Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

Stockholders' Equity
9 Months Ended
Sep. 30, 2012
Stockholders' Equity [Abstract]  
Stockholders' Equity

8. Stockholders’ Equity

Common Stock

On September 12, 2012, we entered into a Stock Purchase and Option Agreement (the “Agreement”) with an affiliate of the party with which we have been engaged in negotiations for a license for Probuphine®. Pursuant to the Agreement, we sold 3,400,000 shares of our common stock for an aggregate purchase price of $4.25 million, or $1.25 per share, and agreed to an exclusive option period for execution of the proposed license agreement. In the event that for any unforeseen reason the license agreement is not executed prior to the expiration of the option period (December 31, 2012), we will be free to negotiate and complete a license arrangement with any third party. The $1.7 million premium, or $0.50 per share, has been allocated to the fair value of the option agreement and has been recorded as deferred revenue at September 30, 2012.

On April 9, 2012, we entered into subscription agreements with certain institutional investors for the purchase and sale, in a registered direct offering, of (i) 6,517,648 shares of our common stock (the “Shares”), (ii) 6,517,648 Series A Warrants and (iii) 6,517,648 Series B Warrants for gross proceeds of $5,540,000 (the “Offering”). The closing of the sale of the Shares and Warrants occurred on April 13, 2012 and April 18, 2012. As a result of the Offering, and pursuant to the terms of the Deerfield Warrants, the exercise price of the Deerfield Warrants (See Note 7, “Warrant Liabilities” for further discussion) was adjusted to $1.25 per share.

We recorded the gross proceeds from the offering, net of (i) issuance costs of $0.5 million and (ii) the fair value of the warrants of $2.9 million (see Note 7, “Warrant Liabilities”), as common stock paid-in in the accompanying condensed balance sheets.

In September 2012, Series B Warrants to purchase 1,133,824 shares of common stock were exercised resulting in gross proceeds of approximately $964,000.