ALZN 10-K & 10-Q changes, risk factors and insider trading

As of April 30, 2025,2026, we had $3.9 million $711,000 in cash and cash equivalents. In February 2025, we entered into a transaction with an investor that resulted in raising an additional $4.0 million subsequent to year end. Based on our current operating plan, we believe that this funding will not be sufficient to fund our operations for the next twelve months. In particular, we need additional funds to allow us to fund Phase II clinical trials for AL001 in Alzheimer’s, BD, MDD and PTSD and to complete the on-going Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type. However, changing circumstances or inaccurate estimates by us may cause us to use capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. For example, our ongoing clinical trial for ALZN002 or our planned clinical trials for AL001 may encounter technical, enrollment or other issues that could cause our development costs to increase more than we expect. We will not have sufficient funds to complete any of these planned or ongoing clinical trials or the clinical development of either AL001 or ALZN002 through regulatory approval. We will need to raise substantial additional capital to complete the development and commercialization of each of those product candidates, which additional capital, if available on reasonable terms if at all, may be raised through the sale of our common stock or other securities or through the entering into of alternative strategic transactions, orwhich could cause our stockholders to incur substantial dilution.

Our future commercial revenues, if if any, will be derived from sales of products that we do not expect to be commercially available for sale for at least the next several years, if ever. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or other operations.

Our independent registered public accounting firm has issued a going concern opinionreport on our financial statements for the year ended April 30, 2025,2026, that contains an emphasis of a matter paragraph expressing substantial doubt thatabout weour canability to continue as ana ongoinggoing businessconcern due to insufficient capital for us to fund our operations. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to successfully raise additional capital, we will need to create and implement alternate operational plans to continue as a going concern, and investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

We are a clinical-stage biopharmaceutical company. We have recently initiated clinical trials for our AL001 and ALZN002 programs. To date, we have not initiated or completed a pivotal clinical trial, obtained marketing approval for any product candidates, manufactured a commercial scale product or arranged for a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization. Our ability to generate revenue depends heavily on, among other developments:

There are certain license fees and milestone payments required to be paid by us to the Licensor,Licensor pursuant to the terms of license agreements we have entered into with the Licensor. The license agreementsagreement for ALZN002 requirerequires us to pay royalty payments of 4% on net sales of products developed from the licensed technology for ALZN002ALZN002, while the license agreements for AL001 require that we pay combined royalty payments of 4.5% on net sales of products developed from the licensed technology for AL001. We have already paid an initial license fee of $200,000 for ALZN002 and an initial license fee of $200,000 for AL001. As an additional licensing fee for the license of ALZN002, the Licensor received 24,0122,668 shares of our common stock. As an additional licensing fee for the license of the AL001 technologies, the Licensor received 14,8531,650 shares of our common stock. Minimum royalties required under the AL001 License Agreements are $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary of the first commercial sale and $100,000 on the third anniversary of the first commercial sale and every year thereafter, for the life of the AL001 License Agreements. Minimum royalties required for ALZN002 are $20,000 on the first anniversary of the first commercial sale, $40,000 on the second anniversary of the first commercial sale and $50,000 on the third anniversary of the first commercial sale and every year thereafter, for the life of the ALZN002 License Agreement. Minimum royalties required under the November AL001 License Agreements are $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary of the first commercial sale and $100,000 on the third anniversary of the first commercial sale and every year thereafter, for the life of the AL001 License Agreements. Minimum royalties for ALZN002 are $20,000 on the first anniversary of the first commercial sale, $40,000 on the second anniversary first commercial sale and $50,000 on the third anniversary of the first commercial sale and every year thereafter, for the life of the ALZN002 License Agreement. Minimum royalties for November AL001 License Agreements are $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary first commercial sale and $100,000 on the third anniversary of the first commercial sale and every year thereafter, for the life of the November AL001 License Agreements .Additionally,Agreements. Additionally, we are required to pay milestone payments on the due dates to the Licensor for the license of the AL001 technologies and for the ALZN002 technology, as follows:

If we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationships with the Licensor, we could lose license rights that are importantcritical to our business.

