delaware subsidiary, OpiantPharmaceuticals, Inc. Pursuant to the Agreement and Plan of Merger, (i) the Company merged with and into its Delaware subsidiary, (ii) the Company'sseparate corporate existence in Nevada ceased to exist,(iii) the Company's Delaware subsidiary became the surviving corporation, (iv) each share of theCompany's common stock, $0.001 par value per share ("Common Stock"), outstanding immediately prior to the effective time was converted into one fully-paid and non-assessable share of Common Stock of Opiant Pharmaceuticals, Inc., a Delaware corporation, and (v) the certificate of incorporation and bylawsof the Company's Delaware subsidiary were adopted as the Company's certificate of incorporation and bylaws at the effective time of the merger. The mergerand the Agreement and Plan of Merger were approved by the Company's Board of Directors (the "Board") and stockholders representing a majority of theCompany's outstanding Common Stock.On December 8, 2017, the Board of Directors, acting pursuant to Section 5.1 of the Company’s Bylaws, approved a resolution changing theCompany’s fiscal year-end from July 31 to December 31. The Company made this change to align its fiscal year end with other companies within its industry.Note 2. Liquidity and Financial Condition The Company had a net loss of $21.2 million for the year ended December 31, 2018 and has an accumulated deficit of $74.4 million at December31, 2018. The Company has $19.5 million of working capital at December 31, 2018. The Company has financed its operations from sale of common stock,and through non-equity cash investments by a number of investors, in exchange for an interest in any pre-tax profits received by the Company that wasderived from the sale of the Opioid Overdose Reversal Treatment Product less any and all expenses incurred by and payments made by the Company inconnection with the Opioid Overdose Reversal Treatment Product ("OORT") (see Note 8 – Deferred Revenue).On September 27, 2018, the Company completed a registered public offering with Cantor Fitzgerald as underwriter and sold 811,764 shares of itsCommon 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 sharesto 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 deductingsales commissions.In addition, during the year ended December 31, 2018, the Company sold 239,270 shares of Common Stock under the Sales Agreement entered intowith Cantor Fitzgerald for gross proceeds of $4.31 million and received net proceeds of $4.18 million, after sales commissions. The Company believes that it has sufficient capital resources to sustain operations through at least the next twelve months from the date of thisfiling.Note 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the UnitedStates of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of Consolidation65 The consolidated financial statements have been prepared in accordance with GAAP and include the accounts for the Company and its wholly-owned subsidiary, Opiant Pharmaceuticals UK Limited. All inter-company transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts ofrevenues and expenses during the reporting period. Actual results could differ from those estimates.Cash and Cash EquivalentsThe Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash andcash equivalents were $24.6 million, $8.1 million and $6.9 million at December 31, 2018, December 31, 2017 and July 31, 2017, respectively. The Companymaintains cash balances at financial institutions insured up to $250,000 by the Federal Deposit Insurance Corporation ("FDIC") and as of December 31, 2018maintains the majority of its cash balances in money market funds not insured by the FDIC. The Company also transfers certain daily available cash balancesto an overnight account which earns interest and the amounts are not insured by the FDIC. Balances in the United Kingdom are insured up to £85,000 by theFinancial Services Compensation Scheme (United Kingdom Equivalent). Although the Company’s cash balances exceeded these insured amounts, theCompany has not experienced any losses on its cash and cash equivalents for the periods presented.Accounts ReceivableThe Company routinely assesses the recoverability of receivables to determine their collectability by considering factors such as historicalexperience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. TheCompany determines its allowance for doubtful accounts by considering such factors as the length of time balances are past due, the Company’s previousloss history, the customer’s current ability to pay its obligations to the Company and the condition of the general economy and the industry as a whole. The Company has evaluated its accounts receivable history and determined that no allowance for doubtful accounts is required for the year endedDecember 31, 2018 and the periods ended December 31, 2017 and July 31, 2017. At December 31, 2018 and 2017 the Company's accounts receivable wereprimarily concentrated with one party, Adapt. At July 31, 2017, 100% of the Company's accounts receivable was concentrated with one party, SWK (see Note5 - Accounts Receivable).Long-Lived AssetsThe Company follows ASC 360, Property, Plant, and Equipment, for its fixed assets. Property and equipment is stated at cost less accumulateddepreciation. Depreciation is computed by the straight-line method over estimated useful lives (3 to7 years). The Company’s capitalizes all asset purchasesgreater than $2,500 having a useful life greater than one year. The Company follows ASC 350, Intangibles – Goodwill and Other for its intellectual propertyasset. Intellectual property consists of patents which are stated at their fair value acquisition cost. Amortization is calculated by the straight-line method overtheir estimated useful lives (20 years). The Company recorded depreciation and amortization of $2,556 for the year ended December 31, 2018, $2,142 for thefive months ended December 31, 2017 and $5,140 and for the year ended July 31, 2017. Long-lived assets such as property and equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstancesindicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fairvalue of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals,if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for thedifference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expectedfuture cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. The Company did not recognize any impairmentlosses for any years presented.Earnings (Loss) per ShareThe Company follows ASC 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) available tocommon stockholders by the weighted-average number of shares of Common Stock outstanding during the respective period presented in the Company’saccompanying consolidated financial statements.66 Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include thenumber of Common Stock equivalents (primarily outstanding options and warrants). Common Stock equivalents represent the dilutive effect of the assumed exercise of outstanding stock options and warrants, using the treasury stockmethod, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the Common Stock equivalents areconsidered dilutive based upon the Company’s net income position at the calculation date.At December 31, 2018, dilutive common stock equivalents have not been included because it would be anti-dilutive. At December 31, 2018,potentially dilutive common stock equivalents are 3,582,560 which consist of options and warrants. The following table illustrates the dilutive effect of theassumed exercise of the Company’s outstanding stock options and warrants, using the treasury stock method, as of December 31, 2017 and July 31, 2017,respectively: Year EndedFive Months endedYear EndedNumerator:December 31, 2018December 31, 2017July 31, 2017Net Income (loss)$(21,195,316)$1,379,379$6,580,613 Denominator: Denominator for basic income (loss) per share - weightedaverage shares2,985,3352,077,6632,014,540Effect of dilutive securities: Equity incentive plans—2,315,475221,311Denominator for diluted income (loss) per share2,985,3354,393,1382,235,851 Income (loss) per share - Basic$(7.10)$0.66$3.27Income (loss) per share - Diluted$(7.10)$0.31$2.94 Research and Development CostsThe Company follows ASC 730, Research and Development, and expenses all research and development costs as incurred for which there is noalternative future use. These costs also include the expensing of employee compensation and employee stock based compensationForeign Currency TranslationThe Company’s functional and reporting currency is the United States dollar. Transactions occur in British Pounds and management has adoptedASC 830, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rateprevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances areincluded in the determination of income.Stock-Based CompensationASC 718 Compensation – Stock Compensation prescribes accounting and reporting standards for all share-based payment transactions in whichemployee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such asemployee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, arerecognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period duringwhich an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value ofwhichever is more reliably measurable: (a) the goods or services received; or (b) the67equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performancecompletion date.The Company had stock-based compensation of $5.7 million, $1.8 million, and $1.7 million for the year ended December 31, 2018, the five monthsended December 31, 2017 and for the year ended July 31, 2017, respectively. Fair Value of Financial InstrumentsASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer aliability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on themeasurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1)market participant assumptions developed based on marketdata obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based onthe best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highestpriority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets orliabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly,including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in marketsthat are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that arederived principally from or corroborated by observable market data by correlation or other means. Level 3 - Inputs that are both significant to the fair value measurement and unobservable.The carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.These financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The fair value of the Company’s note payable isestimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. As of December 31, 2018, December 31, 2017 and July 31, 2017, the Company did not have any financial liabilities measured and recorded at fairvalue on the Company’s balance sheets on a recurring basis.Related PartiesThe Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.Related party balances as of December 31, 2018, December 31, 2017 and July 31, 2017 were zero. The Company uses office space free of charge from relatedparties (see Note 4 - Related Party Transactions).Revenue RecognitionThe Company generates a large majority of revenue from the agreement with Adapt. During the year ended December 31, 2018 and the five monthsended December 31, 2017 the Company recognized 95% and 99%, respectively of revenue from its agreement with Adapt.In May 2014, the FASB issued an accounting standard update (‘ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). This ASUamends the existing accounting standards for revenue recognition and is based on the principle that revenue should be recognized to depict the transfer ofgoods or services to a customer at an amount that reflects the consideration a company expects to receive in exchange for those goods or services.On January 1, 2018, the Company adopted the new Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers usingthe modified retrospective method, and the Company determined the new guidance does not change the Company's policy of revenue recognition. TheCompany's primary source of revenue is through the recognition of royalty and milestone payments from Adapt. Milestone revenue is recognized uponsuccessful accomplishment of certain sales targets set forth in the Adapt Agreement. Royalty revenue is determined based on the agreed upon royalty rateapplied to NARCAN sales reported by Adapt.There are no performance obligations by the Company and the Company recognizes revenue according to theroyalty report provided by Adapt on quarterly basis.68In regards to treatment revenue, the Company received certain investments from investors in return for an interest in its existing treatments. Investorscarry an option to exchange investment into shares of the Company. Revenue is deferred until such time that the option expires or milestones are achievedthat eliminate the investor’s right to exercise the option. Once the option has expired, the Company determined its performance obligations under theagreement which typically is to perform R&D services related to treatments and recognizes revenue over a period of time which is usually the expectedresearch and development period. The treatment revenue is disaggregated by program treatments. (See Note 8 to the Consolidated Financial Statements -Deferred Revenue).In June 2018, the FASB issued guidance clarifying the revenue recognition and measurement issues for grants, contracts, and similar arrangements,ASU Topic 958. Government grants and contracts are agreements that generally provide cost reimbursement for certain types of expenditures in return forresearch and development activities over a contractually defined period. The Company has evaluated its grant with NIH and contract with BARDA anddetermined they are non-exchange transactions and fall withing the scope of ASU 958, and revenue should be recognized in accordance with Topic 958guidance. Accordingly, the Company recognizes revenue from its grant and contract in the period during which the related costs are incurred, provided thatthe conditions under which the grants and contracts were provided have been met and only perfunctory performance obligations are outstanding.Licensing AgreementPursuant to the Adapt Agreement, the Company provided a global license to develop and commercialize the Company’s intranasal naloxone opioidoverdose reversal treatment, now known as NARCAN®.On December 15, 2014, the Company entered into a License Agreement with Adapt. Pursuant to the License Agreement, we provided a globallicense to develop and commercialize our intranasal naloxone opioid overdose reversal treatment, now known as NARCAN®. In addition, on the SWKClosing Date, in connection with the SWK Purchase Agreement, as disclosed below, we entered into the Adapt Amendment which amends the terms of theLicense Agreement relating to the grant of a commercial sublicense outside of the United States and diligence efforts for commercialization of our OpioidOverdose Reversal Treatment Product. Under the terms of the Adapt Amendment, Adapt is required to use commercially reasonable efforts to commercializethe Opioid Overdose Reversal Treatment Product in the United States In the event that Adapt wishes to grant a commercial sublicense to a third party in theEuropean Union or the United Kingdom, we have agreed to negotiate an additional amendment to the License Agreement to include reduced financial termswith respect to the commercial sublicense.The Company also receives payments upon reaching various sales and regulatory milestones, as well as royalty payments for commercial sales ofNARCAN® generated by Adapt. During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized royaltyand milestone revenue of $13.3 million and $11.7 million, respectively.Interest in TreatmentsWith respect to investments in interests in treatments, if an agreement provides an option that allows the investor in the treatment to convert aninterest in a treatment into shares of Common Stock of the Company, then revenue is deferred until such time that the option expires or milestones areachieved that eliminate the investor’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement are reviewedand evaluated under ASC 606. In the event the investor chooses to convert interests into shares of Common Stock, that transaction will be accounted forsimilar to a sale of shares of Common Stock for cash.Sale of Royalties Under the SWK Purchase Agreement, the Company received an upfront purchase price of $13,750,000 less $40,000 of legal fees, and recognized anadditional $3,750,000 when certain milestones were achieved during the fiscal year ended July 31, 2017.During the fiscal year ended July 31, 2017, the Company recognized total proceeds of $17,460,000 as revenue associated with the SWK PurchaseAgreement immediately as a result of (i) the executed agreement constituting persuasive evidence of an arrangement, (ii) the Company having no current orfuture performance obligations, (iii) the total consideration being fixed and known at the time of its execution and there being no rights of return, and (iv) thecash having been received and non-refundable.69Recently Issued Accounting PronouncementsFrom time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard settingbodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective willnot have a material impact on the Company’s financial position or results of operations upon adoption.In June 2018, the FASB issued ASU No. 