Alzamend Neuro Enters $25M Financing, Discloses Nasdaq Board Non-Compliance

What happened

Alzamend Neuro, a pharmaceutical company focused on developing treatments for Alzheimer's disease and other neurological disorders, disclosed two key events in an 8-K filed with the SEC on August 3, 2026. On July 31, 2026, the company entered into a securities purchase agreement with Ault Lending, LLC—an affiliate—to sell up to 25,000 shares of newly designated Series D convertible preferred stock, raising up to $25 million. The initial tranche closed on the same day, generating $7.5 million in cash proceeds. Separately, the company reported that it received a notice from Nasdaq on July 29, 2026, confirming non-compliance with the majority independent board standard after the death of independent director Lynne Fahey McGrath on July 20, 2026. The stock closed at $1.43 on the event date, down 1.38% from the prior close of $1.45.

Financing terms

According to the 8-K, the Series D preferred shares have a stated value of $1,050 per share and do not accrue dividends. Each share is convertible into common stock at a conversion price equal to the greater of (i) a floor price of $0.2668 and (ii) 80% of the lowest closing bid price during the five trading days prior to conversion, subject to a maximum of $2.00 per share. The conversion price is subject to adjustment if the company later issues common stock at a lower price. Holders of the preferred shares are entitled to vote with common stockholders on an as-converted basis, but the conversion price for voting purposes is floored at $1.4175 to comply with Nasdaq rules. In liquidation, holders receive the stated value per share before any distribution to common stockholders.

The agreement requires the company to use its best efforts to file a registration statement for the resale of the underlying common shares and to seek stockholder approval for any issuance exceeding 19.99% of outstanding common stock, as mandated by Nasdaq. The purchaser also received a right of first refusal and a participation right in future financings for up to three years after the preferred shares are no longer outstanding. An origination fee of 2% of the purchase price at each closing is payable to the purchaser.

Nasdaq listing rule non-compliance

The company disclosed that following the death of independent director Lynne Fahey McGrath on July 20, 2026, its board of directors is composed of six members, of which only three qualify as independent directors under Nasdaq Listing Rule 5605(a)(2). This falls short of the majority independent board requirement under Listing Rule 5605(b)(1). The company notified Nasdaq on July 20, 2026, and received a letter on July 29, 2026, granting a cure period. The company has until the earlier of its next annual meeting of stockholders or July 20, 2027 to regain compliance; however, if the next annual meeting is held before January 18, 2027, compliance must be shown by that date. The 8-K states that the Nasdaq letter has no immediate effect on the listing or trading of ALZN common stock. The board is evaluating options to achieve compliance within the cure period.