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Item 9A. Controls and Procedures

2024-07-30 compared with 2023-07-27 · 1192 added, 1144 removed, 949 unchanged (71% of the section changed)

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Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls

and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file

with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and

that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer,

as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures,

management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not

absolute assurance of achieving the desired control objectives.

In reaching a reasonable level of assurance, management necessarily was

required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

In addition, the design

of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance

that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls may become inadequate

because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate.

Because of the inherent limitations

in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and

current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s

rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and

Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure

controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide

only reasonable and not absolute assurance of achieving the desired control objectives.

In reaching a reasonable level of assurance, management

necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can

be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls

may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate.

of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As of April 30, 2024, we carried

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designed to improve our internal control over financial reporting to remediate material weaknesses, including the following:

· Formalizing our internal control documentation and strengthening supervisory reviews by our management;

· Adding additional accounting personnel and segregating duties amongst accounting personnel.

· Continue to formalize our internal control documentation and strengthening supervisory reviews by our

· Developing plans to add additional qualified accounting personnel and segregate duties amongst accounting

Management continues to work

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and management has concluded, through testing, that these controls are operating effectively.

Despite the existence of these material weaknesses, we believe that

the financial statements included in the period covered by this Annual Report on Form 10-K fairly present, in all material respects, our

financial condition, results of operations and cash flows for the periods presented in conformity with U.S.

generally accepted accounting

Despite the existence of these

material weaknesses, we believe that the financial statements included in the period covered by this Annual Report on Form 10-K fairly

present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity

generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

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OTHER INFORMATION

Trading Plans

the three months ended April 30, 2024, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading

arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

Directors, Executive Officers and Corporate Governance

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Chairman of the Board

Vice Chairman of the Board

Mark Gustafson

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in Management and a Bachelor of Engineering in Mechanical Engineering from Stevens Institute of Technology.

Jackman’s 15 years

of experience in life sciences and growth companies, day-to-day operational leadership of our company and in-depth knowledge of our drug

candidates make him well qualified as a member of the Board.

Katzoff joined

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Katzoff has served as Senior Vice President of Finance of AULT since January 2019.

Since December

Katzoff has served as the Chief Financial Officer of Imperalis Holding Corp., a publicly listed company.

Since February

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acquisition company (“Ault Disruptive”).

From 2015 to 2018, Mr.

Katzoff served as Chief Financial Officer of Lumina Media,

LLC, a privately-held media company and publisher of life-style publications.

From December 2021 to September 2023, Mr.

Katzoff served as the Chief Financial Officer

of TurnOnGreen, Inc.

(formerly, Imperalis Holding Corp.) (“TurnOnGreen”), an OTCQB quoted company.

From 2015 to 2018, Mr.

Katzoff served a Vice President

of Finance of Local Corporation, a publicly-held local search company.

Katzoff received a B.S.

degree in Business Management

from the University of California at Davis.

Henry Nisser has

served as Chief Financial Officer of Lumina Media, LLC, a privately-held media company and publisher of life-style publications.

2003 to 2017, Mr.

Katzoff served a Vice President of Finance of Local Corporation, a publicly-held local search company.

received a B.S.

degree in Business Management from the University of California at Davis.

served as our Executive Vice President and General Counsel on a part-time basis since May 2019.

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he became AULT’s President on January 12, 2021.

Since February

Nisser has served as the President, General Counsel and director of RiskOn International, Inc., an OTCPK quoted company (“ROI”).

Since February 2021, Mr.

Nisser has served as the President, General Counsel and a director of Ault Disruptive.

Nisser has served on the board of directors of The Singing Machine Company, Inc.

(“SMC”), a Nasdaq listed company that is

the worldwide leader in consumer karaoke products, since April 2023.

Nisser has served as the President, General Counsel and on the

board of directors of BitNile Metaverse, Inc., a Nasdaq listed company that operates the BitNile.com metaverse platform, since March 2023.

is the Executive Vice President and General Counsel of Avalanche.

From October 2011 through April 2019, Mr.

an associate and subsequently a partner with Sichenzia Ross Ference LLP, a law firm in New York.

While with this law firm, his practice

was concentrated on national and international corporate law, with a particular focus on U.S.

securities compliance, public as well as

private M&A, equity and debt financings and corporate governance.

Nisser drafted and negotiated a variety of agreements related

to reorganizations, share and asset purchases, indentures, public and private offerings, tender offers and going private transactions.

Nisser is fluent in French and Swedish, as well as conversant in Italian.

Nisser received his B.A.

degree from Connecticut

College, where he majored in International Relations and Economics.

Since April 2023, Mr.

Nisser has served as a director of The Singing Machine Company, Inc., an issuer listed on Nasdaq (“MICS”).

is the Executive Vice President and General Counsel of Avalanche International Corp., a publicly traded Nevada company categorized as

a “voluntary filer” (not required to file periodic reports) (“Avalanche”).

Nisser has served as a President, General Counsel and a director of Ault & Co.

since May 2019.

From October 2011

through April 2019, Mr.

Nisser was an associate and subsequently a partner with Sichenzia Ross Ference LLP, a law firm in New

While with this law firm, his practice was concentrated on national and international corporate law, with a particular focus on

securities compliance, public as well as private M&A, equity and debt financings and corporate governance.

Nisser received

degree from Connecticut College, where he majored in International Relations and Economics.

He received his LL.B.

from University of Buckingham School of Law

in the United Kingdom.

We believe that Mr.

Nisser’s extensive legal experience involving complex transactions and comprehensive

knowledge of securities laws and corporate governance requirements applicable to listed companies give him the qualifications and skills

to serve as one of our directors.

Cragun joined

our company on a part-time basis in December 2018.

from University

of Buckingham School of Law in the United Kingdom.

Cragun joined our company on a part-time basis in December 2018.

Since February 2021, Mr.

Cragun has served as the Chief Financial Officer of Ault

Cragun has served as the Chief

Financial Officer of Ault Disruptive.

Since August 2020, Mr.

Cragun has served as the Chief Financial Officer of Ault Alliance and between October 2018 and August

2020, served as its Chief Accounting Officer.

Cragun has served as the Chief Financial Officer of AULT and between October

2018 and August 2020, served as its Chief Accounting Officer.

Since September 2018, Mr.

Cragun has served on the board of directors and Chairman of the

Audit Committee of Verb Technology Company, Inc.

Cragun has served on the board of directors and

Chairman of the Audit Committee of Verb Technology Company, Inc.

Since July 2022, Mr.

Cragun has served on the board of directors of SMC.

a CFO Partner at Hardesty, LLC, a national executive services firm between October 2016 and October 2018.

His assignments at Hardesty

included serving as Chief Financial Officer of CorVel Corporation, a publicly traded company and a nationwide leader in technology driven,

healthcare-related, risk management programs, and of RISA Tech, Inc., a private structural design and optimization software company.

was also Chief Financial Officer of two Nasdaq-traded companies, Local Corporation, from April 2009 to September 2016, which

operated Local.com, a U.S.

Cragun has served on the board of directors of MICS.

He served as a CFO Partner at Hardesty, LLC, a national executive services firm between October 2016 and October 2018.

His assignments

at Hardesty included serving as Chief Financial Officer of CorVel Corporation, a publicly traded company and a nationwide leader in technology

driven, healthcare-related, risk management programs, and of RISA Tech, Inc., a private structural design and optimization software company.

Cragun was also Chief Financial Officer of two Nasdaq-traded companies, Local Corporation, from April 2009 to September 2016,

which operated Local.com, a U.S.

top 100 website, and Modtech Holdings, Inc., from June 2006 to March 2009, a supplier of modular

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since October 2017.

Horne previously

held the position of Chief Financial Officer in various public and private companies in the healthcare and high-tech field.

has a Bachelor of Arts Magna Cum Laude in Accounting from Seattle University.

We believe that Mr.

Horne's extensive financial and accounting

experience in diversified industries and with companies involving complex transactions give him the qualifications and skills to serve

as one of our directors.

Mark Gustafson joined

our Board of Directors and became the Chairman of the Audit Committee in June 2021.

Gustafson is a Chartered Professional Accountant

with over 35 years of corporate, private and public company experience.

He served as the

Chief Financial Officer of Targeted Medical Pharma, Inc.

from August 2013 to May 2019.

Horne previously held the position of Chief

Financial Officer in various public and private companies in the healthcare and high-tech field.

Horne has a Bachelor of Arts Magna

Cum Laude in Accounting from Seattle University.

Ault, III has served as a director of our company since January 2024.

Ault is the Company’s founder and served as

Chairman and a director from inception in 2016 until the Company’s initial public offering in June 2021.

Since January 2021, Mr.

Gustafson has been a director and non-executive

Chairman of BrainLuxury, Inc., a private U.S.

company that is developing and selling nutrients for the brain.

Ault has served as the Executive Chairman of AULT.

Between December 2017 and January 2021, Mr.

Ault was the Chief Executive Officer of

AULT and between March 2017 and December 2017, Mr.

Ault served as the Executive Chairman of AULT.

Ault has served as the Chairman

of the Board of Ault Disruptive since its incorporation in February 2021.

Since January 2024, Mr.

Ault has served as the Chairman and

Chief Executive Officer of ROI.

Since April 2023, Mr.

has been the Chief Financial Officer, and since January 2022, a director, for PharmaKure Limited, a private London-based biopharmaceutical

company dedicated to the treatment of neurodegenerative diseases.

Since December 2021, Mr.

Gustafson has served as an independent director

and Chairman of the Audit Committee of Ault Disruptive.

Ault has served as the Executive Chairman of the board of directors of MICS.

Ault has served as Chairman and Chief Executive Officer of Ault & Co.

since December 2015, and as Chairman of Avalanche since September

Since January 2011, Mr.

Ault has been the Vice President of Business Development for MCKEA Holdings, LLC, a family office (“MCKEA”).

Ault is a seasoned business professional and entrepreneur who has spent more than twenty-seven years identifying value in various

financial markets including equities, fixed income, commodities, and real estate.

Throughout his career, Mr.

Ault has consulted for a

few publicly traded and privately held companies, providing each of them the benefit of his diversified experience, that range from development

stage to seasoned businesses.

Gustafson joined our Board and became the Chairman of the Audit Committee in June 2021.

Gustafson is a Chartered Professional

Accountant with over 35 years of corporate, private and public company experience.

Since June 2024, Mr.

Gustafson has served as the founder and director of Alpha

Helium Inc., a private Canadian-based company helium exploration company.

From 2014 to 2020, he was the Chief Executive Officer of Challenger

Acquisitions Limited, a London Stock Exchange listed entertainment company.

From 2010 to 2012, Mr.

Gustafson was the President and

Chief Executive Officer of Euromax Resources Limited, a Toronto Stock Exchange listed mineral exploration company.

Gustafson has been the Chief Financial

Officer of Orga Energy Ltd., a private oil and gas production company based in Calgary, Alberta.

From January 2023 to June 2024, Mr.

was a director and non-executive Chairman of BrainLuxury, Inc., a private U.S.

company that is developing and selling nutrients for the

Since April 2021, Mr.

Gustafson has been the Chief Financial Officer, and since January 2022, a director, for PharmaKure Limited,

a private London-based biopharmaceutical company dedicated to the treatment of neurodegenerative diseases.

Between December 2021 and December

Gustafson served as an independent director and Chairman of the Audit Committee of Ault Disruptive.

From June 2020 to March

Gustafson was a director of Alpha Helium Inc., a private Canadian-based company helium exploration company.

From 2014 to 2020,

he served as Chairman and Chief Executive Officer of Triangle Energy Corporation, a New York Stock Exchange listed oil and gas exploration

company, from 2004 to 2006, he served as President and Chief Executive Officer of Torrent Energy Corporation, a private oil and gas company,

and from 2001 to 2002, he served as a financial consultant for Samson Oil & Gas and Peavine Resources, two private oil and gas companies.

he was the Chief Executive Officer of Challenger Acquisitions Limited, a London Stock Exchange listed entertainment company.

Gustafson was the President and Chief Executive Officer of Euromax Resources Limited, a Toronto Stock Exchange listed

mineral exploration company.

From 2005 to 2009, he served as Chairman and Chief Executive Officer of Triangle Energy Corporation, a New

York Stock Exchange listed oil and gas exploration company, from 2004 to 2006, he served as President and Chief Executive Officer of Torrent

Energy Corporation, a private oil and gas company, and from 2001 to 2002, he served as a financial consultant for Samson Oil & Gas

and Peavine Resources, two private oil and gas companies.

From 1997 to 1999, Mr.

Gustafson served as President and Chief Executive Officer of Total Energy Services Ltd., a Toronto Stock Exchange

listed oilfield services company, from 1993 to 1995, he served as the Chief Financial Officer of Q/media Software Corporation, a Toronto

Stock Exchange listed software company, and from 1987 to 1993, he served initially as the Chief Financial Officer and then as a Vice President

in charge of two operating divisions at EnServ Corporation, a Toronto Stock Exchange listed oilfield services company.

From 1981 to 1987,

he served as an audit manager at Price Waterhouse in Calgary Alberta.

Gustafson received his Bachelor of Business Administration

from Wilfrid Laurier University.

Gustafson has been a Chartered Accountant since 1983.

We believe that Mr.

Gustafson’s over

35 years of corporate, private and public company operational and financial experience gives him the qualifications and skills to serve

as one of our directors and as Chairman of the Audit Committee.

Lynne Fahey McGrath, M.P.H.,

joined our Board of Directors in June 2021.

McGrath has served as a member of the Advisory Board of Bryleos, Inc.,

a private corporation developing drugs for diseases of aging, since June 2022.

McGrath has served as a consultant to various

companies in the biopharmaceutical industry, including:

Gustafson served as President and Chief Executive

Officer of Total Energy Services Ltd., a Toronto Stock Exchange listed oilfield services company, from 1993 to 1995, he served as the

Chief Financial Officer of Q/media Software Corporation, a Toronto Stock Exchange listed software company, and from 1987 to 1993, he served

initially as the Chief Financial Officer and then as a Vice President in charge of two operating divisions at EnServ Corporation, a Toronto

Stock Exchange listed oilfield services company.

From 1981 to 1987, he served as an audit manager at Price Waterhouse in Calgary Alberta.

Gustafson received his Bachelor of Business Administration from Wilfrid Laurier University.

Gustafson has been a Chartered

Accountant since 1983.

Fahey McGrath, M.P.H., Ph.D.

joined our Board in June 2021.

McGrath has served as a consultant to various companies

in the biopharmaceutical industry, including:

to the executive team of Nobias Therapeutics, Inc., a biotechnology product development

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Johnson Medical School.

We believe that Dr.

McGrath’s expertise in regulatory affairs and pharmaceutical product development

across a range of therapeutic categories and her more than 30 years of experience directing worldwide approvals of more than 50 new

drugs and indications makes her well qualified to serve as one of our directors.

Jeffrey Oram joined

our Board of Directors in June 2021.

Oram is a business professional with more than 25 years of corporate, private and institutional

investment experience.

Oram joined our Board in June 2021.

Oram is a business professional with more than 25 years of corporate, private

and institutional investment experience.

Oram has spent the last 13 years in the institutional real estate capital markets.

Since 2016, he

has been a Principal at Godby Realtors, a private real estate investment and brokerage firm.

Since 2016, he has been a Principal at Godby Realtors, a private real estate investment and brokerage firm.

From 2010 to 2018, Mr.

Oram served as

an Executive Member of the New Jersey State Investment Council, which oversees the investment of the State of New Jersey’s pension

From 2011 to 2016, he served as Executive Managing Director at Colliers International, from 2009 to 2011 he served as Director at

Marcus and Millichap, and from 2003 to 2009, served as First Vice President at CB Richard Ellis.

Oram received a Bachelor of

Science degree in Biology from Princeton University.

We believe that Mr.

Oram’s 25 years of corporate, private and institutional

investment experience gives him the qualifications and skills to serve as one of our directors.

served as an Executive Member of the New Jersey State Investment Council, which oversees the investment of the State of New Jersey’s

pension fund.

From 2011 to 2016, he served as Executive Managing Director at Colliers International, from 2009 to 2011 he served as Director

at Marcus and Millichap, and from 2003 to 2009, served as First Vice President at CB Richard Ellis.

Oram received a Bachelor

of Science degree in Biology from Princeton University.

Woo, M.D., Ph.D.

our Board of Directors in June 2021.

Woo is in private practice at Santa Monica Neurological Consultants and serves as an Assistant

Clinical Professor of Neurology at the David Geffen School of Medicine at UCLA and Cedars-Sinai Medical Center.

He also serves on the

board for the Multiple Sclerosis Association of America and its Navigating MS International Steering Committee.

He has been presented

with UCLA clinical faculty teaching awards in 2006, 2012 and 2019 and is listed in America’s Top Physicians by the Consumer Research

Council of America and Castle Connolly America’s Top Doctors 2006, 2007, 2010-2021, Southern California Super Doctors since 2008,

and Los Angeles Magazine Top Doctors.

our Board in June 2021.

Woo is in private practice at Santa Monica Neurological Consultants and serves as an Assistant Clinical Professor

of Neurology at the David Geffen School of Medicine at UCLA and Cedars-Sinai Medical Center.

He also serves on the board for the Multiple

Sclerosis Association of America and its Navigating MS International Steering Committee.

He has been presented with UCLA clinical faculty

teaching awards in 2006, 2012 and 2019 and is listed in America’s Top Physicians by the Consumer Research Council of America and

Castle Connolly America’s Top Doctors 2006, 2007, 2010-2021, Southern California Super Doctors since 2008, and Los Angeles Magazine

He is an invited speaker at the Muntada International Symposium in Abu Dhabi.

Woo received his

from Cornell University and completed his M.D.

in Neuroimmunology in the Department of Molecular and Cell Biology at Brown

He completed his medicine internship at Weil-Cornell Presbyterian Hospital/Cornell Medical Center in New York, his neurology

residency at UCLA, and his fellowship in neurophysiology at Harbor-UCLA.

We believe that Dr.

Woo’s extensive medical experience

gives him the qualifications and skills and relevant insight to serve as one of our directors.

Woo received his B.A.

from Cornell University

and completed his M.D.

in Neuroimmunology in the Department of Molecular and Cell Biology at Brown University.

his medicine internship at Weil-Cornell Presbyterian Hospital/Cornell Medical Center in New York, his neurology residency at UCLA, and

his fellowship in neurophysiology at Harbor-UCLA.

Board Leadership Structure and Risk Oversight

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Board Committees

Our Board of Directors has

an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

The responsibilities of the Audit Committee

(which consists of Mr.

Our Board has an Audit Committee,

a Compensation Committee and a Nominating and Corporate Governance Committee.

The responsibilities of the Audit Committee (which consists

Gustafson (Chair), Mr.

Woo) include recommending to the Board of Directors the firm

of independent accountants to be retained by our company, reviewing with our independent accountants the scope and results of their audits,

and reviewing with the independent accountants and management our accounting and reporting principles, policies and practices, as well

as our accounting, financial and operating controls and staff.

Woo) include recommending to the Board the independent registered public accounting

firm to be retained by our company, reviewing with our independent registered public accounting firm the scope and results of their audits,

and reviewing with the independent registered public accounting firm and management our accounting and reporting principles, policies

and practices, as well as our accounting, financial and operating controls and staff.

The Compensation Committee (which consist of Dr.

McGrath (Chair),

Gustafson and Mr.

Oram) has responsibility for establishing and reviewing employee compensation.

The Compensation Committee also

has responsibility for administering and interpreting the Alzamend Neuro, Inc.

The Compensation Committee

also has responsibility for administering and interpreting the Alzamend Neuro, Inc.

2021 Stock Incentive Plan, and determining the recipients,

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In May 2021, the Board

of Directors of our company and Mr.

Ault, our Founder and Chairman Emeritus, agreed to certain arrangements with regard to our Board

composition and other matters.

Contemporaneously with the effectiveness of the initial public offering, and in consideration for (i) the

conversion of 750 shares of our series A convertible preferred stock beneficially owned by Mr.

Ault through ALSI into 15,000,000

shares of our common stock, (ii) the extension of the maturity date of the note in the original principal amount of $15,000,000 issued

to us by ALSF to December 31, 2023, and (iii) the retirement by Mr.

Ault as a director and executive officer of our company,

the Board agreed that William B.

Horne will become our Chairman of the Board and remain in that position for so long as Mr.

beneficially owns no less than 5% of the outstanding shares of our common stock (for which Mr.

Horne will be paid $50,000 per year

for his services), and Mr.

Nisser will remain a member of our Board of Directors for so long as Mr.

Ault beneficially owns no

less than 5% of the outstanding shares of our common stock (for no additional remuneration).

Ault, our Founder and Chairman Emeritus, agreed to certain arrangements with regard to our Board composition and other matters.

Contemporaneously with the consummation of the initial public offering, and in consideration for (i) the conversion of 750 shares

of our series A convertible preferred stock beneficially owned by Mr.

Ault through ALSI into 100,000 shares of common stock, (ii) the

extension of the maturity date of the promissory note in the original principal amount of $15,000,000 (the “ ALSF Note ”)

issued to us by ALSF to December 31, 2023, and (iii) the resignation of Mr.

Ault as a director and executive officer of

our company, the Board agreed that William B.

Horne be named our Chairman of the Board and remain in that position for so long as Mr.

beneficially owns no less than 5% of the outstanding shares of common stock (for which Mr.

Horne will be paid $50,000 per year for

his services), and Mr.

Nisser remains a member of our Board for so long as Mr.

Ault beneficially owns no less than 5% of the

outstanding shares of common stock (for no additional remuneration).

Additionally, Mr.

Ault will hold the

position of Founder and Chairman Emeritus and, as such, have the right to nominate an observer to our Board of Directors for a period

of five years after the closing date of the initial public offering.

Following the closing of the initial public offering, we entered

into a five-year consulting agreement with Mr.

Ault under which he will provide strategic advisory and consulting services to us

in consideration for annual fees of $50,000.

Ault will hold the position of Founder and

Chairman Emeritus and, as such, have the right to nominate an observer to our Board for a period of five years after the closing

date of the initial public offering.

Immediately following the closing of the initial public offering in June 2021, we entered into a

five-year consulting agreement with Mr.

Ault under which he will provide strategic advisory and consulting services to us in consideration

for annual fees of $50,000.

Ault’s reappointment to the Board in January 2024, the consulting agreement was terminated.

Term of Office

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Officers are appointed to serve at the discretion

of our Board of Directors.

of our Board.

Family Relationships

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authority over its members or persons associated with a member.

Cragun served as Chief

Financial Officer of Local Corporation (April 2009 to September 2016), which, in June 2015, filed a voluntary petition in the U.S.

Court for the Central District of California seeking relief under the provisions of Chapter 11 of Title 11 of the United States Code.

served as Chief Financial Officer of Local Corporation (April 2009 to September 2016), formerly based in Irvine, California, and, in June

2015, Local Corporation filed a voluntary petition in the United States Bankruptcy Court for the Central District of California seeking

relief under the provisions of Chapter 11 of Title 11 of the United States Code.

see the press release issued by AULT on August 15, 2023.

Except as disclosed in “Certain

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Chief Financial Officer

Former Chief Financial Officer

(1) The values reported in the “Option Awards” column represents the aggregate grant date fair

value, computed in accordance with Accounting Standards Codification (“ASC”) 718 Share Based Payments, of grants of stock

options to each of our named executive officers and directors.

value, computed in accordance with ASC 718, Share Based Payments , of grants of stock options to each of our named executive officers

and directors.

(2) The amounts included in “All Other Compensation” consist of health insurance benefits.

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Chief Operating Officer.

Escalona resigned as Chief Financial Officer on August 1, 2022.

Employment Agreements

Stephan Jackman.

June 17, 2021, we entered into an employment agreement (the “Agreement”) with Stephan Jackman to continue to serve as our

Chief Executive Officer through July 1, 2024.

Pursuant to the Agreement, Mr.

Jackman was paid a base salary of $300,000 per annum, which

was increased by the Compensation Committee to $350,000 effective May 1, 2023 (the “Base Salary”).

In addition, Mr.

shall be eligible to earn a cash and/or equity bonus as our Board of Directors (the “Board”) may determine, from time to time,

based on meeting performance objectives and bonus criteria to be identified by the Board (the “Performance Bonus”), which

Performance Bonus may consist of cash or, in the Board’s sole discretion, our common stock.

The determination of whether we have

achieved a certain financial performance objective in any year for the purposes of the Performance Bonus shall be made by our independent

registered public accounting firm regularly retained or employed by us within 90 days after the end of each fiscal year.

Jackman is entitled

to receive equity participation as follows:

(A) options to purchase 5,000,000 shares of common stock, which options were previously granted

and are exercisable for a period of 10 years at an exercise price of $1.00 per share (the “$1.00 Options”), and (B) options

to purchase 2,000,000 shares of our common stock, which options shall be exercisable for a period of 10 years at an exercise price of

$1.50 per share (the “$1.50 Options”, and collectively with the $1.00 Options, the “Options”).

Subject to the terms and conditions

set forth in the Agreement, as modified by the Compensation Committee, the Options shall vest pursuant to the following schedule:

3,000,000 shares of common stock subject to the $1.00 Options vested ratably over 48 months, commencing on November 16, 2018;

(2) 1,000,000

shares of common stock subject to the $1.00 Options shall vest if the Company completes and announces topline data, by November 29, 2025,

from a Phase II clinical trial of AL001 that would support an NDA in Alzheimer’s;

(3) 1,000,000 shares of common stock subject to

the $1.00 Options shall vest if the Company completes and announces topline data, by November 29, 2026, from a Phase II clinical trial

of ALZN002 that would support an NDA in Alzheimer’s;

and (4) the $1.50 Options shall vest upon the successful achievement of stepped

target closing prices on a national securities exchange for 90 consecutive trading days , with the target prices range from $10 per share

to $20 per share.

In the event any of the stock price milestones are not achieved by November 27, 2026, the unvested portion of the

performance options will be reduced by 25%.

Jackman’s bonuses,

if any, and all stock-based compensation shall be subject to “Company Clawback Rights” if during the period that Mr.

is employed by us and upon the termination of Mr.

Jackman’s employment and for a period of two years thereafter, if there is a restatement

of any of our financial results from which any bonuses and stock-based compensation to Mr.

Jackman shall have been determined.

Upon termination of Mr.

employment (other than upon the expiration of the employment), Mr.

Jackman shall be entitled to receive:

(A) any earned but unpaid Base

Salary through the termination date;

(B) all reasonable expenses paid or incurred;

and (C) any accrued but unused vacation time.

Further, unless Mr.

employment is terminated as a result of his death or disability or for cause or he terminates his employment without good reason, then

upon the termination of Mr.

Jackman’s employment, the Company shall pay to Mr.

Jackman a “Separation Payment” as follows:

(a) an amount equal to 12 months of the Base Salary (as in effect immediately prior to the termination date);

and (b) a prorated Performance

Bonus amount calculated in accordance with the Performance Bonus criteria set forth in the Agreement and the actual number of days Mr.

Jackman worked in the calendar year prior to the termination date.

In addition, all of Mr.

Jackman’s Options shall immediately vest

and shall be exercisable for a period of 12 months after such termination.

CEO Pay Ratio

As required by Section 953(b)

of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing disclosure regarding the ratio of annual total compensation

Jackman, our Chief Executive Officer, to that of our median employee.

Our median employee earned $130,000 in total compensation

for our fiscal year ended April 30, 2024.

Based upon the total fiscal year 2024 compensation reported for Mr.

Jackman of $443,617 as reported

under “Total” in the Summary Compensation Table, our ratio of PEO to median employee pay was 3:1.

Calculation Methodology

To identify our median employee,

we identified our total employee population worldwide as of April 30, 2024, excluding our Chief Executive Officer, in accordance with

On April 30, 2024, all of our employee population was located in the U.S.

We collected full-year fiscal

year 2024 actual gross earnings data for the April 30, 2024 employee population, including cash-based compensation and equity-based compensation

that was realized in fiscal year 2024, relying on our internal payroll records.

Compensation was annualized on a straight-line basis for

non-temporary new hire employees who did not work with our company for the full calendar year.

Once we determined the median

employee, we calculated total compensation for the median employee in the same manner in which we determine the compensation shown for

our named executive officers in the Summary Compensation Table, in accordance with SEC rules.

Policies on Ownership, Insider Trading, 10b5-1

Plans and Hedging

do not have formal stock ownership guidelines for our employees or directors, because the Board is satisfied that stock and option holdings

among our employees or directors are sufficient at this time to provide motivation and to align this group’s interests with those

of our stockholders.

have established an insider trading policy that provides guidelines to, and imposes restrictions on, officers, directors and employees

with respect to transactions in our securities.

Our insider trading policy prohibits certain actions by such individuals relating to buying

and selling our common stock, and discourages certain other actions in other situations.

Such individuals are authorized to enter into

trading plans established according to Section 10b5-1 of the Exchange Act with an independent broker-dealer.

Under these plans, the individual

must not exercise any influence over the amount of the securities to be traded, the price at which they are to be traded or the date of

The plan must either specify the amount, pricing and timing of transactions in advance or delegate discretion on these matters

to an independent third party.

Such plans provide a defense from insider trading liability.

have not adopted any hedging policies.

Outstanding Equity Awards at Fiscal Year End

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of 83,333 shares of our common stock to be offered to our directors, officers, employees and consultants.

On March 1, 2019, our

stockholders approved an additional 7,500,000 shares to be available for issuance under the 2016 Plan.

Options granted under the 2016

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.

On March 1, 2019, our stockholders

approved an additional 50,000 shares to be available for issuance under the 2016 Plan.

Options granted under the 2016 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 2016 Plan are subject to a vesting period determined at the date of grant.

Restricted stock awards

granted under the 2016 Plan are subject to a vesting period determined at the date of grant.

2021 Stock Incentive Plan

In February 2021, our

Board of Directors adopted, and our stockholders approved, the Alzamend Neuro, Inc.

Board adopted, and our stockholders approved, the Alzamend Neuro, Inc.

2021 Stock Incentive Plan (the “2021 Plan”).

The 2021 Plan authorizes the grant to eligible individuals of (1) stock options (incentive and non-statutory), (2) restricted

stock, (3) stock appreciation rights, or SARs, (4) restricted stock units, and (5) other stock-based compensation.

Plan authorizes the grant to eligible individuals of (1) stock options (incentive and non-statutory), (2) restricted stock,

(3) stock appreciation rights, or SARs, (4) restricted stock units, and (5) other stock-based compensation.

Stock Subject to the 2021

The maximum number of shares of our 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 us 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 we acquire

or any subsidiary of ours or with which we 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 our common stock that may be issued under the 2021 Plan is 66,666 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 us 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 we acquire or

any subsidiary of ours or with which we 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.

No Liberal Share Recycling.

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of stock that may be issued under the 2021 Plan.

of, and consultants to, our company or our affiliates and members of our Board of Directors are eligible to receive equity awards under

the 2021 Plan.

Only our employees, and employees of our parent and subsidiary corporations, if any, are eligible to receive incentive

stock options.

Employees, directors (including non-employee directors) and consultants of or for our company and our affiliates are eligible

to receive non-statutory stock options, restricted stock, purchase rights and any other form of award the 2021 Plan authorizes.

of, and consultants to, our company or our affiliates and members of our Board are eligible to receive equity awards under the 2021 Plan.

Only our employees, and employees of our parent and subsidiary corporations, if any, are eligible to receive incentive stock options.

Employees, directors (including non-employee directors) and consultants of or for our company and our affiliates are eligible to receive

non-statutory stock options, restricted stock, purchase rights and any other form of award the 2021 Plan authorizes.

purpose of the 2021 Plan is to promote the interests of our company and our stockholders by providing executive officers, employees, non-employee

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Administration.

otherwise determined by the Board of Directors, the Compensation Committee administers the 2021 Plan.

The Compensation Committee is composed

solely of “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act, “outside directors”

otherwise determined by the Board, the Compensation Committee administers the 2021 Plan.

The Compensation Committee is composed solely

of “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act, “outside directors”

within the meaning of Section 162(m) of the Internal Revenue Code, and “independent directors” within the meaning of

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under the 2021 Plan subsequent to that date.

The Board of Directors may suspend or terminate the 2021 Plan without stockholder approval

or ratification at any time or from time to time.

The Board may suspend or terminate the 2021 Plan without stockholder approval or ratification

at any time or from time to time.

to the terms of the 2021 Plan, the Compensation Committee, as administrator, has the sole discretion to interpret the provisions of the

2021 Plan and outstanding awards.

Our Board of Directors generally may amend or terminate the 2021 Plan at any time and for any reason,

except that no amendment, suspension or termination may impair the rights of any participant without his or her consent, and except that

approval of our stockholders is required for any amendment which, among provisions, increases the number of shares of common stock subject

to the 2021 Plan, decreases the price at which grants may be granted and reprices existing options.

Our Board generally may amend or terminate the 2021 Plan at any time and for any reason, except that

no amendment, suspension or termination may impair the rights of any participant without his or her consent, and except that approval

of our stockholders is required for any amendment which, among provisions, increases the number of shares of common stock subject to the

2021 Plan, decreases the price at which grants may be granted and reprices existing options.

Repricing Prohibition.

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transaction or other change in our corporate structure affecting our common stock or the value thereof, appropriate adjustments to the

2021 Plan and awards will be made as the Board of Directors determines to be equitable or appropriate, including adjustments in the number

and class of shares of stock available for issuance under the 2021 Plan, the number, class and exercise or grant price of shares subject

to awards outstanding under the 2021 Plan, and the limits on the number of awards that any person may receive.

2021 Plan and awards will be made as the Board determines to be equitable or appropriate, including adjustments in the number and class

of shares of stock available for issuance under the 2021 Plan, the number, class and exercise or grant price of shares subject to awards

outstanding under the 2021 Plan, and the limits on the number of awards that any person may receive.

Change of Control.

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voting power after the transaction, (ii) the consummation of the sale, transfer or other disposition of all or substantially all

of our assets, (iii) certain changes in the majority of our Board of Directors from those in office on the effective date of the

2021 Plan, (iv) the acquisition of more than 50% of the total combined voting power in our outstanding securities by any person,

or (v) we are dissolved or liquidated.

of our assets, (iii) certain changes in the majority of our Board from those in office on the effective date of the 2021 Plan, (iv) the

acquisition of more than 50% of the total combined voting power in our outstanding securities by any person, or (v) we are dissolved

or liquidated.

Types of Awards

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Director Compensation

The Company pays each independent

director an annual base amount of $25,000.

Additionally, our Board makes recommendations for adjustments to an independent director’s

compensation when the level of services provided are significantly above what was anticipated.

The table below sets forth,

for each non-employee director, the total amount of compensation related to his or her service during the year ended April 30, 2023:

Company pays each independent director an annual base amount of $25,000.

Additionally, our Board makes recommendations for adjustments

to an independent director’s compensation when the level of services provided are significantly above what was anticipated.

table below sets forth, for each non-employee director, the total amount of compensation related to his or her service during the year

ended April 30, 2024:

Fees earned or

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table shows the beneficial ownership of our common stock

as of July 24, 2023, held by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding common stock,

(ii) each of our directors and director nominees, (iii) each of our executive officers, and (iv) all of our directors,

director nominees and executive officers as a group.

As of July 24, 2023, there were 96,940,124 shares of our common stock issued and

The following table shows the beneficial

ownership of our common stock as of July 29, 2024, held by (i) each person known by us to be the beneficial owner of more than 5%

of our outstanding common stock, (ii) each of our directors and director nominees, (iii) each of our executive officers, and

(iv) all of our directors, director nominees and executive officers as a group.

As of July 29, 2024, there were 841,240 shares of

our common stock issued and outstanding.

Beneficial ownership is determined

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Beneficially Owned

Percentage of

Ault, III (1) (2) (3) (4)

Percentage of Shares

Ault Life Sciences, Inc.

Ault Life Sciences Fund, LLC (2)

Ault Lending, LLC (2)

Ault Alliance, Inc.

Directors and Executive Officers

Ault, III (1) (2) (3) (4)

Stephan Jackman (5)

Henry Nisser (7)

Mark Gustafson (10)

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(1) Milton C.

(Todd) Ault, III, our Founder and Chairman Emeritus, has sole voting and investment power

with respect to the shares held of record by ALSI.

(2) Represents 10,000,000 shares of our common stock and 5,000,000 shares of our common stock issuable upon

the exercise of warrants.

Ault has sole voting and investment power with respect to the securities held of record by ALSF.

Ault has voting and investment power with respect to the securities held by AL.

Excludes 3,333,333

shares of our common stock underlying currently exercisable warrants held by AL due to a beneficial ownership blocker limitation provision

contained therein.

(4) Includes (i) 2,500,000 shares of our common stock held by Mr.

Ault, (ii) 383,000 shares of our common

stock held by Ault Alpha LP, and (iii) 16,667 shares of common stock issuable upon the exercise of warrants held by AULT.

the Manager of Ault Alpha GP LLC (“Ault GP”) and Ault Capital Management LLC (“AC Management”).

Ault GP and AC

Management are the general partner and investment manager to Ault Alpha LP, respectively.

Ault is deemed to beneficially

own the shares held by Ault Alpha LP.

(5) Consist of 45,500 shares of our common stock and 3,000,000 shares of our common stock issuable upon the

exercise of stock options that are currently exercisable or exercisable within 60 days.

(6) Consists of (i) 28,000 shares of our common stock, (ii) 9,000 shares of our common stock issuable upon

the exercise of warrants and (iii) 1,448,958 shares of our common stock issuable upon the exercise of stock options that are currently

exercisable or exercisable within 60 days.

(Todd) Ault, III, our Founder and Vice Chairman, has sole voting and investment power with

respect to the shares held of record by ALSI.

Ault has voting and investment power with respect to the securities held by Ault Lending.

of (i) 77,169 shares of common stock and (ii) 703,753 shares of common stock issuable upon conversion of Series B Preferred Stock.

(A) 210,000 shares of common stock underlying warrants that are not currently exercisable and (B) 22,222 shares of common stock underlying

currently exercisable warrants due to a beneficial ownership blocker limitation provision contained therein.

Notwithstanding

the foregoing, Ault Lending is only permitted to cast a vote representing 240,549 shares of common stock, instead of the 703,753 shares

of common stock issuable upon conversion of the Series B Preferred Stock, in accordance with the terms of the Amended and Restated Certificate

of Designation of the Rights and Preferences of the Series B Preferred Stock.

Ault has voting and investment power with respect to the securities held by AULT.

Ault Lending is

a wholly owned subsidiary of AULT.

Consists of (i) 111 shares of common stock underlying currently exercisable warrants, (ii)

99,619 shares of common stock held by ALSI and (iii) 703,753 shares of common stock issuable upon conversion of Series B Preferred Stock

held by Ault Lending.

Excludes (A) 210,000 shares of common stock underlying warrants held by Ault Lending that are not currently

exercisable and (B) 22,222 shares of common stock underlying currently exercisable warrants held by Ault Lending due to a beneficial ownership

blocker limitation provision contained therein.

(4) Consists of (i) 16,686 shares of our common stock held by Mr.

Ault, (ii) 77,169 shares of common stock

held by Ault Lending, (iii) 703,753 shares of common stock issuable upon conversion of Series B Preferred Stock held by Ault Lending,

(iv) 99,619 shares of common stock held by ALSI, (v) 549 shares of common stock held by Ault Life Sciences Fund, LLC (“ALSF”)

and (vi) 111 shares of common stock underlying currently exercisable warrants held by Ault Alliance.

Excludes (A) 210,000 shares

of common stock underlying warrants held by Ault Lending that are not currently exercisable and (B) 22,222 shares of common stock underlying

currently exercisable warrants held by Ault Lending due to a beneficial ownership blocker limitation provision contained therein.

has sole voting and investment power with respect to the securities held of record by ALSF.

(5) Consist of (i) 303 shares of our common stock and (ii) 20,000 shares of our common stock issuable upon

the exercise of stock options that are currently exercisable or exercisable within 60 days.

(6) Consists of (i) 540 shares of our common stock, (ii) 60 shares of our common stock issuable upon the exercise

of warrants and (iii) 9,999 shares of our common stock issuable upon the exercise of stock options that are currently exercisable or exercisable

within 60 days.

(7) Represents shares of our common stock issuable upon the exercise of stock options, which are currently

exercisable or exercisable within 60 days.

Nisser’s address is 100 Park Avenue, Suite 1658, New York, New York 10017.

Nisser’s address is 122 East 42 nd Street, 50 th Floor,

Suite 5000, New York, New York 10168.

(8) Represents shares of our common stock issuable upon the exercise of stock options, which are currently

exercisable or exercisable within 60 days.

(9) Consists of 1,000,000 shares of our common stock and 1,750,000 shares of our common stock issuable upon

(9) Consists of (i) 6,666 shares of our common stock and (ii) 11,666 shares of our common stock issuable upon

the exercise of stock options that are currently exercisable or exercisable within 60 days.

(10) Consists of 60,000 shares of our common stock and 300,000 shares of our common stock issuable upon the

exercise of stock options that are currently exercisable or exercisable within 60 days.

(10) Consists of (i) 400 shares of our common stock and (ii) 2,000 shares of our common stock issuable upon

the exercise of stock options that are currently exercisable or exercisable within 60 days.

(11) Consists of (i) 500 shares of our common stock owned by Dr.

McGrath, (ii) 10,000 shares of our common

stock owned by Dr.

McGrath’s spouse in an individual retirement account, and (iii) 300,000 shares of our common stock issuable upon

the exercise of stock options owned by Dr.

McGrath and (ii) 2,000 shares of our common

stock issuable upon the exercise of stock options owned by Dr.

McGrath that are currently exercisable or exercisable within 60 days.

McGrath disclaims

beneficial ownership of the shares held by her spouse.

(12) Consists of 100,000 shares of our common stock and 300,000 shares of our common stock issuable upon the

exercise of stock options that are currently exercisable or exercisable within 60 days.

Equity Compensation Information

The following table summarizes information about our equity compensation

plans as of April 30, 2023:

(12) Consists of (i) 666 shares of our common stock and (ii) 2,000 shares of our common stock issuable upon

the exercise of stock options that are currently exercisable or exercisable within 60 days.

Equity Compensation

The following table summarizes

information about our equity compensation plans as of April 30, 2024:

Number of securities

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Certain Relationships

Our company is controlled

(Todd) Ault, III, our Founder and current Chairman Emeritus, directly and through his controlling interests in AL, ALSI and

Ault is also the Chairman, Chief Executive Officer and single largest stockholder (through Ault Alpha LP) of AULT.

of Directors and executive officers of our company and the board of directors and executive officers of AULT contain some of the same

Horne, the Chairman of the Board of our company, is the Chief Executive Officer and a director of AULT, Henry Nisser, our Executive Vice President, General Counsel and a director of our company, is the President, General Counsel and a director

(Todd) Ault, III,

our Founder and Vice Chairman, has significant influence over our Company, directly and through his controlling interests in AULT, Ault

Lending and ALSI.

Ault is also the Chairman, Chief Executive Officer and single largest beneficial stockholder (through Ault &

Co.) of AULT.

The Board and executive officers of our company and the board of directors and executive officers of AULT contain some of

the same individuals.

Horne, the Chairman of the Board of our company, is the Chief Executive Officer and a director of AULT,

Henry Nisser, our Executive Vice President, General Counsel and a director of our company, is the President, General Counsel and a director

of AULT, and Kenneth S.

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Transactions with Related Persons

To the best of our knowledge,

during our most recent fiscal year end on April 30, 2023, other than as set forth below, there were no material transactions, or

series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to

be a party, in which the amount involved exceeds $100,360, or 1% of the average total assets at year-end for the last two completed fiscal years,

and in which any director or executive officer, or any security holder who is known by us to own of record or beneficially more than 5%

of any class of our common stock, or any member of the immediate family of any of the foregoing persons, has an interest (other than compensation

to our officers and directors in the ordinary course of business).

On April 30, 2019, we

entered into a securities purchase agreement with ALSF for the sale of 10,000,000 shares of our common stock, plus 5,000,000 warrants

with a five-year term and an exercise price of $3.00 per share and vesting upon issuance (the “ALSF Warrants”).

purchase price of $15,000,000 was in the form of a note from ALSF.

The note balance as of April 30, 2020 was reduced by $16,800 reflecting

payments made during the year ended April 30, 2020.

The note balance as of April 30, 2021 was reduced by $99,905 reflecting

payments made during the year ended April 30, 2021.

As of April 30, 2023, the note balance was $14,883,295.

The note is due December

the best of our knowledge, during our most recent fiscal year end on April 30, 2024, other than as set forth below, there were no

material transactions, or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to

which we were or are to be a party, in which the amount involved exceeds $32,736, or 1% of the average total assets at year-end for the

last two completed fiscal years, and in which any director or executive officer, or any security holder who is known by us to own

of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing

persons, has an interest (other than compensation to our officers and directors in the ordinary course of business).

April 30, 2019, we entered into a securities purchase agreement with ALSF for the sale of 66,666 shares of common stock, plus 33,333

warrants with a five-year term and an exercise price of $450.00 per share and vesting upon issuance (the “ALSF Warrants”).

The total purchase price of $15,000,000 was in the form of the ALSF Note.

The ALSF Note balance as of April 30, 2020 was reduced

by $16,800 reflecting payments made during the year ended April 30, 2020.

The ALSF Note balance as of April 30, 2021 was reduced

by $99,905 reflecting payments made during the year ended April 30, 2021.

As of April 30, 2023, the ALSF Note balance was $14,883,295.

The ALSF Note was due December 31, 2023.

The control person of ALSF is Mr.

Ault, our Founder and Chairman Emeritus.

ALSF is wholly owned by ALSI.

ALSI is almost

entirely wholly owned by Ault & Company, Inc., of which MCKEA Holdings, LLC (“MCKEA”), of which Mr.

Ault’s spouse

is the managing member, is the majority owner.

As such, MCKEA is indirectly the majority owner of ALSF.

The note is secured by a Stock

Pledge Agreement dated June 11, 2019.

While the securities purchase agreement provides for ALSF’s ability to pledge the securities

acquired thereby, given that the purchased securities are subject to the securities purchase agreement, we and ALSF agreed that such securities

may not be pledged to any third party until the current pledge agreement has been terminated through full repayment of the note.

Pursuant to the securities

purchase agreement, ALSF is entitled to full ratchet anti-dilution protection, most-favored nation status, denying our company the right

to enter into a variable rate transaction absent its consent, and the right to participate in any future financing we may consummate.

All these rights, other than the right to participate in future financings which will not terminate until ALSF no longer holds any shares

of our common stock or any ALSF Warrants, will terminate on the earlier to occur of such date that we have (i) completed a Qualified

Financing, or (ii) received approval by the FDA for any of our product candidates in Phase III clinical trial.

of the securities purchase agreement, a “Qualified Financing” means the sale of equity securities by us in a single transaction

or a series of related transactions, whether or not registered under the Securities Act, resulting in gross proceeds to us of no less

than $25,000,000.

In March of 2021, we entered

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

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

In addition, we issued AL warrants

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

Finally, we agreed that for a period

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

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

million as of the date of this Annual Report.

In May 2021, the Board

of Directors of our company and Mr.

Ault, our Founder and Chairman Emeritus, agreed to certain arrangements with regard to our Board

composition and other matters.

Contemporaneously with the consummation of the initial public offering, and in consideration for (i) the

conversion of 750 shares of our series A convertible preferred stock beneficially owned by Mr.

Ault through ALSI into 15,000,000

shares of our common stock, (ii) the extension of the maturity date of the note in the original principal amount of $15,000,000 issued

to us by ALSF to December 31, 2023, and (iii) the resignation of Mr.

Ault as a director and executive officer of our company,

the Board agreed that William B.

ALSI is almost entirely

wholly owned by Ault & Co., of which MCKEA, of which Mr.

Ault’s spouse is the managing member, is the majority owner.

MCKEA is indirectly the majority owner of ALSF.

The ALSF Note was secured by a stock pledge agreement dated June 11, 2019 (the “Pledge

January 19, 2024, we entered into a settlement agreement with ALSF, pursuant to which ALSF returned 66,117 shares and the ALSF Warrants

to us, in full settlement of the ALSF Note and the Pledge Agreement, as well as disputes and claims between the parties.

May 2021, the Board and Mr.

Ault, agreed to certain arrangements with regard to our Board composition and other matters.

Contemporaneously

with the consummation of the initial public offering, and in consideration for (i) the conversion of 750 shares of our series A convertible

preferred stock beneficially owned by Mr.

Ault through ALSI into 100,000 shares of common stock, (ii) the extension of the maturity

date of the ALSF Note to December 31, 2023, and (iii) the resignation of Mr.

Ault as a director and executive officer of

our company, the Board agreed that William B.

Horne be named our Chairman of the Board and remain in that position for so long as Mr.

Ault beneficially

owns no less than 5% of the outstanding shares of our common stock (for which Mr.

Horne will be paid $50,000 per year for his services),

Nisser remains a member of our Board of Directors for so long as Mr.

Ault beneficially owns no less than 5% of the outstanding

shares of our common stock (for no additional remuneration).

beneficially owns no less than 5% of the outstanding shares of common stock (for which Mr.

Horne will be paid $50,000 per year for

his services), and Mr.

Nisser remains a member of our Board for so long as Mr.

Ault beneficially owns no less than 5% of the

outstanding shares of common stock (for no additional remuneration).

Additionally, Mr.

Ault will hold the position of Founder and Chairman

Emeritus and, as such, have the right to nominate an observer to our Board of Directors for a period of five years after the closing

Ault will hold the position of Founder and

Chairman Emeritus and, as such, have the right to nominate an observer to our Board for a period of five years after the closing

date of the initial public offering.

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for annual fees of $50,000.

In November 2022, we entered into a marketing and

brand development agreement with AULT, effective August 1, 2022, whereby AULT will provide various marketing services over twelve months

valued at $1.4 million.

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

11, 2022, we elected to pay the fee with 933,334 shares of our common stock.

Our accounting and finance

department use shared office space within the Costa Mesa offices of AULT.

Ault III, our Founder

and Chairman Emeritus, is an executive officer and director of AULT, as are several other officers and board members of our company.

Ault’s reappointment to the Board in January 2024, the consulting agreement was terminated.

November 2022, we entered into a marketing and brand development agreement with AULT, effective August 1, 2022, whereby AULT provided

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

We had the right to pay the fee in cash or shares of common stock

with a value of $225.00 per share.

On November 11, 2022, we elected to pay the fee with 6,222 shares of common stock.

the January 31, 2024, we entered into the SPA with Ault Lending, pursuant to which we agreed to sell to Ault Lending up to 6,000 shares

of Series B Preferred Stock and Series B Warrants to purchase up to 600,000 shares of common stock in one or more closings.

On the Execution

Date, we sold 1,220 shares of Series B Preferred Stock and Series B Warrants to purchase 122,000 shares of common stock to Ault Lending,

for a total purchase price of $1.22 million, which was paid by the cancellation of $1.22 million

of cash advances made by Ault Lending to us between November 9, 2023 and the Execution Date.

Each share of Series B Preferred Stock

is convertible into such number of Conversion Shares determined by dividing the Stated Value by

the Conversion Price.

The Series B Preferred Stock votes with the common stock, on an “as-converted” basis, subject

to certain limitations as set forth in the Series B Certificate of Designations.

The Series B Warrants grant Ault Lending the right to

purchase Warrant Shares at the Exercise Price of $12.00 for a period of five years from the Initial Exercise Date.

March 26, 2024, we sold 780 shares of Series B Convertible Preferred Stock and Series B Warrants to purchase 78,000 shares of common

stock with an exercise price of $12.00, for a total purchase price of $780,000.

On April 29, 2024,

we sold 100 shares of Series B Convertible Preferred Stock and Series B Warrants to purchase 10,000 shares of common stock with

an exercise price of $12.00, for a total purchase price of $100,000.

accounting and finance department use shared office space within the Costa Mesa offices of AULT.

Future Transactions

Our Board of Directors has

adopted a policy whereby any future transactions between our company and any of our subsidiaries, affiliates, officers, directors, principal

stockholders or any affiliates of the foregoing will be on terms no less favorable to us than could reasonably be obtained in “arm’s

length” transactions with independent third parties, and any such transactions will also be approved by a majority of our disinterested

and independent outside directors.

Board has adopted a policy whereby any future transactions between our company and any of our subsidiaries, affiliates, officers, directors,

principal stockholders or any affiliates of the foregoing will be on terms no less favorable to us than could reasonably be obtained in

“arm’s length” transactions with independent third parties, and any such transactions will also be approved by a majority

of our disinterested and independent outside directors.

Director Independence

2 unchanged sentences

Governance Committee

Compensation Committee

Stephan Jackman

1 unchanged sentence

Lynne Fahey McGrath

C – Chairman of committee

X – Member of committee

– Chairman of committee

– Member of committee

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Baker Tilly US, LLP served

as our independent registered public accounting firm for the years ended April 30, 2023 and 2022.

Baker Tilly US, LLP (“Baker

Tilly”) served as our independent registered public accounting firm for the year ended April 30, 2023.

On May 6, 2024, our audit

committee dismissed Baker Tilly and appointed Haskell & White LLP as our independent registered public accounting firm for the year

ended April 30, 2024.

Fees and Services

The following table shows

the aggregate fees billed to us for professional services by Baker Tilly US, LLP for the years ended April 30, 2023 and 2022:

the aggregate fees paid to us for professional services by Baker Tilly for the years ended April 30, 2024 and 2023:

Audit Services

1 unchanged sentence

All Other Services

category includes the aggregate fees billed for professional services rendered for the audits of our financial statements for the years

category includes the aggregate fees paid for professional services rendered for the audits of our financial statements during the years

ended April 30, 2024 and 2023, for the reviews of the interim financial statements during the years ended April 30, 2024 and 2023, and

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for the relevant years.

We have not paid Haskell & White LLP for any audit services as they were not engaged prior to April 30, 2024.

Audit-Related Fees.

category includes the aggregate fees billed in each of the last two years for assurance and related services by the independent auditors

category includes the aggregate fees paid in each of the last two years for assurance and related services by the independent auditors

that are reasonably related to the performance of the audits or reviews of the financial statements and are not reported above under “Audit

2 unchanged sentences

This category

includes the aggregate fees billed in each of the last two years for professional services rendered by the independent auditors for tax

includes the aggregate fees paid in each of the last two years for professional services rendered by the independent auditors for tax

compliance, tax planning and tax advice.

All Other Fees.

category includes the aggregate fees billed in each of the last two years for products and services provided by the independent auditors

category includes the aggregate fees paid in each of the last two years for products and services provided by the independent auditors

that are not reported above under “Audit Fees,” “Audit-Related Fees,” or “Tax Fees.”

The Audit Committee’s

policy is to pre-approve all services provided by our independent auditors.

These services may include audit services, audit-related services,

tax services and other services.

The Audit Committee may also pre-approve particular services on a case-by-case basis.

Our independent

auditors are required to report periodically to the Audit Committee regarding the extent of services they provide in accordance with such

pre-approval.

policy is to pre-approve all services provided by our independent registered public accounting firm.

These services may include audit

services, audit-related services, tax services and other services.

The Audit Committee may also pre-approve particular services on a case-by-case

Our independent auditors are required to report periodically to the Audit Committee regarding the extent of services they provide

in accordance with such pre-approval.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit Description

Certificate of Incorporation

(incorporated by reference to Exhibit 2.1 of Form DOS filed with the SEC on August 19, 2016).

and Restated Bylaws (incorporated by reference to Exhibit 3.2 of Form S-1 filed with the SEC on May 10, 2021).

Certificate of Designation

of Alzamend Neuro, Inc.

Series A Convertible Preferred Stock, dated May 30, 2016 (incorporated by reference to Exhibit 2.3

of Form 1-A/A filed with the SEC on February 4, 2020).

Promissory Note Due

April 30, 2020, issued by Ault Life Sciences Fund, LLC, dated April 30, 2019 (incorporated by reference to Exhibit 3.1

of Form 1-A/A filed with the SEC on February 4, 2020).

Amendment to Note

Due April 30, 2020, by and between Ault Life Sciences Fund, LLC and Alzamend Neuro, Inc., dated June 11, 2019 (incorporated

by reference to Exhibit 3.2 of Form 1-A/A filed with the SEC on February 4, 2020).

Warrant to Purchase

Common Stock issued to Ault Life Sciences Fund, LLC, dated April 30, 2019 (incorporated by reference to Exhibit 3.3 of Form

1-A/A filed with the SEC on March 12, 2020).

Warrant to Purchase

Common Stock issued to Ault Global Holdings, Inc., dated March 9, 2021 (incorporated by reference to Exhibit 3.1 of Form 1-U

filed with the SEC on March 12, 2021).

Form of Warrant issued

to Digital Power Lending, LLC, dated March 9, 2021 (incorporated by reference to Exhibit 3.1 of Form 1-U filed with the SEC

on March 12, 2021).

Standard Exclusive

License Agreement with Sublicensing Terms with the University of South Florida Research Foundation, Inc., dated May 1, 2016 (incorporated

by reference to Exhibit 6.1 of Form DOS/A filed with the SEC on September 29, 2016).

Standard Exclusive License

Agreement with Sublicensing Terms Number LIC18110 with the University of South Florida Research Foundation, Inc., dated July 2, 2018

(incorporated by reference to Exhibit 6.3 of Form 1-K filed with the SEC on February 21, 2019).

Standard Exclusive License

Agreement with Sublicensing Terms Number LIC18111 with the University of South Florida Research Foundation, Inc., dated July 2, 2018

(incorporated by reference to Exhibit 6.4 of Form 1-K filed with the SEC on February 21, 2019).

Standard Exclusive

License Agreement with Sublicensing Terms Number LIC19050 with the University of South Florida Research Foundation, Inc., dated June 10,

2020 (incorporated by reference to Exhibit 6.6 of Form 1-K filed with the SEC on August 28, 2020).

Standard Exclusive

License Agreement with Sublicensing Terms Number LIC19051 with the University of South Florida Research Foundation, Inc., dated June 10,

2020 (incorporated by reference to Exhibit 6.7 of Form 1-K filed with the SEC on August 28, 2020).

Employment Agreement

with Stephan Jackman, dated June 17, 2021 (incorporated by reference to Exhibit 10.01 of Form 8-K filed with the SEC on June 22,

Stock Pledge Agreement

with Ault Life Sciences Fund, LLC, dated June 11, 2019 (incorporated by reference to Exhibit 6.9 of Form 1-A filed with the

SEC on March 12, 2020).

Securities Purchase

Agreement with Ault Life Sciences Fund, LLC, dated April 30, 2019 (incorporated by reference to Exhibit 4.2 of Form 1-A/A filed

with the SEC on February 4, 2020).

Purchase Agreement with Ault Global Holdings, Inc.

dated August 31, 2020 (incorporated by reference to Exhibit 10.14 of Form S-1

filed with the SEC on May 10, 2021).

Letter Agreement, dated May 6, 2021, between Alzamend Neuro, Inc.

and Milton C.

Ault III (incorporated by reference

to Exhibit 10.17 of Form S-1/A filed with the SEC on May 25, 2021).

2016 Amended and

Restated Stock Incentive Plan (incorporated by reference to Exhibit 99.1 of Form S-8 filed with the SEC on July 13, 2021).

Certificate of Incorporation (incorporated by reference to Exhibit 2.1 of Form DOS filed with the SEC on August 19, 2016).

Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on June 10, 2016 (incorporated by reference to Exhibit 3.2 of the Quarterly Report on Form 10-Q filed with the SEC on December 15, 2023).

Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on December 22, 2020 (incorporated by reference to Exhibit 3.3 of the Quarterly Report on Form 10-Q filed with the SEC on December 15, 2023).

Certificate of Amendment to the Certificate of Incorporation, filed with the Delaware Secretary of State on October 27, 2023 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed with the SEC on October 30, 2023).

Amended and Restated Certificate of Designations of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, filed with the Delaware Secretary of State on March 1, 2024 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed with the SEC on March 7, 2024).

Certificate of Amendment to the Amended and Restated Certificate of Designations of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, filed with the Delaware Secretary of State on March 21, 2024 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed with the SEC on March 22, 2024).

Certificate of Designations of Preferences and Rights of Series A Preferred Stock, as filed with the Delaware Secretary of State on May 9, 2024 (incorporated by reference to Exhibit 3.1 of the amended Current Report on Form 8-K/A filed with the SEC on May 10, 2024).

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the registration statement on Form S-1 filed with the SEC on May 10, 2021).

Form of Warrant issued to Ault Lending, LLC (formerly, Digital Power Lending, LLC), dated March 9, 2021 (incorporated by reference to Exhibit 3.1 of Form 1-U filed with the SEC on March 12, 2021).

Form of Warrant (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC on February 2, 2024).

Form of Warrant (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed with the SEC on May 9, 2024).

Description of Capital Stock.

Standard Exclusive License Agreement with Sublicensing Terms with the University of South Florida Research Foundation, Inc., dated May 1, 2016 (incorporated by reference to Exhibit 6.1 of Form DOS/A filed with the SEC on September 29, 2016).

Standard Exclusive License Agreement with Sublicensing Terms Number LIC18110 with the University of South Florida Research Foundation, Inc., dated July 2, 2018 (incorporated by reference to Exhibit 6.3 of Form 1-K filed with the SEC on February 21, 2019).

Standard Exclusive License Agreement with Sublicensing Terms Number LIC18111 with the University of South Florida Research Foundation, Inc., dated July 2, 2018 (incorporated by reference to Exhibit 6.4 of Form 1-K filed with the SEC on February 21, 2019).

Standard Exclusive License Agreement with Sublicensing Terms Number LIC19050 with the University of South Florida Research Foundation, Inc., dated June 10, 2020 (incorporated by reference to Exhibit 6.6 of Form 1-K filed with the SEC on August 28, 2020).

Standard Exclusive License Agreement with Sublicensing Terms Number LIC19051 with the University of South Florida Research Foundation, Inc., dated June 10, 2020 (incorporated by reference to Exhibit 6.7 of Form 1-K filed with the SEC on August 28, 2020).

2016 Amended and Restated Stock Incentive Plan (incorporated by reference to Exhibit 99.1 of Form S-8 filed with the SEC on July 13, 2021).

2021 Stock Incentive Plan (incorporated by reference to Exhibit 99.2 of Form S-8 filed with the SEC on July 13, 2021).

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms with the University of South Florida Research Foundation, Inc., dated April 16, 2023.

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC19050 with the University of South Florida Research Foundation, Inc., dated April 16, 2023.

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC19051 with the University of South Florida Research Foundation, Inc., dated April 16, 2023.

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC18110 with the University of South Florida Research Foundation, Inc., dated June 8, 2023.

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC18111 with the University of South Florida Research Foundation, Inc., dated June 8, 2023.

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms with the University of South Florida Research Foundation, Inc., dated April 16, 2023 (incorporated by reference to Exhibit 10.13 of annual report on Form 10-K filed with the SEC on July 27, 2023).

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC19050 with the University of South Florida Research Foundation, Inc., dated April 16, 2023 (incorporated by reference to Exhibit 10.14 of annual report on Form 10-K filed with the SEC on July 27, 2023).

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC19051 with the University of South Florida Research Foundation, Inc., dated April 16, 2023 (incorporated by reference to Exhibit 10.15 of annual report on Form 10-K filed with the SEC on July 27, 2023).

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC18110 with the University of South Florida Research Foundation, Inc., dated June 8, 2023 (incorporated by reference to Exhibit 10.16 of annual report on Form 10-K filed with the SEC on July 27, 2023).

Form of Amendment to Standard Exclusive License Agreement with Sublicensing Terms Number LIC18111 with the University of South Florida Research Foundation, Inc., dated June 8, 2023 (incorporated by reference to Exhibit 10.17 of annual report on Form 10-K filed with the SEC on July 27, 2023).

Securities Purchase Agreement, dated January 31, 2024 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on February 2, 2024).

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on May 9, 2024).

Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC on May 9, 2024).

List of Subsidiaries (incorporated by reference to Exhibit 21.1 of the registration statement on Form S-1 filed with the SEC on June 3, 2024).

Consent of Haskell & White LLP, Independent Registered Public Accounting Firm.

Consent of Baker Tilly US, LLP, Independent Registered Public Accounting Firm.

4 unchanged sentences

Certification of Chief Executive and Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Alzamend Neuro, Inc., Clawback Policy.

Inline XBRL Instance Document.

The instance document does not appear in the Interactive Data File because

its XBRL tags are embedded within the Inline XBRL document.

The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Inline XBRL Taxonomy Extension Schema Document.

45 unchanged sentences

July 30, 2024

/s/ Henry C.W.

/s/ Henry Nisser

Executive Vice President, General Counsel

15 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID 200 )

Report of Independent Registered Public Accounting Firm (PCAOB ID 23)

Balance Sheets as of April 30, 2024 and 2023

3 unchanged sentences

Notes to Financial Statements

REPORT OF INDEPENDENT REGISTERED ACCOUNTING

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Stockholders

Alzamend Neuro, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet

of Alzamend Neuro, Inc.

(the “Company”) as of April 30, 2024, and the related statements of operations, changes in stockholders’

equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company

as of April 30, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles

generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been

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

As discussed in Note 2 to the financial statements, the Company has

recurring losses from operations, negative cash flow from operations and is dependent on additional financing to fund current and future

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

plans in regard to these matters are also described in Note 2 to the financial statements.

The financial statements do not include any

adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification

of liabilities that may result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

HASKELL & WHITE LLP

We have served as the Company’s auditor since 2024.

Irvine, California

July 30, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Board of Directors and Stockholders of

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Alzamend Neuro,

(the "Company") as of April 30, 2023 and 2022, the related statements of operations, stockholders' equity, and cash flows,

for each of the two years in the period ended April 30, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30,

2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended April 30, 2023, in conformity

with accounting principles generally accepted in the United States of America.

We have audited the accompanying balance sheet of Alzamend

(the "Company") as of April 30, 2023, the related statements of operations, stockholders' equity, and cash flows,

for the year ended April 30, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2023, and the

results of its operations and its cash flows for the year ended April 30, 2023, in conformity with accounting principles generally accepted

in the United States of America.

Going Concern

1 unchanged sentence

the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company had cash of $5.1 million

and an accumulated deficit of $44.1 million as of April 30, 2023.

For the year ended April 30, 2023, the Company also incurred operating

losses of $14.9 million and had negative cash flows from operations of $8.9 million.

This raises substantial doubt about the Company's

ability to continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has recurring losses from

operations, negative cash flow from operations and is dependent on additional financing to fund current and future operations.

This raises substantial doubt about the Company's ability to continue

as a going concern.

Management's plans regarding these matters are also described in Note 2.

The financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

The financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's

These financial statements are the responsibility

of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting

firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent

with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control

over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over

financial reporting.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal

control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ BAKER TILLY US, LLP

We have served as the Company's auditor since

We served as the Company’s auditor from 2019 to 2024

San Diego, California

July 27, 2023

July 27, 2023, except for the effects of the reverse stock splits

described in Note 1, as to which the date is July 30, 2024

ALZAMEND NEURO, INC.

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Property, plant and equipment, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

CURRENT LIABILITIES

Accounts payable and accrued liabilities

Related party payable

TOTAL CURRENT LIABILITIES

TOTAL LIABILITIES

TOTAL LIABILITIES, ALL CURRENT

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY

Convertible Preferred stock, $ 0.0001 par value:

10,000,000 shares authorized;

Series A Convertible Preferred Stock, $ 0.0001 stated value per share, 1,360,000

shares designated;

nil 0 issued and outstanding as of April 30, 2023 and 2022

STOCKHOLDERS’ (DEFICIT) EQUITY

Series B Convertible Preferred Stock, $ 0.0001

stated value per share, 6,000

and nil 0 issued and outstanding as of April 30, 2024 and April 30, 2023, respectively

Common stock, $ 0.0001 par value:

300,000,000 shares authorized;

and 95,481,790 shares issued and outstanding as of April 30, 2023 and 2022,

687,999 and 646,267 issued and outstanding as of April 30, 2024 and April 30, 2023, respectively

Additional paid-in capital

1 unchanged sentence

( 14,883,295 )

Accumulated deficit

1 unchanged sentence

( 44,072,662 )

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY

( 2,594,185 )

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

The accompanying notes are an integral part of

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Interest expense

Gain on extinguishment of debt

Total other income (expense), net

2 unchanged sentences

Basic and diluted net loss per common share

Basic and diluted weighted average common

shares outstanding

Basic and diluted weighted average common shares outstanding

The accompanying notes are an integral part of

2 unchanged sentences

Statements of Changes in Stockholders’

Years Ended April 30, 2023 and April 30, 2022

Series A Convertible

Equity (Deficit)

For the Years Ended April 30, 2024 and April

Series B Convertible

Note Receivable for

Preferred Stock

Common Stock -

Related Party

BALANCES, April 30, 2022

3 unchanged sentences

Stock-based compensation to employees and consultants

Proceeds from sale of common stocks & warrants-related party

Proceeds from stock option exercise

Proceeds from initial public offering, net of underwriters' discounts and

commissions and issuance costs of $1.5 million

Issuance of shares of common stock for conversion of debt

Conversion of Series A convertible stock

Issuance of common stock for related party payable

( 14,878,167 )

3 unchanged sentences

$ ( 44,072,662 )

Issuance of common stock for cash

Issuance of common stock for restricted stock awards

Issuance of preferred stock for cash

Subscription receivable payment received

Return of common stock for subscription receivable

( 14,876,286 )

Stock-based compensation to employees and consultants

Proceeds from stock option exercise

Issuance of common stock for related party payable

( 9,947,746 )

14 unchanged sentences

Interest expense - debt discount

Gain on extinguishment of debt

Stock-based compensation to employees and consultants

7 unchanged sentences

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 and warrants - related party, net

Proceeds from the issuance of common stock, net

Proceeds from stock option exercise

Payments of related party payable

Proceeds from initial public offering, net of underwriters’ discounts and commissions

and issuance costs

Proceeds from the issuance of note payable

Proceeds from the issuance of preferred stock - related party

Net cash provided by financing activities

Net (decrease) increase in cash

Net decrease in cash

( 4,764,811 )

( 8,922,952 )

Cash at beginning of period

2 unchanged sentences

Non-cash financing activities:

Fair value of warrants issued in connection with March 2021 securities

purchase agreement, related party

Conversion of Series A Convertible Preferred Stock

Issuance of common stock on conversion of note

Fair value of warrants issued in connection with initial public offering

Return of common stock for cancellation of subscription receivable

$ ( 14,883,295 )

Debt discount from issuance of note payable

Fair value of warrants issued in connection with preferred stock related party

Issuance of common stock for related party payable

7 unchanged sentences

the treatment of Alzheimer’s disease (“Alzheimer’s”), bipolar disorder (“BD”), major depressive disorder

and post-traumatic stress disorder.

With two current product candidates, Alzamend aims to bring treatments or cures to market at a reasonable

cost as quickly as possible.

The Company’s current pipeline consists of two novel therapeutic drug candidates:

(i) a patented ionic

cocrystal technology delivering a therapeutic combination of lithium, proline and salicylate, known as AL001, through two royalty-bearing

exclusive worldwide licenses from the University of South Florida Research Foundation, Inc., as licensor (the “Licensor”);

and (ii) a patented method using a mutant peptide sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability

of a patient’s immunological system to combat Alzheimer’s, known as ALZN002, through a royalty-bearing exclusive worldwide

license from the same Licensor.

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

With two current product candidates, Alzamend aims to bring

treatments or cures to market at a reasonable cost as quickly as possible.

The Company’s current pipeline consists of two novel

therapeutic drug candidates:

(i) a patented ionic cocrystal technology delivering a therapeutic combination of lithium, proline and salicylate,

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

as licensor (the “Licensor”);

and (ii) a patented method using a mutant peptide sensitized cell as a cell-based therapeutic

vaccine that seeks to restore the ability of a patient’s immunological system to combat Alzheimer’s, known as ALZN002, through

a royalty-bearing exclusive worldwide license from the same Licensor.

The Company is devoting substantially

3 unchanged sentences

The Company has financed its operations to date primarily through debt financings and through the sale of its

common stock, par value $ 0.0001 per share.

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

LIQUIDITY, GOING CONCERN AND MANAGEMENT’S PLANS

common stock, par value $ 0.0001 per share (“Common Stock”) and its preferred stock, par value $ 0.0001 per share.

expects to continue to incur net losses in the foreseeable future.

Reverse Stock Splits

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 “First Reverse Split”).

The First 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 First Reverse Split,

each fifteen shares of Common Stock issued and outstanding prior to the First Reverse Split were converted into one share of Common Stock.

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

All share amounts in these financial statements

have been updated for all periods presented to reflect the First Reverse Split.

July 10, 2024, pursuant to the authorization provided by the Company’s stockholders at its annual 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-ten (the “Second Reverse Split”).

The Second 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 Second Reverse Split, each

ten shares of Common Stock issued and outstanding prior to the Second Reverse Split were converted into one share of Common Stock.

Second Reverse Split became effective in the State of Delaware on July 16, 2024.

All share amounts in these financial statements have

been updated for all periods presented to reflect the Second Reverse Split.

LIQUIDITY, GOING CONCERN AND MANAGEMENT’S

The accompanying financial

1 unchanged sentence

As of April 30, 2024, the Company had cash

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

For the year ended April 30, 2023, the Company had net loss of $ 14.9 million

of $ 376,000 and an accumulated deficit of $ 54.0 million.

For the year ended April 30, 2024, the Company had a net loss of $ 9.9 million

and cash used in operating activities of $ 8.3 million.

The Company had cash for the year ended April 30, 2022, totaling $ 14.1 million

and accumulated deficit of $ 29.2 million.

In the past, the Company has financed its operations principally through issuances of promissory

notes and equity securities.

In March of 2021, the Company entered into

a securities purchase agreement (the “SPA”) with Ault Lending, LLC, formerly Digital Power Lending, LLC (“AL”)

and a wholly owned subsidiary of Ault Alliance, Inc.

(“AULT”), a related party, pursuant to which the Company sold an aggregate

of 6,666,667 shares of common stock for an aggregate of $ 10 million, or $ 1.50 per share, which sales were made in tranches between March

2021 and April 2022.

In addition, the Company issued AL warrants to purchase an aggregate of 3,333,333 shares of common stock at an exercise

price of $ 3.00 per share.

Finally, 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 26, 2022, AL will have the right to invest an additional $10 million on the same terms, except that no specific

milestones have been determined with respect to the additional $10 million as of the date of this Annual Report.

The 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.

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 audited 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 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 8) 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 stockholders.

If the Company is unable to obtain

funding, it could be required to delay, reduce or eliminate research and development programs and planned clinical trials which could

adversely affect the Company’s business operations.

The Company had cash as of April 30, 2023, totaling $ 5.1 million and accumulated

deficit of $ 44.1 million.

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

On January 31, 2024, the Company

and Ault Lending, LLC (“Ault Lending”), entered into a securities purchase agreement (the “AL SPA”) for the purchase

of up to 6,000 shares of Series B Convertible Preferred Stock and warrants to purchase shares up to 600,000 shares of Common Stock.

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

Lending has the right to purchase up to $2 million of 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, the Company

sold 1,220 shares of Series B Convertible Preferred Stock and warrants to purchase 122,000 shares of Common Stock with an exercise price

of $ 12.00 , 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 of $ 70,000 .

March 26, 2024, the Company sold 780 shares of Series B Convertible Preferred Stock and warrants to purchase 78,000 shares of Common

Stock with an exercise price of $ 12.00 , for a total purchase price of $ 780,000 .

April 29, 2024, the Company sold 100 shares of Series B Convertible Preferred Stock and warrants to purchase 10,000 shares of Common

Stock with an exercise price of $ 12.00 , for a total purchase price of $ 100,000 .

May 8, 2024, the Company and Orchid Finance, LLC (“Orchid”) , entered into a securities purchase agreement (the “Orchid

SPA”) for the purchase of up to 2,500 shares of Series A Convertible Preferred Stock and warrants to purchase shares up to 2,500,000

shares of Common Stock in several tranche closings.

On May 10, 2024, the Company

sold 100 shares of Series A Convertible Preferred Stock and warrants to purchase 80,000 shares of Common Stock with an exercise price

of $ 12.50 , for a total purchase price of $ 1.0 million.

The purchase price was paid by the surrender

and cancellation of a term note issued by the Company to Orchid of $ 311,356 , consisting of $ 310,000 of principal and $ 1,356 of accrued

and unpaid interest, $ 100,000 discount and net cash of $ 588,644 .

On June 25, 2024, the Company

sold 150 shares of Series A Convertible Preferred Stock and warrants to purchase 120,000 shares of Common Stock with an exercise price

of $ 12.50 , for a total purchase price of $ 1.5 million.

The purchase price was paid in cash.

The Company expects to continue to incur losses for the foreseeable

future and needs to raise additional capital until it is able to generate revenues from operations sufficient to fund its development

and commercial operations.

These factors create substantial doubt about our ability to continue

as a going concern .

However, based on the Company’s current business plan, management believes that the Company’s cash

and cash equivalents at April 30, 2024, together with the anticipated receipt of funds from its Series A and Series B Convertible

Preferred Stock securities purchase agreements, will be sufficient to meet the Company’s anticipated cash requirements during the

twelve-month period subsequent to the issuance of the financial statements included in this Annual Report.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements have been prepared

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

GAAP”) and pursuant to

the rules and regulations of the Securities and Exchange Commission (the “Commission”).

The financial statements have

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

pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”).

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 revenues and expenses

during the reporting period.

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

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

Actual results could differ

from those 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

revenues and expenses during the reporting period.

The Company’s critical accounting policies that involve significant judgment

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

results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid

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

As of April 30, 2023 and 2022, the

Company had no cash equivalents.

The Company considers all

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

As of April 30, 2024

and 2023, the Company had no cash equivalents.

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , defines fair value as the exchange price that

would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset

or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair

value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy is based on three

levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable:

Quoted prices in active markets

for identical assets or liabilities.

Inputs other than Level 1 that

are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in markets that

are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of

the assets or liabilities.

Financial Accounting Standards

Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , defines fair value

as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous

market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques

used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy

is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last

is considered unobservable:

Quoted prices in

active markets for identical assets or liabilities.

Inputs other than

Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in

markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the

full term of the assets or liabilities.

Level 3 assumptions:

Unobservable inputs

that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities

resulting from imbedded derivatives associated with certain warrants to purchase common stock.

The fair values of warrants issued in connection

with equity or debt issuance are determined using the Black-Scholes valuation model, a “Level 3” fair value measurement, based

on the estimated fair value of the underlying 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 conversion option and 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.

The Company determines its income taxes

under the asset and liability method.

Under the asset and liability approach, deferred income tax assets and liabilities are calculated

and recorded based upon the future tax consequences of temporary differences by applying enacted statutory tax rates applicable to future

periods for differences between the financial statements carrying amounts and the tax basis of existing assets and liabilities.

deferred income taxes are classified as current or non-current in accordance with the classification of the related asset or liability.

Those not related to an asset or a liability are classified as current or non-current depending on the periods in which the temporary

differences are expected to reverse.

Valuation allowances are provided for significant deferred income tax assets when it is more likely

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

As of April 30, 2023, the Company had fully reserved the net

deferred income tax assets by taking a full valuation allowance against these assets.

The Company recognizes tax liabilities by

prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized and also

provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable

taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The tax benefit to be recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate

To the extent that the final tax outcome of these matters is different than the amount recorded, such differences impact income

tax expense in the period in which such determination is made.

Interest and penalties, if any, related to accrued liabilities for potential

tax assessments are included in income tax expense.

GAAP also requires management to evaluate tax positions taken by the Company

and recognize a liability if the Company has taken uncertain tax positions that more likely than not would not be sustained upon examination

by applicable taxing authorities.

Management of the Company has evaluated tax positions taken by the Company and has concluded that as

of April 30, 2023, there were no uncertain tax positions taken, or expected to be taken, that would require recognition of a liability

that would require disclosure in the financial statements.

inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including

liabilities resulting from imbedded derivatives associated with certain warrants to purchase common stock.

The fair values of warrants

issued in connection with equity or debt issuance are determined using the Black-Scholes valuation model, a “Level 3” fair

value measurement, based on the estimated fair value of the underlying 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 conversion option and warrants and the risk free interest rate based on the implied yield available

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

The Company determines its

income taxes under the asset and liability method.

Under the asset and liability approach, deferred income tax assets and liabilities

are calculated and recorded based upon the future tax consequences of temporary differences by applying enacted statutory tax rates applicable

to future periods for differences between the financial statements carrying amounts and the tax basis of existing assets and liabilities.

Generally, deferred income taxes are classified as current or non-current in accordance with the classification of the related asset or

Those not related to an asset or a liability are classified as current or non-current depending on the periods in which the

temporary differences are expected to reverse.

Valuation allowances are provided for significant deferred income tax assets when it is

more likely than not that some or all of the deferred tax assets will not be realized.

As of April 30, 2024, the Company had fully reserved

the net deferred income tax assets by taking a full valuation allowance against these assets.

The Company recognizes tax

liabilities by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized

and also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure

and transition.

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the

applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the

The tax benefit to be recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized

upon ultimate settlement.

To the extent that the final tax outcome of these matters is different than the amount recorded, such differences

impact income tax expense in the period in which such determination is made.

Interest and penalties, if any, related to accrued liabilities

for potential tax assessments are included in income tax expense.

GAAP also requires management to evaluate tax positions taken by

the Company and recognize a liability if the Company has taken uncertain tax positions that more likely than not would not be sustained

upon examination by applicable taxing authorities.

Management of the Company has evaluated tax positions taken by the Company and has

concluded that as of April 30, 2024, there were no uncertain tax positions taken, or expected to be taken, that would require recognition

of a liability that would require disclosure in the financial statements.

Research and Development Expenses

Research and development costs are expensed

Research and development costs consist of scientific consulting fees and lab supplies, as well as fees paid to clinical research

organizations that conduct certain research and development activities on behalf of the Company.

The Company has acquired and may continue

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

The upfront payments to acquire licenses,

products 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 costs

are expensed as incurred.

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

to clinical research organizations that conduct certain research and development activities on behalf of the Company.

The Company has acquired and

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

The upfront payments to acquire

licenses, products 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

The Company recognizes stock-based compensation

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

The Company’s

stock-based compensation costs are based upon the grant date fair value of options estimated using the Black-Scholes option pricing model.

To the extent any stock option grants are made subject to the achievement of a performance-based milestone, management evaluates when

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

reporting date.

The Company recognizes stock-based

compensation expense for stock options on a straight-line basis over the requisite service period and accounts for forfeitures as they

The Company’s stock-based compensation costs are based upon the grant date fair value of options estimated using the Black-Scholes

option pricing model.

To the extent any stock option grants are made subject to the achievement of a performance-based milestone, management

evaluates when the achievement of any such performance-based milestone is probable based on the satisfaction of the performance conditions

as of the reporting date.

The Company recognizes stock-based

compensation expense for restricted stock on a straight-line basis over the requisite service period and accounts for forfeitures as they

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

common stock on the date of grant.

The Black-Scholes option pricing model utilizes

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

Certain of such assumptions involve inherent

uncertainties and the application of significant judgment.

As a result, if factors or expected outcomes change and the Company uses significantly

different assumptions or estimates, the Company’s stock-based compensation could be materially different.

The Company accounts for stock warrants

as either equity instruments, derivative liabilities, or liabilities in accordance with ASC 480, Distinguishing Liabilities from

Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”) , depending

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

the date of grant.

The Black-Scholes option pricing

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

Certain of such assumptions

involve inherent uncertainties and the application of significant judgment.

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

Company uses significantly different assumptions or estimates, the Company’s stock-based compensation could be materially different.

The Company accounts for stock

warrants as either equity instruments, derivative liabilities, or liabilities in accordance with ASC 480, Distinguishing Liabilities

from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”) , depending

on the specific terms of the warrant agreement.

During the year ended April 30, 2023, based on the terms of the Company’s

warrant agreements, the Company accounted for the warrants as equity instruments as the warrants were indexed to the common stock, required

settlement in shares and would be classified as equity under ASC 815.

During the year ended April

30, 2024, based on the terms of the Company’s warrant agreements, the Company accounted for the warrants as equity instruments as

the warrants were indexed to the Common Stock, required settlement in shares and would be classified as equity under ASC 815.

Loss per Common Share

10 unchanged sentences

Common Stock that then shared in the earnings of the entity.

Since the effects of outstanding 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 options and warrants that have been excluded from the computation of loss per common share:

Since the effects of outstanding

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 options 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

2 unchanged sentences

Restricted stock units

(1) The Company has excluded 1,500,000 and 2,000,000 stock options for the years ended April 30, 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 ASC 260-10-45-14.

The Company has excluded 10,000 stock options for the years ended April 30, 2024 and 2023, respectively, with an exercise price of $0.06, 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 ASC 260-10-45-14.

Preferred Stock Classification

The Company analyzes the terms

of its preferred stock using ASC Topic No.

480, Distinguishing Liabilities from Equity , to determine whether the Company’s

preferred stock should be classified as a liability or equity, and if classified as equity, permanent or temporary.

Common criteria the

Company considers are redemption provisions, conversion options, cumulative of mandatory fixed dividends, discretionary dividends based

on earning, voting rights and collateral requirements.

NOTE RECEIVABLE, RELATED PARTY, NET

On April 30, 2019, the Company and Ault

Life Science Fund, LLC (“ALSF”), a related party, entered into a securities purchase agreement for the purchase of 10,000,000

shares of the Company’s 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 share and vesting upon issuance.

The total purchase price of $15,000,000 was in the form

of a non-interest bearing note receivable with a 12-month term from ALSF.

In November 2019, the term of the note receivable was extended

to December 31, 2021, and in May 2021, the term of the note receivable was extended to December 31, 2023.

The note is secured by a pledge

of the purchased shares.

As the note receivable from ALSF is related to the issuance of common stock, it is recorded as an offset to additional

paid-in capital.

At April 30, 2023 and 2022, the outstanding balance of the note receivable was $ 14,883,295 .

PREPAID EXPENSES AND OTHER CURRENT ASSETS

On April 30, 2019, the Company

and Ault Life Science Fund, LLC (“ALSF”), a related party, entered into a securities purchase agreement for the purchase of

66,667 shares of Common Stock for a total purchase price of $ 15,000,000 , or $225.00 per share with 33,333 warrants with a 5 -year life

and an exercise price of $ 450.00 per share and vesting upon issuance (the “ALSF Warrants”).

The total purchase price of $15,000,000

was in the form of a non-interest-bearing note receivable with a 12 -month term from ALSF.

In November 2019, the term of the note receivable

was extended to December 31, 2021, and in May 2021, the term of the note receivable was extended to December 31, 2023.

The note was secured

by a pledge of the purchased shares.

As the note receivable from ALSF was related to the issuance of Common Stock, it is recorded as an

offset to additional paid-in capital.

ALSF is wholly owned by Ault Life Sciences, Inc.

ALSI is majority owned by

Ault & Company, Inc.

(“Ault & Co.”).

Ault, Horne and Nisser, directors of the Company, are also directors

of Ault & Co.

On January 19, 2024, the Company

and ALSF entered into a settlement agreement and release of claims whereby ALSF returned to the Company 66,117 shares of Common Stock

and the ALSF Warrants for settlement of the outstanding balance of the note receivable in the amount of $ 14,876,293 .

PREPAID EXPENSES AND OTHER CURRENT ASSETS

are as follows:

Prepaid expenses and other

current assets were as follows:

Schedule of prepaid expenses and other current assets

4 unchanged sentences

Other prepaid expenses

Prepaid consulting fees

Total prepaid expenses and other current assets

During the year ended April 30, 2023, the

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

Prepaid clinical trial fees at April 30, 2023 represented the unused

portion of the prepaid clinical fees.

On June 16, 2022, the Company purchased directors and officers (“D&O”) insurance

for 12 months in the amount of $ 492,000 .

Prepaid insurance at April 30, 2023 represented the unamortized portion of the annual insurance

The following is a geographical breakdown

of the Company’s loss before the provision for income taxes:

On June 14, 2023, the Company

purchased directors’ and officers’ insurance for 12 months in the amount of $ 337,000 .

Prepaid insurance at April 30, 2024

represented the unamortized portion of directors’ and officers’ insurance.

The following is a geographical

breakdown of the Company’s loss before the provision for income taxes:

Schedule of Income before income tax, domestic and foreign

7 unchanged sentences

$ ( 14,878,167 )

Significant components of the Company’s deferred tax assets were

Significant components of

the Company’s deferred tax assets were as follows:

Schedule of deferred tax assets and liabilities

4 unchanged sentences

Net operating loss carryover

Stock compensation

Stock-based compensation

Total deferred tax asset

3 unchanged sentences

Deferred income tax asset, net of allowance

A reconciliation of the federal statutory income tax rate to

the Company’s effective income tax rate for the years ended April 30, 2023 and 2022, is as follows:

A reconciliation of the federal

statutory income tax rate to the Company’s effective income tax rate for the years ended April 30, 2024 and 2023, is as follows:

Schedule of effective income tax rate reconciliation

4 unchanged sentences

Change in valuation allowance

Stock compensation

Stock-based compensation

Effective tax rate

In assessing the realization of deferred

tax assets, management considers whether it is more likely than not the Company’s deferred tax assets will be realized.

considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making such assessments.

Given historical generation of and expected future taxable losses, the Company determined it is more likely than not that some or all

of the deferred tax assets will not be realized.

Therefore, a full valuation allowance was maintained, as of the years ended April 30,

2023 and 2022, of $ 10,813,049 and $ 10,076,931 , respectively.

At April 30, 2023, the Company maintained U.S.

In assessing the realization

of deferred tax assets, management considers whether it is more likely than not the Company’s deferred tax assets will be realized.

Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making

such assessments.

Given historical generation of and expected future taxable losses, management determined it is more likely than not

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

Therefore, a full valuation allowance was maintained, as of the years

ended April 30, 2024 and 2023, of $ 15,766,804 and $ 10,813,049 , respectively.

At April 30, 2024, the Company

maintained U.S.

Federal and state net operating loss (“NOL”) carryovers of approximately $ 38,716,141 and $ 190,584,088 respectively.

and state NOLs begin to expire in various years depending on relevant jurisdiction.

Federal and state NOLs begin to expire in various years depending on relevant jurisdiction.

In accordance with Internal Revenue Code §382

(“IRC §382”), the future deductibility of the Company’s NOL’s may be subject to an annual limitation in the event

of a change in control as defined by applicable regulations.

The Company has yet to complete a formal study to confirm NOL’s are not limited

in utilization per IRC §382 and may reduce applicable deferred tax assets upon completion of such a study, in future periods.

The impact of an uncertain income tax position

on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant

taxing authority.

An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

Company had no uncertain tax positions as of April 30, 2023.

The Company’s policy is to recognize

interest and penalties related to income tax matters in the provision for income taxes.

As of April 30, 2023, no interest or penalties

have been recorded pertaining to uncertain tax positions.

The Company is subject to taxation in the

United States and various U.S.

(“IRC §382”), the future deductibility of the Company’s NOL’s may be subject to an annual limitation in the

event of a change in control as defined by applicable regulations.

The Company has yet to complete a formal study to confirm NOL’s

are not limited in utilization per IRC §382 and may reduce applicable deferred tax assets upon completion of such a study, in future

The impact of an uncertain

income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon

audit by the relevant taxing authority.

An uncertain income tax position will not be recognized if it has less than a 50% likelihood of

being sustained.

The Company had no uncertain tax positions as of April 30, 2024.

The Company’s policy

is to recognize interest and penalties related to income tax matters in the provision for income taxes.

As of April 30, 2024, no

interest or penalties have been recorded pertaining to uncertain tax positions.

The Company is subject to

taxation in the United States and various U.S.

state jurisdictions.

All tax years remain open to examination by the Internal Revenue Service and relevant

state authorities.

On December 27, 2020, the Consolidated Appropriations

Act, 2021 (“CAA 2021”), which included a number of provisions including, but not limited to, the extension of numerous employment

tax credits, the extension of the Section 179D deduction, enhanced business meals deductions, and the deductibility of expenses paid with

Paycheck Protection Program loan funds that are forgiven, was signed into law.

Accordingly, the effects of the CAA 2021 have been incorporated

into the income tax provision for the year ended April 30, 2023.

These provisions did not have a material impact on the income tax

All tax years remain open to examination by the Internal Revenue Service

and relevant state authorities.

On December 27, 2020, the

Consolidated Appropriations Act, 2021 (“CAA 2021”), which included a number of provisions including, but not limited to, the

extension of numerous employment tax credits, the extension of the Section 179D deduction, enhanced business meals deductions, and the

deductibility of expenses paid with Paycheck Protection Program loan funds that are forgiven, was signed into law.

Accordingly, the effects

of the CAA 2021 have been incorporated into the income tax provision for the year ended April 30, 2024.

These provisions did not

have a material impact on the income tax provision.

STOCK-BASED COMPENSATION

2016 Stock Incentive Plan

On April 30, 2016, the Company’s stockholders

approved the Company’s 2016 Stock Incentive Plan (the “Plan”).

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.

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

On April 30, 2016, the Company’s

stockholders approved the Company’s 2016 Stock Incentive Plan (the “Plan”).

The Plan provides for the issuance of a

maximum of 83,333 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 50,000 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 Plan

In February 2021, the Company’s board

of directors (the “Board”) adopted, and the stockholders approved, the Alzamend Neuro, Inc.

2021 Stock Incentive Plan (the

“2021 Plan”).

In February 2021, the Company’s

board of directors (the “Board”) adopted, and the stockholders approved, the Alzamend Neuro, Inc.

2021 Stock Incentive Plan

(the “2021 Plan”).

The 2021 Plan authorizes the grant to eligible individuals of (1) stock options (incentive and non-statutory),

(2) restricted stock, (3) stock appreciation rights, or SARs, (4) restricted stock units, and (5) other stock-based compensation.

Stock Subject to the 2021 Plan.

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.

Stock Subject to the 2021

The maximum number of shares of common stock that may be issued under the 2021 Plan is 66,667 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

Restricted Stock.

In May 2021, the

Company issued restricted stock awards pursuant to the 2021 Plan to one employee and four independent Board members.

The restricted stock

awards vest over 48 months for the employee and 12 months for the independent Board members.

The awards require continued service to the

Company during the vesting period.

May 2021, the Company issued restricted stock awards pursuant to the 2021 Plan to one employee and four independent Board members.

restricted stock awards vest over 48 months for the employee and 12 months for the independent Board members.

The awards require continued

service to the Company during the vesting period.

The vesting provisions of individual awards may vary as approved by the Board.

Compensation expense

for restricted stock is generally recorded based on its market value on the date of grant and recognized ratably over the associated service

and performance period.

expense for restricted stock is generally recorded based on its market value on the date of grant and recognized ratably over the associated

service and performance period.

Stock Options.

All options that the

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

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

options that the Company grants are granted at the per share fair value on the grant date.

Vesting of options differs based on the terms

of each option.

The Company has valued the options at their date of grant utilizing the Black Scholes option pricing model.

As of the date of issuance

of these options, there was not an active public market for the Company’s shares.

Accordingly, the fair value of the underlying

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

of such other entities.

The risk-free interest rate used in the calculations is based on the implied yield available on U.S.

issues with an equivalent term approximating the expected life of the options as calculated using the simplified method.

life of the options used was based on the contractual life of the option granted.

Stock-based compensation is a non-cash expense because

the Company settles these obligations by issuing shares of common stock from its authorized shares instead of settling such obligations

with cash payments.

A summary of stock option activity for the

year ended April 30, 2023, is presented below:

date of issuance of these options, there was not an active public market for the Company’s shares.

Accordingly, the fair value of

the underlying options was determined based on the historical volatility data of similar companies, considering the industry, products

and market capitalization of such other entities.

The risk-free interest rate used in the calculations is based on the implied yield available

Treasury issues with an equivalent term approximating the expected life of the options as calculated using the simplified method.

The expected life of the options used was based on the contractual life of the option granted.

Stock-based compensation is a non-cash

expense because the Company settles these obligations by issuing shares of common stock from its authorized shares instead of settling

such obligations with cash payments.

A summary of stock option

activity for the year ended April 30, 2024, is presented below:

Schedule of share-based payment arrangement, option, activity

1 unchanged sentence

Available for

Exercise Price

Intrinsic Value

Balance at April 30, 2023

Options granted

( 2,000,000 )

Options exercised

Options cancelled/forfeited

( 2,391,671 )

Balance at April 30, 2024

1 unchanged sentence

Options exercisable at April 30, 2024

The aggregate intrinsic value in the table

above represents the total pretax intrinsic value (i.e., the difference between the estimated fair value on the respective date and the

exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their

The aggregate intrinsic value

in the table above represents the total pretax intrinsic value (i.e., the difference between the estimated fair value on the respective

date and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised

their options.

Restricted stock unit activity

for the year ended April 30, 2024 is presented below:

Schedule of nonvested restricted stock units activity

Weighted Average

Grant Date Fair Value

Unvested at April 30, 2023

Unvested at April 30, 2024

Stock Options Granted to Employees and Consultants

The estimated fair value of stock options

granted to employees and consultants during the years ended April 30, 2023 and 2022 were calculated using the Black-Scholes option-pricing

The estimated fair value of

stock options granted to employees and consultants during the year ended April 30, 2023 were calculated using the Black-Scholes option-pricing

model using the following assumptions:

Schedule of stock options granted to employees and consultants

For the Year Ended April 30,

For the Year Ended

April 30, 2023

Expected term (in years)

2 unchanged sentences

Expected Term:

term represents the period that the options granted are expected to be outstanding and is determined using the simplified method (based

on the mid-point between the vesting date and the end of the contractual term).

expected term represents the period that the options granted are expected to be outstanding and is determined using the simplified method

(based on the mid-point between the vesting date and the end of the contractual term).

Expected Volatility:

uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry

Company uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry

that were deemed to be representative of future stock price trends as the Company only has a limited trading history for its common stock.

6 unchanged sentences

Expected Dividend:

has not paid and does not anticipate paying any dividends in the near future.

Company has not paid and does not anticipate paying any dividends in the near future.

Therefore, the expected dividend yield was zero.

For the year ended April 20, 2023, stock-based compensation related

to restricted stock grants and stock options were $63,000 and $3.5 million, respectively, for employees and directors.

Performance Contingent Stock Options

Granted to Employee

On November 26, 2019, the Board granted

4,250,000 performance- and market-contingent awards to certain key employees and a director.

These grants were made outside of the Plan.

There were no stock options

granted during the year ended April 30, 2024.

For the year ended April 20,

2024 and 2023, stock-based compensation related to restricted stock grants and stock options were $ 956,000 and $ 3.6 million, respectively,

for employees and directors.

Performance Contingent

Stock Options Granted to Employee

On November 26, 2019, the

Board granted 28,333 performance and market contingent awards to certain key employees and a director.

These grants were made outside

These awards have an exercise price of $225.00 per share.

These awards have multiple separate market triggers for vesting based upon either

(i) the successful achievement of stepped 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) stepped 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 stepped 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) stepped

target prices for a change in control transaction.

The target prices ranged from $1,500 per share to $6,000 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

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 April 30, 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

II clinical trial of ALZN002 within four years from the grant date.

As of April 30, 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 has recognized the related stock-based compensation.

As of April 30, 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 II of

Performance Contingent Stock Options

Granted to TAMM Net

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

stock options to the 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 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.

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

On November 22, 2022, the

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

The target price range is now $1,500 per share

to $3,000 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 portion of the performance options will be reduced by 25%.

Due to the significant risks and uncertainties

associated with achieving the completion of Phase I for ALZN002, as of April 30, 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

Performance Contingent Stock Options

Granted to Consultants

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.

On January 19, 2023, the Board modified

the performance criteria for these awards.

The revised grant will vest 25% if the Company (a) completes and announces topline data from

a Phase II clinical trial of AL001 and ALZN002, as applicable, that would support a new drug application for the drug candidate and the

indication listed below, and (b) obtained a “Study May Proceed” letter from the U.S.

Food and Drug Administration (“FDA”)

for the additional Investigational New Drug (“IND”) on/or before December 31, 2023, as follows:

(i) AL001 – bipolar

(ii) AL001- major depressive disorder;

(iii) AL001 – post-traumatic stress disorder;

associated with achieving the market-contingent awards, as of April 30, 2024, 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 13,333 performance-based stock option to the Chief Executive Officer at an exercise price

of $175.50 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 II clinical trial of ALZN002 within four years from the grant date.

During the year ended April 30, 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.

As of April 30, 2024, 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 the certain team members at TAMM Net, Inc.

(“TAMM Net”) to purchase an aggregate

of 3,000 shares of common stock at a per share exercise price of $225.00 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 of ALZN002 by December 31, 2022.

The performance goal of

completing Phase I of AL001 was achieved on March 22, 2022.

On January 19, 2023, the Board

modified the performance criteria for these awards.

The remaining 50% of the grant would have vested 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.

The modified performance

criteria was not met on or before March 31, 2024 and, as a result, the remaining unvested stock options were cancelled and no compensation

cost has been recognized for these awards related to ALZN002.

Performance Contingent

Stock Options Granted to Consultants

On October 14, 2021, the Company

issued performance-based stock options to two consultants to purchase an aggregate of 1,334 shares of Common Stock with an exercise price

of $363.00 per share, of which 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

modified the performance criteria for these awards.

The revised grant will vest 25% if the Company (a) completes and announces topline

data from a Phase II clinical trial of AL001 and ALZN002, as applicable, that would support a new drug application for the drug candidate

and the indication listed below, and (b) obtained a “Study May Proceed” letter from the U.S.

Food and Drug Administration

(“FDA”) for the additional Investigational New Drug (“IND”) on/or before December 31, 2023, as follows:

(ii) AL001- MDD;

(iii) AL001 – PTSD;

and (iv) ALZN002 – Alzheimer’s.

As of April 30, 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 year ended April

30, 2024, the Company filed INDs for BD, MDD and PTSD and received a “Study May Proceed” letter for BD in October 2023, MDD

in November 2023 and PTSD in December 2023.

As a result, 75% of the performance grant vested and the Company recognized stock-based compensation

related to the vesting.

As of April 30, 2024, the Company believed that the achievement of the remaining requisite performance condition

was not probable and, as a result, no compensation cost has been recognized for these awards related to ALZN002 – Alzheimer’s.

Stock-Based Compensation Expense

The Company’s results of operations

include expenses relating to stock-based compensation for the years ended April 30, 2023 and 2022, were comprised as follows:

The Company’s results

of operations include expenses relating to stock-based compensation for the years ended April 30, 2024 and 2023, were comprised as follows:

Schedule of stock-based compensation

2 unchanged sentences

General and administrative

As of April 30, 2023, total unamortized

stock-based compensation expense related to unvested employee and non-employee awards that are expected to vest was $ 1.2 million.

weighted-average period over which such stock-based compensation expense will be recognized is approximately 1.6 years.