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-BasedPayment Accounting," ("ASU 2018-07"), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods andservices from non-employees. ASU 2018-07 is effective for financial statements issued for annual periods beginning after December 15, 2018, and for theinterim periods therein. The adoption of ASU 2018-07 is not expected to have a significant impact on the Company’s consolidated financial statements.In August 2018, the FASB issued ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement ThatIs a Service Contract" (ASU No. 2018-15). The new standard describes the accounting for implementation, set-up, and other upfront costs incurred in a cloudcomputing arrangement (CCA). Under the new guidance, customers will assess if a CCA includes a software license and if a CCA does include a softwarelicense, implementation and set-up costs will be accounted for consistent with existing internal-use software implementation guidance. Implementation costsassociated with a CCA that does not include a software license would be expensed to operating expenses. The standard also provides classification guidanceon these implementation costs as well as additional quantitative and qualitative disclosures. The standard is effective for public business entities for fiscalyears beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interimperiods. Entities can choose to adopt the new guidance prospectively or retrospectively. The Company is assessing this standard and currently believes it willnot have any material impact on the consolidated financial statements.In 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain TaxEffects from Accumulated Other Comprehensive Income. This new standard permits entities to reclassify to retained earnings the tax effects stranded inaccumulated other comprehensive income ("AOCI") as a result of U.S. tax reform. The amendments in this update are effective for all entities for fiscal yearsbeginning after December 15, 2018, and interim periods within those fiscal years. The Company has evaluated the impact and timing of the this standard andhas concluded it will not impact the consolidated financial statements.In 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic PensionCost and Net Periodic Postretirement Benefit Cost.The standard requires that an employer report the service cost component in the same line items as othercompensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to bepresented in the income statement separately from the service cost component and outside of operating profit. The amendments in this update are effective forpublic business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company adoptedthis ASU effective January 1, 2018 and has concluded it will not impact the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842) The new standard requires lessees to recognize leases on-balance sheet and disclosekey information about leasing arrangements. The new standard establishes a right-of-use ("ROU") model that requires a lessee to recognize a ROU asset andlease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classificationaffecting the pattern and classification of expense recognition in the income statement. The standard is effective on January 1, 2019, with early adoptionpermitted. The Company adopted the new standard on January 1, 2019, and there is no impact from the adoption of this standard as the current office leasesare less than 12 months.In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” ("ASU 2016-18”). The update iseffective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The purpose of Update No. 2016-18 is to clarify guidance and presentation related to restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents. TheCompany adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financial statements. In October 2016, the FASB issued updated guidance related to the recognition of income tax consequences of an intra-entity transfer of an assetother than inventory. This guidance is effective for the first quarter of tax year 2018. The Company has adopted the guidance and determined that there is noimpact on its consolidated financial statements.70 In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230)” (“ASU 2016-15”), which seeks to reduce the existingdiversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. For public entities, Update2016-15 becomes effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoptionpermitted. The Company adopted this ASU effective January 1, 2018 and has concluded it did not have a material impact on its consolidated financialstatements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements toEmployee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for share-based paymenttransactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.ASU 2016-09 is effective for financial statements issued for fiscal years beginning December 15, 2016, and interim periods within those fiscal years. TheCompany recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each ofthe awards. The guidance provided an entity-wide accounting policy election to account for forfeitures as they occur. The Company has elected to recordforfeitures as they occur. The Company has evaluated the requirements of the new guidance and has determined that the impact is not material to itsconsolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2017-17") to simplify the presentation ofdeferred income taxes. ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financialposition. ASU 2015-17 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscalyears. The Company has adopted the provisions of Update 2016-15 and determined that there is no impact on its consolidated financial statements.In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure ofUncertainties about an Entity’s Ability to Continue as a Going Concern." The amendments in this ASU are intended to provide guidance on theresponsibility of reporting entity management. Specifically, this ASU provides guidance to management related to evaluating whether there is substantialdoubt about the reporting entity’s ability to continue as a going concern and about related financial statement note disclosures. Although the presumptionthat a reporting entity will continue to operate as a going concern is fundamental to the preparation of financial statements, prior to the issuance of this ASU,there was no guidance in United States generally accepted accounting principles (United States GAAP) related to the concept. Due to the lack of guidance inUnited States GAAP, practitioners and their clients often faced challenges in determining whether, when, and how a reporting entity should disclose therelevant information in its financial statements. As a result, the FASB issued this guidance to require management evaluation and potential financialstatement disclosures. This ASU is effective for financial statements with periods ending after December 15, 2016. The Company adopted the ASU during2017 and performed going concern evaluations for its 2018 and 2017 year-end financial statements.The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements willhave a material impact on its consolidated financial statements.Note 4. Related Party TransactionsThe Company uses office space provided by Dr. Phil Skolnick, the Company’s Chief Scientific Officer, free of charge.On March 31, 2017, Dr. Michael Sinclair and Dr. Roger Crystal, the Company’s Chief Executive Officer, each voluntarily entered into separateemployment agreement acknowledgements whereby they elected to forfeit, unconditionally and irrevocably, $175,498 and $586,328, respectively, of certainowed amounts pursuant to their respective existing employment agreements, representing 35% of the total compensation currently owed to each of Dr.Sinclair and Dr. Crystal on such date. As the debt forgiven was owed to a related party, the Company recognized the amount forgiven as an equity transactionrecorded in additional paid-in capital.Furthermore, on March 31, 2017, pursuant to their respective employment agreement acknowledgements, Dr. Sinclair and Dr. Crystal eachvoluntarily elected to forfeit, unconditionally and irrevocably, 680,000 and 825,000 shares of common stock, par value $0.001 per share (“Common Stock”),of the Company underlying stock options and warrants previously issued by the Company, respectively, representing approximately 55% of the total numberof options and warrants previously issued by the Company to each of Dr. Sinclair and Dr. Crystal.During the fiscal year ended July 31, 2017, the Company did not borrow any funds from related parties, nor did it have any outstanding related partydebt and/or accrued and unpaid interest owed to related parties as of July 31, 2017.71Note 5. Accounts ReceivableAs of December 31, 2018 the Company had accounts receivable of $4,489,317 of which $4,484,433 relates to royalty revenue from the sales ofNARCAN®.As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Agreement had been met (see Note 2 -Liquidity and Financial Condition). As a result, 90% of any succeeding milestone payments and royalties due from Adapt/EBS will revert to the Companywhile the remaining 10% will be paid to SWK directly by Adapt/EBS. As of December 31, 2017, the Company recognized accounts receivable of$11,696,676, which is equivalent to 90% of the milestone payments and royalties earned during the five months ended December 31, 2017.The Company had accounts receivable of $3,750,000 as of July 31, 2017, with the entire amount being related to the Earn Out Milestone from SWK.As provided under the Company’s agreement with SWK, the Company was to receive a milestone payment in the amount of $3,750,000 if Adapt hadreceived in excess of $25,000,000 of cumulative Net Sales for any two consecutive fiscal quarters during the period from October 1, 2016 through September30, 2017 from the sale ofNARCAN®. This milestone was achieved as of July 31, 2017, therefore the Company recorded the $3,750,000 as an account receivable, with the actual cashpayment being received by the Company on August 9, 2017.Note 6. Prepaid Expenses and Other Current AssetsAs of December 31, 2018, the Company had approximately $268 thousand recorded as prepaid expenses and other current assets. Of this amountapproximately $74 thousand is for research and development supplies related to product development work being performed by Renaissance Lakewood,LLC ("Renaissance") (see Note 10 - Commitments), and the remaining $194 thousand is for prepaid expenses such as rent, insurance, and software licenses.As of December 31, 2017, the Company had approximately $0.7 million recorded as prepaid expenses and other current assets. Approximately $0.4million was related to a deposit made by the Company to Renaissance in August 2017. As provided under the agreement with Renaissance, the Company wasobligated to make this deposit to fund the initial costs of the product development work to be performed by Renaissance on behalf of the Company. As ofDecember 31, 2017, no work had been performed, nor had any costs been incurred, in relation to this project. During the five months ended December 31, 2017, the Company purchased approximately $0.1 million of research and development suppliesrelated to the above referenced product development work being performed by Renaissance. As provided under the agreement with Renaissance, theCompany is obligated to pay for all supplies and materials that are needed to complete this product development work. These supplies were delivered onOctober 16, 2017 and approximately $25 thousand in supplies have been used as of December 31, 2018. The remaining balance consists primarily of prepaidexpenses such as rent, insurance, and software licenses.The Company had recorded approximately $0.2 million as prepaid expenses and other current assets at July 31, 2017 that consists primarily ofprepaid expenses such as rent, insurance, and software licenses.Note 7. Deferred Financing CostsDuring the five months ended December 31, 2017, the Company incurred approximately $0.2 million of legal, accounting, and filing fees related tothe Company's fund raising efforts. The Company recorded the $0.2 million as deferred financing costs as of December 31, 2017. These expenses were offsetagainst net proceeds received from the Company's financings during 2018.Note 8. Deferred RevenueOn December 17, 2013, the Company entered into an agreement with an investor, Potomac, and subsequently received additional funding totaling$250 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 0.5% interest in theCompany’s BED treatment product (the “BED Treatment Product”) and pay the investor 0.5% of the BED Net Profit in perpetuity (the “2013 0.5% InvestorInterest”). “BED Net Profit” is defined as the pre-tax profit generated from the BED Treatment Product after the deduction of all expenses incurred by andpayments made by the Company in connection with the BED Treatment Product, including but not limited to an allocation of Company overhead. If theBED Treatment Product was not approved by the FDA by December 17, 2016, the investor had a 60-day option to exchange its entire 0.5% Investor Interestfor 31,250 shares of Common Stock of the Company. On February 17, 2017, the investor’s option to receive the shares of Common Stock terminated by itsterms, which resulted in the Company beginning to recognize revenue in relation to this agreement in February 2017. The Company estimates that sufficientresearch and development will be completed by December 31, 2020 to allow the Company to advance the program into final registration studies. Therefore,the Company recognized revenue on a straight-line basis over the expected completion date. During the year ended December 31, 2018, the five monthsended December 31, 2017 and the year ended July 31, 2017, the Company recognized approximately $58 thousand, $36 thousand and $39.9 thousand ofrevenue relating to the agreement, respectively. On September 17, 2014, the Company entered into an agreement with an investor, Potomac, and subsequently received funding totaling $500thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investor with a 1.0% interest in theCompany’s BED Treatment Product and pay the investor 1.0% of the BED Net Profit generated from the BED Treatment Product in perpetuity (the “1.0%Investor Interest”). “BED Net Profit” is defined as the pre-tax profit generated from the BED Treatment Product after the deduction of all expenses incurred byand payments made by the Company in connection with the BED Treatment Product, including but not limited to an allocation of Company overhead. If theBED Treatment Product is not approved by the FDA by September 17, 2017, the investor will have a 60-day option to exchange its entire 1.0% InvestorInterest for 62,500 shares of Common Stock of the Company. On November 15, 2017, the investor’s option to receive the shares of Common Stock terminatedby its terms, which resulted in the Company beginning to recognize revenue in relation to this agreement in November 2017. The Company estimates thatsufficient research and development will be completed by December 31, 2020 to allow the Company to advance the program into final registration studies.Therefore, the Company recognized revenue on straight-line basis over the expected completion date.72During the year ended December 31, 2018 and the five months ended December 31, 2017, the Company recognized approximately $156,863 and $29,400 ofrevenue related to this agreement. The Company recognized no revenue for the fiscal year ended July 31, 2017. On July 20, 2015, the Company entered into an agreement with an investor, Potomac, and subsequently received funding from an individualinvestor in the amount of $250 thousand for use by the Company for any purpose. In exchange for this funding, the Company agreed to provide the investorwith a 0.5% interest in the BED Net Profit (the “2015 0.5% Investor Interest”) generated from the BED Treatment Product in perpetuity. The investor also hasrights with respect to the 2015 0.5% Investor Interest if the BED Treatment Product is sold or the Company is sold. If the product is not introduced to themarket and not approved by the FDA or an equivalent body in Europe and not marketed by July 20, 2018, the investor will have a 60-day option to exchangethe 2015 0.5% Investor Interest for 25,000 shares of Common Stock of the Company. The Investor did not elect to exchange their interest for shares ofCommon Stock as described above and the Company commenced recognizing revenue in September 2018. For the year ended December 31, 2018 theCompany recognized $35,714 of revenue related to this agreement.On September 22, 2015, the Company received a $1.6 million commitment from the Foundation which later assigned its interest to Valour inOctober 2016, from which the Company had the right to make capital calls from the Foundation for the