Alzamend Neuro(ALZN) - 2025 Q1 - Quarterly Report

Financial Performance - Research and development expenses decreased by 91% to $206,571 in Q3 2024 compared to $2,366,137 in Q3 2023[110] - Total operating expenses decreased by 73% to $962,405 in Q3 2024 compared to $3,525,931 in Q3 2023[110] - Net loss decreased by 72% to $974,411 in Q3 2024 compared to $3,527,766 in Q3 2023[110] - Research and development expenses decreased by 91% to $207,000 in Q3 2024 from $2.4 million in Q3 2023, primarily due to lower professional fees and no clinical trial activity[112][113] - Clinical trial fees were $0 in Q3 2024 compared to $1.2 million in Q3 2023, as the company had no clinical trial activity during the period[115] - General and administrative expenses decreased by 35% to $756,000 in Q3 2024 from $1.2 million in Q3 2023, driven by lower stock-based compensation and marketing fees[117][118] - The company had a cash balance of $1.2 million, a working capital deficiency of $1.5 million, and an accumulated deficit of $55.0 million as of July 31, 2024[125] - The company reported a net loss of $974,000 for the three months ended July 31, 2024[125] - No revenue generated in Q3 2024 or Q3 2023, with no anticipated revenue in the foreseeable future[111] - Net cash used in operating activities for the three months ended July 31, 2024 was $1.1 million, primarily due to a net loss of $974,000 and a decrease in net operating assets and liabilities of $185,000, partially offset by non-cash charges of $103,000[142] - Net cash used in investing activities for the three months ended July 31, 2024 was $90,000, primarily for the purchase of equipment related to the AL001 clinical trial[142] - Net cash provided by financing activities for the three months ended July 31, 2024 was $2.0 million from the sale of Series A Convertible Preferred Stock[144] Clinical Trials and Drug Development - AL001 achieved a maximum tolerated dose of 240 mg TID, reducing lithium dosage by 20% compared to standard lithium carbonate treatment[101][104] - ALZN002 Phase I/IIA clinical trial initiated in April 2023 to assess safety and efficacy in 20-30 subjects with mild to moderate Alzheimer's[106] - IND applications for AL001 in BD, MDD, and PTSD received "study may proceed" letters from the FDA in 2023[103] - ALZN002 is an active immunotherapy vaccine using autologous dendritic cells to target amyloid-beta proteins in Alzheimer's patients[105] - The company plans to initiate clinical trials for AL001 in 2025 at the MTD to evaluate brain lithium levels compared to marketed lithium salts[104] - The company is required to complete milestones and make payments for the AL001 and ALZN002 technologies, including $1.25 million upon the first patient treated in a Phase III clinical trial for AL001 and $1 million upon the first patient treated in a Phase III clinical trial for ALZN002[154][155] - The company has additional payment milestones for AL001, including $2 million due in March 2026 and $16 million due on August 1, 2029[156] Financing and Capital Structure - The company requires additional financing to fund future operations and clinical trials[107] - The company entered into a Series B Preferred Financing agreement with Ault Lending, allowing for the purchase of up to $6 million of Series B Convertible Preferred Stock and warrants[129] - The company sold 2,100 shares of Series B Convertible Preferred Stock and warrants for $2.1 million during the year ended April 30, 2024[130] - The company entered into a Series A Preferred Financing agreement with Orchid Finance, allowing for the purchase of up to 2,500 shares of Series A Convertible Preferred Stock and warrants[133] - The company sold 700 shares of Series A Convertible Preferred Stock and warrants for $7.0 million between May 10, 2024 and August 21, 2024[134] - Orchid Finance agreed to purchase the remaining 1,800 Series A Preferred Shares based on the company's achievement of specific milestones[135] - The Series A Convertible Preferred Stock has a stated value of $10,000 per share and accrues dividends at 15% per annum, payable quarterly in cash or paid-in-kind shares[138] - The warrants have an exercise price of $12.50 and are exercisable upon issuance with a five-year term[139] Licensing and Royalties - The AL001 License Agreements require royalty payments of 4.5% on net sales of products developed from the licensed technology, with minimum royalties starting at $40,000 on the first anniversary of the first commercial sale[146] - The ALZN002 License Agreement requires royalty payments of 4% on net sales of products developed from the licensed technology, with minimum royalties starting at $20,000 on the first anniversary of the first commercial sale[148] - The November AL001 License Agreements require royalty payments of 3% on net sales of products developed from the licensed technology, with minimum royalties starting at $40,000 on the first anniversary of the first commercial sale[150]