What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-12-12 compared with 2022-09-13 · 440 added, 315 removed, 201 unchanged (79% of the section changed)

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NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as

amended (the “Exchange Act”).

This section should be read in conjunction with our unaudited condensed financial statements

and related notes included in Part I, Item 1 of this report.

The statements contained in this report that are not purely historical are

forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange

These statements relate to future events or our

future financial performance.

This Quarterly Report on Form 10-Q contains

forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange

Act of 1934, as amended (the “Exchange Act”).

This section should be read in conjunction with our unaudited condensed financial

statements and related notes included in Part I, Item 1 of this report.

The statements contained in this report that are not purely historical

are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange

These statements relate to future events

or our future financial performance.

We have attempted to identify forward-looking statements by terminology including “anticipates,”

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of activity, performance or achievements.

In this Quarterly Report,

unless the context requires otherwise, references to the “Company,” “Alzamend,” “we,” “our company”

and “us” refer to Alzamend Neuro, Inc., a Delaware corporation.

In this Quarterly

Report, unless the context requires otherwise, references to the “Company,” “Alzamend,” “we,” “our

company” and “us” refer to Alzamend Neuro, Inc., a Delaware corporation.

We were incorporated on February 26, 2016,

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under the laws of the State of Delaware.

We were formed to acquire and commercialize patented intellectual

property and know-how to prevent, treat and potentially cure the crippling and deadly Alzheimer’s.

Existing Alzheimer’s treatments

only temporarily relieve symptoms but do not slow or halt the underlying worsening of the disease.

We have developed a novel approach

in an attempt to combat Alzheimer’s through immunotherapy.

We were formed to acquire and commercialize patented intellectual property

and know-how to prevent, treat and potentially cure the crippling and deadly Alzheimer’s.

With our two product candidates, we aim

to bring treatment or cures not only for Alzheimer’s, but also, bipolar disorder (“BD”), major depressive disorder (“MDD”)

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

Existing Alzheimer’s treatments only temporarily relieve symptoms but do

not, to our knowledge, slow or halt the underlying worsening of the disease.

We have developed a novel approach in an attempt to combat

Alzheimer’s through immunotherapy.

Critical Accounting Policies and Estimates

Research and Development

Research and development costs are expensed as incurred.

Research and development costs consist of scientific consulting

fees and lab supplies, as well as fees paid to other entities that conduct certain research and development activities on behalf of our

We have acquired and may continue

to acquire the rights to develop and commercialize new product candidates from third parties.

The upfront payments to acquire license,

product or rights, as well as any future milestone payments, are immediately recognized as research and development expense provided that

there is no alternative future use of the rights in other research and development projects.

Research and Development Expenses .

and development costs are expensed as incurred.

Research and development costs consist of scientific consulting fees and lab supplies,

as well as fees paid to other entities that conduct certain research and development activities on behalf of our company.

We have acquired and may continue to acquire

the rights to develop and commercialize new product candidates from third parties.

The upfront payments to acquire license, product or

rights, as well as any future milestone payments, are immediately recognized as research and development expense provided that there is

no alternative future use of the rights in other research and development projects.

Stock-Based Compensation.

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for the issuance of incentive stock options, non-qualified stock options, restricted stock units, and other forms of equity awards.

We recognize stock-based compensation

expense for stock options on a straight-line basis over the requisite service period and account for forfeitures as they occur.

We recognize stock-based compensation expense

for stock options on a straight-line basis over the requisite service period and account for forfeitures as they occur.

Our stock-based

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of any such performance-based milestone is probable based on the relative satisfaction of the performance conditions as of the reporting

The Black-Scholes option pricing

model utilizes inputs which are highly subjective assumptions and generally require significant judgment.

The Black-Scholes option pricing model utilizes

inputs which are highly subjective assumptions and generally require significant judgment.

These assumptions include:

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Therefore, we used an expected dividend yield of zero.

Certain of such assumptions

involve inherent uncertainties and the application of significant judgment.

As a result, if factors or expected outcomes change and we

use significantly different assumptions or estimates, our stock-based compensation could be materially different.

Certain of such assumptions involve inherent

uncertainties and the application of significant judgment.

As a result, if factors or expected outcomes change and we use significantly

different assumptions or estimates, our stock-based compensation could be materially different.

Common Stock Valuations.

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· external market conditions affecting the life sciences and biotechnology industry sectors.

Following the closing of our

IPO, our Board determined the fair market value of our Common Stock based on the closing price of our Common Stock as reported on the

date of grant.

Following the closing of our IPO, our Board

determined the fair market value of our Common Stock based on the closing price of our Common Stock as reported on the date of grant.

Plan of Operations

plan of operations is currently focused on the development of both our therapeutic candidates which are at different stages of development.

We submitted an Investigational New Drug (“IND”) application for AL001 to the FDA on June 30, 2021.

On July 28, 2021, we announced

receipt of FDA “Study May Proceed” letter for a Phase I study under our IND application for AL001, a lithium-based ionic cocrystal

Our plan of operations

is currently focused on the development of both our therapeutic candidates which are at different stages of development.

an Investigational New Drug (“IND”) application for AL001 to the FDA on June 30, 2021.

On July 28, 2021, we announced receipt

of FDA “Study May Proceed” letter for a Phase I study under our IND application for AL001, a lithium-based ionic cocrystal

oral therapy for patients with dementia related to mild, moderate, and severe cognitive impairment associated with Alzheimer’s.