research, development, any other activities connectedto the Company’s opioid antagonist treatments for addictions and related disorders that materially rely on certain studies funded by the Foundation’sinvestment, excluding the Opioid Overdose Reversal Treatment Product (the “Certain Studies Products”), certain operating expenses, and any other purposeconsistent with the goals of the Foundation. In exchange for funds invested by the Foundation, Valour currently owns 2.1333% interest in the Certain StudiesProducts Net Profit (the “ 2.1333% Interest”). The “Certain Studies Net Profit” is defined as any pre-tax revenue received by the Company that was derivedfrom the sale of the Certain Studies Products less any and all expenses incurred by and payments made by the Company in connection with the CertainStudies Products, including but not limited to an allocation of Company overhead based on the proportionate time, expenses and resources devoted by theCompany to Certain Studies Product-related activities, which allocation shall be determined in good faith by the Company. Valour also has rights withrespect to its up to a 2.1333% Interest if the Certain Studies Product is sold or the Company is sold. Additionally, the Company may buy back, in whole or inpart, the 2.1333% Interest from Valour within 2.5 years or after 2.5 years of the initial investment at a price of two times or 3.5 times, respectively, the relevantinvestment amount represented by the interests to be bought back. If an aforementioned treatment is not introduced to the market by September 22, 2018,Valour will have a 60-day option to exchange its 2.1333% Interest for shares of the Common Stock of the Company at an exchange rate of one-tenth of ashare for every dollar of its investment. On October 2, 2015, December 23, 2015, and May 28, 2016, the Company made capital calls of approximately $618thousand , $715.5 thousand, and $266.5 thousand from the Foundation in exchange for 0.824%, 0.954% and 0.355333% interests in the aforementionedtreatments, respectively. The Company will defer recording revenue until such time as Valour’s option expires or milestones are achieved that eliminatesValour’s right to exercise the option. Upon expiration of the exercise option, the deliverables of the arrangement will be reviewed and evaluated underAccounting Standards Codification (ASC) 606. In the event Valour chooses to exchange its 2.1333% Interest, in whole or in part, for shares of CommonStock of the Company, that transaction will be accounted for similar to a sale of shares of Common Stock for cash. During September 2018 Valour elected toexchange its interest for shares of Common Stock and accordingly the Company issued 160,000 shares of its Common Stock to Valour. On April 17, 2018, the Company was awarded a grant of approximately $7.4 million from the National Institutes of Health’s National Institute onDrug Abuse, ("NIDA"). The grant provides the Company with additional resources for the ongoing development of OPNT003 (intranasal nalmefene), a long-lasting opioid antagonist for the treatment of opioid overdose. The grant includes approximately $2.6 million to be funded for the period ending March 31,2019, with the balance to be funded over the subsequent two years, subject to available funds and satisfactory progress on the development of OPNT003.Government grants are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and developmentactivities over a contractually defined period. The Company recognizes revenues from grants in the period during which the related costs were incurred,provided that the conditions under which the grants were provided had been met and only perfunctory obligations were outstanding. During the year endedDecember 31, 2018 the Company received cash of $1.0 million and recognized revenue of $432 thousand related to this grant.The following is a summary of the Company’s deferred revenue activity for the year ended December 31, 2018, the five months ended December 31,2017 and the year ended July 31, 2017:73(in thousands)NIH Grant BED OtherOpioidTreatments TotalBalance as of July 31, 2016 $— $1,000 $1,600 $2,600Recognized as revenue — (39) — (39)Balance as of July 31, 2017 — 961 1,600 2,561Recognized as revenue — (66) — (66)Balance as of December 31, 2017 — 895 1,600 2,495Cash Received NIH 1,000 — — 1,000Converted to Equity — — (1,600) (1,600)Recognized as revenue (432) (251) — (683)Balance as of December 31, 2018 $568 $644 $— $1,212As of December 31, 2018, the Company had recorded approximately $1,212 thousand of its deferred revenue as a current liability because theCompany expects to recognize that amount as revenue during the next 12 months. Current and long-term deferred revenue are detailed in the following table:Deferred Revenue (in thousands)NIH Grant BED OtherOpioidTreatments TotalCurrent portion $568 $644 $— $1,212Long-term portion — — — —Total $568 $644 $— $1,212Note 9. License Fee PayableOn February 28, 2018, the Company was notified that Adapt, now a Subsidiary of Emergent BioSolutions ("EBS"), had entered into a licenseagreement with a Third Party (as defined in the License Agreement) with regard to one or more patents pursuant to which Adapt invoked its right underSection 5.5 of the License Agreement, dated as of December 15, 2014, by and between the Company and Adapt, as amended (the "License Agreement"), tooffset 50% of certain payments paid to such Third Party from the amounts payable by Adapt to the Company under the License Agreement and SWK underthe SWK Purchase Agreement. On March 1, 2018, the Company received net milestone payments of $6.1 million, which was net of 50% of a license feepayment Adapt made to the Third Party. Adapt reduced such milestone payment by $6.25 million pursuant to Section 5.5 of the License Agreement. Theportion of the milestone payment that the Company would have otherwise received was reduced by $5.6 million.As provided in Amendment No. 2 to the License Agreement, which the parties entered into on March 18, 2019 (see Note 17, Subsequent Events),Adapt has made has made and will in the future make payments to the Third Party Licensee and will be allowed to reduce the royalties and milestones thatthe Company would be due under the License Agreement by a maximum of $9.0 million in relation to such payments. Under the SWK Purchase Agreement,the Company retains 90% of the royalties payable under the License Agreement, with SWK entitled to 10%. The maximum amount payable by the Companyis therefore $8.1 million (90% of $9 million), of which the Company has recorded $5.4 million as a current liability and $2.7 million as a long-term liabilityat December 31, 2018. As provided in Amendment No. 2, Adapt will be allowed to reduce the royalties and milestones that the Company would be due underthe License Agreement during the year ending December 31, 2019 by a maximum of $1.8 million each quarter. As provided in the License Agreement, if NetNarcan Sales (as defined in the License Agreement) exceed $200 million in any calendar year, the Company and SWK will be due a milestone of $15.0million. Under Amendment No. 2, if this $15.0 million milestone becomes payable to the Company and SWK, Adapt may deduct $2.7 million from the $13.5million (90% of $15.0 million) milestone payable to the Company.Note 10. Royalty PayableThe Company entered into various agreements and subsequently received funding from investors for use by the Company for the research anddevelopment its OORT Product. In exchange for this funding, the Company agreed to provide investors with interest in the OORT Net Profit generated fromits OORT Product in perpetuity. At December 31, 2018 and 2017, the Company determined an OORT Net Profit as a result of NARCAN® sales by Adapt.There was no OORT Net Profit74prior to December 31, 2017. The following table sets forth the royalty payable to certain investors as of December 31, 2018 and December 31, 2017:(in thousands) Net Profit % December 31, 2018 December 31, 2017 Potomac 10.2%$422$860LYL 5.0% 206 421Welmers 1.5% 62 127Foundation 6.0% 248 —Pendergast 1.0% 60 —Royalty payable 23.7%$998$1,408Note 11. Commitments and ContingenciesCommitmentsThe Company has entered into various agreements related to its business activities. The following is a summary of the Company’s commitments:a.On December 18, 2014, the Company entered into a consulting agreement (the "2014 Agreement") with Torreya Partners LLP ("Torreya"), a financialadvisory firm, under which Torreya agreed to provide financial advisory services with regard to a licensing agreement. The Company is also requiredto pay an additional fee equivalent to 3.75% of all amounts received by the Company in excess of $3.0 million, in perpetuity. Total fees incurred bythe Company to this consultant pursuant to this agreement during the fiscal year ended July 31, 2017 amounted to approximately $963.6 thousand.On April 25, 2016, the Company entered into a consulting agreement with Torreya, under which Torreya agreed to provide financial advisoryservices for financing activities. In exchange for these services, the Company is required to pay a fee on all funding received by the Company as aresult of assistance provided by the consultant. Torreya’s fee will be equal to 5% of gross funding received by the Company up to $20 million plus3.5% of any proceeds received in excess of $20 million. Total fees incurred by the Company to this consultant pursuant to this agreement during thefiscal year ended July 31, 2017 amounted to $687.5 thousand. As of July 31, 2017, the Company had recorded an accrued liability of approximately$928.5 thousand relating to fees owed to Torreya.On September 8, 2017, the Company and Torreya entered into the Supplemental Engagement Letter to provide financial advisory services withrespect to the licensing of the intellectual and property rights to develop and commercialize certain products with Adapt Pharma OperationsLimited, an Ireland based pharmaceutical company ("Adapt"). The revised engagement amends total consideration as follows: (i) an aggregate of$300 thousand in cash payments to be paid by the Company to Torreya in three equal installments over a 16-month period; (ii) shares of CommonStock, equal to an aggregate value of $300 thousand, to be issued by the Company to Torreya in three equal installments over a 16-month period;(iii) if the Earn Out Milestone Payment is paid under the SWK Purchase Agreement, approximately $140.6 thousand, or 3.75% of the Earn OutMilestone Payment (as defined in the SWK Purchase Agreement), shall be paid by the Company to Torreya within 15 days of the date that the EarnOut Milestone (as defined in the SWK Purchase Agreement) has been paid to the Company; (iv) once SWK has received the Capped RoyaltyAmount, if the Earn Out Milestone Payment (as defined in the SWK Agreement) is paid, Torreya shall receive 3.375% of the Total Consideration (asdefined in the 2014 Agreement) received thereafter or 3.5625% of the Total Consideration received thereafter if no generic version of NARCAN iscommercialized 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, if75the Earn Out Milestone Payment has not been paid, Torreya shall receive 3.45525% of the Total Consideration received thereafter or 3.602625% ofthe Total Consideration received thereafter if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing Dateas per the terms of the SWK Purchase Agreement. Payments made by the Company in the form of shares of Common Stock will be a defined numberof shares calculated based upon the average closing price of the Common Stock for the ten 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 thousand of fees owed by theCompany to Torreya. The Company valued these shares at $40.58 per share, or approximately $133 thousand in the aggregate, which represents theclosing price of the Company's Common Stock on September 22, 2017. The Company also paid Torreya approximately $240.6 thousand in cash inSeptember 2017 as payment for fees owed. On December 22, 2017, the Company issued 3,455 shares as payment for $100 thousand of fees owed bythe Company to Torreya. The Company valued these shares at $24.95 per share, or approximately $81 thousand in the aggregate, which representsthe closing price of the Company's Common Stock on December 22, 2017. The Company also paid Torreya $100 thousand in cash in December2017 as payment for fees owed.Both the $200 thousand of fees paid via the issuance of Common Stock and the $340.6 thousand of fees paid in cash had been recorded as accruedliabilities as of July 31, 2017.During the five-month period ended December 31, 2017, the Company incurred approximately $439 thousand in aggregate fees related to Torreya.As of December 31, 2017, the Company had an accrued liability of $639 thousand owed to Torreya.During the year ended December 31, 2018, the Company incurred approximately $447 thousand in aggregate fees related to Torreya. In additionduring December 2018 the Company paid Torreya $100 thousand in cash and issued 6,498 shares of Common Stock representing a total of $200thousand of fees owed by the Company to Torreya which had been recorded as accrued liability as of December 31, 2017. As of December 31, 2018the Company has an accrued liability of $151 thousand owed to Torreya.b.On November 19, 2015, the Company issued 14,327 shares of unregistered Common Stock upon the execution of a binding letter of intent to agreeto negotiate and enter into an exclusive license agreement and collaboration agreement (“LOI”) with a pharmaceutical company with certaindesirable proprietary information. The shares issued in this transaction were valued using the stock price at issuance date and amounted toapproximately $120.3 thousand. Pursuant to the LOI, the Company is obligated to issue up to an additional 92,634 shares of unregistered CommonStock upon the occurrence of various milestones. A total of 3,582 shares had been issued as of July 31, 2016 due to achievement of certainmilestones. On November 10, 2016, the Company issued an additional 14,327 shares of the unregistered Common Stock pursuant to the LOI. Theshares issued in this transaction were valued using the stock price at issuance date and amounted to approximately $85.1 thousand. On March 16,2017, the Company issued an additional 10,745 shares of unregistered Common Stock pursuant to the LOI. The Company was obligated to issuethese shares upon the one year anniversary of receipt by the Company of a milestone payment from Adapt for the first commercial sale of theCompany’s product, NARCAN®, in the U.S. The shares issued on March 16, 2017 were valued on the date of issuance using the March 16, 2017closing price of the Company’s Common Stock of $7.75 per share, which resulted in an aggregate value of approximately $83.3 thousand. TheCompany expensed the entire $83.3 thousand as non-cash expense during the fiscal year ended July 31, 2017. There were no share issuances, norany expenses incurred, by the Company in relation to this LOI during the five months ended December 31, 2017.As of March 31, 2018, the Company was required to issue an additional 37,866 shares of its unregistered Common Stock pursuant to the LOI. TheCompany was obligated to issue these shares on the receipt of cumulative royalty payments of $2 million from Adapt and milestone payments fromAdapt with respect to first achieving the milestones of the first $30 million, $40 million, $55 million and $75 million of Net NARCAN® Sales. Theshares that were issuable as of March 31, 2018, were valued using the March 29, 2018 closing stock price of the Company's Common Stock of$19.18 per share, which resulted in an aggregate value of approximately $726 thousand. On April 19, 2018 the Company issued 37,866 shares ofCommon Stock. For the year ended December 31, 2018 the Company recorded total non-cash expense of $776 thousand, of which $726 thousandwas recorded to research and development expense and $50 thousand was recorded to loss on settlement of liability in other expense.76c.In October 2016, the Company in-licensed a heroin vaccine from Walter Reed Army Institute of Research ("WRAIR"). In consideration for thelicense the Company agreed to pay a royalty of 3% of net sales if the Company commercializes the vaccine, or 4% if the vaccine is sublicensed. Inaddition, the Company agreed to pay a minimum annual royalty of $10 thousand, as well as fixed payments of up to approximately $715.7 thousandif all of the specified milestones are met. During the five months ended December 31, 2017, the Company paid $60 thousand in cash to WRAIR, ofwhich $50 thousand was a non-recurring "execution" fee and the remaining $10 thousand was the minimum annual royalty for the period ofSeptember 2017 through August 2018. The $10 thousand minimum annual royalty was recorded as a prepaid expense and is being expensed at therate of $833 per month, beginning in September 2017 and ending in August 2018.d.The Company has a Sublease with Standish Management, LLC to sublease office space on a month-to-month basis, located at 201 Santa MonicaBoulevard, Suite 500, Santa Monica, CA 90401, which is the Company's headquarters. The Company also has an Office Service Agreement to leaseoffice space at 83 Baker Street, London, England, W1U 6AG. Effective May 31, 2018 either party is able to terminate the Office Service Agreementby providing three months advance written notice of termination. During the year ended December 31, 2018, the five months ended December 31,2017, and the year ended July 31, 2017 the Company incurred approximately $321 thousand, $150 thousand, and $123 thousand, respectively ofrent expense.e.On June 1, 2017 (the “LYL Effective Date”), the Company entered into an amendment with LYL (the “LYL Amendment”) to the Amended andRestated Consulting Agreement, dated October 25, 2016 and effective as of July 17, 2013 (the “LYL Agreement”). Pursuant to the LYL Amendment,LYL granted the Company certain buyback provisions that have expired as of December 31, 2018. In consideration for LYL entering into the LYLAmendment, upon the Company's receipt after the LYL Effective Date of at least $3 million from (i) SWK under the SWK Purchase Agreementand/or (ii) Adapt under the Adapt Agreement, fifty percent of all actual amounts received by the Company from SWK will be used in determining theNet Profit (as defined in the LYL Agreement).f.On June 22, 2017, the Company entered into a license agreement (the "License Agreement") and a related supply agreement (the “SupplyAgreement”) with Aegis Therapeutics LLC ("Aegis") pursuant to which the Company was granted an exclusive license (the “License”) to Aegis’proprietary chemically synthesizable delivery enhancement and stabilization agents, including, but not limited to, Aegis’ Intravail® absorptionenhancement agents, ProTek® and HydroGel® (collectively, the “Technology”) to exploit (a) the Compounds (as such are defined in the LicenseAgreement) and (b) a product containing a Compound and formulated using the Technology (“Aegis Product”), in each case of (a) and (b) for anyand all purposes. The License Agreement restricts the Company's ability to manufacture any Aegis excipients included in the Technology(“Excipients”), except for certain instances of supply failure, supply shortage or termination of the Supply Agreement, and the Company shall obtainall supply of such Excipients from Aegis under the Supply Agreement. The License Agreement also restricts Aegis’s ability to compete with theCompany worldwide with respect to the Exploitation (as defined in the License Agreement) of any therapeutic containing a Compound or derivativeor active metabolite of a Compound without the Company's prior written consent. The effective date of the License Agreement and the SupplyAgreement is January 1, 2017.As consideration for the grant of the License, the Company paid Aegis two immaterial upfront payments, of which the Company paid 50% byissuing the Company's Common Stock to Aegis, with the number of shares issued equal to 75% of the average closing price of the Company'sCommon Stock over the 20 trading days preceding the date of payment. The License Agreement also provides for (A) additional developmentalmilestone payments for each Product containing a different Compound equal to up to an aggregate of $1.8 million, (B) additionalcommercialization milestone payments for each Aegis Product containing a different Compound equal to up to an aggregate of $5.0 million, and (C)single low digit royalties on the Annual Net Sales (as defined in the License Agreement) of all Aegis Products during the Royalty Term (as definedin the License Agreement) according to a tiered royalty rate based on Annual Net Sales of the Aegis Products by the Company, the Company'ssublicensees and affiliates. The Company shall also pay to Aegis a sublicense fee based on a sublicense rate negotiated in good faith by the parties.The License Agreement contains customary representations and warranties, ownership, patent rights, confidentiality, indemnification and insuranceprovisions. The License Agreement shall expire upon the expiration of the Company's obligation to pay royalties under such License Agreement;provided, however, that the Company shall have the right to terminate the License granted on a product-by-product or country-by-country basisupon 30 days’ prior written notice to Aegis.Under the terms of the Supply Agreement, Aegis shall deliver to the Company any preclinical, clinical and commercial supply of the Excipients,which Aegis sources from various contract manufacturers. The Supply Agreement has a term of 20 years but shall terminate automatically in theevent of expiration or termination of the License Agreement or at any time upon the written agreement of both parties. The Supply Agreementcontains customary provisions relating to pricing for such materials, forecasts, delivery, inspection, indemnification, insurance and representations,warranties and covenants. The Supply Agreement includes technology transfer provisions for the transfer of all materials and know-how77specific to the manufacturing of the Excipients that is necessary or useful for the Company to manufacture such Excipients. The Company does nothave the right to manufacture such Excipients except in the event that Aegis is unable to supply and sell any portion of the material to the Company(subject to a 60-day cure period).For the year ended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017, the Company recorded $350thousand, $150 thousand and $200 thousand, respectively in expense associated with the License Agreement.g.On July 14, 2017, Renaissance Lakewood, LLC (“Renaissance”) and the Company entered into a Research and Development Agreement (the“Renaissance Agreement”). Under the Renaissance Agreement, Renaissance will perform product development work on a naltrexone multi-dosenasal product for the treatment of alcohol use disorder pursuant to the terms set forth in a proposal agreed upon by the parties. The Company willbear the costs of all development services, including all raw materials and packaging components, in connection with the performance of thedevelopment work under the Renaissance Agreement and in accordance with financials agreed upon through the proposal. Renaissance will conductquality control and testing, including non-stability, stability, in-use, raw material, and packaging component testing as part of the services providedto the Company under the Renaissance Agreement. The Company will own all formulations provided to Renaissance and any formulationsdeveloped in connection with the Renaissance Agreement. Renaissance will own all know-how developed in connection with the performance ofthe services that is not solely related to a product. The Company has the right to seek patent protection on any invention or know-how that relatessolely to a product developed under the Renaissance Agreement or any our formulation, excluding general manufacturing or product developmentknow-how of Renaissance. The Renaissance Agreement is effective until terminated by either party in accordance with its terms. The Company orRenaissance may terminate the project under a proposal to the Renaissance Agreement due to unforeseen circumstances in the development. TheRenaissance Agreement may be terminated by the Company, with or without cause, upon 45 days written notice. There are also mutual customarytermination provisions relating to uncured breaches of material provisions. See Note 6 - Prepaid Expenses and Other Current Assets.h.On September 5, 2017, the Company accepted, effective September 11, 2017 (the “Separation Date”), the resignation of Kevin Pollack as (i) theCompany’s Chief Financial Officer, Treasurer and Secretary, and (ii) a director of Opiant Pharmaceuticals UK Limited, a wholly owned subsidiary ofthe Company. On September 5, 2017, the Company and Mr. Pollack entered into a Separation Agreement and General Release (the “SeparationAgreement”), with such agreement becoming effective on September 12, 2017 (the "Separation Agreement Effective Date"), which represented thedate on which Mr. Pollack's seven-day revocation period expired.Pursuant to the terms of the Separation Agreement, Mr. Pollack received (i) a payment equal to approximately $1.13 million relating to certainaccrued obligations, payable in a cash lump sum within three business days following the Separation Agreement Effective Date; and (ii) a separationpayment equal to approximately $1.44 million, payable in one or two installments in accordance with the terms set forth therein. Mr. Pollack alsoretained previously granted options to purchase, in the aggregate, 948,000 shares of Common Stock of the Company, which options are fully vestedand exercisable. Except as set forth in the Separation Agreement, all other options held by Mr. Pollack were forfeited. Additionally, for a period ofno more than 12 months following the Separation Date, Mr. Pollack will cooperate as an adviser with the Company in connection with mattersarising out of Mr. Pollack’s service with the Company, in accordance with the terms set forth in the Separation Agreement.During the five months ended December 31, 2017, the Company paid Mr. Pollack approximately $1.61 million in cash pursuant to the terms of theSeparation Agreement. In addition, as of December 31, 2017, the Company has recorded an accrued liability of approximately $962 thousand.During September 2018, the Company made the final payment due to Mr. Pollack.i.On September 7, 2018, the Company entered into a Development Agreement ("Development Agreement") and an Agreement for Reimbursement ofCapital Expenditure and Service Fees ("Reimbursement Agreement") with Aesica Queenborough Limited ("Aesica"), a wholly owned subsidiary ofConsort Medical plc, related to the Company’s product OPNT003 (intranasal nalmefene), a potent long acting opioid antagonist for the treatment ofopioid overdose. As part of the Development Agreement, Aesica and Bespak, wholly owned subsidiaries of Consort, will supply the Company withclinical samples and registration batches for the purpose of performing clinical studies and obtaining regulatory approvals. Further, as part of theDevelopment Agreement, the Company and Aesica agreed that, upon approval by the U.S. FDA, Aesica and Bespak will manufacture and supply thecommercial device for the Company upon mutually agreed terms. Under the terms of the Reimbursement Agreement, the Company has agreed toreimburse Aesica for certain service, tooling, equipment and facility alteration expenses incurred by Aesica under certain78circumstances, including termination of the Development Agreement and the failure to complete a definitive manufacturing and supply agreement.Contingencies The Company may be subject to various legal proceedings and claims that arise in the ordinary course of business. The Company records aliability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in both theprobability determination and as to whether an exposure can be reasonably estimated. If any legal matter, that may arise, were resolved against theCompany in a reporting period for amounts in excess of management’s expectations, the Company’s would reflect any potential claim in the consolidatedfinancial statements for that reporting period.Note 12. Stockholder's EquityCommon StockDuring 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 stockoptions 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 exercisedwith 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 purchasewarrants 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 forservices 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 optionto 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 $100thousand 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 Stockhaving an aggregate offering price as set forth in the Sales Agreement and a related prospectus supplement filed with the SEC on March 19, 2018. TheCompany 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 receivednet 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 itsCommon 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 sharesto 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 deductingsales 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 ofstock 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 ofCommon 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 stockpurchase warrants with an exercise price of $15.00 per share for total proceeds of $5,175,000.79During the five months ended December 31, 2017, the Company issued 11,790 shares of its Common Stock in relation to the exercise of stockpurchase warrants, with an exercise price of $10.00 per share. The Company received proceeds of $57,900 relating to the warrant exercises during the fivemonths 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 $100thousand 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 inthe aggregate, which represents the closing price of the Company's Common Stock on September 22, 2017. The Company recognized a loss on the settlementof 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 $100thousand 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 inthe aggregate, which represents the closing price of the Company's Common Stock on December 22, 2017. The Company recognized a gain on the settlementof the liability of $19 thousand. During the year ended July 31, 2017During the year ended July 31, 2017, the Company issued 2,875 unregistered shares of the Company’s Common Stock to consultants in exchangefor 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. TheCompany 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 yearanniversary 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 recordedthe 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 yearsprior 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 remaining60 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 waseffected 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 commonstock listed as outstanding on the accompanying Consolidated Statement of Stockholders' Equity (Deficit) reconciles to the actual number of sharesoutstanding 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 approvedby stockholder vote. The 2017 Plan allows the Company to grant both incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”) topurchase 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 Companyemployees and directors, while NSOs may be granted to employees, directors, advisors, and consultants. The Board has the authority to determine to whomoptions 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 anISO 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 forthe Company and its affiliates, and non-employee members of the Board and its affiliates with the opportunity to receive grants of non-qualified stockoptions (the "Pre-2017 Non-Qualified Stock Options"). All of the Pre-2017 Non-Qualified Stock Option Grants were intended to qualify as non-qualifiedstock options. There were no Pre-2017 Non-Qualified Stock Option Grants that were intended to qualify as incentive stock options.80No 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 endedJuly 31, 2017 were as follows: December 31, 2017 July 31, 2017Market value of stock on measurement date$36.79 $5.61 to 13.00Risk-free interest rate1.47% 0.88-2.55%Dividend yield0% 0%Volatility factor96% 76-348%Term2.12 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 ofShares Weighted-averageExercisePrice Weighted-averageRemainingContractualTerm(years) AggregateIntrinsicValueOutstanding at July 31, 20164,635,000 8.79 7.39 $2,731,250Granted320,000 9.38 Expired(5,000) 10.00 Forfeited(1,180,000) 11.03 Outstanding at July 31, 20173,770,000 8.13 6.87 $19,139,625Exercised(217,500) 10.22 Forfeited(572,000) 11.51 Outstanding at December 31, 20172,980,500 7.33 7.06 $46,606,210Exercised(95,000) 8.24 Forfeited— — Outstanding at December 31, 20182,885,500 7.30 6.04 $20,633,100Exercisable at December 31, 20182,747,150 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 yearended December 31, 2018, the five months ended December 31, 2017 and the year ended July 31, 2017 are presented below:Non-vested optionsNumber ofOptions WeightedAverageGrant DateFair Value Non-vested at July 31, 201690,833 $7.27 Granted320,000 7.70 Vested(70,962) 6.70 Non-vested at July 31, 2017339,871 $7.93 Vested(50,969) 9.29 Non-vested at December 31, 2017288,902 $7.87 Vested(150,552) 7.92 Non-vested at December 31, 2018138,350 $7.84 81 During the year ended December 31, 2018 the Company recognized approximately $0.9 million of non-cash expense related to vested Pre-2017Non-Qualified Stock Options granted in prior periods. During the five months ended December 31, 2017, the Company recognized approximately $0.6million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. During the year ended July 31, 2017 theCompany recognized approximately $1.3 million of non-cash expense related to vested Pre-2017 Non-Qualified Stock Options granted in prior periods. AtDecember 31, 2018, there was $0.2 million of unrecognized compensation costs related to non-vested stock options. The 2017 PlanThe assumptions used in the valuation of options granted under the 2017 Plan during the year ended December 31, 2018 and the five months endedDecember 31, 2017 are as follows: Year Ended 12/31/18Five Months Ended12/31/17Market value of stock on measurement date$14.31 to $24.84$18.16 to $49.93Risk-free interest rate2.47 % to 3.05%2.06 % to 2.47%Dividend yield—%—%Volatility factor121% to 324%324% to 329%Term (years)5.5 to 10.010.00Stock 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 ofShares Weighted-averageExercisePrice Weighted-averageRemainingContractualTerm(years) AggregateIntrinsicValueOutstanding at July 31, 2017— Total options authorized400,000 Granted(214,000) $37.62 Expired— Forfeited40,000 $49.93 Outstanding at December 31, 2017174,000 $34.78 9.71 $14,430Exercisable at December 31, 2017— Annual additional options authorized101,431 Granted(196,550) $23.26 Expired— Forfeited27,000 $24.84 Options available at December 31, 2018157,881 Outstanding at December 31, 2018343,550 $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 yearended December 31, 2018 and the five months ended December 31, 2017 are presented in the following table:82 Number ofShares Weighted AverageGrant DateFair Value Per ShareNon-vested at July 31, 2017 and 2016— Granted214,000 $37.62Forfeited(40,000) $49.93Non-vested at December 31, 2017174,000 $34.78Granted196,550 $23.26Forfeited(27,000) $24.84Non-vested at December 31, 2018288,047 $27.62Vested at December 31, 201855,503 $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 ofunrecognized 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 inthe table below: Number ofWarrants Weighted-averageExercisePrice Weighted-averageRemainingContractualTerm(years) AggregateIntrinsicValueOutstanding at July 31, 20161,215,385 $17.90 2.86 $—Granted45,000 10.00 Expired(166,585) $46.37 Forfeited(325,000) 15 Outstanding at July 31, 2017768,800 $12.50 3.04 $1,184,000Exercised(356,790) 14.83 Forfeited(55,000) $15.00 Outstanding at December 31, 2017357,010 $9.78 5.57 $4,708,020Exercised(3,400) $10.00 Outstanding at December 31, 2018353,610 $9.78 4.60 $1,651,16583Note 13. Sale of RoyaltiesOn December 13, 2016, the Company entered into the SWK Purchase Agreement with SWK pursuant to which the Company sold, and SWKpurchased, the Company’s right to receive, commencing on October 1, 2016, all Royalties (as defined in the SWK Purchase Agreement) arising from the saleby Adapt, pursuant to the Adapt Agreement of NARCAN or any other intranasal naloxone opioid overdose reversal treatment, up to (i) $20,625,000 millionand then the Residual Royalty thereafter or (ii)$26,250,000, if Adapt has received in excess of $25,000,000 of cumulative Net Sales for any two consecutivefiscal quarters during the period from October 1, 2016 through September 30, 2017 from the sale of NARCAN® (the “Earn Out Milestone”), and then theResidual Royalty thereafter. The Residual Royalty is defined in the Purchase Agreement as follows: (i) if the Earn Out Milestone is paid, then SWK willreceive 10% of all Royalties; provided, however, if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing, thenSWK shall receive 5% of all Royalties after such date, and (ii) if the Earn Out Milestone is not paid, then SWK will receive 7.86% of all Royalties; provided,however, that if no generic version of NARCAN® is commercialized prior to the sixth anniversary of the Closing, then SWK will receive 3.93% of allRoyalties after such date. Under the Purchase Agreement, the Company received an upfront purchase price of $13,750,000 less $40,000 of legal fees atClosing, and will receive an additional $3,750,000 if the Earn Out Milestone is achieved (the “Purchase Price”). The Purchase Agreement also grants SWK (i)the right to receive the statements produced by Adapt pursuant to Section 5.6 of the Adapt Agreement and (ii) the right, to the extent possible under thePurchase Agreement, to cure any breach of or default under any Product Agreement by the Company. Under the Purchase Agreement, the Company grantedSWK a security interest in the Purchased Assets in the event that the transfer contemplated by the Purchase Agreement is held not to be a sale. The PurchaseAgreement also contains other representations, warranties, covenants and indemnification obligations that are customary for a transaction of this nature.Absent fraud by the Company, the Company’s indemnification obligations under the Purchase Agreement shall not exceed, individually or in the aggregate,an amount equal to the Purchase Price plus an annual rate of return of 12% (compounded monthly) as of any date of determination, with a totalindemnification cap not to exceed 150% of the Purchase Price, less all Royalties received by SWK, without duplication, under the Purchase Agreement priorto and through resolution of the applicable claim. All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in thePurchase Agreement.During the fiscal year ended July 31, 2017, the Company recognized $17.46 million as revenue because (i) the executed agreement constitutedpersuasive evidence of an arrangement, (ii) the Company had no current or future performance obligations, (iii) the total consideration was fixed and knownat the time of its execution and there were no rights of return, (iv) the $13.71 million cash proceeds received in December 2016 were non-refundable, and (v)the $3,750,000 million Earn Out Milestone that was accrued as an account receivable as of July 31, 2017, and subsequently paid to the Company on August9, 2017, was earned as of July 31, 2017.As of December 31, 2017, the Company determined that the Capped Royalty Amount provided in the SWK Purchase Agreement has been met. AfterDecember 31, 2017, SWK's share of the royalty and milestone payments are reduced to 10% of amounts earned from Adapt. Note 14. Potomac AmendmentOn April 12, 2017 (the “Potomac Effective Date”), the Company and Potomac Construction Limited (“Potomac”) entered into an amendment (the“Potomac Amendment”) to the following investment agreements with Potomac to provide for (in the case of Potomac Agreement No. 1 and PotomacAgreement No. 2 ), or modify (in the case of Potomac Agreement No. 3, Potomac Agreement No. 4 and Potomac Agreement No. 5 (each as defined below)), theCompany’s right to buyback the Interest (as defined in each Potomac Amendment) in each Potomac Agreement (as defined below) from Potomac: (i) thatcertain Investment Agreement, dated as of April 16, 2013, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac Agreement No. 1”);(ii) that certain Investment Agreement, dated as of May 30, 2013, as clarified by that certain letter agreement dated October 15, 2014 (“Potomac AgreementNo. 2”); (iii) that certain Investment Agreement, dated as of September 9, 2014, as clarified by that certain letter agreement dated October 15, 2014 (“PotomacAgreement No. 3”); (iv) that certain Investment Agreement, dated as of October 31, 2014, as clarified by that certain letter agreement dated October 31, 2014(“Potomac Agreement No. 4”); and (v) that certain Investment Agreement, dated as of December 8, 2015 (“Potomac Agreement No. 5”) ((i)–(v) collectively,the “Potomac Agreements” and, each, a “Potomac Agreement”).As of December 31, 2018, the buyback provisions under the Potomac Amendment for the Potomac Agreement No. 1 and Potomac Agreement No. 2have expired.Pursuant to the Potomac Amendment, from the Potomac Effective Date until September 30, 2019, the five year anniversary of the date of theInvestment (as defined in Potomac Agreement No. 3) (the “Potomac Interest No. 3 Buyback Expiration Date”), the Company shall have the right to buybackall or any portion of the Interest (as defined in Potomac84Agreement No. 3) from Potomac upon written notice to Potomac (the “Potomac Interest No. 3 Buyback Notice”), at the price of $500,000 per 0.98% ofInterest (the “Potomac Interest No. 3 Buyback Amount”); provided, that in the event the Potomac Interest No. 3 Buyback Notice is provided within 3.25 yearsof the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No. 3 Buyback Amount within ten business days of providingthe Potomac Interest No. 3 Buyback Notice; provided, further, that in the event the Potomac Interest No. 3 Buyback Notice is provided after 3.25 years of thedate of the Investment and on or prior to the Potomac Interest No. 3 Buyback Expiration Date, the Company shall pay Potomac 3.15 times the PotomacInterest No. 3 Buyback Amount within ten business days of providing the Potomac Interest No. 3 Buyback Notice. Pursuant to the Potomac Amendment, from the Potomac Effective Date until November 28, 2019, the five year anniversary of the date of theInvestment (as defined in Potomac Agreement No. 4) (the “Potomac Interest No. 4 Buyback Expiration Date”), the Company shall have the right to buybackall or any portion of the Interest (as defined in Potomac Agreement No. 4) from Potomac upon written notice to Potomac (the “Potomac Interest No. 4Buyback Notice”), at the price of $500,000 per 0.98% of Interest (the “Potomac Interest No. 4 Buyback Amount”); provided, that in the event the PotomacInterest No. 4 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No.4 Buyback Amount within ten business days of providing the Potomac Interest No. 4 Buyback Notice; provided, further, that in the event the PotomacInterest No. 4 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 4 Buyback ExpirationDate, the Company shall pay Potomac 3.15 times the Potomac Interest No. 4 Buyback Amount within ten business days of providing the Potomac Interest No.4 Buyback Notice.Pursuant to the Potomac Amendment, from the Potomac Effective Date until December 17, 2020, the five year anniversary of the date of theInvestment (as defined in Potomac Agreement No. 5) (the “Potomac Interest No. 5 Buyback Expiration Date”), the Company shall have the right to buybackall or any portion of the Interest (as defined in Potomac Agreement No. 5) from Potomac upon written notice to Potomac (the “Potomac Interest No. 5Buyback Notice”), at the price of $500,000 per 0.75% of Interest (the “Potomac Interest No. 5 Buyback Amount”); provided, that in the event the PotomacInterest No. 5 Buyback Notice is provided within 3.25 years of the date of the Investment, the Company shall pay Potomac 1.8 times the Potomac Interest No.5 Buyback Amount within ten business days of providing the Potomac Interest No. 5 Buyback Notice; provided, further, that in the event the PotomacInterest No. 5 Buyback Notice is provided after 3.25 years of the date of the Investment and on or prior to the Potomac Interest No. 5 Buyback ExpirationDate, the Company shall pay Potomac 3.15 times the Potomac Interest No. 5 Buyback Amount within ten business days of providing the Potomac Interest No.5 Buyback Notice.Pursuant to the Potomac Amendment, if the Additional Investment (as defined in Potomac Agreement No. 5) is funded by Potomac, then, from thedate of funding of such Additional Investment until the five year anniversary of such funding date (the “Potomac Additional Interest Buyback ExpirationDate”), the Company shall have the right to buyback all or any portion of the Additional Interest (as defined in Potomac Agreement No. 5) upon writtennotice to Potomac (the “Potomac Additional Interest Buyback Notice”), at the price of $500,000 per 0.75% of Additional Interest (the “Potomac AdditionalInterest Buyback Amount”); provided, that in the event the Potomac Additional Interest Buyback Notice is provided within 3.25 years of the date of theAdditional Investment, the Company shall pay Potomac 1.8 times the Potomac Additional Interest Buyback Amount within ten business days of providingthe Potomac Additional Interest Buyback Notice; provided, further, that in the event the Potomac Additional Interest Buyback Notice is provided after 3.25years of the date of the Additional Investment and on or prior to the Potomac Additional Interest Buyback Expiration Date, the Company shall pay Potomac3.15 times the Potomac Additional Interest Buyback Amount within ten business days of providing the Potomac Additional Interest Buyback Notice.However, Potomac opted, at its sole discretion, not to make the $1,000,000 Additional Investment, and the deadline for Potomac to make the AdditionalInvestment has passed.In consideration for Potomac entering into the Potomac Amendment, the Company agreed to pay Potomac, within 15 business days of the PotomacEffective Date, $159,500. The Company recorded the $159,500 payment to Potomac as a non-recurring general and administrative expense during the yearended July 31, 2017.Furthermore, the Company granted Potomac the right to receive 2.5525% of the Net Profit (as defined in the Potomac Agreements) generated fromDAVINCI (as defined in the Potomac Amendment). In the event that the Company is sold, Potomac will receive 2.5525% of the net proceeds of such sale,after the deduction of all expenses and costs related to such sale. Additionally, from the Potomac Effective Date until the four year anniversary of thePotomac Effective Date (the “Potomac DAVINCI Interest Buyback Expiration Date”), the Company may buyback all or any portion of the DAVINCI Interest(as defined in the Potomac Amendment) upon written notice to Potomac (the “Potomac DAVINCI Interest Buyback Notice), at the price of $382,875 per2.5525% of DAVINCI Interest (the “Potomac DAVINCI Interest Buyback Amount”); provided, that in the event the Potomac DAVINCI Interest BuybackNotice is provided within 2.5 years of the Potomac85Effective Date, the Company shall pay Potomac two times the Potomac DAVINCI Interest Buyback Amount within ten business days of providing thePotomac DAVINCI Interest Buyback Notice; provided, further, that, in the event the Potomac DAVINCI Interest Buyback Notice is provided after 2.5 years ofthe Potomac Effective Date and on or prior to the Potomac DAVINCI Interest Buyback Expiration Date, the Company will pay Potomac 3.5 times thePotomac DAVINCI Interest Buyback Amount within ten business days of providing the Potomac DAVINCI Interest Buyback Notice.Furthermore, pursuant to the Potomac Amendment, the Company and Potomac agree that, upon the Company’s receipt after the Potomac EffectiveDate of at least $3 million from (i) SWK pursuant to the Purchase Agreement with SWK, or (ii) Adapt pursuant to the Adapt Agreement, fifty percent of allactual amounts received by the Company from SWK shall be used in determining the Net Profit.Note 15. Income TaxesThe Company recognizes deferred tax assets and liabilities using the asset and liability method. Deferred tax assets and liabilities are recorded basedon the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected toreverse. This method requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely thannot that some or all of the deferred tax assets will not be realized. As of December 31, 2018, the Company’s deferred tax assets relate to net operating loss(“NOL”) carryforwards that were derived from operating losses and stock based compensation from prior years. A full valuation allowance has been applied tothe Company’s deferred tax assets. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the relateddeferred income tax assets will be realized. At December 31, 2018, the Company had federal and state net operating loss carry forwards, which are available tooffset future taxable income, of 5,753,943. The Company’s NOL carryforwards can be carried forward to offset future taxable income for a period of 20 yearsfor each tax year’s loss. These NOL carryforwards begin to expire in 2026. No provision was made for federal income taxes as the Company has significantNOLs. All of the Company's income tax years remained open for examination by taxing authorities. The provision for income taxes differs from the amountswhich would be provided by applying the statutory federal income tax rate to the net loss before provision for income taxes for the following reasons: December 31, 2018 December 31,2017 July 31, 2017Net loss before taxes at statutory rate$(6,015,352) $919,111 $2,992,311Permanent items1,471,275 4,056 5,828Temporary items2,444,934 (698,380) 385,910Income tax expense at statutory rate(2,099,143) 224,787 3,384,049Valuation allowance2,150,426 (55,624) (2,833,575)Income tax expense per books$51,283 $169,163 $550,474 Net deferred tax assets consist of the following components as of: December 31, 2018 December 31, 2017 July 31, 2017Net operating loss carryover at statutory rate$5,753,943 $2,869,510 $4,936,604Stock-based compensation expense4,939,759 7,404,037 9,922,093Fixed asset depreciation— (353) (2,470)Intangibles amortization(1,148) (1,012) —Other2,046,961 (290,775) —Total$12,739,515 $9,981,407 $14,856,227 Valuation allowance$(12,739,515) $(9,981,407) $(14,856,227)Net deferred tax asset$— $— $— The Company had no uncertain tax positions at December 31, 2018, December 31, 2017 and July 31, 2017.On December 22, 2017, H.R. 1, formally known as the Tax Cut and Jobs Act (the "Act") was enacted into law. The Act provides for significant taxlaw changes and modifications with varying effective dates. The major change that affects the Company is reducing the corporate income tax rate from 35%to 21%. In connection with the Company’s initial analysis of the impact of the Tax Act, no discrete net tax benefit or expense in the period ended December31, 2017 is recorded. This is86primarily due to the change in valuation allowance offsets a net benefit or expense for the corporate rate reduction. Open federal tax years are July 31, 2015,July 31, 2016, July 31, 2017, and December 31, 2017. Open state tax years are July 31, 2014, July 31, 2015, July 31, 2016, July 31, 2017 and December 31,2017.Note 16. Comparative Financials (Unaudited)The Company changed its fiscal year end from July 31 to December 31 effective December 31, 2017. The unaudited consolidated results ofoperations for the year ended December 31, 2017 is as follows: For the Year Ended(in thousands)December 31, 2017 (unaudited)Revenue: Royalty and licensing revenue$15,447 Treatment investment revenue 105Grant and contract revenue —Total revenue 15,552Operating expenses: General and administrative 10,313 Research and development 4,857 Royalty expense 1,408 Selling expense 851Total operating expenses 17,429Income from operations (1,877)Other income, net 68Income before provision of income taxes (1,809)Provision for income taxes 797Net loss$(2,606) Note 17. Subsequent Events On January 3, 2019 and January 15, 2019, the Company granted options to employees to purchase in aggregate 76,500 and 13,200 shares of theCompany’s Common Stock at an exercise price of $13.61 and $14.62 per share, respectively, which represents the per share closing price of the Company’sCommon Stock on the dates of grant. These options were issued under the 2017 Plan and have a ten year term. The options vest as follows: 1/48th of theoption shares vest every month on the anniversary of the grant date.From January 1, 2019 through March 15, 2019, the Company issued a total of 80,000 shares of Common Stock in connection with stock optionexercises. As a result of the stock option exercises, the Company received aggregate proceeds of $601,250.On February 21, 2019, the Company announced that its Phase 2 clinical trial evaluating OPNT001, a naloxone nasal spray for the treatment ofbulimia nervosa did not meet the primary endpoint of reducing the number of binging days from baseline to week eight. Key secondary endpoints were alsonot met. Based on these results, the Company will not devote additional resources to the development of OPNT001.On March 18, 2019, the Company and Adapt entered into Amendment No. 2 to the License Agreement. Amendment No. 2 sets forth the timing andamounts that Adapt is allowed to deduct going forward from royalties and milestones payable to the Company and SWK in relation to payments that Adapthas paid or will pay under a license agreement with a Third Party (as defined in the License Agreement), as further discussed in Note 9. Licensee Fee Payable.As provided in Amendment No. 2, going forward Adapt may only deduct a maximum of $9.0 million from royalties and milestones payable to the Companyand87SWK under the License Agreement in regards to the Third Party license agreement entered into by Adapt on or around February 28, 2018. Under AmendmentNo. 2, with respect to $6.5 million of the $9 million, Adapt may only deduct a maximum of $2.0 million in any one calendar quarter from the royaltiespayable to the Company under the License Agreement and SWK under the SWK Purchase Agreement. As provided in the License Agreement, if Net NarcanSales (as defined in the License Agreement) exceeds $200 million in any calendar year, the Company and SWK will be due a milestone of $15.0 million.Under Amendment No. 2, if this $15.0 million milestone becomes payable to the Company and SWK, Adapt may deduct $2.5 million from this $15.0 millionmilestone, along with any outstanding balance of the $6.5 million that has not already been deducted in previous quarters.Amendment No. 2 also amended Section 5.5 of the License Agreement to provide that Adapt may still enter into Third Party licensing arrangements;however, in order to exercise its right to deduct any payments with respect thereto, with certain specified exceptions, after March 18, 2019, Adapt will needthe consent of the Company that the licensing arrangement is acceptable under the provisions of Amendment No. 2 (in particular the amended Section 5.5 setforth therein). In all instances, any Third Party licensing arrangement and associated deductions taken by Adapt must comply with the provisions of Section5.5 as amended by Amendment No. 2. 88Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. 89Item 9A. Controls and Procedures. Disclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed under theSecurities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SECrules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Indesigning and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designedand operated, can provide only reasonable assurance of achieving the desired control objectives.Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K, have concluded that, basedon such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we fileor submit under the Exchange Act is recorded, processed, summarized and reported, with the time periods specified in the SEC's rules and forms, and isaccumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer as appropriate to allow timelydecisions regarding required disclosure.Internal Control over Financial ReportingManagement's Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f)under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our Principal Executive Officer andPrincipal Financial Officer, and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with GAAP, including those policies and procedures that: (i) pertainto the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and the disposition of our assets, (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP and that receiptsand expenditures are being made only in accordance with authorizations of our management and Board, and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financialstatements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with policies and procedures may deteriorate.Management conducted an evaluation of the effectiveness of our control over financial reporting based on the 2013 framework in Internal Control -Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concludedthat our internal control over financial reporting was effective as of December 31, 2018.This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financialreporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit usto provide only management's report in this Annual Report. Changes in Internal Controls over Financial Reporting There were no significant changes to our internal controls over financial reporting that occurred during the year ended December 31, 2018 that hasmaterially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 90Item 9B. Other Information. None.91PART IIIItem 10. Directors, Executive Officers and Corporate Governance. The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders.The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by thisAnnual Report on Form 10-K.Item 11. Executive Compensation.The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders.The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by thisAnnual Report on Form 10-K.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders.The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by thisAnnual Report on Form 10-K.Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders.The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by thisAnnual Report on Form 10-K.Item 14. Principal Accounting Fees and Services. The information required by this item is incorporated by reference to our Definitive Proxy Statement for our 2019 Annual Meeting of Stockholders.The Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the period covered by thisAnnual Report on Form 10-K.92PART IV Item 15. Exhibits, Financial Statement Schedules.Exhibit Number Exhibit Description2.1 Agreement and Plan of Merger, dated October 2, 2017, between Opiant Pharmaceuticals, Inc., a Nevada corporation, andOpiant Pharmaceuticals, Inc., a Delaware corporation (incorporated herein by reference to Exhibit 2.1 to the Company'sCurrent Report on Form 8-K filed on October 6, 2017). 3(i).1 First Amended and Restated Certificate of Incorporation of Opiant Pharmaceuticals, Inc., a Delaware corporation, filed onOctober 2, 2017 (incorporated herein by reference to Exhibit 3(i).4 to the Company’s Current Report on Form 8-K filed onOctober 6, 2017). 3(i).2 Nevada Articles of Merger, filed October 2, 2017 (incorporated herein by reference to Exhibit 3(i).2 to the Company’sCurrent Report on Form 8-K filed on October 6, 2017). 3(i).3 Delaware Certificate of Merger, filed October 2, 2017 (incorporated herein by reference to Exhibit 3(i).3 to the Company’sCurrent Report on Form 8-K filed on October 6, 2017). 3(ii).1 Bylaws of Opiant Pharmaceuticals, Inc., a Delaware corporation (incorporated herein by reference to Exhibit 3(ii).1 to theCompany’s Current Report on Form 8-K filed on October 6, 2017). 4.1 Specimen Common Stock Certificate of Opiant Pharmaceuticals, Inc., a Delaware corporation (incorporated herein byreference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 6, 2017). 10.1+ License Agreement, dated as of December 15, 2014, by and between the Company and Adapt Pharma Operations Limited(incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 5, 2018). 10.2+ Amendment No. 1 to License Agreement, dated as of December 13, 2016, by and between the Company and Adapt PharmaOperations Limited (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filedon April 19, 2017). 10.3+ Amended and Restated Material Transfer, Option and Research License Agreement, dated as of April 26, 2016, by andbetween the Company and Aegis Therapeutics, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’sQuarterly Report on Form 10-Q filed on June 8, 2016). 10.4+ Letter Agreement, dated as of April 26, 2016, by and between the Company and Aegis Therapeutics, LLC (incorporatedherein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on June 8, 2016). 10.5+ License Agreement, dated as of June 22, 2017, by and between the Company and Aegis Therapeutics, LLC (incorporatedby reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K filed on October 13, 2017). 10.6+ Supply Agreement, dated as of June 22, 2017, by and between the Company and Aegis Therapeutics, LLC (incorporatedby reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K filed on October 13, 2017). 10.7+ Research and Development Agreement, dated as of July 14, 2017, by and between the Company and RenaissanceLakewood, LLC (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K filed onOctober 13, 2017). 10.8+ Purchase and Sale Agreement, dated as of December 13, 2016, by and between the Company and SWK Funding LLC(incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on March 15,2017). 93 10.9+† Separation Agreement and General Release, dated as of September 5, 2017, by and between the Company and KevinPollack (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed on October 13,2017). 10.10† Employment Agreement, dated as of January 11, 2018, by and between the Company and Dr. Roger Crystal (incorporatedherein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2018). 10.11† Employment Agreement Acknowledgement, dated as of March 31, 2017, by and between the Company and Dr. RogerCrystal (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 6,2017). 10.12† Employment Agreement, dated as of January 11, 2018, by and between the Company and Dr. Phil Skolnick (incorporatedherein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2018). 10.13† Employment Agreement, dated as of January 11, 2018, by and between the Company and David O'Toole (incorporatedherein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2018). 10.14† Director Agreement, dated as of December 31, 2012, by and between the Company and Geoffrey Wolf (incorporated hereinby reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on October 29, 2013). 10.15† Director Agreement, dated as of May 5, 2016, by and between the Company and Ann MacDougall (incorporated herein byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 11, 2016). 10.16† Director Agreement, dated as of May 5, 2016, by and between the Company and Dr. Gabrielle Silver (incorporated hereinby reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 11, 2016). 10.17† Director Agreement, dated as of November 4, 2016, by and between the Company and Thomas T. Thomas (incorporatedherein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 10, 2016).9410.18† Senior Advisor Agreement, dated as of January 22, 2013, by and between the Company and Brad Miles (incorporatedherein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on March 15, 2017). 10.19† First Amendment to Senior Advisor Agreement, dated as of February 24, 2015, by and between the Company and BradMiles (incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed on March15, 2017). 10.20† Second Amendment to Senior Advisor Agreement, dated as of March 19, 2015, by and between the Company and BradMiles (incorporated herein by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on March15, 2017). 10.21† Third Amendment to Senior Advisor Agreement, dated as of March 13, 2017, by and between the Company and BradMiles (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on June 14,2017). 10.22 Sublease, effective as of August 1, 2017, by and between the Company and Standish Management, LLC, as amended bythat certain letter agreement, dated as of August 1, 2017 (incorporated herein by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8-K filed on September 5, 2017). 10.23 Engagement Letter, dated December 18, 2014, by and between the Company and Torreya Partners (Europe) LLP(incorporated herein by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.24 Supplemental Engagement Letter, dated as of September 8, 2017, by and between the Company and Torreya Partners(Europe) LLP (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed onSeptember 14, 2017). 10.25 Investment Agreement, dated as of April 16, 2013, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.26 Letter Agreement, dated as of October 15, 2014, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.27 Investment Agreement, dated as of May 30, 2013, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.28 Letter Agreement, dated as of October 15, 2014, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.29 Investment Agreement, dated as of December 20, 2013, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.30 Investment Agreement, dated as of September 9, 2014, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.31 Letter Agreement, dated as of October 15, 2014, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 9510.32 Investment Agreement, dated as of September 17, 2014, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.33 Investment Agreement, dated as of October 31, 2014, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.34 Letter Agreement, dated as of October 31, 2014, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.35 Investment Agreement, dated as of July 20, 2015, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.36 Investment Agreement, dated as of December 8, 2015, by and between the Company and Potomac Construction Limited(incorporated herein by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K filed on October 28,2016). 10.37 Amendment to Investment Agreement, dated as of April 12, 2017, by and between the Company and PotomacConstruction Limited (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-Kfiled on April 18, 2017). 10.38 Investment Agreement, dated as of May 15, 2014, by and between the Company and Ernst Welmers (incorporated hereinby reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed on October 28, 2016). 10.39 Letter Agreement, dated as of October 15, 2014, by and between the Company and Ernst Welmers (incorporated herein byreference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed on October 28, 2016). 10.40 Amendment to Investment Agreement, dated as of June 1, 2017, by and between the Company and Ernst Welmers(incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 2, 2017). 10.41 Amended and Restated Interest Agreement, dated as of October 24, 2016, by and between the Company and Valour Fund,LLC (incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed on October28, 2016). 10.42 Amended and Restated Interest Agreement, dated as of October 24, 2016, by and between the Company and Valour Fund,LLC (incorporated herein by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K filed on October28, 2016). 10.43† Amended and Restated Consulting Agreement, dated as of October 25, 2016, by and between the Company and LYLHoldings Inc. (incorporated herein by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed onOctober 28, 2016). 10.44† Amendment to Amended and Restated Consulting Agreement, dated as of June 1, 2017, by and between the Company andLYL Holdings Inc. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filedon June 2, 2017). 10.45† Regulatory and Strategic Advisor Consultancy Agreement, dated as of September 1, 2015, by and between the Companyand Mary Pendergast (incorporated herein by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-Kfiled on October 28, 2016). 10.46† Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.52 to theCompany's Annual Report on Form 10-K filed on October 13, 2017).96 10.47† Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Dr. Michael Sinclair(incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 29,2015). 10.48† Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Dr. Roger Crystal (incorporatedherein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 29, 2015). 10.49† Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Kevin Pollack (incorporatedherein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 29, 2015). 10.50† Stock Option Grant Agreement, dated October 27, 2015, by and between the Company and Geoffrey Wolf (incorporatedherein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on October 29, 2015). 10.51† Controlled Equity OfferingSM Sales Agreement, dated October 13, 2017, by and between Opiant Pharmaceuticals, Inc. andCantor Fitzgerald & Co. (incorporated herein by reference to Exhibit 1.2 to the Company’s Registration Statement onForm S-3 filed on October 13, 2017) 10.52† Forms of Incentive Stock Option Notice and Incentive Stock Option Agreement under the Opiant Pharmaceuticals, Inc.2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed on December 4, 2017). 10.53† Forms of Nonstatutory Stock Option Notice and Nonstatutory Stock Option Agreement under the Opiant Pharmaceuticals,Inc. 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report onForm 10-Q filed on December 4, 2017). 10.54† Form of Restricted Stock Agreement under the Opiant Pharmaceuticals, Inc. 2017 Long-Term Incentive Plan (incorporatedby reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q filed on December 4, 2017). 10.55† Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Dr. Michael Sinclair(incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-8 filed on November 27,2017). 10.56† Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Dr. Michael Sinclair (incorporatedby reference to Exhibit 10.2 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.57† Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Dr. Michael Sinclair (incorporatedby reference to Exhibit 10.3 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.58† Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Dr. Roger Crystal(incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-8 filed on November 27,2017). 10.59† Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Dr. Roger Crystal (incorporatedby reference to Exhibit 10.6 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.60† Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Kevin Pollack (incorporatedby reference to Exhibit 10.8 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.61† Stock Option Grant Agreement, dated December 31, 2013, by and between the Registrant and Kevin Pollack (incorporatedby reference to Exhibit 10.9 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 9710.62† Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Kevin Pollack (incorporated byreference to Exhibit 10.10 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.63† Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Kevin Pollack (incorporated byreference to Exhibit 10.11 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.64† Stock Option Grant Agreement, dated December 31, 2012, by and between the Registrant and Geoffrey Wolf (incorporatedby reference to Exhibit 10.13 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.65† Warrant Agreement, dated December 31, 2012, by and between the Registrant and Geoffrey Wolf (incorporated byreference to Exhibit 10.14 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.66† Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Geoffrey Wolf (incorporated byreference to Exhibit 10.15 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.67† Stock Option Grant Agreement, dated June 15, 2014, by and between the Registrant and Geoffrey Wolf (incorporated byreference to Exhibit 10.16 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.68† Stock Option Grant Agreement, dated November 12, 2014, by and between the Registrant and Arvind Agrawal(incorporated by reference to Exhibit 10.18 to the Company's Registration Statement on Form S-8 filed on November 27,2017). 10.69† Stock Option Grant Agreement, dated November 12, 2014, by and between the Registrant and Arvind Agrawal(incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on Form S-8 filed on November 27,2017). 10.70† Stock Option Grant Agreement, dated October 27, 2015, by and between the Registrant and Arvind Agrawal (incorporatedby reference to Exhibit 10.20 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.71† Stock Option Grant Agreement, dated January 22, 2013, by and between the Registrant and Brad Miles (incorporated byreference to Exhibit 10.21 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.72† Warrant Agreement, dated March 19, 2015, by and between the Registrant and Brad Miles (incorporated by reference toExhibit 10.22 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.73† Stock Option Grant Agreement, dated March 19, 2015, by and between the Registrant and Brad Miles (incorporated byreference to Exhibit 10.23 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.74† Stock Option Grant Agreement, dated March 19, 2015, by and between the Registrant and Brad Miles (incorporated byreference to Exhibit 10.24 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.75† Stock Option Grant Agreement, dated October 6, 2016, by and between the Registrant and Jenny Lee (incorporated byreference to Exhibit 10.25 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.76† Stock Option Grant Agreement, dated October 6, 2016, by and between the Registrant and Quan Vu (incorporated byreference to Exhibit 10.26 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.77† Stock Option Grant Agreement, dated December 24, 2016, by and between the Registrant and Quan Vu (incorporated byreference to Exhibit 10.27 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 9810.78† Stock Option Grant Agreement, dated February 6, 2017, by and between the Registrant and Dr. Phil Skolnick (incorporatedby reference to Exhibit 10.28 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.79† Stock Option Grant Agreement, dated November 4, 2016, by and between the Registrant and Thomas T. Thomas(incorporated by reference to Exhibit 10.29 to the Company's Registration Statement on Form S-8 filed on November 27,2017). 10.80† Stock Option Grant Agreement, dated May 17, 2016, by and between the Registrant and Dr. Gabrielle Silver (incorporatedby reference to Exhibit 10.30 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.81† Stock Option Grant Agreement, dated May 17, 2016, by and between the Registrant and Ann MacDougall (incorporatedby reference to Exhibit 10.31 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.82† Letter Agreement, dated as of November 12, 2014, by and between the Registrant and Arvind Agrawal (incorporated byreference to Exhibit 10.41 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.83† Warrant Agreement, dated as of March 13, 2017, by and between the Registrant and Brad Miles (incorporated by referenceto Exhibit 10.43 to the Company's Registration Statement on Form S-8 filed on November 27, 2017). 10.84† Executive Employment Agreement, dated January 11, 2018, by and between Dr. Roger Crystal and the Registrant(incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 16, 2018). 10.85† Executive Employment Agreement, dated January 11, 2018, by and between Mr. David O’Toole and the Registrant(incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed January 16, 2018). 10.86† Executive Employment Agreement, dated January 11, 2018, by and between Dr. Phil Skolnick and the Registrant(incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed January 16, 2018). 10.87* Amendment No. 2 to License Agreement, dated March 18, 2019, by and between Registrant and Adapt Pharma OperationsLimited. 10.88† Director Agreement, effective June 12, 2018, by and between the Registrant and Richard Daly (incorporated by referenceto Exhibit 10.1 of the Company’s Current Report on Form 8-K filed June 12, 2018). 10.89† Development and Manufacturing Agreement between the Registrant and Aesica Queensborough Limited dated September7, 2018 (incorporated by reference to Exhibit 10.84 of the Company’s Current Report on Form 8-K filed September 10,2018). 10.90† Agreement for Reimbursement of Capital Expenditures and Service Fees between the Registrant and AesicaQueensborough Limited dated September 7, 2018 (incorporated by reference to Exhibit 10.85 of the Company’s CurrentReport on Form 8-K filed September 10, 2018). 10.91† Contract between the Registrant and Biomedical Advanced Research and Development Authority dated September 19,2018 (incorporated by reference to Exhibit 10.86 of the Company’s Current Report on Form 8-K/A filed December 4,2018). 10.92† Director Agreement, effective October 29, 2018, by and between Opiant Pharmaceuticals, Inc. and Craig A. Collard(incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed October 29, 2018). 10.93† License Agreement between the Registrant and Sanofi dated December 21, 2018 (incorporated by reference to Exhibit 10.1of the Company’s Current Report on Form 8-K filed December 28, 2018).99 21.1 Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-Kfiled on October 13, 2017). 23.1* Consent of MaloneBailey, LLP, Independent Registered Public Accounting Firm. 31.1* Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302of the Sarbanes-Oxley Act of 2002. 31.2* Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302of the Sarbanes-Oxley Act of 2002. 32.1** Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002. 32.2** Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002. 101 The following materials from the Opiant Pharmaceuticals, Inc. Form 10-K for the year ended December 31, 2018, the fivemonths ended December 31, 2017 and the fiscal year ended July 31, 2017, formatted in Extensible Business ReportingLanguage (XBRL): (i) Consolidated Balance Sheets as of December 31, 2018, December 31, 2017, and July 31, 2017, (ii)Consolidated Statements of Operations for the year ended December 31, 2018, the five months ended December 31, 2017and the fiscal year ended July 31, 2017, (iii) Consolidated Statement of Stockholders' Equity (Deficit) for the year endedDecember 31, 2018, the five months ended December 31, 2017 and the fiscal year ended July 31, 2017, (iv) ConsolidatedStatements of Cash Flows for the year ended December 31, 2018, the five months ended December 31, 2017 and the fiscalyear ended July 31, 2017, and (v) Notes to Consolidated Financial Statements. + Confidential Treatment Granted. Confidential Materials omitted and filed separately with the Securities and Exchange Commission. † Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a) (3) of Form 10-K.* File herewith** In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed 100Item 16. Form 10-K Summary NoneSIGNATURESIn accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this Annual Report to be signed on its behalf by the undersigned,thereunto duly authorized. Opiant Pharmaceuticals, Inc. Date:March 21, 2019 By:/s/ Dr. Roger Crystal Dr. Roger Crystal Chief Executive Officer In accordance with the Exchange Act, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacitiesindicated on March 21, 2019. By:/s/ Dr. Roger Crystal Director & Chief Executive Officer Dr. Roger Crystal (Principal Executive Officer) By:/s/ David D. O'Toole Chief Financial Officer David D. O'Toole (Principal Financial and Accounting Officer) By:/s/ Dr. Michael Sinclair Director Dr. Michael Sinclair By:/s/ Thomas T. Thomas Director Thomas T. Thomas By:/s/ Dr. Gabrielle Silver Lead Independent Director Dr. Gabrielle Silver By:/s/ Ann MacDougall Director Ann MacDougall By:/s/ Richard J. Daly Director Richard J. Daly By:/s/ Craig Collard Director Craig Collard 101Exhibit 10.87AMENDMENT NO. 2 TO LICENSE AGREEMENTThis Amendment No. 2 to License Agreement (this “Amendment”) is made as of March 18, 2019, by and between OpiantPharmaceuticals Inc. (formerly known as Lightlake Therapeutics Inc.), a Delaware corporation (“Opiant”), and Adapt PharmaOperations Limited, an Irish limited company (“Adapt”). Opiant and Adapt are sometimes referred to herein individually as a “Party”and collectively as the “Parties”. Capitalized terms used but not defined herein have the meanings given to them in the LicenseAgreement (as defined below).RECITALSWHEREAS, the Parties entered into a License Agreement, dated as of December 15, 2014 (including the exhibits andschedules thereto, and as amended by that certain Amendment No. 1 to License Agreement, dated December 6, 2016, the “LicenseAgreement”), pursuant to which Opiant licenses to Adapt certain intellectual property rights to develop and commercialize Products inaccordance with the terms and conditions set forth therein;WHEREAS, Section 11.9 of the License Agreement provides that no amendment or modification to the License Agreementshall be binding upon the Parties unless in writing and duly executed by authorized representations of both Parties;WHEREAS, Adapt has entered into an agreement with a Third Party, titled Exclusive Patent License Agreement and datedFebruary 27, 2018, a copy of which has been provided to Opiant’s counsel (the “Third Party License”), pursuant to which Adapt hasmade, and expects to make, certain payments to such Third Party;WHEREAS, the Parties wish to memorialize their agreement regarding the treatment under the License Agreement of suchpayments pursuant to the Third Party License; andWHEREAS, in connection with such agreement, the Parties desire to amend the License Agreement in the manner specified inthis Amendment.NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, theParties hereby agree as follows:1. Third Party License. The Parties agree that, anything to the contrary contained in the License Agreement or otherwisenotwithstanding, Adapt shall be entitled to make the following deductions from royalties payable pursuant to Section 5.4 of the LicenseAgreement and, as applicable pursuant to the sub-paragraphs below, the unpaid Annual Net Sales-Based Milestone Payment underSection 5.3.1 of the License Agreement, after the date of this Amendment:(a) Adapt shall deduct six million five hundred thousand dollars ($6,500,000) (the “Initial Deductible Amount”)from royalties payable pursuant to Section 5.4 of the License Agreement after the date of this Amendment; provided, however, that (i)Adapt shall not deduct more than two million dollars ($2,000,000) from the royalty payment in respect of any single Calendar Quarter,and (ii) if the Annual Net Sales-Based Milestone Payment of fifteen millionExhibit 10.87dollars ($15,000,000) due upon achievement of Net Sales of two hundred million dollars ($200,000,000) becomes payable inaccordance with Section 5.3.1 of the License Agreement before the full Initial Deductible Amount has been deducted from royaltypayments, the remaining balance of the Initial Deductible Amount shall be deducted from such Annual Net Sales-Based MilestonePayment.(b) Adapt shall deduct an additional two million five hundred thousand dollars ($2,500,000) (the “AdditionalDeductible Amount”) upon the Annual Net Sales-Based Milestone Payment of fifteen million dollars ($15,000,000) due uponachievement of Net Sales of two hundred million dollars ($200,000,000) becoming payable by Adapt in accordance with Section 5.3.1of the License Agreement. The Additional Deductible Amount shall be deducted from such Annual Net Sales-Based MilestonePayment made by Adapt.(c) Adapt agrees that no deductions other than the Initial Deductible Amount and the Additional Deductible Amountwill be taken after the date of this Amendment from payments made by Adapt under the License Agreement in relation to paymentsmade under or in respect of the Third Party License. With respect to the initial deduction, in the amount of six million two hundred fiftythousand ($6,250,000), from the Annual Net Sales-Based Milestone paid to Opiant on or about February 28, 2018, based on the initialpayment under the Third Party License (the “Initial Deduction”), Opiant, for itself and on behalf of its Affiliates, predecessors,successors, and assigns (i) accepts such Initial Deduction and (ii) irrevocably waives and foregoes any actual or potential objection orclaim related to such Initial Deduction, including, without limitation any actual or potential claim that such Initial Deduction constitutedor constitutes a breach of the License Agreement.2. Omnibus Amendment to the License Agreement. Each instance of “Sublicense” in the License Agreement is herebydeleted and replaced with “sublicense”. In addition, the row containing “Sublicense” in the cross-reference table at the end of Article Iof the License Agreement is hereby deleted.3. Amendment to Section 1.30 of the License Agreement. Section 1.30 of the License Agreement is hereby deleted in itsentirety and replaced with the following:“1.30 “Generic Product” means, with respect to a Product, any intranasal product in an intranasal device that (i) is soldby a Third Party under an (A) Abbreviated New Drug Application (ANDA) in the United States; (B) in the European Union,pursuant to a provision of Articles 10, 10a or 10b of Parliament and Council Directive 2001/83/EC as amended (including anapplication under Article 6.1 of Parliament and Council Regulation (EC) No 726/2004 that relies for its content on any suchprovision), or (C) in any other country or jurisdiction, pursuant to all equivalents of such provisions; (ii) contains naloxone asthe primary active ingredient; and (iii) is approved in reliance, in whole or in part, on the prior approval of such Product. AProduct licensed or produced by Adapt or its Affiliates or Commercial Sublicensees (i.e., an authorized generic product) willnot constitute a Generic Product.”Exhibit 10.874. Amendment to Section 1.45 of the License Agreement. The first paragraph of Section 1.45 of the license agreement(ending with a colon) is hereby deleted and replaced with the following:“1.45 “Net Sales” means, with respect to a Product for any period, the total amount billed or invoiced on sales of such Productduring such period by Adapt, its Affiliates, or Sublicensees on behalf of Adapt or its Affiliates to Third Parties, and the total amount ofmoney or other consideration received by Adapt or its Affiliates from sales of such Product (including sales of Product as an authorizedgeneric product) or Generic Product by Sublicensees or Specified Sublicensee, less the following normal and customary bona-fidedeductions and allowances actually taken:”5. Amendment to Section 1.61 of the License Agreement. Section 1.61 of the License Agreement is hereby deleted in itsentirety and replaced with the following:“1.61 “Sublicensee” means a Person, other than an Affiliate, that is granted a sublicense by Adapt, or an Affiliate ofAdapt, under the license granted in Section 4.1, but excluding Specified Sublicensees.”6. Amendment to Article I of the License Agreement. Article I of the License Agreement is hereby amended by adding thefollowing immediately following Section 1.60 of the License Agreement:“1.60A “Specified Sublicensee” means a Third Party that Adapt or an Affiliate grants a non-exclusive sublicense, acovenant not to sue, or other right, under any Patent in furtherance of any settlement, compromise or other resolution of anyclaim by Adapt or its Affiliate that such Third Party has infringed any Patent.”7. Amendments to Section 4.3.1 of the License Agreement.(a) Section 4.3.1 of the License Agreement is hereby amended by adding the words “or Specified Sublicensees”immediately following the words “tiers of Sublicensees” in the first sentence thereof.(b) Section 4.3.1 of the License Agreement is hereby further amended by adding the words “to a Sublicensee”immediately after the words “With respect to any such Sublicense,” in the fourth sentence thereof.8. Amendment to Section 4.3.2 of the License Agreement. Section 4.3.2 of the License Agreement is hereby amended byadding the following to the end thereof:“provided, however, that notwithstanding the foregoing, any sublicense granted by Adapt to a Specified Sublicensee shallsurvive termination of this Agreement in accordance with the terms of the applicable agreement with such SpecifiedSublicensee”9. Amendment to Section 4.6.1 of the License Agreement. Section 4.6.1 of the License Agreement is hereby amended byadding the following at the end thereof:Exhibit 10.87“provided, however, that the foregoing shall not limit or preclude Adapt or its Affiliate from granting a sublicense to anySpecified Sublicensee”10. Amendment to Section 10.3 of the License Agreement. Section 10.3 of the License Agreement is hereby amended byadding the words “or Specified Sublicensee” after each occurrence of the word “Sublicensee” in the final sentence thereof.11. Amendment to Section 10.6.1 of the License Agreement. Section 10.6.1 of the License Agreement is hereby amended byadding the words “subject to Section 4.3.2,” at the beginning thereof.12. Amendment to Section 5.5 of the License Agreement. Section 5.5 of the License Agreement is hereby deleted in itsentirety and replaced with the following:“5.5 Third Party Licenses.5.5.1 If, during the Term, Adapt elects, in its sole discretion, to seek a license under any Patent of a ThirdParty that (i) Adapt reasonably determines would be infringed by the Exploitation, in any part of the Territory, of anyProduct then under Development or being Commercialized by Adapt, its Affiliates or its Sublicensees, or that Adaptdetermines could be listed in the FDA’s Orange Book in respect of one or more Products (including Products inDevelopment), or that claims an invention that Adapt determines could facilitate the Development of one or more newProduct(s) (any of the foregoing, “Core IP”) or (ii) that Adapt otherwise reasonably determines is necessary ordesirable for Adapt, its Affiliates or Sublicensees to Exploit the Products, then, in either case, Adapt shall be solelyresponsible for the negotiation and execution of the corresponding license agreement (a “Third Party LicenseAgreement”).5.5.2 Adapt may, but shall not be obligated to, provide Opiant with a copy of any Third Party LicenseAgreement before entering into such agreement, in which event Adapt shall concurrently notify Opiant in writing ifAdapt regards any Patent(s) to be licensed under such Third Party License Agreement as Core IP. In the event thatAdapt provides Opiant with a copy of any Third Party License Agreement, the Parties will discuss the same in goodfaith for a period of up to ten (10) Business Days from the date on which such Third Party License Agreement isprovided to Opiant. Not later than fifteen (15) Business Days after the date on which such Third Party LicenseAgreement is provided to Opiant, Opiant shall notify Adapt in writing (a) whether or not, in Opiant’s good faithdetermination, the license contemplated thereby would meet the criteria set forth in either or both of clause (i) or clause(ii) of Section 5.5.1, (b) if Adapt has notified Opiant that it regards one or more of the Patent(s) subject to such licenseas Core IP, whether or not, in Opiant’s good faith determination, such Patent(s) constitute Core IP, and (c) whether andto what extent, in Opiant’s good faith determination, payments that would be owing by Adapt to the Third Party underthe Third Party License Agreement constitute Eligible Payments within the meaning of Section 5.5.3. If Opiant notifiesAdapt within such fifteenExhibit 10.87(15) Business Day period that it agrees that the license contemplated by such Third Party License Agreement wouldmeet the criteria set forth in either or both of clause (i) or clause (ii) of Section 5.5.1, or if Opiant fails to provide itswritten determination to Adapt within such fifteen (15) Business Day period, the applicable Third Party LicenseAgreement, in the form provided to Opiant, shall be deemed an “Accepted Third Party License Agreement”. IfOpiant notifies Adapt within such fifteen (15) Business Day period that payments that would be owing by Adapt to theThird Party under the Third Party License Agreement constitute Eligible Payments, then fifty percent (50%) of suchEligible Payments explicitly identified by Opiant as appropriate shall be deemed “Accepted Section 5.5 Deductions.”If Opiant fails to provide its written determination to Adapt within such fifteen (15) Business Day period, then fiftypercent (50%) of all Eligible Payments under such Third Party License shall be deemed Accepted Section 5.5Deductions. If Opiant further indicates in such notice that it agrees that one or more of the Patent(s) subject to suchlicense constitute Core IP, or if Adapt has notified Opiant that Adapt regards one or more of the Patent(s) subject tosuch license as Core IP and Opiant fails to notify Adapt within such fifteen (15) Business Day period, whether or not itagrees that such Patent(s) constitute Core IP, then such Patent(s) shall be deemed “Accepted Core IP”. For the sake ofclarity, Opiant’s determination as to whether or not any license proposed by Adapt meets the criteria of either or both ofclause (i) or clause (ii) of Section 5.5.1 shall not affect in any way Adapt’s right to enter into any agreement in respectof such license, except that under no circumstances shall Adapt make any deductions from payments owed to Opiant inrelation to any Third Party License Agreement except as expressly provided for in Section 5.5.3 below.5.5.3 Any amounts due under any Third Party License Agreement will be borne by Adapt; provided,however, that (i) if such Third Party License Agreement is an Accepted Third Party License Agreement with AcceptedSection 5.5 Deductions, Adapt shall be entitled to deduct such Accepted Section 5.5 Deductions paid to such ThirdParty from the Regulatory Milestones payable by Adapt pursuant to Section 5.2, the Sales-Based Milestones payable byAdapt pursuant to Section 5.3 and the royalties payable by Adapt pursuant to Section 5.4, or (ii) either (A) if such ThirdParty License Agreement is in furtherance of a settlement of a Patent infringement claim against Adapt or its Affiliatesas evidenced by a written claim of infringement received by a Third Party, or (B) to the extent that royalty payments aremade by Adapt under such Third Party License Agreement based on sales of Products, Adapt shall be entitled to deductup to fifty percent (50%) of all Eligible Payments made to such Third Party under such Third Party License Agreementand referred to in this clause (ii) from the Regulatory Milestones payable by Adapt pursuant to Section 5.2, the Sales-Based Milestones payable by Adapt pursuant to Section 5.3 and the royalties payable by Adapt pursuant to Section 5.4.“Eligible Payments” means any one-time license fee payment that serves as the exclusive source of monetaryconsideration, upfront payment, milestones or royalties paid to the applicable Third Party under a Third Party LicenseAgreement on account of rights relating to Products. For the avoidance of doubt, with respect to AcceptedExhibit 10.87Third Party License Agreements that do not fall within clause (ii) of this Section 5.5.3, Adapt shall only be entitled todeduct Accepted Section 5.5 Deductions. Also for the avoidance of doubt, the term “milestone(s)” as used in thisSection 5.5.3 refers to development, regulatory, launch or sales events or achievements relating to and on account of theProducts that trigger a payment under the Third Party License Agreement. To the extent that, in any Calendar Quarterwith respect to a royalty payment or with respect to milestone payment in the event of a milestone, Adapt was not ableto deduct the entire amount of the above percentage of any and all amounts paid to such Third Party in such CalendarQuarter or from such regulatory or sales-based milestone payment, Adapt shall be entitled to carry forward suchremaining amounts and deduct them from the royalties due in subsequent Calendar Quarters or a subsequent regulatoryor sales-based milestone payment; provided that in no event shall reductions pursuant to this Section 5.5.3 result inroyalties on Product of less than (x) one and one half percent (1.5%) of Net Sales in any Calendar Quarter in the case ofreductions associated with Accepted Core IP or reductions associated with payments contemplated by clause (ii) of thisSection 5.5.3 in respect of Core IP or (y) two and one half percent (2.5%) of Net Sales in any Calendar Quarter in thecase of reductions associated with any other license contemplated by this Section 5.5.”5.5.4. To the extent that Adapt enters into a Third Party License Agreement that it has not provided to Opiant inadvance of execution under Section 5.5.2 above and that is anticipated to result in deductions under clause (ii) ofSection 5.5.3 above, Adapt shall provide Opiant with a copy of the Third Party License Agreement within ten (10)Business Days of execution of the Third Party License Agreement.13. Amendment to Section 11.8.2 of the License Agreement. Section 11.8.2 of the License Agreement is hereby amended byreplacing the address for notice of Opiant set forth therein with the following:If to Opiant, to:Opiant Pharmaceuticals, Inc. 201 Santa Monica Blvd., Suite 500 Santa Monica, CA 90401 Attention: CEO and CFO With a copy (which shall not constitute notice) to:Wilson Sonsini Goodrich & Rosati, P.C. 12235 El Camino Real San Diego, CA 92130-3002 Attention: Martin J. Waters Facsimile: 1-858-350-2399Exhibit 10.8714. References in the License Agreement. All references in the License Agreement to “this Agreement” shall mean theLicense Agreement as amended by this Amendment.15. Limitation of Amendment and Affirmation of License Agreement. Except as expressly provided herein, this Amendmentshall not be deemed to be a waiver or modification of any term, condition or covenant of the License Agreement. Any conflict betweenthe terms herein and in the License Agreement shall be governed by the terms of this Amendment. Except as expressly amendedhereby, all terms and conditions set forth in the License Agreement are hereby affirmed by the Parties and shall remain in full force andeffect.16. Incorporation by Reference. The provisions of Sections 11.3.1, 11.4, 11.5, 11.6, 11.7, 11.8, 11.10, 11.11, 11.12, 11.13,11.14, 11.16 and 11.18 of the License Agreement are hereby incorporated by this reference, mutatis mutandis, as if the provisionswere fully set forth herein.[Signature page follows]IN WITNESS WHEREOF, this Amendment is hereby executed by the authorized representatives of the Parties as ofthe date first written above.OPIANT PHARMACEUTICALS, INC. By: /s/ David D. O'Toole Name: David D O'Toole Title: Chief Financial OfficerADAPT PHARMA OPERATIONS LIMITED By: /s/ David Brabazon Name: David Brabazon Title: Chief Financial Officer Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statements on Form S-3 (File No. 333-220976) and Form- S-8 (File Nos. 333-221759and 333-224239) of our report dated March 21, 2019 with respect to the audited consolidated financial statements of Opiant Pharmaceuticals, Inc.included in the Annual Report on Form 10 K for the year ended December 31, 2018.We also consent to the references to us under the heading “Experts” in such Registration Statements./s/ MaloneBailey, LLPwww.malonebailey.comHouston, TexasMarch 21, 2019 EXHIBIT 31.1CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THESECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, Dr. Roger Crystal, Chief Executive Officer of Opiant Pharmaceuticals, Inc., certify that:1. I have reviewed this Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc.; 2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this AnnualReport; 3. Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,particularly during the period in which this Annual Report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Annual Report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; andd)Disclosed in this Annual Report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control overfinancial reporting.Date: March 21, 2019 By:/s/ Dr. Roger Crystal Dr. Roger Crystal Chief Executive Officer EXHIBIT 31.2CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THESECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, David O'Toole, Chief Financial Officer of Opiant Pharmaceuticals, Inc., certify that:1. I have reviewed this Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc.;2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this AnnualReport;3. Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:e)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities,particularly during the period in which this Annual Report is being prepared;f)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;g)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Annual Report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; andh)Disclosed in this Annual Report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):c)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize and report financial information; andd)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control overfinancial reporting.Date: March 21, 2019 By:/s/ David O'Toole David O'Toole Chief Financial Officer EXHIBIT 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc. (the “Company") for the year ended December 31, 2018, as filed with theSecurities and Exchange Commission on the date hereof (the "Report"), Dr. Roger Crystal, as Chief Executive Officer of the Company, hereby certifies,pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 21, 2019 By:/s/ Dr. Roger Crystal Dr. Roger Crystal Chief Executive Officer This certification accompanies each Report pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by theSarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of ss.18 of the Securities Exchange Act of 1934, as amended.A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished tothe Securities and Exchange Commission or its staff upon request. EXHIBIT 32.2 CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K of Opiant Pharmaceuticals, Inc. (the “Company") for the year ended December 31, 2018, as filed with theSecurities and Exchange Commission on the date hereof (the "Report"), David O'Toole as Chief Financial Officer of the Company, hereby certifies, pursuantto 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: March 21, 2019 By:/s/ David O'Toole David O'Toole Chief Financial Officer This certification accompanies each Report pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by theSarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of ss.18 of the Securities Exchange Act of 1934, as amended.A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished tothe Securities and Exchange Commission or its staff upon request.

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