What changed in this filing

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Item 1. Financial Statements

2022-12-12 compared with 2022-09-13 · 234 added, 173 removed, 470 unchanged (46% of the section changed)

2 unchanged sentences

Condensed Balance Sheets

July 31, 2022

October 31, 2022

April 30, 2022

1 unchanged sentence

Prepaid expenses and other current assets

Prepaid expenses - related party

TOTAL CURRENT ASSETS

10 unchanged sentences

10,000,000 shares authorized;

Series A Convertible Preferred Stock, $ 0.0001 stated value per share, 1,360,000 shares designated;

nil issued and outstanding as of July 31, 2022 and April 30, 2022

Series A Convertible

Preferred Stock, $ 0.0001 stated value per share, 1,360,000 shares designated;

nil issued and outstanding as of October 31, 2022 and

April 30, 2022

Common stock, $ 0.0001 par value:

300,000,000 shares authorized;

shares issued and outstanding as of July 31, 2022 and April 30, 2022

95,494,290 and 95,481,790 shares issued and outstanding as of

October 31, 2022 and April 30, 2022, respectively

Additional paid-in capital

11 unchanged sentences

Condensed Statements of Operations

For the Three Months Ended July 31,

For the Three Months Ended October 31,

For the Six Months Ended October 31,

OPERATING EXPENSES

5 unchanged sentences

( 3,583,934 )

( 6,141,945 )

( 5,890,173 )

OTHER EXPENSE, NET

3 unchanged sentences

$ ( 3,599,929 )

$ ( 6,147,065 )

$ ( 5,919,796 )

Basic and diluted net loss per common share

4 unchanged sentences

Condensed Statements of Stockholders’

For the Three Months Ended July 31, 2022

For the Three Months Ended October 31, 2022

Series A Convertible

Note Receivable

Note Receivable for

Preferred Stock

1 unchanged sentence

Related Party

BALANCES, April 30, 2022

BALANCES, July 31, 2022

$ ( 14,883,295 )

$ ( 32,231,569 )

Issuance of common stock for restricted stock awards

Stock-based compensation to employees and consultants

1 unchanged sentence

( 3,109,991 )

BALANCES, October 31, 2022

$ ( 14,883,295 )

$ ( 35,341,560 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Alzamend Neuro, Inc.

Condensed Statements of Stockholders’

For the Three Months Ended October 31, 2021

Series A Convertible

Note Receivable for

Preferred Stock

Common Stock -

Related Party

BALANCES, July 31, 2021

1 unchanged sentence

$ ( 19,152,304 )

Issuance of common stock for restricted stock awards

Stock-based compensation to employees and consultants

Proceeds from sale of common stocks & warrants-related party

Proceeds from sale of common stocks and warrants-related party (in shares)

Proceeds from stock option exercise

Proceeds from initial public offering, net of underwriters' discounts and commissions and issuance costs of $1.5 million

Stock issued during period value new issues three shares (in shares)

Conversion of Series A convertible stock

Conversion of Series A convertible stock (in shares)

( 3,599,929 )

BALANCES, October 31, 2021

$ ( 14,883,295 )

$ ( 22,752,233 )

The accompanying notes are an integral part of

2 unchanged sentences

Condensed Statements of Stockholders’

For the Three Months Ended July 31, 2021

For the Six Months Ended October 31, 2022

Series A Convertible

Note Receivable

Note Receivable for

Preferred Stock

4 unchanged sentences

$ ( 29,194,495 )

Issuance of common stock for restricted stock awards

Stock-based compensation to employees and consultants

Proceeds from sale of common stocks and warrants-related party

( 6,147,065 )

BALANCES, October 31, 2022

$ ( 14,883,295 )

$ ( 35,341,560 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Alzamend Neuro, Inc.

