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Item 1. Business

2023-07-27 compared with 2022-07-19 · 1060 added, 1049 removed, 212 unchanged (91% of the section changed)

In this Annual Report,

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

In this Annual Report, unless

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

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

Company Overview

are an early clinical-stage biopharmaceutical company focused on developing novel products for the treatment of Alzheimer’s disease

(“Alzheimer’s”), bipolar disorder, major depressive disorder (“MDD”) and post-traumatic stress disorder

With our two product candidates, we aim to bring treatments or cures to market as quickly as possible.

individuals, patients and caregivers suffer from the burden created by these devastating, and often fatal, diseases.

Our primary target,

Alzheimer’s, was among the most-feared diseases (second only to cancer) among Americans, according to a 2011 survey by the Harvard

School of Public Health.

Alzheimer’s is also the sixth leading cause of death in the United States according to a 2021 report from

the Alzheimer’s Association, a nonprofit that funds research.

Existing Alzheimer’s treatments only temporarily relieve symptoms

but do not slow or halt the progression of the disease, which currently affects roughly 6.2 million Americans and that number is expected

to grow to 13 million individuals by 2050.

Alzheimer’s also impacts more than 11 million Americans who provide an estimated 16 billion

hours of unpaid care per year, valued at $272 billion, according to data provided by the Alzheimer’s Association.

In 2022, the estimated

healthcare costs for treating individuals with Alzheimer’s in the United States will be $321 billion, including $206 billion in

Medicare and Medicaid payments.

These costs could rise to as high as $1 trillion per year by 2050 if no permanent treatment or cure for

Alzheimer’s is found, the Alzheimer’s Association reported.

pipeline consists of two novel therapeutic drug candidates:

AL001 - A patented ionic cocrystal technology delivering a therapeutic combination of lithium, proline and

salicylate, known as AL001, through two royalty-bearing exclusive worldwide licenses from the University of South Florida Research Foundation,

Inc., as licensor (the “Licensor”);

AL002 - A patented method using a mutant peptide sensitized cell as a cell-based therapeutic vaccine that

seeks to restore the ability of a patient’s immunological system to combat Alzheimer’s, known as AL002 or CA022W, through

a royalty-bearing exclusive worldwide license from the Licensor.

Our most advanced

product candidate (lead product) licensed and in clinical development in humans is an ionic cocrystal of lithium for the treatment of

Alzheimer’s, bipolar disorder, MDD and PTSD.

Based on our preclinical data, AL001 treatment prevents cognitive deficits, depression

and irritability in APPSWE/PS1dE9 mice, and is superior in improving associative learning and memory and irritability compared with lithium

carbonate treatments, supporting the potential of this lithium formulation for the treatment of Alzheimer’s, bipolar disorder, MDD

and PTSD in humans.

Lithium has been marketed for more than 35 years and human toxicology regarding lithium use has been well characterized,

potentially mitigating the regulatory burden for safety data.

We are a clinical-stage biopharmaceutical company focused on developing

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

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

With our two product candidates,

we aim to bring treatments or potential cures to market as quickly as possible.

Far too many individuals, patients and caregivers suffer

from the burden created by these devastating, and often fatal, diseases.

Our primary target, Alzheimer’s, was among the most-feared

diseases (second only to cancer) among Americans, according to a 2011 survey by the Harvard School of Public Health.

is also the seventh leading cause of death in the United States (“U.S.”) according to a 2021 report from the Alzheimer’s

Association, a nonprofit that funds research.

Existing Alzheimer’s treatments only temporarily relieve symptoms and while one treatment

has been shown to slow the progression of the disease, no treatments have been shown to halt the progression of the disease, which currently

affects roughly 6.7 million Americans and that number is expected to grow to 13 million individuals by 2050.

Alzheimer’s also impacts

more than 11 million Americans who provide an estimated 18 billion hours of unpaid care per year, valued at $340 billion, according to

data provided by the Alzheimer’s Association.

In 2022, the estimated healthcare costs for treating individuals with Alzheimer’s

will be $321 billion, including $206 billion in Medicare and Medicaid payments.

These costs could rise to as high as $1 trillion

per year by 2050 if no permanent treatment or cure for Alzheimer’s is found, the Alzheimer’s Association reported.

Our pipeline consists of two

novel therapeutic drug candidates:

· AL001 - A patented ionic cocrystal technology delivering a therapeutic combination of lithium, salicylate

and proline through three royalty-bearing exclusive worldwide licenses from the University of South Florida Research Foundation, Inc.,

as licensor (the “Licensor”);

· ALZN002 - 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 through a royalty-bearing exclusive

worldwide license from the Licensor.

most advanced product candidate (lead product) is licensed and in clinical development in humans is AL001, an ionic cocrystal of lithium

for the treatment of Alzheimer’s, BD, MDD and PTSD.

Based on our preclinical data involving mice models, AL001 treatment prevented

cognitive deficits, depression and irritability and is superior in improving associative learning and memory and irritability compared

with lithium carbonate treatments, supporting the potential of AL001 for the treatment of Alzheimer’s, BD, MDD and PTSD in humans.

Lithium has been marketed for more than 35 years and human toxicology regarding lithium use has been well characterized, potentially mitigating

the regulatory burden for safety data.

results of randomized, placebo-controlled, clinical trials of lithium in the treatment of patients with Alzheimer’s dementia and

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cognitive function as measured by the Alzheimer’s Disease Assessment Scale cognitive subscale.

Given the absence of adequate treatments

that can slow, halt or even reverse the decline of this highly prevalent disease, the potential efficacy of lithium in the long-term management

of Alzheimer’s may positively impact public health.

There is an unmet medical need for safe and effective Alzheimer’s treatments,

particularly for treatments with neuroprotective properties.

Given the absence of adequate, widely

adapted treatments that can slow, halt or even reverse the decline of this highly prevalent disease, the potential efficacy of lithium

in the long-term management of Alzheimer’s may positively impact public health.

There is an unmet medical need for safe and effective

Alzheimer’s treatments, particularly for treatments with neuroprotective properties.

is increasing evidence to suggest that depressive illness, particularly in the elderly, is associated with neuronal cell loss.

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Molecular biology and animal studies have also suggested that lithium may offer protection against Alzheimer’s.

absence of other adequate treatments, the potential efficacy of lithium in the long-term treatment of neurodegenerative disorders may

be warranted.

Phase III clinical trials in humans, we intend to seek approval to commercialize AL001 via a New Drug Application (“NDA”).

As one of the initial steps of the NDA process, we submitted a pre-Investigational New Drug (“pre-IND”) briefing package to

Food and Drug Administration (“FDA”) in July 2019 that argued against the need for any further preclinical safety

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

On July 28, 2021, the FDA

responded to our IND and stated that we may proceed with Phase I clinical trials in humans.

We initiated our Phase I clinical trial on

September 13, 2021.

We completed our Phase I clinical trial in March 2022 and initiated a Phase IIA clinical trial in May 2022.

The ongoing Phase IIA study

is evaluating the safety and tolerability of AL001 under multiple-dose, steady-state conditions and is determining the maximum tolerated

dose in patients diagnosed with mild to moderate Alzheimer’s.

The lithium and salicylate components of AL001 are to be given within

the amounts already approved for use in patients for other indications.

Up to 40 subjects will complete the Phase IIA trial.

tolerated dose will then be used for further studies.

Topline data are expected in December 2022 from this study.

Based on our preclinical

data, AL001 has a positive effect on the pharmacodynamic biomarkers of Alzheimer’s.

We propose to validate this clinically and if

confirmed, we believe that AL001 is a candidate for breakthrough therapy designation because of its positive effect on a pharmacodynamic

biomarker (beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s.

A drug that receives a breakthrough therapy

designation is eligible for fast-track designation features, intensive guidance on an efficient drug development program and FDA organizational

commitment involving senior managers.

However, we have not yet applied for breakthrough therapy designation nor have we received any official

designation for expedited development.

Our product candidate may not qualify for breakthrough therapy designation;

further, even if it

does qualify for breakthrough therapy designation, it may not actually lead to faster development or expedited regulatory review and approval

or necessarily increase the likelihood that it will receive FDA approval.

Additionally,

we believe that AL001 is positioned for an expedited Section 505(b)(2) regulatory pathway for new drug.

AL001’s active pharmaceutical

ingredients (lithium, proline and salicylate) are well documented and approved by the FDA.

The provisions of 505(b)(2) were created, in

part, to help avoid unnecessary duplication of studies already performed on a previously approved (“reference” or “listed”)

This section gives the FDA express permission to rely on data not developed by the NDA applicant.

This process can result in a much

less expensive and much faster route to approval, compared with a traditional development path such as 505(b)(1), while creating new,

differentiated products with tremendous commercial value.

If we successfully obtain a breakthrough therapy designation and the Section

505(b)(2) regulatory pathway for new drug approvals, we believe we can shorten the development timeline for AL001.

However, our product

candidate may not qualify for expedited development or, if it does qualify for expedited development, it may not actually lead to faster

development or expedited regulatory review and approval.

We believe that

our ability to re-engineer lithium solid dosage forms in order to optimize performance has the potential to address a wide range of clinical

applications ranging from neurodegenerative disorders, not merely Alzheimer’s, but also amyotrophic lateral sclerosis (known as

ALS and Lou Gehrig’s disease), Huntington’s disease, multiple sclerosis, Parkinson’s disease and traumatic brain injury,

to more psychiatric conditions such as bipolar disorder, MDD, mania, PTSD and suicidality.

This novel approach is intended to achieve

the desired therapeutic outcome of enhanced penetration through the blood-brain barrier and sustained brain lithium concentrations while

systemic exposures (and toxicities) are mitigated for other organ systems.

The optimal modified-release lithium dosing approach should

avoid acutely toxic peak concentrations in blood, as well as in the brain, and should maintain such blood concentrations for a predictable,

clinically relevant time, with overall low systemic exposures that mitigate the potential for adverse events.

We anticipate that the lithium

delivery system will be adaptable to a dosing regimen that maintains therapeutic brain lithium concentrations consistently for the longest

possible time while allowing only modest exposures and providing adequate recovery periods between doses for other organ systems.

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 that 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.

We submitted a pre-IND meeting

request for AL002 and supporting briefing documents to the Center for Biological Evaluation and Research of the FDA on July 30, 2021.

We received a written response to relating to the pre-IND from the FDA providing a path for Alzamend’s planned clinical development

of AL002 on September 30, 2021.

The FDA agreed to allow Alzamend to submit an IND to conduct a combined Phase I/II study.

We anticipate

submitting an IND to initiate a Phase I/II study for AL002 in September 2022.

absence of other adequate treatments, research and commercialization of the potential efficacy of lithium in the long-term treatment of

neurodegenerative disorders may be worth pursuing.

Our Business Strategy

We intend to develop

and commercialize therapeutics that are better than existing treatments and have the potential to significantly improve the lives of individuals

afflicted by Alzheimer’s, bipolar disorder, MDD and PTSD.

We intend to develop and commercialize

therapeutics that are better than existing treatments and have the potential to significantly improve the lives of individuals afflicted

by Alzheimer’s, BD, MDD and PTSD.

To achieve these goals, we are pursuing the following key business strategies:

• Advance clinical development of AL001 and AL002 for Alzheimer’s treatment .

For our lead candidate,

AL001, we completed our Phase I clinical trial in March 2022 and initiated a Phase IIA clinical trial in May 2022.

We anticipate topline

data in December 2022 from our ongoing Phase IIA multiple ascending dose (“MAD”) clinical trial for AL001 treatment of dementia

related to Alzheimer’s.

We completed our preclinical study and evaluation of AL002 on May 31, 2021, and anticipate submitting an

IND to initiate a Phase I/II study in September 2022;

• Advance clinical development of AL001 for Alzheimer’s, BD, MDD and PTSD treatment .

our Phase I clinical trial in March 2022 and initiated a Phase IIA Multiple Ascending Dose (“MAD”) clinical trial in May 2022.

We completed the clinical portion of the Phase IIA MAD clinical trial in March 2023 and reported topline data in June 2023.

to initiate two Phase II clinical trials to investigate the safety and efficacy of AL001 for patients with mild to moderate Alzheimer’s.

Additionally, we intend, subject to financing, to investigate the potential of AL001 for patients suffering from BD, MDD and PTSD by submitting

investigational new drug (“IND”) applications to the U.S.

Food and Drug Administration (“FDA”) for these indications

by the end of 2023.

If we achieve successful Phase III clinical trials in humans, we intend to seek approval to commercialize AL001 via

a New Drug Application (“NDA”);

• Advance clinical development of ALZN002 for Alzheimer’s treatment.

We submitted an IND application

to the FDA in September 2022, and received a “study may proceed” letter in October 2022.

In April 2023, we initiated a Phase

I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type.

If we achieve successful Phase III

clinical trials in humans, we intend to seek approval to commercialize ALZN002 via an NDA;

• Expand our pipeline of pharmaceuticals to include additional indications for AL001 and delivery methods.

Another element of our business strategy is to expand our pipeline of pharmaceuticals based on our technology and advance these product

candidates through clinical development for the treatment of a variety of indications.

In addition to treating Alzheimer’s, AL001

has the potential to treat a wide range of neurodegenerative diseases and psychiatric disorders.

We plan to pursue the treatment of bipolar

disorder, MDD, and PTSD with AL001, and in May 2022, we submitted a pre-IND meeting request to the FDA for these indications and received

a written response from the FDA in July 2022.

Based on the written response from the FDA, we plan to submit separate INDs for bipolar

disorder, MDD, and PTSD after completion of the current Phase II MAD clinical trial, which would allow us to initiate Phase II studies

in each of those indications.

Another element of our business strategy is to expand, resources permitting, our pipeline of pharmaceuticals based on our technology and

advance these product candidates through clinical development for the treatment of a variety of indications.

In addition to treating Alzheimer’s,

AL001 has the potential to treat a wide range of neurodegenerative diseases and psychiatric disorders.

We plan to pursue the treatment

of BD, MDD, and PTSD with AL001, and in May 2022, we submitted a pre-Investigational New Drug (“pre-IND”) meeting request

to the FDA for these indications and received a written response from the FDA in July 2022.

Based on the written response from the FDA

and the receipt of topline data from the Phase IIA MAD clinical trial, we plan to submit separate IND’s for BD, MDD, and PTSD by

the end of 2023, which, after receipt from the FDA of a “study may proceed” letter for such indication, would allow us to

initiate a Phase II study.

We also plan to explore different formulations (liquid, immediate release and sprinkle capsules) to deliver

• Focus on translational and functional endpoints to efficiently develop product candidates.

AL001 is positioned for a Section 505(b)(2) regulatory pathway for new drug approvals.

We also believe AL001 and AL002 are positioned

for breakthrough therapy designations because of their positive effects on a pharmacodynamic biomarker (beta-amyloids) and potential for

a clinically meaningful effect on Alzheimer’s, making them eligible to receive assistance from the FDA throughout the development

process that may shorten the development timelines.

However, we have neither received breakthrough therapy designation nor have we qualified

for expedited development, and no assurance can be given that we will.

Even if we qualify for breakthrough therapy designation or expedited

development, it may not actually lead to faster development or expedited regulatory review and approval or necessarily increase the likelihood

that we will receive FDA approval;

• Optimize the value of AL001 and AL002 in major markets .

We intend to commercialize AL001 and AL002

by seeking FDA marketing approval for both product candidates and partnering with biopharmaceutical companies seeking to strategically

that AL001 is positioned for a Section 505(b)(2) regulatory pathway for new drug approvals.

We also believe that AL001 and ALZN002 are

positioned for breakthrough therapy designations because of their positive effects on a pharmacodynamic biomarker (beta-amyloids) and

potential for a clinically meaningful effect on Alzheimer’s, making them eligible to receive assistance from the FDA throughout

the approval process that may shorten the development timelines.

However, we have neither received breakthrough therapy designation nor

have we qualified for expedited development, and no assurance can be given that we will.

Even if we qualify for breakthrough therapy designation

or expedited development, it may not actually lead to faster development or expedited regulatory review and approval or necessarily increase

the likelihood that we will receive FDA approval;

• Optimize the value of AL001 and ALZN002 in major markets .

We intend to commercialize AL001 and

ALZN002 by seeking FDA marketing approval for both product candidates and partnering with biopharmaceutical companies seeking to strategically

fortify pipelines and, in turn, receiving funding for the costly later-stage clinical development.

