{"url_path":"/sec/alzn/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 ****BUSINESS**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-22","source_url":"https://www.sec.gov/Archives/edgar/data/1677077/0001214659-26-008832-index.html","accession_number":"0001214659-26-008832","cik":"0001677077","ticker":"ALZN","issuer_name":"Alzamend Neuro, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1677077/0001214659-26-008832-index.html","primary_entity_key":"0001677077","primary_entity_name":"Alzamend Neuro, Inc."},"word_count":16157,"has_tables":true,"body_markdown":"**ITEM 1.****BUSINESS**\n\n \n\nIn this Annual Report, unless\nthe context requires otherwise, references to the “Company,” “Alzamend,” “we,” “our company”\nand “us” refer to Alzamend Neuro, Inc., a Delaware corporation and its subsidiary.\n\n \n\n**Company Overview**\n\n \n\nWe are a clinical-stage biopharmaceutical\ncompany focused on developing novel products for the treatment of Alzheimer’s disease (“Alzheimer’s”), bipolar\ndisorder (“BD”), major depressive disorder (“MDD”) and post-traumatic stress disorder (“PTSD”). With\nour two product candidates, we aim to bring treatments or potential cures to market as quickly as possible. Far too many individuals,\nincluding patients and caregivers, suffer from the burden created by these devastating, and often fatal, diseases or disorders. Our primary\ntarget, Alzheimer’s, is among the most-feared diseases (second only to cancer) among Americans, according to a 2024 Center for Disease\nControl and Prevention survey. Alzheimer’s is also the fifth leading cause of death (in 2024) in the United States (the “U.S.”)\naccording to a 2026 report from the Alzheimer’s Association, a nonprofit that funds research. Existing Alzheimer’s treatments\nonly temporarily relieve symptoms and while one treatment has been shown to slow the progression of the disease, none has been shown to\nhalt its progression , which currently affects roughly 7.4 million Americans; that number is expected to grow to 13 million individuals\nby 2050. Alzheimer’s also impacts more than 13 million Americans who provide an estimated 19 billion hours of unpaid care per year,\naccording to data provided by the Alzheimer’s Association. In 2026, the estimated healthcare costs for treating individuals with\nAlzheimer’s in the U.S. will be $409 billion, including $263 billion in Medicare and Medicaid payments. These costs could rise to\nas high as $1 trillion per year by 2050 if no permanent treatment or cure for Alzheimer’s is found, according to the Alzheimer’s\nAssociation.\n\n \n\nOur pipeline consists of two\nnovel therapeutic drug candidates:\n\n \n\n·AL001 - A patented ionic cocrystal technology delivering a therapeutic combination of lithium, salicylate\nand proline through three royalty-bearing exclusive worldwide licenses from the University of South Florida Research Foundation, Inc.,\nas licensor (the “Licensor”); and\n\n \n\n·ALZN002 - A patented method using a mutant peptide sensitized cell as a cell-based therapeutic vaccine\nthat seeks to restore the ability of a patient’s immunological system to combat Alzheimer’s through a royalty-bearing exclusive\nworldwide license from the Licensor.\n\n \n\nOur most advanced product\ncandidate (our lead product) is AL001, an ionic cocrystal of lithium designed to treat Alzheimer’s, BD, MDD and PTSD, is licensed\nand in clinical development in humans. Based on our preclinical data involving mice models, treatment using AL001 prevented cognitive\ndeficits, depression and irritability and demonstrated that AL001 is superior in improving associative learning and memory and irritability\ncompared with lithium carbonate treatments, supporting the potential of AL001 for the treatment of Alzheimer’s, BD, MDD and PTSD\nin humans. Lithium was the first mood stabilizer approved by the U.S. Food and Drug Administration (“FDA”) and is still a\nfirst-line treatment option (considered the “gold standard”) for BD and is prescribed off-label for MDD and PTSD. Moreover,\nlithium has been marketed for more than 55 years and human toxicology regarding its use has been well characterized, potentially mitigating\nthe regulatory burden for safety data.\n\n \n\nThe results of randomized,\nplacebo-controlled, clinical trials of lithium in the treatment of patients with Alzheimer’s dementia and subjects with mild cognitive\nimpairment have been widely published. Clinical studies have indicated that lithium administered at doses lower than those used for affective\ndisorders can favorably impact Alzheimer’s outcomes. A study by O.V. Forlenza, et al., entitled “Disease-Modifying Properties\nof Long-Term Lithium Treatment for Amnestic Mild Cognitive Impairment: Randomized Controlled Trial,” which appeared in the British\nJournal of Psychiatry (2011), reported that lithium was superior to a placebo, evidencing a slower decline of cognitive function as measured\nby the Alzheimer’s Disease Assessment Scale cognitive subscale. Given the absence of adequate, widely adopted treatments that can\nslow, halt or even reverse the decline of this highly prevalent disease, the potential efficacy of lithium in the long-term management\nof Alzheimer’s may positively impact public health. There is an unmet medical need for safe and effective Alzheimer’s treatments,\nparticularly for treatments with neuroprotective properties.\n\n \n\nThere is increasing evidence\nto suggest that depressive illness, particularly in the elderly, is associated with neuronal cell loss. These findings suggest that lithium\nmay exert some long-term beneficial effects in the treatment of affective disorders through underappreciated neuroprotective effects.\nMolecular biology and animal studies have also indicated that lithium may offer protection against Alzheimer’s. Given the absence\nof other adequate treatments, we believe that research and commercialization of the potential efficacy of lithium in the long-term treatment\nof neurodegenerative disorders is well worth pursuing.\n\n \n\n - 2 - \n\n \n\n \n\n**Our Business Strategy**\n\n \n\nWe intend to develop and commercialize\ntherapeutics that are better than existing treatments and have the potential to significantly improve the lives of individuals afflicted\nby Alzheimer’s, BD, MDD and PTSD. To achieve these goals, we are pursuing the following key business strategies:\n\n \n\n•**Advance clinical development of AL001 for Alzheimer’s, BD, MDD and PTSD treatment**. We completed\nour Phase I clinical trial in March 2022 and initiated a Phase IIA Multiple Ascending Dose (“MAD”) clinical trial in May 2022.\nWe completed the clinical portion of the Phase IIA MAD clinical trial in March 2023, reported topline data in June 2023 and announced\nfull data in October 2024. We announced that we successfully identified a maximum tolerated dose (“MTD”) for AL001, as assessed\nby an independent safety review committee. This MTD, providing lithium at a lithium carbonate equivalent dose of 240 mg 3-times daily,\nis designed to be unlikely to require lithium therapeutic drug monitoring (“TDM”). Also, this MTD mitigates risk in treatments\nfor fragile populations, such as Alzheimer’s patients. Additionally, we are investigating the potential of AL001 for patients suffering\nfrom BD, MDD and PTSD, and have submitted several Investigational New Drug (“IND”) applications to the FDA for these indications\nand received a “study may proceed” letter from the FDA for each. In August 2024, we announced a partnership with Massachusetts\nGeneral Hospital (“MGH”) and Harvard Medical School to conduct five Phase II imaging clinical trials. The purpose of these\ntrials is to assess the comparative increase in lithium levels within the brain and its structures as opposed to a commonly marketed lithium\nsalt among healthy subjects and patients afflicted with Alzheimer’s, BD, MDD and PTSD.  In May 2025, we announced the initiation,\nenrollment and dosing of the first patient of AL001 “Lithium in Brain” Study in healthy human subjects. In November 2025,\nwe announced the completion of the clinical portion of this study and reported pharmacokinetics topline data in March 2026, with the following\nresults:\n\n \n\n·Bioequivalence Confirmed: AL001 delivered 101% of total lithium blood exposure and 97% of peak lithium\nlevels vs. standard lithium carbonate;\n\n \n\n·Superior Brain Penetration: AL001 showed numerically higher lithium concentrations in all measured brain\nregions, including whole brain; and\n\n \n\n·Faster Brain Uptake: AL001 reached peak brain concentration in 6.7 hours vs. 8.4 hours for standard lithium\ncarbonate.\n\n \n\nIn April 2026, we announced pharmacodynamic \ntopline data of the healthy human subjects with the following results:\n\n \n\n·Potentially Distinct Brain Profile:** **Across multiple brain regions, AL001 and lithium\ncarbonate appeared to trend in opposite directions in brain chemistry measures, suggesting that AL001 may interact with the brain in a\ndistinct manner and generate a lower neurochemical footprint than lithium carbonate;\n\n \n\n·Expected Trends for Myo-Inositol Reduction: Both AL001 and lithium carbonate showed a trend toward reducing\nmyo-inositol, potentially supporting the hypothesis that AL001 retains lithium's core mechanism of action; and\n\n \n\n·Potentially Preserved Glutamate Balance: Lithium carbonate showed large effects across all brain\nregions whereas AL001 showed minimal glutamate effect in most brain regions, which may suggest better long-term tolerability. Full pharmacokinetics\nand pharmacodynamic results are expected in August 2026.\n\n \n\nIn March 2026, we announced the initiation\nof the Phase II Clinical Trial of AL001 “Lithium in Brain” Study in Patients with BD and expect to report topline data in\nthe fourth quarter of 2026. The clinical trials for treatment of patients with MDD and PTSD are expected to commence in the fourth quarter\nof 2026, followed by Alzheimer’s in the first quarter of 2027. Upon completion of these five clinical trials, we intend to initiate\nPhase III clinical trials for the respective indications. If we obtain successful results from the Phase III clinical trials in humans,\nwe intend to seek approval to commercialize AL001 via a New Drug Application (“NDA”);\n\n \n\n•**Advance clinical development of ALZN002 for Alzheimer’s treatment.**We submitted an IND application\nto the FDA in September 2022, and received a “study may proceed” letter in October 2022. In April 2023, we announced the initiation\nof a Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia similar to Alzheimer’s. The purpose of this trial\nis to assess the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that of a placebo in 20-30 subjects\nwith mild to moderate morbidity. The primary goal of this clinical trial is to determine an appropriate dose of ALZN002 for treatment\nof patients with Alzheimer’s in a larger Phase IIB efficacy and safety clinical trial. In February 2024, we received notice from\nBiorasi, LLC (“Biorasi”), the company formerly engaged as our contract research organization (“CRO”), terminating\nour contract with Biorasi. We are currently pursuing the engagement of a replacement CRO. Due to the scientific and operational complexities\nof the ALZN002 trial, along with the limited number of CROs with the expertise and capacity to complete the trial, we have experienced\na delay in engaging a new CRO. We do not expect to restart this trial until the first quarter of 2027. If we achieve successful Phase\nIII clinical trials in humans, we intend to seek approval to commercialize ALZN002 through a Biologics License Application (“BLA”);\n\n \n\n•**Expand our pipeline of pharmaceuticals to include additional delivery methods.** Another element\nof our business strategy is to explore, resources permitting, different formulations (liquid, immediate release and sprinkle capsules)\nto deliver AL001 to accommodate the needs of patients afflicted with Alzheimer’s, BD, MDD and PTSD;\n\n \n\n - 3 - \n\n \n\n \n\n•**Focus on translational and functional endpoints to efficiently develop product candidates.** We believe\nthat AL001 is positioned for a Section 505(b)(2) regulatory pathway for new drug approvals. We also believe that AL001 and ALZN002 are\npositioned for breakthrough therapy designations because of their positive effects on a pharmacodynamic biomarker (beta-amyloids) and\npotential for a clinically meaningful effect on Alzheimer’s, making them eligible to receive assistance from the FDA throughout\nthe approval process that may shorten the development timelines. However, we have neither received breakthrough therapy designation nor\nhave we qualified for expedited development, and no assurance can be given that we will. Even if we qualify for breakthrough therapy designation\nor expedited development, it may not actually lead to faster development or expedited regulatory review and approval or necessarily increase\nthe likelihood that we will ultimately receive FDA approval; and\n\n \n\n•**Optimize the value of AL001 and ALZN002 in major markets**. We intend to commercialize AL001 and\nALZN002 by seeking FDA marketing approval for both product candidates and partnering with biopharmaceutical companies seeking to strategically\nfortify pipelines and, in turn, receiving funding for the costly later-stage clinical development. We do not anticipate selling products\ndirectly into the marketplace, though we may do so depending on market conditions. Our focus is to concentrate on entering into strategic\ntransactions with established distributors and producers, which will provide distribution and marketing capabilities for the sale of our\nproducts in the marketplace.\n\n \n\n**Our Development Pipeline**\n\n \n\nThe following chart provides\nan overview of the current development stages of our product candidates.\n\n \n\n \n\nOur product candidates will\nrequire extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial investment before\neither of them or any successors are likely to provide us with any revenue. As a result, if we do not successfully develop, achieve regulatory\napproval for and commercialize our product candidates, our long-term business objectives may not materialize, and we may be unable to\ngenerate the revenue we have forecast in the foreseeable future, if at all. We do not anticipate that we will generate our maximum revenue\nfor several years, or that we will achieve profitability for any of our therapeutic drug candidates until at least a few years after generating\nmaterial revenue, if at all. If we are unable to generate revenue or raise substantial additional capital, we may not be able to pursue\nany expansion of our business or acquire additional intellectual property, we may never become profitable, and we may be unable to continue\nour operations at the currently planned pace, if at all.\n\n \n\n**AL001 Drug Candidate**\n\n \n\nOur lead product candidate\nthat we have licensed and begun clinical development of in humans is AL001, an ionic cocrystal of lithium for the treatment of Alzheimer’s,\nBD, MDD and PTSD. Lithium salts have a long history of human consumption beginning in the 1800s. In psychiatry, they have been used to\ntreat mania and as a prophylactic for depression since the mid-20th century. Today, lithium salts are used as a mood stabilizer for the\ntreatment of BD. Although the FDA has approved no medications as safe and effective treatments for suicidality, lithium has proven to\nbe the only drug that consistently reduces suicidality in patients with neuropsychiatric disorders. Despite these effective medicinal\nuses, current FDA-approved lithium pharmaceutics (lithium carbonate and lithium citrate) are limited by a narrow therapeutic window that\nrequires regular blood monitoring of plasma lithium levels and blood chemistry by a clinician to mitigate adverse events. Because conventional\nlithium salts (carbonate and citrate) are eliminated relatively quickly, multiple administrations throughout the day are required to safely\nreach therapeutic plasma concentrations. The administration of existing lithium drugs, such as lithium chloride and lithium carbonate,\nmay cause patients to suffer from chronic toxicity, poor physicochemical properties, and poor brain bioavailability. Because lithium is\nso effective at reducing manic episodes in patients with BD, it is still used clinically despite its narrow therapeutic index. This has\nled researchers to begin to look for other treatment methods than lithium but that may evince similar bioactivities.\n\n \n\n - 4 - \n\n \n\n \n\nScientists from the University\nof South Florida have developed a new lithium cocrystal composition and method of preparation that, under certain clinical and/or testing\nconditions, have been shown to allow for lower dosages to achieve therapeutic brain levels of lithium for psychiatric disorders, which\ncould lead to a broadening of lithium’s therapeutic index. Our studies and tests have indicated that the compound offers improved\nphysiochemical properties compared to existing forms of lithium, giving it the potential to be developed as an anti-suicidal drug and\nfor use against mood disorders.\n\n \n\nRecent evidence suggests that\nlithium may be efficacious for both the treatment and prevention of Alzheimer’s. Unlike traditional medications, which only address\na single therapeutic target, lithium appears to be neuroprotective through several modes of action. For example, recent studies have indicated\nthat it exerts neuroprotective effects, in part, by increasing a brain-derived neurotrophic factor leading to restoration of learning\nand memory. Another neuroprotective mechanism of lithium indicated by recent studies is the attenuation of the production of inflammatory\ncytokines like IL-6 and nitric oxide in activated microglia. Results from recent clinical studies suggest that lithium treatment may reduce\nthe progression of dementia while preserving cognitive function and reducing biomarkers associated with Alzheimer’s.\n\n \n\nAL001, which was designed,\nsynthesized and characterized by a team of inventors from the University of South Florida, has been shown to exhibit improved nonclinical\npharmacokinetics compared to currently available FDA-approved lithium products and is also bioactive in many in vitro models of Alzheimer’s.\nAL001 may constitute a means of treating Alzheimer’s, BD, MDD and PTSD.\n\n \n\nWe believe that our ability\nto re-engineer lithium in solid dosage forms in order to optimize performance has the potential to address a wide range of clinical applications\nbeyond neurodegenerative disorders other than Alzheimer’s, but also amyotrophic lateral sclerosis (known as ALS and popularly referred\nto as Lou Gehrig’s disease), Huntington’s disease, multiple sclerosis, Parkinson’s disease and traumatic brain injury,\nto more psychiatric conditions such as BD, MDD, mania, PTSD and suicidality. This novel approach is intended to achieve the desired therapeutic\noutcome of enhanced penetration through the blood-brain barrier and sustained brain lithium concentrations while systemic exposures (and\ntoxicities) are mitigated for other organ systems. The optimal modified-release lithium dosing approach for AL001 should avoid acutely\ntoxic peak concentrations in blood, as well as in the brain, and should maintain such relatively minor blood concentrations for a predictable,\nclinically relevant time, with overall low systemic exposures that mitigate the potential for adverse events. We anticipate that the lithium\ndelivery system will be adaptable to a dosing regimen that maintains therapeutic brain lithium concentrations consistently for the longest\npossible time while allowing only modest exposures and providing adequate recovery periods between doses for other organ systems.\n\n \n\n**Clinical Trials**\n\n \n\nPhase I Study\n\n \n\nOn September 13, 2021, we\ninitiated a randomized, balanced, Phase I, single-dose, open-label, two-treatment, two-period, two- sequence, crossover, relative bioavailability\nclinical trial to investigate lithium pharmacokinetics and safety of AL001 formulation compared to a marketed immediate release lithium\ncarbonate formulation in healthy subjects. The primary objective of this clinical trial was to assess the relative bioavailability of\nthe AL001 lithium formulation relative to a marketed lithium carbonate formulation in healthy subjects for the purpose of determining\npotential clinically safe and effective AL001 dosing in future studies. Additionally, we wanted to characterize safety and tolerability\nof the tested formulations under the conditions of this clinical trial. This was a first-in-human clinical trial of the AL001 formulation\nand this trial was designed to assess the relative bioavailability of the AL001 lithium formulation compared to a marketed lithium carbonate\nformulation in at least 24 completed healthy subjects (30 subjects were to be enrolled) for the purpose of determining potential clinically\nsafe and effective AL001 dosing in future clinical trials. The AL001 lithium content was nearly half of the reference lithium carbonate\ncapsule dosage as it was expected that treatment of frail Alzheimer’s patients will require half the lithium dose used for treatment\nof BD. Lithium carbonate 300 mg (Reference product) was given as a single dose in this clinical trial; this is often used as a starting\ndose for treatment of BD when given three times daily. The shape of the AL001 lithium plasma concentration versus time curve was unknown\nprior to this study. Also unknown were the rate and extent of lithium absorption of AL001. The Phase I study was completed in March 2022\nwith the following results:\n\n \n\n·AL001 was shown to be safe and well-tolerated in healthy adult subjects;\n\n \n\n·No deaths or serious adverse events were reported during the trial;\n\n \n\n·The safety profiles of both AL001 and the marketed lithium carbonate capsule were benign;\n\n \n\n·No clinically significant abnormal findings in electrocardiograms were noted during the trial;\n\n \n\n·AL001 salicylate plasma concentrations were observed to be well tolerated and consistently within safe\nlimits; and\n\n \n\n - 5 - \n\n \n\n \n\n·Dose-adjusted relative bioavailability analyses of the rate and extent of lithium absorption in plasma\nindicated that AL001, at a lithium carbonate equivalent dose of 150 mg, is bioequivalent to a marketed 300 mg lithium carbonate capsule\nand the shapes of the lithium plasma concentration versus time curves are similar.\n\n \n\nPhase IIA Study\n\n \n\nOn May 5, 2022, we initiated\na multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic clinical trial (www.clinicaltrials.gov,\nidentifier: NCT05363293) of AL001 in patients with mild to moderate Alzheimer’s and healthy subjects with the following objectives:\n\n \n\n·**Primary:** To evaluate the safety and tolerability of AL001 under multiple-dose, steady-state conditions\nin Alzheimer’s patients and healthy subjects;\n\n \n\n·**Secondary:** To characterize the MTD of AL001 in patients with mild to moderate Alzheimer’s\nand healthy subjects; and\n\n \n\n·**Tertiary:** To establish the qualitative and quantitative evaluations of patients with Alzheimer’s\nand healthy subjects, leading to our ability to ascertain desirable characteristics for future Phase II and III clinical studies in order\nto:\n\n \n\noFacilitate recruitment into subsequent AL001 clinical trials; and\n\n \n\noFacilitate trial-adherence to completion of study requirements including treatment adherence.\n\n \n\nWe completed the Phase IIA\nclinical trial in March 2023, announced positive topline data in June 2023 and announced full data sets in October 2024. We successfully\nidentified an MTD for development of AL001 from a multiple-ascending dose study as assessed by an independent safety review committee.\nThis dose, providing lithium at a lithium carbonate equivalent dose of 240 mg 3-times daily (“TID”), is designed to be unlikely\nto require lithium TDM. Also, the risk of this MTD is mitigated for the purpose of treating fragile populations, such as Alzheimer’s\npatients.\n\n \n\nLithium is a commonly prescribed\ndrug for manic episodes in BD type 1 as well as maintenance therapy of BP in patients with a history of manic episodes. Lithium is also\nprescribed off-label for MDD, BD and treatment of PTSD, among other disorders. Lithium was the first mood stabilizer approved by the FDA\nand is still a first-line treatment option (considered the “gold standard”) but is underutilized, at least in part because\nof the need for TDM. Lithium was the first drug that required TDM by regulatory authorities in product labelling because the effective\nand safe range of therapeutic drug blood concentrations is narrow and well defined for treatment of BP when using lithium salts. Excursions\nabove this range can be toxic, and dosages below it can impair effectiveness.\n\n \n\nCurrent and Future Phase II “Lithium\nin Brain” Studies\n\n \n\nIn August 2024, we announced\na partnership with MGH and Harvard Medical School to conduct five Phase II imaging clinical trials. The purpose of these trials is to\nassess the comparative increase in lithium levels within the brain and its structures as opposed to a commonly marketed lithium salt among\nhealthy subjects and patients afflicted with Alzheimer’s, BD, MDD and PTSD. \n\n \n\nIn November 2024, we announced\na full data set from a nonclinical study comparing brain and plasma lithium exposures between AL001 and lithium carbonate in Alzheimer’s\ntransgenic mice. This study was a precursor to the five clinical trials and showed that AL001 exhibited consistently higher lithium concentrations\nin brain tissues, particularly at lower doses, compared to lithium carbonate.\n\n \n\nFor these clinical trials,\nwe partnered with Tesla Dynamic Coils BV to create a head coil to enable whole-brain imaging of lithium with remarkable resolution, allowing\nprecise quantification within brain structures. The coil will be used to help identify the disease-specific target doses of AL001 that\nimprove the balance of safety and efficacy compared to lithium carbonate. The coil will also be used to scan the entire brain, helping\nus clearly identify the different structures and important areas necessary for understanding how lithium works and moves within the brain.\nWe announced completion of the head coil in February 2025.\n\n \n\nIn May 2025, we announced\nthe initiation, enrollment and dosing of the first of the healthy human patients. This clinical trial had the following objectives:\n\n \n\n·To assess lithium brain/plasma pharmacokinetics (“PK”) of the AL001 oral capsule relative\nto a marketed lithium carbonate capsule in healthy adult subjects for the purpose of determining potential clinically safe and effective\nAL001 dosing in future studies;\n\n·To characterize AL001 lithium and salicylate steady-state plasma PK, and lithium relative to a marketed\nlithium carbonate capsule;\n\n·To characterize differences in brain and brain structure(s) PK behaviors such as absorption and persistence\nbetween AL001 capsule and a marketed lithium carbonate capsule; and\n\n·To characterize safety and tolerability of the tested formulations under the conditions of this study\n(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,\nequivalent to 150 mg lithium carbonate TID).\n\n \n\n - 6 - \n\n \n\n \n\nIn November 2025, we announced\nthe completion of the clinical portion of this study and reported pharmacokinetics topline data in March 2026, with the following results:\n(1) Bioequivalence Confirmed: AL001 delivered 101% of total lithium blood exposure and 97% of peak lithium levels vs. standard lithium\ncarbonate; (2) Superior Brain Penetration: AL001 showed numerically higher lithium concentrations in all measured brain regions, including\nwhole brain; and (3) Faster Brain Uptake: AL001 reached peak brain concentration in 6.7 hours vs. 8.4 hours for standard lithium carbonate.\nIn April 2026, we announced pharmacodynamic  topline data of the healthy human subjects with the following results:\n\n \n\n·Potentially Distinct Brain Profile:** **Across multiple brain regions, AL001 and lithium\ncarbonate appeared to trend in opposite directions in brain chemistry measures, suggesting that AL001 may interact with the brain in a\ndistinct manner and generate a lower neurochemical footprint than lithium carbonate;\n\n \n\n·Expected Trends for Myo-Inositol Reduction: Both AL001 and lithium carbonate showed a trend toward reducing\nmyo-inositol, potentially supporting the hypothesis that AL001 retains lithium's core mechanism of action; and\n\n** **\n\n·Potentially Preserved Glutamate Balance: Lithium carbonate showed large effects across all brain\nregions whereas AL001 showed minimal glutamate effect in most brain regions, which may suggest better long-term tolerability.\n\n \n\nFull pharmacokinetics and\npharmacodynamic results are expected in August 2026.\n\n \n\nIn March 2026, we announced\nthe initiation of the Phase II Clinical Trial of AL001 “Lithium in Brain” Study in Patients with BD and expect to report topline\ndata in the fourth quarter of 2026. The clinical trials for treatment of patients with MDD and PTSD are expected to commence in the fourth\nquarter of 2026, followed by Alzheimer’s in the first quarter of 2027. These projected timelines reflect our commitment to advancing\nour clinical development programs across multiple neuropsychiatric and neurodegenerative indications.\n\n  \n\n**ALZN002 Drug Candidate**\n\n \n\nALZN002 is our other product\ncandidate that we have obtained a license to clinically develop in humans is ALZN002, a patented method using a mutant peptide sensitized\ncell as a cell-based therapeutic vaccine which seeks to restore the ability of the patient’s immunological system to combat Alzheimer’s.\nThe proposed mechanism of action is through the pulsed-Dendritic Cell (“DC”) activation of T-cells that stimulates the immune\nsystem, resulting in the clearance of brain amyloid. Preclinical studies conducted from April 2005 to July 2010 demonstrated that the\ninfusion of transgenic (or genetically modified) mice with ALZN002-pulsed DCs is associated with lower amyloid burden and improved neuro-behavioral\nperformance. This is likely to be mediated by an anti-inflammatory effect in addition to the immunogenicity of this therapy.\n\n \n\nThe development of ALZN002\nis predicated on the theory that Alzheimer’s symptoms may be caused in large part by plaque deposits that can cluster in the brain\ncomposed of protein fragments called beta-amyloids that build up between nerve cells. One hypothesis is that a special type of immune\ncell, a natural beta-amyloid antibody, may play a role in preventing plaque build-up in people without Alzheimer’s. As people age,\ntheir immune systems tend to degrade, and some people may be unable to produce natural beta-amyloid antibodies, the absence of which leads\nto the plaque build-up causing Alzheimer’s.\n\n \n\nALZN002 is intended to elicit\nan immune response to produce anti-amyloid antibodies, which can then neutralize circulated beta-amyloids and prevent additional plaque\nbuild-up. The mutant antigen within ALZN002 was selected specifically for its high human leukocyte antigens binding affinity, thereby\navoiding the need for an adjuvant, which may cause an adverse (Th1) immune response.\n\n \n\nALZN002 is an autologous modified\nDC treatment. More precisely, it is a patient-specific therapy where the patient undergoes leukapheresis, a nonsurgical treatment used\nto reduce the quantity of white blood cells in the bloodstream, to isolate peripheral blood monocytes that are subsequently matured into\nDCs using cytokine therapy (IL4+ GM-CSF) cocktail. The DCs are incubated with a modified amyloid beta (Aβ) peptide to sensitize them,\nand then administered to the same patient.\n\n \n\nSignificant evidence has accumulated\nrecently suggesting that immunotherapy is a highly promising modality of treatment in Alzheimer’s. Most current immune-based active\ninvestigations are focused on passive immunization by pre-prepared Aβ antibody administration. Active immunization may offer additional\nor more lasting effects on the clearance of amyloid and a safer approach due to its reliance on autologous immune mechanisms. Further,\npreliminary evidence suggests a recurrence of the amyloid accumulation after clearance with the immunoglobulins. A prior attempt at engaging\nthe immune system to treat Alzheimer’s was conducted using the immunization with pre-aggregated synthetic Aβ (AN-1792) combined\nwith the immunogenic adjuvant QS-21. The Phase IIA study with AN-1792 was terminated by the FDA due to severe meningoencephalitis in approximately\n6% of vaccinated subjects. We believe that this may have been caused by using a QS-21 adjuvant in the vaccine formulation, which we will\nnot use.\n\n \n\n - 7 - \n\n \n\n \n\n**Clinical Trials**\n\n \n\nPreclinical\n\n \n\nOn July 23, 2021, we announced\nthat Alzamend received positive toxicology results for ALZN002 in a good laboratory practices (“GLP”) toxicology study using\na transgenic mouse model of Alzheimer’s. The study was conducted by Charles River Laboratories. ALZN002 is a patented method using\na mutant-peptide sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability of a patient’s immunological\nsystem to combat Alzheimer’s.\n\n \n\nA five-dose GLP study with\nALZN002-sensitized cells was completed using a transgenic mouse model of Alzheimer’s to investigate the tolerability of ALZN002.\nSingle injections were administered on days 1, 30, 50, 70, and 90. The mice were evaluated for potential toxicity and reversibility of\nany findings at 75 and 90 days after the final dosing.\n\n \n\nHistopathology results demonstrate\nthat there was no indication of T-cell infiltration or meningoencephalitis, which suggests that ALZN002 therapy is safe and tolerable\nas there were no adverse findings over a 90-day period or 90 days after the last dose. There were no treatment-related mortalities or\nreports of adverse effects on clinical observations, body weight parameters, organ weight parameters, clinical pathology parameters, gross\npathology observations, or histopathologic observations during the main study or the recovery phase.\n\n \n\nModified cell therapies, especially\nDCs, may provide a safer and more patient-specific active immunization. Ex-vivo modification of DCs as a modality of treatment has been\npreviously used in oncological therapeutics. It has been shown to be relatively safe and capable of engaging the immune system to attack\nthe target tissues with success. Its use in Alzheimer’s therapeutics is relatively recent.\n\n \n\nPhase I/II Study\n\n \n\nWe submitted a pre-IND meeting\nrequest for ALZN002 and supporting briefing documents to the Center for Biological Evaluation and Research of the FDA on July 30, 2021.\nOn September 30, 2021, we received a written response relating to the pre-IND from the FDA providing a path for Alzamend’s planned\nclinical development of ALZN002. The FDA agreed to allow Alzamend to submit an IND to conduct a combined Phase I/II study.\n\n \n\nOn September 28, 2022, we\nsubmitted an IND to the FDA for ALZN002 and received a “study may proceed” letter on October 31, 2022. The product candidate\nis an immunotherapy vaccine designed to treat mild to moderate dementia of the Alzheimer’s type. ALZN002 is a proprietary “active”\nimmunotherapy product, which means it is produced by each patient’s immune system. It consists of autologous DCs consisting of activated\nwhite blood cells taken from each individual patient so that they can be engineered outside of the body to attack Alzheimer’s-related\namyloid-beta proteins. These DCs are pulsed with a novel amyloid-beta peptide (E22W) designed to bolster the ability of the patient’s\nimmune system to combat Alzheimer’s; the goal is to foster tolerance to treatment for safety purposes while stimulating the immune\nsystem to reduce the brain’s beta-amyloid protein burden, resulting in reduced Alzheimer’s signs and symptoms. Compared to\npassive immunization treatment approaches that use foreign blood products (such as monoclonal antibodies), active immunization with ALZN002\nis anticipated to offer a more robust and long-lasting effect on the clearance of amyloid. This approach could prove safer due to its\nreliance on autologous immune components, using each individual patient’s own white blood cells rather than foreign cells and/or\nblood products.\n\n \n\nOn April 3, 2023, we announced\nthe initiation of a Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type. The purpose\nof this trial is to assess the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that of a placebo\nin 20-30 subjects with mild to moderate morbidity. The primary goal of this clinical trial is to determine an appropriate dose of ALZN002\nfor treatment of patients with Alzheimer’s in a larger Phase IIB efficacy and safety clinical trial. In February 2024, we received\nnotice from Biorasi terminating our contract with Biorasi. We are currently pursuing the engagement of a replacement CRO. Due to the scientific\nand operational complexities of the ALZN002 trial, along with the limited number of CROs with the expertise and capacity to complete the\ntrial, we have experienced a delay in engaging a new CRO. We do not expect to restart this trial until first quarter of 2027.\n\n \n\n**Intellectual Property and Licensing Agreements**\n\n \n\nOn July 2, 2018, we entered\ninto two Standard Exclusive License Agreements with Sublicensing Terms for AL001 with the Licensor and its affiliate, the University of\nSouth Florida (the “AL001 Licenses”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide licenses\nlimited to the field of Alzheimer’s, under U.S. Patent Nos. (i) 9,840,521, entitled “Organic Anion Lithium Ionic Cocrystal\nCompounds and Compositions,” filed September 24, 2015 and granted December 12, 2017, and (ii) 9,603,869, entitled “Lithium\nCo-Crystals for Treatment of Neuropsychiatric Disorders,” filed May 21, 2016 and granted March 28, 2017. On February 1, 2019, we\nentered into the First Amendments to the AL001 Licenses, on March 30, 2021, we entered into the Second Amendments to the AL001 Licenses\nand on June 8, 2023, we entered into the Third Amendments to the AL001 Licenses (collectively, the “AL001 License Agreements”).\nThe Third Amendments to the AL001 Licenses modified the timing of the payments for the license fees.\n\n \n\nThe AL001 License Agreements\nrequire that we pay combined royalty payments of 4.5% on net sales of products developed from the licensed technology for AL001. We have\nalready paid an initial license fee of $200,000 for AL001. As an additional licensing fee for the licensing of the AL001 technologies,\nthe Licensor received 14,853 shares of our common stock. Minimum royalties for AL001 License Agreements are $40,000 on the first anniversary\nof the first commercial sale, $80,000 on the second anniversary of the first commercial sale and $100,000 on the third anniversary of\nthe first commercial sale and every year thereafter, for the life of the AL001 License Agreements.\n\n \n\nOn April 25, 2025, we entered\ninto a Fourth Amendment of the AL001 Licenses (collectively, the “AL001 License Agreements”). This amendment deleted the timing\nof milestone events.\n\n \n\n - 8 - \n\n \n\n \n\nOn May 1, 2016, we entered\ninto a Standard Exclusive License Agreement with Sublicensing Terms for ALZN002 with the Licensor (the “ALZN002 License”),\npursuant to which the Licensor granted us a royalty bearing exclusive worldwide license limited to the field of Alzheimer’s Immunotherapy\nand Diagnostics, under U.S. Patent No. 8,188,046, entitled “Amyloid Beta Peptides and Methods of Use”, filed April 7, 2009\nand 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\nthe Second Amendment to the ALZN002 License, on January 31, 2019, we entered into the Third Amendment to the ALZN002 License, on January\n24, 2020, we entered into the Fourth Amendment to the ALZN002 License, on March 30, 2021, we entered into the Fifth Amendment to the ALZN002\nLicense, on April 17, 2023, we entered into the Sixth Amendment to the ALZN002 License and on December 11, 2023, we entered into the Seventh\nAmendment to the ALZN002 License (collectively, the “ALZN002 License Agreement”). The Seventh Amendment to the ALZN002 License\nmodified the timing of the payments for the license fees.\n\n \n\nThe ALZN002 License Agreement\nrequires us to pay royalty payments of 4% on net sales of products developed from the licensed technology for ALZN002. We have already\npaid an initial license fee of $200,000 for ALZN002. As an additional licensing fee for the license of ALZN002, the Licensor received\n24,012 shares of our common stock. Minimum royalties for ALZN002 are $20,000 on the first anniversary of the first commercial sale, $40,000\non the second anniversary of the first commercial sale and $50,000 on the third anniversary of the first commercial sale and every year\nthereafter, for the life of the ALZN002 License Agreement.\n\n \n\nOn November 19, 2019, we entered\ninto two Standard Exclusive License Agreements with Sublicensing Terms for two additional indications of AL001 with the Licensor (the\n“November AL001 License”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide license limited\nto the fields of (i) neurodegenerative diseases excluding Alzheimer’s and (ii) psychiatric diseases and disorders. On March 30,\n2021, we entered into the First Amendments to the November AL001 License and on April 17, 2023, we entered into the Second Amendments\nto the November AL001 License (collectively, the “November AL001 License Agreements”). The Second Amendments to the November\nAL001 License modified the timing of the payments for the license fees.\n\n \n\nThe November AL001 License\nAgreements require us to pay royalty payments of 3% on net sales of products developed from the licensed technology for AL001 in those\nfields. We paid an initial license fee of $20,000 for the additional indications. Minimum royalties for November AL001 License Agreements\nare $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary of the first commercial sale and\n$100,000 on the third anniversary of the first commercial sale and every year thereafter, for the life of the November AL001 License Agreements.\n\n \n\nThese license agreements have\nan indefinite term that continue until the later of the date that no licensed patent under the applicable agreement remains a pending\napplication or enforceable patent, the end date of any period of market exclusivity granted by a governmental regulatory body, or the\ndate on which the licensee’s obligations to pay royalties expire under the applicable license agreement. Under our various license\nagreements, if we fail to meet a milestone by its specified date, Licensor may terminate the license agreement. The Licensor was also\ngranted a preemptive right to acquire such shares or other equity securities that may be issued from time to time by us while the Licensor\nremains the owner of any equity securities of our company.\n\n \n\nAdditionally, we are required\nto pay milestone payments on the due dates to the Licensor for the license of the AL001 technologies and for the ALZN002 technology, as\nfollows: \n\n \n\n**Original AL001 Licenses:**\n\n \n\n**Payment**\n**Due Date**\n \n\n$\n50,000*\n Pre-IND Meeting - **Completed** September 2019\n \n\n \n \n \n \n\n$\n65,000*\n IND application filing - **Completed** June 2021\n \n\n \n \n \n \n\n$\n190,000*\n Upon first dosing of patient in a clinical trial - **Completed** December 2021\n \n\n \n \n \n \n\n$\n500,000*\n Upon completion of first clinical trial - **Completed** March 2022\n \n\n \n \n \n \n\n$\n1,250,000\nUpon first patient treated in a Phase III clinical trial\n \n\n \n \n \n \n\n$\n10,000,000\nUpon FDA NDA approval\n \n\n*Milestone met and completed\n\n \n\n - 9 - \n\n \n\n \n\n**ALZN002 License:**\n\n \n\n**Payment**\n**Due Date**\n\n$\n50,000*\nUpon IND application - **Completed** January 2022\n\n \n \n \n\n$\n50,000\nUpon first dosing of patient in first Phase I clinical trial\n\n \n \n \n\n$\n500,000\nUpon completion of first Phase IIB clinical trial\n\n \n \n \n\n$\n1,000,000\nUpon first patient treated in a Phase III clinical trial\n\n \n \n \n\n$\n10,000,000\nUpon first commercial sale\n\n*Milestone met and completed\n\n \n\n**Additional AL001 Licenses:**\n\n \n\n**Payment**\n**Due Date**\n\n$\n2,000,000\nUpon first patient treated in a Phase III clinical trial\n\n \n \n \n\n$\n16,000,000\nFirst commercial sale\n\n \n\n**Market Opportunity**\n\n \n\nAccording to the National\nInstitutes of Health (“NIH”), there are more than 48.4 million Americans afflicted with Alzheimer’s, BD, MDD or PTSD.\nThe rise in the prevalence of these disorders and the associated risks arising therefrom, such as high stress, substance abuse, and advancements\nin a combination of drugs are primarily propelling market growth. Advancements in technology allowing more accurate diagnosis/detection\nof Alzheimer’s, BD, MDD, and PTSD are also positively influencing market growth. Other factors, such as increasing research and\ndevelopment activities (via clinical trials) and investments by the government to improve the healthcare industry, are expected to further\ndrive market growth. Additionally, increased awareness about Alzheimer’s, BD, MDD and PTSD via the various disease/disorder-specific\nnon-profit organizations is accelerating market growth. The potential marketplace for a commercialized therapy or treatment would be\ntremendously significant with large financial support available from numerous national and international pharmaceutical companies and\nvarious governments and worldwide agencies. We were founded with a mission to further develop AL001 and ALZN002, by funding them through\nhuman clinical trials administered by the FDA and ultimately, if successful, making them available to the public.\n\n \n\n  \n\n \n\n**Industry Overview**\n\n \n\n**Alzheimer’s**\n\n \n\nCurrently, Alzheimer’s\nis the fifth leading cause of death in the U.S. and, when extrapolated globally, the market for preventions, treatments and cures of this\ncrippling disease is massive. Since 1990, life expectancy has increased by six years and the worldwide average continues to increase.\nWith the increase in the mean age of the population in developed countries, the prevalence of deteriorating neurological diseases has\nalso increased. According to the Alzheimer’s Association, in the U.S. alone, one of nine persons older than 65 has Alzheimer’s,\nwith roughly 7.4 million Americans currently living with it. It is estimated that this number will grow to 13 million by 2050, barring\nthe development of medical breakthroughs to prevent, slow or cure the disease. Many Alzheimer’s-related associations believe the\nactual number of adults with Alzheimer’s may be much higher since current statistics do not account for deaths from complications\nor from related diseases like pneumonia or heart attack. These death certificates only list the most immediate cause. The fastest growing\nage group in the U.S. is the “over 85” group within which one in three individuals has Alzheimer’s.\n\n \n\nIt is estimated that the cost\nof caring for people with Alzheimer’s and other dementias will increase from an estimated $409 billion in 2026 to a projected $1\ntrillion per year by 2050, with Medicare and Medicaid covering approximately 70% of such costs. Over 13 million Americans provide unpaid\ncare for people with Alzheimer’s or other dementias. The Alzheimer’s Association estimates that, in 2026, caregivers to individuals\nwith Alzheimer’s provided 19 billion hours of care, valued in total at approximately $446 billion.\n\n \n\n - 10 - \n\n \n\n \n\n*Alzheimer’s Therapeutic Landscape*\n\n  \n\nThere are currently several experimental therapeutic agents for Alzheimer’s\nin various stages of development with clinical testing directed towards amyloid-beta, or Aβ, clearance, and inhibition of Tau protein\naggregation or phosphorylated-Tau, or pTau, clearance. In June 2021, the FDA approved Biogen’s Alzheimer’s drug aducanumab,\nalso known as Aduhelm, making it the first new medication for the disease in nearly two decades and the first medication cleared by U.S.\nregulators to reduce amyloid plaques in people living with Alzheimer’s. There had previously been no drugs cleared by the FDA that\ncould slow the mental decline caused by Alzheimer’s. In July 2023, an anti-beta amyloid antibody known as Lecanemab-irmb (“Leqembi”)\nreceived full approval by the FDA for the treatment of Alzheimer’s. In July 2024, the FDA approved Eli Lilly’s Alzheimer’s\ndrug donanemab, also known as Kisunla, which targets amyloid in the brain. Given the current weight of evidence, amyloid is now established\nas a cause of Alzheimer’s. In April 2026, the FDA approved Axsome Therapeutics’ Auvelity for treatment of agitation associated\nwith Alzheimer’s dementia.\n\n \n\nBoth Leqembi and Kisunla are\nhumanized monoclonal antibodies that bind with high affinity to soluble amyloid-beta oligomers, which reportedly are toxic to neurons.\nBoth Leqembi and Kisunla have been demonstrated to reduce biomarkers of amyloid in early Alzheimer’s and result in moderately less\ndecline in measures of cognition and function as compared to a placebo at 18 months. Since each of Leqembi and Kisunla provides only passive\nimmunity, antibody infusions are needed every 2 and 4 weeks, respectively. Both Leqembi and Kisunla support and validate the amyloid theory,\nbut in routine medical practice there will be a large burden on the healthcare system due to the need for bi-weekly or monthly infusions.\n\n \n\n**Bipolar Disorder**\n\n \n\nBD, previously known as manic\ndepression, is a mood disorder characterized by periods of depression or abnormally elevated happiness, each lasting from days to weeks.\nIf the elevation in mood is severe or associated with psychosis, the disorder is diagnosed as mania; if it is less severe, the diagnosis\nis called hypomania. During mania, an individual behaves or feels abnormally energetic, happy, or irritable, and often makes impulsive\ndecisions with little regard for the consequences. There usually will also be a reduced need for sleep during manic phases. During periods\nof depression, the individual may experience crying episodes, have a negative outlook on life and maintain poor eye contact with others.\nThe risk of self-abuse and even suicide is high; over a period of 20 years, 6% of those with BD died by suicide, while 30–40% engaged\nin self-harm. Other mental health issues, such as anxiety disorders and substance use disorders, are commonly associated with BD.\n\n \n\nWhile the causes of BD are\nnot clearly understood, both genetic and environmental factors are thought to play a role. Many genes, each with small effects, may contribute\nto the development of the disorder. Genetic factors account for about 70–90% of the risk of developing BD. Environmental risk factors\ninclude a history of childhood abuse and long-term stress. The condition is classified as bipolar I disorder when a patient has experienced\nat least one manic episode, with or without depressive episodes, or as bipolar II disorder when at least one hypomanic episode (but no\nfull manic episodes) and one major depressive episode have occurred. If these symptoms manifest due to drugs or unrelated medical problems,\nthey are not diagnosed as BD. Other medical conditions that may have overlapping symptoms with BD include attention deficit hyperactivity\ndisorder, personality disorders, schizophrenia, and substance use disorder. Medical testing is not required to diagnose BD, although blood\ntests and medical imaging can assist in ruling out other possible medical conditions.\n\n \n\nBD occurs in approximately\n1% of the global population. According to the NIH, roughly seven million Americans are estimated to be affected by BD at some point in\ntheir lives; rates appear to be similar in men and women. Symptoms most commonly begin to appear between the ages of 20 and 25; an earlier\nonset in life is associated with a worse prognosis. Interest in functioning in the assessment of patients with BD is growing, with an\nemphasis on specific domains such as work, education, social life, family and cognition. Around one-quarter to one-third of people with\nBD have financial, social or work-related problems due to the illness. BD is among the top 20 causes of disability worldwide and has led\nto substantial costs for society. Due to lifestyle choices and the side effects of medications, the risk of death from natural causes\n(such as coronary heart disease) in people with BD is reportedly twice that of the general population.\n\n \n\n*Bipolar Disorder Therapeutic Landscape*\n\n \n\nMood stabilizers, including\nlithium and certain anticonvulsants, such as valproate and carbamazepine, as well as atypical antipsychotics, such as aripiprazole, are\nthe mainstay of long-term pharmacologic relapse prevention. Antipsychotics are additionally given during acute manic episodes as well\nas in cases where mood stabilizers are poorly tolerated or ineffective. In patients where compliance is of concern, long-acting injectable\nformulations are available. There is some evidence that psychotherapy improves the course of BD. The use of antidepressants in depressive\nepisodes is controversial; they can be effective but have been implicated in triggering manic episodes. The treatment of depressive episodes,\ntherefore, is often difficult. Electroconvulsive therapy (“ECT”) is effective in acute manic and depressive episodes, especially\nwith psychosis or catatonia. Admission to a psychiatric hospital may be required if a person could present a risk of harm to themselves\nor others; and involuntary treatment may sometimes be necessary if the affected person refuses treatment.\n\n \n\n**Major Depressive Disorder**\n\n \n\nMDD, also known simply as\ndepression, is a mental disorder characterized by at least two weeks of pervasive low mood, low self-esteem, and loss of interest or pleasure\nin normally enjoyable activities. Those affected may also occasionally have delusions or hallucinations. Introduced by a group of U.S.\nclinicians in the mid-1970s, the term was adopted by the American Psychiatric Association for this symptom cluster under mood disorders\nin the 1980 version of the Diagnostic and Statistical Manual of Mental Disorders (DSM-III), and has become widely used since.\n\n \n\n - 11 - \n\n \n\n \n\nThe diagnosis of MDD is based\non the person's reported experiences and a mental status examination. There is no laboratory test for the disorder, but testing may be\ndone to rule out physical conditions that can cause similar symptoms. The most common time of onset is in a person’s 20s, with women\naffected about twice as often as men. The course of the disorder can vary widely amongst affected patients, with reported experiences\nranging from a single episode that lasts months to a life-long disorder with recurrent major depressive episodes.\n\n \n\nMDD is believed to be caused\nby a combination of genetic, environmental, and psychological factors, with about 40% of the risk being genetic. Risk factors include\na family history of the condition, major life changes, certain medications, chronic health problems, and substance use disorders. It can\nnegatively affect a person's personal life, work life, and education, as well as sleeping, eating habits, and general health. According\nto the NIH, MDD affected approximately 21 million adults (8.4% of all U.S. adults) in 2020, and the prevalence of adults with a major\ndepressive episode was higher among adult women (10.5%) than men (6.2%) and highest among individuals aged 18-25 (17.0%). MDD causes the\nsecond-most years lived with disability, after lower back pain.\n\n \n\n*Major Depressive Therapeutic Landscape*\n\n \n\nThose with MDD are typically\ntreated with psychotherapy and antidepressant medication. Medication appears to be effective, but the effect may predominantly be significant\nin the most severely depressed. Hospitalization (which may be involuntary) may be necessary in cases with associated self-neglect or a\nsignificant risk of harm to self or others. ECT may be considered if other measures are not effective.\n\n \n\nAlthough lithium does not\nhave an FDA approved indication for augmentation of an antidepressant in MDD, it has been prescribed off-label for this purpose for decades.\nWhile a wide variety of medications have been used historically in this capacity, lithium is one of the few agents that has demonstrated\nefficacy in multiple randomized controlled trials. Although the ideal role for lithium augmentation has yet to be established, there is\nevidence to support the clinical practice of adding lithium to conventional antidepressants in pursuit of MDD remission. Lithium augmentation\nhas been cited as a main strategy for depressed patients not responding to an antidepressant, lithium prophylaxis for recurrent unipolar\ndepression as an alternative to prophylaxis with an antidepressant, and for lithium’s anti-suicidal properties, where appropriate.\n\n \n\n**Post-Traumatic Stress Disorder**\n\n \n\nPTSD is a mental and behavioral\ndisorder that can develop because of exposure to a traumatic event, such as sexual assault, warfare, traffic collisions, child abuse,\ndomestic violence, or other threats to a person’s life. Symptoms may include disturbing thoughts, feelings or dreams related to\nthe causal event, mental or physical distress to trauma-related cues, attempts to avoid trauma-related cues, alterations in the way a\nperson thinks and feels, and an increase in the fight-or-flight response. These symptoms may remain for more than a month after the event.\nA person with PTSD is at a higher risk of suicide and intentional self-harm.\n\n \n\nMost people who experience\ntraumatic events do not develop PTSD. People who experience interpersonal violence such as rape, other sexual assaults, being kidnapped,\nstalking, physical abuse by an intimate partner, and incest or other forms of childhood sexual abuse are more likely to develop PTSD than\nthose who experience non-assault-based trauma, such as accidents and natural disasters. Those who experience prolonged trauma, such as\nslavery, concentration camps, or chronic domestic abuse, may develop complex post-traumatic stress disorder (“C-PTSD”). C-PTSD\nis similar to PTSD but has a distinct effect on a person's emotional regulation and core identity.\n\n \n\nAccording to the NIH, about\n3.5%, or roughly nine million, adults in the U.S. have PTSD in a given year, and 9% of people develop it at some point in their life.\nIn much of the rest of the world, rates for a given year are between 0.5% and 1% of the population. Higher rates may occur in regions\nof armed conflict. It is more common in women than men. PTSD was first mentioned in the American Psychiatric Association Diagnostic and\nStatistical Manual of Mental Disorders (DSM-I) in the 1950s under the term “gross stress reaction.” Although this diagnosis\nincluded psychological problems related to traumatic events such as wartime combat, it limited symptoms to six months. This diagnosis\nwas removed from the American Psychiatric Association Diagnostic and Statistical Manual of Mental Disorders (DSM-II) in 1968, representing\na regression in accurate PTSD characterization. The long-term psychological disabilities experienced by trauma survivors, including combat\nveterans, sexual assault victims and Holocaust survivors, led to the introduction of PTSD in the American Psychiatric Association Diagnostic\nand Statistical Manual of Mental Disorders (DSM-III) in 1980 when, for the first time, the definition of PTSD highlighted the critical\nconnection between traumatic events and long-term psychological symptoms.\n\n \n\n*Post-Traumatic Stress Disorder Therapeutic\nLandscape*\n\n \n\nPrevention may be possible\nwhen counselling is targeted at those with early symptoms but is not effective when provided to all trauma-exposed individuals, whether\nor not symptoms are present. The main treatments for people with PTSD are counselling (psychotherapy) and medication. Antidepressants\nof the selective serotonin reuptake inhibitors (“SSRI”) or serotonin-norepinephrine reuptake inhibitors (“SNRI”)\ntype are the first-line medications used for PTSD and are moderately beneficial for about half of people. Benefits from medication are\nless effective than those seen with counselling. It is not currently known whether using medications and counselling together will result\nin more favorable preventative outcomes for PTSD patients than either method separately.\n\n \n\nSertraline (Zoloft) and Paroxetine\n(Paxil) are FDA-approved medications for PTSD. Reviews by a group of doctors of pharmacological monotherapy in 2015 and 2021 found that\nparoxetine, fluoxetine, sertraline and venlafaxine could be effective for PTSD, but the magnitude of the effect was low and the clinical\nrelevance was unclear. These reviews excluded lithium treatments. Medications, other than some SSRIs or SNRIs, do not have enough evidence\nto support their use and, in the case of benzodiazepines, may worsen outcomes.\n\n \n\n - 12 - \n\n \n\n \n\nCase reports suggest that\nlithium treatment may be useful for irritability/anger outbursts in PTSD patients. For example, one study by Kitchner and Greenstein provided\ncase histories of four males (with ages ranging between approximately 31–42 years) who suffered from PTSD resulting from their experiences\nin the Vietnam War. Results from treatment with low doses (300–600 mg/day) of lithium carbonate were reported to indicate that treatment\nwas effective in reducing inappropriate anger, irritability, anxiety and insomnia.\n\n \n\nThe clinical observation of\nmood swings beyond the normal range but milder than those associated with BD reportedly suggested the presence of a subthreshold mood\ndisorder in these PTSD patients. It has also been proposed that treatment of trauma with lithium to forestall the development of PTSD\nmay be provided by pharmacological induction of a mild transient amnesia. \n\n \n\n**Manufacturing**\n\n \n\nCurrently, we do not have\nin-house manufacturing capabilities. We have outsourced and expect to continue to outsource the manufacturing of our products to third\nparty contractors with special capabilities to manufacture chemical drugs and biologic drug candidates for submission and clinical testing\nunder FDA guidelines and, for AL001 and ALZN002, have received Good Manufacturing Practices, or GMP, material manufactured for clinical\ntrial. There are several sources of manufacturing available once a therapy or treatment can achieve Phase II study as identified in a\npublication by Pharma.org released in 2013 (http://www.phrma.org/sites/default/files/Alzheimer’s%202013.pdf).\n\n \n\n**Distribution and Marketing**\n\n \n\nWe intend to develop AL001\nand ALZN002 through successive de-risking milestones towards regulatory approval and seek marketing approval of AL001 and ALZN002 or enter\ninto partnering transactions with biopharmaceutical companies seeking to strategically fortify pipelines and, in turn, receiving funding\nfor the costly later-stage clinical development required to achieve successful commercialization. We do not anticipate selling products\ndirectly into the marketplace, though we may do so depending on market conditions. Our focus is to strategically effect partnering transactions\nthat will provide distribution and marketing capabilities to sell products into the marketplace.\n\n \n\n**Government Regulation**\n\n \n\nClinical trials, the pharmaceutical\napproval process, and the marketing of pharmaceutical products are intensively regulated in the United States and in all major foreign\ncountries.\n\n \n\n**Human Health Product Regulation in the United\nStates**\n\n \n\nIn the United States, the\nFDA regulates pharmaceuticals under the Federal Food, Drug, and Cosmetic Act and related regulations promulgated thereunder. Pharmaceuticals\nare also subject to other federal, state, and local statutes and regulations. Failure to comply with applicable U.S. regulatory requirements\nat any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial\nsanctions. These sanctions could include the imposition by the FDA of an Institutional Review Board (an “IRB”), a clinical\nhold on trials, a refusal to approve pending applications, withdrawal of an approval, warning letters, product recalls, product seizures,\ntotal or partial suspension of production or distribution, injunctions, fines, civil penalties or referrals to the Department of Justice\nfor criminal prosecution. Any such agency or judicial enforcement action, if imposed on us, could have a material adverse effect on us.\n\n \n\nThe FDA and regulatory agencies\nin state and local jurisdictions impose substantial requirements upon the clinical development, manufacturing and marketing of pharmaceutical\nproducts. These agencies and other relevant federal, state and local entities regulate research and development activities and the testing,\nmanufacturing, quality control, safety, effectiveness, labeling, storage, distribution, record keeping, approval, advertising and promotion\nof our product candidates.\n\n \n\nThe FDA’s policies may\nchange, and additional government regulations may be promulgated, in a manner that could prevent or delay regulatory approval of new disease\nindications or label changes. We cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from\nfuture legislative or administrative action, either in the United States or elsewhere.\n\n \n\n**Marketing Approval**\n\n \n\nThe process required by the\nFDA before human healthcare pharmaceuticals may be marketed in the U.S. generally involves the following:\n\n \n\n•nonclinical laboratory and, at times, animal testing;\n\n \n\n•adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed\ndrug for its intended use or uses;\n\n \n\n - 13 - \n\n \n\n \n\n•pre-approval inspection of manufacturing facilities and clinical trial sites; and\n\n \n\n•FDA review and approval of an NDA or BLA, which must occur before a drug or biologic product can be marketed\nor sold.\n\n \n\nWe will need to successfully\ncomplete sufficient clinical trials in order to be in a position to submit a BLA or NDA to the FDA. We must reach agreement with the FDA\non the proposed protocols for our future clinical trials in the U.S. A separate submission to the FDA must be made for each successive\nclinical trial to be conducted during product development. Further, an independent IRB for each site proposing to conduct the clinical\ntrial must review and approve the plan for any clinical trial before it commences at that site, and an informed consent must also be obtained\nfrom each study subject. Regulatory authorities, a data safety monitoring board or the sponsor may all suspend or terminate a clinical\ntrial at any time on numerous grounds.\n\n \n\nFor purposes of BLA or NDA\napproval for human health products, human clinical trials are typically conducted in phases that may overlap.\n\n \n\n•Phase I. The drug is initially introduced into healthy human subjects and tested for safety, dosage\ntolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially\nwhen the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted\nin patients.\n\n \n\n•Phase II. This phase involves trials in a limited subject population to identify possible adverse\neffects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage\ntolerance and optimal dosage. Phase II studies may be sub-categorized into Phase IIA studies, which are smaller, pilot studies to evaluate\nlimited drug exposure and efficacy signals, and Phase IIB studies, which are larger studies testing both safety and efficacy more rigorously.\n\n \n\n•Phase III. This phase involves trials undertaken to further evaluate dosage, clinical efficacy\nand safety in an expanded subject population, often at geographically dispersed clinical trial sites. These trials are intended to establish\nthe overall risk/benefit ratio of the product and provide an adequate basis for product labeling.\n\n \n\nAll of these trials must be\nconducted in accordance with Good Clinical Practice (“GCP”) requirements in order for the data to be considered reliable for\nregulatory purposes.\n\n \n\n**New Drug and Biologics License Applications**\n\n \n\nIn order to obtain approval\nto market a pharmaceutical in the United States, a marketing application must be submitted to the FDA that provides data establishing\nto the FDA’s satisfaction the safety and effectiveness of the investigational drug for the proposed indication. Each NDA or BLA\nsubmission requires a substantial user fee payment unless a waiver or exemption applies (such as with the Orphan Drug Designation discussed\nbelow). For fiscal year 2026, the FDA set the application fee at $4,682,003 for new drug applications that require clinical data. The\nmanufacturer and/or sponsor of certain drugs approved under an NDA or BLA is also subject to annual prescription drug program fees, currently\nset at $442,213 per product for fiscal year 2026. These fees are typically increased annually. The NDA or BLA includes all relevant data\navailable from pertinent non-clinical studies and clinical trials, including negative or ambiguous results as well as positive findings,\ntogether with detailed information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other\nthings. Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of the use of a product, or\nfrom a number of alternative sources, including studies initiated by investigators.\n\n \n\nThe FDA will initially review\nthe NDA or BLA for completeness before it accepts it for filing. The FDA has 60 days from its receipt of an NDA or BLA to determine whether\nthe application will be accepted for filing based on the agency’s threshold determination that the application is sufficiently complete\nto permit substantive review. After the NDA or BLA submission is accepted for filing, the FDA reviews the NDA or BLA to determine, among\nother things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in\naccordance with current GMP, or cGMP, to assure and preserve the product’s identity, strength, quality and purity. The FDA may refer\napplications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee,\ntypically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application\nshould be approved and, if so, under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it typically\nconsiders such recommendations carefully when making decisions.\n\n \n\nBased on pivotal clinical\ntrial results submitted in an NDA or BLA, upon the request of an applicant, the FDA may grant a “Priority Review” designation\nto a product, which sets the target date for FDA action on the application at six to eight months, rather than the standard ten to 12\nmonths. The FDA can extend these reviews by three months. Priority Review is given where preliminary estimates indicate that a product,\nif approved, has the potential to provide a significant improvement compared to marketed products or offers a therapy where no satisfactory\nalternative therapy exists. Priority Review designation does not change the scientific/medical standard for approval or the quality of\nevidence necessary to support approval.\n\n \n\nAfter the FDA completes its\ninitial review of an NDA or BLA, it will communicate to the sponsor that the application for the drug will either be approved, or it will\nissue a complete response letter to communicate that the NDA or BLA will not be approved in its current form and inform the sponsor of\nchanges that must be made or additional clinical, nonclinical or manufacturing data that must be received before the application can be\napproved, with no implication regarding the ultimate approvability of the application.\n\n \n\n - 14 - \n\n \n\n \n\nBefore approving an NDA or\nBLA, the FDA will inspect the facilities at which the product is manufactured, even if such facilities are located overseas. The FDA will\nnot approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements\nand are adequate to ensure consistent production of the product within required specifications.\n\n \n\nAdditionally, before approving\nan NDA or BLA, the FDA may inspect one or more clinical sites and manufacturing sites to ensure compliance with GCP and GMP. If the FDA\ndetermines that any of the application, manufacturing process or manufacturing facilities is not acceptable, it typically will outline\nthe deficiencies and often will request additional testing or information. This may significantly delay further review of the application.\nIf the FDA finds that a clinical site did not conduct the clinical trial in accordance with GCP, the FDA may determine that the data generated\nby the clinical site should be excluded from the primary efficacy analyses provided in the NDA or BLA. Additionally, the FDA may identify\ndeficiencies in the manufacturing process and require changes prior to approval. Notwithstanding the submission of any requested additional\ninformation, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.\n\n \n\nThe testing and approval process\nfor a drug requires substantial time, effort and financial resources, and this process may take several years to complete. Data obtained\nfrom clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent\nregulatory approval. The FDA may not grant approval on a timely basis, or at all. We may encounter difficulties or unanticipated costs\nin our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing our products.\n\n \n\nThe FDA may require, or companies\nmay in their own discretion pursue, additional clinical trials after a product is approved. These so-called Phase IV studies may be made\na condition that must be satisfied for continuing drug approval. The results of Phase IV studies can confirm the effectiveness of a product\ncandidate and can provide important safety information. In addition, the FDA has express statutory authority to require sponsors to conduct\npost-market studies to specifically address safety issues identified by the agency. Any approvals that we may ultimately receive could\nbe withdrawn if required post-marketing trials or analyses do not meet the FDA requirements, which would materially harm the commercial\nprospects for AL001 or ALZN002.\n\n \n\nThe FDA also has authority\nto require a Risk Evaluation and Mitigation Strategy (“REMS”), from manufacturers to ensure that the benefits of a drug or\nbiological product outweigh its risks. A sponsor may also voluntarily propose a REMS as part of the NDA or BLA submission. The need for\na REMS is determined as part of the review of the NDA or BLA. Based on statutory standards, elements of a REMS may include “dear\ndoctor letters,” a medication guide, more elaborate targeted educational programs, and in some cases restrictions on distribution.\nThese elements are negotiated as part of the NDA or BLA approval, and in some cases if consensus is not obtained until after the Prescription\nDrug User Fee Act review cycle, the approval date may be delayed. Once adopted, a REMS is subject to periodic assessment and modification.\n\n \n\nEven if AL001 or ALZN002 receives\nregulatory approval, the approval may be limited to specific disease states, patient populations and dosages, or might contain significant\nlimitations on use in the form of warnings, precautions or contraindications, or in the form of onerous risk management plans, restrictions\non distribution, or post-marketing study requirements. Further, even after regulatory approval is obtained, later discovery of previously\nunknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market.\nAny delay in obtaining, or failure to obtain, regulatory approval for AL001 or ALZN002, or obtaining approval only for significantly limited\nuse, would harm our business. In addition, we cannot predict what adverse governmental regulations may arise from future U.S. or foreign\ngovernmental action.\n\n \n\n**Breakthrough Therapy Designation**\n\n \n\nA product can be designated\nas a breakthrough therapy if it is intended to treat a serious condition (which includes Alzheimer’s) and preliminary clinical evidence\nindicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint(s). For purposes\nof breakthrough therapy designation, a clinically significant endpoint generally refers to an endpoint that measures an effect on irreversible\nmorbidity or mortality (“IMM”), or on symptoms that represent serious consequences of the disease. A clinically significant\nendpoint can also refer to findings that suggest an effect on IMM or serious symptoms, including:\n\n \n\n•an effect on an established surrogate endpoint;\n\n \n\n•an effect on a surrogate endpoint or intermediate clinical endpoint considered reasonably likely to predict\na clinical benefit (i.e., the accelerated approval standard); \n\n \n\n•an effect on a pharmacodynamic biomarker (which is a measurable indicator of the disease state) that does\nnot meet criteria for an acceptable surrogate endpoint, but strongly suggests the potential for a clinically meaningful effect on the\nunderlying disease; and\n\n \n\n•a significantly improved safety profile compared to available therapy (e.g., less dose-limiting toxicity\nfor an oncology agent), with evidence of similar efficacy.\n\n \n\n - 15 - \n\n \n\n \n\nA drug that receives a breakthrough\ntherapy designation is eligible for fast-track designation features, intensive guidance on an efficient drug development program and FDA\norganizational commitment involving senior managers. However, we have not yet applied for breakthrough therapy designation nor have we\nreceived any official designation for expedited development. Our product candidates may not qualify for breakthrough therapy designation;\nfurther, even if one or both do qualify for breakthrough therapy designation, it may not actually lead to faster development or expedited\nregulatory review and approval or necessarily increase the likelihood that it will receive FDA approval.\n\n \n\nBased on our preclinical data,\nAL001 has a positive effect on the pharmacodynamic biomarkers of Alzheimer’s. We intend to validate this clinically and, if confirmed,\nwe believe that AL001 is a candidate for breakthrough therapy designation because of its positive effect on a pharmacodynamic biomarker\n(beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s. We also believe that ALZN002 is positioned for\na breakthrough therapy designation because of its positive effect on a pharmacodynamic biomarker (beta-amyloids) and potential for a clinically\nmeaningful effect on Alzheimer’s.\n\n \n\n**Section 505(b)(2) New Drug Applications**\n\n \n\nCompanies may also consider\nseeking FDA approval through the Section 505(b)(2) NDA process if their product candidates are similar to previously approved drugs but\ndiffer in dosage form, strength, route of administration, formulation or indication. Section 505(b)(2) of the Food, Drug, and Cosmetic\nAct was enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984 and is also known as the Hatch-Waxman Amendments.\nThe purpose of Section 505(b)(2) is to allow companies to avoid duplicative testing by allowing applicants to utilize data from previous\nclinical and non-clinical studies in the current NDA submission, when pertinent. The 505(b)(2) application process requires, among other\nthings, the submission of data from studies demonstrating the product’s safety and efficacy for the new indication.\n\n \n\nWe believe that AL001 is positioned\nfor an expedited Section 505(b)(2) regulatory pathway for a new drug. AL001’s active pharmaceutical ingredients (lithium, proline\nand salicylate) are well documented and approved by the FDA. The provisions of 505(b)(2) were created, in part, to help avoid unnecessary\nduplication of studies already performed on a previously approved (“reference” or “listed”) drug. This section\ngives the FDA express permission to rely on data not developed by the NDA applicant. This process can result in a much less expensive\nand much faster route to approval, compared with a traditional development path such as 505(b)(1), while creating new, differentiated\nproducts with tremendous commercial value.\n\n \n\nThe Hatch-Waxman Amendments\npermit companies to rely upon not only certain published nonclinical or clinical studies conducted for an approved product, but also the\nFDA’s conclusions from a prior review of the studies. Additionally, the FDA may require companies to perform further studies to\nsupport changes from the approved product. After completion of the review, the FDA may approve the new product for all or some of the\nlabeled indications for which the reference product has been approved, as well as for any new indication supported by the NDA. While references\nto nonclinical and clinical data not created by the applicant or for which the applicant does not have a right of reference are allowed,\nthe applicant must still submit data related to the manufacturing and quality of the product candidate, such as information about the\ndevelopment, process, stability, qualification and validation.\n\n \n\nIf a company chooses to rely\non the FDA’s conclusions regarding studies conducted for an already approved product, the company is required to provide a certification\nstatement for any patents listed for the approved product in the FDA’s Orange Book publication. Specifically, the applicant must\ncertify that: (i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has\nnot expired but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid\nor will not be infringed by the new product. The FDA will also not approve a Section 505(b)(2) until any non-patent exclusivity period\nfor the reference product has expired, such as the exclusivity granted for obtaining approval of a new chemical entity.\n\n \n\nIf we qualify for the Section\n505(b)(2) regulatory pathway for new drug approvals, we believe we can shorten the development timeline for AL001. However, AL001 may\nnot qualify for expedited development or, if it does qualify for expedited development, it may not actually lead to faster development\nor expedited regulatory review and approval.\n\n \n\n**Disclosure of Clinical Trial Information**\n\n \n\nSponsors of clinical trials\nof certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical trial information\non a public website maintained by the NIH. Information related to the product, patient population, phase of investigation, study sites\nand investigator, and other aspects of the clinical trial is made public as part of the registration. Sponsors are also obligated to disclose\nthe results of these trials after completion. Disclosure of the results of these trials can be delayed until the product or new indication\nbeing studied has been approved. Competitors may use this publicly available information to gain knowledge regarding the design and progress\nof our development programs.\n\n \n\n**The Drug Price Competition and Patent Term\nRestoration Act**\n\n \n\nThe Drug Price Competition\nand Patent Term Restoration Act, also known as the Hatch-Waxman Amendments, requires pharmaceutical companies to divulge certain information\nregarding their products, which has the effect of making it easier for other companies to manufacture generic drugs to compete with those\nproducts.\n\n \n\n - 16 - \n\n \n\n \n\n**Patent Term Extension.**\nAfter receipt of an NDA or BLA approval, owners of relevant drug patents may apply for a patent extension of up to five years. The permissible\npatent term extension is calculated as half of the drug’s testing phase, that is, the time between IND submission and NDA or BLA\nsubmission, and all of the review phase, or the time between either NDA or BLA submission and approval up to a maximum of five years.\nThe time can be shortened if FDA determines that the applicant did not pursue approval with due diligence. The total patent term after\nthe extension may not exceed 14 years.\n\n \n\nFor patents that might expire\nduring the application phase, the patent owner may request an interim patent extension. An interim patent extension increases the patent\nterm by one year and may be renewed up to four times. For each interim patent extension granted, the post-approval patent extension is\nreduced by one year. The director of the U.S. Patent and Trademark Office, or USPTO, must determine that approval of the drug covered\nby the patent for which a patent extension is being sought is likely. Interim patent extensions are not available for a drug for which\nan NDA or BLA has not been submitted.\n\n \n\n**Environmental Regulations.**\nThe U.S. generally requires an environmental assessment, which discusses a company’s proposed action, possible alternatives to the\naction, and whether the further analysis of an environmental impact statement is necessary. Certain exemptions are available from the\nrequirement to perform an environmental assessment and an environmental impact statement. Once an exemption is claimed, a company must\nstate to the FDA that no extraordinary circumstances exist that may significantly affect the environment. We may claim an exemption, under\nthe category for biologic products, from the requirement to provide an environmental assessment and an environmental impact statement\nfor AL001 or ALZN002 and further state to the FDA that, to our knowledge, no extraordinary circumstance exists that would significantly\naffect the environment.\n\n \n\n**FDA Post-Approval Requirements**\n\n \n\nFollowing the approval of\nan NDA or BLA, the FDA continues to require adverse event reporting and submission of periodic reports. The FDA also may require post-marketing\ntesting, known as Phase IV testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions\non an approval that could restrict the distribution or use of the product. In addition, quality control, drug manufacture, packaging,\nand labeling procedures must continue to conform to cGMP after approval. Drug manufacturers and certain of their subcontractors are required\nto register their establishments with FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced\ninspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMP. Accordingly, manufacturers\nmust continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMP. Regulatory\nauthorities may withdraw product approvals or request product recalls if a manufacturer fails to comply with regulatory standards, if\nit encounters problems following initial marketing or if previously unrecognized problems are subsequently discovered.\n\n \n\n**Patient Protection and Affordable Care Act**\n\n \n\nIn March 2010, the Patient\nProtection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or the ACA, which includes\nmeasures that have significantly changed the way healthcare is financed by both governmental and private insurers, became law in the U.S.\nThe ACA is a sweeping measure intended to expand healthcare coverage within the U.S., primarily through the imposition of health insurance\nmandates on employers and individuals and expansion of Medicaid. The ACA has significantly impacted the pharmaceutical industry. The ACA\nrequires discounts under the Medicare drug benefit program and increased rebates on drugs covered by Medicaid. In addition, the ACA imposes\nan annual fee, which increases annually, on sales by branded pharmaceutical manufacturers. At this time, the financial impact of these\ndiscounts, increased rebates and fees and the other provisions of the ACA on our business are unclear. However, the fees, discounts and\nother provisions of this law are expected to have a significant negative effect on the profitability of pharmaceuticals.\n\n \n\n**Human Health Product Regulation in the European\nUnion**\n\n \n\nIn addition to domestic regulations,\nwe may eventually become subject, either directly or through our distribution partners, to a variety of regulations in other jurisdictions\ngoverning, among other things, clinical trials and any commercial sales and distribution of our products, if approved.\n\n \n\nWhether or not we obtain FDA\napproval for a product, we must obtain the requisite approvals from regulatory authorities in non-U.S. countries prior to the commencement\nof clinical trials or marketing of the product in those countries. Certain countries outside of the U.S. have a process that requires\nthe submission of a clinical trial application prior to the commencement of human clinical trials. In Europe, for example, a Clinical\nTrial Application (“CTA”) must be submitted to the competent national health authority and to independent ethics committees\nin each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with a country’s requirements,\nclinical trial development may proceed in that country.\n\n \n\nThe requirements and process\ngoverning the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country, even though there\nis already some degree of legal harmonization in the EU Member States resulting from the national implementation of underlying EU legislation.\nIn all cases, the clinical trials are conducted in accordance with GCP and other applicable regulatory requirements.\n\n \n\nTo obtain regulatory approval\nof an investigational drug under European Union regulatory systems, we will be required to submit a marketing authorization application.\nThis application is similar to the BLA in the United States, with the exception of, among other things, country-specific document requirements.\nDrugs can be authorized in the European Union by using (i) the centralized authorization procedure, (ii) the mutual recognition procedure,\n(iii) the decentralized procedure or (iv) the national authorization procedure.\n\n \n\n - 17 - \n\n \n\n \n\nThe European Medicines Agency\n(“EMA”) implemented the centralized procedure for the approval of human drugs to facilitate marketing authorizations that\nare valid throughout the EU. This procedure results in a single marketing authorization granted by the European Commission that is valid\nacross the EU, as well as in Iceland, Liechtenstein and Norway, at times referred to as the European Economic Area. The centralized procedure\nis compulsory for human drugs that: (i) are derived from biotechnology processes, such as genetic engineering; (ii) contain a new active\nsubstance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, diabetes, neurodegenerative diseases, autoimmune\nand other immune dysfunctions and viral diseases; (iii) are officially designated orphan drugs; and (iv) constitute advanced-therapy medicines,\nsuch as gene-therapy, somatic cell-therapy or tissue-engineered medicines. The centralized procedure may at the request of the applicant\nalso be used for human drugs that do not fall within the above mentioned categories if the human drug (a) contains a new active substance\nwhich, on the date of entry into force of Regulation (EC) No. 726/2004, was not authorized in the European Economic Area; or (b) the applicant\nshows that the medicinal product constitutes a significant therapeutic, scientific or technical innovation or that the granting of authorization\nin the centralized procedure is in the interests of patients at European Economic Area level.\n\n \n\nUnder the centralized procedure\nin the European Union, the maximum timeframe for the evaluation of a Marketing Authorization Application by the EMA is 210 days, though\nthe date count stops whenever the Committee for Medicinal Products for Human Use (“CHMP”) asks the applicant for additional\nwritten or oral information, with adoption of the actual marketing authorization by the European Commission thereafter. Accelerated evaluation\nmight be granted by the CHMP in exceptional cases, as when a medicinal product is expected to be of a major public health interest from\nthe point of view of therapeutic innovation, defined by three cumulative criteria: (i) the seriousness of the disease to be treated; (ii)\nthe absence of an appropriate alternative therapeutic approach; and (iii) anticipation of exceptional high therapeutic benefit. In this\ncircumstance, EMA ensures that the evaluation for the opinion of the CHMP is completed within 150 days and the opinion issued thereafter.\n\n \n\nThe Mutual Recognition Procedure\n(“MRP”) for the approval of human drugs is an alternative approach to facilitate individual national marketing authorizations\nwithin the European Union. Essentially, the MRP may be applied for all human drugs for which the centralized procedure is not obligatory.\nThe MRP is applicable to the majority of conventional medicinal products and is based on the principle of recognition of an already existing\nnational marketing authorization by one or more EU Member States.\n\n \n\nThe principal characteristic\nof the MRP is that the procedure builds on an already existing marketing authorization in an EU Member State that is used as reference\nin order to obtain marketing authorizations in other Member States. In the MRP, a marketing authorization for a drug already exists in\none or more EU Member States and subsequently marketing authorization applications are made in other EU Member States by referring to\nthe initial marketing authorization. The EU Member State in which the marketing authorization was first granted will then act as the referenced\nEU Member State. The EU Member States where the marketing authorization is subsequently applied for act as concerned EU Member States.\n\n \n\nThe MRP is based on the principle\nof mutual recognition by EU Member States of their respective national marketing authorizations. Based on a marketing authorization in\nthe reference EU Member State, the applicant may apply for marketing authorizations in other EU Member States. In such case, the reference\nEU Member State will update its existing assessment report about the drug in 90 days. After the assessment is completed, copies of the\nreport are sent to all EU Member States, together with the approved summary of product characteristics, labeling and package leaflet.\nThe concerned EU Member States then have 90 days to recognize the decision of the referenced EU Member State and the summary of product\ncharacteristics, labeling and package leaflet. National marketing authorizations will be granted within 30 days after acknowledgement\nof the agreement.\n\n \n\nIf any EU Member State refuses\nto recognize the marketing authorization by the reference EU Member State on the grounds of potential serious risk to public health, the\nissue will be referred to a coordination group. Within 60 days, EU Member States will, within the coordination group, make all efforts\nto reach a consensus. If this fails, the procedure is submitted to an EMA scientific committee for arbitration. The opinion of this EMA\nCommittee is then forwarded to the Commission, for the start of the decision-making process. As in the centralized procedure, this process\nentails consulting various European Commission Directorates General and the Standing Committee on Human Medicinal Products.\n\n \n\n**Human Health Product Regulation in the Rest\nof World**\n\n \n\nFor countries outside of the\nEU, such as the United Kingdom, Canada, countries in Eastern Europe or Asia, the requirements governing the conduct of clinical trials,\nproduct licensing, pricing and reimbursement vary from country to country. In all cases, the clinical trials are conducted in accordance\nwith GCP and the other applicable regulatory requirements. If we fail to comply with applicable foreign regulatory requirements, we may\nbe subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls,\nseizure of products, operating restrictions and criminal prosecution.\n\n \n\n**Other Regulatory Considerations**\n\n \n\n**Labeling, Marketing\nand Promotion.** Once an NDA or BLA is approved, or just before approval, a product will be subject to certain marketing and promotional\nrequirements. For instance, the FDA closely regulates the post-approval marketing and promotion of pharmaceuticals, including standards\nand regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and\npromotional activities on the internet and elsewhere.\n\n \n\n - 18 - \n\n \n\n \n\nWhile appropriate medical\nprofessionals are free to prescribe any pharmaceutical approved by the FDA for any use, a company can only make claims relating to the\nsafety and efficacy of a pharmaceutical that are consistent with the FDA approval, and is only allowed to actively market a pharmaceutical\nfor the particular indication approved by the FDA. Changes to some of the conditions established in an approved application, including\nchanges in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or BLA or\nNDA/BLA supplement before the change can be implemented. A BLA supplement for a new indication typically requires clinical data similar\nto that in the original application, and the FDA uses the same procedures and actions in reviewing supplements as it does in reviewing\nNDAs.\n\n \n\nIn addition, any claims we\nmake for our products in advertising or promotion must be appropriately balanced with important safety information and otherwise be adequately\nsubstantiated. Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising, injunctions\nand potential civil and criminal penalties. Government regulators recently have increased their scrutiny of the promotion and marketing\nof pharmaceuticals.\n\n \n\n**Anti-Kickback and False\nClaims Laws.**In the United States, we are subject to complex laws and regulations pertaining to healthcare “fraud and abuse,”\nincluding, but not limited to, the federal Anti-Kickback Statute, the federal False Claims Act, state false claims acts and anti-kickback\nstatutes, and other state and federal laws and regulations. The Anti-Kickback Statute makes it illegal for any person, including a prescription\ndrug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer, or pay any remuneration that is\nintended to induce the referral of business, including the purchase, order, or prescription of a particular pharmaceutical, for which\npayment may be made under a federal healthcare program, such as Medicare or Medicaid.\n\n \n\nThe federal False Claims Act\nprohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid)\nclaims for items or services, including pharmaceuticals, that are false or fraudulent, claims for items or services not provided as claimed,\nor claims for medically unnecessary items or services.\n\n \n\nMany states have similar anti-kickback\nor false claims statutes that can be even broader than their federal counterparts. There is also an increasing number of state laws that\nrequire manufacturers to make reports to states on pricing and marketing information. Many of these laws contain ambiguities as to what\nis required to comply with the laws. In addition, a federal law known as the Physician Payments Sunshine Act requires pharmaceutical manufacturers\nto track and report to the federal government certain payments and other transfers of value made to physicians and teaching hospitals\nand to disclose any physician ownership in the previous calendar year. The data is published annually in a publicly searchable database.\nThese laws may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us.\nIn addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to\nthe penalty provisions of the pertinent state, and soon federal, authorities.\n\n \n\n**Other Healthcare Laws\nand Compliance Requirements.** In the United States, our activities are potentially subject to regulation by various federal, state\nand local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services (formerly the Health Care Financing\nAdministration), other divisions of the U.S. Department of Health and Human Services (e.g., its Office of Inspector General), the U.S.\nDepartment of Justice and individual U.S. Attorney offices within the Department of Justice, and state and local governments. For example,\nsales, marketing and scientific/educational grant programs must comply with the anti-fraud and abuse provisions of the Social Security\nAct, the False Claims Act, the privacy provisions of the Health Insurance Portability and Accountability Act, and similar state laws,\neach as amended. Pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act\nof 1990 and the Veterans Health Care Act of 1992, or VHCA, each as amended, among others. If products are made available to authorized\nusers of the Federal Supply Schedule of the General Services Administration, additional laws and requirements will apply. Under the VHCA,\ndrug companies are required to offer certain drugs at a reduced price to a number of federal agencies including U.S. Department of Veteran\nAffairs and U.S. Department of Defense, the Public Health Service and certain private Public Health Service designated entities in order\nto participate in other federal funding programs including Medicare and Medicaid. Legislative changes also require that discounted prices\nbe offered for certain U.S. Department of Defense purchases for its TRICARE program via a rebate system. Participation under the VHCA\nrequires submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry\ninto government procurement contracts governed by the Federal Acquisition Regulations.\n\n \n\nIn order to distribute products\ncommercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors of pharmaceutical\nproducts in a state, including, in certain states, manufacturers and distributors that ship products into the state even if such manufacturers\nor distributors have no place of business within the state. Some states also impose requirements on manufacturers and distributors to\nestablish the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new\ntechnology capable of tracking and tracing product as they move through the distribution chain. Several states have enacted legislation\nrequiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public\ndisclosures on sales, marketing, pricing, clinical trials and other activities or register their sales representatives. Other legislation\nhas been enacted in certain states prohibiting pharmacies and other healthcare entities from providing certain physician prescribing data\nto pharmaceutical companies for use in sales and marketing and prohibiting certain other sales and marketing practices. All of our activities\nare potentially subject to federal and state consumer protection, unfair competition and other laws and regulations.\n\n \n\n - 19 - \n\n \n\n \n\n**Our Intellectual Property**\n\n \n\nWe are able to protect our\ntechnology from unauthorized use by third parties only to the extent that it is covered by valid and enforceable patents, is effectively\nmaintained as a trade secret or is protected by confidentiality agreements. Accordingly, patents or other proprietary rights are an essential\nelement of our business. Currently, we do not own a patent, although we do possess a license for an immunotherapy technology and three\nlicenses for a lithium, salicylate and proline cocrystal technology from the Licensor.\n\n \n\nPatents extend for varying\nperiods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection\nis obtained. The actual protection afforded by a patent, which can vary from country to country, depending on the type of patent, the\nscope of its coverage and the availability of legal remedies in the country.\n\n \n\nA summary of the licensed\npatents is as follows:\n\n \n\n \n\n \n\nWhile trade secret protection\nis an essential element of our business and we take security measures to protect our proprietary information and trade secrets, there\ncan be no assurance that our unpatented proprietary technology will afford us significant commercial protection. We seek to protect our\ntrade secrets by entering into confidentiality agreements with third parties, employees and consultants. However, it is possible that\nthese agreements may be breached or invalidated, and if so, there may not be an adequate corrective remedy available. Accordingly, we\ncannot ensure that our employees, consultants or any third parties will not breach the confidentiality provisions in our contracts, infringe\nor misappropriate our trade secrets and other proprietary rights or that measures we take to protect our proprietary rights will be adequate.\n\n \n\nIn the future, third parties\nmay file claims asserting that our technologies or products infringe on their intellectual property. We cannot predict whether third parties\nwill assert such claims against us or against the licensors of technology licensed to us, or whether those claims will harm our business.\nIf we are forced to defend ourselves against such claims, whether they are with or without merit and whether they are resolved in favor\nof, or against, our licensors or ourselves, we may face costly litigation and the diversion of our management’s attention and resources.\nAs a result of such disputes, we may have to develop costly non-infringing technology or enter into licensing agreements. These agreements,\nif necessary, may be unavailable on terms acceptable to us, or at all.\n\n \n\nWe currently have four trademarks\nregistered with the USPTO that include our corporate name, Alzamend Neuro, two for our corporate slogan and one for our trade name.\n\n \n\n**Competition**\n\n \n\nOur industry is highly competitive\nand subject to rapid and significant technological change. While we have some, albeit limited, development experience and scientific knowledge,\nwe will face competition from both large and small pharmaceutical and biotechnology companies, including specialty pharmaceutical companies\nand generic drug companies, as well as academic institutions, government agencies and research institutions, among others.\n\n \n\nOur competition will be determined\nin part by the potential indications for which our products are developed and ultimately approved by regulatory authorities. It is likely\nthat the timing of market introductions of some of our potential products or our competitors’ products will be an important competitive\nfactor. Accordingly, the speed with which we can develop our products, conduct preclinical studies and clinical trials to obtain approval\nand manufacture or obtain supplies of commercial quantities of any approved products should also be important competitive factors. We\nexpect that competition among products approved for sale will be based on additional factors such as product efficacy, safety, reliability,\navailability, price and patent position.\n\n \n\n - 20 - \n\n \n\n \n\n**Employees and Human Capital Resources**\n\n \n\nAs of April 30, 2026, we had\nfour full-time employees and two part-time employees. We also utilize independent consultants to assist us in our medical research and\ndevelopment projects.\n\n \n\nOur human capital resources\nobjectives include identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.\nThe principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based\nand cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals\nto perform to the best of their abilities and achieve our objectives.\n\n \n\n - 21 -"}