What changed in this filing

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Item 1. Financial Statements

2023-12-15 compared with 2023-09-13 · 342 added, 284 removed, 363 unchanged (63% of the section changed)

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Condensed Balance Sheets

July 31, 2023

April 30, 2023

CURRENT ASSETS

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stated value per share, 1,360,000

shares designated;

nil 0 issued and outstanding as of July 31, 2023 and April 30, 2023

nil 0 issued and outstanding as of October 31, 2023 and April 30, 2023

Common stock, $ 0.0001 par value:

300,000,000 shares authorized;

96,940,124 issued and outstanding as of July 31, 2023 and April 30, 2023

6,469,657 and 6,462,675 issued and outstanding as of October 31, 2023 and April 30, 2023, respectively

Additional paid-in capital

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TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

( 2,682,493 )

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

The accompanying notes are an integral part of

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Condensed Statements of Operations

For the Three Months Ended July 31,

For the Three Months Ended October 31,

For the Six Months Ended October 31,

OPERATING EXPENSES

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( 3,106,403 )

( 6,427,652 )

( 6,141,945 )

OTHER EXPENSE, NET

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$ ( 3,109,991 )

$ ( 6,433,799 )

$ ( 6,147,065 )

Basic and diluted net loss per common share

Basic and diluted weighted average common shares outstanding

Basic and diluted weighted average common shares

The accompanying notes are an integral part of

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Condensed Statements of Stockholders’

For the Three Months Ended October 31, 2023

Series A Convertible

Note Receivable for

Preferred Stock

Common Stock -

Related Party

BALANCES, July 31, 2023

$ ( 14,883,295 )

$ ( 47,600,428 )

$ ( 112,883 )

Issuance of common stock for cash, net of issuance costs

Issuance of common stock for restricted stock awards

Subscription receivable payment received

Stock-based compensation to employees and consultants

( 2,906,033 )

BALANCES, October 31, 2023

$ ( 14,876,293 )

$ ( 50,506,461 )

$ ( 2,682,493 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Alzamend Neuro, Inc.

Condensed Statements of Stockholders’

(Deficit) Equity

For the Three Months Ended July 31, 2023

For the Three Months Ended October 31, 2022

Series A Convertible

Note Receivable

Note Receivable for

Preferred Stock

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Related Party

BALANCES, July 31, 2022

$ ( 14,883,295 )

$ ( 32,231,569 )

Issuance of common stock for restricted stock awards

Stock-based compensation to employees and consultants

( 3,109,991 )

BALANCES, October 31, 2022

$ ( 14,883,295 )

$ ( 35,341,560 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Alzamend Neuro, Inc.

Condensed Statements of Stockholders’

(Deficit) Equity

For the Six Months Ended October 31, 2023

Series A Convertible

Note Receivable for

Preferred Stock

Common Stock -

Related Party

BALANCES, April 30, 2023

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$ ( 44,072,662 )

Stock-based compensation

Issuance of common stock for cash, net of issuance costs

Issuance of common stock for restricted stock awards

Subscription receivable payment received

Stock-based compensation to employees and consultants

( 6,433,799 )

BALANCES, July 31, 2023

BALANCES, October 31, 2023

$ ( 14,876,293 )

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Alzamend Neuro, Inc.

Condensed Statements of Stockholders’ (Deficit) Equity

For the Three Months Ended July 31, 2022

Condensed Statements of Stockholders’

For the Six Months Ended October 31, 2022

Series A Convertible

Note Receivable

Note Receivable for

Preferred Stock

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$ ( 29,194,495 )

Stock-based compensation

Issuance of common stock for restricted stock awards

Stock-based compensation to employees and consultants

( 6,147,065 )

BALANCES, July 31, 2022

BALANCES, October 31, 2022

$ ( 14,883,295 )

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Condensed Statements of Cash Flows

For the Three Months Ended July 31,

For the Six Months Ended October 31,

Cash flows from operating activities:

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Cash flows from investing activities:

Purchase of machinery

Purchase of equipment

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from the issuance of common stock, net

Net cash provided by financing activities

Net decrease in cash

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The Company expects to continue to incur net losses in the foreseeable

Reverse Stock Split

On October 27, 2023, pursuant to the authorization provided by the

Company’s stockholders at a special meeting of stockholders, the Company filed an amendment to the Certificate of Incorporation

to effectuate a reverse stock split of the Company’s issued and outstanding Common Stock by a ratio of one-for-fifteen (the “Reverse

The Reverse Split did not affect the number of authorized shares of Common Stock, preferred stock or their respective par

value per share.

As a result of the Reverse Split, each fifteen shares of Common Stock issued and outstanding prior to the Reverse Split

were converted into one share of common stock.

The Reverse Split became effective in the State of Delaware on October 31, 2023.

amounts in these condensed financial statements have been updated for all periods presented to reflect the Reverse Split.

LIQUIDITY AND GOING CONCERN

The accompanying financial

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

As of July 31, 2023, the Company had cash

of $ 1.7 million, an accumulated deficit of $ 47.6 million and stockholders’ deficit of $ 113,000 .

For the three months ended July

31, 2023, the Company had a net loss of $ 3.5 million and cash used in operating activities of $ 3.3 million.

Historically, the Company

has financed its operations principally through issuances of equity and debt instruments.

Company believes its current cash on hand is not sufficient to fund its planned operations through one year after the date the financial

statements are issued.

These factors create substantial doubt about the Company’s ability to continue as a going concern for at

least one year after the date that these condensed financial statements are issued.

The Company’s inability to

continue as a going concern could have a negative impact on the company, including our ability to obtain

needed financing.

The Company’s 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 it be unable to continue as a going

The accompanying condensed financial statements have been prepared

on the basis that the Company will continue as a going concern.

As of October 31, 2023, the Company had cash of $200,000, an accumulated

deficit of $50.5 million and stockholders’ deficit of $2.7 million.

For the three and six months ended October 31, 2023, the Company

had net losses of $2.9 million and $6.4 million, respectively.

For the six months ended October 31, 2023, cash used in operating activities

was $4.8 million.

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

The Company believes its current

cash on hand is not sufficient to fund its planned operations through one year after the date the condensed financial statements are issued.

These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the

date that these condensed financial statements are issued.

The Company’s inability to continue as a going concern could have

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

The Company’s condensed

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 it be unable to continue as a going concern.

In order to continue as a

going concern, the Company will need to raise additional funds.

The Company plans to seek additional funding through public equity, private

equity and debt financings.

Additional funds may also be received from the exercise of warrants (Note 7) and the receipt of funds from

the note receivable (Note 4).

The Company has raised funds subsequent to the quarter end through an

“at-the-market” offering, and plans to seek additional funding through public equity, including the “at-the-market”

offering, private equity and debt financings.

Additional funds may also be received from the exercise of warrants (Note 7) and the receipt

of funds from the note receivable (Note 4).

The terms of any additional financing may adversely affect the holdings or rights of the Company’s

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Basis of Presentation

The accompanying condensed

financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States

of America (“U.S.

GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim

reports of companies filing as a smaller reporting company.

These financial statements should be read in conjunction with the audited

financial statements and notes thereto contained in the Company’s Report on Form 10-K for the year ended April 30, 2023, filed with

the SEC on July 27, 2023.

In the opinion of management, the accompanying condensed interim financial statements include all adjustments

necessary in order to make the financial statements not misleading.

The results of operations for interim periods are not necessarily

indicative of the results to be expected for the full year or any other future period.

Certain notes to the financial statements that

would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported

in the Company’s Report on Form 10-K have been omitted.

The accompanying condensed balance sheet at April 30, 2023 has been derived

from the audited balance sheet at April 30, 2023 contained in such Form 10-K.

The accompanying condensed financial statements of the Company have

been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

the rules of the Securities and Exchange Commission (“SEC”) applicable to interim reports of companies filing as a smaller

reporting company.

These condensed financial statements should be read in conjunction with the audited financial statements and notes

thereto contained in the Company’s Report on Form 10-K for the year ended April 30, 2023, filed with the SEC on July 27, 2023.

the opinion of management, the accompanying condensed interim financial statements include all adjustments necessary in order to make

the condensed financial statements not misleading.

The results of operations for interim periods are not necessarily indicative of the

results to be expected for the full year or any other future period.

Certain notes to the condensed financial statements that would substantially

duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Company’s

Report on Form 10-K have been omitted.

The accompanying condensed balance sheet at April 30, 2023 has been derived from the audited balance

sheet at April 30, 2023 contained in such Form 10-K.

Accounting Estimates

The preparation of financial

statements, in conformity with U.S.

GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of

expenses during the reporting period.

The Company’s significant accounting policies that involve significant judgment and estimates

include stock-based compensation, warrant valuation, and valuation of deferred income taxes.

The preparation of condensed financial statements, in conformity with

GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of expenses during the

reporting period.

The Company’s significant accounting policies that involve significant judgment and estimates include stock-based

compensation, warrant valuation, and valuation of deferred income taxes.

Actual results could differ from those estimates.

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

As of July 31, 2023

As of October 31, 2023

and April 30, 2023, the Company had no cash equivalents.

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liabilities resulting from imbedded derivatives associated with certain warrants to purchase Common Stock.

The fair values of warrants are determined

using the Black-Scholes valuation model, a “Level 3” fair value measurement, based on the estimated fair value of Common Stock,

volatility based on the historical volatility data of similar companies, considering the industry, products and market capitalization

of such other entities, the expected life based on the remaining contractual term of the warrants and the risk free interest rate based

on the implied yield available on U.S.

The fair values of warrants

are determined using the Black-Scholes valuation model, a “Level 3” fair value measurement, based on the estimated fair value

of Common Stock, volatility based on the historical volatility data of similar companies, considering the industry, products and market

capitalization of such other entities, the expected life based on the remaining contractual term of the warrants and the risk free interest

rate based on the implied yield available on U.S.

Treasury Securities with a maturity equivalent to the warrants’ contractual life.

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conditions as of the reporting date.

The Company recognizes stock-based compensation

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

The Company’s stock-based compensation for restricted stocks is based upon the estimated fair value of the Common Stock.

The Company recognizes stock-based

compensation expense for restricted stock units on a straight-line basis over the requisite service period and account for forfeitures

as they occur.

The Company’s stock-based compensation for restricted stocks is based upon the estimated fair value of the Common

The Black-Scholes option pricing

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Liabilities from Equity and FASB ASC 815, Derivatives and Hedging, depending on the specific terms of the warrant

Loss per Common Share

per Common Share

The Company utilizes FASB

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shared in the earnings of the entity.

Since the effects of outstanding stock options, restricted stock units

and warrants are anti-dilutive in the periods presented, shares of Common Stock underlying these instruments have been excluded from the

computation of loss per common share.

The following sets forth the number of shares of Common Stock underlying

outstanding stock options, restricted stock units and warrants that have been excluded from the computation of loss per common share:

Since the effects of outstanding

stock options, restricted stock units and warrants are anti-dilutive in the periods presented, shares of Common Stock underlying these

instruments have been excluded from the computation of loss per common share.

The following sets forth the

number of shares of Common Stock underlying outstanding stock options, restricted stock units and warrants that have been excluded from

the computation of loss per common share:

Schedule of antidilutive securities excluded from computation of earnings per share

For the Three Months Ended July 31,

For the Six Months Ended October 31,

Stock options (1)

Restricted stock units

(1) The Company has excluded 1,500,000 and 2,000,000 stock options for the three months ended July 31, 2023

and 2022, respectively, with an exercise price of $0.0004, from its anti-dilutive securities as these shares have been included in our

determination of basic loss per share as they represent shares issuable for little or no cash consideration upon the satisfaction of certain

conditions pursuant to FASB ASC 260-10-45-14.

(1) The Company has excluded 100,000 and 333,333 stock options for the six months ended October 31, 2023 and

2022, respectively, with an exercise price of $0.006, from its anti-dilutive securities as these shares have been included in our determination

of basic loss per share as they represent shares issuable for little or no cash consideration upon the satisfaction of certain conditions

pursuant to FASB ASC 260-10-45-14.

Recent Accounting Standards

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or results of operations upon adoption.

The Company has considered

all other recently issued accounting standards and does not believe the adoption of such standards will have a material impact on its

financial statements.

The Company has considered all other recently issued accounting standards

and does not believe the adoption of such standards will have a material impact on its condensed financial statements.

NOTE RECEIVABLE FOR COMMON STOCK, RELATED PARTY

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

At July 31, 2023 and April 30, 2023, the outstanding balance of the note receivable was $ 14,883,295 .

ALSF is wholly owned by

Ault Life Sciences, Inc.

At October 31, 2023 and April 30, 2023, the outstanding balance of the note receivable was $ 14,876,293 and $ 14,883,295 , respectively.

ALSF is wholly owned by Ault Life Sciences, Inc.

ALSI is majority owned by Ault & Company, Inc.

(“Ault & Co.”).

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

PREPAID EXPENSES

AND OTHER CURRENT ASSETS

EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other

current assets are as follows:

current assets were as follows:

Schedule of prepaid expenses and other current assets

July 31, 2023

October 31, 2023

April 30, 2023

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Total prepaid expenses and other current assets

During the three months

ended July 31, 2023, the Company prepaid $ 313,000 for clinical trial fees related to ALZN002.

During the year ended April 30, 2023, the

Company prepaid $ 936,000 for clinical trial fees related to ALZN002.

Prepaid clinical trial fees at July 31, 2023 and April 30, 2023 represented

the unused portion of the prepaid clinical trial fees.

On June 14, 2023, the Company purchased directors’ and officers’ insurance

for 12 months in the amount of $ 337,000 .

Prepaid insurance at July 31, 2023 represented the unamortized portion of annual insurance premium.

Prepaid clinical trial fees

at October 31, 2023 and April 30, 2023 represented the unused portion of the prepaid clinical trial fees.

On June 14, 2023, the Company purchased directors’ and officers’

insurance for 12 months in the amount of $ 337,000 .

Prepaid insurance at October

31, 2023 represented the unamortized portion of directors’ and officers’ insurance.

STOCK-BASED COMPENSATION

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The Plan provides for the issuance of a

maximum of 12,500,000

shares of Common Stock to be offered to the Company’s directors, officers, employees, and consultants.

On March 1, 2019,

the Company’s stockholders approved an additional 7,500,000

shares to be available for issuance under the Plan.

Options granted under the Plan have an exercise price equal to or greater

than the fair value of the underlying Common Stock at the date of grant and become exercisable based on a vesting schedule determined

at the date of grant.

The options expire between five and 10

years from the date of grant.

Restricted stock awards granted under the Plan are subject to a vesting period determined at the

maximum of 833,333 shares of Common Stock to be offered to the Company’s directors, officers, employees, and consultants.

1, 2019, the Company’s stockholders approved an additional 500,000 shares to be available for issuance under the Plan.

Options granted

under the Plan have an exercise price equal to or greater than the fair value of the underlying Common Stock at the date of grant and

become exercisable based on a vesting schedule determined at the date of grant.

The options expire between five and 10 years from the

date of grant.

Restricted stock awards granted under the Plan are subject to a vesting period determined at the date of grant.

2021 Stock Incentive

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Stock Subject to the 2021

The maximum number of shares of Common Stock that may be issued under the 2021 Plan is 10,000,000 shares, which number

will be increased to the extent that compensation granted under the 2021 Plan is forfeited, expires or is settled for cash (except as

otherwise provided in the 2021 Plan).

Substitute awards (awards made or shares issued by the Company in assumption of, or in substitution

or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company that the Company

acquires or any subsidiary of the Company or with which the Company or any subsidiary combines) will not reduce the shares authorized

for grant under the 2021 Plan, nor will shares subject to a substitute award be added to the shares available for issuance or transfer

under the 2021 Plan.

The maximum number of shares of Common Stock that may be issued under the 2021 Plan is 666,667 shares, which number will

be increased to the extent that compensation granted under the 2021 Plan is forfeited, expires or is settled for cash (except as otherwise

provided in the 2021 Plan).

Substitute awards (awards made or shares issued by the Company in assumption of, or in substitution or exchange

for, awards previously granted, or the right or obligation to make future awards, in each case by a company that the Company acquires

or any subsidiary of the Company or with which the Company or any subsidiary combines) will not reduce the shares authorized for grant

under the 2021 Plan, nor will shares subject to a substitute award be added to the shares available for issuance or transfer under the

All options that the Company

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A summary of stock option

activity for the three months ended July 31, 2023 is presented below:

activity for the six months ended October 31, 2023 is presented below:

Schedule of share-based payment arrangement, option, activity

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Options expired

Balance at July 31, 2023

Options vested and expected to vest at July 31, 2023

Options exercisable at July 31, 2023

Balance at October 31, 2023

Options vested and expected to vest at October 31, 2023

Options exercisable at October 31, 2023

The aggregate intrinsic value

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their options.

Restricted stock unit activity

for the six months ended October 31, 2023 is presented below:

Weighted Average

Grant Date Fair Value

Unvested at April 30, 2023

Unvested at October 31, 2023

Performance Contingent

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These awards have an exercise price of $22.50 per share.

These awards have multiple separate market triggers for vesting based

upon either (i) the successful achievement of tiered target closing prices on a national securities exchange for 90 consecutive trading

days later than 180 days after the Company’s initial public offering (“IPO”) for its Common Stock, or (ii) tiered target

prices for a change in control transaction.

