Adial Pharmaceuticals (ADIL) investor relations material

Deal rationale and strategic fit

• Acquisition brings a novel, colon-targeted AhR agonist (AT177) for ulcerative colitis, aiming to address significant unmet needs with localized action and limited systemic exposure.

• The combined company will focus on advancing AT177 through IND-enabling studies and Phase 1 trials, building a differentiated pipeline for immune-mediated diseases.

• The addition of experienced leadership and scientific advisors, including Azora’s co-founder and Dr. Wendy Young, is expected to support the next phase of growth.

Financial terms and conditions

• Structured as a stock-for-stock transaction: Azora equity holders receive 437,474 shares of common stock and 12,930 shares of Series A non-voting convertible preferred stock (equal to 12,930,617 shares on an as-converted basis).

• Concurrent private placement to raise up to $64 million: $32 million upfront and up to $32 million in milestone tranches.

• Pre-funded warrants and common warrants issued at $2.7489 per share, with milestone-based additional warrants and conversion/exercise subject to stockholder approval.

• Post-transaction, Azora equity holders own ~51%, Adial pre-acquisition holders ~7.7%, and private placement investors ~41.3% of the combined company on a fully diluted basis.

Integration plans and timeline

• Leadership team expanded with Azora's co-founder joining as Chief Development Officer and a new board member with extensive drug discovery experience.

• AT177 is currently in IND-enabling studies, with Phase 1 initiation and proof-of-concept trial targeted for 2027.

• Private placement expected to close on June 12th, subject to customary conditions.

• Proceeds will fund AT177 through IND-enabling, phase I-A, and phase I-B clinical studies.