S-1/A: Alzamend Neuro Seeks to Resell 125 Million Shares of Common Stock Through S-1/A Filing

Alzamend Neuro files an S-1/A registration statement to resell up to 125 million shares of common stock, primarily for the benefit of Orchid Finance LLC.

Summary

• Alzamend Neuro, Inc. has filed an Amendment No. 2 to Form S-1 registration statement with the SEC.
• The filing pertains to the resale of up to 125,000,000 shares of common stock by Orchid Finance LLC.
• These shares include 105,000,000 shares issuable upon conversion of Series A Convertible Preferred Stock and 20,000,000 shares issuable upon exercise of warrants.
• Alzamend Neuro will not receive any proceeds from the sale of these shares by the Selling Stockholder, except if the Selling Stockholder exercises its Warrants.
• The company's common stock trades on The Nasdaq Capital Market under the symbol ALZN, with the last reported sales price on July 2, 2024, being $0.396 per share.
• The company is currently not in compliance with Nasdaq listing requirements and must regain compliance by July 30, 2024, to avoid potential delisting.
• The company is pursuing clinical development of AL001 for Alzheimers, BD, MDD and PTSD treatment and ALZN002 for Alzheimers treatment.
• The company has received study may proceed letters from the FDA for AL001 for BD, MDD and PTSD.
• The company initiated a Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimers type.
• The company is seeking stockholder approval for the issuance of all the shares of Common Stock issuable upon conversion of the Preferred Shares and the exercise of the Warrants in excess of the Nasdaq Limit, which is 19.99% of our shares of Common Stock issued and outstanding on the Execution Date.

Sentiment

Score: 4

Explanation: The document contains both positive and negative elements. The potential for new treatments is positive, but the company's financial situation and Nasdaq compliance issues weigh negatively on the overall sentiment.

Positives

• The company has received study may proceed letters from the FDA for AL001 for BD, MDD and PTSD.
• The company initiated a Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimers type.

Negatives

• Alzamend Neuro is registering for resale up to 125,000,000 shares of its common stock by Orchid Finance LLC.
• The company will not receive proceeds from the sale of shares by the Selling Stockholder, except if the Selling Stockholder exercises its Warrants.
• The last reported sales price of ALZN on July 2, 2024, was $0.396 per share.
• The company must regain compliance with Nasdaq listing requirements by July 30, 2024, to avoid potential delisting.

Risks

• Investing in the Common Stock is highly speculative and involves a high degree of risk.
• The company may not have access to the full amount available under the Purchase Agreement with the Selling Stockholder within the foreseeable future, if at all.
• The Preferred Shares are convertible into our Common Stock at a discount to the market price, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
• The Series A COD contains anti-dilution provisions that may result in the reduction of the Conversion Price in the future.
• We may not receive any additional funds upon the exercise of the Warrants.
• We are not in compliance with the Nasdaq continued listing requirements.
• If we are unable to comply with the continued listing requirements of The Nasdaq Capital Market, our Common Stock could be delisted, which could affect our Common Stocks market price and liquidity and reduce our ability to raise capital.

Future Outlook

The company intends to develop and commercialize therapeutics that are better than existing treatments and have the potential to significantly improve the lives of individuals afflicted by Alzheimers, BD, MDD and PTSD.

Industry Context

The company operates in the biotechnology industry, focusing on developing treatments for neurodegenerative diseases and mental health disorders. The industry is characterized by high risk, long development timelines, and significant regulatory hurdles.

Comparison to Industry Standards

• Alzamend is developing AL001, a patented ionic cocrystal technology delivering a therapeutic combination of lithium, salicylate and proline.
• Lithium is a commonly prescribed drug for manic episodes in BD type 1 as well as maintenance therapy of BD in patients with a history of manic episodes.
• Lithium was the first mood stabilizer approved by the U.S. Food and Drug Administration (FDA) and is still a first-line treatment option (considered the gold standard) but is underutilized perhaps because of the need for TDM.
• Alzamend is also developing ALZN002, a patented method using a mutant peptide sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability of a patients immunological system to combat Alzheimers.

Related Party Transactions

• The Company agreed to pay Ault Lending, LLC, a related party, an origination fee of five percent (5%) of the total gross proceeds received by the Company from the Selling Stockholder upon each purchase of Preferred Shares.

Stakeholder Impact

• Shareholders may experience dilution due to the potential issuance of a large number of shares.
• The company's ability to continue operations and develop its product candidates depends on securing additional funding.
• The success of clinical trials will impact the potential for new treatments for patients with Alzheimers, BD, MDD and PTSD.

Next Steps

• The company intends to initiate clinical trials at the MTD to determine relative increased lithium levels in the brain compared to a marketed lithium salt for BD, MDD and PTSD.
• The company anticipates beginning Phase II studies for the additional indications after we have obtained the necessary financing for the trials and payment to Phase IIA MAD study vendor for the final reports of that study.
• The company is pursuing the engagement of a replacement CRO.
• The company is seeking stockholder approval for the issuance of all the shares of Common Stock issuable upon conversion of the Preferred Shares and the exercise of the Warrants in excess of the Nasdaq Limit, which is 19.99% of our shares of Common Stock issued and outstanding on the Execution Date.

Key Dates

Keywords

Alzamend Neuro, common stock, resale, Orchid Finance LLC, S-1/A, registration statement, ALZN, Nasdaq, AL001, ALZN002, preferred shares, warrants, clinical trials, FDA