opnt-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to______.

Commission 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.)

233 Wilshire Blvd.

Suite 400,

Santa Monica,

90401

(Address of principal executive offices)

(Zip Code)

(310)-598-5410

(Registrant’s telephone number, including area code)

Indicate 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 1934 during 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 filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		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 or revised 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 Exchange Act). Yes ☐ No ☒

As of May 9, 2022, the registrant had 5,087,015 shares of common stock outstanding.

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, par value $0.001 per share	OPNT	Nasdaq Stock Market LLC

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue”, negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management, any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-K and 8-K, in our press releases, in our presentations, 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 any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

CERTAIN TERMS USED IN THIS REPORT

When this Report uses the words “we,” “us,” “our,” “Opiant,” and the “Company,” they refer to Opiant Pharmaceuticals, Inc. “SEC” refers to the Securities and Exchange Commission.

OPIANT PHARMACEUTICALS, INC.

TABLE OF CONTENTS


PART I— FINANCIAL INFORMATION

Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheet s (unaudited)	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)	6
	Condensed Consolidated Statements of Stockholders Equity (unaudited)	7
	Condensed Consolidated Statements of Cash Flows (unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II— OTHER INFORMATION		29

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31

SIGNATURES		33

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

Opiant Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets


	March 31, 2022		December 31, 2021
Assets	(unaudited)
Current assets
Cash and cash equivalents	$	48,325,444	$	37,853,947
Marketable securities	2,500,089		15,014,750
Accounts receivable	4,453,391		13,327,364
Prepaid and other current assets	3,881,014		2,962,903
Total current assets	59,159,938		69,158,964

Other assets

Property and equipment - net	70,553		78,107
Right of use assets - operating leases	874,620		999,567
Patents and patent applications - net	11,285		11,628
Other non-current assets	202,422		179,532
Total assets	$	60,318,818	$	70,427,798

Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable and accrued expenses	$	5,318,645	$	3,369,848
Accrued salaries and wages	759,385		201,254
Royalty payable	426,257		2,920,148
Deferred revenue	—		16,618
Operating leases	283,320		337,690
Total current liabilities	6,787,607		6,845,558

Long-term liabilities
Operating leases - long term	608,019		673,347
Convertible debt, net of unamortized discount	13,659,946		16,069,085
Total long-term liabilities	14,267,965		16,742,432

Total liabilities	$	21,055,572	$	23,587,990

Stockholders' equity
Common stock; par value $0.001; 200,000,000 shares authorized; 5,079,605 and 4,909,846 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	5,080		4,910
Additional paid-in capital	113,208,236		108,569,988
Accumulated other comprehensive loss	(81,965)		(54,815)
Accumulated deficit	(73,868,105)		(61,680,275)
Total stockholders' equity	39,263,246		46,839,808

Total liabilities and stockholders' equity	$	60,318,818	$	70,427,798

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Opiant Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)


	Three months ended March 31,
	2022		2021
Revenues
Royalty revenue	$	2,193,213	$	4,333,500

Grant and contract revenue	2,276,796		2,053,384
Total revenue	4,470,009		6,386,884

Operating expenses
General and administrative	4,331,950		2,646,329
Research and development	8,823,179		4,088,187
Sales and marketing	2,676,590		997,574
Royalty expense	426,256		979,466
Total operating expenses	16,257,975		8,711,556

Loss from operations	(11,787,966)		(2,324,672)

Other income (expense)
Interest income	5,094		3,199
Interest expense	(420,890)		(536,886)
Gain on foreign exchange	15,932		14,129
Total other income (expense)	(399,864)		(519,558)

Loss before income taxes	(12,187,830)		(2,844,230)

Income tax expense	—		—

Net loss	$	(12,187,830)	$	(2,844,230)

Other comprehensive loss:
Foreign currency translation adjustment	(27,150)		12,501

Comprehensive loss	$	(12,214,980)	$	(2,831,729)

Net loss per share of common stock:
Basic and diluted	$	(2.43)	$	(0.66)

Weighted average shares outstanding used to compute net loss per share:
Basic and diluted	5,015,262		4,282,923

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Opiant Pharmaceuticals, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(unaudited)


