Alzamend Neuro (ALZN) risk factors, FY2025 10-K

Risks Related to Our Company, Early Stage of Clinical Development and Financial Condition

1. 01We need to obtain substantial additional funding to complete the development and any commercialization of AL001 and ALZN002. If we are unable to raise this capital when needed, we may be forced to delay, reduce or eliminate our research and development programs and other operations
2. 02Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern
3. 03We are at an early stage of clinical development and currently have no source of near-term revenue and may never become profitable
4. 04We have a limited operating history on which to judge our business prospects and management

Risks Related to Our Product Candidates

1. 05We have both operational and financial milestones that must be met to maintain the licensing rights to our current technology and intellectual property from the Licensor
2. 06$ 10,000,000 Upon FDA NDA approval
3. 07$ 10,000,000 Upon first commercial sale
4. 08$ 16,000,000 First commercial sale
5. 09If 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 important to our business
6. 10We are substantially dependent on the success of our product candidates, which may not receive regulatory approval or be successfully commercialized
7. 11AL001 and ALZN002 may not achieve market acceptance, which would significantly limit our ability to generate revenue
8. 12Problems in the manufacturing process, failure to comply with manufacturing regulations or unexpected increases in manufacturing costs could harm our business, results of operations and financial condition
9. 13Serious adverse events or other safety risks could require us to abandon development and preclude, delay or limit approval of AL001 or ALZN002, or limit the scope of any approved label or market acceptance
10. 14The course of medical treatment for human patients is, and will continue to be, expensive. We expect that most patients and their families will not be capable of paying for our potential products themselves

Risks Related to Development and Regulatory Approval of Our Drug Candidates

1. 15The regulatory approval process is uncertain, requires us to utilize significant resources, and may prevent us or our future commercial partners from obtaining approvals for the commercialization of AL001 or ALZN002
2. 16There is a high rate of failure for drug candidates proceeding through clinical trials
3. 17Most attempts at drug approval for Alzheimer’s have failed
4. 18Clinical trials for AL001 or ALZN002 can be expensive, time consuming, uncertain and susceptible to change, delay or termination
5. 19The occurrence of any of the foregoing could have a material adverse effect on our business, results of operations and financial condition. See the risk factor “There is a high rate of failure for drug candidates proceeding through clinical trials” above
6. 20In summary, we cannot guarantee that our product candidates will receive breakthrough therapy designations and, even if one does, we cannot guarantee that such designations will have any bearing on the FDA’s review or approval of our product candidates
7. 21AL001 or ALZN002 and any of our future product candidates, if approved, may cause or contribute to adverse medical events that we are required to report to the FDA and regulatory authorities in other countries and, if we fail to do so, we could be subject to sanctions that would materially harm our business
8. 22Legislative or regulatory reforms with respect to products may make it more difficult and costly for us to obtain regulatory clearance or approval of AL001, ALZN002 or any of our future product candidates and to produce, market, and distribute our products after clearance or approval is obtained
9. 23The anticipated development of a REMS for AL001 or ALZN002 could cause delays in the approval process and would add additional layers of regulatory requirements that could impact our ability to commercialize AL001 and ALZN002 in the United States and reduce their market potential
10. 24If 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 care programs, which may adversely affect our business, financial condition and results of operations

Risks Related to Our Business and Industry

1. 25If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop AL001, ALZN002 or any future product candidates, conduct our in-licensing and development efforts or commercialize AL001, ALZN002 or any of our future product candidates
2. 26We expect to face substantial competition, with other entities possibly discovering, developing or commercializing products before, or more successfully than, we do
3. 27Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent our product candidates from being developed or commercialized in a timely manner, which could negatively impact our business

Risks Related to Our Intellectual Property

1. 28We may be forced to litigate to enforce or defend our intellectual property rights, or the intellectual property rights of our licensors
2. 29We may be unable to adequately prevent disclosure of trade secrets and other proprietary information
3. 30We may become subject to third parties’ claims alleging infringement of patents and proprietary rights or seeking to invalidate our patents or proprietary rights, which would be costly, time-consuming and, if successfully asserted against us, delay or prevent the development and commercialization of AL001 or ALZN002
4. 31We expect to rely upon a combination of patents, trade secret protection as well as confidentiality and license agreements to protect the intellectual property related to our product and our current product candidates and our development programs
5. 32Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect AL001 and ALZN002
6. 33Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with any of these requirements
7. 34We may not be able to protect our intellectual property rights throughout the world

Risks Relating to Legal Matters

1. 35If product liability lawsuits are brought against us, we will incur substantial liabilities and may be required to limit the commercialization of AL001 or ALZN002

Risks Related to Our Affiliates’ Control and Relationships

1. 36Members of the Board of Directors and executive officers of our company and Hyperscale Data, Inc. (“HDI”), contain some of the same individuals, which may present potential conflicts of interest
2. 37Certain provisions of our certificate of incorporation allow concentration of voting power, which may, among other things, delay or frustrate the removal of incumbent directors or a takeover attempt, even if such events may be beneficial to our stockholders

Risks Relating to Ownership of Our Common Stock

1. 38If we are unable to comply with the continued listing requirements of The Nasdaq Capital Market, our common stock could be delisted, which would adversely affect our common stock market price and liquidity and reduce our ability to raise capital
2. 39The listing of our common stock on the Nasdaq Capital Market is contingent on our compliance with the Nasdaq Capital Market’s conditions for continued listing. While we are currently in compliance with Nasdaq listing requirements, we have not been in compliance in the past year
3. 40We do not know whether an active market will be sustained; as a result, it may be difficult for you to sell your shares of our common stock
4. 41The market price of our common stock is volatile, which could result in substantial losses for investors
5. 42If there are substantial sales of shares of our common stock, the price of our common stock could decline
6. 43The concentration of our stock ownership will limit your ability to influence corporate matters, including the ability to influence the outcome of director elections and other matters requiring stockholder approval
7. 44We must effectively manage the growth of our operations, or our company will suffer
8. 45We may not be successful in our efforts to expand our pipeline of product candidates
9. 46We may experience product recalls or inventory losses caused by unforeseen events, cold chain interruption and testing difficulties
10. 47Because we do not intend to pay dividends on our common stock, you must rely on stock appreciation for any return on your investment
11. 48We may have trouble hiring additional qualified personnel
12. 49Failure of our information technology systems could significantly disrupt the operation of our business
13. 50We are subject to various claims and legal actions arising in the ordinary course of our business
14. 51Certain provisions of our certificate of incorporation, bylaws and Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in the stockholders’ interest
15. 52Failure to build our finance infrastructure and improve our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies
16. 53If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our common stock could decline
17. 54We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors
18. 55We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices
19. 56Our charter provides for limitations of director liability and indemnification of directors and officers and employees
20. 57These limitations of liability do not apply to liabilities arising under the federal or state securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission
21. 58We could be subject to securities class action litigation