What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-07-27 compared with 2022-07-19 · 355 added, 427 removed, 213 unchanged (79% of the section changed)

8 unchanged sentences

and “Special Note Regarding Forward-Looking Statements,” and elsewhere in this Annual Report.

We were incorporated on February

26, 2016 as Alzamend Neuro, Inc.

were incorporated on February 26, 2016, as Alzamend Neuro, Inc.

under the laws of the State of Delaware.

We were formed to acquire and commercialize patented intellectual

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

Existing Alzheimer’s treatments only

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

We have developed a novel approach in an

attempt to combat Alzheimer’s through immunotherapy.

We were formed to acquire and

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

With our two product candidates, we aim to bring treatment or cures not only for Alzheimer’s, but also, bipolar disorder (“BD”),

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

Existing Alzheimer’s treatments

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

We have developed

a novel approach to combat Alzheimer’s through immunotherapy.

Critical Accounting Policies and Estimates

21 unchanged sentences

· Fair Value of Common Stock.

the subsection titled “– Common Stock Valuations” below;

See the subsection titled “– Common Stock Valuations”

· Risk-Free Interest Rate.

The risk-free

interest rate is based on the U.S.

Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected

term of the option;

The risk-free interest rate is based on the U.S.

Treasury zero

coupon issues in effect at the time of grant for periods corresponding with the expected term of the option;

· Expected Volatility.

do not have an extensive trading history for our common stock, the expected volatility was estimated based on the average volatility for

comparable publicly traded life sciences companies over a period equal to the expected term of the stock option grants.

The comparable

companies were chosen based on the similar size, stage in life cycle or area of specialty.

We will continue to apply this process until

a sufficient amount of historical information regarding the volatility of our own stock price becomes available;

Because we do not have an extensive trading history for our common

stock, the expected volatility was estimated based on the average volatility for comparable publicly traded life sciences companies over

a period equal to the expected term of the stock option grants.

Comparable companies were chosen based on the similar size, stage in life

cycle or area of specialty.

We will continue to apply this process until a sufficient amount of historical information regarding the volatility

of our own stock price becomes available;

· Expected Term.

The expected term

represents the period that the stock-based awards are expected to be outstanding and is determined using the simplified method (based

on the mid-point between the vesting date and the end of the contractual term), as we do not have sufficient historical data to use any

other method to estimate expected term;

The expected term represents the period that the stock-based awards are expected

to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual

term), as we do not have sufficient historical data to use any other method to estimate expected term;

· Expected Dividend Yield.

never paid dividends on our common stock and have no plans to pay dividends on our common stock.

Therefore, we used an expected dividend

yield of zero.

We have never paid dividends on our common stock and have no plans

to pay dividends on our common stock.

Therefore, we used an expected dividend yield of zero.

Certain of such assumptions

4 unchanged sentences

Prior to our IPO in June 2021, there was no public market for our common stock, and, as a result, the fair value of the shares

of common stock underlying our share-based awards was estimated on each grant date by our Board of Directors.

of common stock underlying our stock-based awards was estimated on each grant date by our Board of Directors.

To determine the fair value

3 unchanged sentences

These factors included, but were not limited to:

· our results of operations and financial position,

including our levels of available capital resources;

· our stage of development and material risks related

to our business;

· our results of operations and financial position, including our levels of available capital resources;

· our stage of development and material risks related to our business;

· progress of our research and development activities;

· our business conditions and projections;

· the valuation of publicly traded companies in

the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer companies;

· the lack of marketability of our common stock

as a private company;

· the prices at which we sold shares of our common

stock to outside investors in arms-length transactions;

· the likelihood of achieving a liquidity event

for our security holders, such as an initial public offering or a sale of our company, given prevailing market conditions;

· the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as

recently completed mergers and acquisitions of peer companies;

· the lack of marketability of our common stock as a private company;

· the prices at which we sold shares of our common stock to outside investors in arms-length transactions;

· the likelihood of achieving a liquidity event for our security holders, such as an initial public offering

or a sale of our company, given prevailing market conditions;

· trends and developments in our industry;

· external market conditions affecting the life

sciences and biotechnology industry sectors.