On August 17, 2021, we

announced that we have contracted Altasciences Clinical Kansas (“Altasciences”) to conduct a six-month Phase I relative bioavailability

study for AL001 for dementia related to Alzheimer’s beginning in September 2021.

The Phase I first-in-human study is for the purpose

On August 17, 2021, we announced that

we have contracted Altasciences Clinical Kansas (“Altasciences”) to conduct a six-month Phase I relative bioavailability study

for AL001 for dementia related to Alzheimer’s beginning in September 2021.

The Phase I first-in-human study was for the purpose

of determining potential clinically safe and appropriate dosing for AL001 in future studies.

The Phase I study will investigate the pharmacokinetics

The Phase I study investigated the pharmacokinetics

(the movement of drug through the body) of lithium following a single dose of AL001 (the “study drug”) compared to a typical

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to treat mood disorders) in healthy male and female subjects.

The lithium and salicylate components of AL001 will be given within the

amounts already approved for use in patients.

The purpose of the research study is to test the safety, tolerability, and bioavailability

(how much and when drug gets in the body) of the study drug, AL001, compared to the currently marketed formulation of the comparator,

lithium carbonate.

This is expected to ascertain what AL001 doses should be given, and how often, in subsequent Phase 2 safety and efficacy

trials involving Alzheimer’s patients.

At least 24 healthy male and female human subjects will complete the Phase I trial.

September 13, 2021, we announced that the first group of healthy participants have been dosed in a six-month Phase I relative bioavailability

study for AL001 for dementia related to Alzheimer’s.

A full report of the Phase I first-in-human study was completed in March 2022.

The Phase I study is for the purpose of determining potential clinically safe and appropriate dosing for AL001 in a planned Phase 2 multiple

ascending dose study.

AL001 is a lithium-delivering ionic cocrystal under development as an oral treatment for patients with dementia

related to mild, moderate, and severe cognitive impairment associated with Alzheimer’s.

We have an additional preclinical

candidate for Alzheimer’s, AL002, which has transitioned from early-stage development to an extensive program of preclinical study

and evaluation, which was completed on May 31, 2021, and was followed by a comprehensive report prepared by Charles River Laboratories,

Inc., an independent preclinical service provider, received on July 23, 2021.

Our preclinical program included a toxicologic evaluation,

histopathology study and brain beta amyloid analysis and was expanded to include an immunoglobulin analysis and biodistribution study.

On July 30, 2021, we announced

that we submitted a pre-IND meeting request for AL002 and supporting briefing documents to the Center for Biological Evaluation and Research

On September 30, 2021, we announced that we have received a written response to our meeting request relating to our Type B

Pre-IND application from the FDA providing a path for our planned clinical development of AL002.

AL002 is 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

Preclinical work supports AL002 being associated with a positive anti-inflammatory response and a decrease in brain

amyloid contents.

Based on AL002’s positive toxicology results, the biologic nature of this product and the urgent need to deliver

treatments for Alzheimer’s to patients, we proposed, and the FDA agreed, to conduct a combined Phase I/II study.

We recently announced

that the FDA’s agreement to us conducting a combined Phase I/II study, together with our process to identify the right manufacturing

partner to provide our study drug materials for the Phase I/II study, has extended the timeline for when we anticipate filing the IND,

which is now expected to be done in the third calendar quarter of 2022, and we plan to initiate the clinical trial of AL002 as soon as

possible after the approval of the IND by the FDA.

During Phase I first-in-human

trial, participants received a single dose of AL001 containing lithium in an amount equivalent to 150 mg lithium carbonate;

dose proposed by the inventors as likely appropriate for Alzheimer’s treatment when given three times daily (“TID”).

Currently, marketed immediate-release lithium carbonate 300 mg are given TID;

for example, lithium carbonate 300 mg TID is a dose commonly

used for bipolar affective disorders.

It can be difficult to set the appropriate dose of lithium carbonate and other lithium products

due to the small margin between effective and toxic blood levels and to avoid side effects or inadequate treatment outcomes.

possibility of providing the benefits from lithium at up to 50% of the currently approved lithium carbonate dosage, with the potential

for better outcomes and with elimination of the need for lithium therapeutic drug monitoring.

Moreover, the data confirms AL001’s

potential as a replacement of the current lithium-based treatments and may provide a treatment for over 40 million Americans suffering

from Alzheimer’s and other neurodegenerative diseases and psychiatric disorders.

Such findings may allow us

to design a development program that will potentially reduce the amount of new data generated to support approval.

Bioequivalence may

have utility for AL001 when seeking approval for the indications of currently marketed lithium products, and for new indications as a

benchmark for safety.

Given the systemic pharmacokinetic similarity to marketed immediate-release lithium carbonate products, AL001 may

be dosed TID in the planned Phase II study, a multiple ascending dose safety study in Alzheimer’s patients.

In addition, we are

pursuing investigational new drug applications with the FDA for bipolar disorder, MDD, and PTSD.

On April 4, 2022, we announced

the appointment of Dr.

The lithium and salicylate components of AL001 was given within the amounts

already approved for use in patients.

The purpose of the research study was to test the safety, tolerability, and bioavailability (how

much and when drug gets in the body) of the study drug, AL001, compared to the currently marketed formulation of the comparator, lithium

This was expected to ascertain what AL001 doses should be given, and how often, in subsequent Phase 2 safety and efficacy trials

involving Alzheimer’s patients.

At least 24 healthy male and female human subjects participated in the Phase I trial.

On September 13,

2021, we announced that the first group of healthy participants were dosed in a six-month Phase I relative bioavailability study for AL001

for dementia related to Alzheimer’s.

On March 28, 2022, we announced receipt of full data set from the Phase I clinical trial for

The full data set builds upon topline data previously reported on December 17, 2021.

This data affirmed that dose-adjusted relative

bioavailability analysis of the rate and extent of lithium absorption in plasma indicate that AL001 as 150 mg dosage is bioavailability

to the marketed 300 mg lithium carbonate product and the shapes of the lithium plasma concentration versus time curves are similar.

salicylate plasma concentrations are observed to be well tolerated and consistently within safe limits and the safety profiles of both

AL001 and the marketed lithium carbonate capsule were benign.

During Phase I first-in-human trial, participants

received a single dose of AL001 containing lithium in an amount equivalent to 150 mg lithium carbonate;

this is the dose proposed by the

inventors as likely appropriate for Alzheimer’s treatment when given three times daily (“TID”).

Currently, marketed

immediate-release lithium carbonate 300 mg are given TID;

for example, lithium carbonate 300 mg TID is a dose commonly used for bipolar

affective disorders.

It can be difficult to set the appropriate dose of lithium carbonate and other lithium products due to the small

margin between effective and toxic blood levels and to avoid side effects or inadequate treatment outcomes.

We see the possibility of

providing the benefits from lithium at up to 50% of the currently approved lithium carbonate dosage, with the potential for better outcomes

and with elimination of the need for lithium therapeutic drug monitoring.

Moreover, the data confirms AL001’s potential as a replacement

of the current lithium-based treatments and may provide a treatment for over 40 million Americans suffering from Alzheimer’s and

other neurodegenerative diseases and psychiatric disorders.

Such findings may allow us to design a development

program that will potentially reduce the amount of new data generated to support approval.

Bioequivalence may have utility for AL001 when

seeking approval for the indications of currently marketed lithium products, and for new indications as a benchmark for safety.

the systemic pharmacokinetic similarity to marketed immediate-release lithium carbonate products, AL001 may be dosed TID in the planned

Phase II study, a multiple ascending dose safety study in Alzheimer’s patients.

In addition, we are pursuing investigational new

drug applications with the FDA for bipolar disorder, MDD, and PTSD.

On April 4, 2022, we announced the appointment

Terri Hunter, Ph.D., a Technology Transfer Specialist, to our Scientific Advisory Board.

During her tenure at the

University of South Florida, Dr.

Hunter was responsible for managing the patent portfolio associated with Alzamend’s two product

candidates, AL001 and AL002.

On April 11, 2022, we announced

that we have contracted with Altasciences and iResearch Atlanta, LLC (“iResearch”) to manage and conduct, respectively, our

Phase IIA multiple ascending dose (“MAD”) study in patients with mild to moderate Alzheimer’s.

The Phase IIA study,

which commenced enrollment in May 2022, is for the purposes of evaluating the safety and tolerability of AL001 under multiple dose, steady-state

conditions, and to determine the maximum tolerated dose in patients with mild to moderate Alzheimer’s.

On April 28, 2022, we announced

that Digital Power Lending, LLC (“DPL”) has made an additional investment in our company.

On March 28, 2022, we announced

receipt of the full data set from Phase I clinical trial for AL001.

Based on the achievement of this milestone, under the March 12, 2021,

securities purchase agreement, we sold an additional 2,666,667 shares of Common Stock to DPL for $4 million, or $1.50 per share, and issued

to DPL warrants to acquire 1,333,333 shares of Common Stock with an exercise price of $3.00 per share.

On May 5, 2022, we announced

that the first patient with mild to moderate Alzheimer’s has been dosed in a 12-month Phase IIA MAD study for dementia related to

The Phase IIA study will evaluate the safety and tolerability of AL001 under multiple-dose, steady-state conditions

and determine the maximum tolerated dose in patients diagnosed with mild to moderate Alzheimer’s.

Lithium has been well characterized

for safety and is approved/marketed in multiple formulations for bipolar affective disorders.

Lithium dosing for the MAD cohorts is based

on a fraction of the usual dose for treatment of bipolar affective disorder (i.e., AL001 lithium content at a lithium carbonate equivalent

of 300 mg TID, daily total of 900 mg), with the target dose for Alzheimer’s treatment at half of that lithium carbonate equivalent

value (150 mg TID, daily total of 450 mg).

In each cohort, consisting of six active and two placebo patients (as per randomization), multiple

ascending doses will be administered TID for 14 days under fasted conditions (at least 1 hour before or 4 hours after meals) up to tolerability/safety

The lithium and salicylate components of AL001 will be given within the amounts already approved for use in patients.

subjects will complete the Phase IIA trial.

The maximum tolerated dose will then be used for further studies.

On May 17, 2022, we announced

that we have submitted a Pre-IND meeting request for AL001 and supporting briefing documents to the FDA for the treatment of bipolar disorder,

MDD and PTSD.

The continuation of our current

plan of operations with respect to completing our IND application and beginning the series of human clinical trials for each of our therapeutics

During her tenure at the University of

South Florida, Dr.

Hunter was responsible for managing the patent portfolio associated with Alzamend’s two product candidates, AL001

On April 28, 2022, we announced that Ault

Lending, LLC (formerly, Digital Power Lending, LLC) (“AL”) has made an additional investment in our company.

2022, we announced receipt of the full data set from Phase I clinical trial for AL001.