Condensed Statements of Stockholders’

For the Six Months Ended October 31, 2021

Series A Convertible

Note Receivable for

Preferred Stock

Common Stock -

Related Party

BALANCES, April 30, 2021

$ ( 14,883,295 )

$ ( 16,832,437 )

Issuance of common stock for restricted stock awards

Stock-based compensation to employees and consultants

Proceeds from sale of common stocks & warrants-related party

Proceeds from stock option exercise

3 unchanged sentences

( 5,919,796 )

BALANCES, July 31, 2021

BALANCES, October 31, 2021

$ ( 14,883,295 )

4 unchanged sentences

Condensed Statements of Cash Flows

For the Three Months Ended July 31,

For the Six Months Ended

Cash flows from operating activities:

7 unchanged sentences

Prepaid expenses and other current assets

Accounts payable and accrued liabilities

Prepaid expenses related party

Accounts payable and accrued expenses

Net cash used in operating activities

12 unchanged sentences

Non-cash financing activities:

Fair value of warrants issued in connection with initial public offering

Fair value of warrants issued in connection with March 2021 securities purchase agreement, related party

Fair value of warrants issued in connection with IPO

The accompanying notes are an integral part of

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“Company” or “Alzamend”), is an early clinical-stage biopharmaceutical company focused on developing novel products

for the treatment of neurodegenerative diseases and psychiatric disorders.

The Company’s primary focus is Alzheimer’s disease.

With two current and future product candidates, Alzamend aims to bring treatments or cures to market at a reasonable cost as quickly as

The Company’s current pipeline consists of two novel therapeutic drug candidates (collectively, the “Technology”):

(i) a patented ionic cocrystal technology delivering a therapeutic combination of lithium, proline and salicylate, known as AL001, through

two royalty-bearing exclusive worldwide licenses from the University of South Florida Research Foundation, Inc., as licensor (the “Licensor”);

for the treatment of Alzheimer’s disease (“Alzheimer’s”), bipolar disorder (“BD”), major depressive

disorder (“MDD”) and post-traumatic stress disorder (“PTSD”).

With the Company’s two current product candidates,

Alzamend aims to bring treatments or cures to market as quickly as possible.

The Company’s current pipeline consists of two novel

therapeutic drug candidates (collectively, the “Technology”):

(i) a patented ionic cocrystal technology delivering a therapeutic

combination of lithium, proline and salicylate, for the treatment of Alzheimer’s BD, MDD and PTSD, known as AL001, through two royalty-bearing

exclusive worldwide licenses from the University of South Florida Research Foundation, Inc., as licensor (the “Licensor”);

and (ii) a patented method using a mutant peptide sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability

of a patient’s immunological system to combat Alzheimer’s, known as AL002 or CA022W, through a royalty-bearing exclusive worldwide

of a patient’s immunological system to combat Alzheimer’s, known as ALZN002, through a royalty-bearing exclusive worldwide

license from the same Licensor.

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financial statements have been prepared on the basis that the Company will continue as a going concern.

As of July 31, 2022, the Company

As of October 31, 2022, the Company

had cash of $ 9.2 million and an accumulated deficit of $ 35.3 million .

The Company incurred losses for the three months ended July 31,

2022 totaling $ 3.0 million.

Historically, the Company has financed its operations principally through issuances of equity and debt instruments.

The Company expects to continue to incur losses for the foreseeable

future and needs to raise additional capital until it is able to generate revenues from operations sufficient to fund its development

and commercial operations.

However, based on the Company’s current business plan, management believes that the Company’s cash

at July 31, 2022 is sufficient to meet the Company’s anticipated cash requirements during the twelve-month period subsequent to

the issuance of the financial statements included in this Quarterly Report.

The Company incurred losses for the three and six months ended October

31, 2022 totaling $ 3.1 million and $ 6.1 million , respectively.

Historically, the Company has financed its operations principally through

issuances of equity and debt instruments.

The Company expects

to continue to incur losses for the foreseeable future and needs to raise additional capital until it is able to generate revenues from

operations sufficient to fund its development and commercial operations.

However, based on the Company’s current business plan,

management believes that the Company’s cash at October 31, 2022 is sufficient to meet the Company’s anticipated cash requirements

during the twelve-month period subsequent to the issuance of the financial statements included in this Quarterly Report.

SIGNIFICANT ACCOUNTING POLICIES

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highly liquid investments with a remaining maturity of three months or less when purchased to be cash equivalents.

As of July 31, 2022

As of October 31, 2022

and April 30, 2022, the Company had no cash equivalents.

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warrants as either equity instruments, derivative liabilities, or liabilities in accordance with ASC 480, Distinguishing Liabilities

from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”) , depending

on the specific terms of the warrant agreement.

from Equity and ASC 815, Derivatives and Hedging, depending on the specific terms of the warrant agreement.

Loss per Common Share

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been excluded from the computation of loss per common share:

For the Three Months Ended July 31,

Series A convertible preferred stock

For the Six Months Ended October 31,

Stock options (1)

1 unchanged sentence

(1) The Company has excluded 2,000,000

stock options, with

an exercise price of $ 0.0004 ,

and 5,500,000

stock options for the six months ended October 31, 2022 and 2021, respectively, with an exercise price of $ 0.0004 ,

from its anti-dilutive securities as these shares have been included in our determination of basic loss per share as they represent shares

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As the note receivable from ALSF is related to the issuance of Common Stock, it is recorded as an offset to additional paid-in

At July 31, 2022 and April 30, 2022, the outstanding balance of the note receivable was $ 14,883,295 .

ALSF is wholly owned by

Ault Life Sciences, Inc.

At October 31, 2022 and April 30, 2022, the outstanding balance of the note receivable was $ 14,883,295 .

ALSF is wholly owned

by Ault Life Sciences, Inc.

ALSI is majority owned by Ault & Company, Inc.

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Horne and Nisser, directors of the Company, are also directors of Ault & Co.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other

current assets are as follows:

July 31, 2022

current assets were as follows:

October 31, 2022

April 30, 2022

2 unchanged sentences

Other prepaid expenses

Other receivables

Total prepaid expenses and other current assets

On June 16, 2022, the

Company purchased D&O insurance for 12 months in the amount of $ 492,000.

Prepaid insurance at July 31, 2022 represented the unamortized

portion of annual premium paid for this policy of $ 452,000 .

At July 31, 2022, prepaid consulting fees of $ 117,000 consisted of payments

to Spartan Capital Securities, LLC (“Spartan Capital”).

Company purchased directors and officers (“D&O”) insurance for 12 months in the amount of $ 492,000 .

Prepaid insurance

at October 31, 2022 represented the unamortized portion of annual premium paid for this policy of $ 353,000 .

At October 31, 2022, prepaid

consulting fees of $ 47,000 consisted of payments to Spartan Capital Securities, LLC.

STOCK-BASED COMPENSATION

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A summary of stock option

activity for the three months ended July 31, 2022 is presented below:

activity for the six months ended October 31, 2022 is presented below:

Outstanding Options

Aggregate Intrinsic

Balance at April 30, 2022

3 unchanged sentences

( 1,391,671 )

Balance at July 31, 2022

Options vested and expected to vest at July 31, 2022

Options exercisable at July 31, 2022

Balance at October 31, 2022

Options vested and expected to vest at October 31, 2022

Options exercisable at October 31, 2022

The aggregate intrinsic value

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The estimated fair value of

stock options granted to employees and consultants during the three months ended July 31, 2021 were calculated using the Black-Scholes

stock options granted to employees and consultants during the six months ended October 31, 2021 were calculated using the Black-Scholes

option-pricing model using the following assumptions:

For the Three Months Ended July 31,

For the Six Months Ended October 31,

Expected term (in years)

8 unchanged sentences

that were deemed to be representative of future stock price trends as the Company did not have sufficient trading history for its Common

Stock at July 31, 2022.

Stock at October 31, 2021.

The Company will continue to apply this process until a sufficient amount of historical information regarding

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Stock-based compensation to

employees and consultants from stock option grants for the three months ended July 31, 2022 and 2021 were $ 867,000 and $ 740,000 , respectively.

employees and consultants from stock option grants for the six months ended October 31, 2022 and 2021 was $ 1.6 million and $ 2.0 million,

respectively.

Performance Contingent

Stock Options Granted to Employee

In November 2018, the Board

granted 2,000,000 performance-contingent options under the Plan to the Chief Executive Officer.

These options have an exercise price of

$ 1.00 per share.

These options have two separate

performance triggers for vesting based upon the therapies achieving certain Food and Drug Administration (“FDA”) approval

milestones within a specified timeframe.

By definition, the performance condition in these options can only be achieved after the performance

condition of FDA approval has been achieved.

As such, the requisite service period is based on the estimated period over which the market

condition can be achieved.

