Adial Pharmaceuticals Inc (NASDAQ:ADIL) saw its shares fall sharply in after-hours trading Tuesday, dropping 19.9% after the company disclosed a 1-for-25 reverse stock split set to take effect on February 5, 2026. The company said the split will reduce the number of outstanding shares from roughly 27.8 million to about 1.1 million.
The stock will remain listed on the Nasdaq Capital Market under the ticker symbol "ADIL" but will begin trading on a split-adjusted basis when the market opens on February 6, 2026. Adial characterized the maneuver as primarily designed to return the company to compliance with Nasdaq’s minimum bid price requirement of $1.00 per share.
In its announcement, Adial said the reverse split will also alter the quantity of shares issuable upon exercise of outstanding equity awards and warrants, and will adjust the exercise prices of those instruments. The company noted that holders’ percentage ownership will not change as a result of the split, except in cases where fractional shares arise; those fractional interests will be settled in cash. The cash payment for fractional shares will be based on the average closing price for the ten trading days prior to the effective date.
Adial’s management framed the action as a measure to improve the company’s capital markets profile and to create a more efficient public float that may be more attractive to institutional and long-term investors. Cary Claiborne, President and CEO of Adial Pharmaceuticals, said, "We believe this reverse stock split represents an important step to strengthen our capital markets profile, restore compliance with Nasdaq’s minimum bid price requirement, and create a more efficient public float that supports broader institutional and long-term investor interest."
Adial is a clinical-stage biopharmaceutical company focused on addiction treatment. The company is developing AD04, described as a genetically targeted serotonin-3 receptor antagonist for the treatment of Alcohol Use Disorder. The company said it continues to advance its partnering and regulatory strategies for that program.
The announcement and subsequent price decline underscore the market reaction to corporate actions aimed at meeting exchange listing standards. The split will become effective February 5, 2026, with split-adjusted trading commencing February 6, 2026, while the company maintains its listing under the ADIL symbol on the Nasdaq Capital Market.