As of April 30, 2024, total

unamortized stock-based compensation expense related to unvested employee and non-employee awards that are expected to vest was $ 353,000 .

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

Warrant Issuances During 2024

During the year ended April 30, 2022, the

Company issued warrants to purchase an aggregate of 2,000,000 shares of common stock at an exercise price of $ 3.00 per share and 61,250

shares of common stock at an exercise price of $ 6.25 per share.

(i) On June 17, 2021, the Company

issued a warrant to purchase an aggregate of 61,250 shares of common stock at an exercise price equal to $ 6.25 per share of common stock

in connection with the IPO.

Based on the terms of the Company’s warrant agreement, the Company accounted for the warrant as an equity

instrument as the warrant is indexed to the common stock, requires settlement in shares and would be classified as equity under ASC 815.

(ii) On July 28, 2021, the Company received from the FDA a “Study May Proceed” letter for a Phase

I study under the Company’s IND application for AL001.

Based on the achievement of this milestone, the Company sold an additional

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

stock with an exercise price of $ 3.00 per share (see Note 9).

Based on the terms of the Company’s warrant agreement, the Company

accounted for the warrant as an equity instrument as the warrant is indexed to the common stock, requires settlement in shares and would

be classified as equity under ASC 815.

(iii) On March 28, 2022, the Company received the full data set from the Phase I clinical trial for AL001.

on the achievement of this milestone, on April 28, 2022, under the SPA, the Company sold an additional 2,666,667 shares of its common

stock to AL for $ 4 million, or $ 1.50 per share, and issued to AL warrants to acquire 1,333,333 shares of its common stock with an exercise

price of $ 3.00 per share.

Based on the terms of the Company’s warrant agreement, the Company accounted for the warrant as an equity

instrument as the warrant is indexed to the common stock, requires settlement in shares and would be classified as equity under ASC 815.

The following table summarizes information

about common stock warrants outstanding at April 30, 2023

During the year ended April

30, 2024, the Company issued warrants to purchase an aggregate of 210,000 shares of common stock at an exercise price of $ 12.00 per share.

(i) On January 31, 2024, the Company issued a warrant to purchase 122,000 shares of Common Stock at an exercise

price of $ 12.00 in connection with the sale of convertible preferred stock to Ault Lending for $ 1,220,000 .

Based on the terms of the Company’s

warrant agreement, the Company accounted for the warrant as an equity instrument as the warrant is indexed to the common stock, requires

settlement in shares and would be classified as equity under ASC 815.

(ii) On March 26, 2024, the Company issued a warrant to purchase 78,000 shares of Common Stock at an exercise

price of $ 12.00 in connection with the sale of convertible preferred stock to Ault Lending for $ 780,000 .

Based on the terms of the Company’s

warrant agreement, the Company accounted for the warrant as an equity instrument as the warrant is indexed to the common stock, requires

settlement in shares and would be classified as equity under ASC 815.

(iii) On April 29, 2024, the Company issued a warrant to purchase 10,000 shares of Common Stock at an exercise

price of $ 12.00 in connection with the sale of convertible preferred stock to Ault Lending for $ 100,000 .

Based on the terms of the Company’s

warrant agreement, the Company accounted for the warrant as an equity instrument as the warrant is indexed to the common stock, requires

settlement in shares and would be classified as equity under ASC 815.

The following table summarizes

information about common stock warrants at April 30, 2024:

Schedule of common stock warrants outstanding

$ 12.00 - $ 937.50

The estimated fair value of warrants granted

during the years ended April 30, 2022, were calculated using the Black-Scholes option-pricing model using the following assumptions:

Warrant activity for the year

ended April 30, 2024 is presented below:

Schedule of warrant activity

Weighted Average

Exercise Price

Outstanding at April 30, 2023

Cancelled/Expired

Outstanding at April 30, 2024

The estimated fair value of

warrants granted during the years ended April 30, 2024, were calculated using the Black-Scholes option-pricing model using the following

Schedule of assumptions used

3 unchanged sentences

Risk-free interest rate

3.95 – 4.65 %

Dividend yield

Expected Term:

term represents the period that the warrants granted are expected to be outstanding.

expected term represents the contractual life of the warrants granted.

Expected Volatility:

uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry

Company uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry

that were deemed to be representative of future stock price trends as the Company only has a limited trading history for its common stock.

5 unchanged sentences

Expected Dividend:

has not paid and does not anticipate paying any dividends in the near future.

Company has not paid and does not anticipate paying any dividends in the near future.

Therefore, the expected dividend yield was zero.

OTHER RELATED PARTY TRANSACTIONS

In March of 2021, the Company entered into

the SPA with AL pursuant to which the Company sold an aggregate of 6,666,667 shares of common stock for an aggregate of $ 10 million, or

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

In addition, the Company issued AL warrants to purchase

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

Finally, 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 26, 2022, AL will have the right to invest

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

million as of the date of this Annual Report.

In May 2021, the Board and Mr.

Company’s Founder and Chairman Emeritus, agreed to certain arrangements with regard to Board composition and other matters.

Contemporaneously

with the effectiveness of the IPO, and in consideration for (i) the conversion of 750,000 shares of the Company’s Series A Preferred

Shares beneficially owned by Mr.

Ault through Ault Life Sciences, Inc.

into 15,000,000 shares of common stock;

(ii) the extension of the

maturity date of the note in the original principal amount of $15,000,000 issued to the Company by ALSF, an entity controlled by Mr.

to December 31, 2023;

and (iii) the resignation by Mr.

Ault as a director and executive officer of the Company , the Board agreed that

Horne will become Chairman of the Board and remain in that position for so long as Mr.

Ault beneficially owns no less than

5 % of the outstanding shares of common stock (for which Mr.

Horne will be paid $ 50,000 per year), and Henry Nisser will remain a member

of the Company’s Board for so long as Mr.

Ault beneficially owns no less than 5% of the outstanding shares of common stock (for

no additional remuneration).

Additionally, Mr.

Ault will hold the position of Founder and Chairman Emeritus and, as such, have the right

to nominate an observer to the Board for a period of five years after the closing date of the IPO.

Following the closing of the IPO, the

Company entered into a five-year consulting agreement with Mr.

Ault under which he will provide strategic advisory and consulting services

to the Company in consideration for annual fees of $ 50,000 .

For the year ended April 30, 2022, total expenses paid to related party consulting

was $ 88,000 .

On June 15, 2021, AL, a related party, purchased

2,000,000 of the Company’s IPO shares at the public offering price of $ 5.00 per share.

In November 2022, the Company entered into

a marketing and brand development agreement with 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 April 30, 2023, the balance of related party prepaid expenses was $247,000.

COMMITMENTS AND CONTINGENCIES

In November 2022, the Company

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

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

AULT provided 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 Common Stock with a value of $225.00 per share.

On November 11, 2022, the Company elected to pay the fee with 6,222 shares of

Common Stock.

The Company recorded the value of the agreement using the closing price of the Common Stock on November 11, 2022, and amortizes

the expense over twelve months beginning in August 2022.

At April 30, 2024, the balance of related party prepaid expenses was zero.

AND CONTINGENCIES

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 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.

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 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”).

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.

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 14,853 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.

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, 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 Agreement”).

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 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 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 disorders.

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 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.

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

Under the various license

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

was also granted a preemptive right to acquire such shares or other equity securities that may be issued from time to time by the Company

while the Licensor remains the owner of any equity securities of the Company.

Additionally, the Company is 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:

As an additional licensing

fee for the license of ALZN002, the Licensor received 24,012 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 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

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

Under the various

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

Licensor was also granted a preemptive right to acquire such shares or other equity securities that may be issued from time to time by

the Company while the Licensor remains the owner of any equity securities of the Company.

Additionally,

the Company is 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:

Original AL001 Licenses:

8 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

4 unchanged sentences

Completed January 2022

Upon IND application filing

September 2023

Upon first dosing of patient in first 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 the first Phase II 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 BLA approval

Upon first commercial sale

* Milestone met and completed

Additional AL001 Licenses:

36 months from completion of the first Phase II clinical trial

AL001 Licenses:

Upon first patient treated in a Phase III clinical trial

3 unchanged sentences

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

The Board has designated 1,360,000 shares as the

Series A Convertible Preferred Stock none of which was issued or outstanding as of April 30, 2023.

The rights, preferences, privileges

and restrictions on the remaining authorized 8,640,000 shares of preferred stock have not been determined.

The Board is authorized to

create a new series of preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions

granted to or imposed upon any series of preferred shares.

On April 30, 2019, the Company and ALSF

entered into a securities purchase agreement 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 share and vesting upon issuance.

total purchase price of $ 15,000,000 was in the form of a non-interest bearing note receivable with a 12 -month term from ALSF, a related

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

Pursuant to the securities purchase agreement, ALSF is entitled to full

ratchet anti-dilution protection, most-favored nation status, denying the Company the right to enter into a variable rate transaction

The Board has designated 6,000 shares as Series

B Convertible Preferred Stock.

The rights, preferences, privileges and restrictions on the remaining authorized 9,994,000 shares of Preferred

Stock have not been determined.

The Board is authorized to create a new series of preferred shares and determine the number of shares,

as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred shares.

Series B Convertible

Preferred Stock

On January 31, 2024, the Company

and Ault Lending entered into the AL SPA for the purchase of up to 6,000 shares of Series B Convertible Preferred Stock and warrants to

purchase shares up to 600,000 shares of 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 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 Date”).

The Agreement will automatically terminate if the final closing

has not occurred prior to the Termination Date.

On January 31, 2024, the Company

sold 1,220 shares of Series B Convertible Preferred Stock and warrants to purchase 122,000 shares of Common Stock with an exercise price

of $ 12.00 , 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 of $ 70,000 .

March 26, 2024, the Company sold 780 shares of Series B Convertible Preferred Stock and warrants to purchase 78,000 shares of Common

Stock with an exercise price of $ 12.00 , for a total purchase price of $ 780,000 .

April 29, 2024, the Company sold 100 shares of Series B Convertible Preferred Stock and warrants to purchase 10,000 shares of Common

Stock with an exercise price of $ 12.00 , for a total purchase price of $ 100,000 .

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 $10.00 (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 $8.73 (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.

Upon a liquidation event the holders of Series B Convertible Preferred

Stock receive a liquidation preference ahead of Common Stockholders.

The warrants have an exercise

price of $12.00 (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.

For the period ended January

31, 2024, the Company recorded the Series B Convertible Preferred Stock as mezzanine equity and the warrant as a liability.

2024, the Company amended its Amended and Restated Certificate of Designations for the Series B Convertible Preferred Stock to remove

certain change of control language.

As a result, the Company reassessed the classification of both the Series B Convertible Preferred

Stock and warrant and reclassified both the Series B Convertible Preferred Stock and warrant as permanent equity for the period ended

April 30, 2024.

ALSF Investment

On April 30, 2019, the Company

and ALSF entered into a securities purchase agreement (the “SPA”) for the purchase of 66,667 shares of Common Stock for a

total purchase price of $ 15,000,000 , or $ 225.00 per share with 33,333 warrants with a 5 -year life and an exercise price of $ 450.00 per

share and vesting upon issuance.

The total purchase price of $ 15,000,000 was in the form of a non-interest bearing note receivable with

a 12 -month term from ALSF, a related party.

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

Pursuant to the SPA, ALSF was entitled

to full ratchet anti-dilution protection, most-favored nation status, denying the Company the right to enter into a variable rate transaction

absent its consent, a right to participate in any future financing the Company may consummate and to have all the shares of Common Stock

to which it is entitled to under the SPA registered under the Securities Act within 180 days of the final closing of IPO.

to which it is entitled under the SPA registered under the Securities Act within 180 days of the final closing of the IPO.

the term of the note receivable was extended to December 31, 2023.

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

In March 2021, the Company entered into

the SPA with AL 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 were made in tranches.

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

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

Under the terms of the SPA, AL (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 $4 million.

In addition, the Company issued AL

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

Finally, the Company agreed that for a period

of 18 months following the date of the payment of the final tranche of $4 million, AL will have the right to invest an additional $10

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

date of this Annual Report.

On June 17, 2021, the Company sold an aggregate

of 2,875,000 shares of common stock, including 375,000 shares pursuant to the underwriter’s exercise of its option to purchase additional

shares, each at an offering price of $ 5.00 per share, for aggregate gross proceeds of approximately $ 14.4 million.

The proceeds from the

offering to the Company, net of underwriting discounts and commissions and offering expenses, were $ 12.9 million.

AL also purchased 2,000,000

shares of common stock for $ 10 .0 million in the initial public offering at $ 5.00 per share, the same price and on the same terms as other

investors in the initial public offering, except that a reduced underwriting discount was paid to the underwriters for the sale of common

In November 2022, the Company entered into a marketing and brand development

agreement with AULT, effective August 1, 2022, whereby AULT will provide various marketing services over twelve months valued at $1.4

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 is amortizing the expense over twelve months beginning

in August 2022.

At April 30, 2023, the balance of related party prepaid expenses was $247,000.

On January 19, 2024, the Company and ALSF entered into a settlement

agreement and release of claims whereby ALSF returned to the Company 66,117 shares of Common Stock and the ALSF Warrants for settlement

of the outstanding balance of the note receivable in the amount of $ 14,876,293 .

At-the-Market Offering

On September 8, 2023, the

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 the ATM Offering.

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 was 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 year ended April

30, 2024, the Company sold an aggregate of 107,682 shares of Common Stock pursuant to the ATM Offering for proceeds of $ 1.3 million.

The Company terminated its

ATM Offering on May 6, 2024.

SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial

statements were issued.

The Company has determined that there are no such events that warrant disclosure or recognition in the financial

statements presented herein.

May 8, 2024, the Company and Orchid entered into the Orchid SPA for the purchase of up to 2,500 shares of Series A Convertible

Preferred Stock and warrants to purchase shares up to 2,500,000 shares of Common Stock in several tranche closings.

On May 10, 2024, the Company

sold 100 shares of Series A Convertible Preferred Stock and warrants to purchase 80,000 shares of Common Stock with an exercise price

of $ 12.50 , for a total purchase price of $ 1.0 million.

The purchase price was paid by the surrender

and cancellation of a term note issued by the Company to Orchid of $ 311,356 , consisting of $ 310,000 of principal and $ 1,356 of accrued

and unpaid interest, $ 100,000 discount and net cash of $ 588,644 .

On June 25, 2024, the Company

sold 150 shares of Series A Convertible Preferred Stock and warrants to purchase 120,000 shares of Common Stock with an exercise price

of $ 12.50 , for a total purchase price of $ 1.5 million.

The purchase price was paid in cash.

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

What changed 10-K

Item 9A. Controls and Procedures