--- title: "Alzamend Neuro sells $7.5 million of Series D preferred to affiliate Ault" url: "https://aibio.space/news/alzamend-neuro-sells-7-5-million-series-d-preferred-affiliate-ault/" publisher: "aibio.space (Biotech Investor Relations News)" date: "2026-08-03" section: "Financings" tickers: "NASDAQ:ALZN" source: "https://www.sec.gov/Archives/edgar/data/1677077/000121465926009469/az7312618k.htm" summary: "The agreement allows up to $25 million of Series D convertible preferred stock, and the first tranche closed July 31, 2026." --- By the aibio.space news desk. Sources - [Alzamend Neuro, Inc. 8-K (2026-08-03)](https://www.sec.gov/Archives/edgar/data/1677077/000121465926009469/az7312618k.htm) - [Alzamend Neuro, Inc. financial data (SEC XBRL)](https://www.sec.gov/Archives/edgar/data/1677077/000121465926008832/) [ALZN](https://aibio.space/companies/alzamend-neuro/) 2026-08-03 # Alzamend Neuro sells $7.5 million of Series D preferred to affiliate Ault Lending Tickers [ALZN](https://aibio.space/companies/alzamend-neuro/) The agreement allows up to $25 million of Series D convertible preferred stock, and the first tranche closed July 31, 2026. ## Key facts - **Company**: Alzamend Neuro, Inc. (NASDAQ: ALZN) - **News type**: Financings - **Primary source**: [Alzamend Neuro, Inc. 8-K (2026-08-03)](https://www.sec.gov/Archives/edgar/data/1677077/000121465926009469/az7312618k.htm) *A conference room set for a meeting. CC0, via rawpixel. The picture shows the field, not the companies named.* Alzamend Neuro, Inc. entered a securities purchase agreement dated July 31, 2026, with Ault Lending, LLC, a California limited liability company. The company agreed to sell up to 25,000 shares of its newly designated Series D convertible preferred stock, for up to $25 million in total. On the execution date, the company sold 7,500 preferred shares to Ault Lending for a total cash purchase price of $7.5 million. The company reported the agreement in a Form 8-K dated August 3, 2026, under Item 1.01. The filing states that Ault Lending is an affiliate of the company. The full 8-K names no underwriter, placement agent or other financial advisor for the financing. It is a direct sale to the affiliate purchaser. ## Tranches and future purchases Ault Lending agreed to buy an additional $2.5 million of preferred shares at a second tranche closing. It also has the right to buy up to $15 million more in subsequent tranches, which the filing says excludes the amounts bought at the initial and second closings. ## Registration rights and penalties The company agreed to use its best efforts to file a resale registration statement covering the common stock issuable on conversion of the preferred shares. The filing deadline is the earlier of the fifth calendar day after the company files its annual report on Form 10-K for the fiscal year ended April 30, 2026, or August 15, 2026. If the registration statement is not declared effective within 60 calendar days after that deadline, or 90 calendar days if the SEC conducts a full review, a registration default occurs. If a registration default occurs, the company must pay Ault Lending cash equal to 2% of the stated value of the preferred shares it holds. That payment applies on each default date and each monthly anniversary until the default is cured. The total is capped at 15%. ## Shareholder approval and investor protections The company agreed to use its best efforts to file a preliminary proxy statement within 15 days after the execution date, and a definitive proxy statement for a special meeting of stockholders within 45 days. The special meeting is meant to approve issuing conversion shares above the Nasdaq Limit, which is 19.99% of the common stock outstanding on the execution date. The meeting must take place no later than 75 days after the execution date. While preferred shares are outstanding, the company may not enter into a financing with another investor on terms more favorable than those given to Ault Lending, unless it notifies Ault Lending within three business days and the term applies to Ault Lending at its option. For three years after Ault Lending no longer holds preferred shares, it has a right of first refusal on future equity offerings, including convertible debt. ## Financial position For fiscal 2026, ended April 30, 2026, Alzamend Neuro reported research and development expense of $3.6 million, up from $1.4 million in fiscal 2025. Cash used in operations was $8.1 million, against $6.6 million. Cash and cash equivalents were $3.9 million at April 30, 2025. Its common stock trades on the Nasdaq Capital Market under the symbol ALZN. ## Dilution, control and a thin runway Only $7.5 million has been sold so far. The second $2.5 million tranche and the optional $15 million depend on later closings, and the filing gives Ault Lending, an affiliate, the buying rights rather than the company. The filing does not show that any unaffiliated investor took part. The preferred shares convert into common stock, so current holders face dilution, and issuing conversion shares above the Nasdaq Limit needs a stockholder vote that is not assured. The investor's most favored terms clause, right of first refusal and 33.33% participation right can limit how the company raises money from anyone else. The need is plain: the net loss was $8.8 million, up from $4.5 million, cash used in operations was $8.1 million, and the 10-K reports a material weakness in internal control. [Report an error](https://aibio.space/reputation/#correction) ## Companies in this story ALZN Alzamend Neuro, Inc. 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Cite as: aibio.space, "Alzamend Neuro sells $7.5 million of Series D preferred to affiliate Ault", 2026-08-03, https://aibio.space/news/alzamend-neuro-sells-7-5-million-series-d-preferred-affiliate-ault/