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

Income Taxes.

5 unchanged sentences

temporary differences are expected to be recovered or settled.

accordance with Internal Revenue Code § 382 (“IRC § 382”),

the future deductibility of our net operating losses (“NOLs”) may be subject to an annual limitation in the event of a change

in control as defined by applicable regulations.

We have yet to complete a formal study to confirm NOLs are not limited in utilization

per IRC § 382 and may reduce applicable deferred tax assets upon completion

of such a study, in future periods.

In accordance with Internal

Revenue Code §382 (“IRC §382”), the future deductibility of our net operating losses (“NOLs”) may be

subject to an annual limitation in the event of a change in control as defined by applicable regulations.

We have yet to complete a formal

study to confirm NOLs are not limited in utilization per IRC §382 and may reduce applicable deferred tax assets upon completion of

such a study, in future periods.

The impact of an uncertain

7 unchanged sentences

statements included elsewhere in this report for additional information.

Emerging Growth Company

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment

of the JOBS Act, until such time as those standards apply to private companies.

We have elected to use this extended transition period

for complying with new or revised accounting standards that have different effective dates for public and private companies until the

earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended

transition period provided in the JOBS Act.

As a result, these financial statements may not be comparable to companies that comply with

the new or revised accounting pronouncements as of public company effective dates.

Emerging Growth Company Status

We are an emerging growth

company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth

companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as

those standards apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting

standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer

an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements

as of public company effective dates.

Plan of Operations

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

We submitted an IND application for AL001 to the FDA on June 30, 2021.

On July 28, 2021, we announced receipt of FDA “Study May

Proceed” letter for a Phase I study under our IND application for AL001, a lithium-based ionic cocrystal oral therapy for patients

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

August 17, 2021, we announced that we have contracted Altasciences Clinical Kansas (“Altasciences”) to conduct a six-month

Phase I relative bioavailability study for AL001 for dementia related to Alzheimer’s beginning in September 2021.

The Phase I first-in-human

study is for the purpose of determining potential clinically safe and appropriate dosing for AL001 in future studies.

The Phase I study

investigated the pharmacokinetics (the movement of drug through the body) of lithium following a single dose of AL001 (the “study

drug”) compared to a typical single dose of a marketed 300 mg immediate-release lithium carbonate capsule (the “comparator”

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

The lithium and salicylate components of AL001

have been given within the amounts already approved for use in patients.

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

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

of the comparator, lithium carbonate.

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

and efficacy trials involving Alzheimer’s patients.

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

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

study for AL001 for dementia related to Alzheimer’s.

On December 17, 2021, we announced that we received positive topline data from

our Phase I clinical trial for AL001.

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

The Phase I study

was for the purpose of determining potential clinically safe and appropriate dosing for our ongoing Phase IIA MAD study.

AL001 is a lithium-delivery

it is a lithium-salicylate-L-proline engineered ionic co-crystal under development as an oral treatment for patients with dementia

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

We have an additional preclinical

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

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

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

Our preclinical program included a toxicologic evaluation,

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

On July 30, 2021, we announced

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

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

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

AL002 is a patented method using a mutant-peptide

sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability of a patient’s immunological system to combat

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

amyloid contents.

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

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

We recently announced

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

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

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

possible after the approval of the IND by the FDA.

On March 28, 2022, we announced

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

The full data set builds upon topline data previously reported on December

These data affirmed that dose-adjusted relative bioavailability analyses of the rate and extent of lithium absorption in plasma

indicate that AL001 at 150 mg dosage is bioavailability to the marketed 300 mg lithium carbonate product and the shapes of the lithium

plasma concentration versus time curves are similar.

AL001 salicylate plasma concentrations are observed to be well tolerated and consistently

within safe limits and the safety profiles of both AL001 and the marketed lithium carbonate capsule were benign.

During Phase I first-in-human

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

dose proposed by the inventors as likely appropriate for Alzheimer’s treatment when given three times daily.

Currently, marketed

immediate-release lithium carbonate 300 mg are given three times daily;

for example, lithium carbonate 300 mg three times daily is a dose

commonly used for bipolar affective disorders.

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

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

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

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

Moreover, the data confirms AL001’s

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

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

Such findings may allow us

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

Bioequivalence may

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

benchmark for safety.

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

being dosed three times daily in the ongoing Phase IIA MAD study.

On April 4, 2022, we announced

the appointment of Dr.

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

During her tenure at the

University of South Florida, Dr.

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

candidates, AL001 and AL002.

On April 11, 2022, we announced

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

IIA MAD study in patients with mild to moderate Alzheimer’s.

The Phase IIA study, which commenced enrollment in May 2022, is for

the purposes of evaluating the safety and tolerability of AL001 under multiple dose, steady-state conditions, and to determine the maximum

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

On April 28, 2022, we announced

that DPL has made an additional investment in our company.

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

trial for AL001.

Based on the achievement of this milestone, under the March 12, 2021 securities purchase agreement, Alzamend sold an

additional 2,666,667 shares of its common stock to DPL for $4 million, or $1.50 per share, and issued to DPL warrants to acquire 1,333,333

shares of its common stock with an exercise price of $3.00 per share.

On May 5, 2022, we announced

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

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

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

Lithium has been well characterized

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

Lithium dosing for the MAD cohorts is based

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

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

equivalent value (150 mg three times daily, daily total of 450 mg).

In each cohort, consisting of six active and two placebo patients

(as per randomization), multiple ascending doses will be administered three times daily for 14 days under fasted conditions (at least

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

The lithium and salicylate components of AL001 will be given within

the amounts already approved for use in patients.

Up to 40 subjects will complete the Phase IIA trial.

The maximum tolerated dose will

then be used for further studies.

Topline data are expected in December 2022 from this study.

On May 17, 2022, we announced

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

MDD and PTSD.

On July 18, 2022, we announced that we received a written response from the FDA.

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.

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

· Advance clinical development of AL001 for Alzheimer’s, BD, MDD and PTSD treatment;

· Advance clinical development of ALZN002 for Alzheimer’s treatment;

· Expand our pipeline of pharmaceuticals to include additional indications for AL001 and delivery methods;

· Focus on translational and functional endpoints to efficiently develop product candidates;

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

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) 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 this lithium formulation 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.

On May 5, 2022, we initiated

a multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic clinical trial of AL001 in patients

with mild to moderate Alzheimer’s and healthy subjects.

We completed the Phase IIA clinical trial in March 2023 and announced positive

topline data in June 2023.

announced that we successfully identified a maximum tolerated dose (“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 BP 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, BP 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.

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 indication by the end of 2023.

After FDA permission to proceed on the INDs, 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.

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 application to the FDA for ALZN002 and received a “study may proceed” letter on October

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

ALZN002 is a proprietary “active” immunotherapy product, which means it is produced by each patient’s immune system.

It consists of autologous DCs that are 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 being 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 could provide a safer approach 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 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

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

requires us to raise additional capital to fund our operations.

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

therapeutics requires us to raise additional capital to fund our operations.

Because our working capital

15 unchanged sentences

(14,870,466 )

OTHER EXPENSE, NET

Gain on extinguishment of debt

(12,319,535 )

OTHER INCOME (EXPENSE), NET

Interest expense

Interest expense - related party

Interest income - related party

Total other expense, net

Gain on extinguishment of debt

Total other income (expense), net

$ (14,878,167 )

3 unchanged sentences

Basic and diluted weighted average common shares outstanding

* Not meaningful

We were formed on February

26, 2016 to acquire and commercialize patented intellectual property and know-how to prevent, treat and cure the crippling and deadly

disease, Alzheimer’s.

We currently have only two product candidates, AL001 and AL002.

These products are in the preclinical stage

of development and will require extensive clinical study, review and evaluation, regulatory review and approval, significant marketing

efforts and substantial investment before either or both of them, and any respective successors, will provide us with any revenue.

did not generate any revenues during the years ended April 30, 2022 and 2021, and we do not anticipate that we will generate revenue for

the foreseeable future.

We currently have only two

product candidates, AL001 and ALZN002.