We are a party to these license agreements with the Licensor and expect to enter into additional license agreements in the future. The existing license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royalty and other obligations on us. If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, we may be required to make certain payments to the Licensor, we may lose the exclusivity of our license, or the Licensor may have the right to terminate the license, in which event we would not be able to develop or market products covered by the license and would be forced to wind downcease our operations. The Licensor or or any future licensor may take any of these actions, including terminating a license agreement. Additionally, the milestone and other payments payments associated with these licenses will make it less profitable for us to develop our product candidates. If the Licensor were to terminate terminate a license agreement for whatever reason, it would materially and adversely affect our business, financial position and future prospects prospects and you would likely lose the entirety of your investment in us.

The development and commercial success of our product candidates will depend on a number of factors, including, without limitation, the following:

A current trend in the U.S. health carehealthcare industry, as well as in other countries around the world, is toward cost containment. Large public and private payers, managed care organizations, group purchasing organizations and similar organizations are exerting increasing influence on decisions regarding the use of, and reimbursement levels for, particular treatments. Third-party payers, such as government programs, including Medicare in the United States, and private health carehealthcare insurers, carefully review and have increasingly been challenging the coverage of, and prices charged for, medical products and services. Many third-party payers limit coverage of or reimbursement for newly-approved healthhealthcare careproducts. products. Reimbursement rates and coverage from private health insurance companies vary depending on the company, the insurance plan and other factors. Cost-control initiatives could decrease the price we or our partners establish for products, which could result in lower product revenue and profitability.

Even if we fully comply with all applicable laws and regulations, the FDA may still determine that our clinical data are insufficient for final approval of an NDA or a BLA. The process required by the FDA and most foreign regulatory authorities before human health carehealthcare pharmaceuticals may be marketed generally involves nonclinical laboratory and, in some cases, animal teststesting; submission of an IND, which must become effective before clinical clinical trials may begin; adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use or uses; pre-approval inspection of manufacturing facilities and clinical trial sites; and FDA approval of an NDA or BLA, which must occur before a drug can be marketed or sold.sold, as discussed above.

Despite billions of dollars invested by the NIH and the biopharmaceutical industry in research programs to develop novel therapeutics for Alzheimer’s, the FDA has hasapproved only approved threefour new drugs for Alzheimer’s since 2003; in June 2021, aducanumab (Biogen, Inc) received approval from the FDA for the treatment of Alzheimer’s using the accelerated approval pathway; in July 2023, Leqembi (Eisai) received full approval by the FDA for treatment of Alzheimer’s; in July 2024, Kisunla (Eli Lilly) received full approval by the FDA for treatment of Alzheimer’s; and in JulyApril 2024,2026, KisunlaAuvelity (EliAxsome LillyTherapeutics) received full approval by the FDA for treatment of Alzheimer’s.agitation associated with Alzheimer’s dementia. Since 2003, many new types and classes of drugs have been developed and tested in Alzheimer’s, including monoclonal antibodies, gamma secretase modulators and inhibitors, β-site amyloid precursor protein cleaving enzyme inhibitors, receptor for advanced glycation end-products inhibitors, nicotinic partial agonists and allosteric modulators, serotonin subtype receptor antagonists, and others. Except for Biogen’s, Eisai’s and Eli Lilly’s approvals,and Axsome Therapeutics’ approvals referred to above, virtually all of these scientific programs have failed in clinical testing.

