What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-03-15 compared with 2022-12-12 · 210 added, 199 removed, 442 unchanged (48% of the section changed)

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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 was for the purpose

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

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

single dose of a marketed 300 mg immediate-release lithium carbonate capsule (the “comparator” – currently indicated

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

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.

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 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 single dose of a marketed 300 mg immediate-release lithium carbonate capsule (the “comparator” –

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

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 carbonate.

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.

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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

drug applications with the FDA for BD, MDD, and PTSD.

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.

Lending, LLC (“AL”) 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 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.

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 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 limits.

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

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.

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 the MAD study and that the first healthy patient

On May 17, 2022,

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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.

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.

This 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

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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.

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

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Results of Operations

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

Results of Operations for the Three Months Ended January 31, 2023 and 2022

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,

of our operations for the three months ended January 31, 2023 and 2022:

For the Three Months Ended January 31,

OPERATING EXPENSES

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$ (2,572,865 )

$ (2,852,709 )

Basic and diluted net loss per common share

1 unchanged sentence

* Not meaningful

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.

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 Alzheimer’s.

With our two product

candidates, we aim to bring treatments 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 three months ended January 31, 2023 and 2022, 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 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:

each of the three months ended January 31, 2023 and 2022 were $2.5 million and $1.7 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;

marketing fees;

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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

For the three months ended January

31, 2023 and 2022, the remaining general and administrative expenses of $119,000 and $102,000, respectively, consisted of payments for

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

For the Three Months Ended January 31,

Stock-based compensation expense

Professional fees

Salary and benefits

Marketing fees

Travel and entertainment

Marketing fees

Board of director fees

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Stock-Based Compensation Expense

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

(“Spartan Capital”).

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.

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.

During the three months ended January 31,

2023 and 2022, we incurred general and administrative stock-based compensation expense of $1.6 million and $1.0 million, respectively,

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

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

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

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.

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.

During the three months ended January 31, 2023, we reported marketing

fees of $247,000, which were principally comprised of the related party marketing and brand development agreement.

Salaries and Benefits

During the three months ended October 31,

During the three months ended January 31,

2023 and 2022, we incurred $233,000 and $204,000, respectively, in employee-related expenses.

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

As of January 31, 2023, we had four full-time

and three part-time employees.

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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,

three months ended January 31, 2023 and 2022 were $2.9 million and $874,000, respectively.

As reflected in the table below, research and

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

For the Three Months Ended January 31,

Professional fees

Clinical trial fees

Licenses and fees

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Professional Fees

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

During the three months ended January 31,

2023 and 2022, we incurred professional fees of $861,000 and $480,000, 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 of AL001 and IND preparation for ALZN002.

incurred related to IND preparation for ALZN002.

Clinical Trial Fees

During the three months ended January 31,

2023 and 2022, we incurred clinical trial fees of $2.1 million and $283,000, respectively, which were principally comprised of clinical

trial fees attributed to our Phase I and Phase IIA clinical trials for AL001.

Licenses and Fees

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Stock-Based Compensation Expense

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.

During the three months ended January 31,

2023 and 2022, we incurred $(43,000) and $106,000, respectively, in research and development stock-based 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.

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.

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

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Interest expense was $2,000 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

months ended January 31, 2023, primarily related to financing of D&O insurance.

Results of Operations for the Nine Months Ended January 31, 2023 and 2022

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,

of our operations for the nine months ended January 31, 2023 and 2022:

For the Nine Months Ended January 31,

OPERATING EXPENSES

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Loss from operations

(11,565,457 )

OTHER EXPENSE, NET

3 unchanged sentences

$ (8,492,661 )

$ (3,079,978 )

Basic and diluted net loss per common share

2 unchanged sentences

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.

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

With our two product candidates, we aim to bring treatment 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 nine months ended January 31,

2023 and 2022, 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:

each of the nine months ended January 31, 2023 and 2022 were $5.8 million and $4.9 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;

marketing fees;

travel and entertainment;

1 unchanged sentence

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

For the nine months

ended January 31, 2023 and 2022, the remaining general and administrative expenses of $191,000 and $294,000, respectively, consisted of

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

For the Nine Months Ended January 31,

Stock-based compensation expense

Professional fees

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Total general and administrative expenses

* Not meaningful

Stock-Based Compensation Expense

During the six months ended October 31,

During the nine months ended January 31,

2023 and 2022, we incurred general and administrative stock-based compensation expense of $3.1 million and $2.8 million, respectively,

8 unchanged sentences

Salaries and Benefits

During the six months ended October 31,

During the nine months ended January 31,

2023 and 2022, we incurred $676,000 and $547,000, respectively, in employee-related expenses.

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

As of January 31, 2023, we had four full-time

and three part-time employees.

Nisser, our Executive Vice President

and General Counsel and Kenneth S.

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.

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 4 hours per week on our company’s

Professional Fees

During the six months ended October 31,

During the nine months ended January 31,

2023 and 2022, we reported professional fees of $567,000 and $616,000, 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

Marketing Fees

During the nine months ended January 31, 2023 and 2022, we reported

marketing fees of $495,000 and $7,000, respectively, which were principally comprised of the related party marketing and brand development

During the nine months ended January 31, 2023 and 2022, we reported

insurance expense of $457,000 and $500,000, respectively, which was principally comprised of Directors and Officers insurance.

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.

nine months ended January 31, 2023 and 2022 were $5.8 million and $3.5 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,

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

For the Nine Months Ended January 31,

Professional fees

Clinical trials fees

Licenses and fees

Stock compensation expense

Stock-based 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.

During the nine months ended January 31, 2023 and 2022, we reported

professional fees of $3.0 million and $1.9 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

preparation of Phase IIA clinical trials for AL001 and IND preparation for ALZN002.

Clinical Trial Fees

During the nine months ended January 31, 2023 and 2022, we incurred

clinical trial fees of $2.6 million and $1.0 million, respectively, which were principally comprised of clinical trial fees attributed

to our Phase I and Phase IIA clinical trials for AL001.

Licenses and Fees

3 unchanged sentences

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.

During the nine months ended January 31,

2023 and 2022, we incurred $(43,000) and $359,000, respectively, in research and development stock-based 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.

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.

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

Interest expense was $7,000 for the nine months ended January

31, 2023, primarily related to financing of D&O insurance.

2 unchanged sentences

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

As of January 31, 2023, we had cash of $7.4 million and

an accumulated deficit of $40.8 million.

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

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

31, 2023 totaling $5.4 million and $11.6 million, respectively.

1 unchanged sentence

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.

In March of 2021, we entered into a securities purchase agreement with

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.

On March 9, 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 Ault Alliance, Inc.

(formerly, BitNile Holdings, Inc.), 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, 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 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

24 unchanged sentences

our development and commercial operations.

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

However, based on our current business plan, we believe that our cash at January 31, 2023,

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,

The following table summarizes our cash flows for the nine months

ended January 31, 2023 and 2022:

For the Nine Months Ended January 31,

Net cash provided by (used in):

6 unchanged sentences

Operating Activities

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,

During the nine months ended January 31,

2023, net cash used in operating activities was $6.7 million.

This consisted primarily of a net loss of $11.6 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.

by an increase in our net operating assets and liabilities of $1.8 million and non-cash charges of $3.1 million.

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 in prepaid expenses and other current assets.

During the nine months ended January 31, 2022, net cash used in operating

activities was $5.1 million.

This consisted primarily of a net loss of $8.5 million, partially offset by an increase in non-cash charges

of $3.2 million and our net operating assets and liabilities of $277,000.

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

The increase in our net operating assets and liabilities was primarily due to an increase in prepaid expenses and other current

Investing Activities

There were no investing activities for the

six months ended October 31, 2022 and 2021.

nine months ended January 31, 2023 or 2022.

Financing Activities

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

There were no financing activities for the

nine months ended January 31, 2023.

Financing activities for the nine months ended January 31, 2022 related primarily to proceeds from

our initial public offering.

License Agreement

On May 1, 2016,

50 unchanged sentences

*Milestone met and completed

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.

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.

The Licensor was

31 unchanged sentences

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