Alzamend Neuro Announces Initial Closing of Private Placement

Rhea-AI Summary

Alzamend Neuro announced the initial closing of a private placement, securing $500,000 from an investor. The total agreement allows for up to $25 million in preferred shares. Proceeds will fund clinical trials for treatments targeting Alzheimer's, bipolar disorder, major depressive disorder, and PTSD. The investor also received warrants for 800,000 shares of common stock, with potential for up to 20 million more if the full $25 million is invested. Additional funding milestones are tied to regulatory filings and partnership agreements. The initial funds include $311,356.16 from a converted term note. This financing supports ongoing clinical trials, including a Phase I/IIA trial of an Alzheimer's vaccine.

Positive

• Secured $500,000 in initial funding with potential for up to $25 million.
• Funding will support clinical trials for Alzheimer's, BD, MDD, and PTSD treatments.
• Investor received warrants for 800,000 shares, with potential up to 20 million shares.
• Initial funds include $311,356.16 from a converted term note, showing investor confidence.
• Phase I/IIA clinical trial for an Alzheimer's vaccine continues with this funding.

Negative

• Reliance on future funding milestones tied to regulatory and partnership achievements.
• Potential dilution of common stock with warrants for up to 20 million shares.
• Initial funds are relatively small compared to the total $25 million agreement.

Insights

Financial Analyst

The announcement of Alzamend Neuro's initial closing of a private placement is significant. With an institutional investor committing up to $25 million, this influx of capital is important for a clinical-stage biopharmaceutical company. Alzamend plans to use these funds to advance their clinical trials and for working capital. This is a positive indication for stakeholders, as it suggests strong support from the investor community.

Financial Implications: The immediate receipt of $500,000 and the structured future payments provide a steady cash flow. This will help Alzamend manage its operational costs and continue its R&D efforts without financial strain. The issuance of preferred shares and warrants also indicates a confidence from the investor in Alzamend's long-term prospects.

Potential Risks: The staggered nature of the investment, contingent on specific milestones, means any delays or failures in achieving these could impact the full disbursement. Additionally, the dilution from the warrants could affect existing shareholders.

Industry Context: Within the biopharmaceutical industry, securing funding is essential to sustain lengthy and expensive R&D processes. Given the competitive landscape in Alzheimer's and other neurological disorders, this funding puts Alzamend in a stronger position to compete.

Medical Research Analyst

From a clinical perspective, the funding will significantly accelerate Alzamend's ongoing trials. The focus on conditions such as Alzheimer's, bipolar disorder, major depressive disorder and PTSD indicates a broad therapeutic pipeline. The mention of a potential next-generation lithium product that doesn't require therapeutic drug monitoring is particularly noteworthy. This could represent a substantial improvement over current treatments, which often have a narrow therapeutic window and require regular blood monitoring.

Clinical Impact: Advancing their Phase I/IIA trial for an immunotherapeutic vaccine against Alzheimer's is promising. If successful, it could offer a novel treatment option that moves beyond symptom management to potentially modifying the disease course.

Challenges: Clinical trials are inherently risky, with high failure rates. The success of these trials will heavily influence Alzamend's future prospects and investor confidence. The rigorous process of regulatory approval also means that even promising results can take years to translate into marketable products.

• Investor had agreed to purchase up to $25 million of preferred shares
• Alzamend expects to use proceeds to further its clinical trials and working capital purposes

ATLANTA--(BUSINESS WIRE)-- Alzamend Neuro, Inc. (Nasdaq: ALZN) (“Alzamend”), a clinical-stage biopharmaceutical company focused on developing novel products for the treatment of Alzheimer’s disease (“Alzheimer’s”), bipolar disorder (“BD”), major depressive disorder (“MDD”) and post-traumatic stress disorder (“PTSD”), announced today that it closed upon the initial tranche of a private placement (the “Private Offering”) pursuant to the Securities Purchase Agreement (the “Agreement”) with an institutional investor (the “Investor”).

On May 10, 2024, the Investor purchased 50 shares of Alzamend’s Series A Convertible Preferred Stock (the “Preferred Shares”) for $500,000 in the Private Offering, of which $311,356.16 (which included accrued but unpaid interest) was paid by the Investor by the surrender for cancellation of a term note issued by the Company to the Purchaser on April 29, 2024 in the principal face amount of $310,000. Concurrently with the initial closing of the Offering, the Investor purchased an additional 50 Preferred Shares in a registered direct offering for $500,000 (the “Registered Direct Offering”). The Investor also received warrants to purchase 800,000 shares of Alzamend common stock in the Private Offering.

Pursuant to the Agreement, the Investor agreed to purchase up to $25 million Preferred Shares, of which $500,000 were in the Registered Direct Offering, and up to $24.5 million will be purchased in the Private Offering, of which $1.5 million will be upon filing of a resale registration statement (the “Registration Statement”), $2.5 million within 30 days after effectiveness of the Registration Statement, $2.0 million within 60 days after effectiveness of the Registration Statement and the execution of a partnership agreement with a nationally renowned research facility for a clinical trial, and $1.0 million on each monthly anniversary of the effectiveness of the Registration Statement. In addition, the Investor will receive warrants to purchase an aggregate of 20 million shares of Alzamend common stock if the full amount of the Preferred Shares are purchased.

“This closing, together with completion of the Private Offering, will help us further our clinical trials,” said Stephan Jackman, CEO of Alzamend. “We are working diligently towards completing the next milestone. If we can develop a next-generation lithium product that would not require therapeutic drug monitoring, it would constitute a major improvement over current lithium-based treatments and positively impact the 43.5 million Americans afflicted with Alzheimer’s, BD, MDD and PTSD. Moreover, this funding will enable us to continue our Phase I/IIA safety/tolerability/efficacy clinical trial of our immunotherapeutic vaccine, a potential cure for Alzheimer’s.”

Additional information regarding the securities described above and the terms of the Private Offering are included in an amended Current Report on Form 8-K/A filed with the United States Securities and Exchange Commission on May 10, 2024.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of shares of Alzamend’s common stock in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

For more information on Alzamend, stockholders, investors, and any other interested parties may read Alzamend’s public filings and press releases available under the Investor Relations section at https://www.alzamend.com/ or available at https://www.sec.gov/.

About Alzamend Neuro

Alzamend Neuro is a clinical-stage biopharmaceutical company focused on developing novel products for the treatment of Alzheimer’s, BD, MDD and PTSD. Our mission is to rapidly develop and market safe and effective treatments. Our current pipeline consists of two novel therapeutic drug candidates, AL001 - a patented ionic cocrystal technology delivering lithium via a therapeutic combination of lithium, salicylate and L-proline, and ALZN002 - 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. Both of our product candidates are licensed from the University of South Florida Research Foundation, Inc. pursuant to royalty-bearing exclusive worldwide licenses.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” or similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they are made, and Alzamend undertakes no obligation to update any of them publicly in light of new information or future events. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors. More information, including potential risk factors, that could affect Alzamend’s business and financial results are included in Alzamend’s filings with the U.S. Securities and Exchange Commission. All filings are available at www.sec.gov and on Alzamend’s website at www.Alzamend.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514391603/en/

Email: Info@Alzamend.com or call: 1-844-722-6333

Source: Alzamend Neuro, Inc.

FAQ

What did Alzamend Neuro announce on May 10, 2024?

Alzamend Neuro announced the initial closing of a private placement, securing $500,000 from an investor.

How much funding did Alzamend Neuro secure initially under the private placement?

Alzamend Neuro secured $500,000 initially under the private placement.

What is the stock symbol for Alzamend Neuro?

The stock symbol for Alzamend Neuro is ALZN.

How much total funding is Alzamend Neuro expecting from the private placement?

Alzamend Neuro expects up to $25 million in funding from the private placement.

What will Alzamend Neuro use the proceeds for?

Alzamend Neuro plans to use the proceeds to fund clinical trials and for working capital purposes.

What did the investor receive in addition to preferred shares?

The investor received warrants to purchase 800,000 shares of Alzamend common stock.

What future milestones affect the additional funding for Alzamend Neuro?

Additional funding is tied to regulatory filings and partnership agreements with research facilities.

What clinical trials will be supported by the new funding?

Funding will support clinical trials for treatments targeting Alzheimer's, BD, MDD, and PTSD.

What is the significance of the Phase I/IIA trial mentioned in the announcement?

The Phase I/IIA trial aims to test the safety, tolerability, and efficacy of an Alzheimer's vaccine.