Alzamend Neuro(ALZN) - 2024 Q2 - 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 main product candidates: AL001 and ALZN002[96]. - AL001 has shown positive preclinical results, preventing cognitive deficits and improving memory compared to lithium carbonate, with a maximum tolerated dose identified at 240 mg three times daily[105][106]. - The company plans to initiate two safety and efficacy clinical trials for AL001 in patients with mild to moderate Alzheimer's, with Investigational New Drug applications submitted for bipolar disorder, major depressive disorder, and PTSD[109]. - ALZN002 is an active immunotherapy vaccine designed to treat mild to moderate Alzheimer's, with a Phase I/IIA clinical trial initiated in April 2023 to assess safety and efficacy[112]. - The company has a focus on advancing clinical development and expanding its pharmaceutical pipeline to include additional indications for AL001[104]. - Alzamend Neuro's strategy includes optimizing the value of its product candidates in major markets and pursuing translational and functional endpoints for efficient development[104]. Financial Performance - Research and development expenses for the three months ended October 31, 2023, were $2.0 million, a 30$1.5 million in the same period of 2022[119]. - General and administrative expenses decreased by 42% to $905,000 for the three months ended October 31, 2023, compared to$1.6 million in the prior year[126]. - The net loss for the three months ended October 31, 2023, was $2.9 million, a 7$3.1 million in the same period of 2022[117]. - The company did not generate any revenue during the three months ended October 31, 2023, and does not anticipate generating revenue in the foreseeable future[118]. - Clinical trial fees increased by 44% to $795,000 for the three months ended October 31, 2023, compared to$552,000 in the same period of 2022[123]. - Total operating expenses for the three months ended October 31, 2023, were $2.9 million, a 7$3.1 million in the prior year[117]. - The basic and diluted net loss per common share improved to $(0.44) for the three months ended October 31, 2023, from$(0.48) in the same period of 2022[117]. - Research and development expenses for the six months ended October 31, 2023, were $4.4 million, a 50$2.9 million in the same period of 2022[136]. - The total net loss for the six months ended October 31, 2023, was $6.4 million, a 5$6.1 million in the same period of 2022[133]. - The company incurred professional fees of $2.1 million for the six months ended October 31, 2023, consistent with the previous year[138]. - Clinical trial fees for the six months ended October 31, 2023, increased to$2.0 million from $575,000 in the same period of 2022, with$1.4 million allocated to the Phase IIA clinical trial for AL001 and $650,000 for ALZN002[139]. - General and administrative expenses decreased by 36$2.1 million for the six months ended October 31, 2023, compared to $3.2 million in 2022[144]. - Stock-based compensation expense for general and administrative purposes dropped by 66$545,000 in the six months ended October 31, 2023, from $1.6 million in the prior year[146]. - Net cash used in operating activities was$4.8 million for the six months ended October 31, 2023, compared to $4.9 million in the same period of 2022[158]. - The company reported a net loss of$6.4 million for the six months ended October 31, 2023, compared to a loss of $2.9 million for the three months ended October 31, 2023[151]. - As of October 31, 2023, the company had cash of$200,000 and an accumulated deficit of $50.5 million[151]. Capital and Compliance - Alzamend Neuro requires additional capital to fund ongoing clinical trials and operations, as progress depends on various factors including regulatory approvals and competitive landscape[113]. - As of September 26, 2023, Alzamend Neuro received a notice from Nasdaq regarding non-compliance with the minimum Market Value of Listed Securities requirement, needing to regain compliance by March 25, 2024[114]. - The company sold 6,149 shares of Common Stock for gross proceeds of$19,000 during the six months ended October 31, 2023, and an additional 651,046 shares for $849,000 from November 1, 2023, to December 14, 2023[154]. - The company incurred$147,000 in cash used for investing activities, primarily for the purchase of machinery and equipment for clinical trials[159]. - The company has entered into an At-the-Market Issuance Sales Agreement to sell shares of Common Stock with an aggregate offering price of up to approximately $9.8 million[153]. Licensing and Royalties - The AL001 License Agreements require combined royalty payments of 4.5$40,000 on the first anniversary of the first commercial sale[162]. - The ALZN002 License Agreement requires royalty payments of 4% on net sales of products developed from the licensed technology[164]. - An initial license fee of $200,000 was paid for ALZN002, along with 240,120 shares of common stock as an additional licensing fee[164]. - Minimum royalties for ALZN002 are set at$20,000 on the first anniversary, $40,000 on the second anniversary, and$50,000 on the third anniversary of the first commercial sale[164]. - The November AL001 License Agreements require royalty payments of 3% on net sales of products developed from the licensed technology[166]. - An initial license fee of $20,000 was paid for the additional indications under the November AL001 License Agreements[166]. - Minimum royalties for the November AL001 License Agreements are$40,000 on the first anniversary, $80,000 on the second anniversary, and$100,000 on the third anniversary of the first commercial sale[166]. - Milestone payments for AL001 include $1,250,000 due in March 2025 upon the first patient treated in a Phase III clinical trial[168]. - A total of$10,000,000 is due upon FDA NDA approval for the AL001 technology[168]. - For ALZN002, a payment of $10,000,000 is due upon the first commercial sale[169]. - Additional AL001 licenses include a payment of$16,000,000 due on August 1, 2029, upon the first commercial sale[170].