Item
1.01. Entry into a Material Definitive Agreement.
On July 6, 2021, Adial Pharmaceuticals, Inc. (the
“Company”) entered into Securities Purchase Agreements”), dated July 6, 2021 (the “SPAs”), with three pre-existing
investors for an aggregate investment of $5,000,000 in consideration of the purchase by such investors of an aggregate of 1,666,667 shares
of the Company’s common stock at a purchase price of $3.00 per share. SPAs were entered with each of Bespoke Growth Partners, Inc.
(“Bespoke”), a company controlled by Mark Peikin, the Company’s Chief Strategy Officer, Keystone Capital Partners, LLC
(“Keystone”), and Richard Gilliam, founder of Cumberland Resources (“Gilliam”) (collectively, the “Investors,”
and each an “Investor”), pursuant to which: (i) Bespoke has agreed to purchase an aggregate of 833,334 shares of the Company’s
common stock at a purchase price of $3.00 per share for aggregate gross proceeds of $2,500,002; (ii) Keystone has agreed to purchase an
aggregate of 500,000 shares of the Company’s common stock at a purchase price of $3.00 per share for aggregate gross proceeds of
$1,500,000; and (iii) Gilliam has agreed to purchase an aggregate of 333,334 shares of the Company’s common stock at a purchase
price of $3.00 per share for gross proceeds of $1,000,002.
In connection with the SPAs, the Company entered
into Registration Rights Agreements (“RRAs”), dated July 6, 2021, with each of the Investors pursuant to which the Company
is obligated to file a registration statement (the “Registration Statement”) with the U.S. Securities and Exchange Commission
(the “SEC”) within thirty (30) days following the date of the RRA, and use all commercially reasonable efforts to have the
Registration Statement declared effective by the SEC within thirty (30) days after the Registration Statement is filed (or, in the event
of a “full review” by the SEC, within sixty (60) days after the Registration Statement is filed).
Under
the terms of the SPAs: (i) Bespoke purchased 83,334 shares of the Company’s common stock and agreed to purchase an additional 750,000
shares of the Company’s common stock upon the effectiveness of the Registration Statement; (ii) Keystone purchased 50,000 shares
of the Company’s common stock and agreed to purchase an additional 450,000 shares of the Company’s common stock upon the
effectiveness of the Registration Statement; and (iii) Gilliam purchased 33,334 shares of the Company’s common stock and agreed
to purchase an additional 300,000 shares of the Company’s common stock upon the effectiveness of the Registration Statement.
The SPAs and the RRAs contain customary representations,
warranties, conditions and indemnification obligations of the parties, which were made only for purposes of such SPAs and RRAs as of specific
dates and solely for the benefit of the parties, and which may be subject to limitations agreed upon by the contracting parties.
The
shares of the Company’s common stock issued, and the shares to be issued, under the SPAs were, and will be, sold pursuant to an
exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D promulgated thereunder. The Investors are accredited investors who have purchased the
securities as an investment in the private placement, which did not involve a general solicitation. The shares of common stock have
not been registered under the Securities Act and may not be offered or sold in the United States in the absence of an effective registration
statement or exemption from the registration requirements of the Securities Act. This Current Report on Form 8-K shall not constitute
an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.
The foregoing descriptions of the SPAs and the
RRAs are qualified in their entirety by reference to the forms of SPA and RRA filed hereto as Exhibits 10.1 and 10.2, respectively, each
of which are incorporated herein by reference.