What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-09-10 compared with 2025-03-10 · 178 added, 492 removed, 297 unchanged (69% of the section changed)

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Critical Accounting Policies and Estimates

Research and Development

Research and development costs are expensed as incurred.

Research and development costs consist of scientific consulting

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

We have acquired and may continue

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

The upfront payments to acquire license,

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

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

Stock-Based Compensation.

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Plan of Operations

intend to develop and commercialize therapeutics and vaccines that are better than existing treatments and have the potential to significantly

improve the lives of individuals afflicted by Alzheimer’s, BD, MDD and PTSD.

To achieve these goals, we are pursuing the following

key business strategies:

We intend to develop and commercialize

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

afflicted by Alzheimer’s, BD, MDD and PTSD.

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

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

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

pipeline consists of two novel therapeutic drug candidates:

Our pipeline consists of two

novel therapeutic drug candidates:

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

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worldwide license from the Licensor.

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

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

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

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

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

and PTSD in humans.

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

potentially mitigating the regulatory burden for safety data.

May 5, 2022, we initiated a multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic clinical trial

of AL001 in patients with mild to moderate Alzheimer’s and healthy subjects.

We completed the Phase IIA clinical trial in March

2023 and announced positive topline data in June 2023, followed by the full data set in October 2024.

announced that we successfully identified a maximum tolerated dose (“MTD”) for development of AL001 from a multiple-ascending

dose study as assessed by an independent safety review committee.

This dose, providing lithium at a lithium carbonate equivalent dose

of 240 mg 3-times daily (“TID”), is designed to be unlikely to require lithium therapeutic drug monitoring (“TDM”).

Also, this MTD is risk mitigated for the purpose of treating fragile populations, such as Alzheimer’s patients.

Our most advanced product

candidate (lead product) licensed and in clinical development in humans is AL001, an ionic cocrystal of lithium for the treatment of Alzheimer’s,

BD, MDD and PTSD.

Based on our preclinical data involving mice models, AL001 treatment prevented cognitive deficits, depression and irritability

and is superior in improving associative learning and memory and irritability compared with lithium carbonate treatments, supporting the

potential of this lithium formulation for the treatment of Alzheimer’s, BD, MDD and PTSD in humans.

Lithium has been marketed for

more than 35 years and human toxicology regarding lithium use has been well characterized, potentially mitigating the regulatory burden

for safety data.

On May 5, 2022, we initiated

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

with mild to moderate Alzheimer’s and healthy subjects.

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

topline data in June 2023, followed by the full data set in October 2024.

We announced that we successfully

identified a maximum tolerated dose (“MTD”) for development of AL001 from a multiple-ascending dose study as assessed by an

independent safety review committee.

This dose, providing lithium at a lithium carbonate equivalent dose of 240 mg 3-times daily (“TID”),

is designed to be unlikely to require lithium therapeutic drug monitoring (“TDM”).

Also, this MTD is risk mitigated for the

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

Lithium is a commonly prescribed

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lithium treatment with an enhanced safety profile and advantageous distribution to brain and brain structures.

on the results from our Phase IIA MAD study, we plan to initiate five clinical trials to determine relative increased lithium levels in

the brain compared to a marketed lithium salt for healthy subject and patients diagnosed with mild to moderate Alzheimer’s, BD,

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

when treating with AL001.

For example, the goal is to replace the amount of lithium needed for maintenance treatment of BD with a clinically

relevant, lower AL001 lithium carbonate equivalent lithium dose.

Such lithium dose mitigation could redefine the landscape of neuropsychiatric,

neurodegenerative, and neurological treatment practices.

In August 2024, we announced that we had partnered with Massachusetts General

Hospital to serve as the CRO for these clinical trials.

November 19, 2024, we announced final full data set from a nonclinical study comparing brain and plasma lithium exposures between AL001

and lithium carbonate in Alzheimer’s transgenic mice.

The study was conducted at the University of South Florida and the bioanalytical

procedures for determination of lithium concentration in the brain and plasma samples were conducted under good laboratory practice standards

by Sannova Analytical LLC.

The study involved administering AL001, a good manufacturing practices-quality active pharmaceutical ingredient

(“API”) to 5XFAD mice, a recognized model for Alzheimer’s research, to compare its effects against lithium carbonate,

an FDA approved and marketed API.

Mice received either high or low doses scaled to humans of both AL001 and lithium carbonate over a 14-day

period to observe pharmacokinetic steady-state drug conditions.

On the 15th day, the mice were analyzed to assess how the treatments affected

lithium concentrations in different brain regions and in their plasma.

