Intellect Neurosciences, Inc.

On April 14, 2016, (the “Closing Date”) Intellect Neurosciences, Inc. (the “Company”) entered into a stock purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company sold an aggregate of $250,000 principal amount of its convertible promissory notes (each, a “Note”) to the Investors (the “Financing”). The Company received $250,000 gross proceeds.

The Notes are convertible, at the option of the holder, into shares of the Company’s common stock, par value $0.001 per share, at a per share price of $0.10 (the “Conversion Price”), subject to adjustment as provided in the Notes and subject to a total beneficial ownership limitation of 9.99% of the Company’s issued and outstanding common stock. Each Note has a maturity date (the “Maturity Date”) that is two years from the Closing Date. The Maturity Date may be accelerated, at the option of the holder, upon the occurrence of a Major Liquidity Event or a Minor Liquidity Event (each as defined in the Note).

In May 2008, we entered into a License Agreement (the “License”) with AHP Manufacturing BV, acting through its Wyeth Medica Ireland Branch and Elan Pharma International Limited to provide Wyeth and Elan (collectively, the “Licensees”) with certain license rights under certain of our patents and patent applications (the “Licensed Patents”) relating to certain antibodies that may serve as potential therapeutic products for the treatment for Alzheimer’s Disease (the “Licensed Products”). We granted the Licensees a non-exclusive license under the Licensed Patents to research, develop, manufacture and commercialize Licensed Products. In 2012, the Licensees discontinued all studies of the drug covered by the Licensed Patents. On March 29, 2016, the Licensees sent us a notice of termination of the License, such termination to become effective on May 29, 2016.

General and Administrative expenses, which includes patent prosecution and maintenance costs, decreased by $303,229 to $(196,555) for the three months ended March 31, 2016 as compared to $528,800 for the three months ended March 31, 2015. Primarily, the decrease in General and Administrative expenses was due to a decrease in license fees of approximately $18,250; consulting fees of $55,000; executive compensation of $42,000 professional fees of $61,350; corporate & shareholder expenses of approximately $34,000; and other G&A expenses of $92,000. The reduction in G&A expenses was due partially to the termination of the consulting agreement with our former CEO and reduced corporate transactions.

Other expenses decreased by $5,698,443, to $(1,546,353) for the three months ended March 31, 2016 from $7,244,796 for the three months ended March 31, 2015. The reduction in other expenses primarily is due to a reduction of approximately $5.75 million in the loss recorded for the change in the fair market value of derivative instruments for the three months ended March 31, 2016 as compared to the same period last year, partially offset by an increase of approximately $56,000 in interest expense related to convertible preferred stock and convertible notes for the three months ended March 31, 2016 compared to the three months ended March 31, 2015.