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Our focus is expected to concentrate on entering into

strategical transactions with established distributors and producers, which will provide distribution and marketing capabilities for the

strategic transactions with established distributors and producers, which will provide distribution and marketing capabilities for the

sale of our products into the marketplace.

Our Development Pipeline

following chart provides an overview of the current development stages of our therapeutic product candidates.

Our Proprietary Technology

following chart provides an overview of the current development stages of our product candidates.

product candidates will require extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial

investment before either of them or any successors are likely to provide us with any revenue.

As a result, if we do not successfully develop,

achieve regulatory approval for and commercialize our product candidates, our long-term business plans will not be met, and we will be

unable to generate the revenue we have forecast for the foreseeable future, if any.

We do not anticipate that we will generate our maximum

revenue for several years, or that we will achieve profitability for any of our therapeutic drug candidates until at least a few years

after generating material revenue, if at all.

If we are unable to generate revenue or raise substantial additional capital, we will not

be able to pursue any expansion of our business or acquire additional intellectual property, we will not become profitable with our therapeutic

drug candidates, and we will be unable to continue our operations at the currently planned pace, if at all.

AL001 Drug Candidate

lead product candidate that we have licensed and have begun clinical development in humans is an ionic cocrystal of lithium for the treatment

of Alzheimer’s, bipolar disorder, MDD and PTSD.

lead product candidate that we have licensed and have begun clinical development of in humans is an ionic cocrystal of lithium for the

treatment of Alzheimer’s, BD, MDD and PTSD.

Lithium salts have a long history of human consumption beginning in the 1800s.

psychiatry, they have been used to treat mania and as a prophylactic for depression since the mid-20th century.

Today, lithium salts are

used as a mood stabilizer for the treatment of bipolar disorder.

Although the FDA has approved no medications as safe and effective treatments

for suicidality, lithium has proven to be the only drug that consistently reduces suicidality in patients with neuropsychiatric disorders.

Despite these effective medicinal uses, current FDA-approved lithium pharmaceutics (lithium carbonate and lithium citrate) are limited

by a narrow therapeutic window that requires regular blood monitoring of plasma lithium levels and blood chemistry by a clinician to mitigate

adverse events.

Because conventional lithium salts (carbonate and citrate) are eliminated relatively quickly, multiple administrations

throughout the day are required to safely reach therapeutic plasma concentrations.

Existing lithium drugs, such as lithium chloride and

lithium carbonate, suffer from chronic toxicity, poor physicochemical properties and poor brain bioavailability.

Because lithium is so

effective at reducing manic episodes in patients with bipolar disorder, it is still used clinically despite its narrow therapeutic index.

This has led researchers to begin to look for alternatives to lithium with similar bioactivities.

Scientists from

the University of South Florida have developed a new lithium cocrystal composition and method of preparation that, under certain clinical

and/or testing conditions, have been shown to allow for lower dosages to achieve therapeutic brain levels of lithium for psychiatric disorders,

which could lead to a broadening of lithium’s therapeutic index.

Our studies and/or testing have indicated that the compound offers

improved physiochemical properties compared to existing forms of lithium, giving it the potential to be developed as an anti-suicidal

drug and for use against mood disorders.

In psychiatry,

they have been used to treat mania and as a prophylactic for depression since the mid-20th century.

Today, lithium salts are used as a

mood stabilizer for the treatment of BD.

Although the FDA has approved no medications as safe and effective treatments for suicidality,

lithium has proven to be the only drug that consistently reduces suicidality in patients with neuropsychiatric disorders.

Despite these

effective medicinal uses, current FDA-approved lithium pharmaceutics (lithium carbonate and lithium citrate) are limited by a narrow therapeutic

window that requires regular blood monitoring of plasma lithium levels and blood chemistry by a clinician to mitigate adverse events.

Because conventional lithium salts (carbonate and citrate) are eliminated relatively quickly, multiple administrations throughout the

day are required to safely reach therapeutic plasma concentrations.

Existing lithium drugs, such as lithium chloride and lithium carbonate,

suffer from chronic toxicity, poor physicochemical properties and poor brain bioavailability.

Because lithium is so effective at reducing

manic episodes in patients with BD, it is still used clinically despite its narrow therapeutic index.

This has led researchers to begin

to look for other treatment methods to lithium with similar bioactivities.

from the University of South Florida have developed a new lithium cocrystal composition and method of preparation that, under

certain clinical and/or testing conditions, have been shown to allow for lower dosages to achieve therapeutic brain levels of

lithium for psychiatric disorders, which could lead to a broadening of lithium’s therapeutic index.

Our studies and tests have

indicated that the compound offers improved physiochemical properties compared to existing forms of lithium, giving it the potential

to be developed as an anti-suicidal drug and for use against mood disorders.

evidence suggests that lithium may be efficacious for both the treatment and prevention of Alzheimer’s.

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Results from recent clinical studies suggest that lithium

treatment may reduce dementia development while preserving cognitive function and reducing biomarkers associated with Alzheimer’s.

The novel ionic

cocrystal of lithium (AL001), which was designed, synthesized and characterized by a team of inventors from the University of South Florida

has been shown to exhibit improved nonclinical pharmacokinetics compared to currently FDA-approved lithium products and is also bioactive

in many in vitro models of Alzheimer’s.

AL001 may constitute a means of treating Alzheimer’s, bipolar disorder, MDD and PTSD.

Our preclinical studies encompassed the treatment of 28 transgenic (or genetically modified) and 10 non-transgenic mice with lithium carbonate

In particular, female APPSWE/PS1dE9 mice at 4 months of age were fed with either regular chow (Tg-Ctrl, n=8) or chow that contained

lithium carbonate (LC, 0.05% equivalent to 83 mg/kg/day, n=6), or lithium salicylate (LS, 0.20% equivalent to 325 mg/kg/day, n=6), or

lithium salicylate proline co-crystal, AL001 (AL001, 0.35% equivalent to 583 mg/kg/day, n=8) for 9 months.

In addition, aged-matched non-

transgenic background control mice (B6C3F1/J, Non-Tg-Ctrl, n=10) were fed regular chow for 9 months as control.

Each treatment group was

subject to a battery of behavioral tests at 12 months of age and mice were sacrificed at 13 months of age.

The results of our preclinical

studies, conducted from May 2016 to June 2017, are summarized below:

• AL001 treatment improved cognitive function by 50% (Tg-Ctrl vs.

p<0.01), in comparison with

the control group, through behavioral tests administered to mice with Alzheimer’s.

The tests resulted in 50% lower escape latency

p<0.01) during the training and probe trial of the Morris water maze test and 50% longer contextual freezing time

p<0.05) during the fear conditioning test;

• AL001 treatment reduced depression by 25% (Tg-Ctrl vs.

p<0.001), as assessed by the tail suspension

test, and irritability by 50% (Tg-Ctrl vs.

p<0.01), as assessed by the touch escape test;

• In comparison with lithium carbonate treatment, AL001 treatment afforded superior protection against cognitive

impairment by 50% (LC vs.

p<0.05), as shown by the contextual fear conditioning test, and irritability by 50% (LC vs.

• Continued AL001 treatment prevented cognitive deficits, depression and irritability and, compared to lithium

carbonate treatments, was superior in improving associative learning and memory (LC vs.

p<0.05) and in reducing irritability

p<0.01), supporting the potential of this lithium formulation for the treatment of Alzheimer’s;

• AL001 had no effect on renal COX2 activity (Tg-Ctrl vs.

p>0.05), a biomarker of renal toxicity,

while markedly reducing abnormal biomarkers associated with Alzheimer’s by 50%, in particular beta-amyloid pathology, tau phosphorylation

and neuro-inflammation (Tg-Ctrl vs.

• AL001 treatment did not induce tissue pathological damage in the heart, kidneys, liver and lungs by a

general autopsy (Tg-Ctrl vs.

In contrast, equimolar doses (using a similar structure of moles but different active

pharmaceutical ingredient) of lithium carbonate enhanced renal COX2 expression while having little or no impact on Alzheimer’s pathology

• AL001, at the effective dose, yielded 50% higher lithium levels (LC vs.

p<0.01) in the brain

compared with equimolar doses of lithium carbonate (AL001 vs.

p<0.05), while producing low nontoxic steady state levels in the

• No significant differences in body weight, brain, heart, lungs, spleen, liver or kidneys were found between

cohorts treated with AL001 and untreated cohorts.

analyzing the preclinical study results, a p-value is used to determine the probability as to whether the difference between two data

sets is due to chance.

The smaller the p-value, the more likely the differences are not due to chance alone.

In general, if the p-value

is less than or equal to 0.05, the outcome is considered statistically significant.

The FDA’s evidentiary standard of efficacy generally

relies on a p-value of less than or equal to 0.05.

A p-value greater than 0.05 is considered statistically non-significant.

As shown above,

all of the results of our preclinical studies were statistically significant compared to the control group.

On September 13,

2021, we initiated a randomized, balanced, Phase I, single-dose, open-label, two-treatment, two-period, two- sequence, crossover, relative

bioavailability study to investigate lithium pharmacokinetics and safety of AL001 formulation compared to a marketed immediate release

lithium carbonate formulation in healthy subjects.

The primary objective of this study was to assess the relative bioavailability of the

AL001 lithium formulation relative to a marketed lithium carbonate formulation in healthy subjects for the purpose of determining potential

clinically safe and effective AL001 dosing in future studies.

Additionally, we wanted to characterize safety and tolerability of the tested

formulations under the conditions of this study.

This was a first-in-human study of the AL001 formulation;

this trial was designed to

assess the relative bioavailability of the AL001 lithium formulation compared to a marketed lithium carbonate formulation in at least

24 completed healthy subjects (30 subjects were to be enrolled) for the purpose of determining potential clinically safe and effective

AL001 dosing in future studies.

The AL001 lithium content was nearly half of the reference lithium carbonate capsule dosage as it was

expected that treatment of frail Alzheimer’s patients will require half the lithium dose used for treatment of bipolar/affective

Lithium carbonate 300 mg (Reference product) was given as a single dose in this study;

this is often used as a starting dose

for treatment of bipolar/affective disorders when given three times daily.

The shape of the AL001 lithium plasma concentration versus

time curve was unknown prior to this study.

Also unknown were the AL001 rate and extent of lithium absorption.

The Phase I study was completed

in March 2022 with the following results:

· AL001 was shown to be safe and well-tolerated

in healthy adult subjects;

· No serious adverse events and no deaths were

reported during the trial;

· The safety profiles of both AL001 and the marketed

lithium carbonate capsule were benign;

· No clinically significant abnormal findings in

electrocardiograms were noted during the trial;

· AL001 salicylate plasma concentrations were observed

to be well tolerated and consistently within safe limits;

· Dose-adjusted relative bioavailability

analyses of the rate and extent of lithium absorption in plasma indicated that AL001 1050 mg (lithium content equivalent to 150 mg

lithium carbonate) is bioequivalent to a marketed 300 mg lithium carbonate capsule and the shapes of the lithium plasma

concentration versus time curves are similar.

May 5, 2022, we initiated a multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic study (www.clinicaltrials.gov,

NCT05363293) of AL001 in patients with mild to moderate Alzheimer’s with the following objectives:

To evaluate the safety and tolerability

of AL001 under multiple-dose, steady-state conditions in Alzheimer’s patients;

To characterize the maximum

tolerated dose (MTD) of AL001 in patients with mild to moderate Alzheimer’s;

treatment may reduce the progression of dementia while preserving cognitive function and reducing biomarkers associated with Alzheimer’s.

the novel ionic cocrystal of lithium, which was designed, synthesized and characterized by a team of inventors from the University of

South Florida has been shown to exhibit improved nonclinical pharmacokinetics compared to currently available FDA-approved lithium products

and is also bioactive in many in vitro models of Alzheimer’s.

AL001 may constitute a means of treating Alzheimer’s, BD, MDD

believe that our ability to re-engineer lithium solid dosage forms in order to optimize performance has the potential to address a wide

range of clinical applications ranging from neurodegenerative disorders, not merely Alzheimer’s, but also amyotrophic lateral sclerosis

(known as ALS and Lou Gehrig’s disease), Huntington’s disease, multiple sclerosis, Parkinson’s disease and traumatic

brain injury, to more psychiatric conditions such as BD, MDD, mania, PTSD and suicidality.

This novel approach is intended to achieve

the desired therapeutic outcome of enhanced penetration through the blood-brain barrier and sustained brain lithium concentrations while

systemic exposures (and toxicities) are mitigated for other organ systems.

The optimal modified-release lithium dosing approach for AL001

should avoid acutely toxic peak concentrations in blood, as well as in the brain, and should maintain such relatively minor blood concentrations

for a predictable, clinically relevant time, with overall low systemic exposures that mitigate the potential for adverse events.

We anticipate

that the lithium delivery system will be adaptable to a dosing regimen that maintains therapeutic brain lithium concentrations consistently

for the longest possible time while allowing only modest exposures and providing adequate recovery periods between doses for other organ

Clinical Trials

Phase I Study

On September 13, 2021, we initiated a randomized, balanced, Phase I,

single-dose, open-label, two-treatment, two-period, two- sequence, crossover, relative bioavailability clinical trial to investigate lithium

pharmacokinetics and safety of AL001 formulation compared to a marketed immediate release lithium carbonate formulation in healthy subjects.

The primary objective of this clinical trial was to assess the relative bioavailability of the AL001 lithium formulation relative to a

marketed lithium carbonate formulation in healthy subjects for the purpose of determining potential clinically safe and effective AL001

dosing in future studies.

Additionally, we wanted to characterize safety and tolerability of the tested formulations under the conditions

of this clinical trial.

This was a first-in-human clinical trial of the AL001 formulation;

this trial was designed to assess the relative

bioavailability of the AL001 lithium formulation compared to a marketed lithium carbonate formulation in at least 24 completed healthy

subjects (30 subjects were to be enrolled) for the purpose of determining potential clinically safe and effective AL001 dosing in future

clinical trials.

The AL001 lithium content was nearly half of the reference lithium carbonate capsule dosage as it was expected that treatment

of frail Alzheimer’s patients will require half the lithium dose used for treatment of BD.

Lithium carbonate 300 mg (Reference product)

was given as a single dose in this clinical trial;

this is often used as a starting dose for treatment of BD when given three times daily.

The shape of the AL001 lithium plasma concentration versus time curve was unknown prior to this study.

Also unknown were the AL001 rate

and extent of lithium absorption.

The Phase I study was completed in March 2022 with the following results:

· AL001 was shown to be safe and well-tolerated in healthy adult subjects;

· No serious adverse events and no deaths were reported during the trial;

· The safety profiles of both AL001 and the marketed lithium carbonate capsule were benign;

· No clinically significant abnormal findings in electrocardiograms were noted during the trial;

· AL001 salicylate plasma concentrations were observed to be well tolerated and consistently within safe

· Dose-adjusted relative bioavailability analyses of the rate and extent

of lithium absorption in plasma indicated that AL001, at a lithium carbonate equivalent dose of 150 mg, is bioequivalent to a marketed

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

Phase IIA Study

On May 5, 2022, we initiated

a multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic clinical trial (www.clinicaltrials.gov,

NCT05363293) of AL001 in patients with mild to moderate Alzheimer’s and healthy subjects with the following objectives:

To evaluate the safety and tolerability of AL001 under multiple-dose, steady-state conditions

in Alzheimer’s patients and healthy subjects;

To characterize the maximum tolerated dose (MTD) of AL001 in patients with mild to moderate

Alzheimer’s and healthy subjects;

· Exploratory:

Determination of qualitative

and quantitative evaluations of AD patient desirable characteristics for future Phase 2 and 3 clinical studies in order to:

Determination of qualitative and quantitative evaluations of AD patient and healthy

subjects desirable characteristics for future Phase II and III clinical studies in order to:

o Facilitate recruitment into subsequent AL001 clinical trials;

o Facilitate trial-adherence to completion of study requirements including treatment adherence.

product can be designated as a breakthrough therapy if it is intended to treat a serious condition (for which the FDA considers Alzheimer’s)

and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically

significant endpoint(s).

For purposes of breakthrough therapy designation, a clinically significant endpoint generally refers to an endpoint

that measures an effect on irreversible morbidity or mortality (“IMM”), or on symptoms that represent serious consequences

of the disease.

A clinically significant endpoint can also refer to findings that suggest an effect on IMM or serious symptoms, including:

• an effect on an established surrogate endpoint;

• an effect on a surrogate endpoint or intermediate clinical endpoint considered reasonably likely to predict

a clinical benefit (i.e., the accelerated approval standard);

• an effect on a pharmacodynamic biomarker (which is a measurable indicator of the disease state) that does

not meet criteria for an acceptable surrogate endpoint, but strongly suggests the potential for a clinically meaningful effect on the

underlying disease;

• a significantly improved safety profile compared to available therapy (e.g., less dose-limiting toxicity

for an oncology agent), with evidence of similar efficacy.

on our preclinical data, AL001 has a positive effect on the pharmacodynamic biomarkers of Alzheimer’s.

As a result, we believe that

if the data from AL001 in the aforementioned Phase II study provides confirmation of the pre-clinical data, i.e., positive effect on a

pharmacodynamic biomarker (beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s, AL001 will be a candidate

for breakthrough therapy designation.

If breakthrough therapy designation is granted, it would be eligible for intensive guidance on an

efficient drug development program and FDA organizational commitment involving senior managers.

However, we have neither received breakthrough

therapy designation nor have we qualified for expedited development.

Our product candidate may not qualify for breakthrough therapy designation;

further, even if it does qualify for breakthrough therapy designation, it may not actually lead to faster development or expedited regulatory

review and approval or necessarily increase the likelihood that it will receive FDA approval.

Additionally,

we believe that AL001 is positioned for an expedited Section 505(b)(2) regulatory pathway for new drug.

AL001’s active pharmaceutical

ingredients (lithium, proline and salicylate) are well documented and approved by the FDA.

The provisions of Section 505(b)(2) were created,

in part, to help avoid unnecessary duplication of studies already performed on a previously approved (“reference” or “listed”)

This section gives the FDA express permission to rely on data not developed by the NDA applicant.

This can result in a much less

expensive and much faster route to approval, compared with a traditional development path such as Section 505(b)(1), while creating new,

differentiated products with tremendous commercial value.

If we successfully obtain a breakthrough therapy designation and the Section

505(b)(2) regulatory pathway for new drug approvals, we believe we can shorten the development timeline for AL001.

However, our product

candidate may not qualify for expedited development or, if it does qualify for expedited development, it may not actually lead to faster

development or expedited regulatory review and approval.

AL001 will require

extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial investment before it or any

successors are likely to provide us with any revenue.

As a result, if we do not successfully develop, achieve regulatory approval for

and commercialize AL001, our long-term business plans will not be met, and we will be unable to generate the revenue we have forecast

for the foreseeable future, if any.

We do not anticipate that we will generate our maximum revenue for several years, or that we will

achieve profitability for this therapeutic drug candidate until at least a few years after generating material revenue, if at all.

we are unable to generate revenue or raise substantial additional capital, we will not be able to pursue any expansion of our business

or acquire additional intellectual property, we will not become profitable with this therapeutic drug candidate, and we will be unable

to continue our operations at the currently planned pace, if at all.

AL002 Drug Candidate

other product candidate that we have licensed to clinically develop in humans is AL002, a patented method using a mutant peptide sensitized

cell as a cell-based therapeutic vaccine which seeks to restore the ability of the patient’s immunological system to combat Alzheimer’s.

The proposed mechanism of action is through the pulsed-Dendritic Cell (“DC”) activation of T-cells that stimulates the immune

system, resulting in the clearance of brain amyloid.

Preclinical studies conducted from April 2005 to July 2010 suggest that the infusion

of transgenic (or genetically modified) mice with AL002-pulsed DCs is associated with lower amyloid burden and improved neuro-behavioral

We completed the Phase IIA

clinical trial in March 2023 and announced positive topline data in June 2023.

We announced that we successfully identified an MTD for

development of AL001 from a multiple-ascending dose study as assessed by an independent safety review committee.

This dose, providing

lithium at a lithium carbonate equivalent dose of 240 mg 3-times daily (“TID”), is designed to be unlikely to require lithium

therapeutic drug monitoring (“TDM”).

Also, this MTD is risk mitigated for the purpose of treating fragile populations, such

as Alzheimer’s patients.

Lithium is a commonly prescribed

drug for manic episodes in BD type 1 as well as maintenance therapy of BP in patients with a history of manic episodes.

Lithium is also

prescribed off-label for MDD, BD and treatment of PTSD, among other disorders.

Lithium was the first mood stabilizer approved by the FDA

and is still a first-line treatment option (considered the “gold standard”) but is underutilized, perhaps because of the need

Lithium was the first drug that required TDM by regulatory authorities in product labelling because the effective and safe range

of therapeutic drug blood concentrations is narrow and well defined for treatment of BP when using lithium salts.

Excursions above this

range can be toxic, and below can impair effectiveness.

Planned Future Studies

Based on the results from

our Phase IIA MAD study, we plan to initiate two safety and efficacy clinical trials in subjects with mild to moderate dementia of the

Alzheimer’s type.

Additionally, we intend to investigate the potential of AL001 for patients suffering from BD, MDD and PTSD by

submitting IND applications to the FDA for these indications by the end of 2023.

After FDA permission to proceed on the IND’s, we

intend to initiate clinical trials at this MTD to determine relative increased lithium levels in the brain compared to a marketed lithium

salt for BD, MDD and PTSD, based on published mouse studies that predict that lithium can be given at lower doses for equivalent therapeutic

benefit when treating with AL001.

For example, the goal is to replace a 300 mg TID lithium carbonate dose for treatment of BD with a 240

mg TID AL001 lithium equivalent, which represents a daily decrease of 20% of lithium given to a patient.

ALZN002 Drug Candidate

The other product candidate

that we have licensed to clinically develop in humans is ALZN002, a patented method using a mutant peptide sensitized cell as a cell-based

therapeutic vaccine which seeks to restore the ability of the patient’s immunological system to combat Alzheimer’s.

mechanism of action is through the pulsed-Dendritic Cell (“DC”) activation of T-cells that stimulates the immune system, resulting

in the clearance of brain amyloid.

Preclinical studies conducted from April 2005 to July 2010 demonstrated that the infusion of transgenic

(or genetically modified) mice with ALZN002-pulsed DCs is associated with lower amyloid burden and improved neuro-behavioral performance.

This is likely to be mediated by an anti-inflammatory effect in addition to the immunogenicity of this therapy.

is based on the theory that Alzheimer’s symptoms may be caused in large part by plaque deposits that can cluster in the brain composed

of protein fragments called beta-amyloids that build up between nerve cells.

One hypothesis is that a special type of immune cell, natural

beta-amyloid antibodies, may play a role in preventing plaque build-up in people without Alzheimer’s.

As people age, their immune

systems may degrade, and some people may be unable to produce natural beta-amyloid antibodies, the absence of which leads to the plaque

build-up causing Alzheimer’s.

AL002 is intended

to elicit an immune response to produce anti-amyloid antibodies, which can then neutralize circulated beta-amyloids and prevent additional

plaque build-up.

The mutant antigen within AL002 was selected specifically for its high HLA binding affinity, thereby avoiding the need

for an adjuvant, which may cause an adverse (Th1) immune response.

is an autologous modified DC treatment.

More precisely, it is a patient-specific therapy where the patient undergoes leukapheresis, a

nonsurgical treatment used to reduce the quantity of white blood cells in the bloodstream, to isolate peripheral blood monocytes that

are subsequently matured into DCs using an IL4+ GM-CSF cocktail.

The DCs are incubated with a modified amyloid beta (Aβ) peptide

(“AL002 peptide”) to sensitize them, and then administered to the same patient.

evidence has accumulated recently suggesting that immunotherapy is a highly promising modality of treatment in Alzheimer’s.

current immune-based active investigations are focused on passive immunization by pre-prepared Aβ antibody administration.

immunization may offer additional or more lasting effects on the clearance of amyloid and a safer approach due to its reliance on autologous

immune mechanisms.

ALZN002 is based on the theory

that Alzheimer’s symptoms may be caused in large part by plaque deposits that can cluster in the brain composed of protein fragments

called beta-amyloids that build up between nerve cells.

One hypothesis is that a special type of immune cell, natural beta-amyloid antibodies,

may play a role in preventing plaque build-up in people without Alzheimer’s.

As people age, their immune systems may degrade, and

some people may be unable to produce natural beta-amyloid antibodies, the absence of which leads to the plaque build-up causing Alzheimer’s.

ALZN002 is intended to elicit an immune response to produce anti-amyloid

antibodies, which can then neutralize circulated beta-amyloids and prevent additional plaque build-up.

The mutant antigen within ALZN002

was selected specifically for its high human leukocyte antigens binding affinity, thereby avoiding the need for an adjuvant, which may

cause an adverse (Th1) immune response.

ALZN002 is an autologous

modified DC treatment.

More precisely, it is a patient-specific therapy where the patient undergoes leukapheresis, a nonsurgical treatment

used to reduce the quantity of white blood cells in the bloodstream, to isolate peripheral blood monocytes that are subsequently matured

into DCs using cytokine therapy (IL4+ GM-CSF) cocktail.

The DCs are incubated with a modified amyloid beta (Aβ) peptide to sensitize

them, and then administered to the same patient.

Significant evidence

has accumulated recently suggesting that immunotherapy is a highly promising modality of treatment in Alzheimer’s.

immune-based active investigations are focused on passive immunization by pre-prepared Aβ antibody administration.

Active immunization

may offer additional or more lasting effects on the clearance of amyloid and a safer approach due to its reliance on autologous immune

Further, preliminary evidence suggests a recurrence of the amyloid accumulation after clearance with the immunoglobulins.

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meningoencephalitis in approximately 6% of vaccinated subjects.

We believe that this may have been caused by using a strong non-specific

antigenic determinant T-cell epitope in the Aβ 1-42 peptide and the inclusion of a QS21 adjuvant and polysorbate-80 stabilizing agent

in the vaccine formulation.

July 23, 2021, we announced that Alzamend received positive toxicology results for AL002 in a good laboratory practices (“GLP”)

toxicology study using a transgenic mouse model of Alzheimer’s.

We believe that this may have been caused by using a QS-21 adjuvant in

the vaccine formulation.

Clinical Trials

On July 23, 2021, we announced

that Alzamend received positive toxicology results for ALZN002 in a good laboratory practices (“GLP”) toxicology study using

a transgenic mouse model of Alzheimer’s.

The study was conducted by Charles River Laboratories.

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.

five-dose GLP study with AL002-sensitized cells was completed using a transgenic (or genetically modified) mouse model of Alzheimer’s to investigate the tolerability of AL002.

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.

five-dose GLP study with ALZN002-sensitized cells was completed using a transgenic mouse model of Alzheimer’s to investigate the

tolerability of ALZN002.

Single injections were administered on days 1, 30, 50, 70, and 90.

The mice were evaluated

for potential toxicity and reversibility of any findings at 75 and 90 days after dosing.

The mice were evaluated for potential toxicity

and reversibility of any findings at 75 and 90 days after the final dosing.

Histopathology

results demonstrate that there was no indication of T-cell infiltration or meningoencephalitis suggesting that AL002 therapy is safe and

tolerable as there were no adverse findings over a 90-day period and 90 days after the last dose.

There were no treatment-related mortalities

or reports of adverse effects on clinical observations, body weight parameters, organ weight parameters, clinical pathology parameters,

gross pathology observations, or histopathologic observations during the main study or the recovery phase.

cell therapies, especially DCs, may provide a safer and more patient-specific active immunization.

Ex-vivo modification of DCs as a modality

of treatment has been previously used in oncological therapeutics.

It has been shown to be relatively safe and capable of engaging the

immune system to attack the target tissues with success.

results demonstrate that there was no indication of T-cell infiltration or meningoencephalitis, which suggests that ALZN002 therapy is

safe and tolerable as there were no adverse findings over a 90-day period and 90 days after the last dose.

There were no treatment-related

mortalities or reports of adverse effects on clinical observations, body weight parameters, organ weight parameters, clinical pathology

parameters, gross pathology observations, or histopathologic observations during the main study or the recovery phase.

Modified cell therapies, especially

DCs, may provide a safer and more patient-specific active immunization.

Ex-vivo modification of DCs as a modality of treatment has been

previously used in oncological therapeutics.

It has been shown to be relatively safe and capable of engaging the immune system to attack

the target tissues with success.

Its use in Alzheimer’s therapeutics is relatively recent.

We are proposing

to conduct a first-in-human Phase I/II study of autologous DC, pulsed with a modified Aβ epitope.

Preclinical work supports that

it is associated with positive anti-inflammatory response and a decrease in brain amyloid contents.

We anticipate submitting an IND to

initiate a Phase I/II study for AL002 in September 2022.

A product can be

designated as a breakthrough therapy if it is intended to treat a serious condition and preliminary clinical evidence indicates that the

drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint(s).

A drug that receives a breakthrough

therapy designation is eligible for fast-track designation features, intensive guidance on an efficient drug development program and FDA

organizational commitment involving senior managers.

We believe that AL002 is positioned for a breakthrough therapy designation because

of its positive effect on a pharmacodynamic biomarker (beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s.

If we successfully acquire a breakthrough therapy designation for new drug approvals, we believe we can shorten the development timeline

However, we have neither received breakthrough therapy designation nor qualified for expedited development.

Our product candidate

may not qualify for breakthrough therapy designation;

further, even if it does qualify for breakthrough therapy designation, it may not

actually lead to faster development or expedited regulatory review and approval or necessarily increase the likelihood that it will receive

FDA approval.

will require extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial investment before

it or any successors are likely to provide us with any revenue.

As a result, if we do not successfully develop, achieve regulatory approval

for and commercialize AL002, our long-term business plans will not be met, and we will be unable to generate the revenue we have forecast

for the foreseeable future, if any.

We do not anticipate that we will generate our maximum revenue for several years, or that we will

achieve profitability for this therapeutic drug candidate until at least a few years after generating material revenue, if at all.

we are unable to generate revenue or raise substantial additional capital, we will not be able to pursue any expansion of our business

or acquire additional intellectual property, we will not become profitable with this therapeutic drug candidate, and we will be unable

to continue our operations at the currently planned pace, if at all.

Intellectual Property

and Licensing Agreements

On June 2, 2018, we entered into two Standard

Phase I/II Study

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 July 30, 2021.

We received a written response relating to the pre-IND from the FDA providing a path for Alzamend’s planned clinical development

of ALZN002 on September 30, 2021.

The FDA agreed to allow Alzamend to submit an IND to conduct a combined Phase I/II study.

September 28, 2022, we submitted an IND to the FDA for ALZN002 and received a “study may proceed” letter on October 31, 2022.

The product candidate is an immunotherapy vaccine designed to treat mild to moderate dementia of the Alzheimer’s type.

a proprietary “active” immunotherapy product, which means it is produced by each patient’s immune system.

of autologous DCs consisting of activated white blood cells taken from each individual patient so that they can be engineered outside

of the body to attack Alzheimer’s-related amyloid-beta proteins.

These DCs are pulsed with a novel amyloid-beta peptide (E22W) designed

to bolster the ability of the patient’s immune system to combat Alzheimer’s;

the goal is to foster tolerance to treatment

for safety purposes while stimulating the immune system to reduce the brain’s beta-amyloid protein burden, resulting in reduced

Alzheimer’s signs and symptoms.

Compared to passive immunization treatment approaches that use foreign blood products (such as monoclonal

antibodies), active immunization with ALZN002 is anticipated to offer a more robust and long-lasting effect on the clearance of amyloid.

This approach could prove safer due to its reliance on autologous immune components, using each individual patient’s own white blood

cells rather than foreign cells and/or blood products.

On April 3, 2023,

we announced the initiation of a phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type.

The purpose of this trial is to assess the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that

of a placebo in 20-30 subjects with mild to moderate morbidity.

The primary goal of this 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, which Alzamend

expects to initiate within three months of receiving data from the initial trial.

The continuation

of our current development plans 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.

Intellectual Property and Licensing Agreements

On July 2, 2018, we entered into two Standard

Exclusive License Agreements with Sublicensing Terms for AL001 with the Licensor and its affiliate, the University of South Florida (the

“AL001 License Agreements”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide licenses limited

to the field of Alzheimer’s, under United States Patent Nos.

(i) 9,840,521, entitled “Organic Anion Lithium Ionic Cocrystal

Compounds and Compositions”, filed September 24, 2015 and granted December 12, 2017, and (ii) 9,603,869, entitled “Lithium

Co-Crystals for Treatment of Neuropsychiatric Disorders”, filed May 21, 2016 and granted March 28, 2017.

The AL001 License Agreements 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 AL001.

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 AL001 License Agreements.

On May 1, 2016,

we entered into a Standard Exclusive License Agreement with Sublicensing Terms for AL002 with the Licensor (the “AL002 License Agreement”),

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.

The AL002 License

Agreement requires us to pay royalty payments of 4% on net sales of products developed from the licensed technology for AL002.

“AL001 Licenses”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide licenses limited to the

field of Alzheimer’s, under U.S.

(i) 9,840,521, entitled “Organic Anion Lithium Ionic Cocrystal Compounds and

Compositions”, filed September 24, 2015 and granted December 12, 2017, and (ii) 9,603,869, entitled “Lithium Co-Crystals for

Treatment of Neuropsychiatric Disorders”, filed May 21, 2016 and granted March 28, 2017.

On February 1, 2019, we entered into the

First Amendments to the AL001 Licenses, on March 30, 2021, we entered into the Second Amendments to the AL001 Licenses and on June 8,

2023, we entered into the Third Amendments to the AL001 Licenses (collectively, the “AL001 License Agreements”).

The AL001 License Agreements

require that we pay combined royalty payments of 4.5% on net sales of products developed from the licensed technology for AL001.

already paid an initial license fee of $200,000 for AL001.

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

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 License Agreements are $40,000 on the first anniversary

of the first commercial sale, $80,000 on the second anniversary first commercial sale and $100,000 on the third anniversary of the first

commercial sale and every year thereafter, for the life of the AL001 License Agreements.

May 1, 2016, we entered into a Standard Exclusive License Agreement with Sublicensing Terms for ALZN002 with the Licensor (the “ALZN002

License”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide license limited to the field of Alzheimer’s

Immunotherapy and Diagnostics, under U.S.

8,188,046, entitled “Amyloid Beta Peptides and Methods of Use,” filed

April 7, 2009 and granted May 29, 2012.

On August 18, 2017, we entered into the First Amendment to the ALZN002 License, on May 7, 2018,

we entered into the Second Amendment to the ALZN002 License, on January 31, 2019, we entered into the Third Amendment to the ALZN002 License,

on January 24, 2020, we entered into the Fourth Amendment to the ALZN002 License, on March 30, 2021, we entered into the Fifth Amendment

to the ALZN002 License and on April 17, 2023, we entered into the Sixth Amendment to the ALZN002 License (collectively, the “ALZN002

License Agreement”).

The ALZN002 License Agreement

requires us to pay royalty payments of 4% on net sales of products developed from the licensed technology for ALZN002.

We have already

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

As an additional licensing fee for the license of ALZN002, the Licensor received

3,601,809 shares of our common stock.

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 AL002 License Agreement.

On June 10, 2020, we entered

into two Standard Exclusive License Agreements with Sublicensing Terms for two additional indications of

AL001 with the Licensor (the “June AL001 License Agreements”), pursuant

to which the Licensor granted us a royalty bearing exclusive worldwide

licenses limited to the fields of (i) neurodegenerative diseases excluding Alzheimer’s and (ii) psychiatric diseases and disorders.

The June AL001 License Agreements require

us to pay royalty payments of 3% on net sales of products developed from the licensed technology for AL001 in those fields.

initial license fee of $20,000 for the additional indications.

These license agreements

have an indefinite term that continue until the later of the date no licensed patent under the applicable agreement remains a pending

application or enforceable patent, the end date of any period of market exclusivity granted by a governmental regulatory body, or the

date on which the licensee’s obligations to pay royalties expire under the applicable license agreement.

Under our various license

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

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.

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 License:

Minimum royalties for ALZN002 are $20,000 on the first anniversary of the first commercial sale,

$40,000 on the second anniversary first commercial sale and $50,000 on the third anniversary of the first commercial sale and every year

thereafter, for the life of the ALZN002 License Agreement.

On November 19, 2019, we entered

into two Standard Exclusive License Agreements with Sublicensing Terms for two additional indications of AL001 with the Licensor (the

“November AL001 License”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide licenses limited

to the fields of (i) neurodegenerative diseases excluding Alzheimer’s and (ii) psychiatric diseases and disorders.

2021, we entered into the First Amendments to the November AL001 License and on April 17, 2023, we entered into the Second Amendments

to the November AL001 License (collectively, the “November AL001 License Agreements”).

The November AL001 License

Agreements require us to pay royalty payments of 3% on net sales of products developed from the licensed technology for AL001 in those

We paid an initial license fee of $20,000 for the additional indications.

Minimum royalties for November AL001 License Agreements

are $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary first commercial sale and $100,000

on the third anniversary of the first commercial sale and every year thereafter, for the life of the November AL001 License Agreements.

These license agreements have

an indefinite term that continue until the later of the date no licensed patent under the applicable agreement remains a pending application

or enforceable patent, the end date of any period of market exclusivity granted by a governmental regulatory body, or the date on which

the licensee’s obligations to pay royalties expire under the applicable license agreement.

Under our various license agreements,

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

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.

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

Original AL001 Licenses:

Completed September 2019

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8 years from the effective date of the agreement

Upon FDA approval

Upon FDA NDA approval

* Milestone met and completed

AL002 License:

Completed January 2022

ALZN002 License:

Upon IND application filing

12 months from IND application filing date

Upon IND application filing

September 2023

Upon first dosing of patient in first Phase I clinical trial

12 months from first patient dosed in Phase I

Upon completion of first Phase I clinical trial

24 months from completion of first Phase I clinical trial

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* Milestone met and completed

AL001 Licenses:

Upon IND application filing

IND application filing

12 months from IND filing date

Upon first dosing of patient in a clinical trial

12 months from first patient dosing

Upon Completion of first clinical trial

Additional AL001 Licenses:

36 months from completion of the first Phase II clinical trial

Upon first patient treated in a Phase III clinical trial

8 years from the effective date of the agreement

August 1, 2029

First commercial sale

license agreements have an indefinite term that continue until the later of the date no licensed patent under the applicable agreement

remains a pending application or enforceable patent, the end date of any period of market exclusivity granted by a governmental regulatory

body, or the date on which the licensee’s obligations to pay royalties expire under the applicable license agreement.

Market Opportunity

The Alzheimer’s

Association estimates that the cost of caring for people with Alzheimer’s and other dementias will reach $321 billion in 2022, including

$206 billion in Medicare and Medicaid payments, and that by 2050, these costs may rise as high as $1 trillion per year.

Alzamend was formed

to develop and commercialize patented intellectual property and treatments for Alzheimer’s, by funding it from preclinical through

clinical trials and ultimately, if successful, make it available to the global market.

Additionally, we are supporting ongoing research

at the USF Health College of Medicine and plan to support others with first rights of refusal on technologies for treating terminal diseases.

an article jointly issued on April 8, 2016, Allergan and Heptares cited currently significant unmet medical needs and a heavy economic

burden caused by cognitive impairment and dementia across multiple diseases, noting that currently available drugs for the treatment of

Alzheimer’s provide limited and transient effects on cognition.

They cite projections of healthcare costs, including nursing home

care, associated with Alzheimer’s and dementia (currently estimated to be in excess of $640 billion for North America, Western Europe,

and Asia-Pacific), that are continuing to grow based on data from the World Health Organization, Alzheimer’s International, the

National Institute of Mental Health and the Lewy Body Dementia Association.

medical shortfall puts a spotlight on an urgent need for development of new therapies capable of treating the estimated more than 45 million

people worldwide suffering from Alzheimer’s today, 6.2 million in North America, 7.5 million in Western Europe and 3.6 million in

Asia-Pacific, a number expected to increase to more than 130 million by 2050.

Alzheimer’s is the most common cause of dementia,

estimated to be associated with some 60% to 70% of cases.

An additional estimated 1.4 million patients in the United States suffer from

Lewy body dementia.

We believe that the potential marketplace for a commercialized therapy or treatment would be tremendously significant

with large financial support available from numerous national and international pharmaceutical companies and various governments and worldwide

to the National Institute of Health (“NIH”), there are more than 43.7 million Americans afflicted with Alzheimer’s,

BD, MDD and PTSD.

The rise in the prevalence of these diseases/disorders and the various risks, such as high stress, substance abuse,

and advancements in a combination of drugs are primarily propelling market growth.

Advancements in technology allowing more accurate diagnosis/detection

of Alzheimer’s, BD, MDD, and PTSD are also positively influencing market growth.

Other factors, such as increasing research and

development activities (via clinical trials) and investments by the government to improve the healthcare industry, are expected to further

drive market growth.

Additionally, increased awareness about Alzheimer’s, BD, MDD and PTSD via the various disease/disorder-specific

non-profit organizations is accelerating market growth.

The potential marketplace for a commercialized therapy or treatment would be tremendously

significant with large financial support available from numerous national and international pharmaceutical companies and various governments

and worldwide agencies.

We were founded with a mission to further develop AL001 and ALZN002, by funding them through human clinical trials

administered by the FDA and ultimately, if successful, potentially making them available to the market.

Industry Overview

Currently, Alzheimer’s

is the sixth leading cause of death in the United States and, when extrapolated globally, the market for preventions, treatments and cures

of this crippling disease is massive.

is the seventh leading cause of death in the U.S.

and, when extrapolated globally, the market for preventions, treatments and cures of

this crippling disease is massive.

Since 1990, life expectancy has increased by six years and the worldwide average continues to increase.

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also increased.

According to the Alzheimer’s Association, in the United States alone, one of nine persons over the age of 65 have

Alzheimer’s, with roughly 6.2 million Americans currently living with it.

It is estimated that this number will grow to 13 million

by 2050 barring the development of medical breakthroughs to prevent, slow or cure the disease.

Many Alzheimer’s related associations

believe the actual number of adults with Alzheimer’s may be much higher since current statistics do not take in account deaths from

complications or from related diseases like pneumonia or heart attack.

According to the Alzheimer’s Association, in the U.S.

alone, one of nine persons over the age of 65 have Alzheimer’s,

with roughly 6.7 million Americans currently living with it.

It is estimated that this number will grow to 13 million by 2050 barring

the development of medical breakthroughs to prevent, slow or cure the disease.

Many Alzheimer’s related associations believe the

actual number of adults with Alzheimer’s may be much higher since current statistics do not account for deaths from complications

or from related diseases like pneumonia or heart attack.

These death certificates only list the most immediate cause.

fastest growing age group in the United States is the “over 85” group within which one in three individuals have Alzheimer’s.

deaths from other major causes have decreased significantly, official records indicate that deaths from Alzheimer’s have increased

significantly.

Between 2000 and 2019, the number of deaths from Alzheimer’s as recorded on death certificates has more than doubled,

increasing 145.2%, while the number of deaths from the number one cause of death (heart disease) decreased 7.3%.

Every 65 seconds,

someone in the United States develops Alzheimer’s.

Of the 10 most fatal diseases in the United States, Alzheimer’s is the

only one with no cure, no known way of deceleration and no known means of prevention.

Alzamend was formed to commercialize patented intellectual

property in this space, by funding it from its present state through human clinical trials administered by the FDA and ultimately, if

successful, potentially making it available to the global market.

average annual incidence for individuals aged 65 to 74 was 0.4%.

In individuals ages 75 to 84, the annual incidence was 3.2%, and for

ages 85 and older (the “oldest-old”), the incidence was 7.6%.

The fastest growing

age group in the U.S.

is the “over 85” group within which one in three individuals have Alzheimer’s.

It is estimated that the cost of caring for people with Alzheimer’s

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18 billion hours of care valued at $339.5 billion.

The cause and progression

of Alzheimer’s are not well understood.

Through May 2022, more than 3,793 clinical trials have been or are being conducted to find

ways to treat the disease, but it is unknown if any of the tested treatments will work.

to the Alzheimer’s Association, it is widely accepted that, with the increasing trend towards a longer lifespan coupled with the

baby-boomer population approaching retirement, the incidence of Alzheimer’s is likely to double in the next 30 years.

The exponential

increase in the expected number of patients presenting with Alzheimer’s not only represents a major area of unmet medical need,

but it also constitutes a significant market opportunity for diagnostics for this disease.

Alzheimer’s biomarker sales in 2011 were

reported at $1.5 billion but are expected have doubled in 2018 to over $3 billion.

(BCC research 2013, “Advances in biomarker and

monitoring diagnostics:

Great markets, not so great health effects” by Bjørn Hofmann PhD and H.

Gilbert Welch MD, MPH, 2017).

clinical research focuses on the early phases of the disease.

However, to our knowledge, no accurate and convenient tools are available

today for pre-dementia diagnosis of Alzheimer’s to support these efforts.

Currently, Alzheimer’s is diagnosed using a process

that combines cognition assessments with imaging and spinal-fluid tests.

This diagnostic procedure may last for several months to a year

and is usually initiated late in the disease development.

companies are focusing on blood as a test material.

Typically, these companies employ a multi-assay strategy (multiple RNAs or proteins)

combined with advanced statistical tools/algorithms to develop disease-specific diagnostic models.

Therapeutic Landscape

to the Alzheimer’s Association, the following is a pictorial representation of the more recent published data encompassing the Alzheimer’s

therapeutics landscape.

Alzheimer’s Therapeutic Landscape

According to the Alzheimer’s

Association, the following is a pictorial representation of the more recent published data encompassing the Alzheimer’s therapeutics

are currently several experimental therapeutic agents for Alzheimer’s in various stages of development with clinical testing directed

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regulators to reduce amyloid plaques in people living with Alzheimer’s and the first new medication for the disease in nearly

There were previously no drugs cleared by the FDA that can slow the mental decline from Alzheimer’s, which is the sixth-leading

cause of death in the United States.

The FDA approved Biogen’s Alzheimer’s drug Aduhelm, aimed at helping symptoms, not actually

slowing the disease itself.

Recent clinical failures involving Aβ clearance highlight the incomplete understanding of the pathological

processes in Alzheimer’s and clearly demonstrate the need for novel strategies to fight the disease.

Clinical Management

have retained Rio Pharmaceutical Services and TAMM Net, Inc., to lead, develop and manage our preclinical and clinical efforts, extending

from the current status of each product candidate through the exit or commercialization of the technologies that we have licensed.

may retain experienced Canadian and European Union consulting firms to commercialize these same technologies for those geographic markets.

There were previously no drugs cleared by the FDA that can slow the mental decline caused by Alzheimer’s, which is

the seventh-leading cause of death in the U.S.

In July 2023, an anti-beta amyloid antibody known as Lecanemab-irmb (“Leqembi”),

received full approval by FDA for treatment of Alzheimer’s.

Given the current weight of evidence, amyloid is now established as

a cause of Alzheimer’s.

Leqembi is a humanized monoclonal antibody that binds with high affinity to soluble amyloid-beta oligomers,

which reportedly are toxic to neurons.

Leqembi reduced biomarkers of amyloid in early Alzheimer’s and resulted in moderately less

decline on measures of cognition and function compared to placebo at 18 months.

Since Leqembi only provides passive immunity, antibody

infusions are needed every 2 weeks.

Leqembi supports and validates the amyloid theory, but in routine medical practice there will be a

large burden on the health care system due to the need for every 2-week infusions.

As a first-rendition anti-beta amyloid antibody product,

it is a major landmark requiring innovation.

Bipolar Disorder

previously known as manic depression, is a mood disorder characterized by periods of depression and periods of abnormally elevated happiness

that each lasts from days to weeks.

If the elevated mood is severe or associated with psychosis, it is called mania;

if it is less severe,

it is called hypomania.

During mania, an individual behaves or feels abnormally energetic, happy, or irritable, and they often make impulsive

decisions with little regard for the consequences.

There is usually also a reduced need for sleep during manic phases.

During periods

of depression, the individual may experience crying and have a negative outlook on life and poor eye contact with others.

suicide is high;

over a period of 20 years, 6% of those with BD died by suicide, while 30–40% engaged in self-harm.

health issues, such as anxiety disorders and substance use disorders, are commonly associated with BD.

While the causes

of BD are not clearly understood, both genetic and environmental factors are thought to play a role.

Many genes, each with small effects,

may contribute to the development of the disorder.

Genetic factors account for about 70–90% of the risk of developing BD.

Environmental

risk factors include a history of childhood abuse and long-term stress.

The condition is classified as bipolar I disorder if there has

been at least one manic episode, with or without depressive episodes, and as bipolar II disorder if there has been at least one hypomanic

episode (but no full manic episodes) and one major depressive episode.

If these symptoms are due to drugs or medical problems, they are

not diagnosed as BD.

Other conditions that have overlapping symptoms with BD include attention deficit hyperactivity disorder, personality

disorders, schizophrenia, and substance use disorder as well as many other medical conditions.

Medical testing is not required for a diagnosis,

though blood tests or medical imaging can rule out other problems.

occurs in approximately 1% of the global population.

According to the NIH, roughly seven million, are estimated to be affected at some

point in their life;

rates appear to be similar in females and males.

Symptoms most commonly begin between the ages of 20 and 25 years

an earlier onset in life is associated with a worse prognosis.

Interest in functioning in the assessment of patients with BD is growing,

with an emphasis on specific domains such as work, education, social life, family, and cognition.

Around one-quarter to one-third of people

with BD have financial, social or work-related problems due to the illness.

BD is among the top 20 causes of disability worldwide and

leads to substantial costs for society.

Due to lifestyle choices and the side effects of medications, the risk of death from natural causes

such as coronary heart disease in people with BD is twice that of the general population.

Bipolar Disorder Therapeutic Landscape

Mood stabilizers,

including lithium and certain anticonvulsants, such as valproate and carbamazepine, as well as atypical antipsychotics, such as aripiprazole,

are the mainstay of long-term pharmacologic relapse prevention.

Antipsychotics are additionally given during acute manic episodes as well

as in cases where mood stabilizers are poorly tolerated or ineffective.

In patients where compliance is of concern, long-acting injectable

formulations are available.

There is some evidence that psychotherapy improves the course of BD.

The use of antidepressants in depressive

episodes is controversial;

they can be effective but have been implicated in triggering manic episodes.

The treatment of depressive episodes,

therefore, is often difficult.

Electroconvulsive therapy (“ECT”) is effective in acute manic and depressive episodes, especially

with psychosis or catatonia.

Admission to a psychiatric hospital may be required if a person is a risk to themselves or others;

treatment is sometimes necessary if the affected person refuses treatment.

Major Depressive Disorder

MDD, also known simply as depression, is a mental disorder characterized

by at least two weeks of pervasive low mood, low self-esteem, and loss of interest or pleasure in normally enjoyable activities.

affected may also occasionally have delusions or hallucinations.

Introduced by a group of U.S.

clinicians in the mid-1970s, the term was

adopted by the American Psychiatric Association for this symptom cluster under mood disorders in the 1980 version of the Diagnostic and

Statistical Manual of Mental Disorders (DSM-III) and has become widely used since.

The diagnosis of MDD is based on the person's reported experiences

and a mental status examination.

There is no laboratory test for the disorder, but testing may be done to rule out physical conditions

that can cause similar symptoms.

The most common time of onset is in a person’s 20s, with females affected about twice as often

The course of the disorder varies widely, from one-episode lasting months to a lifelong disorder with recurrent major depressive

MDD is believed to be caused by a combination of genetic, environmental,

and psychological factors, with about 40% of the risk being genetic.

Risk factors include a family history of the condition, major life

changes, certain medications, chronic health problems, and substance use disorders.

It can negatively affect a person's personal life,

work life, or education as well as sleeping, eating habits, and general health.

According to the NIH, MDD affected approximately 21 million

adults (8.4% of all U.S.

adults) in 2020.

The prevalence of adults with a major depressive episode was higher among adult females (10.5%)

than males (6.2%).

The prevalence of adults with a major depressive episode was highest among individuals aged 18-25 (17.0%).

the second-most years lived with disability, after lower back pain.

Major Depressive Therapeutic Landscape

Those with MDD are typically treated with psychotherapy and antidepressant

Medication appears to be effective, but the effect may predominantly be significant in the most severely depressed.

Hospitalization

(which may be involuntary) may be necessary in cases with associated self-neglect or a significant risk of harm to self or others.

may be considered if other measures are not effective.

Although lithium does not have an FDA approved indication for augmentation

of an antidepressant in MDD, it has been prescribed off-label for this purpose for decades.

While a wide variety of medications have been

used historically in this capacity, lithium is one of the few agents that has demonstrated efficacy in multiple randomized controlled

Although the ideal role for lithium augmentation has yet to be established, there is evidence to support the clinical practice

of adding lithium to conventional antidepressants in pursuit of MDD remission.

Lithium augmentation has been cited as a main strategy

for depressed patients not responding to an antidepressant, lithium prophylaxis for recurrent unipolar depression as an alternative to

prophylaxis with an antidepressant, and for lithium's anti-suicidal properties, where appropriate.

Post-Traumatic Stress Disorder

is a mental and behavioral disorder that can develop because of exposure to a traumatic event, such as sexual assault, warfare, traffic

collisions, child abuse, domestic violence, or other threats to a person’s life.

Symptoms may include disturbing thoughts, feelings,

or dreams related to the events, mental or physical distress to trauma-related cues, attempts to avoid trauma-related cues, alterations

in the way a person thinks and feels, and an increase in the fight-or-flight response.

These symptoms may remain for more than a month

after the event.

A person with PTSD is at a higher risk of suicide and intentional self-harm.

Most people who experience traumatic events do not develop PTSD.

who experience interpersonal violence such as rape, other sexual assaults, being kidnapped, stalking, physical abuse by an intimate partner,

and incest or other forms of childhood sexual abuse are more likely to develop PTSD than those who experience non-assault-based trauma,

such as accidents and natural disasters.

Those who experience prolonged trauma, such as slavery, concentration camps, or chronic domestic

abuse, may develop complex post-traumatic stress disorder (“C-PTSD”).

C-PTSD is similar to PTSD but has a distinct effect

on a person's emotional regulation and core identity.

to the NIH, about 3.6%, or roughly nine million, adults in the U.S.

have PTSD in a given year, and 9% of people develop it at some point

in their life.

In much of the rest of the world, rates for a given year are between 0.5% and 1% of the population.

Higher rates may occur

in regions of armed conflict.

It is more common in women than men.

PTSD was first mentioned in the American Psychiatric Association Diagnostic

and Statistical Manual of Mental Disorders (DSM-I) in the 1950s under the term “gross stress reaction.” Although this diagnosis

included psychological problems related to traumatic events such as wartime combat, it limited symptoms to six months.

This diagnosis

was removed from the American Psychiatric Association Diagnostic and Statistical Manual of Mental Disorders (DSM-II) in 1968, representing

a regression in accurate PTSD characterization.

The long-term psychological disabilities experienced by trauma survivors, including Vietnam

veterans, sexual assault victims and Holocaust survivors led to the introduction of PTSD in the American Psychiatric Association Diagnostic

and Statistical Manual of Mental Disorders (DSM-III) in 1980, where, for the first time, the definition of PTSD highlighted the critical

connection between traumatic events and long-term psychological symptoms.

Post-Traumatic Stress Disorder Therapeutic

Prevention may be possible

when counselling is targeted at those with early symptoms but is not effective when provided to all trauma-exposed individuals whether

or not symptoms are present.

The main treatments for people with PTSD are counselling (psychotherapy) and medication.

Antidepressants

of the selective serotonin reuptake inhibitors (“SSRI”) or serotonin-norepinephrine reuptake inhibitors (“SNRI”)

type are the first-line medications used for PTSD and are moderately beneficial for about half of people.

Benefits from medication are

less than those seen with counselling.

It is not known whether using medications and counselling together has greater benefit than either

method separately.

Sertraline (Zoloft) and Paroxetine (Paxil) are FDA-approved medications

Reviews by a group of doctors of pharmacological monotherapy in 2015 and 2021 found that paroxetine, fluoxetine, sertraline

and venlafaxine could be effective for PTSD, but the magnitude of the effect was small and the clinical relevance was unclear.

These reviews

excluded lithium treatments.

Medications, other than some SSRIs or SNRIs, do not have enough evidence to support their use and, in the

case of benzodiazepines, may worsen outcomes.

Case reports suggest

that lithium treatment may be useful for irritability/anger outbursts in PTSD patients.

For example, one study by Kitchner and Greenstein

provided case histories of four males (aged approximately 31–42 years) who suffered from PTSD resulting from their experiences in

the Vietnam War.

Results from treatment with low doses (300–600 mg/day) of lithium carbonate were reported to indicate that treatment

was effective in reducing inappropriate anger, irritability, anxiety, and insomnia.

The clinical observation of mood swings

beyond the normal range but milder than those associated with BD reportedly suggested the presence of a subthreshold mood disorder in

these PTSD patients.

It has also been proposed that treatment of trauma with lithium to forestall the development of PTSD may be provided

by pharmacological induction of a mild transient amnesia.

Manufacturing

we do not have in-house manufacturing capabilities.

We have outsourced and expect to continue to outsource the manufacturing of our products

to third party contractors, with special capabilities to manufacture chemical drugs and biologic drug candidates for submission and clinical

testing under FDA guidelines and, for AL001, have received Good Manufacturing Practices, or GMP, material manufactured for clinical trial.

There are several sources of manufacturing available once a therapy or treatment can achieve Phase II study as identified in a publication

by Pharma.org released in 2013 (http://www.phrma.org/sites/default/files/Alzheimer’s%202013.pdf).

Currently, we do not have

in-house manufacturing capabilities.

We have outsourced and expect to continue to outsource the manufacturing of our products to third

party contractors, with special capabilities to manufacture chemical drugs and biologic drug candidates for submission and clinical testing

under FDA guidelines and, for AL001 and ALZN002, have received Good Manufacturing Practices, or GMP, material manufactured for clinical

There are several sources of manufacturing available once a therapy or treatment can achieve Phase II study as identified in a

publication by Pharma.org released in 2013 (http://www.phrma.org/sites/default/files/Alzheimer’s%202013.pdf).

Distribution and Marketing

We intend to develop

AL001 and AL002 through successive de-risking milestones towards regulatory approval and seek marketing approval of AL001 and AL002 or

enter into partnering transactions with biopharmaceutical companies seeking to strategically fortify pipelines and, in turn, receiving

funding for the costly later-stage clinical development required to achieve successful commercialization.

We do not anticipate selling

products directly into the marketplace, though we may do so depending on market conditions.

Our focus is to strategically effect partnering

transactions which will provide distribution and marketing capabilities to sell products into the marketplace.

intend to develop AL001 and ALZN002 through successive de-risking milestones towards regulatory approval and seek marketing approval of

AL001 and ALZN002 or enter into partnering transactions with biopharmaceutical companies seeking to strategically fortify pipelines and,

in turn, receiving funding for the costly later-stage clinical development required to achieve successful commercialization.

anticipate selling products directly into the marketplace, though we may do so depending on market conditions.

Our focus is to strategically

effect partnering transactions that will provide distribution and marketing capabilities to sell products into the marketplace.

Government Regulation

trials, the pharmaceutical approval process, and the marketing of pharmaceutical products, are intensively regulated in the United States

and in all major foreign countries.

Health Product Regulation in the United States

In the United States,

the FDA regulates pharmaceuticals under the Federal Food, Drug, and Cosmetic Act and related regulations promulgated thereunder.

Clinical trials, the pharmaceutical

approval process, and the marketing of pharmaceutical products, are intensively regulated in the United States and in all major foreign

Human Health Product

Regulation in the United States

In the United States, the

FDA regulates pharmaceuticals under the Federal Food, Drug, and Cosmetic Act and related regulations promulgated thereunder.

Pharmaceuticals

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action could have a material adverse effect on us.

FDA and comparable regulatory agencies in state and local jurisdictions impose substantial requirements upon the clinical development,

manufacturing and marketing of pharmaceutical products.

These agencies and other federal, state and local entities regulate research and

development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, distribution, record keeping,

approval, advertising and promotion of our products.

FDA’s policies may change, and additional government regulations may be enacted that could prevent or delay regulatory approval

The FDA and comparable regulatory

agencies in state and local jurisdictions impose substantial requirements upon the clinical development, manufacturing and marketing of

pharmaceutical products.

These agencies and other federal, state and local entities regulate research and development activities and the

testing, manufacture, quality control, safety, effectiveness, labeling, storage, distribution, record keeping, approval, advertising and

promotion of our products.

FDA’s policies may change, and additional government regulations may be promulgated that could prevent or delay regulatory approval

of new disease indications or label changes.

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might arise from future legislative or administrative action, either in the United States or elsewhere.

process required by the FDA before human health care pharmaceuticals may be marketed in the U.S.

Marketing Approval

The process required by the

FDA before human health care pharmaceuticals may be marketed in the U.S.

generally involves the following:

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suspend or terminate a clinical trial at any time on numerous grounds.

purposes of BLA or NDA approval for human health products, human clinical trials are typically conducted in phases that may overlap.

For purposes of BLA or NDA

approval for human health products, human clinical trials are typically conducted in phases that may overlap.

The drug is initially introduced into healthy human subjects and tested for safety, dosage

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the overall risk/benefit ratio of the product and provide an adequate basis for product labeling.

of these trials must be conducted in accordance with Good Clinical Practice (“GCP”), requirements in order for the data to

be considered reliable for regulatory purposes.

Drug and Biologics License Applications

order to obtain approval to market a pharmaceutical in the United States, a marketing application must be submitted to the FDA that provides

data establishing to the FDA’s satisfaction the safety and effectiveness of the investigational drug for the proposed indication.

Each NDA or BLA submission requires a substantial user fee payment unless a waiver or exemption applies (such as with the Orphan Drug

Designation discussed below).

For fiscal year 2021, the FDA set the application fee at $2,875,842 for new drug applications that require

clinical data.

The manufacturer and/or sponsor of certain drugs approved under an NDA or BLA is also subject to annual prescription drug

program fees, currently set at $336,432 per product for fiscal year 2021.

All of these trials must be

conducted in accordance with Good Clinical Practice (“GCP”), requirements in order for the data to be considered reliable

for regulatory purposes.

New Drug and Biologics

License Applications

In order to obtain approval

to market a pharmaceutical in the United States, a marketing application must be submitted to the FDA that provides data establishing

to the FDA’s satisfaction the safety and effectiveness of the investigational drug for the proposed indication.

Each NDA or BLA

submission requires a substantial user fee payment unless a waiver or exemption applies (such as with the Orphan Drug Designation discussed

For fiscal year 2023, the FDA set the application fee at $3,242,026 for new drug applications that require clinical data.

manufacturer and/or sponsor of certain drugs approved under an NDA or BLA is also subject to annual prescription drug program fees, currently

set at $393,933 per product for fiscal year 2023.

These fees are typically increased annually.

The NDA or BLA

includes all relevant data available from pertinent non-clinical studies and clinical trials, including negative or ambiguous results

as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls and

proposed labeling, among other things.

Data can come from company-sponsored clinical trials intended to test the safety and effectiveness

of the use of a product, or from a number of alternative sources, including studies initiated by investigators.

FDA will initially review the NDA or BLA for completeness before it accepts it for filing.

The FDA has 60 days from its receipt of an

NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that the

application is sufficiently complete to permit substantive review.

After the NDA or BLA submission is accepted for filing, the FDA reviews

the NDA or BLA to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether

the product is being manufactured in accordance with current GMP, or cGMP, to assure and preserve the product’s identity, strength,

quality and purity.

The FDA may refer applications for novel drug products or drug products that present difficult questions of safety

or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation

as to whether the application should be approved and, if so, under what conditions.

The FDA is not bound by the recommendations of an

advisory committee, but it typically considers such recommendations carefully when making decisions.

on pivotal Phase III trial results submitted in an NDA or BLA, upon the request of an applicant, the FDA may grant a “Priority Review”

designation to a product, which sets the target date for FDA action on the application at six to eight months, rather than the standard

ten to 12 months.

The NDA or BLA includes all relevant data

available from pertinent non-clinical studies and clinical trials, including negative or ambiguous results as well as positive findings,

together with detailed information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other

Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of the use of a product, or

from a number of alternative sources, including studies initiated by investigators.

The FDA will initially review

the NDA or BLA for completeness before it accepts it for filing.

The FDA has 60 days from its receipt of an NDA or BLA to determine whether

the application will be accepted for filing based on the agency’s threshold determination that the application is sufficiently complete

to permit substantive review.

After the NDA or BLA submission is accepted for filing, the FDA reviews the NDA or BLA to determine, among

other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in

accordance with current GMP, or cGMP, to assure and preserve the product’s identity, strength, quality and purity.

The FDA may refer

applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee,

typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application

should be approved and, if so, under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it typically

considers such recommendations carefully when making decisions.

Based on pivotal Phase III

trial results submitted in an NDA or BLA, upon the request of an applicant, the FDA may grant a “Priority Review” designation

to a product, which sets the target date for FDA action on the application at six to eight months, rather than the standard ten to 12

The FDA can extend these reviews by three months.

Priority Review is given where preliminary estimates indicate that

a product, if approved, has the potential to provide a significant improvement compared to marketed products or offers a therapy where

no satisfactory alternative therapy exists.

Priority Review designation does not change the scientific/medical standard for approval or

the quality of evidence necessary to support approval.

After the FDA completes

its initial review of an NDA or BLA, it will communicate to the sponsor that the application for the drug will either be approved, or

it will issue a complete response letter to communicate that the NDA or BLA will not be approved in its current form and inform the sponsor

of changes that must be made or additional clinical, nonclinical or manufacturing data that must be received before the application can

be approved, with no implication regarding the ultimate approvability of the application.

approving an NDA or BLA, the FDA will inspect the facilities at which the product is manufactured, even if such facilities are located

The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance

with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before

approving an NDA or BLA, the FDA may inspect one or more clinical sites and manufacturing sites to assure compliance with GCP and GMP.

If the FDA determines that any of the application, manufacturing process or manufacturing facilities is not acceptable, it typically will

outline the deficiencies and often will request additional testing or information.

This may significantly delay further review of the

If the FDA finds that a clinical site did not conduct the clinical trial in accordance with GCP, the FDA may determine that

the data generated by the clinical site should be excluded from the primary efficacy analyses provided in the NDA or BLA.

Additionally,

the FDA may identify deficiencies in the manufacturing process and require changes prior to approval.

Notwithstanding the submission of

any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for

testing and approval process for a drug requires substantial time, effort and financial resources, and this process may take up to several

years to complete.

Data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations,

which could delay, limit or prevent regulatory approval.

Priority Review is given where preliminary estimates indicate that a product,

if approved, has the potential to provide a significant improvement compared to marketed products or offers a therapy where no satisfactory

alternative therapy exists.

Priority Review designation does not change the scientific/medical standard for approval or the quality of

evidence necessary to support approval.

After the FDA completes its

initial review of an NDA or BLA, it will communicate to the sponsor that the application for the drug will either be approved, or it will

issue a complete response letter to communicate that the NDA or BLA will not be approved in its current form and inform the sponsor of

changes that must be made or additional clinical, nonclinical or manufacturing data that must be received before the application can be

approved, with no implication regarding the ultimate approvability of the application.

Before approving an NDA or

BLA, the FDA will inspect the facilities at which the product is manufactured, even if such facilities are located overseas.

not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements

and adequate to assure consistent production of the product within required specifications.

Additionally, before approving

an NDA or BLA, the FDA may inspect one or more clinical sites and manufacturing sites to assure compliance with GCP and GMP.

determines that any of the application, manufacturing process or manufacturing facilities is not acceptable, it typically will outline

the deficiencies and often will request additional testing or information.

This may significantly delay further review of the application.

If the FDA finds that a clinical site did not conduct the clinical trial in accordance with GCP, the FDA may determine that the data generated

by the clinical site should be excluded from the primary efficacy analyses provided in the NDA or BLA.

Additionally, the FDA may identify

deficiencies in the manufacturing process and require changes prior to approval.

Notwithstanding the submission of any requested additional

information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

The testing and approval process

for a drug requires substantial time, effort and financial resources, and this process may take up to several years to complete.

obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit

or prevent regulatory approval.

The FDA may not grant approval on a timely basis, or at all.

We may encounter

difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing

our products.

FDA may require, or companies may pursue, additional clinical trials after a product is approved.

These so-called Phase IV studies may

be made a condition that must be satisfied for continuing drug approval.

The results of Phase IV studies can confirm the effectiveness

of a product candidate and can provide important safety information.

In addition, the FDA has express statutory authority to require sponsors

to conduct post-market studies to specifically address safety issues identified by the agency.

Any approvals that we may ultimately receive

could be withdrawn if required post-marketing trials or analyses do not meet the FDA requirements, which would materially harm the commercial

prospects for AL001 or AL002.

FDA also has authority to require a Risk Evaluation and Mitigation Strategy (“REMS”), from manufacturers to ensure that the

benefits of a drug or biological product outweigh its risks.

We may encounter difficulties or unanticipated

costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing our products.

The FDA may require, or companies

may pursue, additional clinical trials after a product is approved.

These so-called Phase IV studies may be made a condition that must

be satisfied for continuing drug approval.

The results of Phase IV studies can confirm the effectiveness of a product candidate and can

provide important safety information.

In addition, the FDA has express statutory authority to require sponsors to conduct post-market

studies to specifically address safety issues identified by the agency.

Any approvals that we may ultimately receive could be withdrawn

if required post-marketing trials or analyses do not meet the FDA requirements, which would materially harm the commercial prospects for

AL001 or ALZN002.

The FDA also has authority

to require a Risk Evaluation and Mitigation Strategy (“REMS”), from manufacturers to ensure that the benefits of a drug or

biological product outweigh its risks.

A sponsor may also voluntarily propose a REMS as part of the NDA or BLA submission.

The need for a REMS is determined as part of the review of the NDA or BLA.

Based on statutory standards, elements of a REMS may include

“dear doctor letters,” a medication guide, more elaborate targeted educational programs, and in some cases restrictions on

distribution.

These elements are negotiated as part of the NDA or BLA approval, and in some cases if consensus is not obtained until after

the Prescription Drug User Fee Act review cycle, the approval date may be delayed.

Once adopted, a REMS is subject to periodic assessment

and modification.

if AL001 or AL002 receives regulatory approval, the approval may be limited to specific disease states, patient populations and dosages,

or might contain significant limitations on use in the form of warnings, precautions or contraindications, or in the form of onerous risk

management plans, restrictions on distribution, or post-marketing study requirements.

Further, even after regulatory approval is obtained,

later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of

the product from the market.

Any delay in obtaining, or failure to obtain, regulatory approval for AL001 or AL002, or obtaining approval

only for significantly limited use, would harm our business.

In addition, we cannot predict what adverse governmental regulations may

arise from future U.S.

or foreign governmental action.

505(b)(2) New Drug Applications

may also consider seeking FDA approval through the Section 505(b)(2) NDA process if their product candidates are similar to previously

approved drugs but differ in dosage form, strength, route of administration, formulation or indication.

Section 505(b)(2) of the Food,

Drug, and Cosmetic Act was enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984 and is also known as

a REMS is determined as part of the review of the NDA or BLA.

Based on statutory standards, elements of a REMS may include “dear

doctor letters,” a medication guide, more elaborate targeted educational programs, and in some cases restrictions on distribution.

These elements are negotiated as part of the NDA or BLA approval, and in some cases if consensus is not obtained until after the Prescription

Drug User Fee Act review cycle, the approval date may be delayed.

Once adopted, a REMS is subject to periodic assessment and modification.

Even if AL001 or ALZN002 receives

regulatory approval, the approval may be limited to specific disease states, patient populations and dosages, or might contain significant

limitations on use in the form of warnings, precautions or contraindications, or in the form of onerous risk management plans, restrictions

on distribution, or post-marketing study requirements.

Further, even after regulatory approval is obtained, later discovery of previously

unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market.

Any delay in obtaining, or failure to obtain, regulatory approval for AL001 or ALZN002, or obtaining approval only for significantly limited

use, would harm our business.

In addition, we cannot predict what adverse governmental regulations may arise from future U.S.

governmental action.

Breakthrough Therapy

product can be designated as a breakthrough therapy if it is intended to treat a serious condition (which includes Alzheimer’s)

and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically

significant endpoint(s).

For purposes of breakthrough therapy designation, a clinically significant endpoint generally refers to an endpoint

that measures an effect on irreversible morbidity or mortality (“IMM”), or on symptoms that represent serious consequences

of the disease.

A clinically significant endpoint can also refer to findings that suggest an effect on IMM or serious symptoms, including:

• an effect on an established surrogate endpoint;

• an effect on a surrogate endpoint or intermediate clinical endpoint considered reasonably likely to predict

a clinical benefit (i.e., the accelerated approval standard);

• an effect on a pharmacodynamic biomarker (which is a measurable indicator of the disease state) that does

not meet criteria for an acceptable surrogate endpoint, but strongly suggests the potential for a clinically meaningful effect on the

underlying disease;

• a significantly improved safety profile compared to available therapy (e.g., less dose-limiting toxicity

for an oncology agent), with evidence of similar efficacy.

A drug that receives a breakthrough

therapy designation is eligible for fast-track designation features, intensive guidance on an efficient drug development program and FDA

organizational commitment involving senior managers.

However, we have not yet applied for breakthrough therapy designation nor have we

received any official designation for expedited development.

Our product candidates may not qualify for breakthrough therapy designation;

further, even if it does qualify for breakthrough therapy designation, it may not actually lead to faster development or expedited regulatory

review and approval or necessarily increase the likelihood that it will receive FDA approval.

Based on our preclinical data,

AL001 has a positive effect on the pharmacodynamic biomarkers of Alzheimer’s.

We propose to validate this clinically and if confirmed,

we believe that AL001 is a candidate for breakthrough therapy designation because of its positive effect on a pharmacodynamic biomarker

(beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s.

We also believe that ALZN002 is positioned for

a breakthrough therapy designation because of its positive effect on a pharmacodynamic biomarker (beta-amyloids) and potential for a clinically

meaningful effect on Alzheimer’s.

Section 505(b)(2) New

Drug Applications

Companies may also consider

seeking FDA approval through the Section 505(b)(2) NDA process if their product candidates are similar to previously approved drugs but

differ in dosage form, strength, route of administration, formulation or indication.

Section 505(b)(2) of the Food, Drug, and Cosmetic

Act was enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984 and is also known as the Hatch-Waxman Amendments.

The purpose of Section 505(b)(2) is to allow companies to avoid duplicative testing by allowing applicants to utilize data from previous

clinical and non-clinical studies in the current NDA submission, when pertinent.

The 505(b)(2) application process requires, among other

things, the submission of data from studies demonstrating the product’s safety and efficacy for the new indication.

We believe that AL001 is positioned

for an expedited Section 505(b)(2) regulatory pathway for a new drug.

AL001’s active pharmaceutical ingredients (lithium, proline

and salicylate) are well documented and approved by the FDA.

The provisions of 505(b)(2) were created, in part, to help avoid unnecessary

duplication of studies already performed on a previously approved (“reference” or “listed”) drug.

gives the FDA express permission to rely on data not developed by the NDA applicant.

This process can result in a much less expensive

and much faster route to approval, compared with a traditional development path such as 505(b)(1), while creating new, differentiated

products with tremendous commercial value.

The Hatch-Waxman Amendments

The purpose of Section 505(b)(2) is to allow companies to avoid duplicative testing by allowing applicants

to utilize data from previous clinical and non-clinical studies in the current NDA submission, when pertinent.

The 505(b)(2) application

process requires, among other things, the submission of data from studies demonstrating the product’s safety and efficacy for the

new indication.

Hatch-Waxman Amendments permit companies to rely upon not only certain published nonclinical or clinical studies conducted for an approved

product, but also the FDA’s conclusions from a prior review of the studies.

Additionally, the FDA may require companies to perform

further studies to support changes from the approved product.

After completion of the review, the FDA may approve the new product for

all or some of the labeled indications for which the reference product has been approved, as well as for any new indication supported

While references to nonclinical and clinical data not created by the applicant or for which the applicant does not have a

right of reference are allowed, the applicant must still submit data related to the manufacturing and quality of the product candidate,

such as information about the development, process, stability, qualification and validation.

a company chooses to rely on the FDA’s conclusions regarding studies conducted for an already approved product, the company is required

to provide a certification statement for any patents listed for the approved product in the FDA’s Orange Book publication.

Specifically,

the applicant must certify that:

permit companies to rely upon not only certain published nonclinical or clinical studies conducted for an approved product, but also the

FDA’s conclusions from a prior review of the studies.

Additionally, the FDA may require companies to perform further studies to

support changes from the approved product.

After completion of the review, the FDA may approve the new product for all or some of the

labeled indications for which the reference product has been approved, as well as for any new indication supported by the NDA.

While references

to nonclinical and clinical data not created by the applicant or for which the applicant does not have a right of reference are allowed,

the applicant must still submit data related to the manufacturing and quality of the product candidate, such as information about the

development, process, stability, qualification and validation.

If a company chooses to rely

on the FDA’s conclusions regarding studies conducted for an already approved product, the company is required to provide a certification

statement for any patents listed for the approved product in the FDA’s Orange Book publication.

Specifically, the applicant must

certify that:

(i) the required patent information has not been filed;

(ii) the listed patent has expired;

listed patent has not expired but will expire on a particular date and approval is sought after patent expiration;

or (iv) the listed

patent is invalid or will not be infringed by the new product.

The FDA will also not approve a Section 505(b)(2) until any non-patent

exclusivity period for the reference product has expired, such as the exclusivity granted for obtaining approval of a new chemical entity.

of Clinical Trial Information

of clinical trials of certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical

trial information on a public website maintained by the U.S.

National Institutes of Health.

Information related to the product, patient

population, phase of investigation, study sites and investigator, and other aspects of the clinical trial is made public as part of the

registration.

(iii) the listed patent has

not expired but will expire on a particular date and approval is sought after patent expiration;

or (iv) the listed patent is invalid

or will not be infringed by the new product.

The FDA will also not approve a Section 505(b)(2) until any non-patent exclusivity period

for the reference product has expired, such as the exclusivity granted for obtaining approval of a new chemical entity.

we qualify for the Section 505(b)(2) regulatory pathway for new drug approvals, we believe we can shorten the development timeline for

However, our AL001 may not qualify for expedited development or, if it does qualify for expedited development, it may not actually

lead to faster development or expedited regulatory review and approval.

Disclosure of Clinical

Trial Information

Sponsors of clinical trials of certain FDA-regulated products, including

prescription drugs, are required to register and disclose certain clinical trial information on a public website maintained by the NIH.

Information related to the product, patient population, phase of investigation, study sites and investigator, and other aspects of the

clinical trial is made public as part of the registration.

Sponsors are also obligated to disclose the results of these trials after completion.

Disclosure of the results of these

trials can be delayed until the product or new indication being studied has been approved.

Competitors may use this publicly available

information to gain knowledge regarding the design and progress of our development programs.

Drug Price Competition and Patent Term Restoration Act

Disclosure of the results of these trials can be delayed until the product or new indication being studied has been approved.

may use this publicly available information to gain knowledge regarding the design and progress of our development programs.

The Drug Price Competition

and Patent Term Restoration Act

Drug Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Amendments, requires pharmaceutical companies to

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drugs to compete with those products.

Term Extension.

After receipt of an NDA or BLA approval, owners of relevant drug patents may apply for a patent extension of up

to five years.

The permissible patent term extension is calculated as half of the drug’s testing phase, that is, the time between

IND submission and NDA or BLA submission, and all of the review phase, or the time between either NDA or BLA submission and approval up

to a maximum of five years.

Patent Term Extension.

After receipt of an NDA or BLA approval, owners of relevant drug patents may apply for a patent extension of up to five years.

The permissible

patent term extension is calculated as half of the drug’s testing phase, that is, the time between IND submission and NDA or BLA

submission, and all of the review phase, or the time between either NDA or BLA submission and approval up to a maximum of five years.

The time can be shortened if FDA determines that the applicant did not pursue approval with due diligence.

The total patent term after the extension may not exceed 14 years.

For patents that

might expire during the application phase, the patent owner may request an interim patent extension.

An interim patent extension increases

the patent term by one year and may be renewed up to four times.

For each interim patent extension granted, the post-approval patent extension

is reduced by one year.

The total patent term after

the extension may not exceed 14 years.

