If you holdare a beneficial owner and do not instruct your broker, bank, or nominee how to vote your shares, throughthe question of whether your broker, bank or nominee will still be able to vote your shares depends on whether the New York Stock Exchange (the “NYSE”) deems the particular proposal to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. If the broker andor nominee that holds your shares does not receive instructions from you do not give instructions to your broker on how to vote your brokershares on a non-routine matter, the organization that holds your shares will not be entitledable to vote your shares in its discretion on certainsuch matter, often referred to as a broker non-vote.

Under the rules and interpretations of the NYSE, “non-routine” matters considered routine,are matters that may substantially affect the rights or privileges of stockholders, such as the ratification of the appointment of independent auditors. The uncontested electionmergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the approvalfrequency of the amendment to the 2017 Equity Incentive Planstockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. We believe that Proposal 1 and Proposal 2 are not considered routine matters. Therefore, brokers do not have the discretion to vote on those non-routine proposals. If you holdmatters. Accordingly, your broker, bank or nominee may not vote your shares in street name and you do not instructon Proposal 1 and/or Proposal 2 without your broker how toinstructions. Because there are no routine matters on which brokers, banks or other nominees can vote in these matters not considered routine,without instruction at the Special Meeting, no votes will be cast on your behalf. These “brokerbroker non-votes” will be treated as shares that are present and entitled to vote for purposes of determiningexpected at the presence of a quorum, but not as shares entitled to vote on a particular proposal.Special Meeting.

Q:     Can I change my vote or revoke my proxy?

A:     You may change your vote or revoke your proxy at any time before the final vote at the 2023 AnnualSpecial Meeting. To change your vote or revoke your proxy if you are the record holder, you may (1) notify our Corporate Secretary in writing at Adial Pharmaceuticals, Inc., 1180 Seminole Trail, Suite 495 Charlottesville, Virginia 22901; (2) submit a later-dated proxy (either by mail or internet), subject to the voting deadlines that are described on the proxy card or voting instruction form, as applicable;card; (3) deliver to our Corporate Secretary another duly executed proxy bearing a later date; or (4) by appearing at the 2023 AnnualSpecial Meeting in person and voting your shares. Attendance at the meeting will not, by itself, change or revoke a proxy unless you specifically so request.

For shares you hold beneficially, you may change or revoke your vote by following instructions provided by your broker, bank or nominee.

Q:     Who can help answer my questions?What if I return a proxy card or otherwise submit a proxy but do not make specific choices?

A:     If you have any questions about the 2023 Annual Meeting or how to vote or revoke your proxy, or you need additional copies of this proxy statement or voting materials, you should contact the Corporate Secretary, Adial Pharmaceuticals, Inc., at 1180 Seminole Trail, Suite 495 Charlottesville, Virginia 22901 or by phone at (434) 422-9800.

Q:     How are votes counted?

A:     In the election of directors, you may vote FOR either or both of the two (2) nominees for Class II directors named herein or you may direct your vote to be WITHHELD with respect to either or both of the nominees.

         With respect to the other two (2) proposals, you may vote FOR, AGAINST, or ABSTAIN. On these proposals, if you ABSTAIN, it has the same effect as a vote AGAINST.

     If you provide specific instructions, your shares will be voted as you instruct. If you are a record holder and submit your proxy card with no further instructions, your shares will be voted in accordance with the recommendations of the Board of Directors, namely (1) FOR the two (2) nominees for Class II directors for election to our Board of Directors;Warrant Exercise Proposal; and (2) FOR the ratification of the appointment of Marcum our independent registered public accounting firm for the year ending December 31, 2023; and (3) FOR the approval of an amendment to our 2017 Equity Incentive Plan to increase the number of shares of common stock that we will have authority to grant under the plan (as adjusted to reflect the recent stock 1:25 reverse stock split that we effected on August 4, 2023) from 380,000 to 500,000. If any other matters properly arise at the meeting, your proxy, together with the other proxies received, will be voted at the discretion of the proxy holders. If you are a beneficial owner please follow the instructions provided to you by your broker, bank or other nominee.Adjournment Proposal.

Q:     What is a quorum and why is it necessary?

A:     Conducting business at the meetingSpecial Meeting requires a quorum. The presence, either in person or by proxy, of holders of 33.4% of the outstanding shares of stock entitled to vote on September 28,November 17, 2023 are necessary to constitute a quorum. Abstentions are treatedBecause, as present for purposesmentioned above, banks, brokers and nominee holders of determining whether a quorum exists. Your sharesrecord will not have discretionary voting authority with respect to any of the proposals to be counted towardsconsidered at the quorum onlySpecial Meeting, if you submit a valid proxy (or in the case of a beneficial owner one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the 2023 Annual Meeting. Broker non-votes (which result when yourof shares are held in “street name” and you dodoes not tell the nominee howgive voting instructions to vote your shares on a matter for which the broker, doesbank or nominee holder of record, such shares will not have discretionary authority to votebe considered present or represented by proxy at the shares) are treated as present for purposes ofSpecial Meeting, which means such shares will not be included in determining whether a quorum is present atpresent. Abstentions, on the meeting.other hand, will be included in determining whether a quorum is present. If you hold your shares in street name, we encourage you to provide voting instructions to the broker, bank or nominee that holds your shares. If there is no quorum, the chairperson of the meeting or the holders of a majority of the shares represented at the meeting may adjourn the meeting to another date.

have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any unforeseen reason any of our nominees are not available as a candidate for director, the persons named as proxy holders will vote your proxy for any one or more other candidates nominated by the Board of Directors.

Q:     How many shares are outstanding and how many votes is each share entitled?

A:     Each share of our common stock that is issued and outstanding as of the close of business on September 28, 2023, the record date, is entitled to be voted on all items being voted on at the 2023 Annual Meeting, with each share being entitled to one vote on each matter. As of the record date, September 28, 2023, 1,217,981 shares of common stock were issued and outstanding.

Q:     Who will count the votes?

A:     One or more inspectors of election will tabulate the votes.

Q:     Is my vote confidential?

A:     Proxy instructions, ballots, and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed, either within Adial or to anyone else, except: (1) as necessary to meet applicable legal requirements; (2) to allow for the tabulation of votes and certification of the vote; or (3) to facilitate a successful proxy solicitation.

Q:     Who will bear the cost of soliciting votes for the 2023 AnnualSpecial Meeting?

A:     The Board of Directors is making this solicitation on behalf of Adial, which will pay the entire cost of preparing, assembling, printing, mailing, and distributing these proxy materials. Certain of our directors, officers, and employees, without any additional compensation, may also solicit your vote in person, by telephone, or by electronic communication. In addition, we have retained D.F. King & Co., Inc. to aid in the solicitation of proxies for the Special Meeting. We will pay D. F. King & Co., Inc. fees of not more than $7,500 plus expense reimbursement for its services. Please contact (866) 796-6867 with any questions you may have regarding our proposals. On request, we will reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to stockholders. In addition to the use of the mail, proxies may be solicited by personal interview, telephone, telegram, facsimile and advertisement in periodicals and postings, in each case by our directors, officers and employees without additional compensation.

Q:     When are stockholder proposals and director nominations due for next year’s Annual Meeting?annual meeting?

A:     To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by June 1, 2024, to the attention of the Corporate Secretary of Adial Pharmaceuticals, Inc. at 1180 Seminole Trail, Suite 495, Charlottesville, Virginia 22901 and you must comply with all applicable requirements

THE NOMINEESCashless Exercise

Set forth below are our two (2) director nominees, their respective ages and positions as of the date of this proxy statement, the year in which each first became a director and the year in which their terms as director expire assuming they are re-elected at the 2023 Annual Meeting:

Vote Required

Provided that a quorum is present, the nominees for director receiving a plurality of the votes cast at the 2023 Annual Meeting in person or by proxy will be elected. Abstentions, withheld votes and broker non-votes will not affect the outcome of the election.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”
THE ELECTION OF EACH OF THE TWO CLASS II NOMINEES

Board Diversity Matrix (as of September 28, 2023)

CONTINUING DIRECTORS

The directors who are serving terms that end following the 2023 Annual Meeting and their ages, positions at our company, the year in which each first became a director and the expiration of their respective terms on our Board of Directors are provided in the table below and in the additional biographical descriptions set forth in the text below the table.

We selected Mr. Goodman to serve on our Board of Directors because he brings extensive knowledge of the addiction and pharmaceuticals industry and his significant strategic development experience. Mr. Goodman’s experience with the NACD provides him with a broad understanding of the role of directors and corporate governance issues facing public companies.

Class III Directors

J. Kermit Anderson, Director

J. Kermit Anderson has served as a director since February 2015. He has served as the VP and Chief Financial Officer at Cumberland Development Co. since 2007. Cumberland is a privately held company which evaluates and oversees investments in minerals exploration, life sciences, and real estate for a family office. Mr. Anderson has over forty years of experience in financial and development roles for a number of companies. He holds widely diversified experience in financial planning and reporting, accounting, forecasting, pricing, GAAP reporting and contract negotiations including benefits and compensation. His career is split almost equally between public and private companies including major sales and acquisitions. He has held various positions in energy businesses including Massey Energy, AMVEST and Cumberland Resources Corporation working on the sale of the companies for the last two roles. Mr. Anderson has worked extensively on startups for Massey and AMVEST including the move to a new business area with AMVEST. He received his BS -BA from West Virginia University in 1972.

We selected Mr. Anderson to serve on our Board of Directors because he brings extensive industry experience in corporate development and finance. His prior service with other public companies provides experience related to good corporate governance practices.

James W. Newman, Jr., Director

James W. Newman, Jr. has served as a director since September 2014. Since April 2013, he served as the Founder, Chairman, and President of Medical Predictive Science Corporation (“MPSC”), a medical device company that translates ICU research discoveries to the patient’s bedside and develops predictive technology that detects imminent, catastrophic illness. MPSC’s HeRO sold in over 20 countries and is a pioneering monitoring system for premature infants which detects early signs of distress commonly caused by infection and other potentially life-threatening illnesses. He has also served as part of the management team of Newman Company, a real estate company, since 1980, for which he still works and is the sole owner. In the mid — 1990s he began making capital investments in several “start-up” companies, including Charlottesville-based Medical Automation Systems, a major provider of information management systems for point-of-care testing, which was acquired by Massachusetts-based Alere Inc. in 2011. His investments have covered a wide range of fields, encompassing everything from biotechnology, bio-informatics, education, and telecommunications, as well as mechanical inventions. He is particularly interested in investments in the medical field that improve healthcare, but do so at a reduced cost to consumers. Mr. Newman received a B.A. degree from Upsala College in 1968.

We selected Mr. Newman to serve on our Board of Directors because he brings a strong business background to our company and adds significant strategic, business and financial experience. Mr. Newman’s business and finance background provides him with a broad understanding of the issues faced by companies similar to us.

DIRECTOR INDEPENDENCE

Our common stock is listed on the Nasdaq Capital Market (“Nasdaq”). Under the Nasdaq listing standards, independent directors must comprise a majority of a listed company’s Board of Directors and all members of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committees must be independent. Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act and Compensation Committee members must also satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act. Under the Nasdaq listing standards, a director will only qualify as an “independent director” if, in the opinion of that company’s Board of Directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our Board of Directors undertook a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that J. Kermit Anderson, Robertson H. Gilliland, James W. Newman, Jr., and Kevin Schuyler, representing four of our six directors, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the listing standards of Nasdaq. In making such determination regarding independence, our Board of Directors considered the relationship that each such non-employee director has with our company and all other facts and circumstances that our Board of Directors deemed relevant in determining his independence, including the beneficial ownership of our capital stock by each non-employee director. Mr. Claiborne is not “independent” as defined under the listing standards of Nasdaq due to his employment by us and Mr. Goodman is not “independent” as defined under the listing standards of Nasdaq due to the compensation for the consulting services he provides to us. Mr. Stilley, who served as a director until September 18, 2023, was not independent due to his employment by us and our subsidiary.

We currently have: (1) an Audit Committee comprised of Kevin Schuyler, James Newman and J. Kermit Anderson, each of whom are deemed to be independent in accordance with the Nasdaq definition of independence, satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act, and each has the related financial management expertise within the meaning of the Nasdaq rules; (2) a Compensation Committee comprised of James Newman and J. Kermit Anderson, each of whom is deemed to be independent in accordance with the Nasdaq definition of independence and satisfy the independence criteria set forth in Rule 10C-1 under the Exchange Act; and (3) a Nominating and Corporate Governance Committee comprised of J. Kermit Anderson and Robertson H. Gilliland, each of whom is deemed to be independent in accordance with the Nasdaq definition of independence. Effective immediately after the 2023 Annual Meeting, Robertson H. Gilliland will be appointed to serve as a member of the Compensation Committee, together with James Newman and J. Kermit Anderson. Robertson H. Gilliland is deemed to be independent in accordance with the Nasdaq definition of independence and satisfies the independence criteria set forth in Rule 10C-1 under the Exchange Act.

The Board of Directors annually determines the independence of directors based on a review by the directors and the Nominating and Corporate Governance Committee. No director is considered independent unless the Board of Directors has determined that he or she has no material relationship with us.

Family Relationships

There are no family relationships among any of our directors or executive officers.

INFORMATION REGARDING THE COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has a standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. The following table shows the directors who are currently members or Chairman of each of these committees.

____________

(1)      Effective immediately after the 2023 Annual Meeting, Robertson H. Gilliland will be appointed to serve as a member of the Compensation Committee.

Board Composition and Election of Directors

Our Board of Directors consists of six members: Messrs. Kermit Anderson, Robertson Gilliland, Tony Goodman, James Newman, Kevin Schuyler and Cary Claiborne. Our Board of Directors has undertaken a review of its composition and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of Directors has determined that each of Messrs. Kermit Anderson, Robertson Gilliland, James Newman, and Kevin Schuyler is “independent” under the applicable rules of the SEC and Nasdaq and that each of Messrs. Claiborne and Goodman is not “independent” as defined under such rules. In making such determination, our Board of Directors considered the relationship that each such director has with our company and all other facts and circumstances that our Board of Directors deemed relevant in determining his independence, including the beneficial ownership of our capital stock by each non-employee director. Mr. Claiborne is not an independent director under these rules because he is our Chief Executive Officer and President, and Mr. Goodman is not an independent director due to the consulting arrangement that we entered into with him in March 2023.

Corporate Governance

Board Committees

Our Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. From time to time, the Board of Directors may also establish ad hoc committees to address particular matters.

Audit Committee

The members of our Audit Committee are Messrs. Schuyler, Newman, and Anderson each of whom has been determined by our Board of Directors to be independent under applicable Nasdaq and SEC rules and regulations. Mr. Schuyler is the chair of the Audit Committee. The Audit Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on our website at www.adial.com. The charter describes the nature and scope of responsibilities of the Audit Committee. Our Audit Committee’s responsibilities include, among others:

•        appointing, approving the compensation of, and assessing the independence of our registered public accounting firm;

•        overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from that firm;

•        reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

•        monitoring our internal control over financial reporting, disclosure controls and procedures;

•        overseeing our internal audit function;

•        discussing our risk management policies;

•        establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;

•        meeting independently with our internal auditing staff, if any, our independent registered public accounting firm and management;

•        reviewing and approving or ratifying any related person transactions; and

•        preparing the Audit Committee report required by Securities and Exchange Commission, or SEC, rules.

All audit and non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our Audit Committee.

Our Board of Directors has determined that Mr. Schuyler is an “audit committee financial expert” as defined in applicable SEC rules.

Compensation Committee

The members of our Compensation Committee are currently Messrs. Anderson and Newman, each of whom has been determined by our Board of Directors to be independent under current Nasdaq rules and regulations. Effective immediately after the 2023 Annual Meeting, Robertson H. Gilliland will be appointed to serve as a member of the Compensation Committee, together with Messrs. Anderson and Newman. Robertson H. Gilliland is deemed to be independent under current Nasdaq rules and regulations. Mr. Anderson is the chair of the Compensation Committee. The Compensation Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on our website at www.adial.com. The charter describes the nature and scope of responsibilities of the Compensation Committee. Our Compensation Committee’s responsibilities include, among others:

•        reviewing and approving annually the corporate goals and objectives applicable to the compensation of the Chief Executive Officer, evaluating at least annually the Chief Executive Officer’s performance in light of those goals and objectives, and determining and approving the Chief Executive Officer’s compensation level based on this evaluation;

•        reviewing and approving the compensation of all other executive officers;

•        reviewing and approving and, when appropriate, recommending to the Board of Directors for approval, incentive compensation plans and equity-based plans, and where appropriate or required, recommending for approval by the stockholders of the Company, the adoption, amendment or termination of such plans; and administering such plans;

•        reviewing and approving the executive compensation information included in our annual report on Form 10-K and proxy statement;

•        reviewing and approving or providing recommendations with respect to any employment agreements or severance arrangements or plans; and

•        reviewing director compensation and recommending any changes to the Board of Directors.

Nominating and Corporate Governance Committee

The members of our Nominating and Corporate Governance Committee are Messrs. Gilliland, and Schuyler, each of whom has been determined by our Board of Directors to be independent under current Nasdaq rules. Mr. Gilliland is the chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance

Committee operates pursuant to a written charter adopted by the Board of Directors, which is available on our website at www.adial.com. The charter describes the nature and scope of responsibilities of the Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee’s responsibilities include, among others:

•        identifying and recommending candidates to fill vacancies on the Board of Directors and for election by the stockholders;

•        recommending committee and chairperson assignments for directors to the Board of Directors;

•        developing, subject to the Board of Directors’ approval, a process for an annual evaluation of the Board of Directors and its committees and to oversee the conduct of this annual evaluation;

•        overseeing the Company’s corporate governance practices, including reviewing and recommending to the Board of Directors for approval any changes to the documents and policies in the Company’s corporate governance framework, including its certificate of incorporation and bylaws; and

•        monitoring compliance with the Company’s Code of Business Conduct and Ethics, investigating alleged breaches or violations thereof and enforcing its provisions.

Candidates for director should have certain minimum qualifications, including the ability to understand basic financial statements, being over 21 years of age, having relevant business experience (taking into account the business experience of the other directors), and having high moral character. The Nominating and Corporate Governance Committee retains the right to modify these minimum qualifications from time to time.

In evaluating an incumbent director whose term of office is set to expire, the Nominating and Corporate Governance Committee reviews such director’s overall service to the Company during such director’s term, including the number of meetings attended, level of participation, quality of performance, and any transactions with the Company engaged in by such director during his term.

When selecting a new director nominee, the Nominating and Corporate Governance Committee first determines whether the nominee must be independent for Nasdaq purposes or whether the candidate must qualify as an “audit committee financial expert.” The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm to assist in the identification of qualified director candidates. The Nominating and Corporate Governance Committee also will consider nominees recommended by our stockholders. The Nominating and Corporate Governance Committee does not distinguish between nominees recommended by our stockholders and those recommended by other parties. The Nominating and Corporate Governance Committee evaluates the suitability of potential nominees, taking into account the current board composition, including expertise, diversity and the balance of inside and independent directors. The Nominating and Corporate Governance Committee does not have a set policy or process for considering diversity in identifying nominees, but endeavors to establish a diversity of background and experience in a number of areas of core competency, including business judgment, management, accounting, finance, knowledge of our industry, strategic vision, research and development and other areas relevant to our business.

In considering any person recommended by one of our stockholders, the Nominating and Corporate Governance Committee will look for the same qualifications that it looks for in any other person that it is considering for a position on the Board of Directors. The Nominating and Corporate Governance Committee operates under a formal charter that governs its duties and standards of performance.

Board of Directors Leadership Structure

The Board of Directors does not have a policy that requires the separation of the roles of Chief Executive Officer and Chairman of the Board of Directors, or requiring a separate lead independent director. The Board of Directors annually reviews its leadership structure to assess what best serves the interests of the Company and its shareholders at a given time. Currently, the positions of Chief Executive Officer and Chairman of the Board of Directors are held by different persons. Our Chairman of the Board of Directors, who is also our lead independent director is Kevin Schuyler. In that role, he presides over the executive sessions of the Board of Directors, during which our independent directors meet without management, and he serves as the principal liaison between management and the independent directors of the Board of Directors. As our Chief Executive Officer, Mr. Claiborne is responsible for our day-to-day

operations and for executing our long-term strategies. Our Board of Directors has determined its leadership structure is appropriate and effective for us at this time due to the separation of roles of Chief Executive Officer and Chairman of the Board of Directors.

Risk Oversight

One of the Board of Directors’ key functions is informed oversight of our risk management process. The Board of Directors does not have a standing risk management committee, but rather administers this oversight function directly through the Board of Directors as a whole, as well as through various standing committees of the Board of Directors that address risks inherent in their respective areas of oversight. In particular, the Board of Directors is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for us. Our Board of Directors monitors our exposure to a variety of risks through our Audit Committee. Our Audit Committee charter gives the Audit Committee responsibilities and duties that include discussing with management, the internal audit department and the independent auditors our major financial risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. Our Nominating and Corporate Governance Committee’s responsibilities include reviewing and discussing with management the Company’s risk appetite and strategy relating to key risks as well as the guidelines, policies and processes for monitoring and mitigating such risks. Our Compensation Committee is responsible for considering the impact of our compensation policies and practices for all employees on our risk profile.

CORPORATE GOVERNANCE

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors, including those officers responsible for financial reporting. These standards are designed to deter wrongdoing and to promote honest and ethical conduct. The code of business conduct and ethics and the written charter for the audit committee, compensation committee and nominating and corporate governance committee are available on our website at www.adial.com. The information that appears on our website is not part of, and is not incorporated into, this proxy statement.

None of our directors or executive officers, nor any associate of such individual, is involved in a legal proceeding adverse to us.

If, we make any substantive amendments to the code of business conduct and ethics or grant any waiver from a provision of the code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is granted to one of these specified individuals, the name of such person who is granted the waiver and the date of the waiver.

Review and Approval of Transactions with Related Persons

The Board of Directors has adopted policies and procedures for review, approval and monitoring of transactions involving Adial and “related persons” (directors and executive officers or their immediate family members, or stockholders owning 5% or greater of the Company’s outstanding stock). The policy covers any related person transaction that meets the minimum threshold for disclosure in the proxy statement under the relevant rules of the SEC. Pursuant to our charter, our Audit Committee reviews on an on-going basis for potential conflicts of interest, and approve if appropriate, all our “Related Party Transactions.” For purposes of the Audit Committee Charter, “Related Party Transactions” means those transactions required to be disclosed pursuant to SEC Regulation S-K, Item 404.

A discussion of our current related person transactions appears in this proxy statement under “Transactions with Related Persons, Promoters and Certain Control Persons.”

Board and Committee Meetings and Attendance

During our fiscal year ended December 31, 2022, our Board of Directors held fifteen (15) meetings. During our fiscal year ended December 31, 2022, our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee met six (6) times, seven (7) times, and one (1) time, respectively. Each of our incumbent directors that were directors during our fiscal year ended December 31, 2022 attended no less than 75% of the meetings of the Board of Directors and Board committees on which such director served during 2022.

Board Attendance at Annual Stockholders’ Meeting

Our directors are encouraged, but not required, to attend the 2023 Annual Meeting. All seven of our directors who were directors at the time of our 2022 Annual Meeting of Stockholders attended our 2022 Annual Meeting of Stockholders.

Anti-Hedging/Anti-Pledging Policy

We have adopted an insider trading policy (the “Trading Policy”) with respect toa holder exercises its Warrants on a date that is after the policies and procedures covering trades of our securities and the handling of our confidential information. The Trading Policy, which applies to all officers, employees, directors, consultants and independent contractors90th day anniversary of the Company and its subsidiaries (eachWarrant issuance date, a “Covered Person”), prohibitsregistration statement registering the purchase or sale of our securities by a Covered Person, including their family members and others living in their household, who is in possession of material non-public information. The Trading

PROPOSAL 2

RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committeeissuance of the Board of Directors has selected Marcum, LLP (“Marcum”), an independent registered accounting firm, to audit the books and financial records of the Company for the year ending December 31, 2022. Adial is asking its stockholders to ratify the appointment of Marcum, Adial’s independent registered public accounting firm, for fiscal year ending on December 31, 2023.

A representative of Marcum is expected to be present either in person or via teleconference at the 2023 Annual Meeting and available to respond to appropriate questions, and will have the opportunity to make a statement if he or she desires to do so.

Ratification of the appointment of Marcum by our stockholders is not required by law, our bylaws or other governing documents. As a matter of policy, however, the appointment is being submitted to our stockholders for ratification at the 2023 Annual Meeting. If our stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain that firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in our best interest and the best interests of our stockholders.

Vote Required

The affirmative vote of a majority of the shares present or represented by proxy and entitled to vote on this proposal at the 2023 Annual Meeting will be required to approve the ratification of the appointment of Adial’s registered public accounting firm. Abstentions will be counted and will have the same effect as a vote against the proposal. Because this is a routine matter for which brokers have discretion to vote if beneficial owners do not provide voting instructions, no broker non-votes are expected with respect to this proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF THE SELECTION OF MARCUM LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR OUR FISCAL YEAR ENDING ON DECEMBER31, 2023.

AUDIT COMMITTEE REPORT1

The Audit Committee has reviewed and discussed Adial’s audited consolidated financial statements as of and for the year ended December 31, 2022 with the management of Adial and Marcum, Adial’s independent registered public accounting firm. Further, the Audit Committee has discussed with Marcum the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC, and other applicable regulations, relating to the firm’s judgment about the quality, not just the acceptability, of Adial’s accounting principles, the reasonableness of significant judgments and estimates, and the clarity of disclosures in the consolidated financial statements.

The Audit Committee also has received the written disclosures and the letter from Marcum required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, which relate to Marcum’s independence from Adial, and has discussed with Marcum its independence from Adial. The Audit Committee has also considered whether the independent registered public accounting firm’s provision of any non-audit services to Adial is compatible with maintaining the firm’s independence. The Audit Committee has concluded that the independent registered public accounting firm is independent from Adial and its management. The Audit Committee also considered whether, and determined that, the independent registered public accounting firm’s provision of any other non-audit services to us was compatible with maintaining Marcum’s independence. The Committee also reviewed management’s report on its assessment of the effectiveness of Adial’s internal control over financial reporting. In addition, the Audit Committee reviewed key initiatives and programs aimed at strengthening the effectiveness of Adial’s internal and disclosure control structure. The members of the Audit Committee are not our employees and are not performing the functions of auditors or accountants. Accordingly, it is not the duty or responsibility of the Audit Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures or to set auditor independence standards. Members of the Audit Committee necessarily rely on the information provided to them by management and the independent auditors. Accordingly, the Audit Committee’s considerations and discussions referred to above do not constitute assurance that the audit of our consolidated financial statements has been carried out in accordance with generally accepted accounting principles or that our auditors are in fact independent.

Based on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors resolved that Adial’s audited consolidated financial statements for the year ended December 31, 2022 and management’s assessment of the effectiveness of Adial’s internal control over financial reporting be included in Adial’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC. The Audit Committee has recommended, and the Board of Directors has approved, subject to stockholder ratification, the selection of Marcum as Adial’s independent registered public accounting firm for the year ending December 31, 2023.

Submitted by the Audit Committee of Adial’s Board of Directors.

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1        The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not incorporated by reference in any filing of AdialWarrant Shares under the Securities Act of 1933, as amended, is not then effective or available for the Exchange Act, whetherissuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made before or after the date hereof and irrespectiveto us upon such exercise in payment of any general incorporation language in any such filing.

Independent Registered Public Accounting Firm Fees and Services

Marcum serves as our independent registered public accounting firm. Friedman LLP was preceded by Marcum, which merged with Marcum.

Independent Registered Public Accounting Firm Fees and Services

The following table sets forth the aggregate fees including expenses billedexercise price, the holder may elect instead to us forreceive upon such exercise (either in whole or in part) the years ended December 31, 2022 and 2021 by our auditors:

PROPOSAL 3

APPROVAL OF AN AMENDMENT TO OUR 2017 EQUITY INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK THAT WE WILL HAVE AUTHORITY TO GRANT UNDER THE PLAN FROM 380,000 TO 500,000

On October 9, 2017, the Board of Directors adopted, and our stockholders approved on October 9, 2017, the Adial Pharmaceuticals, Inc. 2017 Equity Incentive Plan (the “2017 Equity Incentive Plan”); however, the 2017 Equity Incentive Plan did not become effective until the business day prior to the public trading of our common stock on the Nasdaq. As of September 28, 2023, there were (i) 38,157 shares of common stock availabledetermined according to a formula set forth in the Warrant.

(3)      Overhang is (number of shares subject to equity awards at the end of a fiscal year)/(number of shares outstanding at the end of the fiscal year + number of shares subject to equity awards + number of shares available for future awards).

Limitation on Awards and Shares Available

Initially, the aggregate numberany class of shares of our common stock, that was availablereferred to as Purchase Rights, then each holder of the Warrants will be issued pursuantentitled to stock awards underacquire, upon the 2017 Equity Incentive Plan was 70,000 shares,terms applicable to such Purchase Rights, the aggregate Purchase Rights which was increased to 140,000 shares in 2019, 220,000 on July 30, 2020, 300,000 on August 18, 2021 and 380,000 on September 1, 2022 (all numbersthe holder could have been adjusted to reflectacquired if the recent stock 1:25 reverse stock split that we effected on August 4, 2023). At September 28, 2023, weholder had outstanding options to purchase an aggregateheld the number of 203,312 shares of our common stock and had issued 138,531 shares of common stock underacquirable upon complete exercise of the 2017 Equity Incentive Plan. AsWarrants immediately before the record date, or, if no such record is taken, the date as of September 28, 2023, there are 38,157which the record holders of shares of our common stock available for grants that mayare to be made under the 2017 Equity Incentive Plan.

Summary of the 2017 Equity Incentive Plan

The principal provisions of the 2017 Equity Incentive Plan are summarized below.

Administration

The 2017 Equity Incentive Plan generally is administered by our Compensation Committee, which has been appointed by the Board of Directors to administer the 2017 Equity Incentive Plan. The Compensation Committee will have full authority to establish rules and regulationsdetermined, for the proper administrationgrant, issue or sale of the 2017 Equity Incentive Plan, to select the employees, directors and consultants to whom awards are granted, and to set the date of grant, the type of award and the other terms and conditions of the awards, consistent with the terms of the 2017 Equity Incentive Plan.such Purchase Rights.

EligibilityFundamental Transaction

Persons eligibleIf a Fundamental Transaction (as defined below) occurs, then the successor entity will succeed to, participate in the 2017 Equity Incentive Plan includeand be substituted for us, and may exercise every right and power that we may exercise and will assume all of our officers, employees, directors and consultants.

Awards

The 2017 Equity Incentive Plan provides forobligations under the grant of: (i) incentive stock options; (ii) nonstatutory stock options; (iii) stock appreciation rights; (iv) restricted stock; and (v) other stock-based and cash-based awards to eligible individuals. The terms of the awards will be set forth in an award agreement, consistentWarrants with the terms of the 2017 Equity Incentive Plan. No stock option will be exercisable later than ten years after the date it is granted.

The 2017 Equity Incentive Plan permits the grant of awards intended to qualifysame effect as “performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended.

Stock Options

The Compensation Committee may grant incentive stock options as defined in Section 422 of the Code, and nonstatutory stock options. Options shall be exercisable forif such prices, shall expire at such times, and shall have such other terms and conditions as the Compensation Committee may determine at the time of grant and as set forthsuccessor entity had been named in the award agreement; however, the exercise price must be at least equal to 100% of the fair market value at the date of grant. The option price is payable in cash or other consideration acceptable to us. On September 28, 2023, the closing price of our Common Stock on the Nasdaq was $2.58.

Stock Appreciation Rights

The Compensation Committee may grant stock appreciation rights with such terms and conditions as the Compensation Committee may determine at the time of grant and as set forth in the award agreement. The grant priceWarrant itself. Additionally, upon consummation of a stock appreciation right shall be determined by the Compensation Committee and shall be specified in the award agreement; however, the grant price must be at least equal to 100% of the fair market value of a share on the date of grant. Stock appreciation rights may be exercised upon such terms and conditions as are imposed by the Compensation Committee and as set forth in the stock appreciation right award agreement.

Restricted Stock

Restricted stock may be granted in such amounts and subject to the terms and conditions as determined by the Compensation Committee at the time of grant and as set forth in the award agreement. The Compensation Committee may impose performance goals for restricted stock. The Compensation Committee may authorize the payment of dividends on the restricted stock during the restricted period.

Other Awards

The Compensation Committee may grant other types of equity-based or equity-related awards not otherwise described by the terms of the 2017 Equity Incentive Plan, in such amounts and subject to such terms and conditions, as the Compensation Committee shall determine. Such awards may be based upon attainment of performance goals established by the Compensation Committee and may involve the transfer of actual shares to participants, or payment in cash or otherwise of amounts based on the value of shares.

Amendment and Termination

Our Board of Directors may amend the 2017 Equity Incentive Plan at any time, subject to stockholder approval to the extent required by applicable law or regulation or the listing standards of the Nasdaq or any other market or stock exchange on which the common stock is at the time primarily traded or the provisions of the Code.

Our Board of Directors may terminate the 2017 Equity Incentive Plan at any time provided all shareholder approval has been received to the extent required by the Code, applicable law or the listing standards of Nasdaq or any other market or stock exchange which the common stock is at the time primarily traded. Unless sooner terminated by the Board, the 2017 Equity Incentive Plan will terminate on the close of business on August 30, 2027.

Miscellaneous

The 2017 Equity Incentive Plan also contains provisions with respect to payment of exercise prices, vesting and expiration of awards, treatment of awards upon the sale of our company, transferability of awards, and tax withholding requirements. Various other terms, conditions, and limitations apply, as further described in the 2017 Equity Incentive Plan.

Material Federal Income Tax Consequences

The following is a brief description of the principal federal income tax consequences, as of the date of this proxy statement, associated with the grant of awards under the 2017 Equity Incentive Plan. This summary is based on our understanding of present United States federal income tax law and regulations. The summary does not purport to be complete or applicable to every specific situation. Furthermore, the following discussion does not address foreign, state or local tax consequences.

Options

Grant.    There is generally no United States federal income tax consequence to the participant solely by reason of the grant of incentive stock options or nonqualified stock options under the 2017 Equity Incentive Plan, assuming the exercise price of the option is not less than the fair market value of the shares on the date of grant.

Exercise.    The exercise of an incentive stock option is not a taxable event for regular federal income tax purposes if certain requirements are satisfied, including the requirement that the participant generally must exercise the incentive stock option no later than three months following the termination of the participant’s employment with us. However, such exercise may give rise to alternative minimum tax liability (see “Alternative Minimum Tax” below). Upon the exercise of a nonqualified stock option, the participant will generally recognize ordinary income in an amount equal to the excess of the fair market value of the shares at the time of exercise over the amount paid by the participant as the exercise price. The ordinary income recognized in connection with the exercise by a participant of a nonqualified stock option will be subject to both wage and employment tax withholding, and we generally will be entitled to a corresponding deduction.

The participant’s tax basis in the shares acquiredFundamental Transaction pursuant to the exercise of an option will be the amount paid upon exercise plus, in the case of a nonqualified stock option, the amount of ordinary income, if any, recognized by the participant upon exercise thereof.

Qualifying Disposition.    If a participant disposeswhich holders of shares of our common stock acquiredare entitled to receive securities or other assets with respect to or in exchange for shares of our common stock, we will make appropriate provision to ensure that the holder will thereafter have the right to receive upon exercise of an incentive stock option in a taxable transaction, and such disposition occurs more than two years from the date on which the option was granted and more than one year after the date on which the shares were transferred to the participant pursuant to the exercise of the incentive stock option,Warrants at any time after the participant will realize long-term capital gain or loss equalconsummation of the Fundamental Transaction but prior to the difference betweenapplicable expiration date of the amount realized upon such disposition and the participant’s adjusted basisWarrants, in such shares (generally the option exercise price).

Disqualifying Disposition.    If the participant disposeslieu of shares of our common stock acquired(or other securities, cash, assets or other property) purchasable upon the exercise of an incentive stockthe Warrant prior to such Fundamental Transaction, at the option (other thanof each holder (without regard to any limitation in certain tax free transactions) within two years from the dateWarrant on which the incentive stock option was granted or within one year after the transfer of shares to the participant pursuant to the exercise of the incentiveWarrants), the number of shares of common stock option, atof the timesuccessor or acquiring corporation or of dispositionus, if we are the participant will generally recognize ordinary income equalsurviving corporation, and any additional consideration which the holder would have been entitled to receive upon the happening of such Fundamental Transaction had the Warrants been exercised immediately prior to such Fundamental Transaction.

If holders of our common stock are given a choice as to the lesser of: (i)securities, cash or property to be received in a Fundamental Transaction, then the excessholder shall be given the same choice as to the consideration it receives upon any exercise of the Warrants, following such Fundamental Transaction. These provisions apply similarly and equally to successive Fundamental Transactions and other corporate events described in the Warrants and will be applied without regard to any limitations on the exercise of the Warrants.

Notwithstanding the foregoing, in the event of a fundamental transaction, the holders of the Warrants have the right to require us or a successor entity to redeem the Warrants for cash in the amount of the Black-Scholes Value (as defined in each such share’s fair market valueWarrant) of the remaining unexercised portion of the Warrants on the date of exercise over the exercise price paidconsummation of such fundamental transaction, concurrently with or within 30 days following the consummation of a fundamental transaction. However, in the event of a fundamental transaction which is not in our control, including a fundamental transaction not approved by our Board of Directors, the participantholders of the Warrants will only be entitled to receive from us or (ii) the participant’s actual gain. If the total amount realized on a taxable disposition (including return on capital and capital gain) exceeds the fair market value onour successor entity, as of the date of exerciseconsummation of such fundamental transaction the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the Warrant that is being offered and paid to the holders of our common stock in connection with the fundamental transaction, whether

Stock Appreciation Rights

There are generally no tax consequences to the participant or us by reason of the grant of stock appreciation rights. In general, upon exercise of a stock appreciation rights award, the participant will recognize taxable ordinary income equal to the excess of the stock’s fair market value on the date of exercise over the stock appreciation rights’ base price, or the amount payable. Generally, with respect to employees, the Company is required to withhold from regular wages or supplemental wage payments an amount based on the ordinary income recognized. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code and the satisfaction of a tax reporting obligation, the Company generally will be entitled to a business expense deduction equal to the taxable ordinary income realized by the participant.

Restricted Stock

Unless a participant makes a Section 83(b) election, as described below, with respect to restricted stock granted under the 2017 Equity Incentive Plan, a participant receiving such an award will not recognize U.S. taxable ordinary income and we will not be allowed a deduction at the time such award is granted. While an award remains unvested or otherwise subject to a substantial risk of forfeiture, a participant will recognize compensation income equal to the amount of any dividends received and we will be allowed a deduction in a like amount. When an award vests or otherwise ceases to be subject to a substantial risk of forfeiture, the excess of the fair market value of the award on the date of vesting or the cessation of the substantial risk of forfeiture over the amount paid, if any, by the participant for the award will be ordinary income to the participant and will be claimed as a deduction for federal income tax purposes by us. Upon disposition of the shares received, the gain or loss recognized by the participant will be treated as capital gain or loss, and the capital gain or loss will be short-term or long-term depending upon whether the participant held the shares for more than one year following the vesting or cessation of the substantial risk of forfeiture.

However, by filing a Section 83(b) election with the Internal Revenue Service within 30 days after the date of grant, a participant’s ordinary income and commencement of holding period and the deduction will be determined as of the date of grant. In such a case, the amount of ordinary income recognized by such a participant and deductible by us will be equal to the excess of the fair market value of the award as of the date of grant over the amount paid, if any, by the participant for the award. If such election is made and a participant thereafter forfeits his or her award, no refund or deduction will be allowed for the amount previously included in such participant’s income.

Generally, with respect to employees, we are required to withhold from regular wages or supplemental wage payments an amount based on the ordinary income recognized. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code the satisfaction of a tax reporting obligation and any tax withholding condition, we generally will be entitled to a business expense deduction equal to the taxable ordinary income realized by the recipient. Upon disposition of stock, the recipient will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for such stock, if any, plus any amount recognized as ordinary income upon acquisition (or vesting) of the stock. Such gain or loss will be long- or short-term depending on whether the stock was held for more than one year from the date ordinary income is measured.

Section 409A

If an award under the 2017 Plan is subject to Section 409A of the Code, but does not comply with the requirements of Section 409A of the Code, the taxable events as described above could apply earlier than described, and could result in the imposition of additional taxes and penalties. Participants are urged to consult with their tax advisors regarding the applicability of Section 409A of the Code to their awards.

Potential Limitation on Company Deductions

Section 162(m) of the Code generally disallows a tax deduction for compensation in excess of $1 million paid in a taxable year by a publicly held corporation to its chief executive officer and certain other “covered employees”. Our Board of Directors and Compensation Committee intend to consider the potential impact of Section 162(m) on grants made under the 2017 Equity Incentive Plan, but reserve the right to approve grants of options and other awards for an executive officer that exceeds the deduction limit of Section 162(m).

New Plan Benefits

Any awards to be made under the 2017 Equity Incentive Plan will be subject to the discretion of our Compensation Committee. As a result, as of the date of this proxy statement, we are unable to determine any specific grants of awards under the 2017 Equity Incentive Plan that will be made. Since it is not possible to determine the exact number of awards that will be granted under the 2017 Equity Incentive Plan, the awards granted during fiscal 2022 under the 2017 Equity Incentive Plan are set forth in the following table.

Required Vote Required

The affirmative vote from the holders of a majority of the shares present in person or represented by proxy and entitled to vote on this matterthe Warrant Exercise Proposal at the 2023 AnnualSpecial Meeting is required for approval of this proposal. Abstentions will have the same effect as votes AGAINST this proposal. As noted above, we believe that this proposal and Proposal 2 will be considered “non-routine” and therefore broker non-votes are not expected to be present at this meeting.

Recommendation of the Board of Directors

The Board unanimously recommends that you vote “FOR” Proposal No. 1 to approve the Warrant Exercise Proposal.

EXECUTIVE OFFICERS

Set forth below are the executive officers of the Company who do not serve as directors, including their ages, their positions with our company and a brief biographical description.

Joseph Truluck, Chief Financial Officer, Treasurer, and Secretary

Joseph Truluck has served as our Chief Financial Officer since June 2017 and our Treasurer and served as our Secretary from October 2017 until September 27, 2021, and from May 2016 until his appointment as our Chief Operating Officer, as our VP Operations and Finance. From January 2013 to December of 2019, Mr. Truluck served as the VP Operations and Finance at Adenosine Therapeutics, LLC after the company reacquired its major drug development program. As VP Operations and Finance, at Adenosine Therapeutics, Mr. Truluck oversaw the operations of the business, including seeing to completion a project to merge and analyze two partially completed Phase 3 trials to constitute a single trial. From April 2005 to July 2009, Mr. Truluck served as the Operations Manager of Adenosine Therapeutics’ until its purchase in August 2008 by Clinical Data. After the purchase of Adenosine Therapeutics’ operations by Clinical Data, Mr. Truluck went on to gain an MBA from Tulane University with a concentration in Finance. In addition to his MBA at Tulane, Mr. Truluck earned an MA in Philosophy at the University of Virginia, with a thesis in the philosophy of language.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the information as to compensation paid to or earned by our executive officers during the years ended December 31, 2022 and 2021 whose total compensation did exceed $100,000. The persons listed in the following table are referred to herein as the “named executive officers.”

(11)    Represents the fair value of 5,000 options to purchase shares of common stock at an exercise price of $77.75 per share issued on February 8, 2021 at a fair value of approximately $63.25 per option. Options vest over a three-year period from grant date. Fair value computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 30, 2023.

(12)    Comprised of $13,839 in matched 401(k) contributions.

(13)    According to the terms of Mr. Stilley’s executive agreement, he was eligible to receive a bonus of 40% of his base salary for service as CEO during 2022. The Company has accordingly recognized $90,000 in accrued expenses associated with Mr. Stilley’s service for the year ended December 31, 2022. As of the date of his resignation, no bonus for 2022 had been paid, nor will any such bonus be paid.

(14)    Includes the value of 3,333 shares issued on February 23, 2022 with a market value on issue of $50.00 per share as a discretionary bonus. An additional 6,667 shares were originally granted on the same day at the same value per share but were cancelled on December 30, 2022 at Mr. Stilley’s will. Fair value computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 30, 2023.

(15)    Includes (i) the payment of $24,700 of medical and dental insurance premiums and HSA contributions, (ii) $8,702 of matched 401(k) contributions, $27,000 cash fee for services as a Director, and (iv) $897 of reimbursed telephone expenses.

(16)    Bonuses for Mr. Stilley were comprised of cash performance bonus payment of $114,800 earned in 2021 and paid in 2022.

(17)    Includes the fair value of 10,000 options to purchase shares of common stock at an exercise price of $77.75 per share issued on February 8, 2021 at a fair value of $63.25 per option. Options vest over a three-year period from grant date. Fair value computed in accordance with FASB ASC Topic 718. The valuation assumptions used in determining such amounts are described in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 30, 2023.

(18)    All other compensation for Mr. Stilley is comprised of (i) a contribution by our company to an HSA ($8,004); (ii) the payment by our company of insurance premiums including life, dental, vision ($28,245); (iii) matched 401(k) contributions ($11,187); and (iv) cash fee for services as a Director ($24,000).

(19)    Mr. Stilley served as our Chief Executive Officer until August 18, 2022 when he served as our Executive Vice President and the Chief Executive Officer of Purnovate, Inc. On September 18, 2023, Mr. Stilley resigned from all positions he held with us including as a member of our Board of Directors and Executive Vice President as well as Chief Executive Officer of our subsidiary.

Outstanding Equity Awards at Fiscal Year-End (December 31, 2022)

The following table provides information aboutBoard unanimously recommends that you vote “FOR” Proposal No. 2 to approve the numberAdjournment Proposal.