Adial Pharmaceuticals Announces Exercise of Warrants for $3.5 Million Gross Proceeds
- Adial Pharmaceuticals, Inc. enters a definitive agreement for the immediate exercise of outstanding warrants.
- 1,150,000 shares of common stock to be purchased at an exercise price of $2.82 per share.
- Gross proceeds expected to be $3,530,500 before deducting fees and expenses.
- New unregistered warrants to purchase up to 2,300,000 shares of common stock to be issued.
- H.C. Wainwright & Co. serves as the exclusive placement agent for the offering.
- None.
Insights
The immediate exercise of warrants by Adial Pharmaceuticals represents a strategic move to boost liquidity and potentially strengthen the company's balance sheet. The capital raised, amounting to $3,530,500, will likely be allocated towards advancing the company's pipeline, particularly in the realm of addiction treatment therapies. The involvement of a notable placement agent, H.C. Wainwright & Co., underscores the legitimacy of the offering, which could instill investor confidence.
However, investors should be aware of the dilutive effect of such transactions. Issuing new warrants to purchase up to 2,300,000 shares, in addition to the 1,150,000 shares from the exercised warrants, increases the total number of shares outstanding. This dilution can lead to a decrease in existing shareholders' equity value and could potentially depress the stock price in the short term. Long-term implications hinge on the effective use of the proceeds and the success of the company's therapeutic developments.
The biopharmaceutical sector is highly competitive, with significant research and development costs. Adial's focus on addiction treatment therapies places it within a niche but growing market, given the increasing awareness and need for such treatments. The exercise price of $2.82 per share for both the original and new warrants suggests confidence in the company's valuation and future prospects, as it aligns with the market's perceived value of the stock at the time of the original warrant issue.
The market will be observing the deployment of the raised funds and any subsequent impact on Adial's drug pipeline progression. Success in clinical trials and eventual FDA approval could position Adial as a key player in the addiction treatment space, potentially leading to significant future revenue streams. The terms of the new warrants could also indicate an anticipated positive stock performance, as they encourage investment at a fixed price over a period when significant milestones may be achieved.
From a medical research perspective, the influx of funds is crucial for Adial Pharmaceuticals as it navigates the costly landscape of clinical trials and FDA approval processes. The specific focus on addiction and related disorders is timely, given the opioid crisis and the rising demand for novel and effective treatments. The success of Adial's therapies could have a substantial impact on public health and by extension, its financial performance.
Investors should monitor the company's clinical trial outcomes and any emerging data on the efficacy and safety of its treatments. Positive results could lead to an uptick in investor interest and an increase in stock value. Conversely, any setbacks in the clinical process could have a negative impact on the company's financial health and stock performance. Thus, the long-term business impact hinges on the scientific outcomes of Adial's research endeavors.
CHARLOTTESVILLE, Va., March 01, 2024 (GLOBE NEWSWIRE) -- Adial Pharmaceuticals, Inc. (NASDAQ: ADIL) (“Adial” or the “Company”), a clinical-stage biopharmaceutical company focused on developing therapies for the treatment and prevention of addiction and related disorders, today announced the entry into a definitive agreement for the immediate exercise of certain outstanding warrants to purchase up to an aggregate of 1,150,000 shares of common stock of the Company originally issued in October 2023, having an exercise price of
H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.
In consideration for the immediate exercise of the warrants for cash and the payment of
The offering is expected to close on or about March 6, 2024, subject to satisfaction of customary closing conditions. The Company intends to use the net proceeds for general corporate purposes, including general and administrative expenses, working capital and to support regulatory and clinical activities related to AD04, its lead investigational drug product for the treatment of Alcohol Use Disorder (AUD).
The new warrants described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”), and Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Act, or applicable state securities laws. Accordingly, the new warrants issued in the private placement and the shares of common stock underlying the new warrants may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws. The Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon exercise of the new warrants.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Adial Pharmaceuticals, Inc.
Adial Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the development of treatments for addictions and related disorders. The Company's lead investigational new drug product, AD04, is a genetically targeted, serotonin-3 receptor antagonist, therapeutic agent for the treatment of Alcohol Use Disorder (AUD) in heavy drinking patients and was recently investigated in the Company's ONWARD™ pivotal Phase 3 clinical trial for the potential treatment of AUD in subjects with certain target genotypes (estimated to be approximately one-third of the AUD population) identified using the Company's companion diagnostic genetic test. ONWARD showed promising results in reducing drinking in heavy drinking patients, and no overt safety or tolerability concerns. AD04 is also believed to have the potential to treat other addictive disorders such as Opioid Use Disorder, gambling, and obesity. Additional information is available at www.adial.com.
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 without limitation, statements regarding the closing of the private placement, the satisfaction of the closing conditions of the private placement, and the use of net proceeds from the private placement as well as the potential of AD04 to treat other addictive disorders such as opioid use disorder, gambling, and obesity. Any forward-looking statements included herein reflect our current views, and they involve certain risks and uncertainties, including, among others, market and other conditions, our ability to pursue our regulatory strategy, our ability to maintain our Nasdaq listing, our ability to advance ongoing partnering discussions, our ability to obtain regulatory approvals for commercialization of product candidates or to comply with ongoing regulatory requirements, our ability to develop strategic partnership opportunities and maintain collaborations, our ability to obtain or maintain the capital or grants necessary to fund our research and development activities, our ability to retain our key employees or maintain our Nasdaq listing, our ability to complete clinical trials on time and achieve desired results and benefits as expected, regulatory limitations relating to our ability to promote or commercialize our product candidates for specific indications, acceptance of our product candidates in the marketplace and the successful development, marketing or sale of our products, our ability to maintain our license agreements, the continued maintenance and growth of our patent estate and our ability to retain our key employees or maintain our Nasdaq listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statement included in our Annual Report on Form 10-K for the year ended December 31, 2022, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. We undertake 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.
Investor Contact
Crescendo Communications, LLC
David Waldman / Alexandra Schilt
Tel: 212-671-1020
Email: adil@crescendo-ir.com
FAQ
What is the exercise price for the warrants being exercised?
How many shares of common stock are being purchased through the exercise of warrants?
Who is acting as the exclusive placement agent for the offering?
What is the expected gross proceeds from the exercise of the warrants?
How many new warrants will be issued in consideration for the immediate exercise of the warrants?
