Adial Pharmaceuticals, Inc. (Nasdaq: ADIL) (“Adial” or the “Company”) today announced that the Company’s Compensation Committee and Board of Directors granted Matthew Davidson and Julie Saiki, the Company’s newly appointed chief development officer and executive vice president of strategy, respectively, restricted stock units and stock options to purchase Company common stock as an inducement to them becoming employees of the Company in connection with the closing of its business combination with Azora Therapeutics, Inc. (“Azora”), which was previously announced by the Company on June 11, 2026. Additionally, the Company today announced the closing of the first $32 million (including the conversion of outstanding notes assumed in the acquisition of Azora) of its previously announced up to $64 million private placement.
Inducement Awards
As an inducement to Dr. Davidson and Ms. Saiki becoming employees of Adial, Adial granted Dr. Davidson 424,446 restricted stock units and stock options to purchase 424,447 shares of Company common stock and granted Ms. Saiki 132,802 restricted stock units and stock options to purchase 132,802 shares of Company common stock. The option awards granted to Dr. Davidson and Ms. Saiki have an exercise price of $2.98 per share, the closing price of the Company’s common stock on June 12, 2026, and have a ten-year term. The restricted stock units and the options awarded to Dr. Davidson and Ms. Saiki will vest as follows: (i) with respect to 232,417 restricted stock units and options to purchase 232,417 shares of Company common stock granted to Dr. Davidson and 72,719 restricted stock unit and options to purchase 72,719 shares of Company common stock granted to Ms. Saiki, pro rata on a monthly basis over three years commencing on the one month anniversary of the effective grant date thereof and (ii) with respect to 192,029 restricted stock units and options to purchase 192,030 shares of Company common stock granted to Dr. Davidson and 60,083 restricted stock unit and options to purchase 60,083 shares of Company common stock granted to Ms. Saiki, a pro rata portion of such awards will be subject to the same vesting included in (i) upon the sale and issuance by the Company of each pre-funded warrant and common warrant (collectively, the “Milestone Warrants”) to investors pursuant to that certain Securities Purchase Agreement entered into by and among the Company with certain investors on June 11, 2026 and that Exchange Agreement entered into by and among the Company and certain noteholders on June 11, 2026, subject to catch up vesting for any awards that would have otherwise vested prior to issuance of such Milestone Warrants.
The above grants were approved by the Company’s Compensation Committee and Board of Directors and were made as an inducement material to the employees entering into employment with Adial. The grants were 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.
Closing of Private Placement
On June 12, 2026, the Company closed the first $32 million tranche (including the conversion of outstanding notes assumed in the acquisition of Azora) of the up to $64 million private placement that Adial previously announced on June 11, 2026. The financing was led by Coastlands Capital, with participation from Kern Capital, Boxer Capital Management, Stonepine Capital Management, AuGC BioFund and other biotech specialists and institutional investors along with insiders and management.
Jay Kern, Founder and General Partner of Kern Capital, one of the lead investors in the private placement, said, “Kern Capital focuses on differentiated life sciences programs with outstanding management teams and the potential to become market leaders within their indication, all of which we see at Adial. AT177 is a compelling opportunity, and Matt and Julie are exactly the right executives to help advance it.”
The Company would like to thank its investors for their diligence and support, and looks forward to utilizing the proceeds from the private placement to advance its lead colon-targeted AhR program through key clinical milestones and to build value for the Company’s shareholders.
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