As a condition of approval of an NDA or a BLA, the FDA may require a REMS to ensure that the benefits of the drug outweigh the potential risks. REMS elements can include medication guides, communication plans for health carehealthcare professionals, and elements to assure safe use (“ETASU”). ETASU’s can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. We may be required to adopt a REMS for AL001 or ALZN002 to ensure that the benefits outweigh the risks of abuse, misuse, diversion and other potential safety concerns. Even if the risk of abuse, misuse or diversion are not as high as for some other products, there can be no assurance that the FDA will approve a manageable REMS for AL001 or ALZN002, which could create material and significant limits on our ability to successfully commercialize AL001 and ALZN002 in the U.S. Delays in the REMS approval process could result in delays in the NDA or BLA approval process, respectively. In addition, as part of the REMS, the FDA could require significant restrictions, such as restrictions on the prescription, distribution and patient use of the product, which could significantly impact our ability to effectively commercialize AL001 or ALZN002, and dramatically reduce their market potential thereby adversely impacting our business, financial condition and results of operations. Even if initial REMS are not highly restrictive, if, after launch, AL001, ALZN002 and other drug candidates were to become subject to significant abuse/non-medical use or diversion from licit channels, this could lead to negative regulatory consequences, including a more restrictive REMS, which could materially and adversely affect our business, results of operations and financial condition.

If we are found in violation of “fraud and abuse” laws, we may be subject to criminal and civil penalties and/or be suspended or excluded from participation in government-run health carehealthcare programs, which may adversely affect our business, financial condition and results of operations.

If we are successful in obtaining marketing approval for our products in the United States and elsewhere, we will be subject to various health carehealthcare “fraud and abuse” laws, including anti-kickback laws, false claims laws and other laws intended to reduce fraud and abuse in government-run healthhealthcare careprograms, programs, which could materially and adversely affect us, particularly upon successful commercialization of our products in the United States. For example, the federal Anti-Kickback Statute makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce the referral of business, including the purchase, order or prescription of a particular drug for which payment may be made under a U.S. health carehealthcare program such as Medicare or Medicaid. Under U.S. federal government regulations, some arrangements, known as safe harbors, are deemed not to violate the Anti-Kickback Statute. Compliance with every element of a safe harbor regulation is required for the arrangement to be protected. However, arrangements that do not comply with a safe harbor are not per se illegal. Instead, they will be analyzed on a case-by-case basis. Although we intend to seek to structure our business arrangements in compliance with all applicable requirements, these laws are broadly written, and it is often difficult to determine precisely how the law will be applied in specific circumstances. Accordingly, it is possible that our practices may be challenged under the Anti-Kickback Statute and similar laws in other jurisdictions.

Further, false claims laws prohibit anyone from knowingly and willfully presenting or causing to be presented for payment to third-party payers, including government payers, reimbursement claims for drugs or services that are false or fraudulent, claims for items or services that were not provided as claimed, or claims for medically unnecessary items or services. Cases have been brought under false claims laws alleging that off-label promotion of pharmaceutical products or the payment of kickbacks by pharmaceutical providers has resulted in the submission of false claims to governmental health carehealthcare programs. Under laws such as the Health Insurance Portability and Accountability Act of 1996 in the United States, we are prohibited from knowingly and willfully executing a scheme to defraud any health carehealthcare benefit program, including private payers, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health carehealthcare benefits, items or services. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and/or exclusion or suspension from government-run healthhealthcare care programs such as Medicare and Medicaid and debarment from contracting with the U.S. and other governments. In addition, in the United States, individuals have the ability to bring actions on behalf of the government and potentially share in the recovery under the federal False Claims Act as well as under state false claims laws.

Many states in the United States have adopted fraud and abuse laws similar to their federal counterparts, including laws similar to the Anti-Kickback Statute, some of which apply to the referral of patients for health carehealthcare services reimbursed by any source, not just governmental payers. In addition, California and some other states in the United States have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America Code on Interactions with Health Care Professionals. In addition, several states impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state. There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement, we could be subject to penalties.

We have yet to receive definitive guidance on the application of fraud and abuse laws to our business. Law enforcement authorities are increasingly focused on enforcing these laws, and it is possible that some of our future practices may be challenged under these laws. While we believe we will be able to structure our business arrangements to comply with these laws, it is possible that the government could in the future allege violations of, or convict us of violating, these laws. If we are found in violation of one of these laws, we could be required to pay a penalty and could be suspended or excluded from participation in certain government-run health carehealthcare programs, and our business, results of operations and financial condition may be materially and adversely affected.

Our future growth and success depend in part on our continued ability to attract, retain and motivate highly qualified management and scientific personnel. We are highly dependent upon our senior management, particularly Stephan Jackman, our Chief Executive Officer, David J. Katzoff, our Chief Financial Officer, Kenneth S. Cragun, our Senior Vice President of Finance and Henry Nisser, our Executive Vice President and General Counsel. The loss of services of any of these individuals could delay or prevent the successful development of our current or future product pipeline, completion of our planned development efforts or the commercialization of AL001 or ALZN002. It is possible that current or former employees of ours could put forward claims for an alleged right to our patents and demand compensation therefor. If one or more of the key personnel were to leave us and engage in competing operations, our business, results of operations and financial condition could be materially and adversely affected.

We expect to face substantial competition, with other entities possibly discovering, developing or commercializing products before, or more successfully than,than we do.

The development, FDA approval and commercialization of new therapy and vaccine products is highly competitive. We will face competition with respect to AL001, ALZN002 and any other product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. In addition to existing therapeutic treatments for the indications we are targeting with AL001 and ALZN002, we also face potential competition from other drug candidates in development by other companies. Our potential competitors include, without limitation, large health carehealthcare companies, such as AbbVie, Axesome Therapeutics, Inc., Biogen Inc., Eisai Co., Ltd., Takeda Pharmaceuticals, Bristol Myers Squibb, Pfizer Inc., Merck & Co., Inc., Sanofi S.A., Eli Lilly and Company, Bayer AG, Novartis AG, Johnson and Johnson and Boehringer Ingelheim GmbH. We also know of several smaller early-stage companies that are developing products for use in our segment of the market. Some of the potential competitive compounds referred to above are being developed by large, well-financed and established pharmaceutical and biotechnology companies or have been partnered with such companies, which may give them development, regulatory and marketing advantages over our products.

We rely on the FDA to assist with the development of our product candidates. The ability of the FDA to review and approve new drug products can be affected by a variety of factors outside of our control, including government budget and funding levels, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for our product candidates to be reviewed and/or potentially approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 35 days beginning on December 22, 2018, and 43 days between October 1 and November 12, 2025, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. If the timing of FDA’s review and approval of new products is delayed, the estimated timing of our drug development program may be delayed, which would materially increase costs of drug development and harm our operations or business.

We are not in compliance with the Nasdaq continued listing requirements. If we are unable to complyregain withcompliance with, or thereafter maintain compliance with, the continued continued listing requirements of The Nasdaq Capital Market, our commonCommon stockStock could be delisted, which would adversely affect our commonCommon Stock’s stock market price and liquidity and reduce our ability to raise capital.

One element of our strategy is to expand our pipeline of pharmaceuticals based on our technology and advance these product candidates through clinical development for the treatment of a variety of indications. Although our research and development efforts to date have resulted in a number of development programs based on our technology, we may not ultimately be able to develop product candidates that are safe and effective. Even if we are successful in continuing to expand our pipeline, the potential product candidates that we identify may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance. In addition, if we attempt to apply our technology to develop product candidates for indications outside of Alzheimer’s, we will need to evaluate the preclinical data and determine if additional data are needed to support the new indications. If we do not successfully develop and commercialize product candidates based upon our technological approach, we will not be able to obtain product revenue in future periods, which would make it unlikelyimpossible thatfor weus wouldto ever achieve profitability.

We have identified a material weaknessweaknesses in our internal control over financial reporting.reporting Ifand ourmay remediation of this material weakness is not effective, or if we experienceidentify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controlscontrols, which may result in thematerial future,misstatements we may not be able to accurately or timely reportof our financial conditionstatements or resultscause of operations, which may adversely affect investor confidence in us and,to asfail a result, the value ofto meet our commonperiodic stock.reporting obligations.

Our certificate of incorporation, bylaws and certain provisions of Delaware law could have the effect of making it more difficult or more expensive for a third party to acquire, or discouraging a third party from attempting to acquire, control of our company,Company, even when these attempts may be in the best interests of our stockholders. For example, we are governed by Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales or other transactions resulting in a financial benefit to the stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or within the past three years did own, 15% or more of the corporation’s outstanding voting stock. These provisions provisions may have the effect of delaying, deferring or preventing a change in control of our company.Company.

We announced that we successfully identified a maximum tolerated dose (“MTD”) for development of AL001 from a multiple-ascending dose study as assessed by an independent safety review committee. This dose, providing lithium at a lithium carbonate equivalent dose of 240 mg 3-times daily (“TID”), is designed to be unlikely to require lithium therapeutic drug monitoring (“TDM”). Also, this MTD is risk mitigatedrisk-mitigated for the purpose of treating fragile populations, such as Alzheimer’s patients.

Based on the results from our Phase IIA MAD study, we plan to initiate five clinical trials to determine relative increased lithium levels in the brain compared to a marketed lithium salt for healthy subject and patients diagnosed with mild to moderate Alzheimer’s, BD, MDD and PTSD, based on published mouse studies that predict that lithium can be given at lower doses for equivalent therapeutic benefit when treating with AL001. For example, the goal is to replace the amount of lithium needed for maintenance treatment of BD with a clinically relevant, lower AL001 lithium carbonate equivalent lithium dose. Such lithium dose mitigation could redefine the landscape of neuropsychiatric, neurodegenerative, neurodegenerative, and neurological treatment practices. In August 2024, we announced that we had partnered with Massachusetts General Hospital to serve as the CRO for these clinical trials.

On September 28, 2022, we submitted an Investigational New Drug (“IND”) application to the U.S. Food and Drug Administration (the “FDA ”) for ALZN002 and received a “study may proceed” letter on October 31, 2022. The product candidate is an immunotherapy vaccine designed to treat mild to moderate dementia of the Alzheimer’s type. ALZN002 is a proprietary “active” immunotherapy product, which means it is produced by each patient’s immune system. It consists of autologous DCs that are activated white blood cells taken from each individual patient so that they can be engineered outside of the body to attack Alzheimer’s-related amyloid-beta proteins. These DCs are pulsed with a novel amyloid-beta peptide (E22W) designed to bolster the ability of the patient’s immune system to combat Alzheimer’s, with the goal being to foster tolerance to treatment for safety purposes while stimulating the immune system to reduce the brain’s beta-amyloid protein burden, resulting in reduced Alzheimer’s signs and symptoms. Compared to passive immunization treatment approaches that use foreign blood products (such as monoclonal antibodies), active immunization with ALZN002 is anticipated to offer a more robust and long-lasting effect on the clearance of amyloid. This could provide a safer approach due to its reliance on autologous immune components, using each individual patient’s own white blood cells rather than foreign cells and/or blood products.

On April 3, 2023, we announced the initiation of a Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type. The purpose of this trial is to assess the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that of a placebo in 20-30 subjects with mild to moderate morbidity. The primary goal of this clinical trial is to determine an appropriate dose of ALZN002 for treatment of patients with Alzheimer’s in a larger Phase IIB efficacy and safety clinical trial. On February 13, 2024, we received notice from Biorasi, LLC (“Biorasi”), the company weformerly engaged as our contract research organization (“CRO”), Biorasi, LLC (“Biorasi”) that Biorasi was terminating our contract with them.Biorasi. We are currently pursuing the engagement of a replacement CRO. Due to the scientific and operational complexities of the ALZN002 trial, along with the limited number of CROs with the expertise and capacity to complete the trial, we have experienced a delay in engaging a new CRO. We do not expect to restart this trial in first quarter of 2027.

Results of Operations for the Year Ended April 30, 20252026 Compared to the Year Ended April 30, 20242025

During the years ended April 30, 20252026 and 2024,2025, we incurred professional fees of $656,000$625,000 and $2.9 million,$656,000, respectively, which were primarily comprised of professional fees attributed to various types of scientific services, including FDA consulting services. The decrease relates to lower professional fees incurred during the year ended April 30, 2025,2026, compared to professional fees incurred for the preparation for clinical trials for AL001 and ALZN002 during the year ended April 30, 2024.2025.

During the years ended April 30, 20252026 and 2024, 2025, we incurred clinical trial fees of $716,000$2.9 million and $3.2 million,$716,000, respectively. Clinical trial fees for the year ended April 30, 2026 were for our Phase IIB clinical trial for AL001 for healthy subjects. Clinical trial fees for the year ended April 30, 2025 2025 were for our Phase IIA clinical trial for AL001. Clinical trial fees for the year ended April 30, 2024 were $1.9 million for our Phase IIA clinical trial for AL001 and $1.3 million for our Phase I clinical trial for ALZN002.

During the years ended April 30, 20252026 and 2024,2025, we incurred stock-based compensation expense of $325,000$661,000 and $741,000,$325,000, respectively, related to stock option grants to executives,employees, employeesdirectors and consultants. The decreaseincrease in general and administrative stock-based compensation expense for the year ended April 30, 20252026, was a result of fewerthe vesting of newly granted stock options vesting during the period compared to the prior year period.options.

Our inability to continue as a going concern could have a negative impact on our company, including our ability to obtain needed financing. We intend to finance our future development activities and our working capital needs largely through the sale of equity securities with some additional funding from other sources, including debt financing, until such time as funds provided by operations are sufficient to fund working capital requirements. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern. As of April 30, 2025,2026, we had cash of $3.9 million$711,000 and an accumulated deficit of $58.5$67.3 million. We have incurred recurring losses and reported lossesa loss for the year ended April 30, 20252026 totaling $4.5$8.8 million. In the past, we have financed our operations principally through sales of equity securities and debt instruments.

We intend to develop and commercialize therapeutics and vaccines that are better than existing treatments and have the potential to significantly improve improve the lives of individuals afflicted by Alzheimer’s, BD, MDD and PTSD. To achieve these goals, we are pursuing the following key business strategies:

On May 5, 2022, we initiated a multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic clinical trial of AL001 in patients with mild to moderate Alzheimer’s and healthy subjects. We completed the Phase IIA clinical trial in March 2023 and announced positive topline data in June 2023, followed by the full data set in October 2024.2023.

We announced that we successfully identified a maximum tolerated dose (“MTD”) for development of AL001 from a multiple-ascending dose study as assessed by an independent safety review committee. This dose, providing lithium at a lithium carbonate equivalent dose of 240 mg 3-times daily,daily (“TID”), is designed to be unlikely to require lithium therapeutic drug monitoring (“TDM”). Also, this MTD is risk-mitigated for the purpose of treating fragile populations, such as Alzheimer’s patients.

Based on the results from our Phase IIA MAD study, we plan to initiate five clinical trials to determine relative increased lithium levels in the brain compared to a marketed lithium salt for healthy subject and patients diagnosed with mild to moderate Alzheimer’s, BD, MDD and PTSD, based on published mouse studies that predict that lithium can be given at lower doses for equivalent therapeutic benefit when treating with AL001. For example, the goal is to replace the amount of lithium needed for maintenance treatment of BD with a clinically relevant, lower AL001 lithium carbonate equivalent lithium dose. Such lithium dose mitigation could redefine the landscape of neuropsychiatric, neurodegenerative, neurodegenerative, and neurological treatment practices. In August 2024, we announced that we had partnered with Massachusetts General Hospital to serve as the contract research organization (“CRO”) for these clinical trials.

On September 28, 2022, we submitted an Investigational New Drug (“IND”) application to the U.S. Food and Drug Administration (the “FDA”) for ALZN002 and received a “study may proceed” letter on October 31, 2022. The product candidate is an immunotherapy vaccine designed to treat mild to moderate dementia of the Alzheimer’s type. ALZN002 is a proprietary “active” immunotherapy product, which means it is produced by each patient’s immune system. It consists of autologous dendritic cells (“DCs”) that are activated activated white blood cells taken from each individual patient so that they can be engineered outside of the body to attack Alzheimer’s-related amyloid-beta proteins. These DCs are pulsed with a novel amyloid-beta peptide,peptide E22W,(E22W) designed to bolster the ability of the patient’s immune system to combat Alzheimer’s, with the goal being to foster tolerance to treatment for safety purposes while stimulating the immune system to reduce the brain’s beta-amyloid protein burden, resulting in reduced Alzheimer’s signs and symptoms. Compared to passive immunization treatment approaches that use foreign blood products (such as monoclonal antibodies), active immunization with ALZN002 is anticipated to offer a more robust and long-lasting effect on the clearance of amyloid. This could provide a safer approach due to its reliance on autologous immune components, using each individual patient’s own white blood cells rather than foreign cells and/or blood products.

On April 3, 2023, we announced the initiation of a Phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type. The purpose of this trial is to assess the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that of a placebo in 20-30 subjects with mild to moderate morbidity. The primary goal of this clinical trial is to determine an appropriate dose of ALZN002 for treatment of patients with Alzheimer’s in a larger Phase IIB efficacy and safety clinical trial. On February 13, 2024, we received notice from the company we engaged as CRO, Biorasi, LLC (“Biorasi”), thatthe Biorasicompany wasformerly engaged as our contract research organization (“CRO”), terminating our contract with them.Biorasi. We are currently pursuing the engagement of a replacement CRO. Due to the scientific and operational complexities of the ALZN002 trial, along with the limited number of CROs with the expertise and capacity to complete the trial, we have experienced a delay in engaging a new CRO. We do not expect to restart this trial until the second quarter of 2027.

The continuation of our current plan of operations with respect to initiatingcompleting our IND applications and conducting the series of human clinical trials for each of our therapeutics requires us to raise additional capital to fund our operations.

Results of Operations for the Three Months Ended JanuaryJuly 31, 2026 and 2025

The following table summarizes the results of our operations for the three months ended JanuaryJuly 31, 2026 and 2025:

We currently have only two product candidates, AL001 and ALZN002. These products are in the clinical stage of development and will require extensive clinical study, review and evaluation, regulatory review and approval, significant marketing effortsefforts, whether we or a third party conducts such efforts, and substantial investment before either or both of them, and any respective successors, will provide us with any revenue. We did not generate any revenues during the three months ended JanuaryJuly 31, 2026 and 2025, and we do not anticipate that we will generate revenue for the foreseeable future.

Research and development expenses for the three months ended JanuaryJuly 31, 2026 and 2025 were $1.3$1.1 million and $447,000,$1.7 million, respectively. As reflected in the table below, research and development expenses primarily consisted of professional fees and clinical trial fees:

During the three months ended JanuaryJuly 31, 2026 and 2025, we incurred professional fees of $255,000$146,000 and $135,000,$74,000, respectively, which were primarily comprised of professional fees attributed to various types of scientific services, including FDA consulting services. The increase relates to higher professional fees required to support the current and upcoming clinical trial activities.

During the three months ended JanuaryJuly 31, 2026 and 2025, we incurred clinical trial fees of $1.0 million$929,000 and $298,000,$1.7 million, respectively. The increase in clinicalClinical trial fees relates tofor the AL001three months ended July 31, 2026 were for our Phase IIB clinical study on healthy humanBD subjects conducted with Massachusetts General Hospital,MGH, which was completedwe expect to complete in NovemberSeptember 2026. Clinical trial fees for the three months ended July 31, 2025 were for our Phase IIA brain imaging study with MGH which completed during the three months ended July 31, 2025.

During the three months ended JanuaryJuly 31, 2026 and 2025, we incurred other fees of $7,000$5,000 and $14,000,$6,000, respectively, which were primarily comprised of scientific materials required for our clinical trials.

General and administrative expenses for the three months ended JanuaryJuly 31, 2026 and 2025 were $919,000$1.9 million and $590,000,$959,000, respectively. As reflected in the table below, general and administrative expenses primarily consisted of the following expense categories: salaries and benefits; professional fees; insurance; stock-based compensation expense; marketing fees; and board of director fees. For the three months ended JanuaryJuly 31, 2026 and 2025, the remaining general and administrative expenses of $111,000$162,000 and $116,000,$102,000, respectively, primarily consisted of payments for filing fees, transfer agent fees, travel and entertainment and other office expenses, none of which was significant individually.

During each of the three months ended ended JanuaryJuly 31, 2026 and 2025, we incurred salaries and benefits of $310,000$222,000 and $227,000,$228,000, respectively. TheWe increasereduced inour salariesheadcount andby benefitsone waspart-time due mainly to higher bonuses paid.employee. As of JanuaryJuly 31, 2026, we had four full-time and two part-time employees.

During the three months ended JanuaryJuly 31, 2026 and 2025, we incurred professional fees of $337,000$1.4 million and $62,000,$333,000, respectively. During the three months ended JanuaryJuly 31, 31, 2026, we incurred $295,000$1.3 million in legal fees, $24,000$85,000 in audit fees, $16,000$19,000 in tax preparation fees and $6,000 in investor relationrelations fees. fees and $1,000 in consulting fees. During the three months ended JanuaryJuly 31, 2025, we incurred $35,000$183,000 in legal fees, $22,000$78,000 in audit feesfees, and $5,000$60,000 in investor relations fees and $12,000 in tax preparation fees. The increase in professional fees was due mainly to higher legal, audit and tax preparation fees, partially offset by lower investor relations fees. The increase in legal fees, whichfees was a result of litigationincreased activity in our lawsuit against Biorasi for terminating their agreement. The trial in that lawsuit has commenced and is expected to be completed by the CRO from the terminationend of December our ALZN002 clinical trial.2026.

During the three months ended JanuaryJuly 31, 2026 and 2025, we incurred insurance expenseexpenses of $59,000$56,000 and $60,000, respectively, which waswere primarily directors’ and officers’ insurance.

During the three months ended JanuaryJuly 31, 2026 and 2025, we incurred general and administrative stock-based compensation expense of $9,000$71,000 and $81,000,$43,000, respectively, related to stock option grants and restricted stock grants to executives, employees and consultants. The decreaseincrease in stock-based compensation expense for the three months ended JanuaryJuly 31, 2026,2026 was a result of fewera greater number of stock optionsoption vesting during the period compared to the prior year period.vesting.

During the three months ended JanuaryJuly 31, 2026,2025, we incurred marketing fees of $50,000,$150,000, which primarily represented expenses related to the marketing and branding of our company. We did not incur any marketing fees forduring the three months ended JanuaryJuly 31, 2025.2026.

The accompanying condensed financial statements have been prepared assuming that we will continue as a going concern. We have incurred recurring net losses and our operations have not providedgenerated any cash flows. We believe that we will continue to incur operating and net losses each quarter until at least the time we begin significant deliveries of our products. We believe our current cash on hand is insufficient to fund our planned operations through one year after the date the condensed financial statements are issued. These factors create substantial doubt about our ability to continue as a going concern for at least one year after the date that our condensed financial statements are issued.

Our inability to continue as a going concern could have a negative impact on our company, particularly if we are unable to obtain neededthe requisite financing. We intend to finance our future development activities and our working capital needs largely through the sale of equity securities with some additional funding from other sources, including debt financing, until such time as funds provided by operations are sufficient to fund working capital requirements. Our condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern. As of JanuaryJuly 31, 2026, we had cash of $2.7 million, working capital of $1.8 million, stockholders’ equity of $2.2$7.6 million and an accumulated deficit of $64.4$70.3 million. We have incurred recurring losses and reported losses for the three and nine months ended JanuaryJuly 31, 2026 totaling $2.2 million and $5.9 million, respectively.$3.0 million. In the past, we have financed our operations principally through salesissuances of equity securities and debt instruments.

We will need to obtain substantial additional funding in the future for our clinical development activities and continuing operations. If we are unable to raise capital when needed or on favorable terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts. Our future capital requirements will depend on many factors, including: