Alzamend Neuro(ALZN) - 2025 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 [126] - AL001, a patented ionic cocrystal technology, has shown potential in preclinical studies to prevent cognitive deficits and improve memory compared to traditional lithium carbonate treatments [140] - The maximum tolerated dose for AL001 was identified as 240 mg three times daily, designed to mitigate risks for fragile populations such as Alzheimer's patients [142] - ALZN002 is an active immunotherapy vaccine designed to treat mild to moderate Alzheimer's dementia, utilizing the patient's own immune cells to combat amyloid-beta proteins [150] - A Phase I/IIA clinical trial for ALZN002 was initiated to assess safety and efficacy, with plans for a larger Phase IIB trial pending successful results [151] - Alzamend Neuro plans to initiate five clinical trials to compare lithium levels in the brain between AL001 and marketed lithium salts, aiming for lower doses with equivalent therapeutic benefits [144] - Alzamend Neuro has partnered with Massachusetts General Hospital to conduct clinical trials for AL001, enhancing its research capabilities [144] - The company has received a "study may proceed" letter from the FDA for ALZN002, indicating regulatory progress [150] - Alzamend Neuro's innovative formulations aim to provide safer long-term treatment options for neuropsychiatric and neurodegenerative conditions without the need for therapeutic drug monitoring [147] Financial Performance - Total operating expenses for the three months ended October 31, 2024, were $1,358,068, a decrease of 53% from $2,901,722 in the same period of 2023 [155] - Research and development expenses decreased by 84% to $311,088 for the three months ended October 31, 2024, compared to $1,996,783 in 2023 [158] - The net loss for the three months ended October 31, 2024, was $1,361,563, a 53% improvement from a net loss of $2,906,033 in the same period of 2023 [155] - General and administrative expenses increased by 16% to $1,046,980 for the three months ended October 31, 2024, compared to $904,939 in 2023 [163] - The company did not generate any revenue during the three months ended October 31, 2024, and does not anticipate generating revenue in the foreseeable future [156] - For the six months ended October 31, 2024, total operating expenses were $2,320,473, a decrease of 64% from $6,427,652 in the same period of 2023 [172] - The net loss available to common shares for the six months ended October 31, 2024, was $2,389,625, a 63% improvement from $6,433,799 in 2023 [172] - Research and development expenses for the six months ended October 31, 2024, were $517,659, down 88% from $4,362,920 in 2023 [172] - The company incurred marketing fees of $304,000 during the three months ended October 31, 2024, which were not present in the same period of 2023 [170] - Basic and diluted net loss per common share improved to $(1.11) for the six months ended October 31, 2024, from $(9.80) in 2023 [172] - Research and development expenses for the six months ended October 31, 2024, were $518,000, a decrease of 88% from $4.4 million in the same period of 2023 [174] - Professional fees decreased to $365,000 in the six months ended October 31, 2024, down 83% from $2.1 million in 2023 [176] - Clinical trial fees were $124,000 for the six months ended October 31, 2024, a decrease of 94% from $2.0 million in 2023 [177] - General and administrative expenses for the six months ended October 31, 2024, were $1.8 million, a decrease of 13% from $2.1 million in 2023 [180] - Salaries and benefits increased to $554,000 in the six months ended October 31, 2024, up 46% from $379,000 in 2023 [182] - The company reported net losses of $1.4 million and $2.4 million for the three and six months ended October 31, 2024, respectively [189] - As of October 31, 2024, the company had cash of $4.1 million and working capital of $3.5 million [189] Financing Activities - The company plans to finance future development activities primarily through the sale of equity securities and some debt financing [189] - On January 31, 2024, the company entered into a securities purchase agreement for up to $6 million of Series B Convertible Preferred Stock [194] - The company sold an aggregate of 2,100 shares of Series B Convertible Preferred Stock for a total purchase price of $2.1 million during the year ended April 30, 2024 [195] - Orchid has agreed to purchase 1,700 Preferred Shares based on specific milestones, including 200 shares for $2,000,000 and 100 shares for $1,000,000 monthly until all shares are sold [201] - The average closing price of common stock must be at least $2.50 for tranche closings to proceed; otherwise, closings will be delayed [202] - The Series A Convertible Preferred Stock has a stated value of $10,000 per share and accrues dividends at a rate of 15% per annum, payable quarterly [205] - During the six months ended October 31, 2024, net cash used in operating activities was $4.5 million, with a net loss of $2.4 million [211] - Net cash provided by financing activities during the same period was $8.3 million, primarily from the sale of Series A Convertible Preferred Stock [215] - The company sold 755,888 shares of common stock for gross proceeds of $1.2 million during the six months ended October 31, 2024 [209] - The company has contractual obligations to pay royalties of 4.5% on net sales for AL001 and 4% for ALZN002, with minimum royalties starting at $40,000 [217][219] - The company entered into an At-the-Market Issuance Sales Agreement to sell shares of common stock with an aggregate offering price of up to approximately $6.5 million [207] - The Registration Statement for the resale of common stock was declared effective on July 9, 2024, allowing for the issuance of shares in excess of the Nasdaq Limit [203] - The company has a milestone payment of $10,000,000 due upon FDA new drug application approval for AL001, with a payment due date of eight years from the effective date of the agreement [224]