These awards have multiple separate market triggers for vesting

based upon either (i) the successful achievement of tiered target closing prices on a national securities exchange for 90 consecutive

trading days later than 180 days after the Company’s initial public offering (“IPO”) for its Common Stock, or (ii) tiered

target prices for a change in control transaction.

The target prices ranged from $150 per share to $600 per share.

In the event any of the stock

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

On November 22, 2022, the Compensation Committee of the Board modified

the performance criteria for these awards.

The target price range is now $10 per share to $20 per share.

Additionally, if the stock price

milestones are now not achieved by November 27, 2026, as opposed to within three years, the unvested portion of the performance options

will be reduced by 25%.

Due to the significant risks and uncertainties associated with achieving the market-contingent awards, as of July

31, 2023, the Company believes that the achievement of the requisite performance conditions is not probable and, as a result, no compensation

cost has been recognized for these awards.

On November 29, 2022, the Compensation Committee of the Board granted

2,000,000 performance-based stock option to the Chief Executive Officer at an exercise price of $1.17 per share, of which 50% vest upon

the completion and announcement of topline data from the Company’s Phase II clinical trial of AL001 within three years from grant

date and the remaining 50% vest upon the completion and announcement of topline data from the Company’s Phase I/IIA clinical trial

of ALZN002 within four years from the grant date.

As of July 31, 2023, the Company believes that it is probable that the performance condition

of the completion and announcement of topline data from the Company’s Phase II clinical trial of AL001 will be achieved and had

recognized the related stock-based compensation during the three months ended January 31, 2023.

As of July 31, 2023, the Company believes

that the achievement of the second performance condition is not probable and, as a result, no compensation cost has been recognized related

to Phase I/IIA of ALZN002.

In the event any of

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

On November 22, 2022, the

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

The target price range is now $150 per share to

$300 per share.

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

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

Due to the significant risks and uncertainties associated with

achieving the market-contingent awards, as of October 31, 2023, the Company believed that the achievement of the requisite performance

conditions was not probable and, as a result, no compensation cost has been recognized for these awards.

On November 29, 2022, the

Compensation Committee of the Board granted 133,333 performance-based stock option to the Chief Executive Officer at an exercise price

of $17.55 per share, of which 50% vest upon the completion and announcement of topline data from the Company’s Phase II clinical

trial of AL001 within three years from grant date and the remaining 50% vest upon the completion and announcement of topline data from

the Company’s Phase I/IIA clinical trial of ALZN002 within four years from the grant date.

During the three months ended January

31, 2023, the Company believed that it was probable that the performance condition of the completion and announcement of topline data

from the Company’s Phase II clinical trial of AL001 would be achieved and had recognized the related stock-based compensation.

of October 31, 2023, the Company believed that the achievement of the second performance condition was not probable and, as a result,

no compensation cost has been recognized related to Phase I/IIA of ALZN002.

Performance Contingent

Stock Options Granted to TAMM Net

On March 23, 2021, the Company issued performance-based stock options

to certain team members at TAMM Net, Inc.

(“TAMM Net”) to purchase an aggregate of 450,000 shares of Common Stock at a per

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

50% vest upon completion of Phase I/IIA of ALZN002 by December 31, 2022.

On January 19, 2023, the Board modified the performance criteria for

these awards.

The remaining 50% of the grant will now vest upon the completion and announcement of topline data of the first cohort from

a Phase I/IIA clinical trial of ALZN002 on/or before March 31, 2024.

Due to the significant risks and uncertainties associated with achieving

the completion of Phase I/IIA for ALZN002, as of July 31, 2023, the Company believes that the achievement of the requisite performance

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

On March 23, 2021, the Company

issued performance-based stock options to certain team members at TAMM Net, Inc.

(“TAMM Net”) to purchase an aggregate of

30,000 shares of Common Stock at a per share exercise price of $22.50 per share, of which 50% would vest upon the completion of Phase

I of AL001 by March 31, 2022, and the remaining 50% would vest upon completion of Phase I/IIA of ALZN002 by December 31, 2022.

The performance goal of completing Phase I of AL001 was achieved on

March 22, 2022, and the Company recognized stock-based compensation related to the completion of Phase I of AL001 over the implied service

period to complete this milestone.

On January 19, 2023, the Board

modified the performance criteria for these awards.

The remaining 50% of the grant will now vest upon the completion and announcement

of topline data of the first cohort from a Phase I/IIA clinical trial of ALZN002 on/or before March 31, 2024.

Due to the significant risks

and uncertainties associated with achieving the completion of Phase I/IIA for ALZN002, as of October 31, 2023, the Company believed that

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

these awards related to ALZN002.

Performance Contingent

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On October 14, 2021, the Company

issued performance-based stock options to two consultants to purchase an aggregate of 200,000 shares of Common Stock with an exercise

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

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

issued performance-based stock options to two consultants to purchase an aggregate of 13,333 shares of Common Stock with an exercise price

of $36.30 per share, of which 3,333 vest upon completion of each of the Phase II clinical trials of AL001 for a BD indication, AL001 for

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

On January 19, 2023, the Board

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– Alzheimer’s disease.

As of July 31, 2023, the Company

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

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

During the three months ended

October 31, 2023, the Company filed INDs for BD and MDD and received “Study May Proceed” letter for BD in October 2023 and

MDD in November 2023.

As a result, 50% of the performance grant vested and the Company recognized stock-based compensation related to

the vesting and the probability of achieving the MDD criteria.

As of October 31, 2023, the Company believed that the achievement of the

remaining requisite performance conditions was not probable and, as a result, no compensation cost has been recognized for these awards

related to Phase II of AL001 – post-traumatic stress disorder and ALZN002 – Alzheimer’s disease.

Stock-Based Compensation

The Company’s results

of operations include expenses relating to stock-based compensation for three months ended July 31, 2023 and 2022, that were comprised

of operations included expenses relating to stock-based compensation for three and six months ended October 31, 2023 and 2022 comprised

Schedule of stock-based compensation

For the Three Months Ended July 31,

For the Three Months Ended October 31,

For the Six Months Ended October 31,

Research and development

General and administrative

As of July 31, 2023, total

unamortized stock-based compensation expense related to unvested employee and non-employee awards that are expected to vest was $ 1.0 million.

The weighted-average period over which such stock-based compensation expense will be recognized is approximately 1.3 years.

Total stock-based compensation

As of October 31, 2023, total

unamortized stock-based compensation expense related to unvested employee and non-employee awards that are expected to vest was $ 518,000 .

The weighted-average period over which such stock-based compensation expense will be recognized was approximately 1.7 years.

The following table summarizes

information about Common Stock warrants outstanding and exercisable at July 31, 2023:

information about Common Stock warrants outstanding and exercisable at October 31, 2023:

Schedule of common stock warrants outstanding

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Contractual Obligations

On July 2, 2018,

the Company 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 the Company 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, the Company entered into the First Amendments to the AL001 Licenses, on March 30, 2021, the Company entered into

the Second Amendments to the AL001 Licenses and on June 8, 2023, the Company entered into the Third Amendments to the AL001 Licenses (collectively,

the “AL001 License Agreements”).

The Third Amendments to the AL001 Licenses modified the timing of the payments license fees.

The AL001 License Agreements require that the Company pay combined

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

The Company has already

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

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

Licensor received 2,227,923 shares of the Company’s 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 of the 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,

the Company entered into a Standard Exclusive License Agreement with Sublicensing Terms for ALZN002 with the Licensor (the “ALZN002

License”), pursuant to which the Licensor granted the Company a royalty bearing exclusive worldwide license limited to the field

of Alzheimer’s Immunotherapy and Diagnostics, under United States Patent No.

8,188,046, entitled “Amyloid Beta Peptides and

Methods of Use”, filed April 7, 2009 and granted May 29, 2012.

On August 18, 2017, the Company entered into the First Amendment

to the ALZN002 License, on May 7, 2018, the Company entered into the Second Amendment to the ALZN002 License, on January 31, 2019, the

Company entered into the Third Amendment to the ALZN002 License, on January 24, 2020, the Company entered into the Fourth Amendment to

the ALZN002 License, on March 30, 2021, the Company entered into the Fifth Amendment to the ALZN002 License and on April 17, 2023, the

Company entered into the Sixth Amendment to the ALZN002 License (collectively, the “ALZN002 License Agreement”).

Amendments to the ALZN002 License modified the timing of the payments license fees.

The ALZN002 License Agreement requires the Company to pay royalty payments

of 4% on net sales of products developed from the licensed technology for ALZN002.

The Company has 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 the Company’s common stock.

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

$40,000 on the second anniversary of the 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, the Company 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 the Company a royalty bearing exclusive

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

On March 30, 2021, the Company entered into the First Amendments to the November AL001 License and on April 17, 2023, the Company

entered into the Second Amendments to the November AL001 License (collectively, the “November AL001 License Agreements”).

The Second Amendments to the November AL001 License modified the timing of the payments license fees.

The November AL001 License Agreements require the Company to pay royalty

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

The Company paid

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

Minimum royalties for November AL001 License Agreements are $40,000 on

July 2, 2018, the Company 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 the Company

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, the Company entered into the First Amendments to the AL001 Licenses, on March 30, 2021,

the Company entered into the Second Amendments to the AL001 Licenses and on June 8, 2023, the Company entered into the Third Amendments

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

The Third Amendments to the AL001 Licenses modified

the timing of the payments for the license fees.

AL001 License Agreements require that the Company pay combined royalty payments of 4.5% on net sales of products developed from

the licensed technology for AL001.

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

As an additional

licensing fee for the license of the AL001 technologies, the Licensor received 148,528 shares of 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

of the 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, the Company entered into a Standard Exclusive License

Agreement with Sublicensing Terms for ALZN002 with the Licensor (the “ALZN002 License”), pursuant to which the Licensor granted

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

United States Patent No.

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

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

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

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

the Fifth Amendment to the ALZN002 License, on April 17, 2023, the Company entered into the Sixth Amendment to the ALZN002 License and

on December 11, 2023, the Company entered into the Seventh Amendment to the ALZN002 License (collectively, the “ALZN002 License

The Seventh Amendment to the ALZN002 License modified the timing of the payments for the license fees.

ALZN002 License Agreement requires the Company to pay royalty payments of 4% on net sales of products developed from the licensed

technology for ALZN002.

The Company has already paid an initial license fee of $200,000 for ALZN002.

As an additional licensing

fee for the license of ALZN002, the Licensor received 240,120 shares of Common Stock.

Minimum royalties for ALZN002 are $20,000 on

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

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

the third anniversary of the first commercial sale and every year thereafter, for the life of the ALZN002 License Agreement.

November 19, 2019, the Company 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 the Company a royalty bearing

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

diseases and disorders.

On March 30, 2021, the Company entered into the First Amendments to the November AL001 License and on April 17,

2023, the Company entered into the Second Amendments to the November AL001 License (collectively, the “November AL001 License Agreements”).

The Second Amendments to the November AL001 License modified the timing of the payments for the license fees.

November AL001 License Agreements require the Company to pay royalty payments of 3% on net sales of products developed from

the licensed technology for AL001 in those fields.

The Company 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 of the 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.

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

18 unchanged sentences

Upon completion of first clinical trial

24 months from completion of first Phase II clinical trial

Upon first patient treated in a Phase III clinical trial

2 unchanged sentences

* Milestone met and completed

ALZN002 License:

Completed January 2022

Upon IND application filing

September 2023

Upon first dosing of patient in Phase I clinical trial

24 months from completion of first Phase I clinical trial

Upon completion of first Phase II clinical trial

12 months from completion of first Phase II clinical trial

Upon first dosing of patient in first Phase I clinical trial

Upon completion of first Phase IIb clinical trial

Upon first patient treated in a Phase III clinical trial

7 years from the effective date of the agreement

Upon FDA Biologics License Application approval

Upon first commercial sale

* Milestone met and completed

AL001 Licenses:

36 months from completion of first Phase II clinical trial

Upon first patient treated in a Phase III clinical trial

1 unchanged sentence

First commercial sale

EQUITY TRANSACTIONS

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

7 unchanged sentences

Preferred Stock

As of July 31, 2023, there

As of October 31, 2023, there

were no shares of Series A Convertible Preferred Stock issued or outstanding.

ALSF Investment

On April 30, 2019, the Company

and ALSF entered into a securities purchase agreement (the “SPA”) for the purchase of 10,000,000 shares of Common Stock for

a total purchase price of $ 15,000,000 , or $ 1.50 per share with 5,000,000 warrants with a 5 -year life and an exercise price of $ 3.00 per

and ALSF entered into a securities purchase agreement (the “SPA”) for the purchase of 666,667 shares of Common Stock for a

total purchase price of $ 15,000,000 , or $ 22.50 per share with 333,333 warrants with a 5 -year life and an exercise price of $ 45.00 per

share and vesting upon issuance.

8 unchanged sentences

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

In March 2021, the Company

entered into a securities purchase agreement with Ault Lending, LLC, formerly known as Digital Power Lending, LLC (“Ault Lending”)

pursuant to which the Company agreed to sell an aggregate of 6,666,667 shares of Common Stock for an aggregate of $ 10 million, or $ 1.50

per share, which sales will be made in tranches.

On March 9, 2021, Ault Lending paid $ 4 million, less the $ 1.8 million in prior advances

and the surrender for cancellation of a $ 50,000 convertible promissory note held by BitNile, for an aggregate of 2,666,667 shares of Common

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

upon approval by the FDA of the Company’s IND for its Phase IA clinical trials for AL001 for a purchase price of $2 million, and

(ii) purchased 2,666,667 shares of Common Stock upon the completion of these Phase IA clinical trials for AL001 for a purchase price of

In addition, the Company issued to Ault Lending warrants to purchase 3,333,333 shares of Common Stock at an exercise price

of $3.00 per share.

The term of the warrants is five years.

Finally, the Company agreed

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

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

to the additional $ 10 million as of the date of this Quarterly Report.

RELATED PARTY TRANSACTIONS

November 2022, the Company entered into a marketing and brand development agreement with Ault Alliance, Inc.

(“AULT”), effective

August 1, 2022, whereby AULT will provide various marketing services over twelve months valued at $1.4 million.

The Company had the right

to pay the fee in cash or shares of its common stock with a value of $1.50 per share.

On November 11, 2022, the Company elected to pay

the fee with 933,334 shares of its common stock.

The Company recorded the value of the agreement using the closing price of the Company’s

common stock on November 11, 2022, and will amortize the expense over twelve months beginning in August 2022.

At July 31, 2023,

the balance of related party prepaid expenses was zero.

SUBSEQUENT EVENTS

At-the-Market Offering

On September 8, 2023, the

Company entered into an At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC,

as sales agent to sell shares of its Common stock, having an aggregate offering price of up to approximately $ 9.8 million (the “Shares”)

from time to time, through an “at the market offering” (the “ATM Offering”) as defined in Rule 415 under the Securities

Act of 1933, as amended (the “Securities Act”).

On September 8, 2023, the Company filed a prospectus supplement with the SEC

relating to the offer and sale of up to approximately $ 9.8 million in shares of common stock in the ATM Offering.

The offer and sale of the Shares will be made

pursuant to the Company’s effective “shelf” registration statement on Form S-3 and an accompanying base prospectus

contained therein (Registration Statement No.

333-273610) filed with the SEC on August 2, 2023 and declared effective by the SEC

on August 10, 2023.

Company entered into an At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC, as sales agent to sell shares of

its Common stock, having an aggregate offering price of up to approximately $9.8 million (the “Shares”) from time to time,

through an “at the market offering” (the “ATM Offering”) as defined in Rule 415 under the Securities Act of 1933,

as amended (the “Securities Act”).

On September 8, 2023, the Company filed a prospectus supplement with the SEC relating to

the offer and sale of up to approximately $9.8 million in shares of Common Stock in the ATM Offering.

The offer and sale of the

Shares will be made pursuant to the Company’s effective “shelf” registration statement on Form S-3 and an accompanying

base prospectus contained therein (Registration Statement No.

333-273610) filed with the SEC on August 2, 2023 and declared effective

by the SEC on August 10, 2023.

During the six months ended

October 31, 2023, the Company sold an aggregate of 6,149 shares of Common Stock pursuant to the ATM Offering for gross proceeds of $19,000.

OTHER RELATED PARTY TRANSACTIONS

In November 2022, the Company

entered into a marketing and brand development agreement with Ault Alliance, Inc.

(“AULT”), effective August 1, 2022, whereby

AULT will provide various marketing services over twelve months valued at $1.4 million.

The Company had the right to pay the fee in cash

or shares of its common stock with a value of $22.50 per share.

On November 11, 2022, the Company elected to pay the fee with 62,222 shares

of its common stock.

The Company recorded the value of the agreement using the closing price of the Company’s common stock on November

11, 2022, and amortizes the expense over twelve months beginning in August 2022.

At October 31, 2023, the balance of related party prepaid

expenses was zero.

SUBSEQUENT EVENTS

the period between November 1, 2023 through December 14, 2023, the Company sold an aggregate of 651,046 shares of Common Stock pursuant

to the ATM Offering for gross proceeds of $ 849,000 .

December 11, 2023, the Company entered into the Seventh Amendment to the ALZN002 License.

The Seventh Amendment to the ALZN002

License modified the timing of the payments for the license fees.

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

What changed 10-Q

Item 1. Financial Statements