ALZN US Equity☆

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended April 30, 2022

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

For the

transition period from _______________ to _______________

Commission file number 001-40483

ALZAMEND NEURO, INC.

(Exact name of registrant

as specified in its charter)

Securities registered under Section 12(b) of the

Act:

Title of Each Class Trading Symbol Name of each exchange on which registered

Common Stock, $0.0001 par value per share ALZN NASDAQ Capital Market

Securities registered under Section 12(g) of the

Act: None

Indicate

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ̈Noþ

Indicate

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange

Act. Yes ̈Noþ

Indicate

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding year (or for such shorter period that the registrant was required to file such reports), and

(2) has been subject to such filing requirements for the past 90 days. YesþNo ̈

Indicate

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule

405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant

was required to submit such files). YesþNo ̈

Indicate by check mark whether the registrant

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”

and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈ Accelerated filer ̈

Non-accelerated filer þ Smaller reporting company þ

Emerging growth company þ

If

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ̈

Indicate

by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of

its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public

accounting firm that prepared or issued its audit report. ̈

Indicate

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ̈Noþ

The aggregate market value of the common stock

held by non-affiliates of the registrant, based on the closing price of the shares of common stock on October 31, 2021 (the last business

day of the registrant’s most recently completed second fiscal quarter), as reported by The Nasdaq Stock Market LLC on such date

was approximately $109.1 million. Shares of the registrant’s common stock held by each executive officer and director and by each

other person who may be deemed to be an affiliate of the registrant have been excluded from this computation. This calculation does not

reflect a determination that certain persons are affiliates of the registrant for any other purpose.

There were 95,481,790 shares of common stock outstanding

as of July 19, 2022.

Documents incorporated by reference: None

ALZAMEND NEURO, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED APRIL 30, 2022

INDEX

Page

PART I

Item 1. Business 2

Item 1A. Risk Factors 22

Item 1B. Unresolved Staff Comments 47

Item 2. Properties 47

Item 3. Legal Proceedings 47

Item 4. Mine Safety Disclosures 47

PART II

Item 6. [Reserved] 48

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 59

Item 8. Financial Statements and Supplementary Data 59

Item 9A. Controls and Procedures 59

Item 9B. Other Information 61

Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections 61

PART III

Item 10. Directors, Executive Officers and Corporate Governance 62

Item 11. Executive Compensation 67

Item 12. Security Ownership of Certain Beneficial Owners and Management 73

Item 14. Principal Accountant Fees and Services 77

PART IV

Item 15. Exhibit and Financial Statement Schedules 78

Signatures 80

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (the “Annual

Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of

the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. We have

attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “expects,”

“can,” “continue,” “could,” “estimates,” “expects,” “intends,”

“may,” “plans,” “potential,” “predict,” “should” or “will” or

the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may

cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or

activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations

reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Our expectations are as of the date this Annual Report is filed, and we do not intend to update any of the forward-looking statements

after the date this Annual Report is filed to confirm these statements to actual results, unless required by law.

This Annual Report also contains estimates and

other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves

a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified

the statistical and other industry data generated by independent parties and contained in this Annual Report and, accordingly, we cannot

guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions

and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a

high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere

in this Annual Report. These and other factors could cause results to differ materially from those expressed in the estimates made by

the independent parties and by us.

RISK FACTOR SUMMARY

Below is a summary of

the principal factors that make an investment in our common stock speculative. This summary does not address all of the risks that we

face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under

the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report and our

other filings with the Securities and Exchange Commission (the “SEC”), before making investment decisions regarding our common

stock.

PART I

ITEM 1. BUSINESS

In this Annual Report,

unless the context requires otherwise, references to the “Company,” “Alzamend,” “we,” “our company”

and “us” refer to Alzamend Neuro, Inc., a Delaware corporation.

Company Overview

We

are an early clinical-stage biopharmaceutical company focused on developing novel products for the treatment of Alzheimer’s disease

(“Alzheimer’s”), bipolar disorder, major depressive disorder (“MDD”) and post-traumatic stress disorder

(“PTSD”). With our two product candidates, we aim to bring treatments or cures to market as quickly as possible. Far too many

individuals, patients and caregivers suffer from the burden created by these devastating, and often fatal, diseases. Our primary target,

Alzheimer’s, was among the most-feared diseases (second only to cancer) among Americans, according to a 2011 survey by the Harvard

School of Public Health. Alzheimer’s is also the sixth leading cause of death in the United States according to a 2021 report from

the Alzheimer’s Association, a nonprofit that funds research. Existing Alzheimer’s treatments only temporarily relieve symptoms

but do not slow or halt the progression of the disease, which currently affects roughly 6.2 million Americans and that number is expected

to grow to 13 million individuals by 2050. Alzheimer’s also impacts more than 11 million Americans who provide an estimated 16 billion

hours of unpaid care per year, valued at $272 billion, according to data provided by the Alzheimer’s Association. In 2022, the estimated

healthcare costs for treating individuals with Alzheimer’s in the United States will be $321 billion, including $206 billion in

Medicare and Medicaid payments. These costs could rise to as high as $1 trillion per year by 2050 if no permanent treatment or cure for

Alzheimer’s is found, the Alzheimer’s Association reported.

Our

pipeline consists of two novel therapeutic drug candidates:

Our most advanced

product candidate (lead product) licensed and in clinical development in humans is an ionic cocrystal of lithium for the treatment of

Alzheimer’s, bipolar disorder, MDD and PTSD. Based on our preclinical data, AL001 treatment prevents cognitive deficits, depression

and irritability in APPSWE/PS1dE9 mice, and is superior in improving associative learning and memory and irritability compared with lithium

carbonate treatments, supporting the potential of this lithium formulation for the treatment of Alzheimer’s, bipolar disorder, MDD

and PTSD in humans. Lithium has been marketed for more than 35 years and human toxicology regarding lithium use has been well characterized,

potentially mitigating the regulatory burden for safety data.

The

results of randomized, placebo-controlled, clinical trials of lithium in the treatment of patients with Alzheimer’s dementia and

subjects with mild cognitive impairment have been widely published. Clinical studies have indicated that lithium administered at doses

lower than those used for affective disorders can favorably impact Alzheimer’s outcomes. A study by O.V. Forlenza, et al., entitled

“Disease-Modifying Properties of Long-Term Lithium Treatment for Amnestic Mild Cognitive Impairment: Randomized Controlled Trial,”

appearing in the British Journal of Psychiatry (2011) reported that lithium was superior to a placebo, evidencing a slower decline of

cognitive function as measured by the Alzheimer’s Disease Assessment Scale cognitive subscale. Given the absence of adequate treatments

that can slow, halt or even reverse the decline of this highly prevalent disease, the potential efficacy of lithium in the long-term management

of Alzheimer’s may positively impact public health. There is an unmet medical need for safe and effective Alzheimer’s treatments,

particularly for treatments with neuroprotective properties.

There

is increasing evidence to suggest that depressive illness, particularly in the elderly, is associated with neuronal cell loss. These findings

suggest that lithium may exert some of its long-term beneficial effects in the treatment of affective disorders via underappreciated neuroprotective

effects. Molecular biology and animal studies have also suggested that lithium may offer protection against Alzheimer’s. Given the

absence of other adequate treatments, the potential efficacy of lithium in the long-term treatment of neurodegenerative disorders may

be warranted.

Following

Phase III clinical trials in humans, we intend to seek approval to commercialize AL001 via a New Drug Application (“NDA”).

As one of the initial steps of the NDA process, we submitted a pre-Investigational New Drug (“pre-IND”) briefing package to

the U.S. Food and Drug Administration (“FDA”) in July 2019 that argued against the need for any further preclinical safety

studies. We submitted an Investigational New Drug (“IND”) application to the FDA on June 30, 2021. On July 28, 2021, the FDA

responded to our IND and stated that we may proceed with Phase I clinical trials in humans. We initiated our Phase I clinical trial on

September 13, 2021. We completed our Phase I clinical trial in March 2022 and initiated a Phase IIA clinical trial in May 2022.

The ongoing Phase IIA study

is evaluating the safety and tolerability of AL001 under multiple-dose, steady-state conditions and is determining the maximum tolerated

dose in patients diagnosed with mild to moderate Alzheimer’s. The lithium and salicylate components of AL001 are to be given within

the amounts already approved for use in patients for other indications. Up to 40 subjects will complete the Phase IIA trial. The maximum

tolerated dose will then be used for further studies. Topline data are expected in December 2022 from this study.

Based on our preclinical

data, AL001 has a positive effect on the pharmacodynamic biomarkers of Alzheimer’s. We propose to validate this clinically and if

confirmed, we believe that AL001 is a candidate for breakthrough therapy designation because of its positive effect on a pharmacodynamic

biomarker (beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s. A drug that receives a breakthrough therapy

designation is eligible for fast-track designation features, intensive guidance on an efficient drug development program and FDA organizational

commitment involving senior managers. However, we have not yet applied for breakthrough therapy designation nor have we received any official

designation for expedited development. Our product candidate may not qualify for breakthrough therapy designation; further, even if it

does qualify for breakthrough therapy designation, it may not actually lead to faster development or expedited regulatory review and approval

or necessarily increase the likelihood that it will receive FDA approval.

Additionally,

we believe that AL001 is positioned for an expedited Section 505(b)(2) regulatory pathway for new drug. AL001’s active pharmaceutical

ingredients (lithium, proline and salicylate) are well documented and approved by the FDA. The provisions of 505(b)(2) were created, in

part, to help avoid unnecessary duplication of studies already performed on a previously approved (“reference” or “listed”)

drug. This section gives the FDA express permission to rely on data not developed by the NDA applicant. This process can result in a much

less expensive and much faster route to approval, compared with a traditional development path such as 505(b)(1), while creating new,

differentiated products with tremendous commercial value. If we successfully obtain a breakthrough therapy designation and the Section

505(b)(2) regulatory pathway for new drug approvals, we believe we can shorten the development timeline for AL001. However, our product

candidate may not qualify for expedited development or, if it does qualify for expedited development, it may not actually lead to faster

development or expedited regulatory review and approval.

We believe that

our ability to re-engineer lithium solid dosage forms in order to optimize performance has the potential to address a wide range of clinical

applications ranging from neurodegenerative disorders, not merely Alzheimer’s, but also amyotrophic lateral sclerosis (known as

ALS and Lou Gehrig’s disease), Huntington’s disease, multiple sclerosis, Parkinson’s disease and traumatic brain injury,

to more psychiatric conditions such as bipolar disorder, MDD, mania, PTSD and suicidality. This novel approach is intended to achieve

the desired therapeutic outcome of enhanced penetration through the blood-brain barrier and sustained brain lithium concentrations while

systemic exposures (and toxicities) are mitigated for other organ systems. The optimal modified-release lithium dosing approach should

avoid acutely toxic peak concentrations in blood, as well as in the brain, and should maintain such blood concentrations for a predictable,

clinically relevant time, with overall low systemic exposures that mitigate the potential for adverse events. We anticipate that the lithium

delivery system will be adaptable to a dosing regimen that maintains therapeutic brain lithium concentrations consistently for the longest

possible time while allowing only modest exposures and providing adequate recovery periods between doses for other organ systems.

