Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.10.0.1
Subsequent Events
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

11 — SUBSEQUENT EVENTS

 

On July 26, 2018, the Company concluded its initial public offering of 1,464,000 units (the “IPO”), each unit consisting of one share of common stock and a warrant for the purchase of one share of common stock with an exercise price of $6.25 (the “Offering Warrants”). Joseph Gunnar & Co. (“Gunnar”) acted as the sole book-runner of the IPO and Dawson James Securities, Inc. acted as co-manager. The units were sold to the public at a price of $5.00 per unit. Gunnar, as representative of the several underwriters, was granted an overallotment option to purchase up to 219,600 shares of common stock at $4.99 per share and up to 219,600 Offering Warrants for $0.01 per Offering Warrant. Gunnar exercised its overallotment option to purchase 170,652 Offering Warrants for $1,708. Gross proceeds of the offering, totaled $7,320,000, which after underwriter’s Commissions, fees, credit for overallotment exercise proceeds, and expenses not recognized in previous periods, resulted in net proceeds of $6,267,932.

 

On July 27, 2018, the shares of common stock and Offering Warrants began trading on the Nasdaq Capital Market under the symbols “ADIL” and “ADILW”, respectively.

 

Convertible Notes: On July 31, 2018, as a result of the completion of the IPO and as required under their terms, the Company converted the entirety of the outstanding principal of and interest accrued to the 2016 Convertible Notes to 700,854 units (700,854 shares of common stock and 700,854 Offering Warrants) at the Conversion Cap Price (see Notes 2 and 5) and issued these units to the Convertible note holders, fully satisfying the Company’s obligations.

 

Senior Secured Notes: On July 31, 2018, as a result of the completion of the IPO and as required under their terms, the Company made cash payments of $548,160, issued 408,000 Units (408,000 shares of common stock and 408,000 Offering Warrants), and issued 408,000 Unit Warrants to holders of the Secured Notes (see Notes 2 and 4). With these payments and issuances, the Secured Notes were paid in full, and the Company’s obligation to the note holders fully satisfied. At that time, the Company recognized $7,905 in interest expense for interest accrued from July 1, 2018 to the date of repayment and a $3,524,711 loss on extinguishment for the issuance of the Units and Unit Warrants.

 

Backstop agreement: On July 31, 2018, as a result of the completion of the IPO and as required under their terms, the Company issued 24,200 Units (24,200 shares of common stock and 24,200 Offering Warrants) and 72,600 Unit Warrants to the counterparty to the backstop agreement (see Note 7). With these payments and issuances, the Company’s obligation to the counterparty were fully satisfied. At that time, the Company recognized a $385,191 financing charge.

 

Senior Secured Bridge Note: On July 31, 2018, as a result of the completion of the IPO and as required under the terms of the Settlement agreement of February 22, 2018, the Company made a cash payment of $100,000, issued 10,020 shares of common stock, and issued a warrant for the purchase of 65,130 shares of common stock for an exercise price of $4.99 to the holder of the Senior Secured Bridge note (see Notes 2 and 4). As a result of these payments and issuances, the Company’s obligations under the settlement agreement to the Senior Secured Bridge note holder were fully satisfied. At the time of this final settlement payment, the Company recognized a net loss on extinguishment of $98,137.

 

On July 31, 2018, as a result of the completion of the IPO and as required under the terms of a vendor agreement, the Company issued 20,000 Units to a vendor. At the time of this grant, the Company recognized $100,000 in compensation expense.

 

On July 31, 2018, as a result of the completion of the IPO and as required under their terms of a consulting and employment agreements, the Company issued 368,861 shares of common stock and warrant to purchase 424,608 shares of common stock at an exercise price of $4.99 to vendors and employees. At the time of these grants, the Company recognized an SG&A expense of approximately $3,335,764.

 

On July 31, 2018, the CRO Option (see Note 9) expired, unexercised.

 

On August 13, 2018, the Board of Directors approved the filing of a registration statement on Form S-8 registering the 1,750,000 shares issuable under the Company’s 2017 equity incentive plan (see Note 9). On August 16, 2018, the registration statement on Form S-8 covering the 1,750,000 shares issuable under the 2017 equity incentive plan was filed with the SEC.

 

On September 6, 2018, as a result of the Company’s hiring of a full-time Senior Vice President of Drug Development, the Company revised the terms of its proposed employment with Tomasz H. Zastawny and instead entered into an offer letter with Dr. Zastawny to devote up to 30% of his business effort to serve as its Chief Development Officer.  In consideration for such services, Dr. Zastawny’s sole compensation (subject to additional future equity grants in the discretion of the Board of Directors and/or a committee thereof) will be the prior option award that he received and its continued vesting.