ADIAL PHARMACEUTICALS, INC.
For the period ended Dec 31, 2025. Filed Mar 5, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 5, 2026
ADIL$5.05+36.1%Stored close · as of Oct 28, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-04.
0001213900-25-019771
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-05.
0001213900-26-024175
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 79 previous paragraphs and 83 current paragraphs.
31 unchanged; 23 reworded; 28 added; 23 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
2025 Financing Developments
Current report
May 2025 Warrant Inducement Transaction
Current report
On May 2, 2025, we entered into a warrant inducement agreement (the “May 2025 Inducement Agreement”) with an existing healthcare-focused institutional investor of ours (the “Holder”) for the immediate exercise of existing Series B Warrants to purchase 56,737 shares of our common stock and Series C Warrants, and together with the Series B Warrants (the “Existing Warrants”) to purchase 92,000 shares of our common stock at a reduced exercise price of $18.50 per share for net proceeds of approximately $2.2 million. In consideration for the immediate exercise in full of the Existing Warrants, the Holder received, in a private placement, new unregistered (i) Series B-1 warrants to purchase up to 99,290 shares of common stock(the “Series B-1 Warrants”), and (ii) Series C-1 Warrants to purchase up to 161,000 shares of common stock (the “Series C-1 Warrants”), and together with the Series B-1 Warrants the “May 2025 Warrants”). Upon issuance the May 2025 Warrants had an exercise price of $18.50 per share and were exercisable upon stockholder approval, which approval was obtained on August 1, 2025. The Series B-1 Warrants expire five years from the date of such approval and the Series C-1 Warrants will expire eighteen months from the date of such approval. The warrant inducement transaction closed on May 5, 2025.
Current report
In addition, we issued to a former placement agent’s designees tail fee warrants, consisting of Placement Agent Series B-1 Common Stock Purchase Warrants and Placement Agent Series C-1 Common Stock Purchase Warrants, to purchase up to an aggregate of 8,924 shares of common stock, which tail fee warrants have the same terms as the May 2025 Warrants, except that they have an exercise price of $23.125 per share.
Current report
June 2025 Best Efforts Offering and Warrant Amendment
Current report
On June 17, 2025, we entered into an amendment agreement (the “Warrant Amendment”) with the Holder, pursuant to which we agreed (i) to amend the May 2025 Warrants to reduce the exercise price of the May 2025 Warrants to $8.75 per share, (ii) to amend the May 2025 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 the May 2025 Inducement Agreement, to provide that we 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, of the June 2025 Offering (as defined below) for the purpose of obtaining Stockholder Approval (as defined in the May 2025 Inducement Agreement).
Current report
On June 18, 2025, we consummated a best efforts offering (the “June 2025 Offering”) of (i) 213,648 shares of our common stock(the “June 2025 Shares”), (ii) pre-funded warrants (the “June 2025 Pre-Funded Warrants”) to purchase up to an aggregate of 230,352 shares of our common stock (the “the June 2025 Pre-Funded Warrant Shares”), (iii) Series D warrants (the “Series D Warrants”) to purchase up to an aggregate of 444,000 shares of our common stock (the “Series D Warrant Shares”), (iv) Series E warrants (the “Series E Warrants” and, together with the Series D Warrants, the “June 2025 Warrants”) to purchase up to an aggregate of 333,000 shares of common stock (the “Series E Warrant Shares” and, together with the Series D Warrant Shares, the “June 2025 Warrant Shares”). Each June 2025 Share or June 2025 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 June 2025 Warrants was $8.1275. The combined public offering price for each Pre-Funded Warrant and accompanying June 2025 Warrants was $8.1025. The aggregate net proceeds from the June 2025 Offering was approximately $3.0 million.
Current report
Each June 2025 Pre-Funded Warrant was immediately exercisable for one June 2025 Pre-Funded Warrant Share at an exercise price of $0.025 per share and will remain exercisable until such June 2025 Pre-Funded Warrant is exercised in full. The June 2025 Warrants have an exercise price of $8.75 per June 2025 Warrant Share and became exercisable beginning on the effective date of stockholder approval of the issuance of the June 2025 Warrant Shares, which approval was obtained on August 1, 2025. The Series D Warrants will expire on the 5-year anniversary of the date of such approval and the Series E Warrants will expire on the 18-month anniversary of the date of such approval. As of December 31, 2025, all of the June 2025 Pre-Funded Warrants have been exercised.