When a performance goal is deemed to be probable of achievement, time-based vesting and recognition of stock-based

compensation expense commences.

In the event any of the milestones are not achieved by the specified timelines, such vesting award will

terminate and no longer be exercisable with respect to that portion of the shares.

The maximum potential expense associated with the performance-contingent

awards is $ 1.2 million of general and administrative expense if all of the performance conditions are achieved as stated in the option

Due to the significant risks and uncertainties associated with FDA approvals, as of July 31, 2022, the Company believes that

the achievement of the requisite performance conditions is not probable and, as a result, no compensation cost has been recognized for

these awards.

On November 26, 2019, the

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price milestones are not achieved within three years , the unvested portion of the performance options will be reduced by 25%.

significant risks and uncertainties associated with achieving the market-contingent awards, as of July 31, 2022, the Company believes

significant risks and uncertainties associated with achieving the market-contingent awards, as of October 31, 2022, the Company believes

that the achievement of the requisite performance conditions is not probable and, as a result, no compensation cost has been recognized

for these awards.

On November 22, 2022, the

Compensation Committee of the Board modified the performance criteria for these awards.

The target price range is now $10 per share to

$20 per share.

Additionally, if the stock price milestones are now not achieved by November 27, 2026, as opposed to within three years,

the unvested portion of the portion of the performance options will be reduced by 25%.

Performance Contingent

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Stock at a per share exercise price of $1.50 per share, of which 50% vest upon the completion of Phase I of AL001 by March 31, 2022, and

the remaining 50% vest upon completion of Phase I of AL002 by December 31, 2022.

the remaining 50% vest upon completion of Phase I of ALZN002 by December 31, 2022.

The performance goal of completing

2 unchanged sentences

Due to the significant risks and uncertainties associated with achieving

the completion of Phase I for AL002, as of July 31, 2022, the Company believes that the achievement of the requisite performance conditions

is not probable and, as a result, no compensation cost has been recognized for these awards related to AL002.

the completion of Phase I for ALZN002, as of October 31, 2022, the Company believes that the achievement of the requisite performance

conditions is not probable and, as a result, no compensation cost has been recognized for these awards related to ALZN002.

Performance Contingent

3 unchanged sentences

price of $2.42 per share, of which 50,000 vest upon completion of each of the Phase II clinical trials of AL001 for a Bipolar indication,

AL001 for a PTSD indication, AL001 for a depression indication and AL002 for an Alzheimer’s indication.

As of July 31, 2022, the Company

believes that the achievement of the requisite performance conditions is not probable and, as a result, no compensation cost has been

recognized for these awards related to Phase II of AL001 and AL002.

AL001 for a PTSD indication, AL001 for a depression indication and ALZN002 for an Alzheimer’s indication.

As of October 31, 2022, the

Company believes that the achievement of the requisite performance conditions is not probable and, as a result, no compensation cost has

been recognized for these awards related to Phase II of AL001 and ALZN002.

Stock-Based Compensation

The Company’s results

of operations include expenses relating to stock-based compensation for three months ended July 31, 2022 and 2021, that were comprised

For the Three Months Ended July 31,

of operations include expenses relating to stock-based compensation for three and six months ended October 31, 2022 and 2021, that were

comprised as follows:

For the Three Months Ended October 31,

For the Six Months Ended October 31,

Research and development

General and administrative

As of July 31, 2022, total

As of October 31, 2022, total

unamortized stock-based compensation expense related to unvested employee and non-employee awards that are expected to vest was $ 2.8 million .

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The following table summarizes

information about Common Stock warrants outstanding and exercisable at July 31, 2022:

information about Common Stock warrants outstanding and exercisable at October 31, 2022:

$ 1.00 - $ 6.25

The estimated fair value of warrants granted during

the three months ended July 31, 2021 were calculated using the Black-Scholes option-pricing model using the following assumptions:

For the Three Months Ended July 31,

The estimated fair value of warrants granted during the six months

ended October 31, 2021 were calculated using the Black-Scholes option-pricing model using the following assumptions:

For the Six Months Ended October 31,

Expected term (in years)

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Expected Term:

expected term represents the period that the warrants granted are expected to be outstanding.

term represents the period that the warrants granted are expected to be outstanding.

Expected Volatility:

Company uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry

uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry

that were deemed to be representative of future stock price trends as the Company did not have sufficient trading history for its Common

Stock at July 31, 2021.

Stock at October 31, 2021.

The Company will continue to apply this process until a sufficient amount of historical information regarding

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Expected Dividend:

Company has not paid and does not anticipate paying any dividends in the near future.

has not paid and does not anticipate paying any dividends in the near future.

Therefore, the expected dividend yield was zero.

OTHER RELATED PARTY TRANSACTIONS

In March 2021, the Company

entered into a securities purchase agreement with Digital Power Lending, LLC (“DPL”) pursuant to which the Company sold an

aggregate of 6,666,667 shares of Common Stock for an aggregate of $ 10 million, or $1.50 per share, which sales were made in tranches.

On March 9, 2021, DPL paid $ 4 million, less the $1.8 million in prior advances and the surrender for cancellation of a $50,000 convertible

promissory note held by BitNile Holdings, Inc.

(“BitNile”), the parent company of DPL, for an aggregate of 2,666,667 shares

of Common Stock.

Under the terms of the securities purchase agreement, DPL (i) purchased an additional 1,333,333 shares of Common Stock

upon approval of the IND for Phase IA clinical trials for AL001 for a purchase price of $2 million, and (ii) purchased 2,666,667 shares

of Common Stock upon the completion of Phase IA clinical trials for AL001 for a purchase price of $4 million.

The Company issued to DPL

warrants to purchase 3,333,333 shares of Common Stock at an exercise price of $3.00 per share.

Finally, the Company agreed that for a

period of 18 months following the date of the payment of the final tranche of $4 million, DPL will have the right to invest an additional

In March 2021, the Company entered into

a securities purchase agreement with Ault Lending, LLC (formerly, Digital Power Lending, LLC) (“AL”) pursuant to which the

Company sold an aggregate of 6,666,667 shares of Common Stock for an aggregate of $ 10 million, or $1.50 per share, which sales were made

On March 9, 2021, AL paid $ 4 million, less the $1.8 million in prior advances and the surrender for cancellation of a $50,000

convertible promissory note held by BitNile Holdings, Inc.

(“BitNile”), the parent company of AL, for an aggregate of 2,666,667

shares of Common Stock.

Under the terms of the securities purchase agreement, AL (i) purchased an additional 1,333,333 shares of Common

Stock upon approval of the IND for Phase IA clinical trials for AL001 for a purchase price of $2 million, and (ii) purchased 2,666,667

shares of Common Stock upon the completion of Phase IA clinical trials for AL001 for a purchase price of $4 million.

The Company issued

to AL warrants to purchase 3,333,333 shares of Common Stock at an exercise price of $3.00 per share.

Finally, the Company agreed that

for a period of 18 months following the date of the payment of the final tranche of $4 million, AL will have the right to invest an additional

$10 million on the same terms, except that no specific milestones have been determined with respect to the additional $10 million as of

the date of this Quarterly Report.

In November 2022, the Company entered into

a marketing and brand development agreement with BitNile, effective August 1, 2022, whereby BitNile will provide various marketing services

over twelve months valued at $1.4 million.

The Company had the right to pay the fee in cash or shares of its Common Stock with a value

of $1.50 per share.

On November 11, 2022, the Company elected to pay the fee with 933,334 shares of its Common Stock.

The Company recorded

the value of the agreement using the closing price of the Company’s Common Stock on November 11, 2022, and will amortize the expense

over twelve months beginning in August 2022.

At October 31, 2022, the balance of related party prepaid expenses was $ 742,000 and the balance

of related party payable was $ 989,000 .

COMMITMENTS AND CONTINGENCIES

Contractual Obligations

On May 1, 2016, the Company

entered into a Standard Exclusive License Agreement for AL002 with Sublicensing Terms with Licensor, pursuant to which Licensor granted

the Company a royalty bearing exclusive worldwide license limited to the field of Alzheimer’s Immunotherapy and Diagnostics, under

United States Patent No.

8,188,046, entitled “Amyloid Beta Peptides and Methods of Use,” filed April 7, 2009 and granted

May 29, 2012.

On May 1, 2016, the Company entered into

a Standard Exclusive License Agreement for ALZN002 with Sublicensing Terms with Licensor, pursuant to which Licensor granted the Company

a royalty bearing exclusive worldwide license limited to the field of Alzheimer’s Immunotherapy and Diagnostics, under United States

8,188,046, entitled “Amyloid Beta Peptides and Methods of Use,” filed April 7, 2009 and granted May 29, 2012.

are certain initial license fees and milestone payments required to be paid by the Company to the Licensor pursuant to the terms of license

The license agreements for AL002 require the Company to pay royalty payments of 4 % on net sales of products developed

from the licensed technology for AL002 while the license agreements for AL001 require that the Company pay combined royalty payments of 4.5 %

on net sales of products developed from the licensed technology for AL001.

The Company has already paid an initial license fee of

$200,000 for AL002 and an initial license fee of $200,000 for AL001.

As an additional licensing fee for the license of AL002, the Licensor

received 3,601,809 shares of common stock.

As an additional licensing fee for the license of the AL001 technologies, the Licensor received

2,227,923 shares of common stock.

Minimum royalties for AL001 are $25,000 in 2023, $45,000 in 2024 and $70,000 in 2025 and every year

thereafter, for the life of the agreement.

Minimum royalties for AL002 are $20,000 in 2022, $40,000 in 2023 and $50,000 in 2024 and every

year thereafter, for the life of the respective agreement.

Additionally, the Company is required to pay milestone payments on the

due dates to the Licensor for the license of the AL001 technologies and for the AL002 technology, as follows:

AL001 License:

The license agreements for ALZN002 require the Company to pay royalty payments of 4 % on net sales of products developed

from the licensed technology for ALZN002 while the license agreements for AL001 require that the Company pay combined royalty payments

of 4.5 % on net sales of products developed from the licensed technology for AL001.

The Company has already paid an initial

license fee of $200,000 for ALZN002 and an initial license fee of $200,000 for AL001.

As an additional licensing fee for the license

of ALZN002, the Licensor received 3,601,809 shares of common stock.

As an additional licensing fee for the license of the AL001 technologies,

the Licensor received 2,227,923 shares of common stock.

Minimum royalties for AL001 are $25,000 in 2023, $45,000 in 2024 and $70,000

in 2025 and every year thereafter, for the life of the agreement.

Minimum royalties for ALZN002 are $20,000 in 2022, $40,000 in 2023

and $50,000 in 2024 and every year thereafter, for the life of the respective agreement.

Additionally, the Company is required to

pay milestone payments on the due dates to the Licensor for the license of the AL001 technologies and for the ALZN002 technology, as

Original AL001 License :

Completed September 2019

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* Milestone met and completed

Completed January 2022

ALZN002 License:

Completed September 2022

Upon IND application filing

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Upon FDA BLA approval

* Milestone met and completed

Company has met the pre-IND meeting, IND application filing, and successfully completed the Phase I clinical trial milestones encompassing

If the Company fails to meet a milestone by its specified date, the Licensor may terminate the license agreement.

AL001 and the IND application filing milestone for ALZN002.

If the Company fails to meet a milestone by its specified date, the Licensor

may terminate the license agreement.

was also granted a preemptive right to acquire such shares or other equity securities that may be issued from time to time by the Company

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Licensor for the license of the technology, as follows:

AL001 Licenses:

Additional AL001 Licenses:

Upon IND application filing

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EQUITY TRANSACTIONS

Company is authorized to issue 10,000,000 shares of Preferred Stock $ 0.0001 par value.

The Board has designated 1,360,000 shares as the

Series A Preferred Shares.

The rights, preferences, privileges and restrictions on the remaining authorized 8,640,000 shares of Preferred

Stock have not been determined.

The Board is authorized to create a new series of preferred shares and determine the number of shares,

as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred shares.

The Company is

authorized to issue 10,000,000 shares of Preferred Stock $ 0.0001 par value.

The Board has designated 1,360,000 shares as the Series A

Preferred Shares.

The rights, preferences, privileges and restrictions on the remaining authorized 8,640,000 shares of Preferred Stock

have not been determined.

The Board is authorized to create a new series of preferred shares and determine the number of shares, as well

as the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred shares.

Series A Preferred Shares

As of July 31, 2022, there

were no Series A Preferred Shares or any other shares of Preferred Stock issued or outstanding.

On April 30, 2019, the Company

and ALSF entered into a SPA for the purchase of 10,000,000 shares of Common Stock for a total purchase price of $ 15,000,000 , or $ 1.50

per share with 5,000,000 warrants with a 5 -year life and an exercise price of $ 3.00 per share and vesting upon issuance.

The total purchase

price of $ 15,000,000 was in the form of a non-interest bearing note receivable with a 12 -month term from ALSF, a related party.

is secured by a pledge of the purchased shares.

As of October 31, 2022, there were no Series

A Preferred Shares or any other shares of Preferred Stock issued or outstanding.

On April 30, 2019, the Company and ALSF

entered into a SPA for the purchase of 10,000,000 shares of Common Stock for a total purchase price of $ 15,000,000 , or $ 1.50 per share

with 5,000,000 warrants with a 5 -year life and an exercise price of $ 3.00 per share and vesting upon issuance.

The total purchase price

of $ 15,000,000 was in the form of a non-interest bearing note receivable with a 12 -month term from ALSF, a related party.

secured by a pledge of the purchased shares.

Pursuant to the SPA, ALSF is entitled to full ratchet anti-dilution protection, most-favored

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The note is secured by a pledge of the purchased shares.

In March 2021, the Company

entered into a securities purchase agreement with DPL pursuant to which the Company agreed to sell an aggregate of 6,666,667 shares of

Common Stock for an aggregate of $ 10 million, or $ 1.50 per share, which sales will be made in tranches.

On March 9, 2021, DPL paid $ 4

million, less the $ 1.8 million in prior advances and the surrender for cancellation of a $ 50,000 convertible promissory note held by BitNile,

for an aggregate of 2,666,667 shares of Common Stock.

Under the terms of the securities purchase agreement, DPL (i) purchased an additional

1,333,333 shares of Common Stock upon approval by the FDA of the Company’s IND for its Phase IA clinical trials for AL001 for a

purchase price of $2 million, and (ii) purchased 2,666,667 shares of Common Stock upon the completion of these Phase IA clinical trials

for AL001 for a purchase price of $4 million.

The Company further agreed to issue to DPL warrants to purchase 3,333,333 shares of Common

Stock at an exercise price of $3.00 per share.

Finally, the Company

agreed that for a period of 18 months following the date of the payment of the final tranche of $4 million, on April 28, 2022, DPL

will have the right to invest an additional $ 10

million on the same terms, except that no specific milestones have been determined with respect to the additional $ 10

In March 2021, the Company entered into

a securities purchase agreement with AL pursuant to which the Company agreed to sell an aggregate of 6,666,667 shares of Common Stock

for an aggregate of $ 10 million, or $ 1.50 per share, which sales will be made in tranches.

On March 9, 2021, AL paid $ 4 million, less

the $ 1.8 million in prior advances and the surrender for cancellation of a $ 50,000 convertible promissory note held by BitNile, for an

aggregate of 2,666,667 shares of Common Stock.

Under the terms of the securities purchase agreement, AL (i) purchased an additional 1,333,333

shares of Common Stock upon approval by the FDA of the Company’s IND for its Phase IA clinical trials for AL001 for a purchase price

of $2 million, and (ii) purchased 2,666,667 shares of Common Stock upon the completion of these Phase IA clinical trials for AL001 for

a purchase price of $4 million.

The Company further agreed to issue to AL warrants to purchase 3,333,333 shares of Common Stock at an

exercise price of $3.00 per share.

Finally, the Company agreed that for a period

of 18 months following the date of the payment of the final tranche of $4 million, on April 28, 2022, AL will have the right to invest

an additional $ 10 million on the same terms, except that no specific milestones have been determined with respect to the additional $ 10

million as of the date of this Quarterly Report.

SUBSEQUENT EVENTS

The Company has evaluated

subsequent events through the date the financial statements were issued.

The Company has determined that there are no such events that

warrant disclosure or recognition in the condensed financial statements presented herein.

The Company has evaluated subsequent events

through the date the financial statements were issued.

The Company has determined that there are no such events that warrant disclosure

or recognition in the condensed financial statements presented herein.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements