AVXL 10-K/A
Anavex Life Sciences Corp. (AVXL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
AMENDMENT NO. 1
TO
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
For the transition period from ______________ to________________
Commission file number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (IRS Employer |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
1-
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | |
| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. | |
| Yes ☐ | |
| Indicate by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | |
| Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. | |
| Accelerated filer ☐ | |
| Non-accelerated filer ☐ | Smaller reporting company |
| Emerging growth company |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
☐ | |
|
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
| |
| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | |
|
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). | |
| ☐ | |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | |
| Yes ☐ | |
State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal
quarter: $
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: issued and outstanding as of November 24, 2025.
As used in this Amendment (defined below), the terms “we,” “us,” “our,” “Company” and “Anavex” mean Anavex Life Sciences Corp., unless the context clearly requires otherwise.
2
EXPLANATORY NOTE
As previously disclosed in a Current Report on Form 8-K, filed with the Securities and Exchange Commission (“SEC”) on May 6, 2026, on April 30, 2026, a special committee (the “Special Committee”) composed of independent directors of the Board of Directors of the Company (the “Board”) terminated the employment of the Company’s former Chief Executive Officer (“CEO”) for Cause (as defined in the Employment Agreement, dated as of June 27, 2013, between the Company and its former CEO, as amended and restated), effective immediately for, among other things, conduct that the Special Committee believed was inconsistent with Company policy. As a result of the review by the Special Committee, management, in consultation with the Audit Committee of the Board (the “Audit Committee”), concluded that there was a material weakness in internal control over financial reporting that existed at September 30, 2025. Accordingly, the Company’s internal control over financial reporting as of September 30, 2025, as reported in its Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “Original Form 10-K”) was not effective. In addition, the Company’s disclosure controls and procedures were not effective as of September 30, 2025, due to the material weakness in internal control over financial reporting as described above.
The reassessment of the effectiveness of the Company’s disclosure controls and procedures and its internal control over financial reporting described above did not result in any misstatement in the Company’s previously issued annual consolidated financial statements for the year ended September 30, 2025, included in the Original Form 10-K. As a result, the Company is not restating its annual consolidated financial statements contained in Item 8 of this Amendment.
The Company is filing this Amendment No. 1 (this “Amendment”) to the Original Form 10-K solely to amend the following:
| ● | Item 8. “Financial Statements and Supplementary Data” of the Original Form 10-K is amended and restated to (1) restate Grant Thornton LLP’s opinion on the Company’s internal control over financial reporting and (2) update Grant Thornton LLP’s unqualified opinion on the Company’s consolidated financial statements to refer to its restated opinion on the Company’s internal control over financial reporting; |
| ● | Item 9A. “Controls and Procedures” of the Original Form 10-K is amended and restated to reflect the ineffective disclosure controls and procedures and internal control over financial reporting as of September 30, 2025 as a result of the material weakness discussed therein; and |
| ● | Item 15. “Exhibits, Financial Statement Schedules” of the Original Form 10-K is amended and restated to reflect the new certifications and consent referenced below. |
This Amendment also includes the following exhibits to replace exhibits previously filed:
| ● | new currently dated certifications (as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended) , by the Company’s principal executive officer and principal financial officer; and |
| ● | a new consent from Grant Thorton LLP. |
Except as described in this Explanatory Note, this Amendment does not amend, modify or update disclosures included in the Original Form 10-K, nor does it reflect events occurring after the filing of the Original Form 10-K. Among other things, business-related disclosures, risk factors and forward-looking statements made in the Original Form 10-K have not been revised to reflect events that occurred or facts that became known to the Company after the filing of the Original Form 10-K, and any such statements should be read in their historical context. Accordingly, this Amendment should be read in conjunction with the Company’s filings with the SEC that were made subsequent to the filing of the Original Form 10-K and this Amendment.
3
TABLE OF CONTENTS
| PART II | 5 |
| ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 5 |
| ITEM 9A. CONTROLS AND PROCEDURES | 28 |
| PART IV | 31 |
| ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES | 31 |
| SIGNATURES | 32 |
4
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ANAVEX LIFE SCIENCES CORP.
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2025
5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Anavex Life Sciences Corp.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Anavex Life Sciences Corp. (a Nevada corporation) and subsidiaries (the “Company”) as of September 30, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of September 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated August 28, 2026, expressed an adverse opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2022.
Melville, New York
November 25, 2025, except for the reference to our report on the Company’s internal control over financial reporting, for which the date is August 28, 2026
6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Anavex Life Sciences Corp.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Anavex Life Sciences Corp. (a Nevada corporation) and subsidiaries (the “Company”) as of September 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, because of the effect of the material weakness described in the following paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of September 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
In our report dated November 25, 2025, we previously expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. The Company subsequently identified a material weakness in its internal control over financial reporting, and management has revised its assessment about the effectiveness of the Company’s internal control over financial reporting. Accordingly, our present opinion on the effectiveness of the Company’s internal control over financial reporting as of September 30, 2025, as presented herein, is different from that expressed in our previous report.
A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment.
The Company did not maintain effective Control Environment and Information and Communication elements of the COSO framework as the former CEO failed to set an appropriate tone at the top, including lack of transparency with the Board regarding regulatory, clinical and non-financial matters. These deficiencies, in the aggregate, constitute a material weakness.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended September 30, 2025. This report does not affect our report dated November 25, 2025, which expressed an unqualified opinion on those consolidated financial statements. Our report on the 2025 consolidated financial statements has been updated, as of August 28, 2026, to refer to this report and our adverse opinion.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Other information
We do not express an opinion or any other form of assurance on management’s plan to remediate the material weakness in internal control over financial reporting.
/s/
August 28, 2026
7
Anavex Life Sciences Corp.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Incentive and tax receivables | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities - Note 3 | ||||||||
| Deferred grant income - Note 4 | ||||||||
| Total Liabilities | $ | $ | ||||||
| Commitments and Contingencies - Note 6 | ||||||||
| Capital stock | ||||||||
| Authorized: | ||||||||
| preferred stock, par value $ per share | ||||||||
| common stock, par value $ per share | ||||||||
| Issued and outstanding: | ||||||||
| common shares (2024 - ) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | $ | $ | ||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See Accompanying Notes to Consolidated Financial Statements
8
Anavex Life Sciences Corp.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
| Years Ended September 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Operating expenses | ||||||||||||
| General and administrative | $ | $ | $ | |||||||||
| Research and development | ||||||||||||
| Total operating expenses | ||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expense) | ||||||||||||
| Grant income | ||||||||||||
| Research and development incentive income | ||||||||||||
| Interest income, net | ||||||||||||
| Other financing expense | ( | ) | ||||||||||
| Foreign exchange gain (loss) | ( | ) | ( | ) | ||||||||
| Total other income, net | ||||||||||||
| Net loss and comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Net Loss per share | ||||||||||||
| Basic and diluted | $ | ) | $ | ) | $ | ) | ||||||
| Weighted average number of shares outstanding | ||||||||||||
| Basic and diluted | ||||||||||||
See Accompanying Notes to Consolidated Financial Statements
9
Anavex Life Sciences Corp.
Consolidated Statements of Cash Flows
(in thousands, except share and per share amounts)
| Years ended September 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cash Flows used in Operating Activities | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash used in operations: | ||||||||||||
| Non cash financing related charges | ||||||||||||
| Share based compensation | ||||||||||||
| Changes in working capital balances related to operations: | ||||||||||||
| Incentive and tax receivables | ||||||||||||
| Prepaid expenses and deposits | ( | ) | ( | ) | ||||||||
| Accounts payable | ( | ) | ||||||||||
| Accrued liabilities | ( | ) | ( | ) | ||||||||
| Deferred grant income | ( | ) | ( | ) | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash Flows provided by Financing Activities | ||||||||||||
| Issuance of common shares, net of share issue costs | ||||||||||||
| Payment for taxes related to cashless exercise of options | ( | ) | ||||||||||
| Proceeds from exercise of stock options | ||||||||||||
| Net cash provided by financing activities | ||||||||||||
| (Decrease) Increase in cash and cash equivalents during the year | ( | ) | ( | ) | ||||||||
| Cash and cash equivalents, beginning of year | ||||||||||||
| Cash and cash equivalents, end of year | $ | $ | $ | |||||||||
| Supplemental Cash Flow Information | ||||||||||||
| Cash paid for state and local franchise taxes | $ | $ | $ | |||||||||
| Common stock issued upon cashless exercise of stock options | $ | $ | $ | |||||||||
See Accompanying Notes to Consolidated Financial Statements
10
Anavex Life Sciences Corp.
Consolidated Statements of Changes in Stockholders’ Equity
(in thousands, except share and per share amounts)
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Par Value | Capital | Deficit | Total | ||||||||||||||||
| Balance, October 1, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Shares issued under 2023 Purchase Agreement | ||||||||||||||||||||
| Initial Commitment shares | ||||||||||||||||||||
| Purchase shares | ||||||||||||||||||||
| Commitment shares | ||||||||||||||||||||
| Shares issued pursuant to exercise of stock options | ||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2023 | ( | ) | ||||||||||||||||||
| Shares issued under 2023 Purchase Agreement | ||||||||||||||||||||
| Purchase shares | ||||||||||||||||||||
| Commitment shares | ||||||||||||||||||||
| Shares issued pursuant to exercise of stock options | ||||||||||||||||||||
| Share based compensation | — | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Shares issued under 2025 Sales Agreement | ||||||||||||||||||||
| Shares issued pursuant to exercise of stock options | ||||||||||||||||||||
| Shares issued pursuant to cashless exercise of stock options | ||||||||||||||||||||
| Shares withheld related to cashless exercise of stock option | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Share based compensation | — | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
See Accompanying Notes to Consolidated Financial Statements
11
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 8
Note 1 Business Description and Basis of Presentation
Business
Anavex Life Sciences Corp. (“Anavex” or the “Company”) is a clinical stage biopharmaceutical company engaged in the development of differentiated therapeutics by applying precision medicine to central nervous system (“CNS”) diseases with high unmet need. Anavex analyzes genomic data from clinical trials to identify biomarkers, which are used in the analysis of its clinical trials for the treatment of neurodegenerative and neurodevelopmental diseases.
The Company’s focus is on developing innovative treatments for Alzheimer’s disease, Parkinson’s disease, schizophrenia, neurodevelopmental, neurodegenerative, and rare diseases, including Rett syndrome, and other central nervous system (CNS) disorders.
Basis of Presentation
These consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and the instructions to Form 10-K and have been prepared under the accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Certain immaterial amounts from prior periods have been reclassified to conform to the current year’s presentation.
Liquidity
All of the Company’s potential drug compounds are in the clinical development stage and the Company cannot be certain that its research and development efforts will be successful or, if successful, that its potential drug compounds will ever be approved for sales to pharmaceutical companies or generate commercial revenues. To date, the Company has not generated any revenue from our operations. The Company expects the business to continue to experience negative cash flows from operations for the foreseeable future and cannot predict when, if ever, its business might become profitable.
Management believes that the current working capital position will be sufficient to meet the Company’s working capital requirements beyond the next 12 months after the date that these consolidated financial statements are issued. The process of drug development can be costly, and the timing and outcomes of clinical trials are uncertain. The assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change. The actual amount of the Company’s expenditures will vary depending upon a number of factors including but not limited to the design, timing and duration of future clinical trials, the progress of the Company’s research and development programs and the level of financial resources available. The Company has the ability to adjust its operating plan spending levels based on the timing of future clinical trials.
Other than our rights related to the 2025 Sales Agreement and the 2023 Purchase Agreement (as defined below in Note 5), there can be no assurance that additional financing will be available when needed or, if available, that it can be obtained on commercially reasonable terms. The Company will need to file a prospectus supplement in order to access funds under the 2023 Purchase Agreement. If the Company is not able to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all of its research and development activities.
12
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 9
Note 2 Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to accounting for research and development costs, incentive and tax receivables, valuation and recoverability of deferred tax assets, share based compensation, and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Principles of Consolidation
These consolidated financial statements include the accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiaries, Anavex Australia Pty Limited (“Anavex Australia”), a company incorporated under the laws of Australia, Anavex Germany GmbH, a company incorporated under the laws of Germany, and Anavex Canada Ltd., a company incorporated under the laws of the Province of Ontario, Canada. All inter-company transactions and balances have been eliminated.
Cash and equivalents
The Company considers only those investments which are highly liquid, readily convertible to cash and that mature within three months from the date of purchase to be cash equivalents.
Highly liquid investments that are considered cash equivalents include money market accounts, money market funds and certificates of deposit. The carrying value of cash equivalents approximates fair value due to the short-term maturity of these securities. The Company’s investment policy allows for investments in domestic money market certificates, certificates of deposit, money market funds, bonds or commercial papers, and establishes diversification and credit quality requirements and limits investments by maturity and issuer. The Company currently maintains the majority of its investments at one large well known financial institution.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, under current regulations. At September 30, 2025 and 2024, substantially all of the Company’s cash balances were in excess of these federally insured limits. The Company mitigates this risk by maintaining the majority of its cash balances in a large well-known financial institution. The Company has not experienced any losses in such accounts.
Research and Development Expenses
Research and development costs are expensed as incurred. These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits and share-based compensation expense, contract services including external research and development expenses incurred under arrangements with third parties such as contract research organizations (“CROs”), facilities costs, overhead costs and other related expenses. Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved. Manufacturing costs are expensed as incurred in accordance with Accounting Standard Codification (“ASC”) 730, Research and Development, as these materials have no alternative future use outside of their intended use.
13
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 10
Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered, or the related services are performed, subject to an assessment of recoverability. The Company makes estimates of costs incurred in relation to external CROs, and clinical site costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the trials and studies including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from actual costs.
In addition, the Company incurs expenses in respect of intellectual property costs relating to patents and trademarks. The probability of success and length of time to develop commercial applications of the drugs subject to the underlying patent and trademark costs is difficult to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects. There is no assurance the drugs subject to the underlying patents and trademarks will ever be successfully commercialized.
Due to these risks and uncertainties, the patent and trademark costs do not meet the definition of an asset and thus are expensed as incurred within general and administrative expenses.
Research and Development Incentive Income
The Company is eligible to obtain certain research and development tax credits, including, through its wholly owned subsidiary Anavex Australia, the Australian research and development tax incentive credit (the “Australia R&D credit”) through a program administered through the Australian Tax Office (the “ATO”) and AusIndustry, a division of the Australian Government’s Department of Industry, Innovation and Science (“AusIndustry”). The Australia R&D credit program provides for a cash refund based on a percentage of eligible research and development activities undertaken in Australia by Anavex Australia. Anavex Australia is also eligible under the Australia R&D credit program to receive the cash refund for certain research and development expenses incurred by Anavex Australia outside of Australia, to the extent such expenses are pre-approved by AusIndustry pursuant to an advanced overseas finding application.
The Australia R&D credit program is available to eligible companies with an annual aggregate revenue of less than $20.0 million Australian during the reimbursable period at a rate of 18.5% above the claimant’s company tax rate in Australia.
The tax incentives are available on the basis of specific criteria with which the Company must comply. Although the tax incentive may be administered through the local tax authority, the Company has accounted for the incentives outside of the scope of ASC Topic 740, Income Taxes (“ASC 740”), since the incentives are not linked to the Company’s taxable income and can be realized regardless of whether the Company has generated taxable income in the respective jurisdictions.
With respect to the Australia R&D credit, as there is no authoritative guidance under GAAP for accounting for grants to for-profit business entities, the Company accounts for the grant by analogy to IAS20 Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”). The Company recognizes the research and development incentive income as it incurs costs eligible for reimbursement under the Australia R&D credit program when it is reasonably assured that the cash incentive will be received, as evidenced through enrollment in the program and when the applicable conditions under the program have been met. The Company accrues for the amount of cash refund it expects to receive in relation to research and development expenses outside of Australia only to the extent it has received advanced approval from AusIndustry, pursuant to an approved advanced overseas finding application.
In addition, Anavex Australia and Anavex Canada incur Goods and Services Tax (GST) on certain services provided by local vendors. As a domestic entity in those jurisdictions, Anavex Australia and Anavex Canada are entitled to a refund of the GST paid. Similarly, Anavex Germany incurs Value Added Tax (VAT) on certain services provided by local vendors, to which it is entitled to a refund of such VAT paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST and VAT incurred is included in Incentive and tax receivables in the accompanying consolidated balance sheets.
14
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 11
License Fees
The Company expenses amounts paid to acquire licenses associated with products under development when the ultimate recovery of the amounts paid is uncertain and the technology has no alternative future use when acquired. Acquisitions of technology licenses are charged to expense or capitalized based on management’s assessment regarding the ultimate recoverability of the amounts paid and the potential for alternative future use. The Company has determined that the technological feasibility for its product candidates is reached when the requisite regulatory approvals are obtained to make the product available for sale.
Basic income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the sum of (1) the weighted-average number of common shares outstanding during the period, (2) the dilutive effect of the assumed exercise of options and warrants using the treasury stock method and (3) the dilutive effect of other potentially dilutive securities. For purposes of the diluted net loss per share calculation, options and warrants are potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.
As of September 30, 2025, diluted loss per share excludes potentially dilutive common shares (2024 - ; 2023 – ) related to outstanding options and warrants, as their effect was anti-dilutive.
Financial Instruments
The book value of the Company’s financial instruments, consisting of cash and equivalents, incentive and tax receivables, accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Foreign Currency Translation
The functional currency of the Company is the US dollar. Monetary items denominated in a foreign currency are translated into US dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired, or obligations incurred. Foreign currency denominated expense items are translated at exchange rates prevailing on the transaction date. Unrealized gains or losses arising from the translations are credited or charged to income in the period in which they occur.
The Company has determined that the functional currency of Anavex Australia Pty Limited, Anavex Germany GmbH, and Anavex Canada Ltd. is also the US dollar.
Segment and Geographic Reporting
The Company determines and presents operating segments based on the information that is internally provided to the Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, in accordance with ASC 280, Segment Reporting. The Company has determined that it operates in a single business segment, which is a clinical-stage biopharmaceutical company developing differentiated therapeutics by applying precision medicine to central nervous system (“CNS”) diseases with high unmet need. Refer to Note 8 – Segmented Information for further information related to the Company’s segment.
