What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-07-22 compared with 2025-07-22 · 228 added, 338 removed, 241 unchanged (70% of the section changed)

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and “Special Note Regarding Forward-Looking Statements,” and elsewhere in this Annual Report.

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

We were incorporated on February

26, 2016, as Alzamend Neuro, Inc.

under the laws of the State of Delaware.

We were formed to acquire and

commercialize patented intellectual property and know-how to prevent, treat and potentially cure the crippling and deadly Alzheimer’s.

With our two product candidates, we aim to bring treatment or cures not only for Alzheimer’s, but also, bipolar disorder (“BD”),

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

Existing Alzheimer’s treatments

only temporarily relieve symptoms but do not, to our knowledge, slow or halt the underlying worsening of the disease.

We have developed

a novel approach to combat Alzheimer’s through immunotherapy.

We were formed to acquire and commercialize patented intellectual

property and know-how to prevent, treat and potentially cure the crippling and deadly Alzheimer’s.

With our two product candidates,

we aim to bring treatment or cures not only for Alzheimer’s, but also, bipolar disorder (“BD”), major depressive disorder

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

Existing Alzheimer’s treatments only temporarily relieve

symptoms but do not, to our knowledge, slow or halt the underlying worsening of the disease.

We have developed a novel approach to combat

Alzheimer’s through immunotherapy.

Critical Accounting Policies and Estimates

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discretionary dividends based on earning, voting rights and collateral requirements.

Emerging Growth Company Status

We are an emerging growth

company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth

companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as

those standards apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting

standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer

an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements

as of public company effective dates.

Plan of Operations

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

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

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

We intend to develop and commercialize

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

by Alzheimer’s, BD, MDD and PTSD.

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

· 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.

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.

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.

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 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.

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 15 th 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

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

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

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.

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.

The dosing level identified as optimal in this

robust nonclinical study will serve as the foundation for advancing the evaluation of AL001 in the comprehensive ‘Lithium in Brain’

Phase II clinical trials.

These trials, conducted in collaboration with Massachusetts General Hospital, will encompass a diverse cohort

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

In May 2025, we began

the trial and dosed the first healthy subject.

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.

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.

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.

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

a partnership with MGH and Harvard Medical School to conduct five Phase II imaging clinical trials.

The purpose of these trials is to

assess the comparative increase in lithium levels within the brain and its structures as opposed to a commonly marketed lithium salt among

healthy subjects and patients afflicted with Alzheimer’s, BD, MDD and PTSD.

In November 2024, we announced

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

transgenic mice.

This study was a precursor to the five clinical trials and showed that AL001 exhibited consistently higher lithium concentrations

in brain tissues, particularly at lower doses, compared to lithium carbonate.

For these clinical trials,

we partnered with Tesla Dynamic Coils BV to create a head coil to enable whole-brain imaging of lithium with remarkable resolution, allowing

precise quantification within brain structures.

The coil will be used to help identify the disease-specific target doses of AL001 that

improve the balance of safety and efficacy compared to lithium carbonate.

The coil will also be used to scan the entire brain, helping

us clearly identify the different structures and important areas necessary for understanding how lithium works and moves within the brain.

We announced completion of the head coil in February 2025.

In May 2025, we announced

the initiation, enrollment and dosing of the first patient for the healthy human patients.

This clinical trial has the following objectives:

· To assess lithium brain/plasma pharmacokinetics (“PK”) of the AL001 oral capsule relative

to a marketed lithium carbonate capsule in healthy adult subjects for the purpose of determining potential clinically safe and effective

AL001 dosing in future studies;

· To characterize AL001 lithium and salicylate steady-state plasma PK, and lithium relative to a marketed

lithium carbonate capsule;

· To characterize differences in brain and brain structure(s) PK behaviors such as absorption and persistence

between AL001 capsule and a marketed lithium carbonate capsule;

· To characterize safety and tolerability of the tested formulations under the conditions of this study

(38% below the pre-determined MTD for AL001, at a half-dose of a usual lithium starting dose of lithium carbonate for treatment of BD,

equivalent to 150 mg lithium carbonate TID).

In November 2025, we announced

the completion of the clinical portion of this study and reported pharmacokinetics topline data in March 2026, with the following results:

(1) Bioequivalence Confirmed:

AL001 delivered 101% of total lithium blood exposure and 97% of peak lithium levels vs.

standard lithium

(2) Superior Brain Penetration:

AL001 showed numerically higher lithium concentrations in all measured brain regions, including

and (3) Faster Brain Uptake:

AL001 reached peak brain concentration in 6.7 hours vs.

8.4 hours for standard lithium carbonate.

In April 2026, we announced pharmacodynamic topline data of the healthy human subjects with the following results:

· Potentially Distinct Brain Profile:

Across multiple brain regions, AL001 and lithium

carbonate appeared to trend in opposite directions in brain chemistry measures, suggesting that AL001 may interact with the brain in a

distinct manner and generate a lower neurochemical footprint than lithium carbonate;

· Expected Trends for Myo-Inositol Reduction:

Both AL001 and lithium carbonate showed a trend toward reducing

myo-inositol, potentially supporting the hypothesis that AL001 retains lithium's core mechanism of action;

· Potentially Preserved Glutamate Balance:

Lithium carbonate showed large effects across all brain

regions whereas AL001 showed minimal glutamate effect in most brain regions, which may suggest better long-term tolerability.

Full pharmacokinetics and

pharmacodynamic results are expected in August 2026.

In March 2026, we announced

the initiation of the Phase II Clinical Trial of AL001 “Lithium in Brain” Study in Patients with BD and expect to report topline

data in the fourth quarter of 2026.

The clinical trials for treatment of patients with MDD and PTSD are expected to commence in the fourth

quarter of 2026, followed by Alzheimer’s in the first quarter of 2027.

These projected timelines reflect our commitment to advancing

our clinical development programs across multiple neuropsychiatric and neurodegenerative indications.

On September 28, 2022, we

submitted an Investigational New Drug (“IND”) application to the U.S.

Food and Drug Administration (the “FDA”)

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

The product candidate is an immunotherapy vaccine

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

ALZN002 is a proprietary “active” immunotherapy

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

It consists of autologous DCs that are activated white blood

cells taken from each individual patient so that they can be engineered outside of the body to attack Alzheimer’s-related amyloid-beta

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.

passive immunization treatment approaches that use foreign blood products (such as monoclonal antibodies), active immunization with ALZN002

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

This could provide a safer approach due to

its reliance on autologous immune components, using each individual patient’s own white blood cells rather than foreign cells and/or

blood products.

On April 3, 2023, we announced

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

of this trial is to assess the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that of 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 Biorasi, LLC (“Biorasi”), the company formerly engaged as our contract research organization (“CRO”),

terminating our contract with Biorasi.

We are currently pursuing the engagement of a replacement CRO.

continuation of our current plan of operations with respect to completing our IND applications 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.

Due to the scientific and operational

complexities of the ALZN002 trial, along with the limited number of CROs with the expertise and capacity to complete the trial, we have

experienced a delay in engaging a new CRO.

We do not expect to restart this trial in first quarter of 2027.

The continuation of our current

plan of operations with respect to completing our IND applications 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 Year Ended April 30, 2026 Compared

to Year Ended April 30, 2024

to the Year Ended April 30, 2025

The following table summarizes

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Research and development

$ (5,040,179 )

General and administrative

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Loss from operations

OTHER EXPENSE, NET

OTHER INCOME (EXPENSE), NET

Interest income

Interest expense

Total other expense, net

Deemed dividend on warrant modification issued with preferred

NET LOSS ATTRIBURED TO COMMON SHARES

Dividend on preferred shares

Deemed dividend on warrant modification issued with preferred shares

NET LOSS AVAILABLE TO COMMON SHARES

$ (8,772,382 )

$ (5,105,084 )

$ (3,667,298 )

Basic and diluted net loss per common share

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Professional fees

$ (2,242,743 )

Clinical trial fees

Stock-based compensation expense

Clinical trial fees

Other research and development expenses

Total research and development expenses

$ (5,040,179 )

* Not meaningful

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During the years ended April

30, 2025 and 2024, we incurred professional fees of $656,000 and $2.9 million, respectively, which were primarily comprised of professional

30, 2026 and 2025, we incurred professional fees of $625,000 and $656,000, respectively, which were primarily comprised of professional

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

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AL001 and ALZN002 during the year ended April 30, 2025.

Clinical Trial Fees

During the years ended April 30, 2025 and

2024, we incurred clinical trial fees of $716,000 and $3.2 million, respectively.

Clinical trial fees for the year ended April 30, 2025

were for our Phase IIA clinical trial for AL001.

Clinical trial fees for the year ended April 30, 2024 were $1.9 million for our Phase

IIA clinical trial for AL001 and $1.3 million for our Phase I clinical trial for ALZN002.

Stock-Based Compensation Expense

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No such expense was incurred during the fiscal year ended April 30, 2025.

The decrease in research and development stock-based compensation

expense for the year ended April 30, 2025, was a result of all vested stock options grants having been expensed.

The increase in research and development stock-based compensation

expense for the year ended April 30, 2026, was a result of the expense recorded as a result of the vesting of newly granted stock options.

Clinical Trial Fees

During the years ended April

30, 2026 and 2025, we incurred clinical trial fees of $2.9 million and $716,000, respectively.

Clinical trial fees for the year ended

April 30, 2026 were for our Phase IIB clinical trial for AL001 for healthy subjects.

Clinical trial fees for the year ended April 30,

2025 were for our Phase IIA clinical trial for AL001.

Other Research and Development Expenses

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For the years ended April 30, 2026 and 2025, the remaining general and

administrative expenses of $347,000 and $381,000, respectively, primarily consisted of payments for advertising and promotion, transfer

administrative expenses of $469,000 and $347,000, respectively, primarily consisted of payments for franchise taxes, depreciation, transfer

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

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During the years ended April

30, 2025 and 2024, we incurred $1.0 million and $836,000, respectively, in employee-related expenses.

30, 2026 and 2025, we incurred $988,000 and $1.0 million, respectively, in employee-related expenses.

As of April 30, 2026, we had four

full-time and three part-time employees.

The increase in salary and benefits expense was a result of higher bonuses earned during the

year ended April 30, 2025.

full-time and two part-time employees.

The decrease in salary and benefits expense was a result of the reduction of one part-time employee

during the year ended April 30, 2026.

Professional Fees

During the years ended April

30, 2025 and 2024, we incurred professional fees of $618,000 and $736,000, respectively.

During the year ended April 30, 2025, we incurred

$243,000 in legal fees, $221,000 in audit and tax fees, $149,000 in investor relations and $5,000 in other professional fees.

year ended April 30, 2024, we incurred $341,000 in audit and tax fees, $192,000 in investor relations, $104,000 in legal fees, $33,000

in related party consulting, $28,000 in Sarbanes-Oxley compliance fees and $38,000 in other professional fees.

30, 2026 and 2025, we incurred professional fees of $2.2 million and $618,000, respectively.

During the year ended April 30, 2026, we

incurred $1.9 million in legal fees, $190,000 in audit and tax fees, $95,000 in investor relations and $7,000 in other professional fees.

During the year ended April 30, 2025, we incurred $243,000 in legal fees, $221,000 in audit and tax fees, $149,000 in investor relations

and $5,000 in other professional fees.

The increase in legal fees was a result of increased activity in our lawsuit against Biorasi for

terminating their agreement.

The trial in that lawsuit has commenced and is expected to be completed by the end of August 2026.

Insurance Expense

During the years ended April

30, 2025 and 2024, we incurred insurance expense of $259,000 and $382,000, respectively, which was primarily directors and officers insurance.

30, 2026 and 2025, we incurred insurance expense of $236,000 and $259,000, respectively, which was primarily directors’ and officers’

The decrease in insurance expense was due to lower negotiated pricing with the same amount of coverage.

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30, 2026 and 2025, we incurred stock-based compensation expense of $661,000 and $325,000, respectively, related to stock option grants

to executives, employees and consultants.

The decrease in stock-based compensation expense for the year ended April 30, 2025 was a result

of fewer stock options vesting during the period compared to the prior year period.

to employees, directors and consultants.

The increase in general and administrative stock-based compensation expense for the year ended

April 30, 2026, was a result of the vesting of newly granted stock options.

Marketing Fees

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Current and Deferred Income Taxes

As of April 30, 2025 and 2024, we had deferred

tax assets totaling $15.2 million and $15.8 million, respectively.

The ultimate realization of deferred tax assets is dependent upon the

existence, or generation, of taxable income in the periods when those temporary differences and net operating loss carryovers are deductible.

Management considers the scheduled reversal of deferred tax liabilities, taxes paid in carryover years, projected future taxable income,

available tax planning strategies, and other factors in making this assessment.

Based on available evidence, management believes it is

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

Accordingly, we have established a 100% valuation

As a result of the full valuation allowance, we did not record an income tax benefit for the years ended April 30, 2025 and

As of April 30, 2026 and 2025,

we had deferred tax assets totaling $15.4 million and $15.3 million, respectively.

The ultimate realization of deferred tax assets is

dependent upon the existence, or generation, of taxable income in the periods when those temporary differences and net operating loss

carryovers are deductible.

Management considers the scheduled reversal of deferred tax liabilities, taxes paid in carryover years, projected

future taxable income, available tax planning strategies, and other factors in making this assessment.

Based on available evidence, management

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

Accordingly, we have established

a 100% valuation allowance.

As a result of the full valuation allowance, we did not record an income tax benefit for the years ended April

30, 2026 and 2025.

Liquidity and Capital Resources

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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 financial statements are issued.

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

financial statements are issued.

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

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

Our inability to continue as

5 unchanged sentences

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

As of April 30, 2025, we had cash of $3.9 million and an accumulated deficit of $58.5 million.

As of April 30, 2026, we had cash of $711,000 and an accumulated deficit of $67.3 million.

We have incurred recurring losses

and reported losses for the year ended April 30, 2025 totaling $4.5 million.

and reported a loss for the year ended April 30, 2026 totaling $8.8 million.

In the past, we have financed our operations principally

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

On September 8, 2023, we entered

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

shares of our Common Stock, having an aggregate offering price of up to approximately $9.8 million from time to time, through an “at

the market offering” (the “ATM Offering”) as defined in Rule 415 under the Securities Act.

On September 8, 2023, we

filed a prospectus supplement with the SEC relating to the offer and sale of up to approximately $9.8 million in shares of Common Stock

in the ATM Offering.

During the year ended April

30, 2024, we sold an aggregate of 11,964 shares of Common Stock pursuant to the ATM Offering for proceeds of $1.3 million.

On May 6, 2024,

we terminated our ATM Offering.

On October 3, 2024, we entered

into a new At-the-Market Issuance Sales Agreement with Ascendiant, 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 an “at the market offering” (the “New

ATM Offering”) as defined in Rule 415 under the Securities Act.

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 New ATM Offering.

During the year ended April

30, 2025, we sold an aggregate of 235,904 shares of Common Stock pursuant to the New ATM Offering for proceeds of $2.7 million.

7, 2025, we terminated our New ATM Offering.

Series B Preferred Financing

On January 31, 2024, we and

Ault Lending entered into a securities purchase agreement (the “AL SPA”) for the purchase of up to 6,000 shares of Series

B Convertible Preferred Stock and warrants to purchase shares up to 66,667 shares of Common Stock.

The AL SPA provided that Ault Lending

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

Ault Lending had 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 final closing

did not occur prior to the Termination Date and the AL SPA automatically terminated.

Between January 31, 2024 and

April 29, 2024, we sold an aggregate of 2,100 shares of Series B Convertible Preferred Stock and warrants to purchase 23,333 shares of

common stock with an exercise price of $108.00, 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 a subscription receivable of $70,000 and further cash proceeds of $8 80,000.

Series 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.

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.

The 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 “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 277,778 shares of common stock in several tranche closings.

Between May 10, 2024 and September

11, 2024, we sold an aggregate of 800 shares of Series A Convertible Preferred Stock and warrants to purchase an aggregate of 71,109 shares

of Common Stock with an exercise price of $112.50, for a total purchase price of $8.0 million.

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, $200,000 discount and net cash of $7.5 million.

to the Orchid SPA, Orchid had agreed to purchase the remaining 1,700 Preferred Shares on each monthly anniversary of the effectiveness

of a registration statement until all remaining 1,700 Preferred Shares had been sold (“Milestones”).

Orchid had the ability

to invest any amount in its sole discretion in advance of the Milestone dates.

In the event that the average closing price of the Common

Stock during the three trading days preceding the date of a tranche closing was not equal to or greater than $22.50 a share (the “Floor

Price”), then the applicable closing would be delayed until such time as the price meet the required threshold.

to 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,

and on the closing which occurred on August 21, 2024.

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

A Stated Value”) and accrued 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 was 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) $135.00 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 was 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 warrants had an exercise

price of $112.50 (the “ Series A Exercise Price”) and were exercisable upon issuance

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

The Series A Exercise

Price were 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.

were 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.

During the year ended April

30, 2025, Orchid converted 712.0133 shares of Series A Convertible Preferred Stock into 420,809 shares of Common Stock.

On February 28, 2025, we and

Orchid terminated the Orchid SPA and entered into the Securities Purchase and Exchange Agreement (the “Orchid SPEA”).

the termination, 97.7511 shares of Series A Convertible Preferred Stock were converted to 97.7511 shares of Series C Convertible Preferred

Stock and warrants to purchase 71,111 shares of common stock with an exercise price of $112.50 issued were cancelled.

Series C Preferred Financing

February 28, 2025, we and Orchid entered into the Orchid SPEA for the purchase of up to 500 shares of Series C Convertible Preferred

Stock in several tranche closings and warrants to purchase shares up to 111,111 shares of Common Stock with an exercise price of $8.29

(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.

97.7511 shares of Series A Convertible Preferred Stock were converted to 97.7511 shares of Series C Convertible Preferred Stock.

Between April 28, 2025 and

June 13, 2025, we sold an aggregate of 500 shares of Series C Convertible Preferred Stock for an aggregate purchase price of $5 million.

Effective June 13, 2025, the Orchid SPEA was terminated as all the shares of Series C Convertible Preferred Stock were sold.

registration statement registering for resale the shares of Common Stock issuable upon conversion of the Series C Convertible Preferred

Stock and exercise of the warrants was declared effective on April 8, 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 Orchid SPEA 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 the shares of Common Stock issued and outstanding on the execution date

of the Orchid SPEA.

We held our annual meeting of stockholders on April 25, 2025, at which time, the stockholders 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 accrued 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 a number of shares of

Common Stock determined by dividing the Series C Stated Value by (y)

the greater of (i) $0.90 per share (“Series C Floor Price”) and (ii) the lesser of (A) $135.00 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

C Conversion Price”).

The Series C Conversion Price was 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.

The holders of the Series

C Convertible Preferred Stock were 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 $7.5375 (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 Orchid SPEA.

The Series C Voting Floor Price shall be

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

During the year ended April 30, 2025, Orchid

converted 23.9712 shares of Series C Convertible Preferred Stock into 44,444 shares of Common Stock.

From May 1, 2025 to July 22, 2025,

subsequent to our fiscal year end, Orchid converted 575.7176 shares of Series C Convertible Preferred Stock into 2,117,699 shares of Common

At-the-Market Offering

See Note 9 – Equity

Transactions in the notes to the financial statements for a description of our fundraising activities.

The following table summarizes our cash flows for

7 unchanged sentences

Financing activities

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

$ (3,237,969 )

3 unchanged sentences

This consisted primarily of a net loss of $8.8 million and a decrease

in our net operating assets and liabilities of $2.4 million, partially offset by stock-based compensation of $325,000.

The decrease in

our net operating assets and liabilities was primarily due to a decrease in accounts payable and accrued liabilities and an increase in

prepaid expenses.

in our net operating assets and liabilities of $114,000, partially offset by stock-based compensation of $708,000 and depreciation of

The decrease in our net operating assets and liabilities was primarily due to an increase in accounts payable and accrued liabilities

and an increase in prepaid expenses.

During the year ended April

30, 2025, net cash used in operating activities was $6.6 million.

This consisted primarily of a net loss of $9.9 million, partially offset

by non-cash charges of $956,000 in stock-based compensation expense and an increase in our net operating assets and liabilities of $671,000.

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

and a decrease in prepaid expenses.

This consisted primarily of a net loss of $4.5 million and a decrease

in our net operating assets and liabilities of $2.4 million, partially offset by stock-based compensation of $325,000.

The decrease in

our net operating assets and liabilities was primarily due to an increase in prepaid expenses and a decrease in accounts payable.

Investing Activities

During the year ended April

30, 2025, net cash used in investing activities was $300,000, from the purchase of equipment and machinery being used in our AL001 Phase

II clinical trials.

30, 2026, there were no investing activities.

During the year ended April 30, 2025, net cash used in investing activities was $300,000

for the purchase of equipment and machinery used in our AL001 Phase II clinical trials.

Financing Activities

During the year ended April

30, 2025, net cash provided by financing activities was $7.7 million from the sale of convertible preferred stock and $2.7 million from

proceeds from the New ATM Offering.

30, 2026, net cash provided by financing activities was $4.1 million from the sale of convertible preferred stock and $800,000 from proceeds

from an “at-the-market” offering (“ATM Offering”).

During the year ended April

30, 2024, net cash provided by financing activities was $2.1 million from the sale of convertible preferred stock to Ault Lending, a related

party, $1.3 million from proceeds from the ATM Offering and $300,000 from a promissory note.

30, 2025, net cash provided by financing activities was $7.7 million from the sale of convertible preferred stock and $2.7 million from

proceeds from the ATM Offering.

See Note 9 – Equity

Transactions in the notes to the financial statements for a description of our financing activities.

Contractual Obligations

7 unchanged sentences

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

we are a smaller reporting company, this section is not applicable.

Because we are a smaller reporting

company, this section is not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required

by this Item 8 are included in this Annual Report following Item 16 hereof.

As a smaller reporting company, we are not required to provide

supplementary financial information.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 7. Management’s Discussion and Analysis