Based on the achievement of this milestone, under

the March 12, 2021, securities purchase agreement, we sold an additional 2,666,667 shares of common stock to AL for $4 million, or $1.50

per share, and issued to AL warrants to acquire 1,333,333 shares of common stock with an exercise price of $3.00 per share.

On May 5, 2022,

we announced that the first patient with mild to moderate Alzheimer’s was dosed in a 12-month Phase IIA multiple ascending dose

(“MAD”) study for dementia related to Alzheimer’s.

The Phase IIA study will evaluate the safety and tolerability of

AL001 under multiple-dose, steady-state conditions and determine the maximum tolerated dose in patients diagnosed with mild to moderate

Lithium has been well characterized for safety and is approved/marketed in multiple formulations for bipolar affective

Lithium dosing for the MAD cohorts is based on a fraction of the usual dose for treatment of bipolar affective disorder (i.e.,

AL001 lithium content at a lithium carbonate equivalent of 300 mg TID, daily total of 900 mg), with the target dose for Alzheimer’s

treatment at half of that lithium carbonate equivalent value (150 mg TID, daily total of 450 mg).

In each cohort, consisting of six active

and two placebo patients (as per randomization), multiple ascending doses will be administered TID for 14 days under fasted conditions

(at least 1 hour before or 4 hours after meals) up to tolerability/safety limits.

The lithium and salicylate components of AL001 will

be given within the amounts already approved for use in patients.

Up to 40 subjects will complete the Phase IIA trial.

The maximum tolerated

dose will then be used for further studies.

On October 5, 2022, we announced the addition of a healthy adult subject cohort to MAD study

and that the first healthy patient was dosed.

On May 17, 2022,

we announced submission of a Pre-IND meeting request for AL001 and supporting briefing documents to the FDA for the treatment of BD, MDD

On July 18, 2022, we announced receipt of a written response from the FDA to our meeting request relating to our Pre-IND application.

The FDA’s response provided a path for our planned clinical development of AL001 for the treatment of BD, MDD and PTSD.

the FDA’s written feedback, we anticipate filing INDs for BD, MDD and PTSD upon the completion of the current Phase IIA MAD study.

This will allow us to initiate Phase II clinical trials for all three new indications.

We have an additional preclinical candidate

for Alzheimer’s, ALZN002, which has transitioned from early-stage development to an extensive program of preclinical study and evaluation,

which was completed on May 31, 2021, and was followed by a comprehensive report prepared by Charles River Laboratories, Inc., an independent

preclinical service provider, received on July 23, 2021.

Our preclinical program included a toxicologic evaluation, histopathology study

and brain beta amyloid analysis and was expanded to include an immunoglobulin analysis and biodistribution study.

On July 30, 2021, we announced that we submitted

a pre-IND meeting request for ALZN002 and supporting briefing documents to the Center for Biological Evaluation and Research of the FDA.

On September 30, 2021, we announced that we have received a written response to our meeting request relating to our Type B Pre-IND application

from the FDA providing a path for our planned clinical development of ALZN002.

ALZN002 is 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.

Preclinical work supports ALZN002 being associated with a positive anti-inflammatory response and a decrease in brain amyloid contents.

Based on ALZN002’s positive toxicology results, the biologic nature of this product and the urgent need to deliver treatments for

Alzheimer’s to patients, we proposed, and the FDA agreed, to conduct a combined Phase I/II study.

On September 29, 2022, we announced

that we submitted an IND application to the FDA for ALZN002 to conduct a Phase I/IIA clinical trial.

The purpose of this trial is to assess

the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that of placebo in 20-30 subjects with mild

to moderate dementia of the Alzheimer’s type.

Also, the trial is designed to determine the optimal dosage of ALZN002, allowing for

induction of anti-Amyloid-beta antibody responses that can target Alzheimer’s-associated brain proteins while maintaining safety.

The primary goal of this initial clinical trial is to determine an appropriate dose of ALZN002 for treatment of patients with Alzheimer’s

in a larger Phase IIB efficacy and safety clinical trial (ALZN002-02), which we expect to initiate within three months of receiving data

from the initial trial.

On October 31, 2022 we announced receipt

of a “study may proceed” letter from the FDA for a phase I/IIA clinical trial under our IND application for ALZN002 to treat

mild to moderate dementia of the Alzheimer’s type.

We are advancing the process and expect that the first patient will be dosed

in the first quarter of 2023.

The continuation of our current plan of

operations with respect to completing our IND applications and conducting the series of human clinical trials for each of our therapeutics

requires us to raise additional capital to fund our operations.

Because our working capital

requirements depend upon numerous factors, including the progress of our preclinical and clinical testing, timing and cost of obtaining

regulatory approvals, changes in levels of resources that we devote to the development of manufacturing and marketing capabilities, competitive

and technological advances, status of competitors, and our ability to establish collaborative arrangements with other organizations, we

will require additional financing to fund future operations.

Because our working capital requirements

depend upon numerous factors, including the progress of our preclinical and clinical testing, timing and cost of obtaining regulatory

approvals, changes in levels of resources that we devote to the development of manufacturing and marketing capabilities, competitive and

technological advances, status of competitors, and our ability to establish collaborative arrangements with other organizations, we will

require additional financing to fund future operations.

Results of Operations

Results of Operations for the Three Months Ended July 31,

2022 and 2021

The following table summarizes

the results of our operations for the three months ended July 31, 2022 and 2021.

For the Three Months Ended July 31,

Results of Operations for the Three Months Ended October 31, 2022 and 2021

The following table summarizes the results

of our operations for the three months ended October 31, 2022 and 2021:

For the Three Months Ended October 31,

OPERATING EXPENSES

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* Not meaningful

We were formed on February 26, 2016, to acquire and commercialize patented

intellectual property and know-how to prevent, treat and cure the crippling and deadly disease, Alzheimer’s.

We currently have only

two product candidates, AL001 and AL002.

These products are in the early clinical stage of development and will require extensive clinical

study, review and evaluation, regulatory review and approval, significant marketing efforts and substantial investment before either or

both of them, or any respective successors, will provide us with any revenue.

We did not generate any revenues during the three months

ended July 31, 2022 and 2021, and we do not anticipate that we will generate revenue for the foreseeable future.

We were formed on February 26, 2016, to

acquire and commercialize patented intellectual property and know-how to prevent, treat and potentially cure the crippling and deadly

With our two product candidate, we aim to bring treatments or cures not only for Alzheimer’s, but also BD, MDD

These product candidates are in the early clinical stage of development and will require extensive clinical study, review and

evaluation, regulatory review and approval, significant marketing efforts and substantial investment before either or both of them, or

any respective successors, will provide us with any revenue.

We did not generate any revenues during the three months ended October 31,

2022 and 2021, and we do not anticipate that we will generate revenue for the foreseeable future.

General and Administrative Expenses

General and administrative expenses for the three months ended July

31, 2022 and 2021 were $1.7 million and $1.4 million, respectively.

As reflected in the table below, general and administrative expenses

primarily consisted of the following expense categories:

General and administrative expenses for

the three months ended October 31, 2022 and 2021 were $1.6 million and $1.8 million, respectively.

As reflected in the table below, general

and administrative expenses primarily consisted of the following expense categories:

stock-based compensation expense;

professional fees;

as well as salaries

and benefits.

For the three months ended July 31, 2022 and 2021, the remaining general and administrative expenses of $83,000 and $232,000,

respectively, primarily consisted of payments for filing fees, transfer agent fees, license fees, travel, and other office expenses, none

of which is significant individually.

For the Three Months Ended July 31,

Stock-based compensation expense

marketing fees;

travel and entertainment;

as well as salaries and benefits.

For the three months ended October

31, 2022 and 2021, the remaining general and administrative expenses of $37,000 and $25,000, respectively, primarily consisted of payments

for filing fees, transfer agent fees, license fees, travel, and other office expenses, none of which is significant individually.

For the Three Months Ended October 31,

Stock compensation expense

Professional fees

Salary and benefits

Licenses and fees

Marketing fees

Travel and entertainment

Board of director fees

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Stock-Based Compensation Expense

During the three months ended

July 31, 2022 and 2021, we incurred general and administrative stock-based compensation expense of $867,000 and $598,000, respectively, related

During the three months ended October 31,

2022 and 2021, we incurred general and administrative stock-based compensation expense of $716,000 and $1.2 million, respectively, related

to stock option grants to executives, employees and consultants as well as shares issued for services to Spartan Capital Securities, LLC

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we settle these obligations by issuing shares of Common Stock from authorized shares instead of settling such obligations with cash payments.

Professional Fees

The second largest component

of our general and administrative expenses is professional fees.

During the three months ended July 31, 2022 and 2021, we reported professional

fees of $243,000 and $300,000, respectively, which were principally comprised of the following items:

Three Months Ended July 31, 2022

· In June 2017, we entered into a five-year consulting agreement with Spartan Capital pursuant to which

Spartan Capital agreed to provide consulting services with respect to general corporate matters.

In December 2017, we paid to Spartan

Capital a consulting fee of $1.4 million for the services to be rendered over the 60-month term of this consulting agreement.

the three months ended July 31, 2022, we recorded an expense of $70,000 as a result of this consulting agreement.

· During the three months ended July 31, 2022, we incurred $80,000 in audit fees, $24,000 in tax preparation

fees, $23,000 in Sarbanes-Oxley compliance fees and $13,000 in related party consulting.

Three Months Ended July 31, 2021

· During the three months ended July 31, 2021, we recorded an expense of $70,000 in connection with the

five-year consulting agreement with Spartan Capital.

· During the three months ended July 31, 2021, we incurred $29,000 in legal fees.

· During the three months ended July 31, 2021, we incurred $79,000 in audit fees.

Marketing Fees

The second largest component of our general

and administrative expenses is marketing fees.

During the three months ended October 31, 2022 and 2021, we reported marketing fees of

$247,000 and $600, respectively, which were principally comprised of the related party marketing and branding agreement.

Salaries and Benefits

During the three months ended

July 31, 2022 and 2021, we incurred $224,000 and $189,000, respectively, in employee-related expenses.

As of July 31, 2022, we had four

full-time and four part-time employees.

Nisser, our Executive Vice President and General Counsel, Kenneth S.

Cragun, our Senior Vice President of Finance, and David J.

our Chief Financial Officer, work for us on a part-time basis.

Katzoff, as a result of his recent appointment as our Chief Financial

Officer, will spend no less than an average of 28 hours per week on our company’s business.

Nisser spends no less than an average

of 8 hours per week on our company’s business and Mr.

Cragun spends no less than an average of 10 hours per week on our company’s

During the three months ended October 31,

2022 and 2021, we incurred $219,000 and $154,000, respectively, in employee-related expenses.

As of October 31, 2022, we had four full-time

and three part-time employees.

our Executive Vice President and General Counsel and Kenneth S.

Cragun, our Senior Vice President of Finance work for us on a part-time

Nisser spends no less than an average of 8 hours per week on our company’s business and Mr.

Cragun spends no less than

an average of 10 hours per week on our company’s business.

Research and Development Expenses

Research and development expenses for the three months ended July 31,

2022 and 2021 were $1.4 million and $916,000, respectively.

As reflected in the table below, research and development expenses primarily

consisted of professional fees, licenses and fees, as well as stock-based compensation expense.

For the Three Months Ended July 31,

Research and development expenses for the

three months ended October 31, 2022 and 2021 were $1.5 million and $1.8 million, respectively.

As reflected in the table below, research

and development expenses primarily consisted of professional fees, licenses and fees, as well as stock-based compensation expense.

For the Three Months Ended October 31,

Professional fees

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Professional Fees

During the three months ended

July 31, 2022 and 2021, we reported professional fees of $1.2 million and $705,000, respectively, which were principally comprised of

professional fees attributed to various types of scientific services, including FDA consulting services.

The increase relates to professional

fees incurred related to Phase IIA clinical trial monitoring AL001 and IND preparation for AL002.

During the three months ended October 31,

2022 and 2021, we incurred professional fees of $1.5 million and $1.4 million, respectively, which were principally comprised of professional

fees attributed to various types of scientific services, including FDA consulting services.

The increase relates to professional fees

incurred related to Phase IIA clinical trial monitoring of AL001 and IND preparation for ALZN002.

Licenses and Fees

There are certain initial

license fees and milestone payments required to be paid to the University of South Florida and the Licensor, for the licenses of the technologies,

pursuant to the terms of the License Agreement with Sublicensing Terms.

There are certain initial license fees and

milestone payments required to be paid to the University of South Florida and the Licensor, for the licenses of the technologies, pursuant

to the terms of the License Agreement with Sublicensing Terms.

Stock-Based Compensation Expense

During the three months ended

July 31, 2022 and 2021, we incurred zero and $142,000, respectively, in research and development stock compensation expense related to

stock option grants to consultants.

During the three months ended October 31,

2022 and 2021, we incurred zero and $111,000, respectively, in research and development stock compensation expense related to stock option

grants to consultants.

All option grants are granted at the per share fair value on the grant date.

Vesting of options differs

based on the terms of each option.

Vesting of options differs based on

the terms of each option.

We valued the options at their date of grant utilizing the Black-Scholes option pricing model.

compensation is a non-cash expense because we settle these obligations by issuing shares of Common Stock from authorized shares instead

of settling such obligations with cash payments.

Stock-based compensation

is a non-cash expense because we settle these obligations by issuing shares of Common Stock from authorized shares instead of settling

such obligations with cash payments.

Other Expense, Net

Interest Expense

Interest expense was $2,000

for the three months ended July 31, 2022, primarily related to financing of D&O insurance.

Interest expense was $4,000 for the three

months ended October 31, 2022, primarily related to financing of D&O insurance.

Results of Operations for the Six Months Ended October 31, 2022 and 2021

The following table summarizes the results

of our operations for the six months ended October 31, 2022 and 2021:

For the Six Months Ended October 31,

OPERATING EXPENSES

Research and development

General and administrative

Total operating expenses

Loss from operations

OTHER EXPENSE, NET

Interest expense

Total other expense, net

$ (6,147,065 )

$ (5,919,796 )

Basic and diluted net loss per common share

Basic and diluted weighted average common shares outstanding

* Not meaningful

We were formed on February 26, 2016, to

acquire and commercialize patented intellectual property and kno-how to prevent, treat and potentially cure the crippling and deadly Alzheimer’s.

With our two product candidates, we aim to bring treatment or cures not only for Alzheimer’s, but also BD, MDD and PTSD.

These product

candidates are in the early clinical stage of development and will require extensive clinical study, review and evaluation, regulatory

review and approval, significant marketing efforts and substantial investment before either or both of them, or any respective successors,

will provide us with any revenue.

We did not generate any revenues during the six months ended October 31, 2022 and 2021, and we do not

anticipate that we will generate revenue for the foreseeable future.

General and Administrative Expenses

General and administrative expenses for

each of the six months ended October 31, 2022 and 2021 were $3.2 million.

As reflected in the table below, general and administrative

expenses primarily consisted of the following expense categories:

stock-based compensation expense;

professional fees;

travel and entertainment;

board of director fees;

as well as salaries and benefits.

For the six months ended October 31, 2022 and

2021, the remaining general and administrative expenses of $72,000 and $192,000, respectively, primarily consisted of payments for filing

fees, transfer agent fees, license fees, and other office expenses, none of which is significant individually.

For the Six Months Ended October 31,

Stock compensation expense

Professional fees

Salary and benefits

Travel and entertainment

Marketing fees

Board of director fees

Other general and administrative expenses

Total general and administrative expenses

* Not meaningful

Stock-Based Compensation Expense

During the six months ended October 31,

2022 and 2021, we incurred general and administrative stock-based compensation expense of $1.6 million and $1.8 million, respectively,

related to stock option grants to executives, employees and consultants as well as shares issued for services to Spartan Capital.

option grants are granted at the per share fair value on the grant date.

Vesting of options differs based on the terms of each option.

We valued the options at their date of grant utilizing the Black-Scholes option pricing model.

We valued the shares issued for services

at their intrinsic value on the date of issuance.

Stock-based compensation is a non-cash expense because we settle these obligations by

issuing shares of Common Stock from authorized shares instead of settling such obligations with cash payments.

