Material Agreement Form 8 K

Item 1.01. Entry into a Material Definitive Agreement.

On December 13, 2024, Adial Pharmaceuticals, Inc. (the "Company," "we," "us" or "our") entered into a Purchase Agreement (the "Purchase Agreement") with Alumni Capital LP ("Alumni Capital"). Pursuant to the Purchase Agreement, the Company has the right to sell to Alumni Capital up to the lesser of (i) $5,000,000 of newly issued shares, subject to increase to $10,000,000 at the option of the Company (the "Investment Amount"), of the shares (the "Shares") of the Company's common stock, par value $0.001 per share (the "Common Stock"), and (ii) the Exchange Cap (as defined below) (subject to certain conditions and limitations), from time to time during the term of the Purchase Agreement. Sales of Common Stock pursuant to the Purchase Agreement, and the timing of any sales, are solely at the option of the Company and the Company is under no obligation to sell securities pursuant to this arrangement. Shares of Common Stock may be sold by the Company pursuant to this arrangement over a period ending on the earlier of December 31, 2026 or the date on which Alumni Capital shall have purchased Shares pursuant to the Purchase Agreement for an aggregate purchase price of the Investment Amount; provided, however that the Company can terminate the Agreement at any time upon ten days prior written notice, subject to the satisfaction of the conditions in the Purchase Agreement.

Upon the satisfaction of the conditions in the Purchase Agreement, including that a registration statement that we agreed to file with the Securities and Exchange Commission (the "SEC") pursuant to the Purchase Agreement is declared effective by the SEC and a final prospectus in connection therewith is filed with the SEC, we will have the right, but not the obligation, from time to time at our sole discretion over the period described above, to direct Alumni Capital to purchase up to a fixed maximum amount of shares of Common Stock as set forth in the Purchase Agreement; provided, that Alumni Capital's maximum commitment under any single fixed purchase will not exceed the greater of (i) $500,000 and (ii) 150% of the average daily trading volume of the Common Stock during the five (5) Days immediately prior to the date that we deliver a Purchase Notice, without mutual agreement of Alumni Capital; further provided, however, that the maximum commitment under any single fixed purchase will in no case exceed $1,250,000 or, with mutual agreement of Alumni Capital, $2,500,000.

The purchase price per Share that may be sold to Alumni Capital under the Purchase Agreement in such fixed purchases equals ninety-seven percent (97%) of the lowest daily dollar volume-weighted average price for the Common Stock during the period ending on the earlier of (i) three (3) consecutive trading days period following the date we deliver a purchase notice and (ii) the date on which Alumni Capital notifies us that it is prepared to proceed with the closing, subject to a Minimum Acceptable Price (as defined in the Purchase Agreement). There is no upper limit on the price per share that Alumni Capital might be obligated to pay for the Common Stock under the Purchase Agreement; provided, however, that at no time can the purchase price be below $0.55 per share (subject to adjustment as provided in the Purchase Agreement for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring after the date of the Purchase Agreement).

The Company will control the timing and amount of any sales of Shares to Alumni Capital. Actual sales of Shares to Alumni Capital under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the Common Stock and determinations by us as to the appropriate sources of funding for us and our operations.

Under the applicable rules of the Nasdaq Stock Market LLC ("Nasdaq"), in no event may we issue more than 1,280,515 Shares (including the Commitment Shares, as defined below), representing 19.99% of the shares of the Common Stock outstanding immediately prior to the execution of the Purchase Agreement (the "Exchange Cap"), to Alumni Capital under the Purchase Agreement, unless we obtain stockholder approval to issue shares of Common Stock in excess of the Exchange Cap, provided further that the Exchange Cap does not apply to the extent the purchase price is equal to or exceeds the Minimum Price, which is $1.09. If stockholders approval to exceed the Exchange Cap were obtained and all $5,000,000 were to be sold at $0.55 per share, we would issue a total of 9,090,909 shares of Common Stock (not including the Commitment Shares).