Cary Claiborne
executive
Thanks, Matt. As part of the transaction, the company is pleased to announce the appointment of Wendy Young, PhD, to its Board of Directors. Dr. Young brings more than 30 years of drug discovery and biopharma leadership experience, including senior leadership roles at Genentech, where she served as Senior Vice President, Small Molecule Drug Discovery. She currently serves as an adviser to Google Ventures and is an independent Board Director and scientific adviser to multiple life science companies. Dr. Young's deep expertise in small molecule drug discovery, company building and strategic R&D leadership will be highly valuable as we enter our next phase.
Now let me walk through the structure of the transaction. The acquisition of Azora was structured as a stock-for-stock transaction, pursuant to which all of Azora's outstanding equity interests were exchanged based on a fixed exchange ratio for a combination of 437,474 shares of Adial common stock and approximately 12,930 shares of Adial Series A nonvoting convertible preferred stock, which represents 12,930,617 shares on an as-converted-to-common basis.
In each case, this was calculated on a fully diluted basis and without giving effect to any beneficial ownership limitations. Please refer to the, About the Transactions section of the press release and the 8-K filed today with the SEC for a complete description of the terms. Concurrent with the acquisition, Adial entered into a definitive agreement for a concurrent private placement of up to $64 million in gross proceeds to Adial before deducting placement agent and other offering expenses.
The private placement is comprised of an initial upfront financing of approximately $32 million in gross proceeds in exchange for prefunded warrants to purchase 11,780,948 shares of Adial's common stock, representing a purchase price of $2.75 for each prefunded warrant sold at the initial closing and the potential for up to an additional milestone-dependent $32 million in gross proceeds in exchange for prefunded warrants to purchase up to 11,780,948 shares of common stock and common warrants to purchase up to 11,780,948 shares of common stock at a combined purchase price of $2.75 for each prefunded warrant and common warrants sold at the milestone closing.
The private placement is expected to close on June 12, subject to customary closing conditions. As a result of the transactions, following Adial's stockholder approval and without giving effect to the funding of the milestone tranche of the financing, equity holders of Adial immediately prior to the acquisition will own approximately 7.7% of Adial's common stock. Equity holders of Azora immediately prior to the acquisition will own approximately 51% of Adial's common stock and investors in the private placement financing, including the conversion of outstanding notes, will own approximately 41.3% of Adial's common stock.
In each case, this is calculated on a fully diluted as converted to common basis without giving effect to any beneficial ownership limitations using the treasury stock method and based on the implied equity values of Adial and Azora. The acquisition was approved by the Board of Directors of Adial and the Board of Directors and stockholders of Azora. Adial expects to use the proceeds from the private placement primarily to advance AT177 through key clinical milestones, including IND-enabling studies, Phase 1a and Phase 1b clinical studies.
We note that this description of the transactions is not complete. We refer investors and security holders to our filings with the SEC, which incorporate by reference the material agreements in connection with the acquisition and private placement. I will now turn the call back to Matt for closing remarks.
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