Salaries and Benefits

During the six months ended October 31,

2022 and 2021, we incurred $443,000 and $343,000, respectively, in employee-related expenses.

As of October 31, 2022, we had four full-time

and three part-time employees.

Nisser, our Executive Vice President

and General Counsel and Kenneth S.

Cragun, our Senior Vice President of Finance work for us on a part-time basis.

Nisser spends no

less than an average of 8 hours per week on our company’s business and Mr.

Cragun spends no less than an average of 10 hours per

week on our company’s business.

Professional Fees

During the six months ended October 31,

2022 and 2021, we reported professional fees of $377,000 and $532,000, respectively, which were principally comprised of Spartan Capital

consulting fees and audit fees.

During the six months ended October 31,

2022 and 2021, we reported insurance fees of $326,000 and $286,000, respectively, which were principally comprised of Directors and Officers

Research and Development Expenses

Research and development expenses for the

six months ended October 31, 2022 and 2021 were $2.9 million and $2.7 million, respectively.

As reflected in the table below, research

and development expenses primarily consisted of professional fees, licenses and fees, as well as stock-based compensation expense.

For the Six Months Ended October 31,

Professional fees

Licenses and fees

Stock compensation expense

Other research and development expenses

Total research and development expenses

* Not meaningful

Professional Fees

During the six months ended October 31,

2022 and 2021, we reported professional fees of $2.7 million and $2.1 million, respectively, which were principally comprised of professional

fees attributed to various types of scientific services, including FDA consulting services.

The increase relates to professional fees

incurred related to Phase IIA clinical trial monitoring of AL001 and IND preparation for ALZN002.

Licenses and Fees

There are certain initial license fees and

milestone payments required to be paid to the University of South Florida and the Licensor, for the licenses of the technologies, pursuant

to the terms of the License Agreement with Sublicensing Terms.

Stock-Based Compensation Expense

During the six months ended October 31,

2022 and 2021, we incurred zero and $253,000, respectively, in research and development stock compensation expense related to stock option

grants to consultants.

All option grants are granted at the per share fair value on the grant date.

Vesting of options differs based on

the terms of each option.

We valued the options at their date of grant utilizing the Black-Scholes option pricing model.

Stock-based compensation

is a non-cash expense because we settle these obligations by issuing shares of Common Stock from authorized shares instead of settling

such obligations with cash payments.

Other Expense, Net

Interest Expense

Interest expense was $5,000 for the six months ended October

31, 2022, primarily related to financing of D&O insurance.

Liquidity and Capital Resources

The accompanying financial

statements have been prepared on the basis that our company will continue as a going concern.

As of July 31, 2022, we had cash of $11.5

million and an accumulated deficit of $32.2 million.

We have incurred recurring losses and reported losses for the three months ended

July 31, 2022 totaling $3.0 million.

In the past, we have financed our operations principally through issuances of promissory notes and

equity securities.

In March of 2021, we entered

into a securities purchase agreement with DPL, pursuant to which we 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 the $50,000 convertible promissory note, previously issued to BitNile Holdings, Inc.,

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, in July 2021, an additional 1,333,333 shares of Common Stock upon FDA approval of our IND for our Phase IA clinical

trials for AL001 for a purchase price of $2 million, and (ii) purchased, in April 2022, 2,666,667 shares of Common Stock upon completion

of our Phase IA clinical trials for AL001 for a purchase price of $4 million.

We issued DPL warrants to purchase 3,333,333 shares of Common

Stock at an exercise price of $3.00 per share.

Finally, we agreed that for a period of eighteen months following the date of the payment

of the final tranche of $4 million, 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 million as of the date of this Quarterly Report.

We will need to obtain substantial

additional funding in the future for our clinical development activities and continuing operations.

If we are unable to raise capital

when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization

The accompanying financial statements have

been prepared on the basis that our company will continue as a going concern.

As of October 31, 2022, we had cash of $9.2 million and

an accumulated deficit of $35.3 million.

We have incurred recurring losses and reported losses for the three and six months ended October

31, 2022 totaling $3.1 million and $6.2 million, respectively.

In the past, we have financed our operations principally through issuances

of promissory notes and equity securities.

In March of 2021, we entered into a securities

purchase agreement with Ault Lending, LLC (formerly, Digital Power Lending, LLC) (“AL”), pursuant to which we 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.

2021, AL paid $4 million, less the $1.8 million in prior advances and the surrender for cancellation of the $50,000 convertible promissory

note, previously issued to BitNile Holdings, Inc., the parent company of AL, for an aggregate of 2,666,667 shares of Common Stock.

the terms of the securities purchase agreement, AL (i) purchased, in July 2021, an additional 1,333,333 shares of Common Stock upon FDA

approval of our IND for our Phase IA clinical trials for AL001 for a purchase price of $2 million, and (ii) purchased, in April 2022,

2,666,667 shares of Common Stock upon completion of our Phase IA clinical trials for AL001 for a purchase price of $4 million.

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

Finally, we agreed that for a period

of eighteen 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.

We will need to obtain substantial additional

funding in the future for our clinical development activities and continuing operations.

If we are unable to raise capital when needed

or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization

Our future capital requirements will depend on many factors, including:

12 unchanged sentences

· the costs and timing of regulatory approvals.

A change in the outcome of

any of these or other variables with respect to the development of any of our product candidates could significantly change the costs

and timing associated with the development of that product candidate.

Furthermore, our operating plans may change in the future, and we

may need additional funds to meet operational needs and capital requirements associated with such operating plans.

We expect to continue to incur losses for the foreseeable future and

need to raise additional capital until we are able to generate revenues from operations sufficient to fund our development and commercial

However, based on our current business plan, we believe that our cash at July 31, 2022, is sufficient to meet our anticipated

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

The following table summarizes our cash flows for

the three months ended July 31, 2022:

For the Three Months Ended July 31,

A change in the outcome of any of these

or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated

with the development of that product candidate.

Furthermore, our operating plans may change in the future, and we may need additional

funds to meet operational needs and capital requirements associated with such operating plans.

We expect to continue to incur losses for

the foreseeable future and need to raise additional capital until we are able to generate revenues from operations sufficient to fund

our development and commercial operations.

However, based on our current business plan, we believe that our cash at October 31, 2022,

is sufficient to meet our anticipated cash requirements during the twelve-month period subsequent to the issuance of the financial statements

included in this Quarterly Report.

The following table summarizes our cash flows for the six months

ended October 31, 2022 and 2021:

For the Six Months Ended October 31,

Net cash provided by (used in):

3 unchanged sentences

Financing activities

Net increase (decrease) in cash

Net (decrease) increase in cash

$ (4,880,999 )

Operating Activities

During the three months ended July 31, 2022, net cash used in operating

activities was $2.5 million.

This consisted primarily of a net loss of $3.0 million and a decrease in our net operating assets and liabilities

of $374,000, partially offset by non-cash charges of $874,000.

The non-cash charges primarily consisted of stock-based compensation expense.

The decrease in our net operating assets and liabilities were due to a decrease in accounts payable and accrued liabilities and an increase

in prepaid expenses and other current assets.

During the six months ended October 31,

2022, net cash used in operating activities was $4.9 million.

This consisted primarily of a net loss of $6.1 million and a decrease in

our net operating assets and liabilities of $329,000, partially offset by non-cash charges of $1.6 million.

The non-cash charges primarily

consisted of stock-based compensation expense.

The decrease in our net operating assets and liabilities was due to a decrease in accounts

payable and accrued liabilities and an increase in prepaid expenses and other current assets.

During the six months ended October 31,

2021, net cash used in operating activities was $3.3 million.

This consisted primarily of a net loss of $5.9 million, partially offset

by an increase in non-cash charges of $2.0 million and our net operating assets and liabilities of $601,000.

The non-cash charges primarily

consisted of stock-based compensation expense.

The increase in our net operating assets and liabilities was due to an increase in accounts

payable and accrued liabilities and a decrease in prepaid expenses and other current assets.

Investing Activities

There were no investing activities

for the three months ended July 31, 2022.

There were no investing activities for the

six months ended October 31, 2022 and 2021.

Financing Activities

There were no financing activities for the three

months ended July 31, 2022.

There were no financing activities for the six months ended October

Financing activities for the six months ended October 31, 2021 related primarily to proceeds from our initial public offering.

Contractual Obligations

May 1, 2016, we entered into a Standard Exclusive License Agreement for AL002 with Sublicensing Terms with the University of South Florida

Research Foundation, Inc., as licensor (the “Licensor”), pursuant to which the Licensor granted us 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.

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

we have entered into with the Licensor.

The license agreements for AL002 require us 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 we pay combined royalty payments

On May 1, 2016,

we entered into a Standard Exclusive License Agreement for ALZN002 with Sublicensing Terms with the University of South Florida Research

Foundation, Inc., as licensor (the “Licensor”), pursuant to which the Licensor granted us 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.

There are certain

initial license fees and milestone payments required to be paid by us to the Licensor, pursuant to the terms of license agreements we

have entered into with the Licensor.

The license agreements for ALZN002 require us 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 we pay combined royalty payments

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

We have 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 our common stock.

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

2,227,923 shares of our 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, we are 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:

Original AL001

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 our common stock.

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

received 2,227,923 shares of our 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, we are 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 follows:

Original AL001 License:

Completed September 2019

11 unchanged sentences

*Milestone met and completed

AL002 License:

Upon IND application filing

ALZN002 License:

Completed September 2022

Upon IND application filing

10 unchanged sentences

*Milestone met and completed

have met the pre-IND meeting, IND application filing, and successfully completed the Phase I clinical trial milestones encompassing AL001.

We have met the pre-IND meeting, IND application filing, and successfully

completed the Phase I clinical trial milestones encompassing AL001 and the IND application filing

milestone for ALZN002 .

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

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

us while the Licensor remains the owner of any equity securities of our company.

The Licensor was

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

Licensor remains the owner of any equity securities of our company.

June 10, 2020, we obtained two (2) additional royalty-bearing exclusive worldwide licenses from the Licensor to a therapy named AL001.

9 unchanged sentences

of the technology, as follows:

Additional AL001

Additional AL001 Licenses:

Upon IND application filing

8 unchanged sentences

First commercial sale

Off-Balance Sheet Arrangements

We do not have any off-balance

sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Recent Accounting Standards

For information about recent

accounting pronouncements that may impact our financial statements, please refer to Note 3 of the Notes to Unaudited Condensed Financial

Statements under the heading “Recent Accounting Standards.”

For information about recent accounting

pronouncements that may impact our financial statements, please refer to Note 3 of the Notes to Unaudited Condensed Financial Statements

under the heading “Recent Accounting Standards.”

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

we are a smaller reporting company, this section is not applicable.

Because we are

a smaller reporting company, this section is not applicable.

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 2. Management’s Discussion and Analysis