[8-K] Adial Pharmaceuticals, Inc Reports Material Event

Rhea-AI Filing Summary

Adial Pharmaceuticals, Inc. (ADIL) reported the completion of a best-efforts public offering on 18 June 2025 that generated gross proceeds of approximately $3.6 million. The transaction combined newly issued common shares, pre-funded warrants and two new warrant series, materially increasing the company’s potential fully-diluted share count.

Key terms of the offering

• 5,341,200 new common shares and 5,758,800 pre-funded warrants were sold. Each share or pre-funded warrant unit was paired with one Series D and one Series E warrant.
• Pricing: $0.3251 per common share unit; $0.3241 per pre-funded unit.
• Aggregate securities created: up to 11,100,000 Series D warrant shares (exercise price $0.35; 5-year life) and 8,325,000 Series E warrant shares (exercise price $0.35; 18-month life).
• Pre-funded warrants have a de minimis $0.001 exercise price and no expiration; all warrants include customary anti-dilution and cashless-exercise features and a 4.99%/9.99% ownership cap.
• The securities were registered on Form S-1 (File No. 333-287826) declared effective 16 June 2025.

Use of proceeds: The company intends to deploy the net funds for working capital and general corporate purposes.

Placement & lock-ups: A.G.P./Alliance Global Partners acted as exclusive placement agent, earning 7.0 % of gross proceeds (less a 3.5 % credit on tail-list investors) plus a 1.0 % management fee and up to $75,000 in expense reimbursement. The purchase and placement agreements restrict additional equity issuances for 30 days (general) and 60 days (ATM/variable rate), with limited exceptions.

Warrant amendments: Concurrently, the exercise price on existing Series B-1 (2,482,270 shares) and Series C-1 (4,025,000 shares) warrants was reduced to $0.35. Expirations were extended to 17 Jun 2030 (B-1) and 17 Dec 2026 (C-1), subject to future shareholder approval obligations.

Investor impact

• The raise strengthens near-term liquidity but is modest relative to the potential issuance of up to 30 million additional shares, implying significant dilution.
• Common warrant exercise is conditional on shareholder approval to be secured within 120 days; failure to obtain approval could delay additional dilution or cash inflow.
• The repricing and term extension of prior warrants increases the likelihood of further share issuance at $0.35.

Overall, the 8-K details substantial low-priced equity and warrant issuance that improves cash resources but materially increases future dilution risk.

Positive

• $3.6 million gross proceeds enhance near-term liquidity and fund working-capital needs.
• Warrants priced at $0.35, a premium to unit offering price, providing potential additional capital if shares appreciate.
• Placement and purchase agreements impose 30-60 day issuance restrictions, temporarily limiting further dilution.
• Registration on Form S-1 enables immediate tradability, facilitating faster capital access if warrants are exercised.

Negative

• Potential issuance of 30+ million shares (new + warrants) implies significant dilution for existing shareholders.
• Offering priced at $0.3251, indicating investor discount and probable pressure on secondary market price.
• Repricing and term extension of prior warrants to $0.35 entrenches low valuation and increases dilution likelihood.
• Net proceeds after ~8 % fees and expenses are modest relative to dilution, raising capital-efficiency concerns.
• Common warrant exercise depends on stockholder approval—uncertainty may overhang the shares.

Insights

Financial Analyst

TL;DR (25 words)

Raises $3.6 m cash, extends runway, but massive warrant overhang and discounted pricing create dilution headwinds; overall liquidity positive, valuation pressure likely.

The $3.6 million gross proceeds bolster Adial’s working-capital position, important given its clinical-stage cash burn. However, issuing >30 million potential shares at ~$0.35 dramatically enlarges the fully-diluted base versus today’s trading float, pressuring per-share valuations. Lock-ups are brief, leaving room for additional capital needs later in 2025. Conditional warrant exercisability does provide a near-term shareholder-approval gate, but repricing prior Series B-1/C-1 warrants to the same $0.35 level aligns all warrants at a single strike, simplifying future capital structure yet intensifying dilution risk. Net effect is liquidity neutral to slightly negative for existing shareholders: cash cushion up, ownership percentage down. Rating: neutral.

Equity Capital Markets Specialist

TL;DR (25 words)

Deeply discounted raise signals limited market appetite; proceeds small against potential dilution, warrant repricing undermines equity value—clearly shareholder-dilutive.