For patents that might expire

during the application phase, the patent owner may request an interim patent extension.

An interim patent extension increases the patent

term by one year and may be renewed up to four times.

For each interim patent extension granted, the post-approval patent extension is

reduced by one year.

The director of the U.S.

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an exemption, under the category for biologic products, from the requirement to provide an environmental assessment and an environmental

impact statement for AL001 or AL002 and further state to the FDA that, to our knowledge, no extraordinary circumstances exist that would

impact statement for AL001 or ALZN002 and further state to the FDA that, to our knowledge, no extraordinary circumstance exists that would

significantly affect the environment.

Post-Approval Requirements

the approval of an NDA or BLA, the FDA continues to require adverse event reporting and submission of periodic reports.

The FDA also may

require post-marketing testing, known as Phase IV testing, REMS, and surveillance to monitor the effects of an approved product, or the

FDA may place conditions on an approval that could restrict the distribution or use of the product.

In addition, quality control, drug

manufacture, packaging, and labeling procedures must continue to conform to cGMP after approval.

Drug manufacturers and certain of their

subcontractors are required to register their establishments with FDA and certain state agencies.

Registration with the FDA subjects entities

to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMP.

Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance

Regulatory authorities may withdraw product approvals or request product recalls if a manufacturer fails to comply with regulatory

standards, if it encounters problems following initial marketing or if previously unrecognized problems are subsequently discovered.

Protection and Affordable Care Act

March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act,

or the ACA, which includes measures that have significantly changed the way health care is financed by both governmental and private insurers,

became law in the U.S.

The ACA is a sweeping measure intended to expand health care coverage within the U.S., primarily through the imposition

of health insurance mandates on employers and individuals and expansion of the Medicaid program.

The ACA has significantly impacted the

pharmaceutical industry.

The ACA requires discounts under the Medicare drug benefit program and increased rebates on drugs covered by

In addition, the ACA imposes an annual fee, which increases annually, on sales by branded pharmaceutical manufacturers.

have been significant ongoing judicial, administrative, executive and legislative efforts to modify, amend or eliminate the ACA.

District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate”

was repealed by Congress.

The case has been appealed to the U.S.

Supreme Court and is awaiting a ruling.

At this time, the financial impact

of these discounts, increased rebates and fees and the other provisions of the ACA on our business are unclear.

However, the fees, discounts

and other provisions of this law are expected to have a significant negative effect on the profitability of pharmaceuticals.

Health Product Regulation in the European Union

addition to domestic regulations, we may eventually be subject, either directly or through our distribution partners, to a variety of

regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products,

or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S.

prior to the commencement of clinical trials or marketing of the product in those countries.

FDA Post-Approval Requirements

Following the approval of

an NDA or BLA, the FDA continues to require adverse event reporting and submission of periodic reports.

The FDA also may require post-marketing

testing, known as Phase IV testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions

on an approval that could restrict the distribution or use of the product.

In addition, quality control, drug manufacture, packaging,

and labeling procedures must continue to conform to cGMP after approval.

Drug manufacturers and certain of their subcontractors are required

to register their establishments with FDA and certain state agencies.

Registration with the FDA subjects entities to periodic unannounced

inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMP.

Accordingly, manufacturers

must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMP.

authorities may withdraw product approvals or request product recalls if a manufacturer fails to comply with regulatory standards, if

it encounters problems following initial marketing or if previously unrecognized problems are subsequently discovered.

Patient Protection and

Affordable Care Act

In March 2010, the Patient

Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or the ACA, which includes

measures that have significantly changed the way health care is financed by both governmental and private insurers, became law in the

The ACA is a sweeping measure intended to expand health care coverage within the U.S., primarily through the imposition of health

insurance mandates on employers and individuals and expansion of the Medicaid program.

The ACA has significantly impacted the pharmaceutical

The ACA requires discounts under the Medicare drug benefit program and increased rebates on drugs covered by Medicaid.

the ACA imposes an annual fee, which increases annually, on sales by branded pharmaceutical manufacturers.

At this time, the financial

impact of these discounts, increased rebates and fees and the other provisions of the ACA on our business are unclear.

However, the fees,

discounts and other provisions of this law are expected to have a significant negative effect on the profitability of pharmaceuticals.

Human Health Product

Regulation in the European Union

In addition to domestic regulations,

we may eventually be subject, either directly or through our distribution partners, to a variety of regulations in other jurisdictions

governing, among other things, clinical trials and any commercial sales and distribution of our products, if approved.

Whether or not we obtain FDA

approval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S.

countries prior to the commencement

of clinical trials or marketing of the product in those countries.

Certain countries outside of the U.S.

a process that requires the submission of a clinical trial application prior to the commencement of human clinical trials.

for example, a Clinical Trial Application (“CTA”) must be submitted to the competent national health authority and to independent

ethics committees in each country in which a company intends to conduct clinical trials.

Once the CTA is approved in accordance with a

country’s requirements, clinical trial development may proceed in that country.

requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country,

even though there is already some degree of legal harmonization in the EU Member States resulting from the national implementation of

underlying EU legislation.

have a process that requires

the submission of a clinical trial application prior to the commencement of human clinical trials.

In Europe, for example, a Clinical

Trial Application (“CTA”) must be submitted to the competent national health authority and to independent ethics committees

in each country in which a company intends to conduct clinical trials.

Once the CTA is approved in accordance with a country’s requirements,

clinical trial development may proceed in that country.

The requirements and process

governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country, even though there

is already some degree of legal harmonization in the EU Member States resulting from the national implementation of underlying EU legislation.

In all cases, the clinical trials are conducted in accordance with GCP and other applicable regulatory requirements.

obtain regulatory approval of an investigational drug under European Union regulatory systems, we will be required to submit a marketing

authorization application.

This application is similar to the BLA in the United States, with the exception of, among other things, country-specific

document requirements.

Drugs can be authorized in the European Union by using (i) the centralized authorization procedure, (ii) the mutual

recognition procedure, (iii) the decentralized procedure or (iv) the national authorization procedure.

European Medicines Agency (“EMA”) implemented the centralized procedure for the approval of human drugs to facilitate marketing

authorizations that are valid throughout the EU.

This procedure results in a single marketing authorization granted by the European Commission

that is valid across the EU, as well as in Iceland, Liechtenstein and Norway, at times referred to as the European Economic Area.

centralized procedure is compulsory for human drugs that:

To obtain regulatory approval

of an investigational drug under European Union regulatory systems, we will be required to submit a marketing authorization application.

This application is similar to the BLA in the United States, with the exception of, among other things, country-specific document requirements.

Drugs can be authorized in the European Union by using (i) the centralized authorization procedure, (ii) the mutual recognition procedure,

(iii) the decentralized procedure or (iv) the national authorization procedure.

The European Medicines Agency

(“EMA”) implemented the centralized procedure for the approval of human drugs to facilitate marketing authorizations that

are valid throughout the EU.

This procedure results in a single marketing authorization granted by the European Commission that is valid

across the EU, as well as in Iceland, Liechtenstein and Norway, at times referred to as the European Economic Area.

The centralized procedure

is compulsory for human drugs that:

(i) are derived from biotechnology processes, such as genetic engineering;

contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative

diseases, autoimmune and other immune dysfunctions and viral diseases;

(ii) contain a new active

substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune

and other immune dysfunctions and viral diseases;

(iii) are officially designated orphan drugs;

and (iv) constitute

advanced-therapy medicines, such as gene-therapy, somatic cell-therapy or tissue-engineered medicines.

The centralized procedure may at

the request of the applicant also be used for human drugs that do not fall within the above mentioned categories if the human drug (a)

contains a new active substance which, on the date of entry into force of Regulation (EC) No.

726/2004, was not authorized in the European

Economic Area;

or (b) the applicant shows that the medicinal product constitutes a significant therapeutic, scientific or technical innovation

or that the granting of authorization in the centralized procedure is in the interests of patients at European Economic Area level.

the centralized procedure in the European Union, the maximum timeframe for the evaluation of a Marketing Authorization Application by

the EMA is 210 days, though the date count stops whenever the Committee for Medicinal Products for Human Use (“CHMP”) asks

the applicant for additional written or oral information, with adoption of the actual marketing authorization by the European Commission

Accelerated evaluation might be granted by the CHMP in exceptional cases, as when a medicinal product is expected to be of

a major public health interest from the point of view of therapeutic innovation, defined by three cumulative criteria:

(i) the seriousness

of the disease to be treated;

(ii) the absence of an appropriate alternative therapeutic approach;

and (iii) anticipation of exceptional

high therapeutic benefit.

In this circumstance, EMA ensures that the evaluation for the opinion of the CHMP is completed within 150 days

and the opinion issued thereafter.

Mutual Recognition Procedure (“MRP”) for the approval of human drugs is an alternative approach to facilitate individual national

marketing authorizations within the European Union.

Essentially, the MRP may be applied for all human drugs for which the centralized

procedure is not obligatory.

The MRP is applicable to the majority of conventional medicinal products and is based on the principle of

recognition of an already existing national marketing authorization by one or more EU Member States.

and (iv) constitute advanced-therapy medicines,

such as gene-therapy, somatic cell-therapy or tissue-engineered medicines.

The centralized procedure may at the request of the applicant

also be used for human drugs that do not fall within the above mentioned categories if the human drug (a) contains a new active substance

which, on the date of entry into force of Regulation (EC) No.

726/2004, was not authorized in the European Economic Area;

or (b) the applicant

shows that the medicinal product constitutes a significant therapeutic, scientific or technical innovation or that the granting of authorization

in the centralized procedure is in the interests of patients at European Economic Area level.

Under the centralized procedure

in the European Union, the maximum timeframe for the evaluation of a Marketing Authorization Application by the EMA is 210 days, though

the date count stops whenever the Committee for Medicinal Products for Human Use (“CHMP”) asks the applicant for additional

written or oral information, with adoption of the actual marketing authorization by the European Commission thereafter.

Accelerated evaluation

might be granted by the CHMP in exceptional cases, as when a medicinal product is expected to be of a major public health interest from

the point of view of therapeutic innovation, defined by three cumulative criteria:

(i) the seriousness of the disease to be treated;

the absence of an appropriate alternative therapeutic approach;

and (iii) anticipation of exceptional high therapeutic benefit.

circumstance, EMA ensures that the evaluation for the opinion of the CHMP is completed within 150 days and the opinion issued thereafter.

The Mutual Recognition Procedure

(“MRP”) for the approval of human drugs is an alternative approach to facilitate individual national marketing authorizations

within the European Union.

Essentially, the MRP may be applied for all human drugs for which the centralized procedure is not obligatory.

The MRP is applicable to the majority of conventional medicinal products and is based on the principle of recognition of an already existing

national marketing authorization by one or more EU Member States.

principal characteristic of the MRP is that the procedure builds on an already existing marketing authorization in an EU Member State

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The EU Member State in which the marketing authorization was first granted

will then act as the reference EU Member State.

will then act as the referenced EU Member State.

The EU Member States where the marketing authorization is subsequently applied for act

as concerned EU Member States.

MRP is based on the principle of the mutual recognition by EU Member States of their respective national marketing authorizations.

on a marketing authorization in the reference EU Member State, the applicant may apply for marketing authorizations in other EU Member

In such case, the reference EU Member State will update its existing assessment report about the drug in 90 days.

After the assessment

is completed, copies of the report are sent to all EU Member States, together with the approved summary of product characteristics, labeling

and package leaflet.

The concerned EU Member States then have 90 days to recognize the decision of the referenced EU Member State and

the summary of product characteristics, labeling and package leaflet.

National marketing authorizations will be granted within 30 days

after acknowledgement of the agreement.

any EU Member State refuses to recognize the marketing authorization by the reference EU Member State on the grounds of potential serious

risk to public health, the issue will be referred to a coordination group.

Within 60 days, EU Member States will, within the coordination

group, make all efforts to reach a consensus.

The MRP is based on the principle

of the mutual recognition by EU Member States of their respective national marketing authorizations.

Based on a marketing authorization

in the reference EU Member State, the applicant may apply for marketing authorizations in other EU Member States.

In such case, the reference

EU Member State will update its existing assessment report about the drug in 90 days.

After the assessment is completed, copies of the

report are sent to all EU Member States, together with the approved summary of product characteristics, labeling and package leaflet.

The concerned EU Member States then have 90 days to recognize the decision of the referenced EU Member State and the summary of product

characteristics, labeling and package leaflet.

National marketing authorizations will be granted within 30 days after acknowledgement

of the agreement.

If any EU Member State refuses

to recognize the marketing authorization by the reference EU Member State on the grounds of potential serious risk to public health, the

issue will be referred to a coordination group.

Within 60 days, EU Member States will, within the coordination group, make all efforts

to reach a consensus.

If this fails, the procedure is submitted to an EMA scientific committee for arbitration.

The opinion of this EMA Committee is then forwarded to the Commission, for the start of the decision-making process.

As in the centralized

procedure, this process entails consulting various European Commission Directorates General and the Standing Committee on Human Medicinal

Health Product Regulation in the Rest of World

countries outside of the EU, such as Canada, countries in Eastern Europe or Asia, the requirements governing the conduct of clinical trials,

product licensing, pricing and reimbursement vary from country to country.

In all cases, the clinical trials are conducted in accordance

with GCP and the other applicable regulatory requirements.

If we fail to comply with applicable foreign regulatory requirements, we may

be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls,

seizure of products, operating restrictions and criminal prosecution.

The opinion of this EMA

Committee is then forwarded to the Commission, for the start of the decision-making process.

As in the centralized procedure, this process

entails consulting various European Commission Directorates General and the Standing Committee on Human Medicinal Products.

Human Health Product

Regulation in the Rest of World

countries outside of the EU, such as the United Kingdom, Canada, countries in Eastern Europe or Asia, the requirements governing the conduct

of clinical trials, product licensing, pricing and reimbursement vary from country to country.

In all cases, the clinical trials are conducted

in accordance with GCP and the other applicable regulatory requirements.

If we fail to comply with applicable foreign regulatory requirements,

we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product

recalls, seizure of products, operating restrictions and criminal prosecution.

Other Regulatory Considerations

Marketing and Promotion.

Once an NDA or BLA is approved, or just before approval, a product will be subject to certain marketing

and promotional requirements.

For instance, the FDA closely regulates the post-approval marketing and promotion of pharmaceuticals, including

standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities

and promotional activities on the internet and elsewhere.

doctors are free to prescribe any pharmaceutical approved by the FDA for any use, a company can only make claims relating to the safety

and efficacy of a pharmaceutical that are consistent with the FDA approval, and is only allowed to actively market a pharmaceutical for

the particular indication approved by the FDA.

Changes to some of the conditions established in an approved application, including changes

in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or BLA or NDA/BLA

supplement before the change can be implemented.

A BLA supplement for a new indication typically requires clinical data similar to that

in the original application, and the FDA uses the same procedures and actions in reviewing supplements as it does in reviewing NDAs.

addition, any claims we make for our products in advertising or promotion must be appropriately balanced with important safety information

and otherwise be adequately substantiated.

Failure to comply with these requirements can result in adverse publicity, warning letters,

corrective advertising, injunctions and potential civil and criminal penalties.

Government regulators recently have increased their scrutiny

of the promotion and marketing of pharmaceuticals.

Anti-Kickback

and False Claims Laws.

In the United States, we are subject to complex laws and regulations pertaining to health care “fraud

and abuse,” including, but not limited to, the federal Anti-Kickback Statute, the federal False Claims Act, state false claims acts

and anti-kickback statutes, and other state and federal laws and regulations.

The Anti-Kickback Statute makes it illegal for any person,

including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer, or pay

any remuneration that is intended to induce the referral of business, including the purchase, order, or prescription of a particular pharmaceutical,

for which payment may be made under a federal health care program, such as Medicare or Medicaid.

federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including

Medicare and Medicaid) claims for items or services, including pharmaceuticals, that are false or fraudulent, claims for items or services

not provided as claimed, or claims for medically unnecessary items or services.

states have similar anti-kickback or false claims statutes that can be even broader than their federal counterparts.

There is also an

increasing number of state laws that require manufacturers to make reports to states on pricing and marketing information.

Many of these

laws contain ambiguities as to what is required to comply with the laws.

In addition, a federal law known as the Physician Payments Sunshine

Act requires pharmaceutical manufacturers to track and report to the federal government certain payments and other transfers of value

made to physicians and teaching hospitals and to disclose any physician ownership in the previous calendar year.

The data is published

annually in a publicly searchable database.

These laws may affect our sales, marketing, and other promotional activities by imposing administrative

and compliance burdens on us.

In addition, given the lack of clarity with respect to these laws and their implementation, our reporting

actions could be subject to the penalty provisions of the pertinent state, and soon federal, authorities.

Health Care Laws and Compliance Requirements.

In the United States, our activities are potentially subject to regulation by various

federal, state and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services (formerly the Health

Care Financing Administration), other divisions of the U.S.

Department of Health and Human Services (e.g., its Office of Inspector General),

Labeling, Marketing

and Promotion.

Once an NDA or BLA is approved, or just before approval, a product will be subject to certain marketing and promotional

requirements.

For instance, the FDA closely regulates the post-approval marketing and promotion of pharmaceuticals, including standards

and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and

promotional activities on the internet and elsewhere.

appropriate medical professionals are free to prescribe any pharmaceutical approved by the FDA for any use, a company can only make claims

relating to the safety and efficacy of a pharmaceutical that are consistent with the FDA approval, and is only allowed to actively market

a pharmaceutical for the particular indication approved by the FDA.

Changes to some of the conditions established in an approved application,

including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA

or BLA or NDA/BLA supplement before the change can be implemented.

A BLA supplement for a new indication typically requires clinical data

similar to that in the original application, and the FDA uses the same procedures and actions in reviewing supplements as it does in reviewing

In addition, any claims we

make for our products in advertising or promotion must be appropriately balanced with important safety information and otherwise be adequately

substantiated.

Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising, injunctions

and potential civil and criminal penalties.

Government regulators recently have increased their scrutiny of the promotion and marketing

of pharmaceuticals.

Anti-Kickback and False

In the United States, we are subject to complex laws and regulations pertaining to health care “fraud and abuse,”

including, but not limited to, the federal Anti-Kickback Statute, the federal False Claims Act, state false claims acts and anti-kickback

statutes, and other state and federal laws and regulations.

The Anti-Kickback Statute makes it illegal for any person, including a prescription

drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer, or pay any remuneration that is

intended to induce the referral of business, including the purchase, order, or prescription of a particular pharmaceutical, for which

payment may be made under a federal health care program, such as Medicare or Medicaid.

The federal False Claims Act

prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid)

claims for items or services, including pharmaceuticals, that are false or fraudulent, claims for items or services not provided as claimed,

or claims for medically unnecessary items or services.

Many states have similar anti-kickback

or false claims statutes that can be even broader than their federal counterparts.

There is also an increasing number of state laws that

require manufacturers to make reports to states on pricing and marketing information.

Many of these laws contain ambiguities as to what

is required to comply with the laws.

In addition, a federal law known as the Physician Payments Sunshine Act requires pharmaceutical manufacturers

to track and report to the federal government certain payments and other transfers of value made to physicians and teaching hospitals

and to disclose any physician ownership in the previous calendar year.

The data is published annually in a publicly searchable database.

These laws may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us.

In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to

the penalty provisions of the pertinent state, and soon federal, authorities.

Other Health Care Laws

and Compliance Requirements.

In the United States, our activities are potentially subject to regulation by various federal, state

and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services (formerly the Health Care Financing

Administration), other divisions of the U.S.

Department of Health and Human Services (e.g., its Office of Inspector General), the U.S.

Department of Justice and individual U.S.

Attorney offices within the Department of Justice, and state and local governments.

For example, sales, marketing and scientific/ educational grant programs must comply with the anti-fraud and abuse provisions of the Social

Security Act, the False Claims Act, the privacy provisions of the Health Insurance Portability and Accountability Act, and similar state

laws, each as amended.

Pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation

Act of 1990 and the Veterans Health Care Act of 1992, or VHCA, each as amended, among others.

sales, marketing and scientific/ educational grant programs must comply with the anti-fraud and abuse provisions of the Social Security

Act, the False Claims Act, the privacy provisions of the Health Insurance Portability and Accountability Act, and similar state laws,

each as amended.

Pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act

of 1990 and the Veterans Health Care Act of 1992, or VHCA, each as amended, among others.

If products are made available to authorized

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into government procurement contracts governed by the Federal Acquisition Regulations.

order to distribute products commercially, we must comply with state laws that require the registration of manufacturers and wholesale

distributors of pharmaceutical products in a state, including, in certain states, manufacturers and distributors that ship products into

the state even if such manufacturers or distributors have no place of business within the state.

Some states also impose requirements

on manufacturers and distributors to establish the pedigree of product in the chain of distribution, including some states that require

manufacturers and others to adopt new technology capable of tracking and tracing product as it moves through the distribution chain.

states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with

the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities or register their sales

representatives.

Other legislation has been enacted in certain states prohibiting pharmacies and other health care entities from providing

certain physician prescribing data to pharmaceutical companies for use in sales and marketing and prohibiting certain other sales and

marketing practices.

All of our activities are potentially subject to federal and state consumer protection, unfair competition and other

laws and regulations.

In order to distribute products

commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors of pharmaceutical

products in a state, including, in certain states, manufacturers and distributors that ship products into the state even if such manufacturers

or distributors have no place of business within the state.

Some states also impose requirements on manufacturers and distributors to

establish the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new

technology capable of tracking and tracing product as it moves through the distribution chain.

Several states have enacted legislation

requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public

disclosures on sales, marketing, pricing, clinical trials and other activities or register their sales representatives.

Other legislation

has been enacted in certain states prohibiting pharmacies and other health care entities from providing certain physician prescribing

data to pharmaceutical companies for use in sales and marketing and prohibiting certain other sales and marketing practices.

activities are potentially subject to federal and state consumer protection, unfair competition and other laws and regulations.

Our Intellectual Property

4 unchanged sentences

Currently, we do not own a patent, although we do possess a license for an immunotherapy

technology and two licenses for a lithium, salicylate and proline cocrystal technology from the University of South Florida.

extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where

patent protection is obtained.

The actual protection afforded by a patent, which can vary from country to country, depending on the type

of patent, the scope of its coverage and the availability of legal remedies in the country.

summary of the licensed patents is as follows:

technology and three licenses for a lithium, salicylate and proline cocrystal technology from the Licensor.

Patents extend for varying

periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection

The actual protection afforded by a patent, which can vary from country to country, depending on the type of patent, the

scope of its coverage and the availability of legal remedies in the country.

A summary of the licensed

patents is as follows:

Title of Patent

6 unchanged sentences

Composition of Matter

trade secret protection is an essential element of our business and we take security measures to protect our proprietary information and

trade secrets, there can be no assurance that our unpatented proprietary technology will afford us significant commercial protection.

We seek to protect our trade secrets by entering into confidentiality agreements with third parties, employees and consultants.

it is possible that these agreements may be breached or invalidated, and if so, there may not be an adequate corrective remedy available.

Accordingly, we cannot ensure that our employees, consultants or any third parties will not breach the confidentiality provisions in our

contracts, infringe or misappropriate our trade secrets and other proprietary rights or that measures we take to protect our proprietary

rights will be adequate.

the future, third parties may file claims asserting that our technologies or products infringe on their intellectual property.

predict whether third parties will assert such claims against us or against the licensors of technology licensed to us, or whether those

claims will harm our business.

If we are forced to defend ourselves against such claims, whether they are with or without merit and whether

they are resolved in favor of, or against, our licensors or ourselves, we may face costly litigation and the diversion of our management’s

attention and resources.

As a result of such disputes, we may have to develop costly non-infringing technology or enter into licensing

These agreements, if necessary, may be unavailable on terms acceptable to us, or at all.

We currently have

four trademarks registered with the USPTO that include our corporate name, Alzamend Neuro, two for our corporate slogan and one for our

While trade secret protection

is an essential element of our business and we take security measures to protect our proprietary information and trade secrets, there

can be no assurance that our unpatented proprietary technology will afford us significant commercial protection.

We seek to protect our

trade secrets by entering into confidentiality agreements with third parties, employees and consultants.

However, it is possible that

these agreements may be breached or invalidated, and if so, there may not be an adequate corrective remedy available.

Accordingly, we

cannot ensure that our employees, consultants or any third parties will not breach the confidentiality provisions in our contracts, infringe

or misappropriate our trade secrets and other proprietary rights or that measures we take to protect our proprietary rights will be adequate.

In the future, third parties

may file claims asserting that our technologies or products infringe on their intellectual property.

We cannot predict whether third parties

will assert such claims against us or against the licensors of technology licensed to us, or whether those claims will harm our business.

If we are forced to defend ourselves against such claims, whether they are with or without merit and whether they are resolved in favor

of, or against, our licensors or ourselves, we may face costly litigation and the diversion of our management’s attention and resources.

As a result of such disputes, we may have to develop costly non-infringing technology or enter into licensing agreements.

These agreements,

if necessary, may be unavailable on terms acceptable to us, or at all.

We currently have four trademarks

registered with the USPTO that include our corporate name, Alzamend Neuro, two for our corporate slogan and one for our trade name.

Our Competition

industry is highly competitive and subject to rapid and significant technological change.

While we have some, albeit limited, development

experience and scientific knowledge, we will face competition from both large and small pharmaceutical and biotechnology companies, including

specialty pharmaceutical companies and generic drug companies, as well as academic institutions, government agencies and research institutions,

among others.

competition will be determined in part by the potential indications for which our products are developed and ultimately approved by regulatory

It is likely that the timing of market introductions of some of our potential products or our competitors’ products

will be an important competitive factor.

Accordingly, the speed with which we can develop our products, conduct preclinical studies and

clinical trials to obtain approval and manufacture or obtain supplies of commercial quantities of any approved products should also be

important competitive factors.

We expect that competition among products approved for sale will be based on additional factors such as

product efficacy, safety, reliability, availability, price and patent position.

Employees and Human

Capital Resources

of April 30, 2022, we have four full-time employees (Stephan Jackman, our Chief Executive Officer, Lien T.

Escalona, our Chief Financial

Officer, Bradford Sullivan, our Director of Investor Relations, and Kraingsak Roajphlastien, our Senior Operations Manager) and four part-time

We also utilize independent consultants to assist us in our medical research and development projects.

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

Cragun, our Senior Vice President of Finance, David Katzoff,

our Chief Operating Officer and James M.

Turner, our Deputy General Counsel, work for us on a part-time basis.

human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing

and new employees, advisors and consultants.

The principal purposes of our equity and cash incentive plans are to attract, retain and

reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the

success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Scientific Advisory

scientific advisory board of leading researchers in the neurodegenerative and neuropathology fields presently consists of Dr.

Wisniewski, Dr.

Eric McDade and Dr.

Terri Hunter.

Wisniewski, MD is a board-certified neurologist and neuropathologist and is the Director of the NYU Pearl I.

Barlow Center for

Memory Evaluation and Treatment.

He operates an active research laboratory focusing on neurodegenerative disorders with a particular focus

on the mechanisms that drive amyloid deposition in Alzheimer’s and prion diseases.

This work has led to more than 300 peer-reviewed

publications, 28 issued patents, and continuous funding from the NIH for over 30 years.

Wisniewski’s career has been dedicated

to researching and developing treatments for numerous conditions including Alzheimer’s, mild cognitive impairment, Lewy body dementia,

frontotemporal dementia, prion disease, Jakob-Creutzfeldt disease, multiple system atrophy and memory loss.

This has led him to receive

numerous awards, honors and recognitions including being elected as a Distinguished Fellow in 2014, receiving the 2009 Prion Prize, the

Alzheimer’s Association Zenith Award in 2002 and being recognized every year by “Best Doctors in America” since 2008.

Wisniewski has been an Associate Editor for the Journal of Alzheimer’s Disease and Chief Editor of Frontiers in Aging Neuroscience

Wisniewski earned his M.D.

degree at King’s College London GKT School of Medical Education and completed his residencies

and chief residencies in neurology and neuropathology at NYU School of Medicine and New York-Presbyterian/Columbia University Medical

Center, respectively.

McDade, DO is a board-certified cognitive neurologist who has focused his activities on the evaluation of those with dementia syndromes

and on developing a clinical research program that focuses on using brain imaging and cerebrospinal fluid markers to identify those at

risk for Alzheimer’s.

Currently, Dr.

McDade is leveraging his clinical expertise to develop a cross-disciplinary team that combines

neuroimaging, clinical evaluations and basic science to better explore and translate work in the use of imaging and fluid biomarkers to

better understand the timing and relationship between measures of disease risk and progression.

The goal of this work is to identify better

measures and target for interventions and prevention for Alzheimer’s and has led to more than 76 peer-reviewed publications and

continuous funding from the NIH for over 10 years.

Additionally, Dr.

McDade is the Associate Director of the Dominantly Inherited Alzheimer

Network Trials Unit (“DIAN-TU”).

The DIAN-TU is a global network of families at risk for dominantly inherited Alzheimer’s,

a genetic form of Alzheimer’s and is pioneering prevention trials for this young-onset form of Alzheimer’s.

McDade earned

his doctorate at Chicago College of Osteopathic Medicine and a B.A.

degree in Psychology from Canisius College.

McDade completed an

internship at the University of Illinois College of Medicine in Chicago and his residency at the University of Maryland.

McDade received

his certification of Neurology from the American Board of Psychiatry and Neurology and Behavioral Neurology from the United Council of

Neurologic Subspecialties.

Hunter, PhD is a Technology Transfer Specialist at the United States Department of Veterans Affairs (USDVA).

Hunter joined the

USDVA in September 2020 and is responsible for managing life science technologies from initial disclosure through licensing and the maintenance

of the license.

Prior to joining the USDVA, Dr.

Hunter worked as a senior licensing manager in the technology transfer Office, patents

& licensing at the University of South Florida for 9 years (2010 to 2020).

From 2003 to 2010, Dr.

Hunter worked as a Research Scientist

at Moffitt Cancer Center in Tampa, Florida.

At Moffitt Dr.

Hunter performed translational research focused on cancer vaccines and combination

therapies for cancer.

She has also served as a DNA analyst/expert witness for the Florida Department of Law Enforcement.

Her post-doctoral

training was conducted at St.

Jude Children’s Research Hospital in Memphis, Tennessee form 1998-2000.

She received a B.S.

from Palm Beach Atlantic University in 1994, a M.S.

in Medical Sciences from the University of South Florida, College of Medicine in 1997,

in Medical Sciences from the University of South Florida, College of Medicine (1998, Medical Microbiology and Immunology Program).

Hunter’s research interests included microbial genetics, DNA analysis, cell signaling, immunobiology of cancer, gene-modified

tumor cell vaccine research:

specifically pre-clinical and clinical research and combination biologic and pharmacologic treatments for

entered into consulting agreements with Drs.

Wisniewski and McDade on May 1, 2019 and Dr.

Hunter on April 4, 2022.

The annual cash compensation

under the consulting agreements consists of $12,000 per scientific advisory board member.

Wisniewski and McDade were awarded stock

options to purchase 50,000 shares at $1.00 per share with a two-year term, vesting over two years.

Hunter was awarded stock options

to purchase 50,000 shares at $2.42 per share with a two-year term, vesting over two years.

Our industry is highly competitive

and subject to rapid and significant technological change.

While we have some, albeit limited, development experience and scientific knowledge,

we will face competition from both large and small pharmaceutical and biotechnology companies, including specialty pharmaceutical companies

and generic drug companies, as well as academic institutions, government agencies and research institutions, among others.

Our competition will be determined in part by

the potential indications for which our products are developed and ultimately approved by regulatory authorities.

It is likely that the

timing of market introductions of some of our potential products or our competitors’ products will be an important competitive factor.

Accordingly, the speed with which we can develop our products, conduct preclinical studies and clinical trials to obtain approval and

manufacture or obtain supplies of commercial quantities of any approved products should also be important competitive factors.

that competition among products approved for sale will be based on additional factors such as product efficacy, safety, reliability, availability,

price and patent position.

Employees and Human Capital Resources

As of April 30, 2023, we have

four full-time employees and three part-time employees.

We also utilize independent consultants to assist us in our medical research and

development projects.

Our human capital resources

objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors

and consultants.

The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the

granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating

such individuals to perform to the best of their abilities and achieve our objectives.

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-K

Item 1. Business