15
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 12
Grant Income
Grant income is recognized at the fair value of the grant when it is received, and all substantive conditions have been satisfied. Grants received from government and other agencies in advance of the specific research and development costs to which they relate are deferred and recognized in the consolidated statements of operations and comprehensive loss in the period they are earned, typically when the related research and development costs are incurred.
Income Taxes
The Company follows the provisions of ASC 740, which requires the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The Company follows the provisions of ASC 740 regarding accounting for uncertainty in income taxes. The Company initially recognizes tax positions in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts. Application requires numerous estimates based on available information. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, and its recognized tax positions and tax benefits may not accurately anticipate actual outcomes. As additional information is obtained, there may be a need to periodically adjust the recognized tax positions and tax benefits. These periodic adjustments may have a material impact on the consolidated statements of operations and comprehensive loss.
The Company recognizes interest and penalties related to current income tax expense on the interest income, net line, in the accompanying consolidated statements of operations and comprehensive loss. Accrued interest and penalties, if any, are included in accrued liabilities on the consolidated balance sheets.
The Company accounts for all share-based payments and awards under the fair value method.
The fair value of all share-based payments are expensed over their contractual vesting period, or over the expected performance period for only the portion of awards expected to vest, in the case of milestone-based vesting, with a corresponding increase to additional paid-in capital.
Compensation costs for share-based payments with graded vesting are recognized on a straight-line basis. Stock based compensation expense is adjusted for actual forfeitures of unvested awards as they occur.
The Company has granted share purchase option awards that vest upon achievement of certain performance criteria, or milestone-based awards. The Company estimates an implicit service period for achieving performance criteria for each award and recognizes the resulting fair value as expense over the implicit service period when it concludes that achieving the performance criteria is probable. The Company periodically reviews and updates as appropriate its estimates of implicit service periods and conclusions on achieving the performance criteria. Performance awards vest upon achievement of the performance criteria.
16
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 13
The Company uses the Black-Scholes option valuation model to calculate the fair value of share-based awards at the date of the grant. This model requires the input of subjective assumptions, including the expected price volatility and expected life of each award. The Company uses the U.S. Treasury daily treasury yield curve rates for the expected term of the option as the risk-free rate. The expected term represents the period that options granted are expected to be outstanding using the simplified method. Historically, the Company’s historical share option exercise experience did not provide sufficient basis for estimating the expected term. Expected volatility is based on the average of the daily share price changes over the expected term. The Company does not estimate forfeitures and elects to record actual forfeitures as they occur. The Company has not paid any dividends on its common stock historically, therefore no assumption of dividend payments is made in the model. These assumptions consist of estimates of future market conditions, which are inherently uncertain, and therefore, are subject to management’s judgment. Changes in these assumptions can materially affect the fair value estimates.
The purchase price of share-based compensation awards may be paid in cash or, if approved by the Company’s compensation committee (or in the case of warrants by the Board of Directors) in advance, “net settled” in shares of the Company’s common stock. In a net settlement of an share-based award, the Company does not receive payment of the exercise price from the holder but reduces the number of shares of common stock issued upon the exercise of the award by the smallest number of whole shares that have an aggregate fair market value equal to or over the aggregate exercise price for the option shares covered by the instrument exercised. Shares issued pursuant to the exercise of options and warrants are issued from the Company’s treasury.
Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
Level 2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3 - assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.
At September 30, 2025 and 2024, the Company did not have any Level 2 or Level 3 assets or liabilities.
17
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 14
Recently Adopted Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, “Segment Reporting: Improvements to Reportable Segment Disclosures.” This guidance requires disclosure of incremental segment information on an annual and interim basis, including disclosure of the title and position of the Chief Operating Decision Maker and requires that a public entity that has a single reportable segment to provide all the disclosures required by the amendments in ASU No. 2023-07. The Company adopted the new standard effective September 30, 2025, and for subsequent interim periods. Since ASU No. 2023-07 addresses only disclosures, the adoption of ASU No. 2023-07 did not have a significant impact on the Company’s consolidated financial statements.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes: Improvements to Income Tax Disclosures.” This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. This amendment is effective for our fiscal year ending September 30, 2026. The Company is currently assessing the impact of this guidance on its disclosures.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. The amendments in ASU No. 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to the financial statements for certain categories of expenses that are included on the face of the financial statements. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of this guidance on its disclosures.
Note 3 Accrued Liabilities
The principal components of accrued liabilities consist of (in thousands):
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Accrued investigator payments | $ | $ | ||||||
| Accrued compensation and benefits | ||||||||
| Milestone-based contract accruals | ||||||||
| All other accrued liabilities | ||||||||
| Total accrued liabilities | $ | $ | ||||||
Note 4 Other Income
Grant income
As of September 30, 2025,
the Company had received a $
The grant income has been
deferred when received and is being amortized to other income as the related research and development expenditures are incurred. During
the year ended September 30, 2025, the Company recognized $
Research and development incentive income
Research and development incentive income represents the income earned by Anavex Australia of the Australia R&D credit. This cash incentive is received by Anavex Australia, upon filing of a claim in connection with Anavex Australia’s annual income tax return.
18
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 15
During the year ended September
30, 2025, the Company recorded research and development incentive income of $
At September 30, 2025, Incentive
and tax receivables includes $
The Australia R&D credit program is a self-assess program whereby the Company must assess its eligibility each year to determine (i) if the entity is eligible (ii) if the specific R&D activities are eligible and (iii) if the individual R&D expenditures have nexus to such R&D activities. The Company evaluates its eligibility under the tax incentive program as of each balance sheet date based on the most current and relevant data available. Anavex Australia is able to continue to claim the R&D tax incentive for as long as it remains eligible and continues to incur eligible research and development expenditures.
Although the Company believes that it has complied with all the relevant conditions of eligibility under the program for all periods claimed, the ATO has the right to review the Company’s qualifying programs and related expenditures for a period of four years. If such a review were to occur, the ATO may have different interpretations of certain eligibility requirements. If the ATO disagreed with the Company’s assessments and any related subsequent appeals, it could require adjustment to and repayment of current or previous years’ claims already received. Additionally, if the Company was unable to demonstrate a reasonably arguable position taken on such claims, the ATO could also assess penalties and interest on any such adjustments.
Currently, the Company’s tax incentive claims from 2020 to 2025 are open to potential review by the ATO. Additionally, the period open for review is indefinite if the ATO suspects fraud. The Company has not provided any allowance for any such potential adjustments, should they occur in the future.
Note 5 Equity Offerings
Common Stock
Common shares are voting and are entitled to dividends as declared at the discretion of the Board of Directors.
Preferred Stock
The Company’s Board of Directors (the “Board”) has the authority to issue preferred stock in one or more series and to fix the rights, preferences, privileges, restrictions and the number of shares constituting any series or the designation of the series.
2025 Sales Agreement
On July 25, 2025, the Company entered into a Sales Agreement (the “2025 Sales Agreement”) with TD Securities (USA) LLC (the “Sales Agent”). Pursuant to the 2025 Sales Agreement, the Company may offer and sell up to an aggregate offering price of $ million (the “Offering”) in shares of common stock from time to time through the Sales Agent.
Upon delivery of a placement notice based on the Company’s instructions and subject to the terms and conditions of the 2025 Sales Agreement, the Sales Agent may sell shares of common stock by methods deemed to be an “at the market offering”, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to the Company’s prior written consent. The Company is not obligated to make any sales of shares under the 2025 Sales Agreement. The Company or the Sales Agent may suspend or terminate the Offering upon notice to the other party, subject to certain conditions. The Sales Agent will act as sales agent on a commercially reasonable efforts basis consistent its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of Nasdaq.
19
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 16
The Company has agreed to pay the Sales Agent commissions for its services of up to 3.0% of the gross proceeds from the sale of shares of common stock pursuant to the Sales Agreement. The Company has also agreed to provide the Sales Agent with customary indemnification and contribution rights.
During the year ended September 30, 2025, the Company
issued shares of common stock for net proceeds of $
2023 Purchase Agreement
On February 3, 2023, the Company entered into a $150.0 million purchase agreement (the “2023 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company has the right to sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $ million in value of its shares of common stock from time to time over a three-year period until February 3, 2026.
In consideration for entering into the 2023 Purchase
Agreement, the Company issued to Lincoln Park shares of common stock as a commitment fee (the “initial commitment shares”)
and agreed to issue up to an additional
During the year ended September 30, 2025, the Company
did not issue any shares of common stock under the 2023 Purchase Agreement. During the year ended September 30, 2024, the Company issued
to Lincoln Park an aggregate of shares of common stock under the 2023 Purchase Agreement, including shares of common
stock for an aggregate purchase price of $
At September 30, 2025, there was an unused amount
of $
Exercise of Stock Options
During the year ended September 30, 2025, the Company
issued shares of common stock to the Company’s Chief Executive Officer upon a net exercise of an option to purchase shares
of common stock at an exercise price of $
During the year ended September 30, 2025, the Company
issued shares of common stock to a director of the Company upon a net exercise of an option to purchase shares
of common stock at an exercise price of $
20
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 17
During the year ended September 30, 2025, the Company
issued shares of common stock to the Company’s Chief Executive Officer upon a net exercise of an option to purchase shares
of common stock at an exercise price of $
Note 6 Commitments and Contingencies
Lease
The Company leases office space under an operating
lease with an initial term of
The operating lease costs were as follows (in thousands):
| Years ended September 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Operating lease costs | $ | $ | $ | |||||||||
Employee 401(k) Benefit Plan
The Company has a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers all United States based employees. United States based employees eligible to participate in the plan may contribute up to the current statutory limits under the Internal Revenue Service regulations. The 401(k) plan permits the Company to make additional matching contributions on behalf of contributing employees.
The Company made matching contributions under the 401(k) plan as follows (in thousands):
| Years ended September 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Contributions to 401(k) plan | $ | $ | $ | |||||||||
Litigation
The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company’s consolidated financial statements. The Company does not believe that any of such pending claims and legal proceedings will have a material adverse effect on its consolidated financial statements.
On March 13, 2024, a shareholder class action complaint was filed in the United States District Court for the Southern District of New York and it named the Company and an officer of the Company as Defendants. The complaint was amended on July 12, 2024 (the “Initial Action”). The complaint alleged violations of the Securities and Exchange Act of 1934 associated with disclosures and statements made with respect to certain clinical trials for ANAVEX®2-73 related to Rett syndrome. This lawsuit was dismissed by the United States District Court for the Southern District of New York on June 18, 2025. The plaintiff filed a notice of appeal on July 17, 2025. Briefing on the appeal concluded October 30, 2025. No decision has been entered. No amount has been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is not probable that any loss will occur.
21
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 18
On May 8, 2024, a similar complaint was filed in the same court by Kenneth Downing, a purported shareholder of the Company, against the same defendants. The Company believed that this lawsuit was also without merit and filed a motion to dismiss the complaint. Plaintiff Downing voluntarily dismissed this complaint subsequent to the filing of the motion to dismiss.
On or about May 13, 2024, a derivative lawsuit was filed against the Company (as nominal defendant), an officer of the Company, and members of the Company’s Board of Directors in the U.S. District Court for the District of Nevada by another purported shareholder. The complaint asserts various common law claims (including breach of fiduciary duty) and violation of Section 14(a)of the Securities Exchange Act regarding the same or similar allegations at issue in the purported class action lawsuit related to disclosures and statements made about certain clinical trials related to Rett syndrome. On January 22, 2025, pursuant to a stipulation of the parties, the Court entered an order staying this purported derivative lawsuit until the motion to dismiss filed by defendants in the Initial Action is decided by the U.S. District Court for the Southern District of New York. The stay has been extended through the appeal. No amount has been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is not probable that any loss will occur.
On February 14, 2025, another derivative lawsuit asserting state law breach of fiduciary duty and unjust enrichment claims based upon similar allegations was filed against the Company (as nominal defendant), an officer of the Company, and members of the Company’s Board of Directors in the Supreme Court for the State of New York, County of New York, by another purported shareholder. On August 18, 2025, pursuant to a stipulation of the parties, the Court entered an order staying this purported derivative lawsuit until the appeal in the Initial Action is resolved. No amount has been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is not probable that any loss will occur.
We know of no other material pending legal or governmental proceedings, other than ordinary routine litigation incidental to our business, to which our Company or our subsidiaries are a party or of which any of their property is subject. There are no other proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder holding more than 5% of our shares, or any associate of such persons, is an adverse party or has a material interest adverse to our or our subsidiaries’ interest.
Share Purchase Warrants
At September 30, 2025 and 2024, the Company had
Stock–based Compensation Plan
2015 Stock Option Plan
On September 18, 2015, the Company’s Board approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which provided for the grant of stock options and restricted stock awards to directors, officers, employees and consultants of the Company.
The maximum number of our common shares reserved for issue under the plan was shares, subject to adjustment in the event of a change of the Company’s capitalization.
2019 Stock Option Plan
On January 15, 2019, the Board approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which provides for the grant of stock options and restricted stock awards to directors, officers, employees, consultants and advisors of the Company.
22
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 19
The maximum number of our common shares reserved for issue under the plan was shares, subject to adjustment in the event of a change of the Company’s capitalization.
During the year ended September 30, 2022, options previously available under the 2019 Plan and the 2015 Plan became available under the 2022 Plan (as defined below).
2022 Stock Option Plan
On March 25, 2022, the Board approved the 2022 Omnibus Incentive Plan (the “2022 Plan”). The 2022 Plan was approved by stockholders on May 24, 2022. Under the terms of the 2022 Plan, additional shares of Common Stock will be available for issuance under the plan, in addition to the shares available under the 2019 Plan and the 2015 Plan. Any awards outstanding under a previous stock option plan will remain subject to and be paid under such plan, and any shares subject to outstanding awards under a previous plan that subsequently cease to be subject to such awards (other than by reason of settlement of the awards in shares) will automatically become available for issuance under the 2022 Plan.
The 2022 Plan provides that it may be administered by the Board, or the Board may delegate such responsibility to a committee. The exercise price will be determined by the Board at the time of grant shall be at least equal to the fair market value on such date. If the grantee is a 10% stockholder on the grant date, then the exercise price shall not be less than 110% of fair market value of the Company’s shares of common stock on the grant date. Stock options may be granted under the 2022 Plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by the Board, subject to earlier termination in accordance with the terms of the 2022 Plan.
On April 17, 2025, the Board approved an amendment to the 2022 Plan (the “Amendment”). The Amendment was approved by the stockholders on June 10, 2025. The Amendment increased the number of shares of common stock reserved for issuance under the 2022 Plan by 4,000,000 shares for a total of . In addition, the Amendment established a minimum vesting period of one year for all awards granted under the 2022 Plan and limited the discretion to accelerate the vesting of awards upon a separation from service, with limited exceptions permitted. Finally, the Amendment prohibited liberal share recycling provisions.
At September 30, 2025,
The following summarizes information about stock option activity during the years ended September 30, 2025:
| Number of Options | Weighted Average Exercise Price ($) | Weighted Average Grant Date Fair Value ($) | Aggregate intrinsic value ($) | |||||||||||||
| Outstanding, September 30, 2024 | ||||||||||||||||
| Granted | — | |||||||||||||||
| Expired | ( | ) | — | — | ||||||||||||
| Exercised | ( | ) | | |||||||||||||
| Forfeited | ( | ) | — | |||||||||||||
| Outstanding, September 30, 2025 | ||||||||||||||||
| Exercisable, September 30, 2025 | ||||||||||||||||
23
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 20
The following summarizes information about stock options at September 30, 2025 by a range of exercise prices:
| Range of exercises prices | Number of outstanding | Weighted average remaining contractual life | Weighted average exercise | Number of vested | Weighted average exercise | |||||||||||||||||||||
| From | To | options | (in years) | price | options | price | ||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
The weighted average per share fair value of options vested at September 30, 2025 was $ (2024: $; 2023: $). At September 30, 2025, the weighted average contractual life of options outstanding was years (2024: years; 2023: years) and for options exercisable was years (2024: years; 2023: years).
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price of the Company’s stock for the options that were in-the-money at September 30, 2025.
The Company recognized share-based compensation expense of $ million during the year ended September 30, 2025 (2024: $ million; 2023: $ million) in connection with the issuance and vesting of stock options in exchange for services. These amounts have been included in general and administrative expenses and research and development expenses on the Company’s consolidated statements of operations as follows (in thousands):
| Years ended September 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| General and administrative | $ | $ | $ | |||||||||
| Research and development | ||||||||||||
| Total share-based compensation | $ | $ | $ | |||||||||
An amount of approximately $ million in share-based compensation is expected to be recorded over the remaining term of such options and warrants through fiscal 2029.
The fair value of each option and warrant award is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions:
| 2025 | 2024 | 2023 | ||||||||||
| Risk-free interest rate | % | % | % | |||||||||
| Expected life of options (years) | ||||||||||||
| Annualized volatility | % | % | % | |||||||||
| Dividend rate | % | % | % | |||||||||
The fair value of stock compensation charges recognized during the years ended September 30, 2025, 2024 and 2023 was determined with reference to the quoted market price of the Company’s shares on the grant date.
24
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 21
Note 7 Income Taxes
The Company’s U.S. and foreign losses before income taxes are set forth below (in thousands):
| 2025 | 2024 | 2023 | ||||||||||
| United States | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Foreign | ( | ) | ( | ) | ( | ) | ||||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
During the years ended September 30, 2025, 2024 and 2023, there were no current or deferred income tax provisions (benefits) for any U.S. federal, state & local, and foreign jurisdictions. The components of net deferred income tax assets as of September 30, 2025 and 2024 are as follows (in thousands):
| 2025 | 2024 | |||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Research and development tax credit carryforwards | ||||||||
| Share-based compensation | ||||||||
| Research and development capitalization | ||||||||
| Unpaid charges | ||||||||
| Intangible asset costs | ||||||||
| Foreign exchange and other | ( | ) | ( | ) | ||||
| Valuation allowance of deferred tax assets | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
A reconciliation of income tax expense at the statutory federal income tax rate and income taxes as reflected in the consolidated financial statements for the years ended September 30, 2025, 2024 and 2023 is as follows (in thousands):
| 2025 | 2024 | 2023 | ||||||||||
| Income tax benefit at statutory federal rate | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Foreign income taxed at other rates | ( | ) | ||||||||||
| Permanent differences relating to share-based compensation | ( | ) | ( | ) | ( | ) | ||||||
| Permanent differences relating to GILTI inclusion | ||||||||||||
| Other permanent differences | ( | ) | ||||||||||
| Research and development credits, net | ( | ) | ( | ) | ( | ) | ||||||
| State and local taxes | ( | ) | ( | ) | ( | ) | ||||||
| Adjustment to true up to prior years’ tax provision | ( | ) | ||||||||||
| Change in valuation allowances | ||||||||||||
| Income tax expense | $ | $ | $ | |||||||||
As of September 30, 2025, the Company had U.S. federal
net operating loss carryforwards of approximately $
25
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 22
The Company had approximately $
The Company evaluates its valuation allowance
requirements based on available evidence. When circumstances change, and this causes a change in management’s judgment about
the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income.
Because management of the Company does not currently believe that it is more likely than not that the Company will receive the
benefit of these assets, a full valuation allowance has been established at September 30, 2025 and 2024. During the year ended
September 30, 2025, the valuation allowance increased by $
The Tax Cuts and Jobs Act of 2017 (TCJA) has
modified the treatment of IRC 174 expenses related to research and development for tax years beginning after December 31, 2021.
Under the TCJA, the Company must capitalize the expenditures related to research and development activities and amortize them over
5 years for U.S. activities and over 15 years for non-U.S. activities using a mid-year convention. Therefore, the capitalization of
research and development costs in accordance with IRC 174 has resulted in a net deferred tax assets at September 30, 2025 of $
Uncertain Tax Positions
The Company files income tax returns in the U.S. federal jurisdiction and various state and local and foreign jurisdictions. The Company’s tax returns are subject to tax examinations by U.S. federal and state tax authorities, or examinations by foreign tax authorities until the respective statutes of limitation expire. The Company is subject to tax examinations by tax authorities for all taxation years commencing on or after 2005.
Under the provisions of the Internal Revenue Code, the net operating loss (“NOL”) carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Under Section 382 of the Internal Revenue Code, NOL and tax credit carryforwards may become subject to an annual limitation in the event of an over 50% cumulative change in the ownership interest of significant stockholders over a three-year period, as well as similar state tax provisions.
The Company conducts a Section 382 study annually
and has reduced its federal NOLs by $
As of September 30, 2025, the Company did not provide any foreign withholding taxes related to its foreign subsidiaries’ undistributed earnings, as such earnings have been retained and are intended to be indefinitely reinvested to fund ongoing operations of the foreign subsidiaries. It is not practicable to estimate the amount of taxes that would be payable upon remittance of these earnings, because such tax, if any, is dependent upon circumstances existing if and when remittance occur.
As of September 30, 2025 and 2024, the Company had determined that no liabilities for uncertain tax positions, interest or penalties were required to be recorded.
26
Anavex Life Sciences Corp.
Notes to the Consolidated Financial Statements
September 30, 2025 – Page 23
Note 8 Segmented Information
Operating segments are defined as components of an entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM is the Chief Executive Officer. The Company has determined that it operates in a single operating segment, which consists of the development of clinical and preclinical product candidates focused on advancing novel therapeutics for CNS diseases and disorders, and related administrative activities.
The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The CODM evaluates performance and allocates resources based on consolidated net loss, as presented in the Company’s consolidated statement of operations, and monitors forecast-to-actual variances for significant expense categories given their direct relationship to cash burn. The CODM also reviews the consolidated balance sheet to assess liquidity, funding capacity, and segment assets, which are reported as total consolidated assets.
The CODM receives and reviews financial information on a consolidated basis and does not assess performance or allocate resources based on geographic regions. In addition, management does not internally organize or evaluate operating results by geography. Accordingly, management has determined that it is not required to present financial information disaggregated by geographic region under ASC 280.
The table below summarizes the significant expense categories regularly reviewed by the CODM for the years ended September 30, 2025, 2024 and 2023 (in thousands):
| 2025 | 2024 | 2023 | ||||||||||
| Research and development costs | ||||||||||||
| Preclinical studies | $ | $ | $ | |||||||||
| Clinical trials | ||||||||||||
| Personnel costs | ||||||||||||
| Non-cash share-based compensation | ||||||||||||
| Other research and development costs(a) | ||||||||||||
| Total research and development costs | ||||||||||||
| General and administrative costs | ||||||||||||
| Personnel costs | ||||||||||||
| Non-cash share-based compensation | ||||||||||||
| Other general and administrative costs(b) | ||||||||||||
| Total general and administrative costs | ||||||||||||
| Other income | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| (a) | Other research and development costs include, but are not limited to, publications, sponsorships, membership fees, scientific conferences, and medical affairs strategy and branding. |
| (b) | Other general and administrative expenses include, but are not limited to, office rent, public company reporting requirements including professional fees, insurance, and other general operating expenses not otherwise included in research and development expenses. |
Note 9 Subsequent Events
The Company evaluates subsequent events occurring between the most recent balance sheet date and the date the financial statements are available to be issued in order to determine whether the subsequent events are to be recorded and/or disclosed in the Company’s financial statements and footnotes. The financial statements are considered to be available to be issued at the time they are filed with the Securities and Exchange Commission (SEC).
There were no subsequent events or transactions that required recognition or disclosure in the consolidated financial statements.
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ITEM 9A. CONTROLS AND PROCEDURES
As previously disclosed in a Current Report on Form 8-K, filed with the Securities and Exchange Commission (“SEC”) on May 6, 2026, on April 30, 2026, a special committee (the “Special Committee”) composed of independent directors of our Board of Directors (the “Board”) terminated the employment of our former Chief Executive Officer (“CEO”) for Cause (as defined in the Employment Agreement, dated as of June 27, 2013, between us and our former CEO, as amended and restated) effective immediately for, among other things, conduct that the Special Committee believed was inconsistent with Company policy.
As a result of the review by the Special Committee, management, in consultation with the Audit Committee of the Board, re-assessed the effectiveness of our disclosure controls and procedures and our internal control over financial reporting as of September 30, 2025, as reported in our Original Form 10-K. The re-evaluation of our disclosure controls and procedures and our internal control over financial reporting considers the circumstances in effect at September 30, 2025, prior to the termination of our former CEO.
Evaluation of Disclosure Controls and Procedures (Amended and Restated)
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to provide reasonable assurance that material information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our principal executive officer and our principal financial officer to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. At the time of filing our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, with the SEC on November 25, 2025 (the “Original Form 10-K”), our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2025. Subsequent to the filing of the Original Form 10-K, management identified a material weakness in internal control over financial reporting that existed as of September 30, 2025. Based on the re-evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2025, due to the material weakness in internal control over financial reporting described below.
Management’s Annual Report on Internal Control Over Financial Reporting (Amended and Restated)
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. At the time of filing our Original Form 10-K, our principal executive officer and principal financial officer concluded that our internal control over financial reporting were effective as of September 30, 2025. Subsequent to the filing of our Original Form 10-K, management identified a material weakness in internal control over financial reporting (described below) that existed as of September 30, 2025. As a result of this material weakness, management reassessed their conclusion and concluded that our internal control over financial reporting was not effective as of September 30, 2025.
Material Weakness in Internal Control over Financial Reporting
Management identified deficiencies in our Control Environment and Information and Communication controls related to the historical flow of regulatory, clinical and non-financial information.
We did not maintain an effective Control Environment because our former CEO failed to set an appropriate tone at the top. There was a lack of transparency with the Board regarding regulatory, clinical and non-financial matters, and the former CEO failed to foster an environment which prioritized regulatory and clinical compliance and in fact took steps to disincentivize such efforts.
Additionally, we failed to maintain effective controls over Information and Communication as historically, our former CEO served as a principal source and decision-maker with respect to regulatory, clinical and non-financial matters and related communications. We did not maintain sufficiently independent and formalized mechanisms to ensure that regulatory, clinical and non-financial information was communicated completely and timely to our principal financial officer, the Audit Committee and the Board, and other disclosure-process participants.
In particular, the historical process did not include certain controls that our management has subsequently determined were necessary to provide reasonable assurance regarding the completeness of regulatory, clinical and non-financial information used in our disclosure and financial reporting processes, including a formal disclosure committee (the “Disclosure Committee”), recurring functional sub-certifications, routine access by appropriate disclosure-process participants to relevant source regulatory, clinical and non-financial information, formal source-document reconciliation procedures and a documented escalation process for regulatory, clinical and non-financial information.
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The material weakness resulted from an overreliance on our former CEO as the principal source and gatekeeper for regulatory, clinical and non-financial information, together with insufficient independent controls to ensure that such information was communicated completely and timely to our financial reporting and disclosure-process participants, including the principal financial officer, Audit Committee and Board.
As a result of these deficiencies, established downstream controls, including management review, legal review, Audit Committee review, Board review and executive certifications, could operate while relying on an incomplete information population, and thus were deemed ineffective. The deficiencies also increased the susceptibility of our information and communication processes to senior-management influence and management override.
Management evaluated these deficiencies individually and in combination and concluded that they represent interrelated manifestations of an entity-level control deficiency. Accordingly, management concluded that these deficiencies, in the aggregate, constitute a material weakness because there was a reasonable possibility that a material misstatement of our annual or interim financial statements or related notes would not be prevented or detected on a timely basis. Specifically, the deficiencies could prevent information relevant to financial-reporting and SEC disclosure judgments, disclosures and certifications from entering the financial-reporting and SEC disclosure process before downstream accounting and review controls had an opportunity to operate.
Notwithstanding the material weakness described above, management has concluded that the financial statements included in the Original Form 10-K are fairly presented, in all material respects, in accordance with U.S. GAAP.
Attestation Report of the Registered Public Accounting Firm
The effectiveness of our internal controls over financial reporting as of September 30, 2025 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report which appears in this Amendment.
Planned Remediation of the Material Weakness
To address the material weakness in internal control over financial reporting, and building on the leadership change initiated by the Special Committee, we have developed, and our Audit Committee will oversee, a remediation plan, which is described below. We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weakness described above.
The remediation plans include:
| ● | establishing a formal Disclosure Committee with defined responsibilities for reviewing information relevant to our SEC disclosures; |
| ● | enhancing the process for communicating regulatory, clinical and non-financial developments to the principal executive officer, the principal financial officer, the Disclosure Committee, the Audit Committee and the Board; |
| ● | providing appropriate financial reporting and disclosure personnel with broader access to underlying regulatory, clinical and non-financial source information; |
| ● | implementing functional or departmental sub-certifications designed to support the completeness of information considered in the disclosure process; |
| ● | implementing procedures to reconcile significant regulatory, clinical and non-financial source information to matters considered by the Disclosure Committee and other disclosure-process participants; |
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| ● | establishing a documented escalation process for regulatory, clinical and non-financial developments, conflicting information and disagreements regarding disclosure matters; |
| ● | enhancing reporting of significant regulatory, clinical and non-financial and disclosure matters to the Audit Committee; |
| ● | strengthening monitoring of our Control Environment and management-override risk; and |
| ● | considering independent monitoring and testing of internal controls, including through the development of a more formal internal audit and Sarbanes-Oxley Act of 2002 compliance process. |
We established a Disclosure Committee during fiscal 2026, and the Committee has begun performing its responsibilities in connection with our current-period reporting process.
Management is committed to remediating the material weakness and believes these actions are designed to remediate the material weakness. However, the material weakness will not be considered remediated until the applicable controls have been fully implemented, have operated for a sufficient period and management has concluded, through testing, that the controls are operating effectively. Accordingly, we cannot provide assurance that the material weakness will be remediated by a particular date.
Changes in Internal Control Over Financial Reporting
Except as noted above, during the quarter ended September 30, 2025, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a 15(d) or 15d 15(d) of the Exchange Act that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
* Filed herewith.
** The certification attached as Exhibit 32.1 that accompanies this Amendment is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Registrant under the Securities Act or the Exchange Act, whether made before or after the date of this Amendment, irrespective of any general incorporation language contained in such filing.
^ Denotes a management contract or compensatory plan or arrangement.
+ Previously filed
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August 28, 2026 | ANAVEX LIFE SCIENCES CORP. | |
| By: | /s/ Terrie Kellmeyer, Ph.D. | |
| Name: | Terrie Kellmeyer, Ph.D. | |
| Title: | Interim Chief Executive Officer (Principal Executive Officer) | |
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