We

have an additional preclinical candidate for Alzheimer’s, AL002, which has transitioned from early-stage development to an extensive

program of preclinical study and evaluation that was completed on May 31, 2021, and was followed by a comprehensive report prepared by

Charles River Laboratories, Inc., an independent preclinical service provider, received on July 23, 2021. We submitted a pre-IND meeting

request for AL002 and supporting briefing documents to the Center for Biological Evaluation and Research of the FDA on July 30, 2021.

We received a written response to relating to the pre-IND from the FDA providing a path for Alzamend’s planned clinical development

of AL002 on September 30, 2021. The FDA agreed to allow Alzamend to submit an IND to conduct a combined Phase I/II study. We anticipate

submitting an IND to initiate a Phase I/II study for AL002 in September 2022.

Our Business Strategy

We intend to develop

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

afflicted by Alzheimer’s, bipolar disorder, MDD and PTSD. To achieve these goals, we are pursuing the following key business strategies:

Our Development Pipeline

The

following chart provides an overview of the current development stages of our therapeutic product candidates.

Our Proprietary Technology

AL001 Drug Candidate

Our

lead product candidate that we have licensed and have begun clinical development in humans is an ionic cocrystal of lithium for the treatment

of Alzheimer’s, bipolar disorder, MDD and PTSD. Lithium salts have a long history of human consumption beginning in the 1800s. In

psychiatry, they have been used to treat mania and as a prophylactic for depression since the mid-20th century. Today, lithium salts are

used as a mood stabilizer for the treatment of bipolar disorder. Although the FDA has approved no medications as safe and effective treatments

for suicidality, lithium has proven to be the only drug that consistently reduces suicidality in patients with neuropsychiatric disorders.

Despite these effective medicinal uses, current FDA-approved lithium pharmaceutics (lithium carbonate and lithium citrate) are limited

by a narrow therapeutic window that requires regular blood monitoring of plasma lithium levels and blood chemistry by a clinician to mitigate

adverse events. Because conventional lithium salts (carbonate and citrate) are eliminated relatively quickly, multiple administrations

throughout the day are required to safely reach therapeutic plasma concentrations. Existing lithium drugs, such as lithium chloride and

lithium carbonate, suffer from chronic toxicity, poor physicochemical properties and poor brain bioavailability. Because lithium is so

effective at reducing manic episodes in patients with bipolar disorder, it is still used clinically despite its narrow therapeutic index.

This has led researchers to begin to look for alternatives to lithium with similar bioactivities.

Scientists from

the University of South Florida have developed a new lithium cocrystal composition and method of preparation that, under certain clinical

and/or testing conditions, have been shown to allow for lower dosages to achieve therapeutic brain levels of lithium for psychiatric disorders,

which could lead to a broadening of lithium’s therapeutic index. Our studies and/or testing have indicated that the compound offers

improved physiochemical properties compared to existing forms of lithium, giving it the potential to be developed as an anti-suicidal

drug and for use against mood disorders.

Recent

evidence suggests that lithium may be efficacious for both the treatment and prevention of Alzheimer’s. Unlike traditional medications

which only address a single therapeutic target, lithium appears to be neuroprotective through several modes of action. For example, recent

studies have indicated that it exerts neuroprotective effects, in part, by increasing a brain-derived neurotrophic factor leading to restoration

of learning and memory. Another neuroprotective mechanism of lithium indicated by recent studies is the attenuation of the production

of inflammatory cytokines like IL-6 and nitric oxide in activated microglia. Results from recent clinical studies suggest that lithium

treatment may reduce dementia development while preserving cognitive function and reducing biomarkers associated with Alzheimer’s.

The novel ionic

cocrystal of lithium (AL001), which was designed, synthesized and characterized by a team of inventors from the University of South Florida

has been shown to exhibit improved nonclinical pharmacokinetics compared to currently FDA-approved lithium products and is also bioactive

in many in vitro models of Alzheimer’s. AL001 may constitute a means of treating Alzheimer’s, bipolar disorder, MDD and PTSD.

Our preclinical studies encompassed the treatment of 28 transgenic (or genetically modified) and 10 non-transgenic mice with lithium carbonate

and AL001. In particular, female APPSWE/PS1dE9 mice at 4 months of age were fed with either regular chow (Tg-Ctrl, n=8) or chow that contained

lithium carbonate (LC, 0.05% equivalent to 83 mg/kg/day, n=6), or lithium salicylate (LS, 0.20% equivalent to 325 mg/kg/day, n=6), or

lithium salicylate proline co-crystal, AL001 (AL001, 0.35% equivalent to 583 mg/kg/day, n=8) for 9 months. In addition, aged-matched non-

transgenic background control mice (B6C3F1/J, Non-Tg-Ctrl, n=10) were fed regular chow for 9 months as control. Each treatment group was

subject to a battery of behavioral tests at 12 months of age and mice were sacrificed at 13 months of age. The results of our preclinical

studies, conducted from May 2016 to June 2017, are summarized below:

In

analyzing the preclinical study results, a p-value is used to determine the probability as to whether the difference between two data

sets is due to chance. The smaller the p-value, the more likely the differences are not due to chance alone. In general, if the p-value

is less than or equal to 0.05, the outcome is considered statistically significant. The FDA’s evidentiary standard of efficacy generally

relies on a p-value of less than or equal to 0.05. A p-value greater than 0.05 is considered statistically non-significant. As shown above,

all of the results of our preclinical studies were statistically significant compared to the control group.

On September 13,

2021, we initiated a randomized, balanced, Phase I, single-dose, open-label, two-treatment, two-period, two- sequence, crossover, relative

bioavailability study to investigate lithium pharmacokinetics and safety of AL001 formulation compared to a marketed immediate release

lithium carbonate formulation in healthy subjects. The primary objective of this study was to assess the relative bioavailability of the

AL001 lithium formulation relative to a marketed lithium carbonate formulation in healthy subjects for the purpose of determining potential

clinically safe and effective AL001 dosing in future studies. Additionally, we wanted to characterize safety and tolerability of the tested

formulations under the conditions of this study. This was a first-in-human study of the AL001 formulation; this trial was designed to

assess the relative bioavailability of the AL001 lithium formulation compared to a marketed lithium carbonate formulation in at least

24 completed healthy subjects (30 subjects were to be enrolled) for the purpose of determining potential clinically safe and effective

AL001 dosing in future studies. The AL001 lithium content was nearly half of the reference lithium carbonate capsule dosage as it was

expected that treatment of frail Alzheimer’s patients will require half the lithium dose used for treatment of bipolar/affective

disorders. Lithium carbonate 300 mg (Reference product) was given as a single dose in this study; this is often used as a starting dose

for treatment of bipolar/affective disorders when given three times daily. The shape of the AL001 lithium plasma concentration versus

time curve was unknown prior to this study. Also unknown were the AL001 rate and extent of lithium absorption. The Phase I study was completed

in March 2022 with the following results:

· AL001 was shown to be safe and well-tolerated in healthy adult subjects;

· No serious adverse events and no deaths were reported during the trial;

On

May 5, 2022, we initiated a multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic study (www.clinicaltrials.gov,

identifier: NCT05363293) of AL001 in patients with mild to moderate Alzheimer’s with the following objectives:

o Facilitate recruitment into subsequent AL001 clinical trials; and

A

product can be designated as a breakthrough therapy if it is intended to treat a serious condition (for which the FDA considers Alzheimer’s)

and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically

significant endpoint(s). For purposes of breakthrough therapy designation, a clinically significant endpoint generally refers to an endpoint

that measures an effect on irreversible morbidity or mortality (“IMM”), or on symptoms that represent serious consequences

of the disease. A clinically significant endpoint can also refer to findings that suggest an effect on IMM or serious symptoms, including:

• an effect on an established surrogate endpoint;

Based

on our preclinical data, AL001 has a positive effect on the pharmacodynamic biomarkers of Alzheimer’s. As a result, we believe that

if the data from AL001 in the aforementioned Phase II study provides confirmation of the pre-clinical data, i.e., positive effect on a

pharmacodynamic biomarker (beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s, AL001 will be a candidate

for breakthrough therapy designation. If breakthrough therapy designation is granted, it would be eligible for intensive guidance on an

efficient drug development program and FDA organizational commitment involving senior managers. However, we have neither received breakthrough

therapy designation nor have we qualified for expedited development. Our product candidate may not qualify for breakthrough therapy designation;

further, even if it does qualify for breakthrough therapy designation, it may not actually lead to faster development or expedited regulatory

review and approval or necessarily increase the likelihood that it will receive FDA approval.

Additionally,

we believe that AL001 is positioned for an expedited Section 505(b)(2) regulatory pathway for new drug. AL001’s active pharmaceutical

ingredients (lithium, proline and salicylate) are well documented and approved by the FDA. The provisions of Section 505(b)(2) were created,

in part, to help avoid unnecessary duplication of studies already performed on a previously approved (“reference” or “listed”)

drug. This section gives the FDA express permission to rely on data not developed by the NDA applicant. This can result in a much less

expensive and much faster route to approval, compared with a traditional development path such as Section 505(b)(1), while creating new,

differentiated products with tremendous commercial value. If we successfully obtain a breakthrough therapy designation and the Section

505(b)(2) regulatory pathway for new drug approvals, we believe we can shorten the development timeline for AL001. However, our product

candidate may not qualify for expedited development or, if it does qualify for expedited development, it may not actually lead to faster

development or expedited regulatory review and approval.

AL001 will require

extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial investment before it or any

successors are likely to provide us with any revenue. As a result, if we do not successfully develop, achieve regulatory approval for

and commercialize AL001, our long-term business plans will not be met, and we will be unable to generate the revenue we have forecast

for the foreseeable future, if any. We do not anticipate that we will generate our maximum revenue for several years, or that we will

achieve profitability for this therapeutic drug candidate until at least a few years after generating material revenue, if at all. If

we are unable to generate revenue or raise substantial additional capital, we will not be able to pursue any expansion of our business

or acquire additional intellectual property, we will not become profitable with this therapeutic drug candidate, and we will be unable

to continue our operations at the currently planned pace, if at all.

AL002 Drug Candidate

The

other product candidate that we have licensed to clinically develop in humans is AL002, a patented method using a mutant peptide sensitized

cell as a cell-based therapeutic vaccine which seeks to restore the ability of the patient’s immunological system to combat Alzheimer’s.

The proposed mechanism of action is through the pulsed-Dendritic Cell (“DC”) activation of T-cells that stimulates the immune

system, resulting in the clearance of brain amyloid. Preclinical studies conducted from April 2005 to July 2010 suggest that the infusion

of transgenic (or genetically modified) mice with AL002-pulsed DCs is associated with lower amyloid burden and improved neuro-behavioral

performance. This is likely to be mediated by an anti-inflammatory effect in addition to the immunogenicity of this therapy.

AL002

is based on the theory that Alzheimer’s symptoms may be caused in large part by plaque deposits that can cluster in the brain composed

of protein fragments called beta-amyloids that build up between nerve cells. One hypothesis is that a special type of immune cell, natural

beta-amyloid antibodies, may play a role in preventing plaque build-up in people without Alzheimer’s. As people age, their immune

systems may degrade, and some people may be unable to produce natural beta-amyloid antibodies, the absence of which leads to the plaque

build-up causing Alzheimer’s.

AL002 is intended

to elicit an immune response to produce anti-amyloid antibodies, which can then neutralize circulated beta-amyloids and prevent additional

plaque build-up. The mutant antigen within AL002 was selected specifically for its high HLA binding affinity, thereby avoiding the need

for an adjuvant, which may cause an adverse (Th1) immune response.

AL002

is an autologous modified DC treatment. More precisely, it is a patient-specific therapy where the patient undergoes leukapheresis, a

nonsurgical treatment used to reduce the quantity of white blood cells in the bloodstream, to isolate peripheral blood monocytes that

are subsequently matured into DCs using an IL4+ GM-CSF cocktail. The DCs are incubated with a modified amyloid beta (Aβ) peptide

(“AL002 peptide”) to sensitize them, and then administered to the same patient.

Significant

evidence has accumulated recently suggesting that immunotherapy is a highly promising modality of treatment in Alzheimer’s. Most

current immune-based active investigations are focused on passive immunization by pre-prepared Aβ antibody administration. Active

immunization may offer additional or more lasting effects on the clearance of amyloid and a safer approach due to its reliance on autologous

immune mechanisms. Further, preliminary evidence suggests a recurrence of the amyloid accumulation after clearance with the immunoglobulins.

A prior attempt at engaging the immune system to treat Alzheimer’s was conducted using the immunization with pre-aggregated synthetic

Aβ (AN-1792) combined with the immunogenic adjuvant QS-21. The Phase IIA study with AN-1792 was terminated by the FDA due to severe

meningoencephalitis in approximately 6% of vaccinated subjects. We believe that this may have been caused by using a strong non-specific

antigenic determinant T-cell epitope in the Aβ 1-42 peptide and the inclusion of a QS21 adjuvant and polysorbate-80 stabilizing agent

in the vaccine formulation.

On

July 23, 2021, we announced that Alzamend received positive toxicology results for AL002 in a good laboratory practices (“GLP”)

toxicology study using a transgenic mouse model of Alzheimer’s. The study was conducted by Charles River Laboratories. AL002

is a patented method using a mutant-peptide sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability of a

patient’s immunological system to combat Alzheimer’s.

A

five-dose GLP study with AL002-sensitized cells was completed using a transgenic (or genetically modified) mouse model of Alzheimer’s to investigate the tolerability of AL002. Single injections were administered on days 1, 30, 50, 70, and 90. The mice were evaluated

for potential toxicity and reversibility of any findings at 75 and 90 days after dosing.

Histopathology

results demonstrate that there was no indication of T-cell infiltration or meningoencephalitis suggesting that AL002 therapy is safe and

tolerable as there were no adverse findings over a 90-day period and 90 days after the last dose. There were no treatment-related mortalities

or reports of adverse effects on clinical observations, body weight parameters, organ weight parameters, clinical pathology parameters,

gross pathology observations, or histopathologic observations during the main study or the recovery phase.

Modified

cell therapies, especially DCs, may provide a safer and more patient-specific active immunization. Ex-vivo modification of DCs as a modality

of treatment has been previously used in oncological therapeutics. It has been shown to be relatively safe and capable of engaging the

immune system to attack the target tissues with success. Its use in Alzheimer’s therapeutics is relatively recent. We are proposing

to conduct a first-in-human Phase I/II study of autologous DC, pulsed with a modified Aβ epitope. Preclinical work supports that

it is associated with positive anti-inflammatory response and a decrease in brain amyloid contents. We anticipate submitting an IND to

initiate a Phase I/II study for AL002 in September 2022.

A product can be

designated as a breakthrough therapy if it is intended to treat a serious condition and preliminary clinical evidence indicates that the

drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint(s). A drug that receives a breakthrough

therapy designation is eligible for fast-track designation features, intensive guidance on an efficient drug development program and FDA

organizational commitment involving senior managers. We believe that AL002 is positioned for a breakthrough therapy designation because

of its positive effect on a pharmacodynamic biomarker (beta-amyloids) and potential for a clinically meaningful effect on Alzheimer’s.

If we successfully acquire a breakthrough therapy designation for new drug approvals, we believe we can shorten the development timeline

for AL002. However, we have neither received breakthrough therapy designation nor qualified for expedited development. Our product candidate

may not qualify for breakthrough therapy designation; further, even if it does qualify for breakthrough therapy designation, it may not

actually lead to faster development or expedited regulatory review and approval or necessarily increase the likelihood that it will receive

FDA approval.

AL002

will require extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial investment before

it or any successors are likely to provide us with any revenue. As a result, if we do not successfully develop, achieve regulatory approval

for and commercialize AL002, our long-term business plans will not be met, and we will be unable to generate the revenue we have forecast

for the foreseeable future, if any. We do not anticipate that we will generate our maximum revenue for several years, or that we will

achieve profitability for this therapeutic drug candidate until at least a few years after generating material revenue, if at all. If

we are unable to generate revenue or raise substantial additional capital, we will not be able to pursue any expansion of our business

or acquire additional intellectual property, we will not become profitable with this therapeutic drug candidate, and we will be unable

to continue our operations at the currently planned pace, if at all.

Intellectual Property

and Licensing Agreements

On June 2, 2018, we entered into two Standard

Exclusive License Agreements with Sublicensing Terms for AL001 with the Licensor and its affiliate, the University of South Florida (the

“AL001 License Agreements”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide licenses limited

to the field of Alzheimer’s, under United States Patent Nos. (i) 9,840,521, entitled “Organic Anion Lithium Ionic Cocrystal

Compounds and Compositions”, filed September 24, 2015 and granted December 12, 2017, and (ii) 9,603,869, entitled “Lithium

Co-Crystals for Treatment of Neuropsychiatric Disorders”, filed May 21, 2016 and granted March 28, 2017.

The AL001 License Agreements 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 AL001. As an additional licensing fee for the license of the AL001 technologies, the Licensor received

2,227,923 shares of our common stock. Minimum royalties for AL001 are $25,000 in 2023, $45,000 in 2024 and $70,000 in 2025 and every year

thereafter, for the life of the AL001 License Agreements.

On May 1, 2016,

we entered into a Standard Exclusive License Agreement with Sublicensing Terms for AL002 with the Licensor (the “AL002 License Agreement”),

pursuant to which the Licensor granted us a royalty bearing exclusive worldwide license limited to the field of Alzheimer’s Immunotherapy

and Diagnostics, under United States Patent No. 8,188,046, entitled “Amyloid Beta Peptides and Methods of Use”, filed April

7, 2009 and granted May 29, 2012.

The AL002 License

Agreement requires us to pay royalty payments of 4% on net sales of products developed from the licensed technology for AL002. We have

already paid an initial license fee of $200,000 for AL002. As an additional licensing fee for the license of AL002, the Licensor received

3,601,809 shares of our common stock. Minimum royalties for AL002 are $20,000 in 2022, $40,000 in 2023 and $50,000 in 2024 and every year

thereafter, for the life of the AL002 License Agreement.

On June 10, 2020, we entered

into two Standard Exclusive License Agreements with Sublicensing Terms for two additional indications of

AL001 with the Licensor (the “June AL001 License Agreements”), pursuant

to which the Licensor granted us a royalty bearing exclusive worldwide

licenses limited to the fields of (i) neurodegenerative diseases excluding Alzheimer’s and (ii) psychiatric diseases and disorders.

The June AL001 License Agreements require

us to pay royalty payments of 3% on net sales of products developed from the licensed technology for AL001 in those fields. We paid an

initial license fee of $20,000 for the additional indications.

These license agreements

have an indefinite term that continue until the later of the date no licensed patent under the applicable agreement remains a pending

application or enforceable patent, the end date of any period of market exclusivity granted by a governmental regulatory body, or the

date on which the licensee’s obligations to pay royalties expire under the applicable license agreement. Under our various license

agreements, if we fail to meet a milestone by its specified date, Licensor may terminate the license agreement. The Licensor was also

granted a preemptive right to acquire such shares or other equity securities that may be issued from time to time by us while the Licensor

remains the owner of any equity securities of our company.

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 AL002 technology, as follows:

Original AL001 License:

Payment Due Date Event

$ 50,000 * Completed September 2019 Pre-IND meeting

$ 65,000 * Completed June 2021 IND application filing

$ 500,000 * Completed March 2022 Upon Completion of first clinical trial

$ 10,000,000 8 years from the effective date of the agreement Upon FDA approval

*Milestone met and completed

AL002 License:

Payment Due Date Event

$ 50,000 * Completed January 2022 Upon IND application filing

*

Milestone met and completed

Additional

AL001 Licenses:

Payment Due Date Event

$ 50,000 Upon IND application filing IND application filing

These

license agreements have an indefinite term that continue until the later of the date no licensed patent under the applicable agreement

remains a pending application or enforceable patent, the end date of any period of market exclusivity granted by a governmental regulatory

body, or the date on which the licensee’s obligations to pay royalties expire under the applicable license agreement.

Market Opportunity

The Alzheimer’s

Association estimates that the cost of caring for people with Alzheimer’s and other dementias will reach $321 billion in 2022, including

$206 billion in Medicare and Medicaid payments, and that by 2050, these costs may rise as high as $1 trillion per year. Alzamend was formed

to develop and commercialize patented intellectual property and treatments for Alzheimer’s, by funding it from preclinical through

clinical trials and ultimately, if successful, make it available to the global market. Additionally, we are supporting ongoing research

at the USF Health College of Medicine and plan to support others with first rights of refusal on technologies for treating terminal diseases.

In

an article jointly issued on April 8, 2016, Allergan and Heptares cited currently significant unmet medical needs and a heavy economic

burden caused by cognitive impairment and dementia across multiple diseases, noting that currently available drugs for the treatment of

Alzheimer’s provide limited and transient effects on cognition. They cite projections of healthcare costs, including nursing home

care, associated with Alzheimer’s and dementia (currently estimated to be in excess of $640 billion for North America, Western Europe,

and Asia-Pacific), that are continuing to grow based on data from the World Health Organization, Alzheimer’s International, the

National Institute of Mental Health and the Lewy Body Dementia Association.

This

medical shortfall puts a spotlight on an urgent need for development of new therapies capable of treating the estimated more than 45 million

people worldwide suffering from Alzheimer’s today, 6.2 million in North America, 7.5 million in Western Europe and 3.6 million in

Asia-Pacific, a number expected to increase to more than 130 million by 2050. Alzheimer’s is the most common cause of dementia,

estimated to be associated with some 60% to 70% of cases. An additional estimated 1.4 million patients in the United States suffer from

Lewy body dementia. We believe that the potential marketplace for a commercialized therapy or treatment would be tremendously significant

with large financial support available from numerous national and international pharmaceutical companies and various governments and worldwide

agencies.

Industry Overview

Currently, Alzheimer’s

is the sixth leading cause of death in the United States and, when extrapolated globally, the market for preventions, treatments and cures

of this crippling disease is massive. Since 1990, life expectancy has increased by six years and the worldwide average continues to increase.

With the increase in the mean age of the population in developed countries, the prevalence of deteriorating neurological diseases has

also increased. According to the Alzheimer’s Association, in the United States alone, one of nine persons over the age of 65 have

Alzheimer’s, with roughly 6.2 million Americans currently living with it. It is estimated that this number will grow to 13 million

by 2050 barring the development of medical breakthroughs to prevent, slow or cure the disease. Many Alzheimer’s related associations

believe the actual number of adults with Alzheimer’s may be much higher since current statistics do not take in account deaths from

complications or from related diseases like pneumonia or heart attack. These death certificates only list the most immediate cause. The

fastest growing age group in the United States is the “over 85” group within which one in three individuals have Alzheimer’s.

Although

deaths from other major causes have decreased significantly, official records indicate that deaths from Alzheimer’s have increased

significantly. Between 2000 and 2019, the number of deaths from Alzheimer’s as recorded on death certificates has more than doubled,

increasing 145.2%, while the number of deaths from the number one cause of death (heart disease) decreased 7.3%.

Every 65 seconds,

someone in the United States develops Alzheimer’s. Of the 10 most fatal diseases in the United States, Alzheimer’s is the

only one with no cure, no known way of deceleration and no known means of prevention. Alzamend was formed to commercialize patented intellectual

property in this space, by funding it from its present state through human clinical trials administered by the FDA and ultimately, if

successful, potentially making it available to the global market.

Alzheimer’s

Alzheimer’s

average annual incidence for individuals aged 65 to 74 was 0.4%. In individuals ages 75 to 84, the annual incidence was 3.2%, and for

ages 85 and older (the “oldest-old”), the incidence was 7.6%. It is estimated that the cost of caring for people with Alzheimer’s

and other dementias will increase from an estimated $305 billion in 2020 to a projected $1.1 trillion per year by 2050 with Medicare and

Medicaid covering approximately 70% of such costs. Over 11 million Americans provide unpaid care for people with Alzheimer’s or

other dementias. The Alzheimer’s Association estimates that, in 2021, caregivers to individuals with Alzheimer’s will provide

15.3 billion hours of care valued at $257 billion.

The cause and progression

of Alzheimer’s are not well understood. Through May 2022, more than 3,793 clinical trials have been or are being conducted to find

ways to treat the disease, but it is unknown if any of the tested treatments will work.

According

to the Alzheimer’s Association, it is widely accepted that, with the increasing trend towards a longer lifespan coupled with the

baby-boomer population approaching retirement, the incidence of Alzheimer’s is likely to double in the next 30 years. The exponential

increase in the expected number of patients presenting with Alzheimer’s not only represents a major area of unmet medical need,

but it also constitutes a significant market opportunity for diagnostics for this disease. Alzheimer’s biomarker sales in 2011 were

reported at $1.5 billion but are expected have doubled in 2018 to over $3 billion. (BCC research 2013, “Advances in biomarker and

monitoring diagnostics: Great markets, not so great health effects” by Bjørn Hofmann PhD and H. Gilbert Welch MD, MPH, 2017).

Current

clinical research focuses on the early phases of the disease. However, to our knowledge, no accurate and convenient tools are available

today for pre-dementia diagnosis of Alzheimer’s to support these efforts. Currently, Alzheimer’s is diagnosed using a process

that combines cognition assessments with imaging and spinal-fluid tests. This diagnostic procedure may last for several months to a year

and is usually initiated late in the disease development.

Several

companies are focusing on blood as a test material. Typically, these companies employ a multi-assay strategy (multiple RNAs or proteins)

combined with advanced statistical tools/algorithms to develop disease-specific diagnostic models.

Alzheimer’s

Therapeutic Landscape

According

to the Alzheimer’s Association, the following is a pictorial representation of the more recent published data encompassing the Alzheimer’s

therapeutics landscape.

There

are currently several experimental therapeutic agents for Alzheimer’s in various stages of development with clinical testing directed

towards amyloid-beta, or Aβ, clearance, and inhibition of Tau protein aggregation or phosphorylated-Tau, or pTau, clearance. In June

2021, the FDA approved Biogen’s Alzheimer’s drug aducanumab, also known as Aduhelm, making it the first medication cleared

by U.S. regulators to reduce amyloid plaques in people living with Alzheimer’s and the first new medication for the disease in nearly

two decades. There were previously no drugs cleared by the FDA that can slow the mental decline from Alzheimer’s, which is the sixth-leading

cause of death in the United States. The FDA approved Biogen’s Alzheimer’s drug Aduhelm, aimed at helping symptoms, not actually

slowing the disease itself. Recent clinical failures involving Aβ clearance highlight the incomplete understanding of the pathological

processes in Alzheimer’s and clearly demonstrate the need for novel strategies to fight the disease.

Clinical Management

We

have retained Rio Pharmaceutical Services and TAMM Net, Inc., to lead, develop and manage our preclinical and clinical efforts, extending

from the current status of each product candidate through the exit or commercialization of the technologies that we have licensed. We

may retain experienced Canadian and European Union consulting firms to commercialize these same technologies for those geographic markets.

Manufacturing

Currently,

we do not have in-house manufacturing capabilities. We have outsourced and expect to continue to outsource the manufacturing of our products

to third party contractors, with special capabilities to manufacture chemical drugs and biologic drug candidates for submission and clinical

testing under FDA guidelines and, for AL001, have received Good Manufacturing Practices, or GMP, material manufactured for clinical trial.

There are several sources of manufacturing available once a therapy or treatment can achieve Phase II study as identified in a publication

by Pharma.org released in 2013 (http://www.phrma.org/sites/default/files/Alzheimer’s%202013.pdf).

Distribution and Marketing

We intend to develop

AL001 and AL002 through successive de-risking milestones towards regulatory approval and seek marketing approval of AL001 and AL002 or

enter into partnering transactions with biopharmaceutical companies seeking to strategically fortify pipelines and, in turn, receiving

funding for the costly later-stage clinical development required to achieve successful commercialization. We do not anticipate selling

products directly into the marketplace, though we may do so depending on market conditions. Our focus is to strategically effect partnering

transactions which will provide distribution and marketing capabilities to sell products into the marketplace.

Government Regulation

Clinical

trials, the pharmaceutical approval process, and the marketing of pharmaceutical products, are intensively regulated in the United States

and in all major foreign countries.

Human

Health Product Regulation in the United States

In the United States,

the FDA regulates pharmaceuticals under the Federal Food, Drug, and Cosmetic Act and related regulations promulgated thereunder. Pharmaceuticals

are also subject to other federal, state, and local statutes and regulations. Failure to comply with applicable U.S. regulatory requirements

at any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial

sanctions. These sanctions could include the imposition by the FDA of an Institutional Review Board, or IRB, a clinical hold on trials,

a refusal to approve pending applications, withdrawal of an approval, warning letters, product recalls, product seizures, total or partial

suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution. Any agency or judicial enforcement

action could have a material adverse effect on us.

The

FDA and comparable regulatory agencies in state and local jurisdictions impose substantial requirements upon the clinical development,

manufacturing and marketing of pharmaceutical products. These agencies and other federal, state and local entities regulate research and

development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, distribution, record keeping,

approval, advertising and promotion of our products.

The

FDA’s policies may change, and additional government regulations may be enacted that could prevent or delay regulatory approval

of new disease indications or label changes. We cannot predict the likelihood, nature or extent of adverse governmental regulation that

might arise from future legislative or administrative action, either in the United States or elsewhere.

Marketing

Approval

The

process required by the FDA before human health care pharmaceuticals may be marketed in the U.S. generally involves the following:

• nonclinical laboratory and, at times, animal tests;

We

will need to successfully complete sufficient clinical trials in order to be in a position to submit a BLA or NDA to the FDA. We will

reach agreement with the FDA on the proposed protocols for our future clinical trials in the U.S. A separate submission to the FDA must

be made for each successive clinical trial to be conducted during product development. Further, an independent IRB for each site proposing

to conduct the clinical trial must review and approve the plan for any clinical trial before it commences at that site, and an informed

consent must also be obtained from each study subject. Regulatory authorities, a data safety monitoring board or the sponsor may each

suspend or terminate a clinical trial at any time on numerous grounds.

For

purposes of BLA or NDA approval for human health products, human clinical trials are typically conducted in phases that may overlap.

All

of these trials must be conducted in accordance with Good Clinical Practice (“GCP”), requirements in order for the data to

be considered reliable for regulatory purposes.

New

Drug and Biologics License Applications

In

order to obtain approval to market a pharmaceutical in the United States, a marketing application must be submitted to the FDA that provides

data establishing to the FDA’s satisfaction the safety and effectiveness of the investigational drug for the proposed indication.

Each NDA or BLA submission requires a substantial user fee payment unless a waiver or exemption applies (such as with the Orphan Drug

Designation discussed below). For fiscal year 2021, the FDA set the application fee at $2,875,842 for new drug applications that require

clinical data. The manufacturer and/or sponsor of certain drugs approved under an NDA or BLA is also subject to annual prescription drug

program fees, currently set at $336,432 per product for fiscal year 2021. These fees are typically increased annually. The NDA or BLA

includes all relevant data available from pertinent non-clinical studies and clinical trials, including negative or ambiguous results