Alzamend Neuro Announces $25 Million Funding Agreement

Alzamend Neuro, Inc. (Nasdaq: ALZN), a clinical-stage biopharmaceutical company specializing in treatments for Alzheimer’s disease, bipolar disorder (BD), major depressive disorder (MDD), and post-traumatic stress disorder (PTSD), announced a new financial arrangement with an institutional investor. The company entered into a Securities Purchase Agreement for the sale of 50 shares of its Series A Convertible Preferred Stock, valued at $10,000 per share, resulting in a total of $500,000.

Furthermore, the investor will also engage in a private placement to purchase an additional 2,450 Preferred Shares. The initial closing will involve the purchase of 50 shares, with the remaining shares purchased over time, potentially culminating in $25 million in funding for Alzamend. These Preferred Shares take precedence over other classes of preferred stock and common stock of the company.

Each Preferred Share can be converted into common stock at a conversion price that is the higher of $0.25 per share or the lower of either $1.50 or 80% of the lowest closing price of the common stock within the three trading days before conversion. These shares come with anti-dilution protections and price adjustments in cases of stock splits or similar events. The Preferred Shares also offer a "full ratchet" price protection if the company issues securities at a lower price than the conversion price. Additionally, these shares will pay a 15% annual dividend, which can be paid either in cash or additional Preferred Shares at the investor's discretion.

The investor will receive unregistered warrants to purchase up to 20 million shares of common stock, assuming the full amount of Preferred Shares is sold. These warrants are exercisable for five years at a price of $1.25 per share and are subject to adjustment.

The closing of these financial transactions is expected around May 10, 2024, subject to customary closing conditions and receipt of third-party consents. The proceeds will be utilized by Alzamend to launch further clinical trials for its two main product candidates and for general working capital needs.

Information about these securities and the financing terms will be detailed in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (SEC).

The Preferred Shares and the common stock issued upon conversion in the registered direct offering are offered under a "shelf" registration statement on Form S-3, previously filed with the SEC and declared effective in August 2023. A final prospectus supplement related to the offering will also be filed with the SEC.

The additional Preferred Shares and Warrants issued in the concurrent private placement are not registered and are issued under Section 4(a)(2) of the Securities Act of 1933 and Regulation D. Therefore, these securities cannot be sold or offered in the U.S. without an effective registration statement or an applicable exemption from registration requirements.

Alzamend Neuro, headquartered in Atlanta, is dedicated to developing innovative treatments for various neurodegenerative and psychiatric disorders. Its product pipeline includes AL001, a patented ionic cocrystal technology combining lithium, salicylate, and L-proline, and ALZN002, a cell-based therapeutic vaccine intended to help the immune system combat Alzheimer’s disease. These candidates are under exclusive worldwide licenses from the University of South Florida Research Foundation, Inc.

Alzamend's mission is to quickly bring safe and effective treatments to market, with the ultimate goal of improving the quality of life for patients suffering from debilitating conditions such as Alzheimer's, BD, MDD, and PTSD.