Adial Pharmaceuticals Announces Inducement Grant under Nasdaq Listing Rule 5635(c)(4)

The employee option vests over four years, with each installment dependent on continued service.

Rhea-AI Summary

Adial Pharmaceuticals (ADIL) granted a new employee an option to purchase 155,446 common shares as an inducement to join the company.

The grant took effect September 25, 2026, with a $4.22 exercise price, equal to that day's closing share price, and a ten-year term. It vests over four years: 25% on the first anniversary and the remainder in equal monthly installments, subject to continued service at each vesting date. The Compensation Committee approved the award outside Adial's equity incentive plans under Nasdaq Listing Rule 5635(c)(4), an employment-inducement exception to shareholder approval that requires public announcement.

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Hollow bars mark forward-looking points. How the balance works

Positive

• None.

Negative

• Moderate point. Forward-looking: it has not happened yet and may not happen.Employee option for 155,446 common shares at $4.22 per share creates potential dilution upon exercise.

News Explained

Adial granted an option to buy 155,446 common shares; the grant itself is not a share issuance, but exercise could increase the share count and reduce existing holders’ percentage ownership, subject to the stated vesting and exercise terms.

Key Figures

Option shares: 155,446 shares Exercise price: $4.22 per share Option term: 10 years +2 more

Option shares

155,446 shares

Inducement award to a new employee

Exercise price

$4.22 per share

Closing price on September 25, 2026

Option term

10 years

Inducement award

Vesting period

Four years

Subject to continued service through applicable vesting dates

Initial vesting

25%

Vests on the first anniversary of the grant date

Key Terms

exercise price, nasdaq listing rule 5635(c)(4)

2 terms

exercise price financial

"The option award has an exercise price of $4.22 per share"

The exercise price is the fixed amount at which you can buy or sell an asset, like a stock, when using an options contract. It matters because it helps determine whether exercising the option will be profitable or not, depending on the current market price. Think of it as the set price you agree on today to buy or sell later.

nasdaq listing rule 5635(c)(4) regulatory

"in reliance on the employment inducement exception to shareholder approval"

NASDAQ Listing Rule 5635(c)(4) is a rule that requires a company to get approval from its shareholders before selling a large amount of its shares, usually over 20%. This helps protect investors by making sure the company doesn't flood the market with new shares without their say, which could lower the stock's value.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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GLEN ALLEN, Va., Sept. 30, 2026 (GLOBE NEWSWIRE) -- Adial Pharmaceuticals, Inc. (Nasdaq: ADIL) (“Adial” or the “Company”) today announced that the Company’s Compensation Committee has granted a new employee stock option to purchase 155,446 shares of common stock as an inducement to such person becoming an employee of the Company.

The option award has an exercise price of $4.22 per share, the closing price of the Company’s common stock on September 25, 2026, the effective date of grant and has a ten-year term. The option award will vest over four years, with 25% vesting on the first anniversary of the grant date and the remainder vesting in equal monthly installments thereafter, subject to the recipient’s continued service through each applicable vesting date.

The above grant was approved by the Company’s Compensation Committee and was made as an inducement material to the employee entering into employment with Adial. The grant was made outside of the Company’s equity incentive plans and in reliance on the employment inducement exception to shareholder approval provided under Nasdaq Listing Rule 5635(c)(4), which requires public announcement of inducement awards.

About Adial Pharmaceuticals, Inc.

Adial Pharmaceuticals, a clinical-stage biopharmaceutical company, has historically focused on the development of treatments for addictions and related disorders. In June 2026, the Company acquired Azora Therapeutics, a biopharmaceutical company focused on treating autoimmune diseases, including ulcerative colitis (“UC”). Following the acquisition of Azora, the Company’s focus has shifted to the treatment of serious inflammatory diseases, and its lead program is AT177, which is being studied for the treatment of UC. AT177 is a fully synthetic, patented, oral AhR agonist designed to restore mucosal immune homeostasis at the site of disease with minimal systemic exposure. Its active ingredient is a prodrug of indirubin, the most potent AhR agonist within indigo naturalis, a botanical extract with best-in-category clinical efficacy in UC. In preclinical studies, AT177 demonstrated robust local colonic AhR activation with markedly limited systemic exposure. AT177 is currently in IND-enabling studies, with an investigational new drug (“IND”) filing planned for the first half of 2027, initiation of a Phase 1a single- and multiple-ascending-dose (“SAD/MAD”) clinical trial planned to commence in the second half of 2027, followed by a Phase 1b proof-of-concept study in UC patients. Additional information is available at www.adial.com.

Cautionary Note Regarding Forward-Looking Statements

This communication contains certain “forward-looking statements” within the meaning of the U.S. federal securities laws. Such statements are based upon various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. The forward-looking statements include, but are not limited to, statements regarding the vesting of the inducement awards and IND filing planned for the first half of 2027, initiation of a Phase 1a single- and multiple-ascending-dose clinical trial planned to commence in the second half of 2027, followed by a Phase 1b proof-of-concept study in UC patients. Any forward-looking statements included herein reflect the Company’s current views, and they involve certain risks and uncertainties, including, among others, the Company’s ability to pursue its regulatory strategy; the Company’s ability to obtain regulatory approvals for commercialization of product candidates or to comply with ongoing regulatory requirements; the Company’s ability to develop strategic partnership opportunities and maintain collaborations; the Company’s ability to obtain or maintain the capital or grants necessary to fund its research and development activities; the Company’s ability to complete clinical trials on time and achieve desired results and benefits as expected; regulatory limitations relating to the Company’s ability to promote or commercialize its product candidates for specific indications; acceptance of the Company’s product candidates in the marketplace and the successful development, marketing or sale of its products; the Company’s ability to maintain its license agreements; the continued maintenance and growth of the Company’s patent estate and its ability to retain its key employees or maintain the Company’s Nasdaq listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K filed with the Securities and Exchange Commission. These risks should not be construed as exhaustive and should be read together with the other cautionary statements contained in such reports. Any forward-looking statement speaks only as of the date on which it was initially made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.

Contact:

Mike Moyer
Managing Director,
LifeSci Advisors, LLC
Phone: (617) 328-4326
Email: mmoyer@lifesciadvisors.co

FAQ

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What are the terms of Adial Pharmaceuticals' employee inducement option?

The option covers 155,446 common shares at an exercise price of $4.22 per share and has a ten-year term. Effective September 25, 2026, it vests over four years, with 25% vesting on the first anniversary and the remainder in equal monthly installments, subject to continued service.