Related Party Transactions
|12 Months Ended|
Dec. 31, 2020
|Related Party Transactions [Abstract]|
|RELATED PARTY TRANSACTIONS||
6 — RELATED PARTY TRANSACTIONS
In January 2011, the Company entered into an exclusive, worldwide license agreement with The University of Virginia Patent Foundation d/b/a the University of Virginia Licensing and Ventures Group (the "UVA LVG") for rights to make, use or sell licensed products in the United States based upon patents and patent applications made and held by UVA LVG (the "UVA LVG License"). The Company is required to pay compensation to the UVA LVG, as described Note 9. A certain percentage of these payments by the Company to the UVA LVG may then be distributed to the Company's former Chairman of the Board who currently serves as the Company's Chief Medical Officer in his capacity as inventor of the patents by the UVA LVG in accordance with their policies at the time.
On September 21, 2020, the Company concluded a private placement of 357,143 unregistered shares of common stock and above market price of $1.40 per share with Bespoke Growth Partners, Inc. ("Bespoke"). Bespoke is controlled by a consultant who serves as the Company's Chief Development Officer. Net proceeds of the offering was $500,000.
On December 7, 2020, the Company entered into an Equity Purchase Agreement with Purnovate, LLC to purchase all of the outstanding membership interests of Purnovate from the members of Purnovate (the "Members"), such that after the acquisition, Purnovate would be a wholly owned subsidiary of Adial. Purnovate is a drug development company with a platform focused on developing drug candidates for non-opioid pain reduction and other diseases and disorders potentially targeted with adenosine analogs that are selective, potent, stable, and soluble. Adial's Chief Executive Officer and board member, William B. Stilley, and another Adial board member were, directly or indirectly, members of Purnovate. Messrs. Stilley and Newman agreed to sell their membership interests on the same terms as the other Members, except that Mr. Stilley is subject to a two (2) year lock up with respect to the sale and transfer of the stock consideration that he receives so long as his employment has not been terminated by the Company without cause prior to the end of such period. Mr. Stilley owned approximately 28.7% of the membership interest of Purnovate and Mr. Newman controlled two entities that, together, own less than 1% of the membership interests of Purnovate.
As a result of the foregoing, the Company formed a Special Committee of independent members of its Board of Directors to review and negotiate the acquisition terms. On January 26, 2021 the acquisition was consummated, and Messrs. Stilley and Newman sold all of their membership interests in Purnovate to the Company (see Note 10).
See Note 9 for related party vendor, consulting, and lease agreements and Note 4 for Advance to Seller.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef