Alzamend Neuro(ALZN) - 2025 Q4 - Annual Report

Financial Position and Capital Needs - As of April 30, 2025, the company had $3.9 million in cash and cash equivalents, and raised an additional $4.0 million in February 2025, but this funding is insufficient to support operations for the next twelve months [161]. - The company must raise substantial additional capital to complete the development and commercialization of AL001 and ALZN002, which may involve significant dilution for existing shareholders [161]. - The independent registered public accounting firm has expressed substantial doubt about the company's ability to continue as a going concern due to insufficient capital [164]. Product Development and Regulatory Approval - The company has two product candidates, AL001 and ALZN002, which require extensive clinical evaluation and regulatory approval before generating any revenue [166]. - The company has not yet submitted AL001 or ALZN002 for regulatory approval, which is necessary before commercial distribution can begin [180]. - The regulatory approval process for AL001 and ALZN002 is uncertain and resource-intensive, potentially delaying commercialization [202]. - The company plans to seek breakthrough therapy designation for both AL001 and ALZN002, which may provide additional guidance from the FDA during the development process [215]. - The company has not yet received breakthrough therapy designation or qualified for expedited development, which could extend the development timeline [216]. Market Risks and Competition - The company faces substantial competition, which may impact pricing and market acceptance of its products [188]. - If competitors develop safer, more effective, or less expensive products, the company's commercial opportunity could be significantly reduced [236]. - The high rate of failure for drug candidates in clinical trials poses a significant risk to the company's product development [206]. Financial Reporting and Internal Controls - The company has identified a material weakness in its internal control over financial reporting, which could lead to inaccurate financial statements and affect investor confidence [290]. - The company must enhance its accounting department to address identified weaknesses, which will require time and financial resources [292]. - The company is required to comply with the Sarbanes-Oxley Act and maintain effective internal controls over financial reporting, which is a complex and costly process [303]. Legal and Compliance Risks - The company may face significant penalties if found in violation of fraud and abuse laws, which could adversely affect its business [228]. - The company is subject to various legal claims and actions that could be costly and distract management from operations [298]. - The company’s bylaws may limit stockholders' ability to bring claims in favorable judicial forums, potentially discouraging lawsuits [283]. Stock and Ownership Structure - The common stock is subject to volatility, with prices fluctuating between $5.94 and $66.15 per share over the past year [275]. - The concentration of stock ownership among executive officers and directors may limit the ability of other stockholders to influence corporate matters [280]. - The company is currently in compliance with Nasdaq listing requirements, but has faced non-compliance issues in the past year, which could lead to delisting [271]. Operational Challenges - The company expects substantial increases in expenses over the next few years due to the capital-intensive nature of biotechnology product development, particularly for AL001 and ALZN002 [160]. - Clinical trials for AL001 and ALZN002 are expected to be expensive and time-consuming, with potential for delays or cancellations [210]. - The company anticipates challenges in hiring qualified personnel due to intense competition in the biopharmaceutical field [296]. Intellectual Property Risks - The company may need to litigate to protect its intellectual property rights, which could be costly and distract management from core business activities [243]. - There is a risk that trade secrets and proprietary information may be inadequately protected, allowing competitors to develop similar products [245]. - The strength and enforceability of the company's patents may be uncertain, potentially threatening its ability to commercialize products [254].