Adial Pharmaceuticals Enters Purchase Agreement with Alumni Capital; Allows Sale of Up to $10 Million in Common Stock

Adial Pharmaceuticals, Inc. recently announced entering into a Purchase Agreement with Alumni Capital LP, providing the company with the right to sell up to $10 million of newly issued shares at its discretion. The agreement, dated December 13, 2024, allows the sale of shares of the company’s common stock, par value $0.001 per share (Common Stock), subject to certain conditions and limitations.

Under the terms of the Purchase Agreement, sales of Common Stock over the period ending on December 31, 2026 or upon reaching the agreed Investment Amount are solely the option of Adial Pharmaceuticals. The Company may direct Alumni Capital to purchase shares of Common Stock at a purchase price per share set at ninety-seven percent (97%) of the lowest daily dollar volume-weighted average price during specific trading days.

Importantly, Adial Pharmaceuticals has the discretion to control the timing and amount of shares sold to Alumni Capital. Market conditions, trading price of the Common Stock, and funding requirements will guide the sale decisions, with the Company indicating intentions to utilize proceeds from the sales for strategic opportunities, staff augmentation, working capital, and corporate needs.

The Purchase Agreement caps the issuance of shares to Alumni Capital at 19.99% of Common Stock outstanding, subject to stockholder approval if exceeded, with a minimum price floor set at $1.09 per share. The Company is precluded from issuing shares resulting in Alumni Capital owning more than 4.99% of the Common Stock.

In exchange for Alumni Capital’s commitment, Adial Pharmaceuticals issued 68,807 shares of Common Stock as Commitment Shares. Additional commitments require the issuance of extra shares as a fee, determined as a percentage of the increased amount based on market prices.

Furthermore, the company agreed to register these shares under the Securities Act of 1933, providing customary provisions, representations, warranties, and indemnification obligations between parties. Notably, Adial Pharmaceuticals has the right to terminate the Purchase Agreement upon written notice to Alumni Capital.

Moreover, a Termination Agreement with Alumni Capital effectively terminated a previous Purchase Agreement dated May 31, 2023, providing insights into the Company’s ongoing financial strategies and partnerships.

These transactions have been conducted under Regulation D of the Securities Act, exempting the shares from registration requirements, with Alumni Capital confirmed as an accredited investor acquiring shares for investment purposes only.

The Current Report on Form 8-K filed by Adial Pharmaceuticals, Inc. includes the Purchase Agreement, Termination Agreement, and relevant exhibits for interested stakeholders’ reference.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Adial Pharmaceuticals’s 8K filing here.

Adial Pharmaceuticals Company Profile

Adial Pharmaceuticals, Inc, a clinical-stage biopharmaceutical company, focuses on the development of therapeutics for the treatment or prevention of addiction and related disorders. Its lead product is AD04, a serotonin-3 antagonist, which is in Phase III clinical trial for the treatment of alcohol use disorder.