What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-03-25 compared with 2023-12-15 · 426 added, 355 removed, 274 unchanged (74% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following management’s

discussion and analysis of financial condition and results of operations in conjunction with our unaudited condensed financial statements

and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and related

notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report

on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on July 27, 2023.

You should read the following

management’s discussion and analysis of financial condition and results of operations in conjunction with our unaudited condensed

financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial

statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included

in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on July 27, 2023.

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains

forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),

and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

This section should be read in conjunction

with our unaudited condensed financial statements and related notes included in Part I, Item 1 of this report.

The statements contained

in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and

Section 21E of the Exchange Act.

These statements relate to future events

or our future financial performance.

This Quarterly Report on Form

10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities

Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

This section should

be read in conjunction with our unaudited condensed financial statements and related notes included in Part I, Item 1 of this report.

The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A

of the Securities Act and Section 21E of the Exchange Act.

These statements relate to

future events or our future financial performance.

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

7 unchanged sentences

of activity, performance or achievements.

In this Quarterly Report, unless the context

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

refer to Alzamend Neuro, Inc., a Delaware corporation.

In this Quarterly Report,

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

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

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

9 unchanged sentences

Critical Accounting Policies and Estimates

Research and Development Expenses .

and development costs are expensed as incurred.

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

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

We have acquired and may continue to acquire

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

The upfront payments to acquire license, product or

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

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

Research and Development

Research and development costs are expensed as incurred.

Research and development costs consist of scientific consulting

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

We have acquired and may continue

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

The upfront payments to acquire license,

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

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

Stock-Based Compensation.

2 unchanged sentences

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

We recognize stock-based compensation expense

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

We recognize stock-based compensation

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

Our stock-based

2 unchanged sentences

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

The Black-Scholes option pricing model utilizes

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

The Black-Scholes option pricing

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

These assumptions include:

20 unchanged sentences

Therefore, we used an expected dividend yield of zero.

Certain of such assumptions involve inherent

uncertainties and the application of significant judgment.

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

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

Certain of such assumptions

involve inherent uncertainties and the application of significant judgment.

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

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

Common Stock Valuations.

17 unchanged sentences

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

Following the closing of our IPO, our Board

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

Following the closing of our

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

date of grant.

Plan of Operations

We intend to develop and commercialize therapeutics

that are better than existing treatments and have the potential to significantly improve the lives of individuals afflicted by Alzheimer’s,

BD, MDD and PTSD.

We intend to develop and commercialize

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

by Alzheimer’s, BD, MDD and PTSD.

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

4 unchanged sentences

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

Our pipeline consists of two novel therapeutic

drug candidates:

Our pipeline consists of two

novel therapeutic drug candidates:

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

4 unchanged sentences

worldwide license from the Licensor.

Our 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,

Our 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.

5 unchanged sentences

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 patient dosing in

March 2023 and announced positive topline data in June 2023.

We 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.

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 patient dosing

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

We 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”),

2 unchanged sentences

purpose of treating fragile populations, such as Alzheimer’s patients.

Lithium is a commonly prescribed drug for

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

Lithium is also prescribed

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

Lithium is a commonly prescribed

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

Lithium is also

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

Lithium was the first mood stabilizer approved by the U.S.

Drug Administration (“FDA”) and is still a first-line treatment option (considered the “gold standard”) but is

underutilized perhaps because of the need for TDM.

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 BD when using

lithium salts.

Food and Drug Administration (“FDA”) and is still a first-line treatment option (considered the “gold standard”)

but is underutilized perhaps because of the need for TDM.

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 BD

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

Additionally, we are investigating the potential of AL001 for patients suffering from BD, MDD and PTSD, and submitted Investigational

New Drug (“IND”) applications to the FDA for these indications.

The IND for BD was filed in August 2023 and we received a

“study may proceed” letter from the FDA in September 2023.

The IND for MDD was filed in October 2023 and we received a “study

may proceed” letter from the FDA in November 2023.

The IND for PTSD was filed in November 2023.

After FDA permission to proceed

on the INDs, we intend to initiate clinical trials at the 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.

We submitted a pre-IND meeting request for

ALZN002 and supporting briefing documents to the Center for Biological Evaluation and Research of the FDA on July 30, 2021.

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.

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 are investigating the potential of AL001 for patients suffering from BD, MDD and PTSD, and submitted

Investigational New Drug (“IND”) applications to the FDA for these indications.

The IND for BD was filed in August 2023 and

we received a “study may proceed” letter from the FDA in September 2023.

The IND for MDD was filed in October 2023 and we

received a “study may proceed” letter from the FDA in November 2023.

The IND for PTSD was filed in November 2023 and we received

a “study may proceed” letter from the FDA in December 2023.

After FDA permission to proceed on the INDs, we intend to initiate

clinical trials at the 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.

We anticipate beginning Phase II studies for

the additional indications after we have obtained the necessary financing for the trials and payment to Phase IIA MAD study vendor for

the final reports of that study.

We submitted a pre-IND meeting

request for ALZN002 and supporting briefing documents to the Center for Biological Evaluation and Research of the FDA on July 30, 2021.

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

of ALZN002 on September 30, 2021.

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

On September 28, 2022, we submitted an IND

application to the FDA for ALZN002 and received a “study may proceed” letter on October 31, 2022.

The product candidate is

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

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.

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 conducting the series of human clinical trials for each of our therapeutics requires us to raise additional

capital to fund our operations.

Because our working capital requirements

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

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

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

require additional financing to fund future operations.

On September 26,

2023, we received a notice from the staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, for the previous 30 consecutive

business days, the minimum Market Value of Listed Securities (“MVLS”) for our Common Stock was below the $35 million minimum

MVLS requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”).

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have 180 calendar days, or until March 25, 2024, to regain compliance with the

To regain compliance with the MVLS Rule, the MVLS for our Common Stock must close at $35 million or more for a minimum of 10

consecutive business days at any time during this 180-day period.

If we regain compliance with the MVLS Rule, Nasdaq will provide us with

written confirmation and will close the matter.

If we do not regain compliance with the rule by March 25, 2024, Nasdaq will provide notice

that our Common Stock will be delisted from the Nasdaq Capital Market.

In the event of such notification, the Nasdaq rules permit us an

opportunity to appeal Nasdaq’s determination.

On September 28, 2022, we

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

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.

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.

We expect this trial to last for up to five years.

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.

On February 13,

2024, we received notice from the company we engaged as our contract research organization (“CRO”), Biorasi, LLC.

that Biorasi was terminating our contract with them.

We are currently pursuing the engagement of a replacement CRO.

The continuation of our current

plan of operations with respect to initiating and conducting the series of human clinical trials for each of our therapeutics requires

us to raise additional capital to fund our operations.

Because our working capital

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

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

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

will require additional financing to fund future operations.

Recent Developments

Nasdaq Listing

Deficiency Letter from Nasdaq – Market Value

September 26, 2023, we received a notice from the staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, for the

previous 30 consecutive business days, the minimum Market Value of Listed Securities (“MVLS”) for our Common Stock was below

the $35 million minimum MVLS requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2) (the

“MVLS Rule”).

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we have 180 calendar days, or until March 25, 2024, to

regain compliance with the MVLS Rule.

To regain compliance with the MVLS Rule, the MVLS for our Common Stock must close at $35 million

or more for a minimum of 10 consecutive business days at any time during this 180-day period.

If we regain compliance with the MVLS Rule,

Nasdaq will provide us with written confirmation and will close the matter.

If we do not regain compliance with the rule by March 25,

2024, Nasdaq will provide notice that our Common Stock will be delisted from the Nasdaq Capital Market.

In the event of such notification,

the Nasdaq rules permit us an opportunity to appeal Nasdaq’s determination.

Deficiency Letter from Nasdaq – Bid Price

On February 1, 2024, we received

a notice in the form of a letter (“Deficiency Letter”) from the Listing Qualifications Staff of the Nasdaq stating that we

were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the bid price for the Common Stock had closed below $1.00 per share

for the previous 30 consecutive business days.

In accordance with Nasdaq listing rule 5810(c)(3)(A), we have 180 calendar days, or until

July 30, 2024, to regain compliance.

The Deficiency Letter states that to regain compliance, the bid price for the Common Stock must close

at $1.00 per share or more (the “Minimum Bid Price”) for a minimum of 10 consecutive business days during the compliance period

ending July 30, 2024.