Current report
A.G.P. At the Market Offering
Current report
November 2025 Warrant Inducement Transaction
Current report
On November 25, 2025, we entered into a warrant inducement agreement (the “November Inducement Agreement”) with a certain holder for the immediate exercise of existing Series C-1 Warrants to purchase 161,000 shares of our common stock and Series E Warrants to purchase 207,627 shares of our common stock at a reduced exercise price of $7.75 in exchange for warrants to purchase up to 552,940 shares of common stock (the “Series F Warrants”). The Series F Warrants have an exercise price of $7.75 and will be exercisable upon stockholder approval, which approval has not yet been obtained. We were unable to hold our planned special meeting of stockholders and vote upon a proposal to allow for the full exercise of the Series F Warrants due to lack of quorum. The Series F Warrants expire (24) months from the date of such approval. The aggregate net proceeds from the transactions contemplated by the November Inducement Agreement were approximately $2.6 million. As of December 31, 2025, the issuance of 216,960 shares of common stock issuable upon exercise of existing warrants pursuant to the November Inducement Agreement was held in abeyance subject to a beneficial ownership limitation provision in such warrants
Current report
2024 Financing Developments
Current report
March 2024 Warrant Inducement Transaction
Current report
H.C. Wainwright At the Market Offering
Current report
Alumni Equity Line of Credit
Current report
On December 13, 2024, we entered into a Purchase Agreement (the “ELOC Agreement”) with Alumni Capital LP (“Alumni Capital”). Pursuant to the ELOC Agreement, we have 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 our option (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 ELOC Agreement. Sales of Common Stock pursuant to the ELOC Agreement, and the timing of any sales, are solely at our option and we are under no obligation to sell securities pursuant to this arrangement. Shares of Common Stock may be sold by us 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 ELOC Agreement for an aggregate purchase price of the Investment Amount; provided, however that we can terminate the Agreement at any time upon ten days prior written notice, subject to the satisfaction of the conditions in the ELOC Agreement.
Current report
The purchase price per Share that may be sold to Alumni Capital under the ELOC 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 ELOC 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 ELOC Agreement; provided, however, that at no time can the purchase price be below $13.75 per share (subject to adjustment as provided in the ELOC Agreement for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring after the date of the ELOC Agreement).
Current report
During the year ended December 31, 2025, we sold 5,666 shares of common stock under the ELOC Agreement for net proceeds of approximately $93,000, after fees and expenses.
Current report
Feedback from the FDA included:
Current report
Research and development expenses decreased by approximately $609,000 (19%) during the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily driven by decreased clinical activity and lower compensation expense for the year ended December 31, 2025 as compared to the same period in 2024.
Current report
General and administrative expenses increased by approximately $125,000 (2%) during the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase was mainly due to higher compensation expense for the year ended December 31, 2025 as compared to the same period in 2024.
Current report
On May 2, 2025, we entered into the May 2025 Inducement Agreement with the Holder providing for the immediate exercise of existing the Series B Warrants to purchase 56,737 shares of our common stock and the Series C Warrants, and together with the Series B Warrants to purchase 92,000 shares of our common stock at a reduced exercise price of $18.50 per share for net proceeds of approximately $2.2 million.
Current report
On June 18, 2025, we consummated the June 2025 Offering as describe above in the section titled “2025 Financing Developments.” The aggregate net proceeds from the June 2025 Offering were approximately $3.0 million.
Current report
On November 25, 2025, we entered into a warrant inducement agreement as describe above in the section titled “2025 Financing Developments.” We received aggregate net proceeds of approximately $2.6 million in connection therewith.
Current report
For the year ended December 31 2025, we sold 80,839 shares of common stock through the AGP ATM, for net proceeds of approximately $531 thousand after placement fees and expenses. From January 1, 2026 through March 3, 2026 we sold 100,000 shares of common stock through the AGP ATM, for net proceeds of approximately $229 thousand after placement fees and expenses.
Current report
Net cash used in operating activities decreased by approximately $429,000 during the year ended December 31, 2025 compared to the year ended December 31, 2024. The primary driver was a decrease in the net loss during the year ended December 31, 2025 as compared to the same period in 2024, excluding the inducement expense.
Current report
Net cash provided by investing activities increased by approximately $150,000 in the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase was due to the recognition of a milestone payment received from Adovate of $150,000.
Current report
Net cash provided by financing activities increased by approximately $627,000 in the year ended December 31, 2025 compared to the year ended December 31, 2024. During the year ended December 31, 2025, we realized proceeds of approximately $8,473,000 from the June 2025 Offering, ATM sales and from the exercise of warrants in connection with the May 2025 Inducement Agreement and November 2025 Inducement Agreement, as compared to approximately $7,846,000 for the same period in 2024, from sales under the Wainwright ATM Agreement and exercise of warrants in connection with the March 2024 Inducement Agreement.
Removed paragraphs (23)
Previous report
Effective June 30, 2023, we sold the business of our wholly owned subsidiary, Purnovate, Inc., to a third party. As a result, the assets, liabilities, and results of Purnovate were classified as discontinued operations. We have retrospectively reclassified all assets, liabilities, and results of Purnovate as discontinued operations in the following discussion and have adjusted all references to Purnovate assets, liabilities, and results accordingly.
Previous report
We continue to explore opportunities to expand our portfolio in the field of addiction and related disorders, both through internal development and through acquisitions. Our vision is to create the world’s leading addiction focused pharmaceutical company.
Previous report
In January 2021, we expanded our portfolio in the field of addiction with the acquisition of Purnovate, LLC via a merger into our wholly owned subsidiary, Purnovate, Inc. (“Purnovate”) and in January 2023, we entered into an option agreement with Adovate LLC (“Adovate”), pursuant to which we granted to Adovate an exclusive option for a period of one hundred twenty (120) days from the effective date of the Option Agreement for Adovate or its designated affiliate to acquire all of the assets of Purnovate and to assume related liabilities and expenses. On May 8, 2023, Adovate sent a letter exercising its option effective May 16, 2023 and made payment of the $450,000 in fees due on exercise. Effective June 30, 2023, Adovate issued to us the equity stake in Adovate due on exercise of the option agreement. On August 17, 2023, a Bill of Sale, Assignment and Assumption Agreement (“Bill of Sale”) was executed between Purnovate and Adovate, transferring the Purnovate assets to Adovate, effective as of June 30, 2023. On August 17, 2023, Purnovate and Adovate also entered into a Letter Agreement which stated that Adovate acquired the assets of Purnovate effective as of June 30, 2023, pursuant to the Bill of Sale.
Previous report
Based on the new expectations regarding the patient population and targeted genotypes and subject to upcoming discussions with regulatory authorities, the two additional Phase 3 trials are expected to cost a total of between $21-$29 million and each expected to require $8-12 million in direct expenses pending final trial design, and up to $5 million in additional other development expenses is expected to be required.
Previous report
2024 and 2023 Financing Developments
Previous report
On October 19, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”) for the issuance and sale in a private placement (the “Private Placement”) of (i) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 1,418,440 shares of our common stock, par value $0.001 (the “Common Stock”), at an exercise price of $0.001 per share, (ii) series A warrants (the “Series A Warrants”) to purchase up to 1,418,440 shares of our Common Stock at an exercise price of $2.82 per share, and (iii) series B warrants (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase up to 1,418,440 shares of our Common Stock at an exercise price of $2.82 per share. The Series A Warrants are exercisable at any time on or after the earlier of (i) if permitted by the rules and regulations of the Nasdaq Stock Market, upon the payment by the Purchaser of $0.125 per share in addition to the exercise price of $2.82 per share, and (ii) the Stockholder Approval Date (as defined in the Purchase Agreement) (the “Initial Exercise Date”), and have a term of exercise equal to five and one-half years from the date of issuance. The Series B Warrants are exercisable at any time on or after the Initial Exercise Date and have a term of exercise equal to eighteen months from the date of issuance. The combined purchase price for one Pre-Funded Warrant and the accompanying Warrants was $2.819. In addition, 85,106 warrants with an exercise price of $3.52 per share of common stock were issued to the placement agent.
Previous report
The net proceeds to us from the Private Placement were approximately $3.4 million, after deducting placement agent fees and expenses and estimated offering expenses payable by us.
Previous report
Pursuant to the terms of the Purchase Agreement, we are prohibited from entering into any agreement to issue or announcing the issuance or proposed issuance of any shares of Common Stock or securities convertible or exercisable into Common Stock for a period commencing on October 19, 2023 and expiring 60 days from the Effective Date (as defined in the Purchase Agreement). Furthermore, the Company is also prohibited from entering into any agreement to issue Common Stock or Common Stock Equivalents (as defined in the Purchase Agreement) involving a Variable Rate Transaction (as defined in the Purchase Agreement), subject to certain exceptions, for a period commencing on October 19, 2023 and expiring one year from such Effective Date. The Effective Date is defined in the Purchase Agreement as the earliest of the date that (a) the initial registration statement contemplated by the Registration Rights Agreement has been declared effective by the SEC, (b) all of the Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for us to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c) following the one year anniversary of the closing of the Private Placement provided that the holder of the Shares is not an affiliate of the Company, or (d) all of the Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and the holders of such Shares shall have received an opinion from Company legal counsel reasonably acceptable to them. The registration statement was declared effective on November 16, 2023.
Previous report
At the date of this report the 1,418,440 shares of common stock had been issued on exercise of pre-funded warrants for proceeds of $1,418, leaving no pre-funded warrants unexercised.
Previous report
On May 31, 2023, we entered into an Equity Purchase Agreement with Alumni Capital, LLC (“Alumni”). This agreement constituted a standby equity purchase agreement (a “SEPA”). Pursuant to the SEPA, we have the right, but not the obligation, to sell to Alumni up to $3,000,000 of newly issued shares, subject to increase to $10,000,000 at our option, at our request at any time during the commitment period, which commenced on May 31, 2023 and will end on the earlier of (i) December 31, 2024, or (ii) the date on which Alumni shall have made payment of advances requested by the Company totaling up to the commitment amount of $3,000,000. Each sale we request under the SEPA (a “Purchase Notice”) may be for a number of shares of common stock with an aggregate value of up to $500,000, and up to $2,000,000 provided certain conditions concerning the average daily trading value are met. The SEPA provides for shares to be sold to Alumni at 95% of the lowest daily volume weighted average price during the three days after a Purchase Notice is issued to Alumni. Upon our entry into and subject to the terms and conditions set forth in the SEPA, we issued 7,983 shares of common stock to Alumni as consideration for its irrevocable commitment to purchase shares of common stock, pursuant to the SEPA. On August 3, 2023, 20,550 shares of common stock were sold under the terms of the SEPA for cash proceeds $140,330. On December 13, 2024, this SEPA was terminated by mutual agreement in favor of a new equity purchase agreement (seeRecent Developmentsabove).
Previous report
On February 23, 2023, we entered into a securities purchase agreement (the “2023 Purchase Agreement”) with an accredited institutional investor (the “Investor”) providing for the issuance of 73,144 shares of our common stock. Pursuant to the 2023 Purchase Agreement, the Investor purchased the shares of our common stock for an aggregate purchase price of $750,000 with net proceeds of $609,613, after placement agent fees and expenses. Pursuant to the Purchase Agreement, an aggregate of 73,144 shares were issued to the Investor.
Previous report
We issued to the Placement Agent a warrant (the “Placement Agent Warrants”) to purchase up to an aggregate of 7,317 shares of common stock, representing 10% of the aggregate number of shares of Common Stock sold pursuant to the Purchase Agreement. The Placement Agent Warrants have an exercise price equal to $10.25 and are exercisable two months after the closing date and expire five years after the date of issuance. The total estimated fair value of the Placement agent warrant was $58,540.
Previous report
Feedback from the FDA as well as key country-level regulatory agencies in Europe included:
Previous report
Research and development expenses increased by approximately $1,962,000 (155%) during the year ended December 31, 2024 compared to the year ended December 31, 2023. The key drivers of this increase were an increase of approximately $1,397,000 of direct clinical trial expenses associated with the Phase 1b trial initiated in 2024 and an increase of approximately $813,000 of chemistry, manufacturing, and controls (CMC) expenses, which increased by approximately $813,000, as stability testing took place to support the Phase 1b trial in 2024 and drug product manufacturing were initiated to support the upcoming Phase 3 trials. These increases were offset by an approximately $182,000 decrease in compensation, including equity-based compensation of R&D personnel.
Previous report
General and administrative expenses decreased by approximately $491,000 (9%) during the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease was the result of lower corporate legal expense of approximately $269,000 and a decrease in compensation of approximately $215,000, including equity based compensation of G&A personnel.
Previous report
Gain (loss) from discontinued operations, net of tax
Previous report
The gain from discontinued operations, net of tax, decreased by approximately $1,894,000 (100%) in the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease is wholly due to the fact that the business of Purnovate, Inc., the activities of which are now classified as discontinued, was sold in June of 2023 and all associated activities ceased.
Previous report
In the year ended December 31, 2024, we sold 2,348,520 shares of common stock through our ATM agreement, for net proceeds of approximately $4 million after placement fees and expenses.
Previous report
Net cash used in operating activities increased by approximately $1,119,000 during the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily due to higher research and development expenses, partially offset by the favorable increase in the net change in operating assets and liabilities when comparing the same two periods.
Previous report
Net cash used in discontinued operations
Previous report
Net cash used in discontinued operations decreased by approximately $1,003,000 during the year ended December 31, 2024 compared to the year ended December 31, 2023. This was entirely due to the completion of the sale of the discontinued operations in June of 2023, after which these operations ceased requiring the use of cash.
Previous report
Net cash provided by investing activities decreased by approximately $1,500,000 in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was driven by payments received in the prior year period related to the sale of Purnovate.
Previous report
Net cash provided by financing activities increased by approximately $3,714,000 in the year ended December 31, 2024 compared to the year ended December 31, 2023. In the year ended December 31, 2023, we engaged in two financings: a limited sale of common stock to a single individual investor for net proceeds of approximately $750,000 and a sale of pre-funded warrants to an institutional investor for net proceeds of approximately $3,383,000. In the year ended December 31, 2024, we sold 2,348,520 shares of common stock through an ATM agreement for net proceeds of approximately $4,021,000 and realized additional funds from the induced and uninduced exercise of additional warrants for net proceeds of approximately $3,824,000.
Reworded paragraphs (23)
Previous wording
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial statements and the notes presented herein. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in the 2024 Annual Report on Form 10-K. Our actual results could differ significantly from those expressed, implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed by us with the Securities and Exchange Commission.
Current wording
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial statements and the notes presented herein. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K. Our actual results could differ significantly from those expressed, implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed by us with the Securities and Exchange Commission.
Previous wording
On August 4, 2023, we effected a reverse stock split of our outstanding shares of common stock, trading on Nasdaq under the symbol ADIL, at a ratio of 1-for-25. As a result of the reverse split, we had 1,197,630 shares of common stock outstanding immediately after effecting the reverse split. The shares authorized for issue under our charter remained 50,000,000 common stock. We have retrospectively adjusted all references to common stock, stock warrants to purchase common stock, stock options to purchase common stock, share data, per share data and related information contained in the following discussion to reflect the effect of the reverse stock split.
Current wording
On February 5, 2026, we effected the Reverse Stock Split of our outstanding shares of common stock, trading on Nasdaq under the symbol ADIL, at a ratio of 1-for-25. We have retrospectively adjusted all references to common stock, stock warrants to purchase common stock, stock options to purchase common stock, share data, per share data and related information contained in the following discussion to reflect the effect of the reverse stock split.
Previous wording
We are a clinical-stage biopharmaceutical company focused on the development of therapeutics for the treatment or prevention of addiction and related disorders. Our lead investigational new drug product, AD04, is a genetically targeted therapeutic agent being developed for the treatment of alcohol use disorder (“AUD”). AD04 was recently investigated in a Phase 3 clinical trial, designated the ONWARD trial, for the potential treatment of AUD in subjects with certain target genotypes, which were identified using our companion diagnostic genetic test. Based on our analysis of the subgroup data from the ONWARD trial, we are now focused on commercializing AD04 in the U.S. and Europe.
Current wording
We are a clinical-stage biopharmaceutical company focused on the development of therapeutics for the treatment or prevention of addiction and related disorders. Our investigational new drug candidate, AD04, is being developed as a therapeutic agent for the treatment of alcohol use disorder (“AUD”). AD04 was investigated in a Phase 3 clinical trial, designated the ONWARD trial, for the potential treatment of AUD in subjects with certain target genotypes, which were identified using our companion diagnostic genetic test. Based on our analysis of the subgroup data from the ONWARD trial, we are now focused on completing the clinical development program for AD04 in the specified genetic subgroups to meet regulatory requirements primarily in the US and secondarily in Europe/UK.
Previous wording
We have devoted the vast majority of our resources to development efforts relating to AD04, including preparation for conducting clinical trials, providing general and administrative support for these operations and protecting our intellectual property.
Current wording
We have devoted the vast majority of our resources to development efforts relating to AD04, including preparation for and conducting clinical trials, providing general and administrative support for these operations and protecting our intellectual property. We expect these activities to continue to demand most of our resources for the foreseeable future.
Previous wording
We currently do not have any products approved for sale and we have not generated any significant revenue since our inception. From our inception through the date of our 2024 Annual Report on Form 10-K, we have funded our operations primarily through the private and public placements of debt, equity securities, and an equity line.
Current wording
We currently do not have any products approved for sale and we have not generated any significant revenue since our inception. From our inception through the date of filing this Annual Report on Form 10-K, we have funded our operations primarily through the private and public placements of debt, equity securities, and an equity line.
Previous wording
Our current cash and cash equivalents are not expected to be sufficient to fund operations for the twelve months from the date of filing our 2024 Annual report on Form 10-K, based our current projections.
Current wording
Our current cash and cash equivalents are not expected to be sufficient for the planned Phase 3 clinical trials or to fund operations for the twelve months from the date of filing the Annual Report on Form 10-K, based our current projections, and in fact are only expected to be sufficient to fund operations into the second half of 2026.
Previous wording
We have incurred net losses in each year since our inception, including net losses of approximately $13.2 million and $5.1 million for the years ended December 31, 2024 and 2023. We had accumulated deficits of approximately $82.0 and $68.8 million as of December 31, 2024 and 2023, respectively. Our operating losses resulted from costs incurred in continuing operations, including costs in connection with our continuing research and development programs, from general and administrative costs associated with our operations, and from financing costs.
Current wording
We have incurred net losses in each year since our inception, including net losses of approximately $8 million and $13.2 million for the years ended December 31, 2025 and 2024. We had accumulated deficits of approximately $90 and $82 million as of December 31, 2025 and 2024, respectively. Our operating losses resulted from costs incurred in continuing operations, including costs in connection with our continuing research and development programs, from general and administrative costs associated with our operations, and from financing costs.
Previous wording
Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our operating activities through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop AD04.
Current wording
Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our operating activities through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to continue to develop AD04.
Previous wording
AD04 — Clinical Development Strategy — Conduct two additional Phase 3 clinical trials in parallel
Current wording
AD04 — Clinical Development Strategy — Conduct two additional Phase 3 clinical trials
Previous wording
The clinical development plan for AD04 is based on the regulatory feedback received in the meetings that took place in Q2 2023 which indicated that even though a single additional Phase 3 trial with convincing data may suffice for approval, it would be a review issue for the agencies following the trial completion to determine if the data was sufficient for approval. Therefore, while possible to file for registration with one additional trial, our current planning assumptions are that we will need to conduct two additional Phase 3 trials with AD04, where the active arm of patients will be compared to placebo and the second trial may include a biomarker negative patient arm to satisfy any ongoing questions from the regulators regarding efficacy parameters. This is expected to support potential approval in the shortest time frame possible and removes future regulatory filing and review risk that would be associated with conducting a single additional trial, as we would plan to run the studies in parallel. We believe that conducting two trials in parallel is the best strategy to minimize risk, optimize timing and costs, as well as improve the probability of regulatory authority acceptance and approval in the US and Europe. The new clinical development plan includes both the US and EU endpoints and will be designed to satisfy both US and EU AD04 submission requirements. Confirmation of the clinical development plan and pathway is currently being conducted by Adial’s clinical development and regulatory advisors.
Current wording
The clinical development plan for AD04 is based on the regulatory feedback received in the meetings that took place in the third quarter of 2025 and our current planning assumptions are that we will need to conduct two additional Phase 3 trials with AD04, where the first trial will be an adaptive design comparing active AD04 to placebo and the second trial is a more traditional placebo controlled trial. This is expected to support potential approval in the shortest time frame possible as well as improve the probability of regulatory authority acceptance and approval in the US and Europe. The new clinical development plan includes both the US and EU endpoints and will be designed to satisfy both US and EU AD04 submission requirements. In a recent article, published on February 19, 2026 in The New England Journal of Medicine, the FDA leadership has outlined a shift in the agency’s default evidentiary posture under which, where scientifically appropriate, approval may be supported by one adequate and well-controlled clinical trial plus confirmatory evidence, rather than the historic expectation of two independent clinical trials. Hence, it is possible that we may conduct only one additional Phase 3 clinical trial of AD04. Confirmation of the clinical development plan and pathway is currently being conducted by Adial’s clinical development and regulatory advisors.
Previous wording
On March 1, 2024, we entered into a warrant inducement agreement (the “Inducement Agreement”) with a certain holder (the “Holder”) of the Company’s warrants to purchase shares of our common stock, par value $0.001 per share (the “common stock”), issued in a private placement offering that closed on October 24, 2023 (the “Existing Warrants”). Pursuant to the Inducement Agreement, the Holder of the Existing Warrants agreed to exercise for cash the Existing Warrants to purchase up to approximately 1,150,000 shares of common stock, at an exercise price of $2.82 per share. The transactions contemplated by the Inducement Agreement closed on March 6, 2024. The Company received aggregate gross proceeds of approximately $3.5 million, before deducting placement agent fees and other expenses payable by the Company. Net proceeds of this transaction were estimated to be approximately $3.1 million.
Current wording
On March 1, 2024, we entered into a warrant inducement agreement (the “March 2024 Inducement Agreement”) with the Holder of the Company’s warrants to purchase shares of our common stock, issued in a private placement offering that closed on October 24, 2023 (the “March 2024 Existing Warrants”). Pursuant to the March 2024 Inducement Agreement, the Holder of the March 2024 Existing Warrants agreed to exercise for cash the March 2024 Existing Warrants to purchase up to approximately 46,000 shares of common stock, at an exercise price of $70.50 per share. The transactions contemplated by the March 2024 Inducement Agreement closed on March 6, 2024. The Company received aggregate gross proceeds of approximately $3.5 million, before deducting placement agent fees and other expenses payable by the Company. Net proceeds of this transaction were estimated to be approximately $3.1 million.
Previous wording
In consideration of the Holder’s immediate exercise of the Existing Warrants and the payment of $0.125 per New Warrant (as such term is defined below) in accordance with the Inducement Agreement, we issued unregistered Series C Warrants (the “New Warrants”) to purchase 2,300,000 shares of common stock (200% of the number of shares of common stock issued upon exercise of the Existing Warrants) (the “New Warrant Shares”) to the Holder of Existing Warrants, recognizing a non-cash inducement expense of approximately $4.5 million.
Current wording
In consideration of the Holder’s immediate exercise of the March 2024 Existing Warrants and the payment of $3.125 per Series C Warrant in accordance with the Inducement Agreement, we issued unregistered Series C Warrants to purchase 92,000 shares of common stock (200% of the number of shares of common stock issued upon exercise of the March 2024 Existing Warrants) to the Holder, recognizing a non-cash inducement expense of approximately $4.5 million.
Previous wording
On March 1, 2024, warrants to purchase 268,440 shares of common stock at an exercise price of $2.82 per share were exercised for gross proceeds of approximately $757 thousand.
Current wording
On March 1, 2024, warrants to purchase 10,737 shares of common stock with an exercise price of $70.50 per share were exercised for gross proceeds of approximately $757 thousand.
Previous wording
On April 18, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Sales Agent” or “Wainwright”) providing for sale of our shares of common stock, from time to time, through the Sales Agent, with certain limitations on the number of shares of common stock that may be offered and sold by us as set forth in the ATM Agreement. The aggregate market value of the shares of Common Stock eligible for sale under the ATM prospectus supplement filed in connection with the ATM Agreement was $4,283,650 which is based on the limitations of such offerings under SEC regulations. The ATM Agreement provides that we will pay the Sales Agent commissions for its services in acting as agent in the sale of shares of common stock pursuant to the ATM Agreement. The Sales Agent will be entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of shares of common stock pursuant to the ATM Agreement. The offering of shares of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all shares of common stock subject to the ATM Agreement; or (ii) termination of the ATM Agreement by us as permitted therein. During the year ended December 31, 2024, we used this ATM Agreement to sell 2,348,520 shares of common stock for net proceeds of approximately $4 million, after fees and expenses.
Current wording
On April 18, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC ( “Wainwright”) providing for sale of our shares of common stock, from time to time, through Wainwright, with certain limitations on the number of shares of common stock that may be offered and sold by us as set forth in the ATM Agreement. The aggregate market value of the shares of Common Stock eligible for sale under the ATM prospectus supplement filed in connection with the ATM Agreement was $4,283,650, which was based on the limitations of such offerings under SEC regulations. The ATM Agreement provided that we would pay Wainwright a fixed commission rate of 3.0% of the gross proceeds from the sale of shares of common stock pursuant to the ATM Agreement. The ATM Agreement provided that the offering of shares of common stock pursuant to the ATM Agreement would terminate upon the earlier of (i) the sale of all shares of common stock subject to the ATM Agreement; or (ii) termination of the ATM Agreement by us as permitted therein. The Wainwright ATM Agreement was terminated on July 24, 2025, effective as of July 31, 2025. During the year ended December 31, 2024, we used this ATM Agreement to sell 93,940 shares of common stock for net proceeds of approximately $4 million, after fees and expenses. During the year ended December 31, 2025, we did not sell any shares of common stock under the Wainwright ATM Agreement.
Previous wording
In July 2023, we announced a summary of feedback received following meetings held with both US and EU regulators, as well as an update on the Company’s current clinical development plan based on guidance received.
Current wording
In September 2025, we announced a summary of feedback received following the FDA EOP2 meeting.
Previous wording
Based on positive feedback received from the relevant global regulatory bodies and overlapping clinical requirements, we made the strategic decision to focus its efforts on the US as the US standards should translate to acceptance in other international markets. We have a high level of confidence that AD04 will achieve success in clinical development based on our post hoc analysis and the regulatory feedback on the pre-specified primary endpoint that the FDA has now confirmed, specifically, a reduction of heavy drinking days to zero at months 5 and 6. This is also vital for our ongoing partnering efforts based on discussions with companies active in the US and Europe. Importantly, the regulators acknowledged the valuable insights of the post hoc analysis, which demonstrated that patients with a specific genetic subtype (AG+), achieved a statistical significance of p=0.031 and p=0.021 respectively in both the Phase 2 and Phase 3 trials. Additionally, these patients averaged over 17 (17.23) heavy drinking days per month at the study start and achieved under 3 (2.37) heavy drinking days per month at study completion.
Current wording
We have a high level of confidence that AD04 will achieve success in clinical development based on our post hoc analysis and the regulatory feedback on the pre-specified primary endpoint that the FDA has now confirmed, specifically, a reduction of heavy drinking days to zero at months 5 and 6. This is also vital for our ongoing partnering efforts based on discussions with companies active in the US and Europe. Importantly, the regulators acknowledged the value of this post hoc work, which showed that patients with the AG+ genetic subtype began treatment averaging more than 17 heavy drinking days per month (17.23) and improved to fewer than 3 heavy drinking days per month (2.37) by study completion. This resulted in statistical significance difference for the AG+ group of p=0.031 and p=0.021 respectively in the Phase 2 and Phase 3 trials Importantly, the credible intervals generated by the independent, third-party statistical consulting group confirmed signals highly consistent with those identified in the original post hoc analysis.
Previous wording
The expense recognized to the change in the value of our equity method investment in Adovate, LLC increased by approximately $358,000 in the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase is due to the timing of investment. This investment was made on June 30 of 2023, with changes to the value of our Adovate equity being recognized on a three-month lag. Therefore, the loss recognized for the year ended December 31, 2023 reflects only 3 months of Adovate’s operations while the loss recognized for the year ended December 31, 2024 reflects a full year of Adovate’s operations.
Current wording
The expense recognized to the change in the value of our equity method investment in Adovate, LLC decreased by approximately $60,000 in the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease is due to variations in the loss recognized related to our equity investment which includes a lower equity share, with changes to the value of our Adovate equity recognized on a three month lag.
Previous wording
Total other income, excluding losses from the equity method investment and inducement expense, increased by approximately $98,000 (123%) in the year ended December 31, 2024 compared to year ended December 31, 2023. This increase was due to the increase of approximately $109,000 in interest income that resulted from a higher cash balance held in the period.
Current wording
Total other income, excluding losses from the equity method investment and inducement expense, increased by approximately $211,000 (203%) in the year ended December 31, 2025 compared to year ended December 31, 2024. This increase was primarily due to the recognition of a milestone payment received from Adovate of $150,000 during the year ended December 31, 2025.
Previous wording
During the year ended December 31, 2024, our primary sources of funding were the exercise of previously issued warrants and the use of our ATM Agreement.
Current wording
During the year ended December 31, 2025, our primary sources of funding were the exercise of previously issued warrants, and sales of stock through public offerings, including at-the-market offerings.
Previous wording
At December 31, 2024, we had cash and cash equivalents of $3,750,525. We have completed a Phase 1 pharmacokinetic study of AD04 with a total cost of approximately $1.4 million, which has been fully paid. In addition, we plan to begin a Phase III study of AD04 in the second half of 2025, to complete production of sufficient drug product to carry out the study, and to begin the process of revalidation for our companion diagnostic to be included in our Phase III study. We have signed a contract with a vendor for approximately $2.3 million, which is cancellable by either party, to produce sufficient drug product to carry out the study, validate the manufacturing process, and manufacture registration batches for commercial usage. Our cash on hand is sufficient to fund our operations and meet our existing commitments into the second half of 2025, based on our current commitments.
Current wording
At December 31, 2025, we had cash and cash equivalents of $5.9 million. We have completed a Phase 1 pharmacokinetic study of AD04 with a total cost of approximately $1.4 million, which has been fully paid. In addition, we plan to begin a Phase 3 study of AD04 in 2026, pending availability of adequate funds, to complete production of sufficient drug product to carry out the study, and to begin the process of clinical validation of our new cheek swab diagnostic genetic test, which will be conducted with the Phase 3 study. We have signed a contract with a vendor for approximately $2.3 million with approximately $1.9 million remaining under this contract, which is cancellable by either party, to produce sufficient drug product to carry out the study, validate the manufacturing process, and manufacture registration batches for commercial usage. Our cash on hand is sufficient to fund our operations and meet our existing commitments into the second half of 2026, based on our current commitments.
Previous wording
We will require additional financing as we continue to execute our overall business strategy, including two additional Phase 3 trials for AD04 (one of which is included in our accelerated plans) that are currently expected to require an average of $8-12 million each in direct expenses, and up to $5 million in additional other development expenses. These estimates may change based on upcoming discussions with regulatory authorities and final trial designs. Our liquidity may be negatively impacted as a result of research and development cost increases in addition to general economic and industry factors. Our continued operations will depend on our ability to raise additional capital through various potential sources, such as equity and/or debt financings, grant funding, strategic relationships, or out-licensing in order to complete its subsequent clinical trial requirements for AD04. At this time, we have no committed sources of funding and our ability to use our ATM are restricted by certain SEC rules and our ability to use our equity line is restricted by certain Nasdaq rules. Management is actively pursuing financing and other strategic plans but can provide no assurances that such financing or other strategic plans will be available on acceptable terms, or at all. Without additional funding, we will be required to delay, scale back or eliminate some or all of our research and development programs, which would likely have a material adverse effect on us and our financial statements.
Current wording
We will require additional financing as we continue to execute our overall business strategy. Our current planning assumption is to conduct one Phase 3 trial with adaptive trial design, one subsequent confirmatory Phase 3 trial and one open label extension study. These assumptions may change based on ongoing discussions with regulatory authorities and final trial designs. Our liquidity may be negatively impacted as a result of research and development cost increases in addition to general economic and industry factors. Our continued operations will depend on our ability to raise additional capital through various potential sources, such as equity and/or debt financings, grant funding, strategic relationships, or out-licensing in order to complete its subsequent clinical trial requirements for AD04. At this time, we have no committed sources of funding, our ability to sell shares under the AGP ATM is restricted by certain SEC rules, and our ability to sell shares under the ELOC Agreement is restricted by the terms of such agreement and certain Nasdaq rules. Management is actively pursuing financing and other strategic plans but can provide no assurances that such financing or other strategic plans will be available on acceptable terms, or at all. Without additional funding, we will be required to delay, scale back or eliminate some or all of our research and development programs, which would likely have a material adverse effect on us and our financial statements.
Previous wording
Net cash used in operating activities – continuing operations
Current wording
Net cash used in operating activities
Previous wording
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results and experiences may differ materially from these estimates. We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above. Our significant accounting policies are more fully described in Note 3 to our financial statements included with this report.
Current wording
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results and experiences may differ materially from these estimates. We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above. Our significant accounting policies are more fully described in Note 3 to our financial statements included in this Annual Report on Form 10-K.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On August 1, 2025, we, entered into a sales agreement (the “ATM”) with A.G.P./Alliance Global Partners ( “AGP”) providing for the sale by us of our shares of common stock, from time to time, through the ATM, with certain limitations on the amount of common stock that may be offered and sold by us. The aggregate market value of the shares of Common Stock eligible for sale under the ATM prospectus supplement filed in connection with the ATM was $4,983,000 which is based on the limitations of such offerings under SEC regulations. The ATM provides that we will pay AGP commissions for its services in acting as agent in the sale of shares of common stock pursuant to the ATM. AGP is entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of shares of common stock pursuant to the ATM. During the three and twelve months ended December 31, 2025, we sold 10,619 and 80,839 shares of common stock, respectively under the ATM and received net proceeds of approximately $104 thousand and $531 thousand, respectively, after fees and expenses. After the year ended December 31, 2025 through March 3, 2026, we sold 100,000 shares of common stock under the ATM and received net proceeds of approximately $229,000.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
On March 1, 2024, warrants to purchase 268,440 warrants to purchase shares for common stock for an exercise price of $2.82 per share were exercised for gross proceeds of approximately $757 thousand.
Previous report — wording carried elsewhere
On March 1, 2024, we entered into the Inducement Agreement pursuant to which the Holder of the Existing Warrants exercised for cash the Existing Warrants to purchase up to approximately 1,150,000 shares of common stock, at an exercise price of $2.82 per share. The transactions contemplated by the Inducement Agreement closed on March 6, 2024 and we received aggregate gross proceeds of approximately $3.5 million, before deducting placement agent fees and other expenses payable by us. Net proceeds of this transaction were approximately $3.1 million.