Alzamend Neuro, Inc. annual report, FY2024

Alzamend Neuro, Inc. — Form 10-K Summary

Reporting period: Fiscal year ended April 30, 2024; filed July 30, 2024. Although the request labels the period “2023 Q4,” this is an annual report for fiscal 2024, with fiscal 2023 as the comparable year. The company is a clinical-stage biopharmaceutical developer and reported no product revenue.

Financial results and liquidity

Metric	FY2024	FY2023
Revenue	$0	$0
Research and development expense	$6.46 million	$7.45 million
General and administrative expense	$3.48 million	$7.42 million
Total operating expenses	$9.94 million	$14.87 million
Net loss	$9.95 million	$14.88 million
Net cash used in operating activities	$8.27 million	$8.92 million

Net loss per share was $14.70 versus $22.89; weighted-average common shares were 676,565 versus 650,126. The filing’s share figures reflect reverse-split adjustments.
Cash fell to $376,048 at April 30, 2024, from $5.14 million a year earlier. Current assets were $455,242; current liabilities were $3.23 million, including a $300,714 note payable. Stockholders’ deficit was $2.59 million, and accumulated deficit was $54.0 million.
Cash used in investing was $147,243; financing provided $3.65 million. The company reported no product sales, and the filing does not present a meaningful gross margin.
The decrease in operating expenses and net loss was driven mainly by lower stock-based compensation, professional fees and marketing costs; clinical trial fees increased to $3.25 million from $2.47 million.
The auditor highlighted substantial doubt about the company’s ability to continue as a going concern. Management disclosed limited cash and dependence on additional financing; its assessment of whether post-year-end financing covers the next 12 months depends on the anticipated proceeds and conditions of financing agreements.

Business, development and material changes

AL001: A lithium-based ionic cocrystal licensed for Alzheimer’s disease, bipolar disorder, major depressive disorder and PTSD. The company completed a Phase I study in 2022 and a Phase IIA multiple-ascending-dose study in March 2023; it reported identifying a maximum tolerated dose equivalent to 240 mg lithium carbonate three times daily. The filing describes topline findings as positive but does not provide detailed efficacy results.
The FDA permitted studies to proceed for AL001 in bipolar disorder, MDD and PTSD. The company planned further studies, including a “lithium in brain” study, but said financing constraints delayed previously anticipated AL001 Phase II trials. Timing differs across the filing: one section anticipates a study in the second half of 2024, while MD&A describes planned trials in 2025.
ALZN002: An autologous dendritic-cell vaccine candidate for mild-to-moderate Alzheimer’s dementia. A Phase I/IIA trial began in April 2023, targeting 20–30 participants. The CRO terminated its contract in February 2024, and the company was seeking a replacement; this creates execution and timing risk.
The company has no in-house manufacturing and relies on third parties. Its strategy is to seek regulatory approval and pursue commercial partnerships rather than generally sell products directly.
R&D expense declined 13% and G&A expense declined 53% year over year. The latter included an 80% decrease in stock-based compensation expense, to $742,000 from $3.63 million.

Financing, risks and other notable items

During FY2024, the company raised $1.25 million net through its ATM offering and issued $2.1 million of Series B convertible preferred stock to related-party Ault Lending. It also received $300,000 under a promissory note. The ATM program was terminated May 6, 2024.
After year-end, the company entered into a Series A preferred-stock financing agreement with Orchid. It reported closings of $1.0 million in May and $1.5 million in June 2024; further tranches are conditional, among other things, on registration and specified milestones or stock-price conditions. Series A shares accrue dividends at 15% annually and have conversion terms that can result in dilution. The filing also describes Series B financing rights of up to $6 million, subject to the agreement’s terms and deadline.
The company’s principal risks include the need for substantial additional capital, clinical and regulatory failure, potential safety issues, CRO and manufacturing dependence, and license milestones whose failure could permit termination. No candidate has been approved, and the company expects no near-term revenue.
Nasdaq had granted continued listing subject to meeting stockholders’ equity or an alternative standard by September 23, 2024. A separate minimum-bid-price deficiency was also disclosed; the company effected a one-for-ten reverse stock split effective July 16, 2024. Continued listing was not assured.
Management concluded disclosure controls and internal control over financial reporting were ineffective at year-end because of weaknesses in accounting staffing, review and segregation of duties, and IT access/change-management controls. Remediation was in progress; the auditor was not engaged to opine on internal-control effectiveness.
Related-party and governance considerations include common directors and officers with Ault entities, related-party preferred financing, and substantial insider influence. The company reported that directors and executive officers as a group beneficially owned 60.45% as of July 29, 2024, including securities issuable on conversion or exercise.
The company reported no pending legal proceedings against it. It identified no cybersecurity threats during fiscal 2024 that materially affected, or were reasonably likely to materially affect, the business.

Investor facts to verify

Whether the conditional Series A and Series B financing proceeds were actually received, on what terms, and whether they provide adequate operating runway.
Current cash, payables, debt and working-capital position, and whether the going-concern uncertainty has changed since April 30, 2024.
Current Nasdaq listing compliance, including the stockholders’ equity and minimum-bid-price requirements after the reverse split.
ALZN002 trial status, replacement CRO appointment, enrollment and any resulting timetable changes; also verify AL001 trial plans and timing given inconsistencies in the filing.
Detailed clinical data supporting AL001’s reported MTD and topline conclusions, and any subsequent efficacy or safety findings for either candidate.
Potential dilution and voting effects from preferred conversions, warrants, related-party financing and future capital raises, as well as progress remediating the disclosed control weaknesses.