Alzamend Neuro Regains Compliance with Nasdaq Listing Standards

Rhea-AI Summary

Alzamend Neuro (Nasdaq: ALZN) has regained compliance with Nasdaq's minimum stockholders' equity requirement of $2,500,000. This follows a period of non-compliance and a subsequent appeal to a Hearings Panel. The company had been at risk of delisting but was granted an extension until September 23, 2024, to demonstrate compliance.

Alzamend has secured a $25 million securities purchase agreement for Series A Convertible Preferred Stock, with $8 million already purchased and additional funds expected. This financial arrangement has helped the company meet the equity requirement.

CEO Stephan Jackman expressed satisfaction with regaining compliance and reaffirmed the company's focus on initiating five phase II clinical trials of AL001 in partnership with Massachusetts General Hospital in 2025.

Positive

• Regained compliance with Nasdaq listing standards, avoiding potential delisting
• Secured $25 million securities purchase agreement for Series A Convertible Preferred Stock
• $8 million already received from the purchase agreement, with $2 million more expected within 30 days
• Ongoing monthly funding of $1 million in Series A Preferred stock until January 2026
• Plans to initiate five phase II clinical trials of AL001 in 2025

Negative

• Previously faced risk of delisting due to non-compliance with Nasdaq listing requirements
• Reliance on continued funding through securities purchase agreement to maintain compliance

Insights

Financial Analyst

Alzamend Neuro's regaining of Nasdaq compliance is a positive development for the company, albeit with some caveats. The $25 million securities purchase agreement for Series A Convertible Preferred Stock has been important in meeting the $2.5 million minimum stockholders' equity requirement. However, investors should note that only $8 million has been purchased so far, with $2 million expected within 30 days and subsequent $1 million monthly purchases until January 2026.

This structured financing provides short-term stability but also indicates ongoing capital needs. The company's ability to maintain compliance will depend on consistent funding and operational progress. The planned initiation of five phase II clinical trials for AL001 in 2025 suggests potential catalysts ahead, but also implies significant upcoming R&D expenses. Investors should closely monitor the company's cash burn rate and progress in meeting milestones to ensure continued compliance and assess long-term viability.

Biotech Research Analyst

Alzamend Neuro's focus on Alzheimer's disease, bipolar disorder, major depressive disorder and PTSD represents a diverse neuroscience portfolio. The planned initiation of five phase II clinical trials for AL001 in 2025 is ambitious and could provide multiple shots on goal. However, investors should be aware that neuroscience drug development is notoriously challenging, with high failure rates and long development timelines.

The partnership with Massachusetts General Hospital lends credibility to their research efforts. Still, the company's early clinical stage and the competitive landscape in neurodegenerative and psychiatric disorders mean significant risks remain. The success of these trials will be critical for the company's future prospects and potential partnerships or funding opportunities. Investors should closely follow trial designs, patient recruitment progress and any interim data releases as key indicators of AL001's potential.

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”), today announced that it has received formal written notice from The Nasdaq Stock Market, LLC’s Office of General Counsel (“Nasdaq”) that Alzamend has demonstrated compliance with the minimum stockholders’ equity requirement as set forth in Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”), which requires a minimum stockholders’ equity of $2,500,000.

As previously reported, on September 26, 2023, Alzamend was notified by Nasdaq that it did not meet the minimum market value of listed securities requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(b)(2), or any other continued listing standard, such as the Equity Rule, and was provided 180 calendar days, or until March 25, 2024, to regain compliance. Alzamend had not regained compliance by March 25, 2024, and Nasdaq determined to delist Alzamend’s common stock. Alzamend appealed the delisting determination to a Hearings Panel (the “Panel”). In May 2024, the Panel granted Alzamend’s request to continue its listing on The Nasdaq Capital Market, subject to Alzamend demonstrating compliance, on or before September 23, 2024, with the Equity Rule and satisfying all applicable requirements for continued listing on Nasdaq.

Earlier this year, Alzamend entered into a securities purchase agreement to provide for the sale of $25 million of Alzamend’s Series A Convertible Preferred Stock (“Series A Preferred”) over a period of time. To date, the investor has purchased $8 million of Series A Preferred, with (i) an additional $2 million to be funded within the next 30 days, as Alzamend has achieved the milestones for such payment and (ii) the investor is obligated to purchase $1 million of Series A Preferred each month going forward, subject to the terms and conditions set forth in the purchase agreement, until January 2026. Accordingly, on October 14, 2024, the Panel provided Alzamend with written notice that it had regained compliance with the Equity Rule and determined to continue the listing of Alzamend’s securities on Nasdaq.

Stephan Jackman, CEO of Alzamend, stated, “We are very pleased to announce that Alzamend has regained compliance with Nasdaq’s listing standards. We presented a strategic plan of compliance to the Panel at our hearing in May, which we have successfully executed upon. Regaining compliance with Nasdaq listing standards was an important goal for Alzamend, and we appreciate the Panel’s confirmation that we were able to deliver on our commitment. We remain focused on moving forward with our five phase II clinical trials of AL001 in partnership with Massachusetts General Hospital, which we intend to initiate in 2025.”

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 by removing beta-amyloid from the brain. The latter is a second-generation active-immunity approach designed to mitigate the disadvantages of approved passive immunity marketed antibody products, particularly by reducing the required frequency and costs of dosing associated with antibody products. 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/20241015743614/en/

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

Source: Alzamend Neuro, Inc.

FAQ

What was the minimum stockholders' equity requirement Alzamend Neuro (ALZN) had to meet for Nasdaq compliance?

Alzamend Neuro had to meet a minimum stockholders' equity of $2,500,000 to comply with Nasdaq Listing Rule 5550(b)(1).

How much funding has Alzamend Neuro (ALZN) secured through its securities purchase agreement?

Alzamend Neuro has secured a $25 million securities purchase agreement for Series A Convertible Preferred Stock, with $8 million already purchased and additional funds expected.

When does Alzamend Neuro (ALZN) plan to initiate its phase II clinical trials of AL001?

Alzamend Neuro plans to initiate five phase II clinical trials of AL001 in partnership with Massachusetts General Hospital in 2025.

What was the deadline given to Alzamend Neuro (ALZN) by the Nasdaq Hearings Panel to regain compliance?

The Nasdaq Hearings Panel gave Alzamend Neuro until September 23, 2024, to demonstrate compliance with the Equity Rule and satisfy all applicable requirements for continued listing on Nasdaq.