In the event that we do not regain compliance within this 180-day period, we may be eligible to seek an additional

compliance period of 180 calendar days if we meet the continued listing requirement for market value of publicly held shares and all other

initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Price, and provides written notice to Nasdaq

of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary.

if it appears to the Nasdaq Staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will provide

notice to us that our Common Stock will be subject to delisting.

At that time, we may appeal any such delisting determination to a Nasdaq

hearings panel.

Results of Operations

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

The following table summarizes the results

of our operations for the three months ended October 31, 2023 and 2022.

For the Three Months Ended October 31,

Results of Operations for the Three Months Ended January 31,

2024 and 2023

The following table summarizes

the results of our operations for the three months ended January 31, 2024 and 2023:

For the Three Months Ended January 31,

OPERATING EXPENSES

16 unchanged sentences

We did not generate any revenues

during the three months ended October 31, 2023 and 2022, and we do not anticipate that we will generate revenue for the foreseeable future.

during the three months ended January 31, 2024 and 2023, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and Development Expenses

Research and development expenses

for the three months ended October 31, 2023 and 2022 were $2.0 million and $1.5 million, respectively.

for the three months ended January 31, 2024 and 2023 were $1.9 million and $2.9 million, respectively.

As reflected in the table below,

research and development expenses primarily consisted of professional fees, clinical trial fees and licenses and fees.

For the Three Months Ended October 31,

research and development expenses primarily consisted of professional fees and clinical trial fees:

For the Three Months Ended January 31,

Professional fees

Clinical trial fees

Licenses and fees

Stock-based compensation

Stock-based compensation expense

Other research and development expenses

2 unchanged sentences

Professional Fees

During the three months ended October 31,

2023 and 2022, we incurred professional fees of $1.0 million and $900,000, respectively, which were principally comprised of professional

During the three months ended

January 31, 2024 and 2023, we incurred professional fees of $557,000 and $861,000, respectively, which were principally comprised of professional

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

The increase relates to higher professional

fees incurred related to IND preparation for the additional indications for AL001.

The decrease relates to lower professional

fees incurred related to the preparation for the clinical trial for ALZN002.

Clinical Trial Fees

During the three months ended October 31,

2023 and 2022, we incurred clinical trial fees of $795,000 and $552,000, respectively.

Clinical trial fees for the three months ended

October 31, 2023, consisted of $455,000 for our Phase IIA clinical trial for AL001 and $340,000 for our Phase IIA clinical trial for ALZN002.

Clinical trial fees for the three months ended October 31, 2022 were for our Phase I clinical trial for AL001.

Licenses and Fees

There are certain initial license fees and

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

to the terms of the License Agreement with Sublicensing Terms.

During the three months ended

January 31, 2024 and 2023, we incurred clinical trial fees of $1.3 million and $2.1 million, respectively.

Clinical trial fees for the

three months ended January 31, 2024, consisted of $503,000 for our Phase IIA clinical trial for AL001 and $750,000 for our Phase IIA clinical

trial for ALZN002.

Clinical trial fees for the three months ended January 31, 2023 were for our Phase I clinical trial for AL001.

Stock-Based Compensation Expense

During the three months ended

October 31, 2023, we incurred research and development stock-based compensation of $143,000, related to stock option grants to consultants.

The increase in research and development stock compensation expense for the three months ended October 31, 2023 was a result of the vesting

of performance stock options grants.

January 31, 2024 and 2023, we incurred stock-based compensation of $71,000 and $(43,000), respectively, related to stock option grants

to consultants.

The increase in research and development stock compensation expense for the three months ended January 31, 2024 was a

result of the vesting of performance stock options grants.

Other Research and Development Expenses

During the three months ended October 31,

2023 and 2022, we incurred other fees of $14,000 and $15,000, respectively, which were principally comprised of scientific materials required

for our clinical trials.

During the three months ended

January 31, 2024 and 2023, we incurred other fees of $27,000 and $21,000, respectively, which were principally comprised of scientific

materials required for our clinical trials.

General and Administrative Expenses

General and administrative expenses for the three months ended October

31, 2023 and 2022 were $905,000 and $1.6 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 three months ended January 31, 2024 and 2023 were $751,000 and $2.5 million, respectively.

As reflected in the table

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

stock-based compensation expense;

marketing fees;

professional fees;

as salaries and benefits.

For the three months ended October 31, 2023 and 2022, the remaining general and administrative expenses of $131,000

and $129,000, respectively, primarily consisted of payments for filing fees, transfer agent fees, travel and entertainment, board of director

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

For the Three Months Ended October 31,

salaries and benefits;

as well as marketing fees.

For the three months ended January 31, 2024 and 2023,

the remaining general and administrative expenses of $137,000 and $182,000, respectively, primarily consisted of payments for filing fees,

transfer agent fees, travel and entertainment, board of director fees and other office expenses, none of which was significant individually.

For the Three Months Ended January 31,

Stock-based compensation expense

$ (1,435,573 )

Professional fees

3 unchanged sentences

Total general and administrative expenses

$ (1,783,492 )

Stock-Based Compensation Expense

During the three months ended

October 31, 2023 and 2022, we incurred general and administrative stock-based compensation expense of $175,733 and $716,000, respectively,

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

The decrease in stock-based compensation

for the three months ended October 31, 2023 was a result of fewer stock options vesting during the period compared to the prior year.

January 31, 2024 and 2023, we incurred stock-based compensation expense of $115,000 and $1.6 million, respectively, related to stock option

grants and restricted stock grants to executives, employees and consultants.

The decrease in stock-based compensation expense for the

three months ended January 31, 2024 was a result of fewer stock options vesting during the period compared to the prior year period.

Professional Fees

During the three months ended October 31,

2023 and 2022, we incurred professional fees of $284,000 and $133,000, respectively, which were principally comprised of the following

Three Months Ended October 31, 2023

· During the three months ended October 31, 2023, we incurred $92,000 in audit fees, $89,000 in investor

relations, $67,000 in legal fees, $13,000 in tax preparation fees, $12,000 in related party consulting and $11,000 in Sarbanes-Oxley compliance

Three Months Ended October 31, 2022

· During the three months ended October 31, 2022, we recorded an expense of $70,000 in connection with the

five-year consulting agreement with Spartan Capital;

· During the three months ended October 31, 2022, we incurred $20,000 in audit fees, $13,000 in related

party consulting, $11,000 in Sarbanes-Oxley compliance fees, $7,000 in tax preparation fees and $12,000 in other professional fees.

During the three months ended January 31, 2024 and 2023, we incurred

professional fees of $185,000 and $190,000, respectively.

During the three months ended January 31, 2024, we incurred $54,000 in audit

fees, $52,000 in investor relations, $30,000 in legal fees, $30,000 in consulting, $13,000 in related party consulting and $6,000 in Sarbanes-Oxley

compliance fees.

During the three months ended January 31, 2023, we recorded an expense of $47,000 in connection with the five-year consulting

agreement with Spartan Capital, $87,000 in Sarbanes-Oxley compliance fees, $24,000 in audit fees, $12,000 in related party consulting,

$8,000 in tax preparation fees and $12,000 in other professional fees.

Insurance Expense

During the three months ended October 31,

2023 and 2022, we incurred insurance expense of $89,000 and $130,000, respectively, which was primarily directors’ and officers’

During the three months ended

January 31, 2024 and 2023, we incurred insurance expense of $88,000 and $131,000, respectively, which was primarily directors’ and

officers’ insurance.

Salaries and Benefits

During the three months ended October 31,

2023 and 2022, we incurred $226,000 and $219,000, respectively, in employee-related expenses.

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

and three part-time employees.

During the three months ended

January 31, 2024 and 2023, we incurred $227,000 and $233,000, respectively, in employee-related expenses.

As of January 31, 2024, we had

four full-time and three part-time employees.

Marketing Fees

During the three months ended October 31,

2022, we incurred marketing fees of $247,000, which was primarily expenses related to the marketing and brand development agreement with

Ault Alliance, Inc.

During the three months ended

January 31, 2023, we incurred marketing fees of $247,000, which was primarily expenses related to the marketing and brand development

agreement with Ault Alliance, Inc.

(“AAI”), a related party.

Results of Operations for the Six Months Ended October 31, 2023 and 2022

The following table summarizes the results

of our operations for the six months ended October 31, 2023 and 2022.

For the Six Months Ended October 31,

No such fees were incurred during the three months ended January

Results of Operations for the Nine Months Ended January 31,

2024 and 2023

The following table summarizes

the results of our operations for the nine months ended January 31, 2024 and 2023:

For the Nine Months Ended January 31,

OPERATING EXPENSES

3 unchanged sentences

Loss from operations

(11,565,457 )

OTHER EXPENSE, NET

11 unchanged sentences

We did not generate any revenues

during the six months ended October 31, 2023 and 2022, and we do not anticipate that we will generate revenue for the foreseeable future.

during the nine months ended January 31, 2024 and 2023, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and Development Expenses

Research and development expenses

for the six months ended October 31, 2023 and 2022 were $4.4 million and $2.9 million, respectively.

for the nine months ended January 31, 2024 and 2023 were $6.3 million and $5.8 million, respectively.

As reflected in the table below,

research and development expenses primarily consisted of professional fees, clinical trial fees and licenses and fees.

For the Six Months Ended October 31,

For the Nine Months Ended January 31,

Professional fees

1 unchanged sentence

Licenses and fees

Stock-based compensation

Stock-based compensation expense

Other research and development expenses

Total research and development expenses

* Not meaningful

Professional Fees

During each of the six months ended October

31, 2023 and 2022, we incurred professional fees of $2.1 million, which were principally comprised of professional fees attributed to

various types of scientific services, including FDA consulting services.

During each of the nine months

ended January 31, 2024 and 2023, we incurred professional fees of $2.7 million and $3.0 million, respectively, which were principally

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

Clinical Trial Fees

During the six months ended October 31,

2023 and 2022, we incurred clinical trial fees of $2.0 million and $575,000, respectively.

Clinical trial fees for the six months ended

October 31, 2023 consisted of $1.4 million for our Phase IIA clinical trial for AL001 and $650,000 for our Phase IIA clinical trial for

Clinical trial fees for the six months ended October 31, 2022 were for our Phase I clinical trial for AL001.

During the nine months ended

January 31, 2024 and 2023, we incurred clinical trial fees of $3.3 million and $2.6 million, respectively.

Clinical trial fees for the

nine months ended January 31, 2024 consisted of $1.9 million for our Phase IIA clinical trial for AL001 and $1.4 million for our Phase

IIA clinical trial for ALZN002.

Clinical trial fees for the nine months ended January 31, 2023 were for our Phase I clinical trial for

Licenses and Fees

There are certain initial license fees and

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

to the terms of the License Agreement with Sublicensing Terms.

There are certain initial

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

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

Stock-Based Compensation Expense

During the six months ended

October 31, 2023, we incurred research and development stock-based compensation of $143,000, related to stock option grants to consultants.

The increase in research and development stock compensation expense for the six months ended October 31, 2023 was a result of the vesting

of performance stock options grants

During the nine months ended

January 31, 2024 and 2023, we incurred stock-based compensation of $214,000 and $(43,000), respectively, related to stock option grants

to consultants.

The increase in research and development stock compensation expense for the nine months ended January 31, 2024, was a

result of the vesting of performance stock options grants.

Other Research and Development Expenses

During the six months ended October 31,

2023 and 2022, we incurred other fees of $66,000 and $170,000, respectively, which were principally comprised of scientific materials

required for our clinical trials.

During the nine months ended

January 31, 2024 and 2023, we incurred other fees of $93,000 and $190,000, respectively, which were principally comprised of scientific

materials required for our clinical trials.

General and Administrative Expenses

General and administrative

expenses for the six months ended October 31, 2023 and 2022 were $2.1 million and $3.2 million, respectively.

expenses for the nine months ended January 31, 2024 and 2023 were $2.8 million and $5.8 million, respectively.

As reflected in the table

1 unchanged sentence

stock-based compensation expense;

marketing fees;

professional fees;

as well as salaries and benefits.

For the six months ended October 31, 2023 and 2022, the

salaries and benefits;

as well as marketing fees.

For the nine months ended January 31, 2024 and 2023, the

remaining general and administrative expenses of $388,000 and $439,000, respectively, primarily consisted of payments for filing fees,

transfer agent fees, travel and entertainment, board of director fees and other office expenses, none of which is significant individually.