Pricing below $0.33 suggests constrained demand; gross proceeds equal roughly 11 % of implied market cap yet could more than double outstanding shares. The 7 % placement fee plus 1 % management fee drains roughly $288 k before other costs, raising net proceeds efficiency concerns. Repricing old warrants to $0.35 and extending maturities is a concession to investors that entrenches low pricing. Anti-dilution clauses and Black-Scholes buy-back rights add structural complexity and potential cash liabilities in a change-of-control event. From an ECM lens the transaction was necessary, but highly dilutive and value-destructive in the near term.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): June 16, 2025

Adial Pharmaceuticals, Inc.

(Exact name of registrant as specified in charter)

Delaware		001-38323		82-3074668
(State or other jurisdiction  of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

4870 Sadler Road, Ste 300

Glen Allen, VA 23060

(Address of principal executive offices and zip code)

(804) 487-8196

(Registrant’s telephone number including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each  class		Trading Symbols		Name of each exchange on which registered
Common Stock, par value $0.001 per share		ADIL		The Nasdaq Stock Market LLC (Nasdaq Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark 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. ☐

Item 1.01. Entry into a Material Definitive Agreement.

On June 18, 2025 (the “Closing Date”), Adial Pharmaceuticals, Inc. (the “Company”) consummated a best efforts offering (the “Offering”) of (i) 5,341,200 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), (ii)  pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 5,758,800 shares of Common Stock (the “Pre-Funded Warrant Shares”), (iii) Series D warrants (the “Series D Warrants”) to purchase up to an aggregate of 11,100,000 shares of Common Stock (the “Series D Warrant Shares”), (iv) Series E warrants (the “Series E Warrants” and, together with the Series D Warrants, the “Common Warrants”) to purchase up to an aggregate of 8,325,000 shares of Common Stock (the “Series E Warrant Shares” and, together with the Series D Warrant Shares, the “Common Warrant Shares”). Each Share or Pre-Funded Warrant was sold together with one Series D Warrant and one Series E Warrant. The combined public offering price for each Share and accompanying Common Warrants was $0.3251. The combined public offering price for each Pre-Funded Warrant and accompanying Common Warrants was $0.3241.

The aggregate gross proceeds from the Offering were approximately $3.6 million, before deducting placement agent fees and other offering expenses. The Company intends to use the proceeds of the Offering primarily for working capital and other general corporate purposes.

The Securities Offered

Each Pre-Funded Warrant is immediately exercisable for one (1) Pre-Funded Warrant Share at an exercise price of $0.001 per share and will remain exercisable until such Pre-Funded Warrant is exercised in full.

The Common Warrants have an exercise price of $0.35 per Common Warrant Share and will be exercisable beginning on the effective date (the “Initial Exercise Date”) of stockholder approval of the issuance of the Common Warrant Shares (the “Warrant Stockholder Approval”). The Series D Warrants will expire on the 5-year anniversary of the Initial Exercise Date and the Series E Warrants will expire on the 18-month anniversary of the Initial Exercise Date.

The Shares, Pre-Funded Warrants and accompanying Common Warrants were issued separately.

The respective exercise prices of the Common Warrants and the Pre-Funded Warrants and number of Pre-Funded Warrant Shares and Common Warrant Shares will be adjusted in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events. In the event of a fundamental transaction, as described in the Pre-Funded Warrants and the Common Warrants, the holders of the Pre-Funded Warrants and the Common Warrants will be entitled to receive upon exercise thereof the kind and amount of securities, cash or other property that the holders would have received had they exercised the Pre-Funded Warrants or the Common Warrants immediately prior to such fundamental transaction. In addition, in certain circumstances, upon a fundamental transaction, a holder of Common Warrants will have the right to require us to repurchase its Common Warrants at the Black Scholes Value; provided, however, that, if the fundamental transaction is not within the Company’s control, including not approved by the Company’s board of directors, then the holder shall only be entitled to receive the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the Common Warrant, that is being offered and paid to the holders of common stock in connection with the fundamental transaction.

The Pre-Funded Warrants and the Common Warrants may be exercised on a cashless basis if at the time of exercise thereof there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Pre-Funded Warrant Shares or Common Warrant Shares, as applicable, to the holder.

A holder of Common Warrants or Pre-Funded Warrants (together with its affiliates) may not exercise any portion of such Common Warrants or Pre-Funded Warrants to the extent that the holder would own more than 4.99% (or 9.99%, at the election of the holder) of the outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the amount of beneficial ownership of outstanding shares after exercising the holder’s Common Warrants or Pre-Funded Warrants up to 9.99% of the number of the shares of Common Stock outstanding immediately after giving effect to the exercise.

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The Shares, the Common Warrants, the Common Warrant Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares were offered and sold by the Company pursuant to the Company’s Registration Statement on Form S-1, as amended (File No. 333-287826), filed by the Company with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended, that became effective on June 16, 2025.

The foregoing does not purport to be a complete description of the Series D Warrants, the Series E Warrants or the Pre-Funded Warrants, and is qualified in its entirety by reference to the full text of each of such document, which are filed as Exhibits 4.1, 4.2, and 4.3 respectively, to this Current Report on Form 8-K (this “Form 8-K”) and incorporated herein by reference.

The Securities Purchase Agreement

In connection with the Offering, on June 17, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors, pursuant to which the Company agreed that neither it nor any of its subsidiaries will effect or enter into an agreement to effect any issuance of shares of Common Stock or Common Stock equivalents for a period of thirty (30) days, nor directly or indirectly offer to sell, sell, grant any option to sell or otherwise dispose of shares of Common Stock or any securities convertible into, exercisable or exchangeable for its shares of Common Stock in any “at-the-market,” continuous equity, equity lines, or variable rate transaction, for a period of sixty (60) days after the Closing Date of the Offering, provided that the foregoing shall not apply, following the thirty-first (31st) day anniversary of the Closing Date, to the entry into and/or issuance of shares of Common Stock (i) in an “at-the-market” facility with the Placement Agent (as defined below) or (ii) pursuant to the Equity Purchase Agreement, dated December 13, 2024, by and between the Company and Alumni Capital LP. The Purchase Agreement also provides that the Company will hold an annual or special meeting of stockholders on or prior to the date that is one hundred twenty (120) days following the Closing Date for the purpose of obtaining the Warrant Stockholder Approval, and that, if the Company does not obtain the Warrant Stockholder Approval at the first meeting, the Company shall call a meeting every ninety (90) days thereafter to seek the Warrant Stockholder Approval until the earlier of the date on which the Warrant Stockholder Approval is obtained or the Common Warrants are no longer outstanding.

The foregoing does not purport to be a complete description of the Purchase Agreement and is qualified in its entirety by reference to the full text of such document, which is filed as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.

The Placement Agency Agreement

On June 16, 2025, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with A.G.P./Alliance Global Partners (the “Placement Agent”), pursuant to which the Placement Agent agreed to serve as the exclusive placement agent for the Company, on a “reasonable best efforts” basis, in connection with the Offering. The Company paid the Placement Agent an aggregate fee equal to 7.0% of the gross proceeds raised in the Offering, provided that the Placement Agent credit the Company 3.5% of the gross proceeds raised from investors appearing on a tail fee list with a separate broker-dealer. In addition, the Company paid the Placement Agent a management fee equal to 1.0% of the gross proceeds raised in the Offering. Further, the Company agreed to reimburse the Placement Agent up to an aggregate of $75,000 for out-of-pocket accountable legal expenses and other non-accountable expenses.

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Each of the Placement Agency Agreement and the Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, the Placement Agent, or the purchasers in the Offering, as the case may be, other obligations of the parties and termination provisions. In addition, pursuant to the terms of the Placement Agency Agreement, the Company and its executive officers and directors have entered into agreements providing that the Company (for a period of thirty (30) days from the Closing Date) and each such person (for a period of thirty (30) days from the Closing Date) may not, subject to customary exceptions, offer, issue, sell, transfer or otherwise dispose of the Company’s securities without the prior written consent of the Placement Agent. The Placement Agency Agreement also provides that neither the Company nor any of its subsidiaries will effect or enter into an agreement to effect any issuance of shares of Common Stock or Common Stock equivalents for a period of thirty (30) days, nor directly or indirectly offer to sell, sell, grant any option to sell or otherwise dispose of shares of Common Stock or any securities convertible into, exercisable or exchangeable for its shares of Common Stock in any “at-the-market,” continuous equity, equity lines, or variable rate transaction, for a period of sixty (60) days after the Closing Date of the Offering, provided that the foregoing shall not apply, following the thirty-first (31st) day anniversary of the Closing Date, to the entry into and/or issuance of shares of Common Stock (i) in an “at-the-market” facility with the Placement Agent (as defined below) or (ii) pursuant to the Equity Purchase Agreement, dated December 13, 2024, by and between the Company and Alumni Capital LP.

The foregoing does not purport to be a complete description of the Placement Agency Agreement and is qualified in its entirety by reference to the full text of such document, which is filed as Exhibit 1.1 to this Form 8-K and incorporated herein by reference.

Amendments to Series B-1 Warrants and Series C-1 Warrants

On June 17, 2025, the Company entered into an amendment agreement (the “Warrant Amendment”) with the holder of certain existing warrants to purchase Common Stock (the “Holder”), consisting of (i) Series B-1 warrants to purchase up to 2,482,270 shares of Common Stock (the “Series B-1 Warrants”) and (ii) Series C-1 warrants to purchase up to 4,025,000 shares of Common Stock (the “Series C-1 Warrants” and, together with the Series B-1 Warrants, the “Prior Warrants”). Pursuant to the Warrant Amendment, the Company agreed (i) to amend the Prior Warrants to reduce the exercise price of the Prior Warrants to $0.35 per share, (ii) to amend the Prior Warrants to modify the termination date thereof to (x) June 17, 2030 for the Series B-1 Warrants and (y) December 17, 2026 for the Series C-1 Warrants, and (iii) to amend that certain warrant inducement agreement (the “Inducement Agreement”), dated May 2, 2025, by and between the Company and the Holder, to provide that the Company would hold a special meeting of stockholders at the earliest practicable date, but in no event later than one hundred twenty (120) days after the Closing Date, for the purpose of obtaining Stockholder Approval (as defined in the Inducement Agreement).

The foregoing does not purport to be a complete description of the Warrant Amendment and is qualified in its entirety by reference to the full text of such document, which is filed as Exhibit 10.2 to this Form 8-K and incorporated herein by reference.

Item 8.01. Other Events

The Company issued a press release announcing the pricing of the Offering on June 17, 2025. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated by reference herein.

As of the date of this Form 8-K, after the closing of the Offering and assuming no exercise of the Pre-Funded Warrants, Series D Warrants or Series E Warrants, there are 15,775,895 shares of Common Stock outstanding.

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Item 9.01. Financial Statements and Exhibits.

(d)        Exhibits.

Exhibit Number		Description
1.1		Placement Agency Agreement, dated as of June 16, 2025, by and between Adial Pharmaceuticals, Inc. and A.G.P./Alliance Global Partners, as placement agent.
4.1		Form of Series D Warrant
4.2		Form of Series E Warrant
4.3		Form of Pre-Funded Warrant
10.1		Form of Securities Purchase Agreement, dated June 17, 2025
10.2		Form of Amendment No. 1 to Series B-1 Common Stock Purchase Warrant and Series C-1 Common Stock Purchase Warrant, dated June 17, 2025
99.1		Press Release dated June 17, 2025
104		Cover Page Interactive Data File (embedded within the XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 18, 2025	ADIAL PHARMACEUTICALS, INC.
	By:	/s/ Cary J. Claiborne
	Name:	Cary J. Claiborne
	Title:	President and Chief Executive Officer

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FAQ

How much capital did Adial Pharmaceuticals (ADIL) raise in the June 2025 offering?

The company raised approximately $3.6 million in gross proceeds before fees.

What securities were issued by ADIL in the Form 8-K offering?

Adial issued 5,341,200 common shares, 5,758,800 pre-funded warrants, and Series D (11.1 m) and Series E (8.325 m) warrants.

What is the exercise price and term of the new warrants?

Both Series D and Series E warrants have a $0.35 exercise price; Series D expire in 5 years, Series E in 18 months from stockholder-approval date.

How will ADIL use the proceeds from this capital raise?

The company stated proceeds will be used for working capital and general corporate purposes.

Were existing ADIL warrants affected by this filing?

Yes. Series B-1 and Series C-1 warrants were repriced to $0.35 and their expirations extended to 2030 and 2026, respectively.

What are the lock-up restrictions after the offering?

Adial and insiders are restricted from most equity issuances for 30 days (general) and 60 days (ATM/variable-rate) post-closing.