Alzamend Neuro(ALZN) - 2023 Q3 - Quarterly Report

Drug Development and Clinical Trials - Alzamend Neuro aims to develop treatments for Alzheimer's, bipolar disorder, major depressive disorder, and post-traumatic stress disorder through patented intellectual property and immunotherapy approaches[93]. - The company submitted an Investigational New Drug (IND) application for AL001 to the FDA on June 30, 2021, and received a "Study May Proceed" letter for a Phase I study on July 28, 2021[103]. - Phase I clinical trial data for AL001 indicated that a 150 mg dosage is bioequivalent to the marketed 300 mg lithium carbonate product, suggesting potential for better outcomes with reduced dosing[105]. - Alzamend Neuro plans to initiate Phase II clinical trials for AL001 for Alzheimer's treatment and anticipates filing INDs for bipolar disorder, major depressive disorder, and PTSD upon completion of the current Phase IIA study[111]. - The company has an additional preclinical candidate, ALZN002, which has transitioned to an extensive preclinical study program, with a focus on developing a cell-based therapeutic vaccine for Alzheimer's[112]. - An IND application for ALZN002 was submitted to the FDA on September 29, 2022, to conduct a Phase I/IIA clinical trial assessing safety and efficacy in subjects with mild to moderate Alzheimer's[114]. - The Phase IIA study for AL001 will evaluate safety and tolerability under multiple-dose conditions, targeting a maximum tolerated dose for further studies[109]. - The company expects to dose the first patient in a Phase I/IIA clinical trial for ALZN002 in the first quarter of 2023, following FDA approval[115]. Financial Performance - The company reported a net loss of $5,425,574 for the three months ended January 31, 2023, compared to a net loss of$2,572,865 for the same period in 2022, representing an increase of 111%[118]. - Research and development expenses increased by 231% to $2,888,847 for the three months ended January 31, 2023, up from$873,653 in the same period of 2022[118]. - General and administrative expenses rose by 51% to $2,534,665 for the three months ended January 31, 2023, compared to$1,682,913 for the same period in 2022[118]. - The company did not generate any revenue during the three months ended January 31, 2023, and does not anticipate generating revenue in the foreseeable future[119]. - Total operating expenses for the three months ended January 31, 2023, were $5,423,512, an increase of 112$2,556,566 in the same period of 2022[118]. - Clinical trial fees surged by 623% to $2,050,000 for the three months ended January 31, 2023, compared to$283,497 in the same period of 2022[127]. - The company incurred professional fees of $861,000 for the three months ended January 31, 2023, an increase of 80$480,000 in the same period of 2022[128]. - The company reported a net loss of $11.6 million for the nine months ended January 31, 2023, compared to a net loss of$8.5 million for the same period in 2022[149]. - Cash used in operating activities was $6.7 million for the nine months ended January 31, 2023, compared to$5.1 million in the same period of 2022[156]. - As of January 31, 2023, the company had cash of $7.4 million and an accumulated deficit of$40.8 million[149]. Expenses and Costs - Stock-based compensation expense for the nine months ended January 31, 2023, was $3.1 million, an increase of 12$2.8 million in the same period of 2022[138]. - Total general and administrative expenses increased by 18% to $5.8 million for the nine months ended January 31, 2023, compared to$4.9 million in the prior year[144]. - Research and development expenses rose by 64% to $5.8 million for the nine months ended January 31, 2023, up from$3.5 million in the same period of 2022[144]. - Clinical trial fees increased significantly by 161% to $2.6 million for the nine months ended January 31, 2023, compared to$1.0 million in the prior year[146]. - Marketing fees surged to $495,000 for the nine months ended January 31, 2023, from just$7,000 in the same period of 2022, marking a 6,823% increase[141]. - Professional fees increased by 59% to $3.0 million for the nine months ended January 31, 2023, compared to$1.9 million in the prior year[145]. Capital and Funding - The company raised $4 million by selling 2,666,667 shares of common stock at$1.50 per share to Ault Lending, LLC, following the achievement of a milestone in the Phase I clinical trial for AL001[108]. - The company expects to continue incurring losses and will need to raise additional capital to fund its operations and development activities[153]. Milestones and Obligations - The company has successfully completed several milestones including the pre-IND meeting and IND application filing for AL001 and ALZN002, with milestone payments totaling $10,000,000 upon FDA approval[163]. - Initial license fees of$20,000 have been paid for two additional AL001 licenses, which require a 3% royalty on net sales of products developed from the licensed technology[166]. - The company is obligated to make milestone payments for the additional AL001 licenses, including $1,000,000 upon first patient treated in a Phase III clinical trial and$8,000,000 upon first commercial sale[167]. - The company completed the first clinical trial for ALZN002, with milestone payments of $500,000 due upon completion[164]. - The company has a total of$1,250,000 due 12 months from the completion of the first Phase II clinical trial for ALZN002[163]. - The company has completed the first Phase I clinical trial for ALZN002, with milestone payments of $175,000 due upon completion[164]. - The company has a total of$10,000,000 in milestone payments due upon FDA BLA approval for ALZN002[164]. Regulatory and Accounting Considerations - The company is a smaller reporting company, and certain market risk disclosures are not applicable[169]. - Recent accounting standards may impact the company's financial statements, as noted in the financial statements[168].