	Common Stock			Additional Paid In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance at December 31, 2021	4,909,846	$	4,910	$	108,569,988	$	(61,680,275)	$	(54,815)	$	46,839,808
Return of profit	—	—		5,824		—		—		5,824
Exercise of stock options	7,097	7		91,627		—		—		91,634
Restricted stock issued	31,746	32		(32)		—		—		—
Stock issued from converted debt	130,916	131		2,571,069		—		—		2,571,200
Debt issuance cost associated with debt conversion	—	—		(109,399)		—		—		(109,399)
Stock based compensation	—	—		2,079,159		—		—		2,079,159
Net loss	—	—		—		(12,187,830)		—		(12,187,830)
Foreign currency translation adjustment	—	—		—		—		(27,150)		(27,150)
Balance at March 31, 2022	5,079,605	$	5,080	$	113,208,236	$	(73,868,105)	$	(81,965)	$	39,263,246











Balance at December 31, 2020	4,258,105	$	4,259	$	100,203,979	$	(64,689,065)	$	(26,931)	$	35,492,242
Exercise of stock options	65,962	66		579,553		—		—		579,619
Restricted stock issued	6,527	6		(6)		—		—		—
Stock based compensation	—	—		745,620		—		—		745,620
Net loss	—	—		—		(2,844,230)		—		(2,844,230)
Other comprehensive income - foreign currency translation adjustment	—	—		—		—		12,501		12,501
Balance at March 31, 2021	4,330,594	$	4,331	$	101,529,146	$	(67,533,295)	$	(14,430)	$	33,985,752

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Opiant Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	For the Three Months Ended
	March 31, 2022		March 31, 2021
Cash flows from operating activities
Net loss	$	(12,187,830)	$	(2,844,230)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	7,897		31,472
Amortization of debt discount	52,662		68,392
Non-cash lease expense	104,463		127,708
Stock based compensation	2,079,159		745,620

Change in assets and liabilities:
Accounts receivable	8,873,974		3,301,954
Prepaid and other current assets	(953,736)		553,802
Accounts payable and accrued expenses	2,074,567		613,873
Accrued salaries and wages	454,910		(332,875)
Lease liabilities	(98,812)		(129,196)
Royalty payable	(2,493,892)		(928,583)
Deferred revenue	(16,618)		504,559
Net cash (used in) provided by operating activities	(2,103,256)		1,712,496

Cash flows from investing activities
Maturity (purchase) of marketable securities	12,514,661		(15,108,782)

Net cash (used in) provided by investing activities	12,514,661		(15,108,782)

Cash flows provided by financing activities



Proceeds from stock option exercises	91,634		579,619
Return of profit	5,824		—
Net cash provided by financing activities	97,458		579,619

Effect of foreign currency translation on cash	(37,366)		14,894

Net increase (decrease) in cash and cash equivalents	10,471,497		(12,801,773)
Cash and cash equivalents, beginning of period	37,853,947		48,251,336
Cash and cash equivalents, end of period	$	48,325,444	$	35,449,563

Supplemental disclosure
Interest paid during the period	$	414,963	$	114,521


Supplemental disclosure of non-cash finance transactions
Common stock issued for debt conversion	2,571,200		—
Debt issuance cost associated with debt conversion	109,399		—
Issuance of restricted stock	$	32	$	6

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Opiant Pharmaceuticals, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. Description of Business

Company

Opiant is a specialty pharmaceutical company developing medicines for addiction and drug overdose. The Company developed NARCAN® (naloxone hydrochloride) Nasal Spray (“NARCAN®”), a treatment to reverse opioid overdose. This product was conceived and developed by the Company, licensed to Adapt Pharma 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.

The Company's current pipeline includes medicines in development for Opioid Overdose Reversal (“OOR”), Alcohol Use Disorder (“AUD”), Opioid Use Disorder (“OUD”), and Acute Cannabinoid Overdose (“ACO”). The Company is also pursuing other treatment opportunities within the addiction and drug overdose field.