Based on the results from

our Phase IIA MAD study, we plan to initiate five clinical trials to determine relative increased lithium levels in the brain compared

to a marketed lithium salt for healthy subject and patients diagnosed with mild to moderate Alzheimer’s, BD, MDD and PTSD, based

on published mouse studies that predict that lithium can be given at lower doses for equivalent therapeutic benefit when treating with

For example, the goal is to replace the amount of lithium needed for maintenance treatment of BD with a clinically relevant, lower

AL001 lithium carbonate equivalent lithium dose.

Such lithium dose mitigation could redefine the landscape of neuropsychiatric, neurodegenerative,

and neurological treatment practices.

In August 2024, we announced that we had partnered with Massachusetts General Hospital to serve

as the CRO for these clinical trials.

On November 19, 2024, we announced

a final full data set from a nonclinical study comparing brain and plasma lithium exposures between AL001 and lithium carbonate in Alzheimer’s

transgenic mice.

The study was conducted at the University of South Florida and the bioanalytical procedures for determination of lithium

concentration in the brain and plasma samples were conducted under good laboratory practice standards by Sannova Analytical LLC.

involved administering AL001, a good manufacturing practices-quality active pharmaceutical ingredient (“API”) to 5XFAD mice,

a recognized model for Alzheimer’s research, to compare its effects against lithium carbonate, an FDA approved and marketed API.

Mice received either high or low doses scaled to humans of both AL001 and lithium carbonate over a 14-day period to observe pharmacokinetic

steady-state drug conditions.

On the 15th day, the mice were analyzed to assess how the treatments affected lithium concentrations in

different brain regions and in their plasma.

Based on the study, both treatments

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be tailored to target specific brain areas, allowing for more precise treatment of various brain-related conditions when applied in human

results highlight the potential clinical advantages of AL001 for conditions like Alzheimer’s, BD, MDD and PTSD at low doses.

reducing the systemic burden, AL001 could lessen the risk of side effects such as thyroid and kidney complications often associated with

extant lithium therapies.

These results highlight the

potential clinical advantages of AL001 for conditions like Alzheimer’s, BD, MDD and PTSD at low doses.

By reducing the systemic

burden, AL001 could lessen the risk of side effects such as thyroid and kidney complications often associated with extant lithium therapies.

This positions AL001 as a promising candidate for safer long-term treatment options, without the need for TDM.

This innovation is specifically designed to address the needs of fragile populations, such as elderly and Alzheimer’s patients,

by offering a potentially more efficient and safer alternative to existing treatments.

This innovation is specifically

designed to address the needs of fragile populations, such as elderly and Alzheimer’s patients, by offering a potentially more efficient

and safer alternative to existing treatments.

The dosing level identified

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a diverse cohort of both healthy subjects and patients diagnosed with mild to moderate Alzheimer’s disease, BD, MDD and PTSD.

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

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

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

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

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

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

to bolster the ability of the patient’s immune system to combat Alzheimer’s, with the goal being to foster tolerance to treatment

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

Alzheimer’s signs and symptoms.

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

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

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

blood cells rather than foreign cells and/or blood products.

April 3, 2023, we announced the initiation of a Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s

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

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

The primary goal of this clinical trial is to determine an appropriate

dose of ALZN002 for treatment of patients with Alzheimer’s in a larger Phase IIB efficacy and safety clinical trial.

13, 2024, we received notice from the company we engaged as our contract research organization (“CRO”), Biorasi, LLC (“Biorasi”)

that Biorasi was terminating our contract with them.

May 2025, we began the trial and dosed the first healthy subject.

On September 28, 2022, we

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

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

ALZN002 is a proprietary

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

It consists of autologous

DCs that are activated white blood cells taken from each individual patient so that they can be engineered outside of the body to attack

Alzheimer’s-related amyloid-beta proteins.

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

ability of the patient’s immune system to combat Alzheimer’s, with the goal being to foster tolerance to treatment for safety

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

signs and symptoms.

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

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

provide a safer approach due to its reliance on autologous immune components, using each individual patient’s own white blood cells

rather than foreign cells and/or blood products.

On April 3, 2023, we announced

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

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

in 20-30 subjects with mild to moderate morbidity.

The primary goal of this clinical trial is to determine an appropriate dose of ALZN002

for treatment of patients with Alzheimer’s in a larger Phase IIB efficacy and safety clinical trial.

On February 13, 2024, we received

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

Biorasi was terminating our contract with them.

We are currently pursuing the engagement of a replacement CRO.

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

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

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

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

capabilities, competitive and technological advances, status of competitors, and our ability to establish collaborative arrangements with

other organizations, we will require additional financing to fund future operations.

The continuation of our current

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

us to raise additional capital to fund our operations.

Because our working capital

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

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

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

will require additional financing to fund future operations.

