What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-03-11 compared with 2025-12-09 · 177 added, 253 removed, 319 unchanged (57% of the section changed)

109 unchanged sentences

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.

Lithium is a commonly prescribed

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

Lithium is also

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

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, is designed to be unlikely to require lithium

therapeutic drug monitoring (“TDM”).

Also, this MTD is risk-mitigated for the purpose of treating fragile populations, such

as Alzheimer’s patients.

Lithium is a commonly prescribed drug for manic episodes in BD type

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

Lithium is also prescribed off label for MDD, BD

and treatment of PTSD, among other disorders.

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

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

but is underutilized perhaps because of the need for TDM.

Lithium was the first drug that required TDM by regulatory authorities in product

labelling because the effective and safe range of therapeutic drug blood concentrations is narrow and well defined for treatment of BD

when using lithium salts.

Excursions above this range can be toxic, and below can impair effectiveness.

Existing lithium drugs suffer

from chronic toxicity, poor physicochemical properties, and poor brain bioavailability.

Alzamend’s novel AL001 formulation, a lithium-salicylate/L-proline

engineered ionic cocrystal, is designed to overcome the toxicities associated with conventional lithium salts, promising a next-generation

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

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 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.

lithium dose mitigation could redefine the landscape of neuropsychiatric, neurodegenerative, and neurological treatment practices.

August 2024, we announced that we had partnered with Massachusetts General Hospital to serve as the contract research organization (“CRO”)

for these clinical trials.

Food and Drug Administration

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

because of the need for TDM.

Lithium was the first drug that required TDM by regulatory authorities in product labelling because the effective

and safe range of therapeutic drug blood concentrations is narrow and well defined for treatment of BD when using lithium salts.

above this range can be toxic, and below can impair effectiveness.

Existing lithium drugs suffer from chronic toxicity, poor physicochemical

properties, and poor brain bioavailability.

Alzamend’s novel AL001 formulation, a lithium-salicylate/L-proline engineered ionic

cocrystal, is designed to overcome the toxicities associated with conventional lithium salts, promising a next-generation lithium treatment

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

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 contract research organization (“CRO”) for these clinical trials.

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

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lithium concentrations in different brain regions and in their plasma.

Based on the study, both treatments

had no negative impact on the mice's body weight or clinical signs during the treatment period.

AL001 showed lower plasma lithium levels

than lithium carbonate, reducing the risk of adverse systemic effects, suggesting an expansion for safety of lithium’s therapeutic

Further, AL001 showed consistently higher lithium concentrations in brain tissues, particularly at lower doses, compared to lithium

Based on the study, neither treatments had

a negative impact on the mice's body weight or clinical signs during the treatment period.

AL001 showed lower plasma lithium levels than

lithium carbonate, reducing the risk of adverse systemic effects, suggesting an expansion for safety of lithium’s therapeutic index.

Further, AL001 showed consistently higher lithium concentrations in brain tissues, particularly at lower doses, compared to lithium carbonate.

Finally, the study found that different brain regions absorb and retain lithium differently.

This means treatments can potentially

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

This means treatments can potentially 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.

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in the first quarter of 2026.

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.

On April 3, 2023, we announced the initiation of a Phase I/IIA clinical

trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type.

The purpose of this trial is to assess the safety,

tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that of a placebo in 20-30 subjects with mild to moderate

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 CRO,

Biorasi, LLC (“Biorasi”) that Biorasi was terminating our contract with them.

We are currently pursuing the engagement of

a replacement CRO.

On September 28, 2022, we submitted an IND application to the FDA for

ALZN002 and received a “study may proceed” letter on October 31, 2022.

The product candidate is an immunotherapy vaccine designed

to treat mild to moderate dementia of the Alzheimer’s type.

ALZN002 is a proprietary “active” immunotherapy product,

which means it is produced by each patient’s immune system.

It consists of autologous dendritic cells (“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 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

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Results of Operations

Results of Operations for the Three Months Ended October 31,

Results of Operations for the Three Months Ended January 31,

2026 and 2025

The following table summarizes

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

For the Three Months Ended October 31,

the results of our operations for the three months ended January 31, 2026 and 2025:

For the Three Months Ended January 31,

OPERATING EXPENSES

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We did not generate any revenues

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

during the three months ended January 31, 2026 and 2025, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and Development Expenses

Research and development expenses

for the three months ended October 31, 2025 and 2024 were $176,000 and $311,000, respectively.

for the three months ended January 31, 2026 and 2025 were $1.3 million and $447,000, 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 October 31,

For the Three Months Ended January 31,

Professional fees

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During the three months ended

October 31, 2025 and 2024, we incurred professional fees of $131,000 and $181,000, respectively, which were primarily comprised of professional

January 31, 2026 and 2025, we incurred professional fees of $255,000 and $135,000, 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 required to support the previous and upcoming clinical trial activities.

The increase relates to higher professional

fees required to support the upcoming clinical trial activities.

Clinical Trial Fees

During the three months ended

October 31, 2025 and 2024, we incurred clinical trial fees of $39,000 and $124,000, respectively.

The decrease in clinical trial fees

relates to the timing of our Phase IIA brain imaging study with Massachusetts General Hospital.

January 31, 2026 and 2025, we incurred clinical trial fees of $1.0 million and $298,000, respectively.

The increase in clinical trial

fees relates to the AL001 Phase IIB clinical study on healthy human subjects conducted with Massachusetts General Hospital, which was

completed in November 2025.

Other Research and Development Expenses

During the three months ended

October 31, 2025 and 2024, we incurred other fees of $6,000, which were primarily comprised of scientific materials required for our clinical

January 31, 2026 and 2025, we incurred other fees of $7,000 and $14,000, respectively, which were primarily comprised of scientific materials

required for our clinical trials.

General and Administrative Expenses

General and administrative

expenses for the three months ended October 31, 2025 and 2024 were $822,000 and $1.0 million, respectively.

As reflected in the table

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

expenses for the three months ended January 31, 2026 and 2025 were $919,000 and $590,000, respectively.

As reflected in the table below,

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

salaries and benefits;

professional fees;

stock-based compensation expense;

1 unchanged sentence

and board of director fees.

For the three months ended October 31,

2025 and 2024, the remaining general and administrative expenses of $85,000 and $83,000, 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 October 31,

For the three months ended January 31, 2026 and

2025, the remaining general and administrative expenses of $111,000 and $116,000, 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,

Salary and benefits

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Total general and administrative expenses

* Not meaningful

Salaries and Benefits

During the three months ended

October 31, 2025 and 2024, we incurred salaries and benefits of $224,000 and $326,000, respectively.

The decrease in salaries and benefits

was due mainly to lower bonuses.

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

January 31, 2026 and 2025, we incurred salaries and benefits of $310,000 and $227,000, respectively.

The increase in salaries and benefits

was due mainly to higher bonuses paid.

As of January 31, 2026, we had four full-time and two part-time employees.

Professional Fees

During the three months ended

October 31, 2025 and 2024, we incurred professional fees of $379,000 and $149,000, respectively.

During the three months ended October

31, 2025, we incurred $340,000 in legal fees, $24,000 in audit fees, $20,000 in tax preparation fees and $5,000 in consulting fees, offset

by $10,000 in investor relation fees due to a refund.

During the three months ended October 31, 2024, we incurred $96,000 in audit fees,

$35,000 in legal fees, $14,000 in tax preparation fees and $2,000 in consulting fees.

The increase in professional fees was due mainly

to higher legal and tax preparation fees, partially offset by lower audit and investor relations fees.

The increase in legal fees, which

accounted for a significant proportion of the increase, was a result of actions by the CRO from the termination of our ALZN002 clinical

January 31, 2026 and 2025, we incurred professional fees of $337,000 and $62,000, respectively.

During the three months ended January

31, 2026, we incurred $295,000 in legal fees, $24,000 in audit fees, $16,000 in investor relation fees and $1,000 in consulting fees.

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

The increase in professional fees was due mainly to higher legal fees, which was a result of litigation against the CRO from the

termination of our ALZN002 clinical trial.

Insurance Expense

During the three months ended

October 31, 2025 and 2024, we incurred insurance expense of $59,000 and $60,000, respectively, which was primarily directors’ and

January 31, 2026 and 2025, we incurred insurance expense of $59,000 and $60,000, respectively, which was primarily directors’ and

officers’ insurance.

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During the three months ended

October 31, 2025 and 2024, we incurred general and administrative stock-based compensation expense of $32,000 and $81,000, respectively,

January 31, 2026 and 2025, we incurred general and administrative stock-based compensation expense of $9,000 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 three months ended October 31, 2025, was a result of fewer stock options vesting during the period compared to the prior

expense for the three months ended January 31, 2026, was a result of fewer stock options vesting during the period compared to the prior

Marketing Fees

During the three months ended October 31, 2024, we incurred marketing

fees of $304,000, related to the marketing and branding of our company.

We did not incur any marketing fees for the three months ended

October 31, 2025.

Results of Operations for the Six Months Ended October 31,

During the three months ended

January 31, 2026, we incurred marketing fees of $50,000, related to the marketing and branding of our company.

We did not incur any marketing

fees for the three months ended January 31, 2025.

Results of Operations for the Nine Months Ended January 31,

2026 and 2025

The following table summarizes

the results of our operations for the six months ended October 31, 2025 and 2024:

For the Six Months Ended October 31,

the results of our operations for the nine months ended January 31, 2026 and 2025:

For the Nine Months Ended January 31,

OPERATING EXPENSES

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We did not generate any revenues

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

during the nine months ended January 31, 2026 and 2025, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and Development Expenses

Research and development expenses

for the six months ended October 31, 2025 and 2024 were $1.9 million and $518,000, respectively.

As reflected in the table below, research

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

For the Six Months Ended October 31,

for the nine months ended January 31, 2026 and 2025 were $3.2 million and $1.0 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

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Professional Fees

During the six months ended

October 31, 2025 and 2024, we incurred professional fees of $205,000 and $365,000, respectively, which were primarily comprised of professional

During the nine months ended

January 31, 2026 and 2025, we incurred professional fees of $460,000 and $500,000, respectively, which were primarily comprised of professional

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

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Clinical Trial Fees

During the six months ended

October 31, 2025 and 2024, we incurred clinical trial fees of $1.7 million and $124,000, respectively.

During the nine months ended

January 31, 2026 and 2025, we incurred clinical trial fees of $2.7 million and $422,000, respectively.

The increase in clinical trial

fees relates to the timing of our Phase IIA brain imaging study with Massachusetts General Hospital.

fees relates to our AL001 Phase IIB clinical study on healthy human subjects conducted with Massachusetts General Hospital, which was

completed in November 2025.

Other Research and Development Expenses

During the six months ended

October 31, 2025 and 2024, we incurred other fees of $12,000 and $28,000, respectively, which were primarily comprised of scientific materials

During the nine months ended

January 31, 2026 and 2025, we incurred other fees of $19,000 and $42,000, respectively, which were primarily comprised of scientific materials

required for our clinical trials.

1 unchanged sentence

General and administrative

expenses for the six months ended October 31, 2025 and 2024 were $1.8 million.

As reflected in the table below, general and administrative

expenses primarily consisted of the following expense categories:

expenses for the nine months ended January 31, 2026 and 2025 were $2.7 million and $2.4 million, respectively.

As reflected in the table

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

salaries and benefits;

professional fees;

stock-based compensation

stock-based compensation expense;

marketing fees;

and board of director fees.

For the six months ended October 31, 2025 and 2024, the remaining general and administrative

expenses of $187,000 and $145,000, 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 Six Months Ended October 31,

For the nine months ended January 31, 2026

and 2025, the remaining general and administrative expenses of $297,000 and $262,000, 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

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Salaries and Benefits

During the six months ended

October 31, 2025 and 2024, we incurred salaries and benefits of $452,000 and $554,000, respectively.

During the nine months ended

January 31, 2026 and 2025, we incurred salaries and benefits of $761,000 and $780,000, respectively.

The decrease in salaries and benefits

was due mainly to lower bonuses.

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

As of January 31, 2026, we had four full-time and two part-time employees.

Professional Fees

During the six months ended

October 31, 2025 and 2024, we incurred professional fees of $712,000 and $371,000, respectively.

During the six months ended October 31,

2025, we incurred $522,000 in legal fees, $102,000 in audit fees, $50,000 in investor relation fees, $32,000 in tax preparation fees and

$6,000 in consulting fees.

During the six months ended October 31, 2024, we incurred $151,000 in audit fees, $110,000 in legal fees, $86,000

During the nine months ended

January 31, 2026 and 2025, we incurred professional fees of $1.0 million and $433,000, respectively.

During the nine months ended January

31, 2026, we incurred $818,000 in legal fees, $126,000 in audit fees, $66,000 in investor relation fees, $32,000 in tax preparation fees

and $9,000 in consulting fees.

During the nine months ended January 31, 2025, we incurred $173,000 in audit fees, $144,000 in legal fees,

$92,000 in investor relation fees, $22,000 in tax preparation fees and $2,000 in consulting fees.

The increase in professional fees was due mainly

to higher legal and tax preparation fees, partially offset by lower audit and investor relations fees.

The increase in legal fees, which

accounted for a significant proportion of the increase, was a result of actions by the CRO from the termination of our ALZN002 clinical

The increase in professional fees was

due mainly to higher legal and tax preparation fees, partially offset by lower audit and investor relations fees.

The increase in legal

fees, which accounted for a significant proportion of the increase, was a result of litigation against the CRO from the termination of

our ALZN002 clinical trial.

Insurance Expense

During the six months ended

October 31, 2025 and 2024, we incurred insurance expense of $118,000 and $139,000, respectively, which was primarily directors’

During the nine months ended

January 31, 2026 and 2025, we incurred insurance expense of $177,000 and $199,000, respectively, which was primarily directors’

and officers’ insurance.

Stock-Based Compensation Expense

During the six months ended

October 31, 2025 and 2024, we incurred general and administrative stock-based compensation expense of $74,000 and $163,000, respectively,

During the nine months ended

January 31, 2026 and 2025, we incurred general and administrative stock-based compensation expense of $84,000 and $244,000, respectively,

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

The decrease in stock-based compensation

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

expense for the nine months ended January 31, 2026, was a result of fewer stock options vesting during the period compared to the prior

Marketing Fees

During the six months ended October 31, 2025 and 2024, we incurred

marketing fees of $150,000 and $344,000, respectively, related to the marketing and branding of our company.

During the nine months ended

January 31, 2026 and 2025, we incurred marketing fees of $200,000 and $344,000, respectively, related to the marketing and branding of

Liquidity and Capital Resources

The accompanying condensed

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

We have incurred recurring net losses and operations

have not provided sufficient cash flows.

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

the time we begin significant deliveries of our products.

We believe our current cash on hand is

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

These factors

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

statements are issued.

The accompanying condensed financial statements have been prepared

assuming that we will continue as a going concern.

We have incurred recurring net losses and our operations have not provided any cash

We believe that we will continue to incur operating and net losses each quarter until at least the time we begin significant deliveries

of our products.

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

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

These factors create substantial doubt about our ability

to continue as a going concern for at least one year after the date that our condensed financial statements are issued.

Our inability to continue as

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

As of October 31, 2025, we had cash of $4.4 million, working capital

As of January 31, 2026, we had cash of $2.7 million, working capital

of $1.8 million, stockholders’ equity of $2.2 million and an accumulated deficit of $64.4 million.

We have incurred recurring losses

and reported losses for the three and six months ended October 31, 2025 totaling $1.0 million and $3.7 million, respectively.

we have financed our operations principally through sales of equity securities and debt instruments.

We incurred recurring losses

and reported losses for the three and nine months ended January 31, 2026 totaling $2.2 million and $5.9 million, respectively.

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

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

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

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

15 unchanged sentences

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

At-the-Market Offering

Note 9 Subsequent Events in the notes to the financial statements for a description of our latest fundraising activities.

The following table summarizes

our cash flows for the six months ended October 31, 2025 and 2024:

the Six Months Ended October 31,

our cash flows for the nine months ended January 31, 2026 and 2025:

For the Nine Months Ended January 31,

Net cash provided by (used in):

4 unchanged sentences

Financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

$ (1,235,519 )

Operating Activities

During the six months ended

October 31, 2025, net cash used in operating activities was $3.5 million.

During the nine months ended

January 31, 2026, net cash used in operating activities was $5.3 million.

This consisted primarily of a net loss of $5.9 million, partially

5 unchanged sentences

Investing Activities

During the six months ended

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

During the nine months ended

January 31, 2026, there was no net cash used in investing activities.

Financing Activities

During the six months ended

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

During the nine months ended

January 31, 2026, net cash provided by financing activities was $4.0 million from the sale of Series C Convertible Preferred Stock.

Contractual Obligations

On July 2, 2018, we entered

into two Standard Exclusive License Agreements with Sublicensing Terms for AL001 with the Licensor and its affiliate, the University of

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

limited to the field of Alzheimer’s, under 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.

On February 1, 2019, we

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

and on June 8, 2023, we entered into the Third Amendments to the AL001 Licenses (collectively, the “AL001 License Agreements”).

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

The AL001 License Agreements

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

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 1,650 shares of our common stock.

Minimum royalties for AL001 License Agreements are $40,000 on the first anniversary

of the first commercial sale, $80,000 on the second anniversary of the first commercial sale and $100,000 on the third anniversary of

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

On May 1, 2016, we entered

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

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

and Diagnostics, under 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 for the license fees.

The ALZN002 License Agreement

requires us to pay royalty payments of 4% on net sales of products developed from the licensed technology for ALZN002.

We have already

paid an initial license fee of $200,000 for ALZN002.

As an additional licensing fee for the license of ALZN002, the Licensor received

2,668 shares of our common stock.

Minimum royalties for ALZN002 are $20,000 on the first anniversary of the first commercial sale, $40,000

on the second anniversary of the first commercial sale and $50,000 on the third anniversary of the first commercial sale and every year

thereafter, for the life of the ALZN002 License Agreement.

On November 19, 2019, we entered

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

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

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

2021, we entered into the First Amendments to the November AL001 License and on April 17, 2023, we entered into the Second Amendments

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

The Second Amendments to the November

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

The November AL001 License

Agreements require us to pay royalty payments of 3% on net sales of products developed from the licensed technology for AL001 in those

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

Minimum royalties for November AL001 License Agreements

are $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary of the first commercial sale and

$100,000 on the third anniversary of the first commercial sale and every year thereafter, for the life of the November AL001 License Agreements.

These license agreements have

an indefinite term that continue until the later of the date 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 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:

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

Upon FDA NDA approval

* Milestone met and completed

ALZN002 License:

Upon IND application - Completed January 2022

Upon first dosing of patient in first Phase I clinical trial

Upon completion of first Phase IIB clinical trial

Upon first patient treated in a Phase III clinical trial

Upon first commercial sale

* Milestone met and completed

Additional AL001 Licenses:

Upon first patient treated in a Phase III clinical trial

First commercial sale

See Note 7 Commitments and Contingencies

in the notes to the financial statements for a description of our contractual obligations.

Recent Accounting Standards

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What changed 10-Q

Item 2. Management’s Discussion and Analysis