Exhibit 10.30


 


SECURITIES PURCHASE AGREEMENT


 


This SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of June 6, 2018, is by and between Adial Pharmaceuticals, Inc.,
a Delaware corporation, with headquarters located at 1180 Seminole Trail, Charlottesville, Virginia 22901 (the “Company”),
and the David S Nagelberg 2003 Revocable Trust Dtd 7/2/03 with an address at 939 Coast Blvd, Unit 21 DE, La Jolla, CA 92037
(the “Investor”).


 


WHEREAS:


 


A. The Company
and the Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”
or “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).


 


B. The Investor
desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a senior
secured convertible promissory note of the Company, in the form attached hereto as Exhibit A, in the principal amount set
forth on the signature page of this Agreement (the “Secured Note”). The Company’s obligations under the
Secured Note are secured by the Security Agreement between the Company and the Investor, in the form attached hereto as Exhibit
B (the “Security Agreement”).


 


C. The Company
desires to issue that certain warrant to purchase shares of common stock, par value $0.001 per share, of the Company (the “Common
Stock”) in the form attached hereto as Exhibit C (the “Warrant”), to the Buyer as additional
consideration for the purchase of the Note, as further provided herein.


 


NOW THEREFORE, the Company and the
Investor hereby agree as follows:


 


1.
PURCHASE AND SALE OF SECURED NOTE.


 


a.
Purchase of Secured Note. On the Closing Date (as defined below), the Company shall issue and sell to
the Investor, and the Investor agrees to purchase from the Company the Secured Note in the principal amount of three hundred
and twelve thousand dollars ($325,000) as provided in this Agreement and convertible into shares of Common Stock at a price
of two dollars ($2.00) per share of Common Stock pursuant to the terms contained in the Secured Note. Shares issued pursuant
to the conversion of the Secured Note shall be referred to herein as the “Conversion Shares”.


 


b.
In addition, on the Closing Date, the Company shall issue to Investor a stock purchase warrant to purchase shares of
Common Stock pursuant to the terms contained in the “Warrant”. Shares issued pursuant to the exercise of the
Warrant shall be referred to herein as the “Warrant Shares”). At issuance of the Warrant, the number of Warrant
Shares purchasable under the Warrant shall be three hundred thousand (300,000) and the Exercise Price (as defined in the
Warrant) shall be three dollars and seventy-five cents ($3.75) per share. This Agreement, the Secured Note, the Warrant
and the Security Agreement are sometimes referred to herein as the “Transaction Documents”.


 






     


     


    

 


c.
Form of Payment. On the Closing Date, (i) Investor shall pay two hundred and seventy five thousand
dollars ($275,000) (the “Purchase Price”) by wire transfer of immediately available funds to the Company,
in accordance with the Company’s written wiring instructions, against delivery by the Company of the Secured Note and the
Security Agreement, and (ii) the Company shall deliver the Secured Note and the Security Agreement, the Warrant, duly executed
on behalf of the Company, to the Investor, against delivery by the Investor of the Purchase Price.


 


d.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section
6 and Section 7 below, the date and time of the issuance and sale of the Secured Note pursuant to this Agreement (the “Closing
Date”) shall be 12:00 noon, Eastern Time on June 6, 2018 or such other mutually agreed upon time. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location
as may be agreed to by the parties.


 


2.
INVESTOR’S REPRESENTATIONS AND WARRANTIES. Investor represents and warrants to the Company to Investor
that:


 


a.
Investment Purpose; Experience. As of the date hereof, the Investor is purchasing the Secured Note for
its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered
or exempted from registration under the 1933 Act. The Investor and its representatives have a history of investing in private placements
of equity and convertible debt securities.


 


b.
Accredited Investor Status. The Investor is an “accredited investor” as that term is defined
in Rule 501(a) of Regulation D (an “Accredited Investor”). The Investor is a trust, with total assets in excess
of $30,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated
person as described under Rule 506(b)(ii01(a) of the 1933 Act (i.e. a person with knowledge and experience in financial and business
matters such that he is capable of evaluating the merits and risks of the prospective investment in this offering).


 


c.
Reliance on Exemptions. The Investor understands that the Secured Note, the Conversion Shares, the Warrant,
and the Warrant Shares (collectively with the Secured Note and the Warrant, as the “Securities”) are being offered
and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the Investor’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Investor set forth herein in order to determine the availability
of such exemptions and the eligibility of the Investor to acquire the Securities.


 


d.
Governmental Review. The Investor understands that no United States federal or state agency or any other
government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.


 






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e.
Transfer or Re-sale. The Investor understands that (i) the sale or re-sale of the Securities has not been
and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred
unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Investor shall have
delivered to the Company an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in
comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (”Rule 144”)) of the Investor who
agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(e) and who is an Accredited Investor,
(d) the Securities are sold pursuant to Rule 144, and the Investor shall have delivered to the Company an opinion of counsel as
set forth in clause (b), or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation
S”), and the Investor shall have delivered to the Company an opinion of counsel that shall be in form, substance and
scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred
may be sold or transferred pursuant to an exemption from registration under the 1933 Act, which opinion shall be accepted by the
Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule
and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) other than the piggy-back
registration rights set forth in the Warrant, neither the Company nor any other person is under any obligation to register the
Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.
Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement.


 


f.
Legends. The Investor understands that the Secured Note, the Warrant and, until such time as the Warrant
Shares and Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144, the Warrant
Shares and Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Securities):


 


“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED
UNDER SUCH ACT, THE SUBSTANCE OF WHICH OPINION SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.”


 






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The legend set forth
above shall be removed and the Company shall issue a certificate without such legend to the holder of any Securities upon which
it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Securities are registered for sale under
an effective registration statement filed under the 1933 Act, or (b) such holder provides the Company with an opinion of counsel,
in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or
transfer of such Securities may be made without registration under the 1933 Act, which opinion shall be accepted by the Company
so that the sale or transfer is effected or (c) such holder provides the Company with reasonable assurances that such Securities
can be sold pursuant to Rule 144 or Regulation S and a legal opinion to support such assurances. The Investor agrees to sell all
Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable
prospectus delivery requirements, if any.


 


g.
Authorization; Enforcement. This Agreement and the other Transaction Documents have each been duly and
validly authorized by the Investor. This Agreement and the other Transaction Documents have each been duly executed and delivered
on behalf of the Investor, and constitute valid and binding agreements of the Investor, enforceable against the Investor in accordance
with their terms.


 


h.
Residency. The Investor is a resident of the jurisdiction set forth immediately below the Investor’s
name on the signature page hereto.


 


i.
Restrictions. The Investor hereby agrees not to sell or otherwise transfer, make any short sale of, grant
any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any
Common Stock (or other securities) of the Company held by the Investor during the 180-day period following the effective date of
the registration statement for the Company’s initial public offering (including, without limitation, to accommodate regulatory
restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including,
but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments
thereto) (the “Lock-Up Period”); provided, that substantially all current holders, including all officers, directors
and 5% holders, of the Company’s voting securities are bound by the same requirement during the Lock-Up Period. The obligations
described in this Section 2(i) shall not apply to a registration relating solely to employee benefit plans on Form S-l or Form
S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each certificate with
a legend as substantially set forth below with respect to the shares of Common Stock subject to the foregoing restriction until
the end of such 180-day period. To effect the above, the Investor agrees to execute a market stand-off agreement with the underwriters
in the offering in customary form consistent with the provisions of this Section 2(i).


 


j.
Non-reliance. The Investor acknowledges that the Company may not effect a public offering of its securities
and the Investor’s decision to invest in the Company was made independent of and the Investor did not rely upon any public
filings of the Company and investor had the opportunity to conduct its own diligence on the Company, including access to management
and the Company’s books and records.


 






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k.
Pre-existing Relationship. Investor has a substantive, pre-existing relationship with Joseph Gunnar outside
of any public offering effort on behalf of the Company.


 


3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Investor that:


 


a.
Organization and Qualification. The Company and each of its Subsidiaries, if any, is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power
and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now
owned, leased, used, operated and conducted. “Subsidiary” shall mean any corporation or other entity of which
at least a majority of the securities or other ownership interests having ordinary voting power (absolutely or contingently) for
the election of directors or other persons performing similar functions are at the time owned directly or indirectly by the Company
and/or any of its other Subsidiaries.


 


b.
Authorization; Enforcement. The Company has all requisite corporate power and authority to enter into
and perform this Agreement and the other Transaction Documents. This Agreement and the other Transaction Documents have each been
duly and validly authorized by the Company. This Agreement and the other Transaction Documents have each been duly executed and
delivered on behalf of the Company, and constitute valid and binding agreements of the Company, enforceable against the Company
in accordance with their terms.


 


c.
Capitalization. The current capitalization of the Company is as set forth on Schedule 3(c) attached
hereto. The Company presently has 50,000,000 shares of Common Stock and 5,000,000 shares of preferred stock authorized, of which
3,560,314 shares of common stock are issued and outstanding. The Company owns all of the outstanding equity interests, if any,
of each of its Subsidiaries, free and clear of any liens, and there are no outstanding options, warrants or other securities exercisable
for or convertible into equity interests of any Subsidiary of the Company.


 


d.
Issuance of Shares. The Warrant Shares have been duly and validly authorized and reserved for issuance
upon exercise of the Warrant and will, upon issuance, be duly and validly issued, fully paid and non-assessable. The Conversion
Shares have been duly and validly authorized and reserved for issuance upon consummation of a Next Financing and will, upon issuance,
be duly and validly issued, fully paid and non-assessable.


 


e.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to
the Common Stock upon the issuance of the Warrant Shares and Conversion Shares.


 






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f.
Bad Actor Representation. None of the Company, any of its Subsidiaries, predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company participating in the offering, any beneficial owner of 20% or more
of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine
whether any Issuer Covered Person is subject to a Disqualification Event.


 


g.
Litigation. There is no action, suit, proceeding, or investigation (including without limitation any suit,
proceeding, or investigation involving the prior employment of any of employees of the Company or any Subsidiary, their use in
connection with the Company’s business of any information or techniques allegedly proprietary to any of their former employers,
or their obligations under any agreements with prior employers) pending or, to the best of the Company’s knowledge, currently
threatened before any court, administrative agency, or other governmental body against the Company, any Subsidiary or any of their
respective assets or properties. Neither the Company nor any Subsidiary is a party or subject to, and none of their respective
assets is bound by, the provisions of any order, writ, injunction, judgment, or decree of any court or government agency or instrumentality.
There is no action, suit, or proceeding by the Company or any Subsidiary currently pending or that the Company or any Subsidiary
intends to initiate.


 


h.
Disclosure. The Company has fully provided the Investor with all the information that the Investor has
requested for deciding whether to purchase the Securities and all material information that is reasonably necessary to enable a
reasonable Investor to make such decision. Neither this Agreement or the other Transaction Documents, nor any other agreements,
statements or certificates made or delivered to Investor in connection herewith or therewith contains any untrue statement of a
material fact or, when taken together, omits to state a material fact necessary to make the statements herein or therein, in light
of the circumstances under which they were made, not misleading.


 


i.
Shell Company Status. During the previous twelve (12) months, the Company has not been a shell as such
term is defined in Rule 144(i) under the 1933 Act.


 


j.
Financial Statements. The consolidated financial statements of the Company and its Subsidiaries annexed
hereto (the “Financial Statements”) comply as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. The Financial
Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”)
applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in the Financial Statements
or the Notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnote or may be
condensed or summary statements), and fairly present in all material respects the consolidated financial position of the Company
and its Subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments, which will not be material).


 






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k.
No Material Adverse Effect. Since March 31, 2018, neither the Company nor any Subsidiary has experienced
or suffered any Material Adverse Effect. For the purposes of this Agreement, “Material Adverse Effect” means
any of (i) a material and adverse effect on the legality, validity or enforceability of this Agreement or the other Transaction
Documents; (ii) a material adverse effect on the business, operations, properties, or financial condition of the Company, its Subsidiaries,
individually, or in the aggregate and/or any condition, circumstance, or situation that would prohibit or otherwise materially
interfere with the ability of the Company or any Subsidiary to perform any of their obligations under this Agreement or the other
Transaction Documents in any material respect; or (iii) an adverse impairment to the ability of the Company or any Subsidiary to
perform on a timely basis their obligations under this Agreement or the other Transaction Documents.


 


l.
No Undisclosed Liabilities. Except as shown on Schedule 3(l), neither the Company nor any Subsidiary has
any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) not reflected in the Financial Statements, other than those incurred in the ordinary course of the Company’s
and any Subsidiary’s respective businesses since the date of the Financial Statements.


 


m.
No Undisclosed Events or Circumstances. To the Company’s knowledge, no event or circumstance has
occurred or exists with respect to the Company or any Subsidiary or their respective businesses, properties, operations or financial
condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.


 


n.
Indebtedness. Other than as set forth on Schedule 3(n), the Financial Statements set forth all outstanding
Indebtedness of the Company or any Subsidiary. For the purposes of this Agreement, “Indebtedness” shall mean
(i) any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course of business);
(ii) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same
should be reflected in the consolidated balance sheet of the Company and its Subsidiaries (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (iii) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any Indebtedness and no event has occurred that could reasonably be
expected to result in any such Indebtedness.


 


o.
Title to Assets. The Company and its Subsidiaries each have good and marketable title in fee simple to
all real property owned by it and good and marketable title in all personal property owned by it that is material to the respective
businesses of the Company and its Subsidiaries, in each case free and clear of all liens, except for (i) liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by
the Company and its Subsidiaries (ii) liens for the payment of federal, state or other taxes, for which appropriate reserves have
been made therefore in accordance with GAAP, and (iii) liens held by holders of those certain Senior Secured Promissory Notes dated
February 22, 2018 and March 19, 2018 and, the payment of which is neither delinquent nor subject to penalties (liens referenced
in subsection (i) and (ii) above are collectively referred to as "Permitted Liens"). Any real property and facilities
held under lease by the Company or any Subsidiary are held by it under valid, subsisting and enforceable leases with which the
Company or such Subsidiary is in compliance.


 






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p.
Actions Pending. There is no action, suit, claim, investigation, arbitration, alternate dispute resolution
proceeding or any other proceeding pending or, to the knowledge of the Company, threatened against or involving the Company or
any Subsidiary which questions the validity of this Agreement or any of the other Transaction Documents or the transactions contemplated
hereby or thereby or any action taken or to be taken pursuant hereto or thereto. There are no outstanding orders, judgments, injunctions,
awards or decrees of any court, arbitrator or governmental or regulatory body pending or, to the Company’s knowledge, threatened
against the Company or any Subsidiary or any of their respective executive officers or directors in their capacities as such.


 


q.
Compliance with Law. The Company and its Subsidiaries have all material franchises, permits, licenses,
consents and other governmental or regulatory authorizations and approvals (collectively, “Permits”) necessary
for the conduct of their respective business as now being conducted by it in compliance with applicable law and neither the Company
or the applicable Subsidiary is in violation or breach of any such Permit.


 


r.
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in material violation of
(and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default or material
violation by the Company or any Subsidiary), nor has the Company or any Subsidiary received notice of a claim that it is in default
under or that it is in material violation of, any indenture, or loan or credit agreement to which it is a party or by which it
or any of its properties is bound (whether or not such default or violation has been waived); (ii) is in material violation of
any judgment, decree or order of any court, arbitrator or other governmental authority; or (iii) is or has been in material violation
of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and
employment and labor matters.


 


s.
Consents and Approvals. Neither the Company nor any Subsidiary is required: (a) under any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound; or (b) under federal, state, local or foreign law, rule or regulation, to obtain any consent, authorization or order of,
or make any filing or registration with, any counterparty to any such indenture, loan or credit agreement or other agreement or
instrument, or any court or governmental agency, in order for it to execute, deliver or perform any of its obligations under this
Agreement and the other Transaction Documents, or issue and sell the Secured Note, the Warrant, the Warrant Shares or the Conversion
Shares in accordance with the terms hereof or thereof (other than (x) any consent, authorization or order that has been obtained
as of the date hereof, (y) any filing or registration that has been made as of the date hereof or (z) any filings which may be
required to be made by the Company with the Commission or state securities administrators subsequent to the Closing). The Company
and its Subsidiaries have obtained all approvals of their respective board of directors and stockholders required in connection
with their execution, delivery and performance of this Agreement and the other Transaction Documents and consummation of the transactions
contemplated herein and therein, including the issuance and sale of the Secured Note, the Warrant, the Warrant Shares or the Conversion
Shares.


 






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t.
No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents
by the Company and its Subsidiaries and the consummation by the Company and its Subsidiaries of the transactions contemplated herein
and therein do not and will not (i) materially violate any provision of their respective organizational documents, (ii) materially
conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture,
note, bond, license, lease agreement, instrument or obligation to which the Company or any Subsidiary is a party or by which it
or its properties or assets are bound, (iii) create or impose a lien, mortgage, security interest, pledge, charge or encumbrance
(collectively, “Lien”) of any nature on any property of the Company or any Subsidiary under any agreement or
any commitment to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or by which
any of its respective properties or assets are bound, or (iv) result in a material violation of any federal, state, local or foreign
statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to
the Company or any Subsidiary or by which any property or asset of the Company, or any Subsidiary are bound or affected.


 


u.
Taxes. Each of the Company and its Subsidiaries, to the extent applicable, has accurately prepared and
filed all federal, state and other tax returns required by law to be filed by it in compliance with applicable law, has paid or
made provisions for the payment of all taxes shown to be due (other than payments being contested in good faith for which adequate
provisions have been and are reflected in the consolidated financial statements of the Company and its Subsidiaries). None of the
federal income tax returns of the Company or any Subsidiary have been audited by the Internal Revenue Service. The Company has
no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal, state or foreign) of any
nature whatsoever, whether pending or threatened against the Company or any Subsidiary for any period, nor of any basis for any
such assessment, adjustment or contingency.


 


v.
Intellectual Property. Each of the Company and its Subsidiaries, owns or has the lawful right to use all
patents, trademarks, domain names (whether or not registered) and any patentable improvements or copyrightable derivative works
thereof, websites and intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations,
if any, and all rights with respect to the foregoing (collectively, “Intellectual Property”), if any, which
are necessary for the conduct of their respective business as now conducted, each of which is valid, subsisting and in full force
and effect. To the knowledge of the Company, neither the Company nor any Subsidiary is infringing upon any Intellectual Property
rights of any other person or entity and, to the Company’s knowledge, no other person or entity is infringing upon any Intellectual
Property rights of the Company or any Subsidiary.


 


w.
Books and Records Internal Accounting Controls. The books and records of the Company and its Subsidiaries
accurately reflect in all material respects the information relating to the business of the Company and its Subsidiaries, the location
and collection of their assets, and the nature of all transactions giving rise to the obligations or accounts receivable of the
Company and its Subsidiaries. The Company and its Subsidiaries maintain systems of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate actions
are taken with respect to any differences.


 






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x.
Material Agreements. Any and all written or oral contracts, instruments, agreements, commitments, obligations,
plans or arrangements, the Company or any of its Subsidiaries is a party to, that a copy of which would be required to be filed
with the Commission as an exhibit to a registration statement (collectively, the “Material Agreements”), if
the Company or any Subsidiary were registering securities under the 1933 Act, has previously been publicly filed with the Commission.
Each of the Company and its Subsidiaries has in all material respects performed all the obligations required to be performed by
them to date under the Material Agreements, and neither has received any notice of material breach or default, and the Company
and its Subsidiaries are not in material breach or default, under any Material Agreement and neither, to the Company’s knowledge,
is any other party to any Material Agreement in material breach of, or default under, any Material Agreement.


 


y.
Transactions with Affiliates. Except as disclosed in the Company’s filings with the Commission and
herein, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other transactions
between (a) the Company or any Subsidiary on the one hand, and (b) on the other hand, any officer, employee, consultant or director
of the Company or any Subsidiary, or any person owning more than 10% capital stock of the Company or any Subsidiary, or any member
of the immediate family of such officer, employee, consultant, director or stockholder or any corporation or other entity controlled
by such officer, employee, consultant, director or stockholder, or a member of the immediate family of such officer, employee,
consultant, director or stockholder.


 


z.
Private Placement and Solicitation. Assuming the accuracy of the Investor’s representations and
warranties set forth in Section 2, no registration under the 1933 Act is required for the offer and sale of the Securities by the
Company to the Investor as contemplated hereby. Based in part on the accuracy of the representations of the Investor in Section
2, and subject to timely applicable Form D filings pursuant to Regulation D of the 1933 Act with the Commission and pursuant to
applicable state securities laws, the offer, sale and issuance of the Securities to be issued pursuant to and in conformity with
the terms of this Agreement, will be issued in compliance with all applicable federal and state securities laws. Neither the Company
nor any of its Subsidiaries or other affiliates, nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under the 1933 Act) in connection with the offer or sale
of any of the Secured Note, Warrant or Warrant Shares.


 


aa.
Employees. Neither the Company nor any Subsidiary has any collective bargaining arrangements covering
any of its employees. Since December 31, 2017, no officer, consultant or key employee of the Company or any Subsidiary has terminated
or, to the knowledge of the Company, has any present intention of terminating, his or her employment or engagement with the Company
or any Subsidiary.


 






    	 	10	 



     


    

 


4.
COVENANTS. While the Note is outstanding, the Company makes the following covenants.


 


a.
Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described
in Section 6 and 7 of this Agreement.


 


b.
Blue Sky Laws. The Company shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Securities for sale to the Investor at the applicable closing pursuant to this
Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken to the Investor on or prior to the Closing Date.


 


c.
Use of Proceeds. The Company shall use the proceeds from the sale of the Secured Note solely for general
working capital purposes in the ordinary course of business, consistent with past practice, and shall not, directly or indirectly,
use any of such proceeds for: (i) any distribution or dividend to any shareholder of the Company, (ii) payment of any bonus or
other compensation to any officer, director or other employee of the Company or any Subsidiary (other than payment of salaries
to employees in the ordinary course of business consistent with past practice), or (iii) the repayment of any Indebtedness of the
Company or any Subsidiary.


 


d.
Securities Compliance. The Company shall notify the Commission in accordance with its rules and regulations,
of the transactions contemplated by this Agreement and the Transaction Documents, including filing a Form D with respect to the
Securities, as required under Regulation D and applicable “blue sky” laws if such Securities are offered pursuant to
Rule 506 of Regulation D and shall take all other necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Secured Note, the Warrant, the Warrant Shares and the Conversion
Shares to the Investor or subsequent holders.


 


e.
Liquidation. Subject to the terms of the other Transaction Documents, the Company covenants that it will
take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor
to sell the Securities without registration under the 1933 Act within the limitation of the exemptions provided by Rule 144 promulgated
under the 1933 Act, as amended.


 


f.
Keeping of Records and Books of Account. The Company shall keep and cause each Subsidiary to keep adequate
records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all
financial transactions of the Company and its Subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation,
depletion, obsolescence, amortization, taxes, bad debts and other purposes in connection with its business shall be made.


 


g.
Amendments. The Company will not and will not permit any Subsidiary
to amend, modify or waive any term or provision of its organizational documents, or any shareholders agreement, other than amendments,
modifications and waivers that are not materially adverse in any respect to the Investor and of which the Investor have received
at least five (5) Business Days’ prior written notice.


 






    	 	11	 



     


    

 


h.
Other Agreements. The Company shall not and shall cause its Subsidiaries to not, enter into any agreement
the terms of which would restrict or impair the ability of the Company or any Subsidiary to perform their obligations under this
Agreement and the other Transaction Documents.


 


i.
Disposition of Assets. While the Secured Note or
any principal amount, interest, fees or other amounts due thereunder remains outstanding and
unpaid, neither the Company nor any of its Subsidiaries shall sell, transfer or otherwise dispose of any of their material
properties, assets and rights including, without limitation, its software and Intellectual Property, to any person except for (i)
sales or non-exclusive licenses to customers in the ordinary course of business, (ii) sales or transfers between the Company and
the Subsidiaries, (iii) disposition of obsolete or worn out equipment, or (iv) otherwise with the prior written consent of the
Investor.


 


j.
Sarbanes-Oxley Act. Except as disclosed in the Company’s filings with the Commission, the
Company shall be in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002, and the rules and regulations
promulgated thereunder, as required under such Act.


 


k.
No Integrated Offerings. The Company shall not make any offers or sales of any security (other than the
securities being offered or sold hereunder) under circumstances that would require registration of the Securities being offered
or sold hereunder under the 1933 Act.


 


l.
Legal Counsel Opinions. Upon the request of the Investor from time to time, the Company shall be responsible
(at its cost) for promptly supplying to the Company’s transfer agent and the Investor a customary legal opinion letter of
its counsel (the “Legal Counsel Opinion”) to the effect that the resale of the Warrant Shares or Conversion
Shares by the Investor or its affiliates, successors and assigns is exempt from the registration requirements of the 1933 Act pursuant
to Rule 144 (provided the requirements of Rule 144 are satisfied and provided the Warrant Shares or Conversion Shares are not then
registered under the 1933 Act for resale pursuant to an effective registration statement). Should the Company’s legal counsel
fail for any reason to issue the Legal Counsel Opinion, the Investor may (at the Company’s cost) secure another legal counsel
to issue the Legal Counsel Opinion, and the Company will instruct its transfer agent to accept such opinion. The Company hereby
agrees that it may never take the position that it is a “shell company” in connection with its obligations under this
Agreement or otherwise.


 


m.
Variable Rate Transactions. While the Secured Note or any principal
amount, interest or fees or expenses due thereunder remain outstanding and unpaid, the Company shall be prohibited from
effecting or entering into an agreement involving a Variable Rate Transaction. “Variable Rate Transaction” means
a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company
may issue securities at a future determined price. The Investor shall be entitled to obtain injunctive relief against the Company
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.


 






    	 	12	 



     


    

 


5.
INDEMNITY.


 


a.
General Indemnity. The Company agrees to indemnify and hold harmless the Investor (and its directors,
officers, affiliates, managers, partners, members, shareholders, affiliates, agents, successors and assigns) (collectively, the
“Investor Indemnified Parties”) from and against any and all losses, liabilities, deficiencies, costs, damages
and expenses (including, without limitation, reasonable attorneys’ fees, charges and disbursements) incurred by the Investor
Indemnified Parties as a result of any breach of the representations, warranties or covenants made by the Company herein or in
any other Transaction Document. The Investor agrees to indemnify and hold harmless the Company and its directors, officers, affiliates,
agents, successors and assigns (the “Company Indemnified Parties”) from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys’ fees, charges and disbursements)
incurred by the Company Indemnified Parties as a result of any breach of the representations, warranties or covenants made by the
Investor herein or in any other Transaction Document. The maximum aggregate liability of the Investor pursuant to its indemnification
obligations under this Section 5 shall not exceed the Purchase Price paid by the Investor hereunder. In no event shall any “Indemnified
Party” (as defined below) be entitled to recover consequential or punitive damages resulting from a breach or violation
of this Agreement.


 


b.
Indemnification Procedure. Any Investor Indemnified Party or Company Indemnified Party entitled to indemnification
under this Section 5 (an “Indemnified Party”) will give written notice to the indemnifying party of any matters
giving rise to a claim for indemnification; provided, that the failure of any party entitled to indemnification hereunder
to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Section 5 except to the
extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any action, proceeding or claim
is brought against an Indemnified Party in respect of which indemnification is sought hereunder, the indemnifying party shall be
entitled to participate in and, unless in the reasonable judgment of the Indemnified Party a conflict of interest between it and
the indemnifying party may exist with respect of such action, proceeding or claim, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. In the event that the indemnifying party advises an Indemnified Party that it will contest
such a claim for indemnification hereunder, or fails, within thirty (30) days of receipt of any indemnification notice to notify,
in writing, such person of its election to defend, settle or compromise, at its sole cost and expense, any action, proceeding or
claim (or discontinues its defense at any time after it commences such defense), then the Indemnified Party may, at its option,
defend, settle or otherwise compromise or pay such action or claim. In any event, unless and until the indemnifying party elects
in writing to assume and does so assume the defense of any such claim, proceeding or action, the Indemnified Party’s costs
and expenses arising out of the defense, settlement or compromise of any such action, claim or proceeding shall be losses subject
to indemnification hereunder. The Indemnified Party shall cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party which relates to such action or claim. The indemnifying party shall keep the Indemnified Party
fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. If the indemnifying
party elects to defend any such action or claim, then the Indemnified Party shall be entitled to participate in such defense with
counsel of its choice at its sole cost and expense. The indemnifying party shall not be liable for any settlement of any action,
claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall
be liable for any settlement if the indemnifying party is advised of the settlement but fails to respond to the settlement within
thirty (30) days of receipt of such notification. Notwithstanding anything in this Section 5 to the contrary, the indemnifying
party shall not, without the Indemnified Party’s prior written consent, settle or compromise any claim or consent to entry
of any judgment in respect thereof which imposes any future obligation on the Indemnified Party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the Indemnified Party of a release from all liability
in respect of such claim. The indemnity agreements contained herein shall be in addition to (a) any cause of action or similar
rights of the Indemnified Party against the indemnifying party or others, and (b) any liabilities the indemnifying party may be
subject to pursuant to the law.


 






    	 	13	 



     


    

 


6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. The obligation of the Company hereunder to issue
and sell the Secured Note to the Investor at the Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion:


 


a.
The Investor shall have executed this Agreement and the other Transaction Documents and delivered the same to the Company.


 


b.
The Investor shall have delivered the Purchase Price in accordance with Section 1(b) above.


 


c.
The representations and warranties of the Investor shall have been true and correct when made and be true and correct
in all material respects as of the Closing Date as though made at that time (except for representations and warranties that speak
as of a specific date), and the Investor shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Investor at or prior to
the Closing Date.


 


d.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.


 






    	 	14	 



     


    

 


7.
CONDITIONS TO INVESTOR’S OBLIGATION TO PURCHASE. The obligation of the Investor hereunder to purchase
the Secured Note at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions,
provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its sole
discretion:


 


a.
The Company shall have executed this Agreement and the Secured Note and delivered the same to the Investor.


 


b.
The representations and warranties of the Company shall have been true and correct when made and be true and correct
in all material respects as of the Closing Date as though made at such time (except for representations and warranties that speak
as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to
the Closing Date.


 


c.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement or the other Transaction Documents.


 


d.
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company.


 


8.
GOVERNING LAW; MISCELLANEOUS.


 


a.
Governing Law. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED
IN MANHATTAN, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL
AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE
JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE
FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.


 






    	 	15	 



     


    

 


b.
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.


 


c.
Headings. The headings of this Agreement are for convenience of reference only and shall not form part
of, or affect the interpretation of, this Agreement.


 


d.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision hereof.


 


e.
Entire Agreement; Amendments. This Agreement and the other Transaction Documents contain the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged
with enforcement of such waiver or amendment.


 


f.
Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent
by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile and shall be effective five (5) days after being placed in the mail, if mailed by regular United
States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile,
in each case addressed to a party. The addresses for such communications shall be:


 


	
        If to the Company, to:
	ADial Pharmaceuticals, LLC
	 	1180 Seminole Trail
	 	Charlottesville, Virginia 22901
	 	Attention: William B. Stilley
	 	Telephone: (212) 217-6725
	 	
        Facsimile: (434) 422-9797

         

	With a copy to:	
        Gracin &
        Marlow, LLP

        The Chrysler Building

        405 Lexington Avenue, 26th Floor

        New York, New York 10174

        Telephone No.: (212) 907-6457

        Facsimile No.: (212) 208-4657

        Attention: Leslie Marlow, Esq.

        E-mail: lmarlow@gracinmarlow.com



 


If to the Investor, to the address set
forth on the signature page. Each party shall provide notice to the other party of any change in address.


 


g.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. Neither the Company nor the Investor shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(e), the Investor may assign
its rights hereunder to any person that purchases Securities in a private transaction from the Investor or to any of its “affiliates,”
as that term is defined under the 1934 Act, without the consent of the Company.


 


h.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other
person.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 




    	 	16	 



     


    

 


IN WITNESS WHEREOF, the Investor and
the Company have caused this Agreement to be duly executed as of the date first above written.


 


	COMPANY:	 
	 	 
	ADIAL PHARMACEUTICALS, INC.	 
	 	 
	By:	/s/ William B. Stilley	 
	Name:	William B. Stilley	 
	Title:	Chief Executive Officer	 
	 	                               	 
	INVESTOR:	 
	 	 
	David S Nagelberg 2003 Revocable Trust Dtd 7/2/03
	 	 
	By:	/s/ David S. Nagelberg	 
	Name:	David S. Nagelberg	 
	Title:	Trustee	 


 


		Address:	939 Coast Blvd, Unit 21 DE



La Jolla,
CA 92037


 


Principal Amount of Note being Purchased:
$325,000


Purchase Price of Note being Purchased:
$275,000


 




    	 	17	 



     


    

 


SCHEDULES TO SECURITIES PURCHASE AGREEMENT


 


Schedule 3(c) – Current Capitalization


 


	Security	 	Number Outstanding	 
	Common Stock	 	 	3,560,314	 
	Warrants @ $0.0054	 	 	134,648	 
	Warrants @ $7.6344	 	 	347,907	 
	Options @ $5.6989	 	 	174,282	 
	Total	 	 	4,217,151	 



 


Schedule 3(l) – Undisclosed Liabilities


 


None


 


Schedule 3(n) – Indebtedness


 


None


 








    	 	18	 



     


    

 





EXHIBIT A


 


Reference is made to Exhibit 4.24 to the
Registration Statement on Form S-1 (File Number 333- 220368)

 of the Company, which is incorporated by reference.


 


EXHIBIT B


 


Reference is made to Exhibit 10.31 to
the Registration Statement on Form S-1 (File Number 333-220368) of the Company, which is incorporated by reference.


  


EXHIBIT C


 


Reference is made to Exhibit 4.21 to the
Registration Statement on Form S-1 (File Number 333- 220368)

 of the Company, which is incorporated by reference.