For the Six Months Ended October 31,

transfer agent fees, travel and entertainment, board of director fees and other office expenses, none of which was significant individually.

For the Nine Months Ended January 31,

Stock-based compensation expense

7 unchanged sentences

Stock-Based Compensation Expense

During the six months ended

October 31, 2023 and 2022, we incurred general and administrative stock-based compensation expense of $545,000 and $1.6 million, respectively,

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

The decrease in stock-based compensation

for the six months ended October 31, 2023 was a result of fewer stock options vesting during the period compared to the prior year.

During the nine months ended

January 31, 2024 and 2023, we incurred stock-based compensation expense of $660,000 and $3.1 million, respectively, related to stock option

grants and restricted stock grants to executives, employees and consultants.

The decrease in stock-based compensation for the nine months

ended January 31, 2024 was a result of fewer stock options vesting during the period compared to the prior year period.

Professional Fees

During the six months ended October 31,

2023 and 2022, we incurred professional fees of $435,000 and $376,000, respectively, which were principally comprised of the following

Six Months Ended October 31, 2023

· During the six months ended October 31, 2023, we incurred $170,000 in audit fees, $118,000 in investor

relations, $69,000 in legal fees, $29,000 in tax preparation fees, $24,000 in related party consulting, $17,000 in Sarbanes-Oxley compliance

fees and $8,000 in other professional fees.

Six Months Ended October 31, 2022

· During the six months ended October 31, 2022, we recorded an expense of $140,000 in connection with the

five-year consulting agreement with Spartan Capital;

· During the six months ended October 31, 2022, we incurred $100,000 in audit fees, $41,000 in Sarbanes-Oxley

compliance fees, $25,000 in related party consulting, $25,000 in tax preparation fees and $43,000 in other professional fees.

During the nine months ended

January 31, 2024 and 2023, we incurred professional fees of $620,000 and $567,000, respectively.

During the nine months ended January

31, 2024, we incurred $224,000 in audit fees, $170,000 in investor relations, $99,000 in legal fees, $38,000 in related party consulting,

$30,000 in tax preparation fees, $24,000 in Sarbanes-Oxley compliance fees and $35,000 in other professional fees.

During the nine months

ended January 31, 2023, we recorded an expense of $187,000 in connection with the five-year consulting agreement with Spartan Capital,

$128,000 in Sarbanes-Oxley compliance fees, $124,000 in audit fees, $38,000 in related party consulting, $33,000 in tax preparation fees

and $57,000 in other professional fees.

Insurance Expense

During the six months ended October 31,

2023 and 2022, we incurred insurance expense of $207,000 and $326,000, respectively, which was primarily directors’ and officers’

During the nine months ended

January 31, 2024 and 2023, we incurred insurance expense of $294,000 and $457,000, respectively, which was primarily directors’

and officers’ insurance.

Salaries and Benefits

During the six months ended October 31,

2023 and 2022, we incurred $379,000 and $443,000, respectively, in employee-related expenses.

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

and three part-time employees.

During the nine months ended

January 31, 2024 and 2023, we incurred $606,000 and $676,000, respectively, in employee-related expenses.

As of January 31, 2024, we had

four full-time and three part-time employees.

Marketing Fees

During the six months ended October 31,

2023 and 2022, we incurred marketing fees of $247,000 and $248,000, respectively, which was primarily expenses related to the marketing

and brand development agreement with AAI, a related party.

During the nine months ended

January 31, 2024 and 2023, we incurred marketing fees of $247,000 and $495,000, respectively, which was primarily expenses related to

the marketing and brand development agreement with AAI, a related party.

Liquidity and Capital Resources

The accompanying condensed financial statements have been prepared

assuming that we will continue as a going concern.

We have incurred recurring net losses and operations have not provided sufficient cash

We believe that we will continue to incur operating and net losses each quarter until at least the time we are able to generate

revenues from operations.

We believe our current cash on hand is insufficient to fund our planned

operations through one year after the date the condensed financial statements are issued.

These factors create substantial doubt about

our ability to continue as a going concern for at least one year after the date that our condensed 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 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 we be unable to continue as a going concern.

As of October

31, 2023, we had cash of $200,000, an accumulated deficit of $50.5 million and stockholders’ deficit of $2.7 million.

