{"url_path":"/sec/adil/8-k/2026-06-11/item-5-03","section_key":"item-5-03","section_title":"Item 5.03 Amendments to Articles","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-06-11","source_url":"https://www.sec.gov/Archives/edgar/data/1513525/0001213900-26-067711-index.html","accession_number":"0001213900-26-067711","cik":"0001513525","ticker":"ADIL","issuer_name":"ADIAL PHARMACEUTICALS, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1513525/0001213900-26-067711-index.html","primary_entity_key":"0001513525","primary_entity_name":"ADIAL PHARMACEUTICALS, INC."},"word_count":1189,"has_tables":true,"body_markdown":"**Item 5.03 - Amendments to Articles\nof Incorporation or Bylaws; Change in Fiscal Year.**\n\n \n\nOn June 11, 2026, the Company filed with the\nSecretary of State of the State of Delaware the Certificate of Designation in connection with the Merger referenced in Item 1.01 above.\nThe Certificate of Designation provides for the creation of the Company’s Series A Preferred Stock, designating 13,000 shares of\nthe Company’s preferred stock as Series A Preferred Stock, and sets forth the terms applicable thereto, a summary of certain of\nwhich is set forth below.\n\n \n\n*Ranking*. The Series A Preferred Stock\nranks pari pasu with the Common Stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary\nliquidation, dissolution or winding up of the affairs of the Company.\n\n \n\n*Dividends.* Holders of Series A Preferred\nStock are entitled to receive dividends on shares of Series A Preferred Stock equal to, on an as-if-converted-to-Common-Stock basis,\nand in the same form as dividends actually paid on shares of the Common Stock.\n\n \n\n*Voting.*Except as otherwise provided in\nthe Certificate of Designation or as otherwise required by the General Corporation Law of the State of Delaware, the Series A Preferred\nStock shall have no voting rights. However, as long as any shares of Series A Preferred Stock are outstanding, the Company shall not,\nwithout the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock: (i) alter or\nchange adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation,\namend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series\nA Preferred Stock, (ii) issue further shares of Series A Preferred Stock or increase or decrease the number of authorized shares of Series\nA Preferred Stock, (iii) prior to the stockholder approval of the Company Stockholder Matters, consummate either: (A) any Fundamental\nTransaction (as defined in the Certificate of Designation) or (B) any merger or consolidation of the Company with or into another Person\nor any stock sale to, or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, share\nexchange or scheme of arrangement) with or into another Person in which the stockholders of the Company immediately before such transaction\ndo not hold at least a majority of the capital stock of the Company immediately after such transaction or in which the Company issues\nsecurities in such transaction that represent or are convertible into securities representing more than a majority of the voting power\nof the Company immediately before such transaction, (iv) prior to the stockholder approval of the Company Stockholder Matters, authorize\nor issue any class or series of stock that has powers, preferences or rights that are senior to those of the Series A Preferred Stock,\n(v) amend, waive or modify the Merger Agreement in any manner that would be reasonably likely to prevent, impede or materially delay\nstockholder approval of the Company Stockholder Matters or the Automatic Conversion (as defined in the Certificate of Designation) or\n(iv) enter into any agreement with respect to any of the foregoing. Holders of shares of Common Stock acquired upon the conversion of\nshares of Series A Preferred Stock shall be entitled to the same voting rights as each other holder of Common Stock, except that such\nholders may not vote such shares in connection with the Company Stockholder Matters in accordance with Rule 5635 of the listing rules\nof Nasdaq.\n\n \n\n10\n\n \n\n \n\n*Transfer Restrictions*. Subject to certain\nexceptions, holders of shares of Series A Preferred Stock and shares of Common Stock issued upon conversion of shares of Series A Preferred\nStock (collectively, the “**Locked Shares**”) shall be subject to the following restrictions on transfer:\n\n \n\n1.1/3 of the Locked Shares held by each\nholder thereof shall not be transferred until the date that is 180 days after the Initial\nClosing;\n\n \n\n2.1/3 of the Locked Shares held by each\nholder thereof shall not be transferred until the date that is 180 days after the date that\nstockholder approval of the Company Stockholder Matters in obtained; and\n\n \n\n3.1/3 of the Locked Shares held by each\nholder thereof shall not be transferred until the date that is 180 days after the date that\nthe Company issues the Milestone Event Notice.\n\n \n\nNotwithstanding the foregoing, in no event shall\nany Locked Shares remain subject to the foregoing transfer restrictions after the Company’s issuance of the Milestone Event Notice.\n\n \n\n*Conversion.*Following stockholder approval\nof the Company Stockholder Matters, each share of Series A Preferred Stock will automatically convert into 1,000 shares of Common Stock,\nsubject to certain limitations (the “**Conversion Ratio**”), including that a holder of Series A Preferred Stock\nis prohibited from converting shares of Series A Preferred Stock into shares of Common Stock if, as a result of such conversion, such\nholder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between\n4.99% and 19.99%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion,\nprovided that following approval of the Nasdaq Listing Application (as defined in the Merger Agreement) and the Company Stockholder Matters,\nsuch beneficial ownership blockers may be waived by each holder of Series A Preferred Stock upon written notice to the Company to be\neffective on the 61st day following receipt of such notice. Following the earlier of (i) the third business day after the date that the\nCompany Stockholder Matters are approved by the Company’s stockholders and (ii) solely for purposes of a cash settlement (as discussed\nbelow), the date that is 6 months after the initial issuance date of the Series A Non-Voting Preferred Stock, any shares of Series A\nPreferred Stock that remain outstanding may be converted, at the option of the holder thereof, into that number of shares equal to the\nConversion Ratio.\n\n \n\n*Cash Settlement*. If at any time after\nthe earlier of (i) approval of the Company Stockholder Matters or (ii) six months after the initial issuance of the Series A Preferred\nStock, the Company fails to deliver to the holder of the Series A Preferred Stock shares of Common Stock underlying such shares Series\nA Preferred Stock, then (other than in certain circumstances set forth in the Certificate of Designation), the Company will pay, at the\nrequest of such holder, an amount of cash by wire transfer of immediately available funds equal to the Fair Value (as defined in the\nCertificate of Designation) of such undelivered shares.\n\n \n\n*Liquidation.*In the event of liquidation,\ndissolution, or winding up of the affairs of the Company, whether voluntary or involuntary, holders of Series A Preferred Stock shall\nrank on parity with holders of Common Stock as to the distributions of assets.\n\n \n\nThe foregoing description of the Series A Preferred\nStock does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which\nis filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference."}