Results of Operations

Results of Operations for the Three Months Ended January 31,

Results of Operations for the Three Months Ended July 31,

2025 and 2024

The following table summarizes

the results of our operations for the three months ended January 31, 2025 and 2024:

For the Three Months Ended January 31,

the results of our operations for the three months ended July 31, 2025 and 2024:

For the Three Months Ended July 31,

OPERATING EXPENSES

Research and development

$ (1,461,646 )

General and administrative

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We did not generate any revenues

during the three months ended January 31, 2025 and 2024, and we do not anticipate that we will generate revenue for the foreseeable future.

during the three months ended July 31, 2025 and 2024, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and Development Expenses

Research and development expenses

for the three months ended January 31, 2025 and 2024 were $447,000 and $1.9 million, respectively.

for the three months ended July 31, 2025 and 2024 were $1.7 million and $207,000, respectively.

As reflected in the table below, research

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

For the Three Months Ended January 31,

For the Three Months Ended July 31,

Professional fees

Clinical trial fees

Stock-based compensation expense

Other research and development expenses

Total research and development expenses

$ (1,461,646 )

* Not meaningful

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During the three months ended

January 31, 2025 and 2024, we incurred professional fees of $135,000 and $560,000, respectively, which were primarily comprised of professional

July 31, 2025 and 2024, we incurred professional fees of $74,000 and $184,000, respectively, which were primarily comprised of professional

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

The decrease relates to lower professional

fees incurred given the reduction in clinical trial activities.

fees required to support the previous and upcoming clinical trial activities.

Clinical Trial Fees

During the three months ended

January 31, 2025 and 2024, we incurred clinical trial fees of $298,000 and $1.3 million, respectively.

Clinical trial fees for the three

months ended January 31, 2025 were for our initial set-up for our Phase IIA brain imaging study with Massachusetts General.

Clinical trial

fees for the three months ended January 31, 2024 were for our Phase IIA clinical trial for AL001 and our Phase I/IIA clinical trial for

Stock-Based Compensation Expense

During the three months ended

January 31, 2025 and 2024, we incurred research and development stock-based compensation expense of nil and $71,000, respectively, related

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

The decrease in stock-based compensation

expense for the three months ended January 31, 2025 was a result of fewer stock options vesting during the period compared to the prior

July 31, 2025 and 2024, we incurred clinical trial fees of $1.7 million and nil, respectively.

Clinical trial fees for the three months

ended July 31, 2025 were for our Phase IIA brain imaging study with Massachusetts General Hospital.

Other Research and Development Expenses

During the three months ended

January 31, 2025 and 2024, we incurred other fees of $14,000 and $27,000, respectively, which were primarily comprised of scientific materials

July 31, 2025 and 2024, we incurred other fees of $6,000 and $22,000, respectively, which were primarily comprised of scientific materials

required for our clinical trials.

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General and administrative

expenses for the three months ended January 31, 2025 and 2024 were $590,000 and $750,000, respectively.

expenses for the three months ended July 31, 2025 and 2024 were $959,000 and $756,000, respectively.

As reflected in the table below,

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marketing fees;

as well as board of director fees.

For the three months ended January 31,

2025 and 2024, the remaining general and administrative expenses of $116,000 and $99,000, respectively, primarily consisted of payments

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

For the Three Months Ended January 31,

and board of director fees.

For the three months ended July 31, 2025 and

2024, the remaining general and administrative expenses of $102,000 and $62,000, respectively, primarily consisted of payments for filing

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

For the Three Months Ended July 31,

Salary and benefits

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Stock-based compensation expense

Marketing fees

Board of director fees

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Total general and administrative expenses

* Not meaningful

Salaries and Benefits

During each of the three months

ended January 31, 2025 and 2024, we incurred $227,000 in employee-related expenses.

As of January 31, 2025, we had four full-time and

three part-time employees.

ended July 31, 2025 and 2024, we incurred $228,000 in employee-related expenses.

As of July 31, 2025, we had four full-time and three

part-time employees.

Professional Fees

During the three months ended

January 31, 2025 and 2024, we incurred professional fees of $62,000 and $185,000, respectively.

During the three months ended January

31, 2025, we incurred $35,000 in legal fees, $22,000 in audit fees and $5,000 in investor relations fees.

During the three months ended

January 31, 2024, we incurred $54,000 in audit fees, $52,000 in investor relations fees, $30,000 in legal fees, $30,000 consulting, $13,000

in related party consulting, and $6,000 in Sarbanes-Oxley compliance fees.

The decrease in professional fees was due mainly to lower audit,

investor relations, consulting and related party consulting fees.

July 31, 2025 and 2024, we incurred professional fees of $333,000 and $222,000, respectively.