We have incurred

recurring losses and reported losses for the three and six months ended October 31, 2023 totaling $2.9 million and $6.4 million, respectively.

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

We will need to obtain substantial additional

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

If we are unable to raise capital when needed

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

The accompanying condensed

financial statements have been prepared assuming that we will continue as a going concern.

We have 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 are able to generate revenues from operations.

We believe our current cash on hand is

insufficient to fund our planned operations through one year after the date the condensed financial statements are issued.

These factors

create substantial doubt about our ability to continue as a going concern for at least one year after the date that our condensed 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 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 we be unable to continue

as a going concern.

As of January 31, 2024, we had cash of $283,000, a working capital deficiency of $3.2 million, an accumulated deficit

of $53.2 million and stockholders’ deficit of $4.3 million.

We have incurred recurring losses and reported losses for the three

and nine months ended January 31, 2024 totaling $2.7 million and $9.1 million, respectively.

In the past, we have financed our operations

principally through sales of equity securities and debt instruments.

We will need to obtain substantial

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

If we are unable to raise capital

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

As previously disclosed we had anticipated beginning Phase II clinical trials for AL001 additional indications in the first quarter

of calendar 2024.

Due to the Company’s inability to obtain significant additional financing, we have been unable to initiate those

clinical trials and reduce the working capital deficiency.

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

12 unchanged sentences

· the costs and timing of regulatory approvals.

A change in the outcome of any of these

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

with the development of that product candidate.

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

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

On September 8, 2023, we entered into an

At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC, as sales agent to sell shares of our 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.

On September 8, 2023, we 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.

During the six months ended October 31, 2023, we sold an aggregate

of 6,149 shares of Common Stock pursuant to the ATM Offering for gross proceeds of $19,000.

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

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

The following table summarizes our cash

flows for the six months ended October 31, 2023 and 2022:

For the Six Months Ended October 31,

A change in the outcome of

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

and timing associated with the development of that product candidate.

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

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

On September 8, 2023, we entered

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

On September 8, 2023, we

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.

During the nine months ended January 31,

2024, we sold an aggregate of 816,426 shares of Common Stock pursuant to the ATM Offering for gross proceeds of $1.0 million.

the period between February 1, 2024 through March 22, 2024, we sold an aggregate of 248,080 shares of Common Stock pursuant to the

ATM Offering for gross proceeds of $266,000.

On January 31, 2024, we entered

into the AL SPA with Ault Lending whereby Ault Lending may purchase of up to 6,000 shares of series B convertible preferred stock (“Series

B Convertible Preferred Stock”) and warrants to purchase shares up to 6,000,000 shares of our Common Stock.

The AL SPA provides

that Ault Lending may purchase up to $6 million of Series B Convertible Preferred Stock in one or more closings.

Ault Lending has the

right to purchase up to $2 million of series B Series B Convertible Preferred Stock, on or before March 31, 2024, and the right to purchase

up to $4 million of Series B Convertible Preferred Stock after March 31, 2024, but on or before March 31, 2025 (the “Termination

The Agreement will automatically terminate if the final closing has not occurred prior to the Termination Date.

On January 31, 2024, we sold 1,220 shares

of Series B Convertible Preferred Stock and warrants to purchase 1,220,000 shares of Common Stock with an exercise price of $1.20, for

a total purchase price of $1.22 million.

The purchase price was paid by the cancellation of $1.15

million of cash advances made by Ault Lending to the Company between November 9, 2023 and January 31, 2024 and a subscription receivable

Series B Convertible Preferred Stock has a stated value of $1,000 per share (“Stated

Value”) and does not accrue dividends.

Each share of Series B Convertible Preferred Stock is convertible into a number of

shares of Common Stock determined by dividing the Stated Value by $1.00 (the “Conversion

The Conversion Price is subject to adjustment in the event of an issuance of Common Stock at a price per share lower than

the Conversion Price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events.

of the Series B Convertible Preferred Stock are entitled to vote with the Common Stock as a single class on an as-converted basis, subject

to applicable law provisions of the Delaware General Company Law and Nasdaq, provided however, that for purposes of complying with Nasdaq

regulations, the conversion price, for purposes of determining the number of votes the holder of Series B Convertible Preferred Stock

is entitled to cast, shall not be lower than $0.873 (the “Voting Floor Price”), which represents the closing sale price of

the Common Stock on the trading day immediately prior to the Execution Date.

The Voting Floor Price shall be adjusted for stock dividends,

stock splits, stock combinations and other similar transactions.

The warrants have an exercise

price of $1.20 (the “Exercise Price”) and become exercisable on the first business day after the six-month anniversary of

issuance (the “Initial Exercise Date”) and have a five-year term, expiring on the fifth anniversary of the Initial Exercise

The Exercise Price is subject to adjustment in the event of an issuance of Common Stock at a price per share lower than the Exercise

Price then in effect, as well as upon customary stock splits, stock dividends, combinations or similar events.

The following table summarizes

our cash flows for the nine months ended January 31, 2024 and 2023:

For the Nine Months Ended January 31,

Net cash provided by (used in):

8 unchanged sentences

Operating Activities

During the six months ended

October 31, 2023, net cash used in operating activities was $4.8 million.

During the nine months ended

January 31, 2024, net cash used in operating activities was $6.8 million.

This consisted primarily of a net loss of $9.1 million partially

offset by an increase in our net operating assets and liabilities of $909,000 and non-cash charges of $714,000.

The non-cash charges primarily

consisted of stock-based compensation expense.

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

payable and accrued liabilities, an increase in prepaid expenses and other current assets and a decrease in prepaid expenses - related

offset by an increase in our net operating assets and liabilities of $1.3 million and non-cash charges of $912,000.

The non-cash charges

primarily consisted of stock-based compensation expense.

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

in accounts payable and accrued liabilities, an decrease in prepaid expenses and other current assets and an decrease in prepaid expenses

- related party.

Investing Activities

During the six months ended October 31,

2023, net cash used in investing activities was $147,000 from the purchase of machinery and equipment.

We purchased equipment, which draws

blood from patients and separates the monocytes from their blood, to be used in the ALZN002 clinical trial.

During the nine months ended

January 31, 2024, net cash used in investing activities was $147,000 from the purchase of machinery and equipment.

We purchased equipment,

which draws blood from patients and separates the monocytes from their blood, to be used in the ALZN002 clinical trial.

Financing Activities

During the six months ended October 31,

2023, net cash provided by financing activities was $18,000 from proceeds from the ATM Offering.

During the nine months ended

January 31, 2024, net cash provided by financing activities was $1.2 million from the sale of convertible preferred stock to a related

party and $1.0 million from proceeds from the ATM Offering.

Contractual Obligations

10 unchanged sentences

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

The AL001 License Agreements require that

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

We have already paid

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

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

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 148,528 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 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, we entered

into a Standard Exclusive License Agreement with Sublicensing Terms for ALZN002 with the Licensor (the “ALZN002 License”),

pursuant to which the Licensor granted us a royalty bearing exclusive worldwide license limited to the field of Alzheimer’s Immunotherapy

and Diagnostics, under 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, on April 17, 2023, we entered into the Sixth Amendment to the ALZN002 License and on December 11, 2023, we entered

into the Seventh Amendment to the ALZN002 License (collectively, the “ALZN002 License Agreement”).

The Seventh Amendment to

the ALZN002 License modified the timing of the payments for the license fees.

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

240,120 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 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, we entered into a Standard Exclusive License Agreement

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

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

8,188,046, entitled “Amyloid Beta Peptides and Methods of Use”, filed April 7, 2009 and granted May 29, 2012.

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, on April 17,

2023, we entered into the Sixth Amendment to the ALZN002 License and on December 11, 2023, we entered into the Seventh Amendment to the

ALZN002 License (collectively, the “ALZN002 License Agreement”).

The Seventh Amendment to the ALZN002 License modified the

timing of the payments for the license fees.

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 240,120 shares of

our 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.

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, we entered

6 unchanged sentences

AL001 License modified the timing of the payments for the license fees.

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 fields.

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.

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 follows:

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 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.

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:

22 unchanged sentences

First commercial sale

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements

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

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

Recent Accounting Standards

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Because we are a smaller reporting company,

this section is not applicable.

Because we are a smaller reporting

company, this section is not applicable.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis