Alzamend Neuro(ALZN) - 2025 Q3 - Quarterly Report

Product Development - Alzamend Neuro aims to develop therapeutics for Alzheimer's, bipolar disorder, major depressive disorder, and post-traumatic stress disorder, with two product candidates in clinical development[118]. - The lead product candidate, AL001, has shown positive preclinical data, preventing cognitive deficits and improving memory compared to traditional lithium carbonate treatments[127]. - AL001's maximum tolerated dose is identified at 240 mg three times daily, designed to mitigate the need for therapeutic drug monitoring[129]. - A nonclinical study indicated that AL001 resulted in lower plasma lithium levels and higher brain lithium concentrations compared to lithium carbonate, suggesting a better safety profile[133]. - The company plans to initiate five clinical trials for AL001 to evaluate its efficacy in increasing lithium levels in the brain for patients with Alzheimer's, bipolar disorder, major depressive disorder, and PTSD[131]. - ALZN002, an immunotherapy vaccine for Alzheimer's, has received FDA approval to proceed with clinical trials, focusing on safety and efficacy[136][137]. - The company is currently seeking a replacement contract research organization after the termination of its previous engagement for ALZN002 trials[137]. - Alzamend Neuro's innovative approach with AL001 and ALZN002 positions it to potentially redefine treatment practices for neuropsychiatric and neurodegenerative conditions[134]. - The company has established partnerships, including with Massachusetts General Hospital, to advance its clinical trials[131]. Financial Performance - Total operating expenses for the three months ended January 31, 2025, were $1,037,415, a decrease of 61$2,659,930 in 2024[141]. - Research and development expenses for the three months ended January 31, 2025, were $447,111, down 77$1,908,757 in 2024[143]. - General and administrative expenses for the three months ended January 31, 2025, were $590,304, a decrease of 21$751,173 in 2024[148]. - The net loss for the three months ended January 31, 2025, was $1,039,434, a reduction of 61$2,662,418 in 2024[141]. - The company did not generate any revenue during the three months ended January 31, 2025, and does not anticipate generating revenue in the foreseeable future[142]. - For the nine months ended January 31, 2025, total operating expenses were $3,357,888, a decrease of 63$9,087,581 in 2024[154]. - Research and development expenses for the nine months ended January 31, 2025, were $964,771, down 85$6,271,677 in 2024[157]. - General and administrative expenses for the nine months ended January 31, 2025, were $2,393,117, a decrease of 15$2,815,904 in 2024[162]. - The net loss for the nine months ended January 31, 2025, was $3,375,408, a reduction of 63$9,096,217 in 2024[154]. - The company incurred clinical trial fees of $298,005 for the three months ended January 31, 2025, significantly down from$1,253,237 in 2024[145]. - Employee-related expenses increased to $780,000 for the nine months ended January 31, 2025, compared to$606,000 for the same period in 2024, primarily due to a bonus paid to the CEO[165]. - Professional fees decreased to $433,000 for the nine months ended January 31, 2025, from$620,000 in the prior year, mainly due to lower audit and investor relations fees[166]. - Insurance expenses were $199,000 for the nine months ended January 31, 2025, down from$294,000 in 2024, primarily related to directors' and officers' insurance[167]. - Stock-based compensation expense decreased significantly to $244,000 for the nine months ended January 31, 2025, from$660,000 in the prior year, due to fewer stock options vesting[168]. - Marketing fees increased to $344,000 for the nine months ended January 31, 2025, compared to$247,000 in 2024, attributed to a new marketing program[169]. - As of January 31, 2025, the company had cash of $3.4 million, working capital of$3.2 million, and an accumulated deficit of $57.4 million[171]. - The company reported net losses of$1.0 million and $3.4 million for the three and nine months ended January 31, 2025, respectively[171]. Financing Activities - The Series B financing agreement allows for the purchase of up to$6 million in Series B Convertible Preferred Stock, with the right to purchase $2 million by March 31, 2024[173]. - The Series A financing agreement includes the sale of up to 2,500 shares of Series A Convertible Preferred Stock, with a total purchase price of$1.0 million for the first tranche[177][178]. - An At-the-Market Offering was initiated on October 3, 2024, to sell shares of common stock with an aggregate offering price of up to approximately $6.5 million[183]. - During the nine months ended January 31, 2025, the company sold a total of 1,321,468 shares of common stock for gross proceeds of$2.0 million and net proceeds of $1.9 million[185]. - For the same period, net cash used in operating activities was$5.9 million, which included a net loss of $3.4 million and a decrease in net operating assets and liabilities of$2.8 million[192]. - The company reported net cash provided by financing activities of $8.9 million, primarily from the sale of Series A Convertible Preferred Stock ($7.1 million) and common stock from the ATM Offering ($1.9 million)[194]. Obligations and Future Plans - The Series C Convertible Preferred Stock has a stated value of$10,000 per share and accrues dividends at a rate of 15% per annum, payable quarterly[189]. - The company is required to pay combined royalty payments of 4.5% on net sales of products developed from the licensed technology for AL001, with minimum royalties starting at $40,000 on the first anniversary of the first commercial sale[196]. - The company has contractual obligations to make milestone payments totaling$10 million upon FDA new drug application approval for AL001[203]. - The company plans to hold its annual meeting of stockholders on April 25, 2025, to seek approval for the issuance of shares related to the Series C Convertible Preferred Stock and warrants[189]. - The warrants associated with the Series C Convertible Preferred Stock have an exercise price of $0.92125 and are exercisable upon issuance for a term of five years[190]. - The company used$90,000 in investing activities for the purchase of equipment to measure lithium levels in the brain for clinical trials[193]. - The company exchanged 97.7511 shares of Series A Convertible Preferred Stock for Series C Convertible Preferred Stock, receiving warrants to purchase 1,000,000 shares of common stock in the process[187].