Analysis:

Part 1: Performance Analysis

Adial Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on developing therapeutics for the treatment or prevention of addiction and related disorders. The company's mission is to create the leading addiction-focused pharmaceutical company by exploring internal developments and acquisitions. In January 2021, Adial Pharmaceuticals acquired Purnovate, a company's drug discovery and development platform to invent and develop new chemical entities to treat unmet medical needs. The acquisition is consistent with Adial Pharmaceuticals' strategy to expand its portfolio in the field of addiction and related disorders such as pain reduction using internal development and acquisitions.

The company's primary product is AD04, a genetically targeted therapeutic agent under investigation in a phase 3 clinical trial for the potential treatment of AUD. AD04's potential treatment involves subjects with certain target genotypes identified by the companion diagnostic genetic test. Based on the ONWARD trial's subgroup data, the company is focused on commercializing AD04 in the US and Europe.

However, Adial Pharmaceuticals currently does not have any products approved for sale; hence, it has not generated any significant revenue since inception. The company has primarily funded its operations through private and public placements of debt and equity securities and an equity line.

Part of the company's concern is that it does not project to have sufficient cash and equivalents to fund operations for the next twelve months from the filing of the annual report on Form 10-K. Until Adial Pharmaceuticals generates substantial revenue from product sales, it plans to finance its operating activities through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, and other collaborations, strategic alliances, and licensing arrangements. However, the company may not raise additional funds or enter into other arrangements needed. A failure to do so would negatively impact its financial condition and ability to develop AD04.

Part 2: Forward Looking Analysis

Adial Pharmaceuticals is committed to developing therapeutics for addiction and related disorders, and it intends to continue expanding its portfolio through acquisitions and internal development. The acquisition of Purnovate reflects the company's strategy to expand its adenosine drug discovery and development platform to invent and develop novel chemical entities as drug candidates for unmet medical needs.

The company anticipates that upon execution of collaborative research and development agreements with its vendors, it will execute the two-stage clinical development strategy for AD04 in a sequential Phase 3 clinical trial. Even if the first Phase 3 trial is not accepted by the FDA due to the study's lack of power in the FDA's end point, the company anticipates that the EMA will require only one additional trial. However, a third trial might be required by the FDA if two additional trials are required for FDA approval after conducting an initial Phase 3 trial conducted in EMA. This means that the second and third trials will run in parallel to shorten the timeframe.

Adial Pharmaceuticals does not anticipate any significant direct expenses resulting from the ONWARD trial; however, the continued expenditures relate to data analysis, strategic planning, and regulatory follow-up resulting from the trial continue. In general, the company's focus on commercializing AD04 in the US and Europe and expanding its portfolio in the field of addiction and related disorders is a positive indication of the company's commitment to growth. However, given its lack of substantial revenue, the company's ability to fund its operations and to develop AD04 must remain a central point of consideration for investors.

Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405]

LIST OF SUBSIDIARIES OF ADIAL PHARMACEUTICALS, INC

Adial Pharmaceuticals Inc

Adial Pharma developing novel addiction treatments. Analysis & Forward Looking.

Form 8-K - Current report - Item 1.01 Item 7.01 Item 9.01

MASTER SERVICES AGREEMENT BETWEEN ADIAL PHARMACEUTICALS, INC. AND THE KESWICK GR

Adial Pharma developing novel addiction treatments. Analysis & Forward Looking.

Adial Pharma developing novel addiction treatments. Analysis & Forward Looking.

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing

Announcement: ADIL 8-K Special Filing