Alzamend Neuro Faces Delisting, Sells Unregistered Equity

TL;DR

**Alzamend Neuro got a delisting notice and sold unregistered shares, big red flags for investors.**

AI Summary

Alzamend Neuro, Inc. filed an 8-K on February 2, 2024, reporting a material definitive agreement, unregistered sales of equity securities, and amendments to its bylaws. The company also disclosed a notice of delisting or failure to satisfy a continued listing rule, which is a significant concern for investors. This matters because the delisting notice indicates potential issues with the company's ability to maintain its stock exchange listing, which could negatively impact liquidity and investor confidence.

Why It Matters

The delisting notice signals potential financial or operational instability, which could lead to reduced stock liquidity and a lower share price. Unregistered equity sales can dilute existing shareholders if not managed carefully.

Risk Assessment

Risk Level: high — The delisting notice and unregistered equity sales indicate significant regulatory and financial risks for Alzamend Neuro, Inc.

Analyst Insight

A smart investor would carefully evaluate the implications of the delisting notice and unregistered equity sales, as these events often precede significant stock price volatility and potential loss of value. Further investigation into the reasons for the delisting notice is crucial before making any investment decisions.

Key Players & Entities

• Alzamend Neuro, Inc. (company) — the registrant filing the 8-K
• February 2, 2024 (date) — date of earliest event reported and filing date
• 001-40483 (other) — Commission File Number for Alzamend Neuro, Inc.
• 81-1822909 (other) — I.R.S. Employer Identification No. for Alzamend Neuro, Inc.

FAQ

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value ALZN The Nasdaq Capital M
• $6 million — s that the Purchaser may purchase up to $6 million of Series A Convertible Preferred Stock
• $1.22 million — urchaser, for a total purchase price of $1.22 million (the " Initial Closing "). The purchase
• $1,000 — e Preferred Stock has a stated value of $1,000 per share (the " Stated Value "). The S
• $1.00 — ermined by dividing the Stated Value by $1.00 (the " Conversion Price "). The Convers
• $0.873 — titled to cast, shall not be lower than $0.873 (the " Voting Floor Price "), which rep
• $1.20 — . The exercise price of the Warrants is $1.20 (the " Exercise Price ") and the number
• $2 million — rchaser has the right to purchase up to $2 million of Series A Convertible Preferred Stock
• $4 million — , 2024, and the right to purchase up to $4 million of Series A Convertible Preferred Stock

Filing Documents

• o212438k.htm (8-K) — 43KB
• ex3_1.htm (EX-3.1) — 87KB
• ex10_1.htm (EX-10.1) — 253KB
• ex10_2.htm (EX-10.2) — 73KB
• 0001214659-24-001777.txt ( ) — 741KB
• alzn-20240202.xsd (EX-101.SCH) — 3KB
• alzn-20240202_lab.xml (EX-101.LAB) — 33KB
• alzn-20240202_pre.xml (EX-101.PRE) — 22KB
• o212438k_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On January 31, 2024 (the " Execution Date "), Alzamend Neuro, Inc., a Delaware corporation (the " Company ") entered into a Securities Purchase Agreement (the " Agreement ") with Ault Lending, LLC, a California limited liability company (the " Purchaser "), pursuant to which the Company agreed to sell to the Purchaser up to 6,000 shares of Series A convertible preferred stock (the " Series A Convertible Preferred Stock "), and warrants (the " Warrants ") to purchase shares of the Company's common stock, par value $0.0001 per share (the " Common Stock "). The Agreement provides that the Purchaser may purchase up to $6 million of Series A Convertible Preferred Stock in one or more closings (the " Financing "). On the Execution Date, the Company sold 1,220 shares of Series A Convertible Preferred Stock and Warrants to purchase 1,220,000 shares of Common Stock to the Purchaser, for a total purchase price of $1.22 million (the " Initial Closing "). The purchase price was paid by the cancellation of $1.22 million of cash advances made by the Purchaser to the Company between November 9, 2023 and the Execution Date. The Purchaser is an affiliate of the Company. The Purchaser is an affiliate of the Company. The material terms of Series A Convertible Preferred Stock, the Warrants and the Agreement are summarized below. Description of the Series A Convertible Preferred Stock The terms of the Series A Convertible Preferred Stock are as set forth in the Certificates of Designations of the Rights, Preferences and Limitations of the Series A Convertible Preferred Stock (the " Series A Certificate of Designation "). Each share of Series A Convertible Preferred Stock has a stated value of $1,000 per share (the " Stated Value "). The Series A Convertible Preferred Stock does not accrue dividends. Conversion Rights Each share of Series A Convertible Preferred Stock is convertible into a number of shares of Common Stock (

01 Notice of Delisting or Failure to

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. On February 1, 2024, the Company received a notice in the form of a letter (" Deficiency Letter ") from the Listing Qualifications Staff of the Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) because the bid price for the Common Stock had closed below $1.00 per share for the previous 30 consecutive business days. In accordance with Nasdaq listing rule 5810(c)(3)(A), the Company has 180 calendar days, or until July 30, 2024, to regain compliance. The Deficiency Letter states that to regain compliance, the bid price for the Common Stock must close at $1.00 per share or more (the " Minimum Bid Price ") for a minimum of 10 consecutive business days during the compliance period ending July 30, 2024. In the event that the Company does not regain compliance within this 180-day period, the Company may be eligible to seek an additional compliance period of 180 calendar days if it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Price, and provides written notice to Nasdaq of its intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq Staff that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible, Nasdaq will provide notice to the Company that its Common Stock will be subject to delisting. At that time, the Company may appeal any such delisting determination to a Nasdaq hearings panel. The Deficiency Letter has no immediate effect on the listing of the Common Stock, and the Common Stock continues to trade on the Nasdaq Capital Market under the symbol "ALZN." The Company intends to actively monitor the closing bid price for the Common Stock b

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference to this Item 3.02. Series A Convertible Preferred Stock and the Warrants described in this Current Report on Form 8-K were offered and sold to the Purchaser in reliance upon exemption from the registration requirements under Section 4(a)(2) under the Securities Act of 1933.

03 Amendments to Articles of Incorporation or Bylaws; Change In Fiscal Year

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change In Fiscal Year. On January 31, 2024, in connection with the Agreement and the Initial Closing , the Company filed the Series A Certificate of Designation with the Secretary of State of the State of Delaware. The Series A Certificate of Designation, which is filed as Exhibit 3.1 to this Current Report on Form 8-K is incorporated herein by reference. -3-

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits: Exhibit No. Description 3.1 Certificate of Designations of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, filed with the Delaware Secretary of State on January 31, 2024. 10.1 Securities Purchase Agreement, dated January 31, 2024. 10.2 Form of Warrant. 101 Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language). 104 Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). -4- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALZAMEND NEURO, INC. Dated: February 2, 2024 /s/ Henry Nisser Henry Nisser Executive Vice President and General Counsel -5-

View Full Filing

View this 8-K filing on SEC EDGAR