The Company has not had a bankruptcy, receivership or similar proceeding. The Company is required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the clinical testing and manufacturing and sale of pharmaceutical products.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company's financial position as of March 31, 2022 and December 31, 2021, results of operations for the three months ended March 31, 2022 and 2021, and cash flows for the three months ended March 31, 2022 and 2021. The interim results are not necessarily indicative of the results for any future interim period or for the entire year.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Opiant Pharmaceuticals UK Limited ("Opiant UK"), a company incorporated on November 4, 2016 under the England and Wales Companies Act of 2006. Intercompany balances and transactions are eliminated upon consolidation.

The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2021 included in the Company's Annual Report on Form 10-K filed with the SEC on March 15, 2022.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates included in the financial statements include the valuation of: deferred income tax assets, equity instruments, stock-based compensation, acquired intangibles, and allowances for accounts receivable.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents were approximately $48.3 million and $37.9 million at March 31, 2022 and December 31, 2021, respectively. The Company maintains cash balances at financial institutions insured up to $250 thousand by the Federal Deposit Insurance Corporation. Balances in the UK are insured up to £85 thousand by the Financial Services Compensation Scheme (UK Equivalent). Although the Company’s cash balances exceeded these insured amounts at various

times during the three months ended March 31, 2022, the Company has not experienced any losses on its deposits of cash and cash equivalents for the periods presented.

Earnings (Loss) Per Share

Basic and diluted loss per share is computed by dividing loss attributable to common stockholders by the weighted average number of shares of Common Stock outstanding during the period.

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of shares of Common Stock outstanding during the respective period presented in the Company’s accompanying condensed consolidated financial statements. Fully-diluted earnings (loss) per share is computed similarly to basic income (loss) per share except that the denominator is increased to include the number of Common Stock equivalents (primarily outstanding options and warrants).

The Company excluded the following securities from the calculation of basic and diluted net loss per share as the effect would have been antidilutive.


	For the Three Months Ended March 31,
	2022	2021
Options to purchase common stock	2,744,861	3,142,908
Warrants to purchase common stock	278,800	278,800
Unvested restricted stock	336,305	104,116
Convertible debt	222,332	509,165
Total	3,582,298	4,034,989

Foreign Currency Translation

The functional currency of the Company's wholly-owned subsidiary, Opiant UK is the British Pound, its local currency. Consequently, its assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign currency exchange rates for the period. Adjustments resulting from the translation of the financial statements of Opiant UK, into U.S. dollars, the reporting currency, are excluded from the determination of net loss and are recorded in accumulated other comprehensive loss, a separate component of equity. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Recently Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, ("FASB"), or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its consolidated financial statements.

Note 3. Marketable Securities

The Company invests in debt securities and has the intent and ability to hold until maturity. Therefore, the Company's Securities are classified as held-to-maturity. The Company's debt securities are all U.S. Treasury securities. The investments in debt securities are carried at either amortized cost or fair value. As of March 31, 2022, the Company had a total of $2.5 million of total marketable securities all invested in U.S. Treasury securities, all of which was classified as a short-term asset as the maturity is greater than three months, but less than one year. Any debt securities with original maturities of three months or less are classified as cash equivalents.

Note 4. Accounts Receivable

As of March 31, 2022 and December 31, 2021, the Company had accounts receivable of $4.5 million and $13.3 million respectively, which primarily relates to royalty revenue from sales of NARCAN® and billings to BARDA.

Note 5. Prepaid Expenses and Other Current Assets

As of March 31, 2022, the Company had prepaid expenses and other current assets of approximately $3.9 million. The Company's prepaid expenses are primarily for advance research and development payments, insurance, software licenses,

prepaid rent, and other amounts that relate to future periods of service. Other current assets primarily consist of such items as other receivables and security deposits.

Note 6. Leases

On January 1, 2019, the Company adopted a new accounting standard, Topic 842, that amends the guidance for the accounting and reporting of leases. Leases with terms of 12 months or less are expensed on a straight-line basis over the term and are not recorded in the Company's Condensed Consolidated Balance Sheets.

The Company had two operating leases during the period ended March 31, 2022. In accordance with the guidance of Topic 842, the two leases which are classified as operating leases are included in the Company's Condensed Consolidated Balance Sheet as of March 31, 2022. The Company's two operating leases do not include options to renew, do not contain residual value guarantees, do not have variable lease components, or impose significant restrictions or covenants.

Right of use assets, "ROU assets", represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments over the respective lease term, with the ROU asset adjusted for deferred rent liability. Lease expense is recognized on a straight line basis over the lease term. As the implicit rate on the leases is not determinable, the Company used an estimated incremental borrowing rate of 8.8% as the discount rate to determine the present value of lease payments.

The weighted average discount rate used was 8.8% and the weighted average remaining lease term is 4.02 years at March 31, 2022. The ROU asset and corresponding operating lease liability recognized at lease inception was $1.2 million all of which was recorded in 2021.

The following table summarizes information related to the Company's two operating leases and are included in the Company's Balance Sheet as of March 31, 2022.


Balance Sheet descriptions	March 31, 2022
Assets:	(in thousands)
Right of use assets - operating leases	$	875
Liabilities:
Operating leases - current	283
Operating leases - long term	608
Total lease liabilities:	$	891

The following table summarizes the components of operating lease cost for the three months ended March 31, 2022:


Lease costs, (in thousands)	Three months ended March 31, 2022
Operating expenses lease costs	$	97

As of March 31, 2022, future minimum operating leases payments related to the Company’s operating lease liabilities were as follows:


(in thousands)	March 31, 2022

2022	$	230
2023	225
2024	236
2025	262
2026	110
Total lease payments	1,063
Less imputed interest	(172)
Present value of operating lease liabilities	$	891

Note 7. Other Non-Current Assets

As of March 31, 2022 and December 31, 2021, the Company had non-current prepaid expenses approximately $0.2 million. The Company's non-current assets are primarily for lease deposits.

Note 8. Revenue

The Company's primary source of revenue is from royalty payments received from NARCAN® net sales by EBS. During the three months ended March 31, 2022 the Company recorded revenue of $2.2 million, related to its agreement with EBS.

On September 19, 2018, the Company entered into a contract with the Biomedical Advanced Research and Development Authority (“BARDA”), which is part of the U.S. Health and Human Services Office of the Assistant Secretary for Preparedness and Response, to accelerate the Company’s development of OPTN003, its lead product candidate. OPTN003, nasal nalmefene, is a potent, long-acting opioid antagonist currently in development for the treatment of opioid overdose. The contract will provide potential funding up to a maximum of approximately $10.3 million and cover activities related to a potential New Drug Application submission for OPTN003 with the Food and Drug Administration. BARDA has awarded approximately $8.7 million of the contract through September 30, 2022, with the remaining $1.6 million balance expected to be funded, subject to satisfactory project progress, availability of funds and certain other conditions. During the three months ended March 31, 2022 the Company recognized revenue of $2.3 million related to this contract.

Deferred revenue

On April 17, 2018, the Company was awarded a grant of approximately $7.4 million from the National Institutes of Health’s National Institute on Drug Abuse, ("NIDA"). The grant provides the Company with additional resources for the ongoing development of OPNT003. The Company has been awarded the entire $7.4 million through the period ending March 31, 2022. Government grants are agreements that generally provide cost reimbursement for certain types of expenditures in return for research and development activities over a contractually defined period. The Company recognized 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 three months ended March 31, 2022, the Company recognized revenue of $17 thousand related to this grant.

As of March 31, 2022, the Company had recognized all remaining deferred revenue and the contract with NIDA was determined to be complete.

The following is a summary of the Company’s deferred revenue activity as of March 31, 2022:


(in thousands)	NIDA Grant	Total




Balance as of December 31, 2021		$	17	$	17

Additions to deferred revenue		—		—
Recognized as revenue		(17)		(17)
Balance as of March 31, 2022		$	—	$	—

Note 9. Royalty Payable

The Company entered into various agreements and subsequently received funding from investors for use by the Company for the research and development of its Opioid Overdose Reversal Treatment Product ("OORTP"). In exchange for this funding, the Company agreed to provide investors with interest in the OORTP net profit generated from NARCAN® sales by EBS into perpetuity. As of March 31, 2022 and December 31, 2021, the Company recorded a royalty payable of $0.4 million and $2.9 million, respectively.

Note 10. Long Term Debt

As of March 31, 2022 and December 31, 2021 the Company had long term debt (net of amortization discount) of $13.7 million and $16.1 million, respectively. There have been no changes to the maturity or other conditions of the debt for the three months ended March 31, 2022. During the three months ended March 31, 2022 approximately $2.6 million of debt was converted to Common Stock at a conversion price of $19.64 per share.

Note 11. Stockholders' Equity

Common Stock

During the three months ended March 31, 2022, the Company issued 7,097 shares of Common Stock as a result of stock option exercises, and received net cash proceeds of approximately $0.1 million.

Equity Plans

On September 8, 2017, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”), at which time the 2017 Long-Term Incentive Plan ("2017 Plan") was approved by stockholder vote. The 2017 Plan allows the Company to grant both incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”) to purchase a maximum of 400,000 shares of the Company's Common Stock. Under the terms of the 2017 Plan, ISOs may only be granted to Company employees and directors, while NSOs may be granted to employees, directors, advisors, and consultants. The Board has the authority to determine to whom options will be granted, the number of options, the term, and the exercise price. Options are to be granted at an exercise price not less than fair value for an ISO or an NSO. The vesting period is normally over a period of four years from the vesting date. The contractual term of an option is no longer than 10 years. The 2017 Plan also allows the Company to issue restricted stock.

As provided in the 2017 Plan, on January 1, 2022 the number of shares available for issuance was increased by 4% of the outstanding stock as of December 31, 2021, which represents an increase of 196,394 shares. As of March 31, 2022, the Company had 105,515 shares available for future issuance under the 2017 Plan.

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

On July 8, 2021, the Board of Directors of the Company adopted the 2021 Inducement Equity Incentive Plan (the “Inducement Plan”) and, subject to the adjustment provisions of the Inducement Plan, reserved 100,000 shares of the Company’s Common Stock for issuance pursuant to equity awards granted under the Inducement Plan. On December 9, 2021, the Board of Directors of the Company amended the Inducement Plan to reserve an additional 100,000 shares of the Company’s Common Stock under the Inducement Plan.

Pre-2017 Non-Qualified Stock Options

As of December 31, 2021, the Company had outstanding Pre-2017 Non-Qualified Stock Options to purchase, in the aggregate, 1,950,500 shares of the Company's Common Stock. During the three months ended March 31, 2022, the Company did not grant any Pre-2017 Non-Qualified Stock Options.

Stock option activity for the Pre-2017 Non-Qualified Stock Options for the three months ended March 31, 2022 is presented in the table below:


	Number of Shares	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2021	1,950,500	$	7.17	3.4	$	51,602,190
Exercised	—	—
Forfeited	—	—
Outstanding at March 31, 2022	1,950,500	$	7.17	3.15	$	27,786,585

A summary of the status of the Company’s non-vested Pre-2017 Non-Qualified Stock Options as of March 31, 2022 is presented below:


	Number of Options	Weighted Average Grant Date Fair Value

Vested at March 31, 2022	1,950,500	$	7.17

During the three months ended March 31, 2022 and 2021, the Company did not recognize any non-cash expense related to Pre-2017 Non-Qualified Stock Options, and there is no further compensation expense to be recognized for the Pre-2017 Non-Qualified Stock Options.

The 2017 Plan

During the three months ended March 31, 2022, the Company did not grant any options under the 2017 Plan.

Stock option activity for options granted under the 2017 Plan during the three months ended March 31, 2022 is presented in the table below:


	Number of Options Outstanding	Weighted-average Exercise Price		Weighted-average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)





Balance at December 31, 2021	759,058	$	19.61	7.31	$	10,997,428

Granted	—	$	—
Exercised	(7,046)	$	19.49
Forfeited	(14,151)	$	12.60
Balance at March 31, 2022	737,861	$	19.79	7.02	$	3,897,756

A summary of the status of the Company’s vested and non-vested options granted under the 2017 Plan as of March 31, 2022 is presented in the following table:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share




Vested at March 31, 2022	535,326	$	21.42
Non-vested at March 31, 2022	202,535	$	9.59

During the three months ended March 31, 2022 and 2021, the Company recognized approximately $0.2 million and $0.6 million, respectively of non-cash expense related to options granted under the 2017 Plan. As of March 31, 2022, there was approximately $0.7 million of unrecognized compensation costs related to non-vested stock options that were granted under the 2017 Plan.

Restricted Stock Activity

The following summarizes the restricted stock unit activity under the Company's 2017 Plan during the three months ended March 31, 2022:


	Number of Shares	Weighted Average Fair Value Per Share
Restricted stock outstanding and unvested at December 31, 2021	104,416	$	12.57
Restricted stock granted	135,475	$	32.85
Restricted stock vested	(31,746)	$	12.45
Restricted stock forfeited	(6,925)	$	24.76
Restricted stock outstanding and unvested at March 31, 2022	201,220	$	12.15

One-third (33.33%) of the restricted stock units will vest on the one year anniversary of the vesting commencement date, and twenty-five percent (25%) and one-third of the restricted stock units will vest annually thereafter on the same day as the vesting commencement date. During the three months ended March 31, 2022 and 2021 the Company recognized approximately $0.8 million and $0.2 million, respectively of non-cash expense related to restricted stock units. As of March 31, 2022, there was $4.1 million of total unrecognized compensation cost related to restricted stock units.

Performance Stock Unit Activity

During the three months ended March 31, 2022, the Company granted 80,735 performance stock units to certain employees. The performance stock units vest upon meeting various performance criteria established by the Compensation and Human Capital Committee of the Board of Directors.

Performance stock unit activity granted under the 2017 Plan during the three months ended March 31, 2022 is presented in the table below:


	Number of Shares	Weighted Average Fair Value Per Share
Performance stock outstanding and unvested at December 31, 2021	—	$	—
Performance stock granted	80,735	$	32.85
Performance stock vested	—	$	—
Performance stock forfeited	—	$	—
Performance stock outstanding and unvested at March 31, 2022	80,735	$	32.85

During the three months ended March 31, 2022, the Company recognized approximately $0.9 million of non-cash expense related to performance stock units under the 2017 Plan. As of March 31, 2022, there was $1.8 million of total unrecognized compensation cost related to performance stock units under the 2017 Plan.

Inducement Plan

During the three months ended March 31, 2022, the Company did not grant any options under the Inducement Plan.

Stock option activity for options granted under the Inducement Plan during the three months ended March 31, 2022 is presented in the table below:


	Number of Options Outstanding	Weighted-average Exercise Price		Weighted-average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)





Balance at December 31, 2021	56,500	$	16.41	9.55	$	973

Granted	—	$	—
Exercised	—	—
Forfeited	—	$	—
Balance at March 31, 2022	56,500	$	16.41	9.3	$	283

During the three months ended March 31, 2022, the Company recognized approximately $0.1 million of non-cash expense related to options granted under the Inducement Plan. As of March 31, 2022, there was approximately $0.3 million of total unrecognized compensation cost related to the non-vested stock options that were granted under the Inducement Plan.

Restricted Stock Activity

The following summarizes the restricted stock activity under the Inducement Plan during the three months ended March 31, 2022:


	Number of Shares	Weighted Average Fair Value Per Share
Restricted stock outstanding and unvested at December 31, 2021	49,800	$	26.98
Restricted stock granted	4,550	$	26.16
Restricted stock vested	—	$	—
Restricted stock forfeited	—	$	—
Restricted stock outstanding and unvested at March 31, 2022	54,350	$	26.91

During the three months ended March 31, 2022 the Company recognized approximately $0.2 million of non-cash expense related to restricted stock units granted under the Inducement Plan. As of March 31, 2022, there was $1.1 million of total unrecognized compensation cost related to restricted stock units granted under the Inducement Plan.

Warrants

During the three months ended March 31, 2022, the Company did not issue any warrants.

Warrant activity for the three months ended March 31, 2022 is presented in the table below:


	Number of Shares	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2021	278,800	$	9.72	2.51	$	6,665,644

SEC Form 10-Q filed by Opiant Pharmaceuticals Inc.