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

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

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

We did not generate any revenues during the years ended April

30, 2023 and 2022, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and Development Expenses

2 unchanged sentences

As reflected in the table below, research

and development expenses primarily consisted of professional fees, licenses and fees, as well as stock compensation expense:

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

For the Year Ended April 30,

Professional fees

Clinical trial fees

Licenses and fees

2 unchanged sentences

Total research and development expenses

* Not meaningful

Professional Fees

During the years ended April

30, 2022 and 2021, we reported incurring professional fees of $3.9 million and $1.2 million, respectively, which were principally comprised

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

The increase relates to professional

fees incurred related to the Phase I study for AL001 for dementia related to Alzheimer’s.

30, 2023 and 2022, we incurred professional fees of $4.6 million and $3.7 million, respectively, which were principally comprised of professional

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

The increase relates to professional fees

incurred related to the Phase IIA study for AL001 for dementia related to Alzheimer’s.

Clinical Trial Fees

During the years ended April

30, 2023 and 2022, we incurred clinical trial fees of $2.5 million and $0.2 million, respectively, which were principally comprised of

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

Licenses and Fees

3 unchanged sentences

During the year ended April

30, 2022, we incurred $715,000 in license fees related to completion of the Phase I study for AL001 for dementia related to Alzheimer’s.

During the year ended April 30, 2021, we incurred $50,000 in license fees related to achieving the milestone of conducting pre-IND discussions

with the FDA regarding AL001.

30, 2023, we incurred $50,000 in license fees related to the IND filing for ALZN002.

During the year ended April 30, 2022, we incurred

$715,000 in license fees related to the completion of the Phase I study for AL001 for dementia related to Alzheimer’s.

Stock Compensation Expense

During the years ended April

30, 2022 and 2021, we incurred $423,000 and $87,000, respectively, in research and development stock compensation expense related to stock

option grants to consultants.

30, 2023 and 2022, we incurred $(43,000) and $423,000, respectively, in research and development stock compensation expense related to

stock option grants to consultants.

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

4 unchanged sentences

of settling such obligations with cash payments.

The gain in research and development stock compensation expense for the year ended April

30, 2023 was a result of forfeitures of stock options previously expensed.

Other Research and Development Expenses

During the years ended April

30, 2023 and 2022, we incurred other fees of $0.4 million and $0.2 million, respectively, which were principally comprised of scientific

materials required for our clinical trials.

General and Administrative Expenses

General and administrative

expenses for the years ended April 30, 2022 and 2021 were $7.1 million and $3.6 million, respectively.

As reflected in the table below,

general and administrative expenses primarily consisted of the following expense categories:

General and administrative expenses for the years ended April 30, 2023

and 2022 were $7.4 million and $7.1 million, respectively.

As reflected in the table below, general and administrative expenses primarily

consisted of the following expense categories:

stock compensation expense;

as well as salaries and benefits.

salary and benefits;

professional fees;

marketing fees;

travel and entertainment;

as well as board of director fees.

For the years ended April 30, 2023 and 2022, the remaining general and administrative

3 unchanged sentences

Stock compensation expense

Professional fees

Salary and benefits

Licenses and fees

Management services

Professional fees

Marketing fees

Insurance expense

Travel and entertainment

Board of director fees

Other general and administrative expenses

Total general and administrative expenses

* Not meaningful

Stock Compensation Expense

1 unchanged sentence

30, 2023 and 2022, we incurred general and administrative stock compensation expense of $3.6 million and $4.0 million, respectively,

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

LLC (“Spartan Capital”).

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

Vesting of options differs

based on the terms of each option.

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

the shares issued for services at their intrinsic value on the date of issuance.

Stock-based compensation is a non-cash expense because

we settle these obligations by issuing shares of our common stock from authorized shares instead of settling such obligations with cash

Salaries and Benefits

related to stock option grants to executives, employees and consultants.

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

the grant date.

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

We valued the options at their date of grant utilizing the

Black Scholes option pricing model.

We valued the shares issued for services at their intrinsic value on the date of issuance.

Stock compensation

is a non-cash expense because we settle these obligations by issuing shares of our common stock from authorized shares instead of settling

such obligations with cash payments.

Salary and Benefits

The second largest component

of general and administrative expenses is salaries and benefits expense.

of general and administrative expenses is salary and benefits expense.

During the years ended April 30, 2023 and 2022, we incurred $1.0

and $452,000, respectively, in employee-related expenses.

As of April 30, 2022, we had four full-time and four part-time employees.

Insurance Expense

During the year ended April

30, 2022, we incurred insurance expense of $714,000, which was primarily directors and officers insurance that was required as part of

the IPO process.

million and $873,000, respectively, in employee-related expenses.

As of April 30, 2023, we had four full-time and three part-time employees.

Professional Fees

2 unchanged sentences

Year Ended April 30, 2023

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

services with respect to general corporate matters.

In December 2017, we paid to Spartan Capital a consulting fee of $1.4 million

for the services to be rendered over the 60-month term of this consulting agreement.

During the year ended April 30, 2022, we recorded

an expense of $248,000 as a result of this consulting agreement.

· During the year ended April 30, 2022, we incurred $249,000 in audit and tax fees, $89,000 in legal fees,

$88,000 in related party consulting and $40,000 in investor relations expenses.

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

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

In December 2017, we paid to Spartan

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

the year ended April 30, 2023, we recorded an expense of $187,000 as a result of this consulting agreement.

· During the year ended April 30, 2023, we incurred $189,000 in consulting fees, mainly for Sarbanes-Oxley

compliance, $187,000 in audit and tax fees, $126,000 in legal fees, $50,000 in related party consulting and $22,000 in investor relations

Year Ended April 30, 2022

· During the year ended April 30, 2021, we recorded an expense of $280,000 in connection with the five-year

consulting agreement with Spartan Capital.

· In June 2019, we entered into a two-year uplisting agreement (the “Uplisting Agreement”) with

Spartan Capital pursuant to which Spartan Capital agreed to provide consulting services with respect to a potential public offering.

under this agreement consisted of a cash payment in the amount of $475,000 and the issuance of 500,000 shares of common stock.

amortizing the cost of these services over the two-year term of the Uplisting Agreement.

During the year ended April 30, 2021, we recorded

an expense of $263,000 in connection with the Uplisting Agreement.

The Uplisting Agreement was terminated on March 3, 2021.

· During the year ended April 30, 2021, we incurred $107,000 in audit fees, $26,000 in legal fees and $24,000

in investor relations expenses.

· During the year ended April 30, 2022, we incurred $249,000 in audit and tax fees, $248,000 in Spartan

Capital consulting fees, $89,000 in legal fees, $88,000 in related party consulting and $40,000 in investor relations expenses.

Marketing Fees

During the years ended April

30, 2023 and 2022, we incurred marketing fees of $743,000 and $18,000, respectively, which was primarily expenses related to the marketing

and brand development agreement with AULT.

Insurance Expense

During the years ended April

30, 2023 and 2022, we incurred insurance expense of $587,000 and $714,000, respectively, which was primarily directors and officers insurance.

Other Expense, Net

Gain on Extinguishment of Debt

In May 2020, we received an

advance of $4,000 and loan proceeds in the amount of $62,000 under the Paycheck Protection Program (“PPP”).

The PPP, established

as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses

for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business.

The loans and accrued interest are forgivable

after the earlier of (i) 24 weeks after the loan disbursement date and (ii) December 31, 2020;

as long as the borrower uses the loan proceeds

for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels.

We used the proceeds for purposes

consistent with the PPP.

In December 2020, we met the conditions and received forgiveness of the advance of $4,000 and loan of $62,000

and recorded the benefit as a gain on extinguishment of debt.

Interest Expense

Interest expense was $8,000

for the year ended April 30, 2022 related to the convertible promissory note issued in August 2020, including non-cash interest expense

of $13,000 recorded from the amortization of debt discount.

Interest expense was $142,000 for the year ended April 30, 2021 related to

the convertible promissory note issued in August 2020, including non-cash interest expense of $124,000 recorded from the amortization

of debt discount.

for the year ended April 30, 2023 related to the financing of D&O insurance.

Interest expense was $47,000 for the year ended April

30, 2022 related to the convertible promissory note issued in August 2020, including non-cash interest expense of $13,000 recorded from

the amortization of debt discount.

Current and Deferred Income Taxes

As of April 30, 2022 and 2021, we had deferred

tax assets totaling $10.1 million and $4.4 million, respectively.

The ultimate realization of deferred tax assets is dependent upon the

existence, or generation, of taxable income in the periods when those temporary differences and net operating loss carryovers are deductible.

Management considers the scheduled reversal of deferred tax liabilities, taxes paid in carryover years, projected future taxable income,

available tax planning strategies, and other factors in making this assessment.

Based on available evidence, management believes it is

less likely than not that all of the deferred tax assets will be realized.

As of April 30, 2023 and 2022, we had deferred tax assets totaling

$10.8 million and $10.1 million, respectively.

The ultimate realization of deferred tax assets is dependent upon the existence, or generation,

of taxable income in the periods when those temporary differences and net operating loss carryovers are deductible.

Management considers

the scheduled reversal of deferred tax liabilities, taxes paid in carryover years, projected future taxable income, available tax planning

strategies, and other factors in making this assessment.

Based on available evidence, management believes it is more likely than not that

some or all of the deferred tax assets will not be realized.

Accordingly, we have established a 100% valuation allowance.

As a result of the full valuation allowance, we did not record an income tax benefit during the years ended April 30, 2022 and 2021.

of the full valuation allowance, we did not record an income tax benefit for the years ended April 30, 2023 and 2022.

Liquidity and Capital Resources

The accompanying financial

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

As of April 30, 2022, we had cash of $14.1

million and an accumulated deficit of $29.2 million.

We have incurred recurring losses and reported losses for the year ended April 30,

2022 totaling $12.4 million.

In the past, we have financed our operations principally through sales of promissory notes and equity securities.

statements have been prepared assuming that the Company will continue as a going concern.

The Company has incurred recurring net losses

and operations have not provided sufficient cash flows.

We believe that we will continue to incur operating and net losses each quarter

until at least the time we begin significant deliveries of our products.

We believe our current

cash on hand is insufficient to fund our planned operations through one year after the date the financial statements are issued.

factors create substantial doubt about our ability to continue as a going concern for at least one year after the date that our audited

financial statements are issued.

Our inability to continue as a going concern could have

a negative impact on our company, including our ability to obtain needed financing.

We intend to finance our

future development activities and our working capital needs largely through the sale of equity securities with some additional funding

from other sources, including debt financing, until such time as funds provided by operations are sufficient to fund working capital requirements.

Our financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts

and classifications of liabilities that might be necessary should we be unable to continue as a going concern.

As of April 30, 2023, we

had cash of $5.1 million and an accumulated deficit of $44.1 million.

We have incurred recurring losses and reported losses for the year

ended April 30, 2023 totaling $14.9 million.

In the past, we have financed our operations principally through sales of equity securities.

In March of 2021, we entered

into a securities purchase agreement with DPL, pursuant to which we agreed to sell an aggregate of 6,666,667 shares of common stock for

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

On March 9, 2021, DPL paid $4 million, less the

$1.8 million in prior advances and the surrender for cancellation of the $50,000 convertible promissory note, previously issued to BitNile,

for an aggregate of 2,666,667 shares of common stock.

Under the terms of the securities purchase agreement, DPL (i) purchased, in July

2021, an additional 1,333,333 shares of common stock upon FDA approval of our IND for our Phase I clinical trials for AL001 for a purchase

price of $2 million;

and (ii) on April 26, 2022, purchase 2,666,667 shares of common stock upon completion of these Phase I clinical trials

for AL001 for a purchase price of $4 million.

In addition, we issued DPL warrants to purchase an aggregate of 6,666,667 shares of common

stock at an exercise price of $3.00 per share.

Finally, we agreed that for a period of 18 months following the date of the payment of

the final tranche of $4 million on April 26, 2022, DPL will have the right to invest an additional $10 million on the same terms, except

that no specific milestones have been determined with respect to the additional $10 million as of the date of this Annual Report.

into a securities purchase agreement with AL, pursuant to which we sold an aggregate of 6,666,667 shares of common stock for an aggregate

of $10 million, or $1.50 per share, which sales were made in tranches between March 2021 and April 2022.

In addition, we issued AL warrants

to purchase an aggregate of 3,333,333 shares of common stock at an exercise price of $3.00 per share.

Finally, we agreed that for a period

of 18 months following the date of the payment of the final tranche of $4 million on April 26, 2022, AL will have the right to invest

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

million as of the date of this Annual Report.

On June 17, 2021, we announced

9 unchanged sentences

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

· successful enrollment in and completion of clinical

· our ability to establish agreements with third-party

manufacturers for clinical supply for our clinical trials and, if our product candidates are approved, commercial manufacturing;

· our ability to maintain our current research

and development programs and establish new research and development programs;

· addition and retention of key research and development

· our efforts to enhance operational, financial,

and information management systems, and hire additional personnel, including personnel to support development of our product candidates;

· negotiating favorable terms in any collaboration,

licensing, or other arrangements into which we may enter and performing our obligations in such collaborations;

· the timing and amount of milestone and other

payments we may receive under our collaboration arrangements;

· our eventual commercialization plans for our

product candidates;

· the costs involved in prosecuting, defending,

and enforcing patent claims and other intellectual property claims;

· successful enrollment in and completion of clinical trials;

· our ability to establish agreements with third-party manufacturers for clinical supply for our clinical

trials and, if our product candidates are approved, commercial manufacturing;

· our ability to maintain our current research and development programs and establish new research and development

· addition and retention of key research and development personnel;

· our efforts to enhance operational, financial, and information management systems, and hire additional

personnel, including personnel to support development of our product candidates;

· negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter

and performing our obligations in such collaborations;

· the timing and amount of milestone and other payments we may receive under our collaboration arrangements;

· our eventual commercialization plans for our product candidates;

· the costs involved in prosecuting, defending, and enforcing patent claims and other intellectual property

· the costs and timing of regulatory approvals.

4 unchanged sentences

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

We expect to continue to incur

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

to fund our development and commercial operations.

However, based on our current business plan, we believe that our cash and cash equivalents

at April 30, 2022, are sufficient to meet our anticipated cash requirements during the twelve-month period subsequent to the issuance

of the financial statements included in this Annual Report.

The following table summarizes our cash flows for

1 unchanged sentence

For the Year Ended April 30,

Net cash provided by (used in):

Net cash (used in) provided by:

Operating activities

3 unchanged sentences

Financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

$ (8,922,952 )

Operating Activities

1 unchanged sentence

30, 2023, net cash used in operating activities was $8.9 million.

This consisted primarily of a net loss of $12.4 million, partially offset by

non-cash charges of $4.4 million in stock-based compensation expense and an increase in our net operating assets and liabilities of

This consisted primarily of a net loss of $14.9 million, partially offset

by non-cash charges of $3.6 million in stock-based compensation expense and an increase in our net operating assets and liabilities of

$2.3 million.

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

expenses and a decrease in prepaid expenses and other current assets.

Prepaid expenses decreased primarily from the amortization of

Spartan Capital consulting fees in the amount of $280,000 and offering costs in the amount of $353,000.

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

liabilities and a decrease in prepaid expenses – related party.

During the year ended April

30, 2022, net cash used in operating activities was $6.6 million.

This consisted primarily of a net loss of $5.0 million, offset by non-cash

charges of $2.4 million in stock-based compensation expense and a decrease in our net operating assets and liabilities of $152,000.

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

prepaid expenses and other current assets.

This consisted primarily of a net loss of $12.4 million, partially offset

by non-cash charges of $4.4 million in stock-based compensation expense and an increase in our net operating assets and liabilities of

$1.3 million.

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

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

Investing Activities

During the year ended April

30, 2022, net cash used in investing activities was $106,000, from the purchase of equipment and machinery.

We purchased a CliniMACS

Plus instrument to be used on the ALZN002 project at the University of Miami.

The machine was purchased from Miltenyi Biotec and

is utilized to separate the monocytes from blood.

We purchased this equipment to streamline the development of DCs to create the AL002

vaccine for patients in the 24-months Phase I/II clinical trials.

During the year ended April 30, 2021, net

cash provided by investing activities was $101,000.

This consisted of proceeds from repayment of notes receivable from Avalanche, a related

In August 2020, the principal and accrued interest on the AVLP Note was paid in full.

During the year ended April 30, 2022, net cash used in investing activities

was $106,000, from the purchase of equipment and machinery.

We purchased a CliniMACS Plus instrument to be used on the ALZN002 project

at the University of Miami.

The machine was purchased from Miltenyi Biotec and is utilized to separate monocytes from blood.

this equipment to streamline the development of DCs to create the ALZN002 vaccine for patients in the Phase I/IIA clinical trial.

Financing Activities

During the year ended April

30, 2023, net cash provided by financing activities was $200 from the exercise of stock options.

During the year ended April

30, 2022, net cash provided by financing activities was $18.9 million.

This consisted primarily of proceeds from our initial public offering

of $12.9 million, net of costs, and proceeds of $6 million from the issuance of common stock and warrants to DPL.

On July 28, 2021, we

received from the FDA a “Study May Proceed” letter for a Phase IA study under our IND application for AL001.

achievement of this milestone, we sold an additional 1,333,333 shares of common stock to DPL for $2 million, or $1.50 per share, and issued

to DPL warrants to acquire 666,667 shares of our common stock with an exercise price of $3.00 per share.

On March 28, 2022, we a received

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

Based on the achievement of this milestone, we sold an additional 2,666,667

shares of our common stock to DPL for $4.0 million, or $1.50 per share, and issued to DPL warrants to acquire 1,333,333 shares of our

common stock with an exercise price of $3.00 per share.

During the year ended April 30, 2021, net

cash provided by financing activities was $4.5 million.

This consisted primarily of proceeds from the issue of common stock and short-term

advances from DPL.

of $12.9 million, net of costs, and proceeds of $6 million from the issuance of common stock and warrants to AL.

Contractual Obligations

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 Licenses”), 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.

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 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.

On May 1, 2016, we entered

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

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

States Patent No.

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

There are certain initial

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

into with the Licensor.

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

the licensed technology for AL002 while the license agreements for AL001 require that we pay combined royalty payments of 4.5% on net

sales of products developed from the licensed technology for AL001.

We have already paid an initial license fee of $200,000 for AL002

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

As an additional licensing fee for the license of AL002, the Licensor received 3,601,809

shares of our common stock.

As an additional licensing fee for the license of the AL001 technologies, the Licensor received 2,227,923

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 United States Patent No.

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

7, 2009 and granted May 29, 2012.

On 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 AL001 are $25,000 in 2023, $45,000 in 2024 and $70,000 in 2025 and every year thereafter,

for the life of the agreement.

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

for the life of the respective agreement.

Additionally, we are required to pay milestone payments on the due dates to the Licensor for

the license of the AL001 technologies and for the AL002 technology, as follows:

Original AL001 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

1 unchanged sentence

Completed June 2021

ND application filing

IND application filing

Completed December 2021

5 unchanged sentences

8 years from the effective date of the agreement

Upon FDA approval

Upon FDA NDA approval

* Milestone met and completed

AL002 License:

ALZN002 License:

Upon IND application filing

12 months from IND application filing date

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

5 unchanged sentences

* Milestone met and completed

We have met the pre-IND meeting,

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

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.

On June 10, 2020, we

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

One of the additional

licenses is for the treatment of neurodegenerative diseases excluding Alzheimer’s and the other license is for the treatment of

psychiatric diseases and disorders.

There are certain license fees and milestone payments required to be paid pursuant to the terms of

the June AL001 License Agreements.

Under each of the June AL001 License Agreements, a royalty payment of 3% is required on net sales of

products developed from the licensed technology.

For the two additional AL001 licenses, in the aggregate, we paid initial license fees

Additionally, under each of the June AL001 License Agreements, we are required to pay milestone payments on the due dates

to the Licensor for the license of the technology, as follows:

Additional 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

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

4 unchanged sentences

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

financial statements required by this Item 8 are included in this Annual Report following Item 16 hereof.

As a smaller reporting company,

we are not required to provide supplementary financial information.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Because we are a smaller reporting

company, this section is not applicable.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis