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): August 19, 2020

 

Adial Pharmaceuticals, Inc.

(Exact name of registrant as specified in charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-38323   82-3074668
(Commission File Number)   (IRS Employer Identification No.)

 

1001 Research Park Blvd., Suite 100

Charlottesville, Virginia 22911

(Address of principal executive offices and zip code)

 

(434) 422-9800

(Registrant’s telephone number including area code)

 

 

(Former Name and Former Address)

 

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:

 

☐ 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   ADIL   NASDAQ
         
Warrants   ADILW   NASDAQ

 

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).

 

Emerging growth company   ☒

 

If an emerging growth company, indicate by check mark 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 August 19, 2020, Adial Pharmaceuticals, Inc. (the “Company”) and Dr. Bankole Johnson entered into a Lock-Up Agreement Extension and Right of First Refusal (the “Lock-Up Extension”), which amended the Lock-Up Agreement that they had entered into dated December 12, 2019 (the “Lock-Up”). The Lock-Up Extension extended the term of Dr. Johnson’s Lock-Up from January 1, 2021 until April 1, 2021. In connection with the Lock-Up Extension, Dr. Johnson was released from his Lock-Up restrictions with respect to 350,000 shares of the Company’s common stock, in order to enable Dr. Johnson to fund his new clinic focused on brain wellness and addiction treatments, Privée Clinics, LLC. The shares were sold by Dr. Johnson to an unaffiliated third-party that purchased the entire block of shares in a private transaction. Additionally, under the Lock-Up Extension, the Company was granted a right of first refusal for future financings in Privée Clinics, LLC.

 

The foregoing description of the terms of the Amendment, which is filed as Exhibits 10.1 to this Current Report on Form 8-K and are incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

The following exhibit is filed with this Current Report on Form 8-K:

 

Exhibit No.   Description
10.1   Lock-Up Agreement Extension and Right of First Refusal dated August 19, 2020 to Lock-Up Agreement

 

1

 

 

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:  August 25, 2020 ADIAL PHARMACEUTICALS, INC.
     
  By: /s/ William B. Stilley, III
  Name: William B. Stilley
  Title: President and Chief Executive Officer

 

 

2

 

 

Exhibit 10.1

 

Lock-Up Agreement Extension and Right of First Refusal

 

August 19, 2020

 

Board of Directors

Adial Pharmaceuticals, Inc.

1001 Research Park Blvd.

Charlottesville, VA 22911

 

Ladies and Gentlemen:

 

The undersigned previously entered a Lock-Up Agreement dated December 12, 2019 (the “Lock-Up Agreement”) in the favor of Adial Pharmaceuticals, Inc. (“Adial”). To now induce Adial to permit the sale of 350,000 shares of common stock, par value $0.001 per share of Adial (“Shares”) to First Choice International Company, Inc. (the “Permitted Sale”) on or about the date hereof, the undersigned hereby agrees to extend the Lock-Up Period (as that term is defined in the Lock-Up Agreement) from January 1, 2021 until April 1, 2021. All other terms of the Lock-Up Agreement remain unchanged

 

Additionally, as further inducement to allow the Permitted Sale, the undersigned warrant and agree that Adial will have a right of first refusal (the “ROFR”) to invest in any debt of equity financings (each a “Financing”) of Privée Clinics, LLC, a Delaware limited liability company, and any subsidiaries or controlled affiliates (collectively, “Privée”) that occur within twenty-four (24) months of the date first hereof, but not including the investment of the proceeds of the Permitted Sale.

 

Under the ROFR, Privée shall notify Adial of its intention to pursue a Financing, including the material terms thereof, by providing written notice thereof by registered mail, overnight courier service addressed to Adial or email to the Chief Executive Officer of Adial with a reply received back from Adial. If Adial, fails to exercise its ROFR with respect to any Financing within ten (10) business days after the mailing of such written notice or email reply, then Adial shall have no further claim or right with respect to such Financing. Adial may elect, in its sole and absolute discretion, not to exercise its ROFR with respect to any Financing and any such election by Adial shall not adversely affect Adial with respect to any other Financing during the twenty-four (24) month period agreed to above. If the terms of any Financing are changed to be materially from those disclosed to Adial, then the Financing will be deemed a new Financing and Adial’s ROFR shall apply.

 

The undersigned warrant that they will use their individual and collective best efforts to ensure Adial enjoys the full value of the ROFR, including retaining the ability to provide the ROFR and causing Privée to enter an agreement directly with Adial for the ROFR.

 

Johnson-Adial Lock-Up Agreement Extension and Right of First Refusal Page 1 of 2

 

 

 

Very truly yours,

   
  /s/ Bankole A. Johnson
  Bankole A. Johnson
   
  MEDICO-TRANS COMPANY, LLC
   
  By: /s/ Bankole A. Johnson
  Name: Bankole A. Johnson
  Title: Manager
   
  EN FIDECOMISO DE MI VIDA 11/23/2010 (TRUST)
   
  By: /s/ Bankole A. Johnson
  Name: Bankole A. Johnson
  Title: Trustee
   
 

EN FIDECOMISO DE TODOS MIS SUENOS GRANTOR RETAINED ANNUITY TRUST DATED JUNE 27, 2017

   
  By: /s/ Bankole A. Johnson
  Name: Bankole A. Johnson
  Title: Trustee
   
 

EN FIDEICOMISO DE MIS SUENOS 11/23/2010 (TRUST)

   
  By: /s/ Bankole A. Johnson
  Name: Bankole A. Johnson
  Title: Trustee
   
  DE MI AMOR 11/23/2010 (TRUST)
   
  By: /s/ Bankole A. Johnson
  Name: Bankole A. Johnson
  Title: Trustee

 

Johnson-Adial Lock-Up Agreement Extension and Right of First Refusal Page 2 of 2