[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I-FINANCIAL%20INFORMATION) [Condensed Consolidated Unaudited Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Unaudited%20Financial%20Statements) The company reported a net loss of $4.8 million in Q1 2021, with assets growing to $8.6 million, and faces substantial doubt about its going concern ability [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $8.6 million as of March 31, 2021, primarily due to cash and the Purnovate acquisition, with liabilities rising to $3.0 million Condensed Consolidated Balance Sheets (Unaudited) | | March 31, 2021 ($) | December 31, 2020 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 6,172,299 | 5,135,838 | | **Total Assets** | **8,625,499** | **5,491,444** | | **Total Current Liabilities** | 2,042,340 | 1,505,378 | | **Total Liabilities** | 3,007,857 | 1,505,378 | | **Total Shareholders' Equity** | 5,617,642 | 3,986,066 | | **Total Liabilities and Shareholders' Equity** | **8,625,499** | **5,491,444** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a net loss of $4.83 million in Q1 2021, significantly higher than the prior year, primarily due to increased R&D and G&A expenses Condensed Consolidated Statements of Operations (Unaudited) | | Three months ended March 31, 2021 ($) | Three months ended March 31, 2020 ($) | | :--- | :--- | :--- | | Research and development expenses | 2,051,623 | 1,059,578 | | General and administrative expenses | 2,788,711 | 1,240,667 | | **Total Operating Expenses** | **4,840,334** | **2,300,245** | | **Loss From Operations** | **(4,840,334)** | **(2,300,245)** | | **Net Loss** | **(4,833,764)** | **(2,276,813)** | | **Net loss per share, basic and diluted** | (0.30) | (0.22) | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity increased to $5.6 million by March 31, 2021, driven by equity financing and the Purnovate acquisition, despite a net loss - Key activities affecting shareholders' equity in Q1 2021 included the sale of common stock (**$2.6M**), warrant exercises (**$1.4M**), stock issued for an acquisition (**$1.1M**), and equity-based compensation (**$1.3M**), offset by a net loss of **$4.8M**[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by $1.24 million in Q1 2021, driven by $4.08 million in financing activities, offsetting $2.84 million used in operations Condensed Consolidated Statements of Cash Flows (Unaudited) | | Three months ended March 31, 2021 ($) | Three months ended March 31, 2020 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,843,424) | (1,825,421) | | Net cash provided by (used in) investing activities | (286) | 0 | | Net cash provided by financing activities | 4,080,503 | 0 | | **Net Increase (Decrease) in Cash** | **1,236,793** | **(1,825,421)** | | **Cash and Cash Equivalents - End of Period** | **5,637,907** | **4,951,631** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the Purnovate acquisition, and liquidity risks, highlighting a going concern warning and significant future payment commitments - The company has commenced its first Phase 3 clinical trial for its lead compound AD04 for the treatment of alcohol use disorder[22](index=22&type=chunk) - On January 26, 2021, the company acquired its wholly owned subsidiary, Purnovate, Inc., a drug development company focused on non-opioid pain reduction[23](index=23&type=chunk) - The financial statements have been prepared on a going concern basis, but the company's recurring losses, negative cash flows, and accumulated deficit of approximately **$36.4 million** raise substantial doubt about its ability to continue as a going concern. Existing cash is expected to fund operations only into the fourth quarter of 2021[24](index=24&type=chunk) - The acquisition of Purnovate was a related-party transaction, as Adial's CEO, William B. Stilley, owned **28.73%** of Purnovate's membership interests[56](index=56&type=chunk) - The company has an ongoing master services agreement with Crown CRO Oy for its Phase 3 clinical study, with remaining future milestone payments totaling approximately **$949,588**, plus estimated pass-through costs of around **$3.1 million**[98](index=98&type=chunk)[100](index=100&type=chunk)[103](index=103&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A details AD04 development and Purnovate acquisition, analyzing increased expenses that drove a higher net loss, and highlights critical liquidity challenges - The company's landmark ONWARD pivotal Phase 3 clinical trial for AD04 is more than **50% enrolled**, with completion expected by the first quarter of 2022[123](index=123&type=chunk) - The COVID-19 pandemic caused delays in obtaining regulatory approvals and slowed trial enrollment in 2020, pushing the projected completion of the Phase 3 trial to Q1 2022 and increasing costs[148](index=148&type=chunk) Results of Operations Comparison (in thousands of dollars) | | For the Three Months Ended March 31, 2021 ($) | For the Three Months Ended March 31, 2020 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Research and development expenses | 2,052,000 | 1,060,000 | 992,000 | | General and administrative expenses | 2,789,000 | 1,241,000 | 1,548,000 | | **Net Loss** | **(4,834,000)** | **(2,278,000)** | **(2,556,000)** | - Current cash and cash equivalents are not sufficient to fund operations for the next twelve months. The company expects to exhaust funds in Q4 2021 and will require approximately **$2.7 million** in additional funding to reach the expected database lock for its clinical trial in February 2022[156](index=156&type=chunk)[157](index=157&type=chunk) - The company has an equity purchase agreement with Keystone Capital, LLC, allowing for up to **$15 million** in equity financing, of which **$2.85 million** had been raised as of the filing date. Access to the remaining funds is dependent on the stock's market price and other conditions[156](index=156&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states this item is not applicable, indicating no significant exposure to market risks requiring quantitative and qualitative disclosure - The company has determined that quantitative and qualitative disclosures about market risk are not applicable[181](index=181&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2021, due to identified material weaknesses, despite believing financial statements are fairly presented - Management identified material weaknesses in internal control over financial reporting and concluded that disclosure controls and procedures were not effective as of March 31, 2021[181](index=181&type=chunk) - Identified weaknesses include: inadequately documented policies, lack of proper approval/review processes, insufficient GAAP experience, and insufficient staff to maintain optimal segregation of duties[181](index=181&type=chunk) - Notwithstanding the material weaknesses, management has concluded that the financial statements included in the quarterly report are fairly presented in all material respects[182](index=182&type=chunk) [PART II - OTHER INFORMATION](index=37&type=section&id=PART%20II-OTHER%20INFORMATION) [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that would materially adversely affect its business, financial condition, or cash flows - As of the reporting date, the company is not a party to any material legal proceedings[184](index=184&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing the company's history of net losses, substantial doubt about its going concern ability, and the need for significant additional financing - The company has a history of net losses, with an accumulated deficit of approximately **$36.4 million** as of March 31, 2021, and anticipates continued losses[187](index=187&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern, as current funds are projected to be exhausted in the fourth quarter of 2021 without additional financing[190](index=190&type=chunk) - Significant additional financing is required to complete clinical trials and support operations. Failure to raise capital could negatively impact business strategies and may lead to significant shareholder dilution[192](index=192&type=chunk)[194](index=194&type=chunk) - Officers and directors beneficially own approximately **28%** of the company's outstanding common stock, giving them significant influence over corporate matters[198](index=198&type=chunk) - The company's stock price has been and may continue to be volatile, which could result in substantial losses for investors[202](index=202&type=chunk)[203](index=203&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the quarter, beyond those previously disclosed in SEC filings, with other sections marked not applicable - No unregistered sales of equity securities occurred during the three months ended March 31, 2021, other than those previously disclosed in SEC filings[207](index=207&type=chunk) [Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[207](index=207&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[207](index=207&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) The company reports no other information to disclose for this period - Not applicable[207](index=207&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, material agreements, and CEO/CFO certifications - This section lists exhibits filed with the report, including certifications required by the Sarbanes-Oxley Act (Sections 302 and 906) and various corporate and transactional agreements[209](index=209&type=chunk)[211](index=211&type=chunk)

Financial Reporting and Compliance - The company has identified material weaknesses in its internal control over financial reporting, which may lead to material misstatements in financial statements [240]. - The company is subject to increasing legal, accounting, and financial compliance costs due to the reporting requirements of the Sarbanes-Oxley Act [238]. - The company anticipates incurring significant legal, accounting, and compliance costs as a public entity, which were not present as a private company [399]. - The company is classified as an "emerging growth company" and will remain so until total annual gross revenue exceeds $1.07 billion or other specified conditions are met [397]. Clinical Trials and Product Development - The company is currently conducting the ONWARD Phase 3 clinical trial for its lead product candidate, AD04, with approximately 290 patients in Scandinavia and Central and Eastern Europe [248]. - The company anticipates completing patient enrollment in the ONWARD pivotal Phase 3 clinical trial in Q2 or Q3 of 2021, but patient enrollment challenges may lead to significant delays [286]. - The company plans to test AD04 in adolescent patients (ages 12-17) as part of the next Phase 3 trial [272]. - The company has limited experience in conducting clinical trials, which may impact the timely completion of planned trials [279]. - The company cannot guarantee that the clinical trial material produced will be approved for use in trials, which could delay the clinical program [274]. - Success in preclinical testing and early clinical trials does not ensure later clinical trials will be successful, which could delay commercialization [281]. - The company must demonstrate safety and efficacy through lengthy and expensive preclinical testing and clinical trials before obtaining regulatory approvals for AD04 and future product candidates [283]. - The FDA may require additional clinical trials for patients negative for the targeted genotypes, potentially delaying approval [270]. - The approval of AD04 is contingent upon the successful development and approval of a companion diagnostic genetic test [275]. - The Phase 3 trials are expected to last 24 weeks, compared to the 12 weeks of the Phase 2b trial [268]. - The FDA has indicated that a satisfactory endpoint for the Phase 3 trial will be the percentage of patients with no heavy drinking days in the last two months of a six-month treatment regimen [269]. Market and Competitive Landscape - The pharmaceutical industry is characterized by rapid technological change and substantial competition, which may impair the company's business [289]. - The company will compete against larger pharmaceutical companies and smaller firms with greater resources and experience in drug development and commercialization [291]. - The success of the product candidates will depend on acceptance by physicians, healthcare payers, and patients, particularly as the products are intended to be used in conjunction with genetic testing [288]. - Market acceptance of AD04 and future product candidates is uncertain, and failure to gain acceptance could significantly harm revenue generation [319]. Financial Risks and Funding - The company currently generates no revenues from its product candidate and may never be able to develop or commercialize a marketable drug [251]. - The company may need to raise additional financing through equity sales, which could have a dilutive effect on existing shareholders [237]. - The company may require additional financing in the future, which could lead to dilution of existing shareholders' equity [408]. - If the common stock is de-listed and trades as a "penny stock," it may face additional regulatory requirements that could limit trading activity and increase transaction costs [410]. - The company may incur substantial costs if its products infringe on the proprietary rights of other parties, which could include obtaining licenses, redesigning products, or paying damages [349]. Intellectual Property and Legal Risks - There is a risk of third parties asserting claims related to their intellectual property rights, which could lead to costly litigation and diversion of resources [348]. - The company has limited protection for its intellectual property, and unauthorized use of technology may occur despite licensing efforts [340]. - The company cannot assure that pending patent applications will be approved or that issued patents will provide significant commercial protection [343]. - Non-compliance with patent application requirements could lead to abandonment or loss of patent rights, allowing competitors to enter the market [356]. - The company may face lawsuits to protect or enforce patents, which could be expensive and time-consuming, with adverse outcomes risking the validity of licensed patents [351]. Strategic Partnerships and Acquisitions - The company may pursue acquisitions and joint ventures, but lacks experience in integrating such transactions successfully [377]. - The company relies on collaboration agreements for the commercialization of investigational product candidates, which may involve greater uncertainty and less control [335]. - If strategic partnerships are not established or maintained, the development of current and future product candidates may be delayed or terminated [332]. - The acquisition of Purnovate is expected to provide strategic benefits, but there is no assurance that these benefits will materialize or enhance stockholder value [292]. Stockholder and Governance Issues - The company has outstanding warrants to purchase 7,957,225 shares at a weighted average exercise price of $4.83, which could dilute common stock ownership [389]. - The company’s board is authorized to issue 50,000,000 shares of common stock and 5,000,000 shares of preferred stock, potentially diluting existing shareholders [390]. - The company has never paid dividends and does not plan to do so in the future, intending to retain future earnings for operations [392]. - Provisions in the corporate charter and Delaware law may complicate potential acquisitions, potentially hindering stockholder interests [411]. - The company's board of directors is divided into three classes, with each class serving a three-year term, which may limit stockholder influence on management [412].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-38323 ADIAL PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in its Charter) | --- | --- | |------ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-38323 ADIAL PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in its Charter) | --- | --- | |----------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 001-38323 ADIAL PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in its Charter) | --- | --- | |---------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-3823 ADIAL PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Delaware 82-3074668 State or Other Jurisdiction of Incorporation or Organization I.R.S. Employer Identification No. Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock ADIL NASDAQ Warrants ADILW NASDAQ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 O ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock ADIL NASDAQ Warrants ADILW NASDAQ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File ...