UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):July 5, 2019
Adial Pharmaceuticals, Inc.
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction of incorporation)
| 001-38323 | | 82-3074668 |
| (Commission File Number) | | (IRS Employer Identification No.) |
1001 Research Park Blvd., Suite 100
Charlottesville, Virginia 22911
(Address of principal executive offices and zip code)
(434) 422-9800
(Registrant’s telephone number including area code)
(Former Name and Former Address)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | |
| ☐ | Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12) |
| | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Trading Symbols | | Name of each exchange on which registered |
| Common Stock | | ADIL | | NASDAQ |
| | | | | |
| Warrants | | ADILW | | NASDAQ |
Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On July 5, 2019, Adial Pharmaceuticals, Inc. (the “Company”) entered into a Master Services Agreement (the “MSA”) and attached statement of work with Psychological Education Publishing Company (“PEPCO”) to administer a behavioral therapy program during the Company’s upcoming Phase 3 clinical trial (the “Trial”) using the Company’s lead investigational new drug product, AD04, for the treatment of alcohol use disorder. Specifically, PEPCO is engaged in the business of training and certifying clinical investigators in the administration of Brief Behavioral Compliance Enhancement Treatment (“BBCET”). PEPCO is owned by an affiliate of the Company, Dr. Bankole Johnson, the Company’s Chief Medical Officer, and currently the largest stockholder in the Company.
The Company may terminate the MSA at any time upon ten (10) days prior written notice to PEPCO. Unless otherwise indicated in the Company’s notice of termination, Work (as defined in the MSA) under any statement of work in progress at the time of the delivery of notice of termination shall continue as if the applicable statement of work had not been terminated, and the terms hereof shall continue to apply to such work. The Company may also terminate the MSA for cause due to PEPCO’s failure to perform its obligations thereunder upon three (3) days prior written notice to PEPCO; provided, however, the Company may terminate the MSA immediately in the event of PEPCO’s violation, or threatened violation, of certain provisions contained therein.
The statement of work under the MSA will terminate upon the completion the final study report for the Trial and delivery of the final report by PEPCO on the supervision and monitoring of the BBCET, including, without limitation, data reports. Notwithstanding the forgoing, the statement of work may be terminated by the Company upon written notice to PEPCO.
It is anticipated that the compensation to be paid to PEPCO for services under the MSA will be approximately $300,000, of which subject to approval of the Nasdaq Capital Market shares of the Company’s common stock having a value equal to twenty percent (20%) of the fees due thereunder (the “Company Shares”) will be issued to Dr. Johnson as a consultant under the Company’s 2017 Equity Incentive Plan.
The Company Shares issued thereunder will be subject to a six month lock-up and Dr. Johnson may not offer, pledge, announce, sell, contract to sell, announce any proposed issuance, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly the Company Shares for a period of six months from their date of issuance. The stock certificate issued, if a stock certificate is issued, for the Company Shares will bear a restrictive legend and if the shares are held in book entry the Company’s transfer agent shall have a restricted notation in its books and records.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is filed with this Current Report on Form 8-K:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: July 8, 2019 | ADIAL PHARMACEUTICALS, INC. |
| | | |
| | By: | /s/ William B. Stilley, III |
| | Name: | William B. Stilley |
| | Title: | President and Chief Executive Officer |
EXHIBIT INDEX
4