During the three months ended July 31, 2025,

we incurred $183,000 in legal fees, $78,000 in audit fees, $60,000 in investor relations fees and $12,000 in tax preparation fees.

the three months ended July 31, 2024, we incurred $85,000 in investor relations fees, $74,000 in legal fees, $56,000 in audit fees, and

$7,000 in tax preparation fees.

The increase in professional fees was due mainly to higher legal, audit and tax preparation fees, partially

offset by lower investor relations fees.

The increase in legal fees, which accounted for a significant proportion of the increase, was

a result of actions from the termination of our ALZN002 clinical trial.

Insurance Expense

During the three months ended

January 31, 2025 and 2024, we incurred insurance expense of $60,000 and $88,000, respectively, which was primarily directors’ and

officers’ insurance.

July 31, 2025 and 2024, we incurred insurance expense of $60,000 and $78,000, respectively, which was primarily directors’ and officers’

Stock-Based Compensation Expense

During the three months ended

January 31, 2025 and 2024, we incurred general and administrative stock-based compensation expense of $81,000 and $115,000, respectively,

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

The decrease in stock-based compensation

expense for the three months ended January 31, 2025, was a result of fewer stock options vesting during the period compared to the prior

Results of Operations for the Nine Months Ended January 31,

2025 and 2024

The following table summarizes

the results of our operations for the nine months ended January 31, 2025 and 2024:

For the Nine Months Ended January 31,

OPERATING EXPENSES

Research and development

$ (5,306,906 )

General and administrative

Total operating expenses

Loss from operations

OTHER EXPENSE, NET

Interest expense

Total other expense, net

$ (3,375,408 )

$ (9,096,217 )

Basic and diluted net loss per common share

Basic and diluted weighted average common shares outstanding

* Not meaningful

currently have only two product candidates, AL001 and ALZN002.

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

extensive clinical study, review and evaluation, regulatory review and approval, significant marketing efforts and substantial investment

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

We did not generate any revenues

during the nine months ended January 31, 2025 and 2024, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and Development Expenses

Research and development expenses

for the nine months ended January 31, 2025 and 2024 were $965,000 and $6.3 million, respectively.

As reflected in the table below, research

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

For the Nine Months Ended January 31,

Professional fees

$ (2,171,903 )

Clinical trials

Stock-based compensation expense

Other research and development expenses

Total research and development expenses

$ (5,306,906 )

* Not meaningful

Professional Fees

During the nine months ended

January 31, 2025 and 2024, we incurred professional fees of $500,000 and $2.7 million, respectively, which were primarily comprised of

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

The decrease relates to lower

professional fees incurred related to minimal clinical trial activities.

Clinical Trial Fees

During the nine months ended

January 31, 2025 and 2024, we incurred clinical trial fees of $422,000 and $3.3 million, respectively.

Clinical trial fees for the nine

months ended January 31, 2025 were for our initial set-up for our Phase IIA brain imaging study with Massachusetts General.

Clinical trial

fees for the nine months ended January 31, 2024 were for our Phase IIA clinical trial for AL001 and our Phase I/IIA clinical trial for

Stock-Based Compensation Expense

During the nine months ended

January 31, 2025 and 2024, we incurred research and development stock-based compensation expense of nil and $214,000, respectively, related

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

The decrease in stock-based compensation

expense for the nine months ended January 31, 2025 was a result of fewer stock options vesting during the period compared to the prior

Other Research and Development Expenses

During the nine months ended

January 31, 2025 and 2024, we incurred other fees of $42,000 and $93,000, respectively, which were primarily comprised of scientific materials

required for our clinical trials.

General and Administrative Expenses

General and administrative

expenses for the nine months ended January 31, 2025 and 2024 were $2.4 million and $2.8 million, respectively.

As reflected in the table

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

salaries and benefits;

stock-based compensation expense;

marketing fees;

as well as board of director fees.

For the nine months ended January

31, 2025 and 2024, the remaining general and administrative expenses of $262,000 and $276,000, respectively, primarily consisted of payments

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

For the Nine Months Ended January 31,

Salaries and benefits

Professional fees

Stock-based compensation expense

Marketing fees

Board of director fees

Other general and administrative expenses

Total general and administrative expenses

Salaries and Benefits

During the nine months ended

January 31, 2025 and 2024, we incurred $780,000 and $606,000, respectively, in employee-related expenses.

The increase in salaries and

benefits was due to a bonus paid to our chief executive officer.

As of January 31, 2025, we had four full-time and three part-time employees.

Professional Fees

During the nine months ended

January 31, 2025 and 2024, we incurred professional fees of $433,000 and $620,000, respectively.

During the nine months ended January

31, 2025, we incurred $173,000 in audit fees, $144,000 in legal fees, $92,000 in investor relations fees, $22,000 in tax preparation fees,

and $2,000 in consulting fees.

During the nine months ended January 31, 2024, we incurred $224,000 in audit fees, $170,000 in investor

relations fees, $99,000 in legal fees, $38,000 in related party consulting, $34,000 in consulting fees, $30,000 in tax preparation fees

and $24,000 in Sarbanes-Oxley compliance fees.

The decrease in professional fees was due mainly to lower audit, investor relations, consulting

fees, related party consulting and Sarbanes-Oxley compliance fees partially offset by higher legal fees.

Insurance Expense

During the nine months ended

January 31, 2025 and 2024, we incurred insurance expense of $199,000 and $294,000, respectively, which was primarily directors’

and officers’ insurance.

Stock-Based Compensation Expense

During the nine months ended

January 31, 2025 and 2024, we incurred general and administrative stock-based compensation expense of $244,000 and $660,000, respectively,

July 31, 2025 and 2024, we incurred general and administrative stock-based compensation expense of $43,000 and $81,000, respectively,

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

The decrease in stock-based compensation

expense for the nine months ended January 31, 2025, was a result of fewer stock options vesting during the period compared to the prior

Marketing Fees

During the nine months ended

January 31, 2025 and 2024, we incurred marketing fees of $344,000 and $247,000, respectively.

The increase was due to a marketing program

launched to promote our company and our stock during the nine months ended January 31, 2025.

expense for the three months ended July 31, 2025, was a result of fewer stock options vesting during the period compared to the prior

Liquidity and Capital Resources

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

the time we are able to generate revenues from operations.

the time we begin significant deliveries of our products.

We believe our current cash on hand is

8 unchanged sentences

fund working capital requirements.

Our condensed financial statements do not include any adjustments relating to the recoverability and

classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue

as a going concern.

As of January 31, 2025, we had cash of $3.4 million, working capital of $3.2 million, an accumulated deficit of $57.4

million and stockholders’ equity of $3.4 million.

For the three and nine months ended January 31, 2025, we had net losses of $1.0

million and $3.4 million, respectively.

For the nine months ended January 31, 2025, cash used in operating activities was $5.9 million.

Historically, we have financed our operations principally through issuances of equity and debt instruments.

Our condensed financial statements do not include any

adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that

might be necessary should we be unable to continue as a going concern.

As of July 31, 2025, we had cash of $5.6 million, working capital

of $4.9 million, stockholders’ equity of $5.3 million and an accumulated deficit of $61.2 million.

We have incurred recurring losses

and reported losses for the three months ended July 31, 2025 totaling $2.7 million.

In the past, we have financed our operations principally

through sales of equity securities and debt instruments.

We will need to obtain substantial

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

B Preferred Financing

January 31, 2024, we entered into a securities purchase agreement (“AL SPA”) with Ault Lending, LLC (“Ault Lending”)

whereby Ault Lending may purchase of up to 6,000 shares of series B convertible preferred stock (“Series B Convertible Preferred

Stock”) and warrants to purchase shares up to 600,000 shares of our common stock.

The AL SPA provides that Ault Lending may purchase

up to $6 million of Series B Convertible Preferred Stock in one or more closings.

Ault Lending has the right to purchase up to $2 million

of Series B 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.

the year ended April 30, 2024, we sold an aggregate of 2,100 shares of Series B Convertible Preferred Stock and warrants to purchase 210,000

shares of common stock with an exercise price of $12.00, for a total purchase price of $2.1 million.

purchase price was paid by the cancellation of $1.15 million of cash advances made by Ault Lending to us between November 9, 2023 and

January 31, 2024 and the remaining $950,000 in cash.

B Convertible Preferred Stock has a stated value of $1,000 per share (“Series B 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 Series B Stated Value by $10.00 (the

“ Series B Conversion Price”).

B Conversion Price is subject to adjustment in the event of an issuance of common stock at a price per share lower than the Series

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

The holders 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 Corporation 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 date of execution of the AL SPA.

The Voting Floor Price shall

be adjusted for stock dividends, stock splits, stock combinations and other similar transactions.

warrants have an exercise price of $12.00 (the “ Series B Exercise Price”)

and become exercisable on the first business day after the six-month anniversary of issuance (the “ Series

B Initial Exercise Date”) and have a five-year term, expiring on the fifth anniversary of the Series

B Initial Exercise Date.

The Series B Exercise Price is subject to

adjustment in the event of an issuance of common stock at a price per share lower than the Series

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

Series A Preferred Financing

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

SPA”) for the purchase of up to 2,500 shares of Series A Convertible Preferred Stock (“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, we 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 us 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, we 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.

purchase price was paid in cash.

On August 19, 2024, we sold 200 shares of Series A Convertible Preferred Stock and warrant to purchase

160,000 shares of common stock with an exercise price of $12.50, for a total purchase price of $2.0 million.

The purchase price was paid

On August 21, 2024, we sold 250 shares of Series A Convertible Preferred Stock and warrant to purchase 200,000 shares of common

stock with an exercise price of $12.50, for a total purchase price of $2.5 million less $100,000 discount.

The purchase price was paid

On September 11, 2024, we sold 100 shares of Series A Convertible Preferred Stock and warrant 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 in cash.

to the Orchid SPA, Orchid has agreed to purchase the remaining 1,700 Preferred Shares based on our achievement of the milestones set forth

below (the “Milestones”):

200 Preferred Shares, for $2,000,000, within 60 days of the effectiveness of the resale registration statement (the “Old Registration Statement”) and the execution of a partnership agreement with a nationally renowned research facility for a clinical trial (the “Fourth Tranche”);

100 Preferred Shares, for $1,000,000, on each monthly anniversary of the effectiveness of the Old Registration Statement, which was declared effective on July 9, 2024, until all remaining 1,500 Preferred Shares have been sold (each, a “Final Tranche”).

Notwithstanding

the foregoing Milestones, Orchid has the ability to invest any amount in its sole discretion in advance of the dates that the foregoing

Milestones shall have been met.

In the event that the average closing price of the common stock during the three trading days preceding

the date of a tranche closing shall not be equal to or greater than $2.50 a share (the “Floor Price”), then the applicable

closing shall be delayed until such time as the price meets the required threshold.

pay Ault Lending an origination fee of five percent (5%) of the total gross proceeds we receive from Orchid upon each purchase of Series

A Convertible Preferred Stock.

We also agreed to pay Orchid a fee of $100,000 upon the first closing, which occurred on May 10, 2024,

$100,000 upon the third closing, which occurred on August 21, 2024, and the fourth, eighth and thirteenth closings constituting parts

of the Final Tranche.

Old Registration Statement, which registered for resale the shares of common stock issuable upon conversion of the Series A Convertible

Preferred Stock and exercise of the warrants, was declared effective on July 9, 2024.

In addition, we agreed to use our best efforts to

hold a special meeting of our stockholders within 90 days of the execution date of the Orchid SPA for purposes of seeking stockholder

approval of the issuance of all the shares of common stock issuable upon conversion of the Series A Convertible Preferred Stock and the

exercise of the warrants in excess of the “Nasdaq Limit,” which is 19.99% of our shares of common stock issued and outstanding

on the execution date of the Orchid SPA.

We held a special meeting of stockholders on July 8, 2024, at which time, the stockholders approved

the issuance of all the shares of common stock issuable upon conversion of the Series A Convertible Preferred Stock and the exercise of

the warrants in excess of the “Nasdaq Limit.”

Series A Convertible Preferred Stock has a stated value of $10,000 per share (“Series

A Stated Value”) and accrues dividends at the rate of 15% per annum, payable quarterly in arrears in cash or paid-in-kind

shares, in Orchid’s sole discretion.

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

common stock determined by dividing the Series A Stated Value by (y)

the greater of (i) the Floor Price and (ii) the lesser of (A) $15.00 and (B) 80% of the lowest closing price of our common stock during

the three trading days immediately prior to the date of conversion into conversion shares (the “ Series

A Conversion Price”).

The Series A Conversion Price is subject to adjustment

in the event of an issuance of common stock at a price per share lower than the Series A Conversion

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

The holders of the Series

A 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 Corporation 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 A Convertible Preferred Stock is entitled to

cast, shall not be lower than $5.63 (the “Series A Voting Floor Price”), which represents the closing sale price of the common

stock on the trading day immediately prior to the date of execution of the Orchid SPA.

The Series A Voting Floor Price shall be adjusted

for stock dividends, stock splits, stock combinations and other similar transactions.

The warrants have an exercise

price of $12.50 (the “ Series A Exercise Price”) and are exercisable upon issuance

and have a five-year term, expiring on the fifth anniversary of issuance.

The Series A Exercise

Price is subject to adjustment in the event of an issuance of common stock at a price per share lower than the Series

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

are exercisable on a cashless basis in the event that there is not then an effective resale registration statement for the common stock

issuable upon exercise of the warrants.

At-the-Market Offering

On October 3, 2024, we entered

into an At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC (the “ATM Offering”), as sales agent to

sell shares of our common stock, having an aggregate offering price of up to approximately $6.5 million from time to time, through the

ATM Offering.

On October 3, 2024, we filed a prospectus supplement with the SEC relating to the offer and sale of up to approximately

$6.5 million in shares of common stock in the ATM Offering.

The offer and sale of the

shares will be made pursuant to our 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 nine months ended

January 31, 2025, we sold an aggregate of 1,321,468 shares of common stock pursuant to the ATM Offering for gross proceeds of $2.0 million

and net proceeds of $1.9 million.

From February 1, 2025 to March 7, 2025, we sold an aggregate of 800,673 shares of common stock pursuant

to the ATM Offering for gross proceeds of $869,000 and net proceeds of $843,000.

Series C Preferred Financing

February 28, 2025, we and Orchid entered into a securities purchase & exchange agreement (the “New Orchid SPA”)

for the (i) exchange of 97.7511 shares of Series A Convertible Preferred Stock for an equal number of shares of the Company’s Series

C convertible preferred stock (the “Series C Convertible Preferred Stock”) and (ii) purchase of up to 500 shares

of Series C Convertible Preferred Stock and warrants to purchase up to 1,000,000 shares of Common Stock in several tranche closings.

On March 3, 2025, Orchid exchanged

the 97.7511 shares of Series A Convertible Preferred Stock it owned for an equal number of shares of Series C Convertible Preferred Stock

(the “Exchange”).

In addition, in connection with the Exchange, Orchid received from the Company warrants to purchase 1,000,000

shares of Common Stock and Orchid canceled all warrants previously issued to it, which were exercisable for an aggregate of 640,000 shares

of Common Stock.

Finally, as a result of the Exchange, the Old Orchid SPA, and all rights and obligations thereto, were canceled.

Pursuant to the New Orchid SPA, Orchid shall purchase

up to 500 shares of Series C Convertible Preferred Stock as follows:

75 shares of Series C Convertible Preferred Stock, for $725,000, on the earlier of (i) April 29, 2025 or (ii) the fifteenth calendar day after a resale registration statement (the “Registration Statement”) has been declared effective (the “Second Tranche Closing”);

75 shares of Series C Convertible Preferred Stock, for $725,000, on each of the five monthly anniversaries of the Second Tranche Closing;

50 shares of Series C Convertible Preferred Stock, for $475,000, on the sixth monthly anniversary of the Second Tranche Closing.

Notwithstanding

the foregoing, Orchid has the ability to invest any amount in its sole discretion in advance of the dates set.

In the event that the average

closing price of the common stock during the three trading days preceding the date of a tranche closing shall not be equal to or greater

than $0.10 a share (the “Series C Floor Price”), then the applicable closing shall be delayed until such time as the price

meets the required threshold.

New Orchid SPA may be terminated by either us or Orchid in the event that the Registration Statement has not been declared effective by

the Securities and Exchange Commission by April 15, 2025.

In addition, we agreed to use our best efforts to hold a meeting of our stockholders

within 90 days of the execution date of the New Orchid SPA for purposes of seeking stockholder approval of the issuance of all the shares

of common stock issuable upon conversion of the Series C Convertible Preferred Stock and the exercise of the warrants in excess of the

“Nasdaq Limit,” which is 19.99% of our shares of common stock issued and outstanding on the execution date of the New Orchid

We intend to hold our annual meeting of stockholders on April 25, 2025, at which time, the stockholders will be asked approved the

issuance of all the shares of common stock issuable upon conversion of the Series C Convertible Preferred Stock and the exercise of the

warrants in excess of the “Nasdaq Limit.”

Series C Convertible Preferred Stock has a stated value of $10,000 per share (“Series

C Stated Value”) and accrues dividends at the rate of 15% per annum, payable quarterly in arrears in cash or paid-in-kind

shares, in Orchid’s sole discretion.

Each share of Series C Convertible Preferred Stock is

convertible into such number of shares of Common Stock equal to (x) the stated value of the Series C Convertible Preferred Stock being

converted plus all accrued but unpaid dividends, divided by (y) the greater of (i) the Series C Floor Price, and (ii) the lesser of (A)

$15.00 and (B) 80% of the lowest closing price of the Common Stock during the three (3) trading days immediately prior to the date of

conversion (the “ Series C Conversion Price”).

C Conversion Price is subject to adjustment in the event of an issuance of common stock at a price per share lower than the Series

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

holders of the Series C 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 Corporation 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 C Convertible Preferred

Stock is entitled to cast, shall not be lower than $0.8375 (the “Series C Voting Floor Price”), which represents the closing

sale price of the common stock on the trading day immediately prior to the date of execution of the New Orchid SPA.

The Series C Voting

Floor Price shall be adjusted for stock dividends, stock splits, stock combinations and other similar transactions.

The warrants have an exercise

price of $0.92125 (the “ Series C Exercise Price”) and are exercisable upon issuance

and have a five-year term, expiring on the fifth anniversary of issuance.

The Series C Exercise

Price is subject to adjustment in the event of an issuance of common stock at a price per share lower than the Series

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

are exercisable on a cashless basis in the event that there is not then an effective resale registration statement for the common stock

issuable upon exercise of the warrants.

Note 8 Equity Transactions in the notes to the financial statements for a description of our latest fundraising activities.

The following table summarizes

our cash flows for the nine months ended January 31, 2025 and 2024:

For the Nine Months Ended January 31,

our cash flows for the three months ended July 31, 2025 and 2024:

For the Three Months Ended July 31,

Net cash provided by (used in):

4 unchanged sentences

Financing activities

Net increase (decrease) in cash and cash equivalents

$ (4,857,992 )

Net increase in cash and cash equivalents

Operating Activities

During the nine months ended

January 31, 2025, net cash used in operating activities was $5.9 million.

This consisted primarily of a net loss of $3.4 million and a

decrease in our net operating assets and liabilities of $2.8 million, partially offset by non-cash charges of $300,000.

During the three months ended

July31, 2025, net cash used in operating activities was $2.4 million.

This consisted primarily of a net loss of $2.7 million, partially

offset by an increase in our net operating assets and liabilities of $269,000 and by non-cash charges of $71,000.

The non-cash charges

primarily consisted of stock-based compensation expense.

The decrease in our net operating assets and liabilities was due to a decrease

in accounts payable and accrued liabilities and an increase in prepaid expenses and other current assets.

consisted of stock-based compensation expense and depreciation expense.

The increase in our net operating assets and liabilities was due

to an increase in accounts payable and accrued liabilities and an increase in prepaid expenses and other current assets.

Investing Activities

During the nine months ended

January 31, 2025, net cash used in investing activities was $90,000 from the purchase of equipment.

We purchased equipment, which measures

lithium levels in the brain, to be used in the AL001 clinical trials.

During the three months ended

July 31, 2025, there was no net cash used in investing activities.

Financing Activities

During the nine months ended

January 31, 2025, net cash provided by financing activities was $9.0 million.

This consisted of $7.1 million from the sale of Series A

Convertible Preferred Stock and $1.9 million from the sale of common stock from our ATM Offering.

During the three months ended

July 31, 2025, net cash provided by financing activities was $4.0 million from the sale of Series C Convertible Preferred Stock.

Contractual Obligations

2 unchanged sentences

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

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

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

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

limited to the field of Alzheimer’s, under U.S.

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

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

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

2 unchanged sentences

and on June 8, 2023, we 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 of the license fees.

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

The AL001 License Agreements

9 unchanged sentences

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

and Diagnostics, under United States Patent No.

and Diagnostics, under U.S.

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

and granted May 29, 2012.

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

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

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

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

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

The Seventh Amendment to

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

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

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

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

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

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

The Seventh Amendment to the ALZN002 License

modified the timing of the payments for the license fees.

The ALZN002 License Agreement

9 unchanged sentences

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

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

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

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

2 unchanged sentences

The Second Amendments to the November

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

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

The November AL001 License

5 unchanged sentences

These license agreements have

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

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

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

Under our various license agreements,

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

The Licensor was also granted a preemptive

right to acquire such shares or other equity securities that may be issued from time to time by us while the Licensor remains the owner

of any equity securities of our company.

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

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

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

Under our various license

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

The Licensor was also

granted a preemptive right to acquire such shares or other equity securities that may be issued from time to time by us while the Licensor

remains the owner of any equity securities of our company.

Additionally, we are required

to complete milestones and make payments on the due dates to the Licensor for the license of the AL001 technologies and for the ALZN002

technology, as follows:

to pay milestone payments on the due dates to the Licensor for the license of the AL001 technologies and for the ALZN002 technology, as

Original AL001 Licenses:

Completed September 2019

Pre-IND meeting

Completed June 2021

IND application filing

Completed December 2021

Upon first dosing of patient in a clinical trial

Completed March 2022

Upon completion of first clinical trial

Pre-IND Meeting - Completed September 2019

IND application filing - Completed June 2021

Upon first dosing of patient in a clinical trial - Completed December 2021

Upon completion of first clinical trial - Completed March 2022

Upon first patient treated in a Phase III clinical trial

8 years from the effective date of the agreement

Upon FDA new drug application approval

* Milestone met and payment made

Upon FDA NDA approval

* Milestone met and completed

ALZN002 License:

4 unchanged sentences

Upon first commercial sale

* Milestone met and payment made

* Milestone met and completed

Additional AL001 Licenses:

Upon first patient treated in a Phase III clinical trial

August 1, 2029

First commercial sale

4 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis