ANAVEX LIFE SCIENCES CORP. 10-Q

ITEM 1. FINANCIAL STATEMENTS Anavex Life Sciences Corp. Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) 3 Anavex Life Sciences Corp. Interim Condensed Consolidated Balance Sheets As at June 30, 2022 and September 30, 2021 (Unaudited) June 30, 2022 September 30, 2021 Assets Current assets Cash and cash equivalents $ 153,199,352 $ 152,107,745 Incentive and tax receivables 6,559,829 9,136,831 Prepaid expenses and other current assets 461,963 371,914 Total assets $ 160,221,144 $ 161,616,490 Liabilities and stockholders' equity Current Liabilities Accounts payable $ 3,126,892 $ 4,739,781 Accrued liabilities (Note 4) 5,913,821 5,614,774 Deferred grant income 443,831 443,831 Total liabilities 9,484,544 10,798,386 Commitments and Contingencies - Note 6 Stockholders' equity Capital stock Authorized: 10,000,000 preferred stock, par value $ 0.001 per share - - 200,000,000 common stock, par value $ 0.001 per share Issued and outstanding: 77,942,568 common shares (September 30, 2021 - 75,918,465 ) 77,944 75,920 Additional paid-in capital 381,932,039 348,328,048 Accumulated deficit ( 231,273,383 ) ( 197,585,864 ) Total stockholders' equity 150,736,600 150,818,104 Total liabilities and stockholders' equity $ 160,221,144 $ 161,616,490 See Accompanying Notes to Condensed Consolidated Interim Financial Statements 4 Anavex Life Sciences Corp. Interim Condensed Consolidated Statements of Operations and Comprehensive Loss For the three and nine months ended June 30, 2022 and 2021 (Unaudited) Three months ended June 30, Nine months ended June 30, 2022 2021 2022 2021 Operating expenses General and administrative $ 3,185,451 $ 2,434,127 $ 9,167,560 $ 6,138,528 Research and development 9,273,269 8,964,528 26,534,297 23,610,888 Total operating expenses ( 12,458,720 ) ( 11,398,655 ) ( 35,701,857 ) ( 29,749,416 ) Other income (expenses) Grant income — 43,280 — 54,100 Research and development incentive income 682,432 1,363,661 2,328,675 3,593,856 Interest income, net 229,917 11,453 242,405 19,110 Foreign exchange(loss) gain, net ( 732,549 ) ( 160,880 ) ( 408,541 ) 17,191 Total other income, net 179,800 1,257,514 2,162,539 3,684,257 Net loss before provision for income taxes ( 12,278,920 ) ( 10,141,141 ) ( 33,539,318 ) ( 26,065,159 ) Income tax expense, current ( 88,421 ) ( 39,000 ) ( 148,201 ) ( 125,269 ) Net loss and comprehensive loss $ ( 12,367,341 ) $ ( 10,180,141 ) $ ( 33,687,519 ) $ ( 26,190,428 ) Net Loss per share Basic and diluted $ ( 0.16 ) $ ( 0.14 ) $ ( 0.44 ) $ ( 0.39 ) Weighted average number of shares outstanding Basic and diluted 77,442,236 70,589,651 76,561,940 67,810,774 See Accompanying Notes to Condensed Consolidated Interim Financial Statements 5 Anavex Life Sciences Corp. Interim Condensed Consolidated Statement of Changes in Stockholders' Equity For the three months ended June 30, 2022 and 2021 (Unaudited) Common Stock Additional Share Paid-in proceeds Accumulated Shares Par Value Capital Receivable Deficit Total Balance, April 1, 2022 77,161,688 77,163 371,437,616 $ ( 403,696 ) $ ( 218,906,042 ) 152,205,041 Shares issued under Sales Agreement 557,177 557 6,178,127 403,696 — 6,582,380 Less: share issue costs — — ( 185,361 ) — — ( 185,361 ) Shares issued pursuant to exercise of stock options 223,703 224 513,043 — — 513,267 Stock based compensation — — 3,988,614 — — 3,988,614 Net loss — — — — ( 12,367,341 ) ( 12,367,341 ) Balance, June 30, 2022 77,942,568 $ 77,944 $ 381,932,039 $ — $ ( 231,273,383 ) $ 150,736,600 Balance, April 1, 2021 70,030,620 $ 70,032 $ 251,427,781 — $ ( 175,687,517 ) $ 75,810,296 Shares issued under Sales Agreement, net of share issue costs 2,082,263 2,082 41,282,225 — — 41,284,307 Less: share issue costs — — ( 1,302,826 ) — — ( 1,302,826 ) Shares issued pursuant to registered direct offering, net of share issuance costs 2,380,953 2,381 49,997,619 — — 50,000,000 Less: share issue costs — — ( 3,095,938 ) — — ( 3,095,938 ) Shares issued upon exercise of options 305,997 306 869,300 — — 869,606 Shares issued pursuant to exercise of warrants 350,000 350 1,466,150 — — 1,466,500 Stock based compensation — — 2,293,925 — — 2,293,925 Net loss — — — — ( 10,180,141 ) ( 10,180,141 ) Balance, June 30, 2021 75,149,833 $ 75,151 $ 342,938,236 $ — $ ( 185,867,658 ) $ 157,145,729 See Accompanying Notes to Condensed Consolidated Interim Financial Statements 6 Anavex Life Sciences Corp. Interim Condensed Consolidated Statement of Changes in Stockholders' Equity For the nine months ended June 30, 2022 and 2021 (Unaudited) Common Stock Additional Paid-in Accumulated Shares Par Value Capital Deficit Total Balance, October 1, 2021 75,918,465 $ 75,920 $ 348,328,048 $ ( 197,585,864 ) $ 150,818,104 Shares issued under Sales Agreement 1,623,566 1,623 20,980,525 — 20,982,148 Less: share issue costs — — ( 723,167 ) — ( 723,167 ) Shares issued upon exercise of stock options 400,537 401 1,009,789 — 1,010,190 Stock based compensation — — 12,336,844 — 12,336,844 Net loss — — — ( 33,687,519 ) ( 33,687,519 ) Balance, June 30, 2022 77,942,568 $ 77,944 $ 381,932,039 $ ( 231,273,383 ) $ 150,736,600 Balance, October 1, 2020 62,045,198 $ 62,047 $ 186,851,752 $ ( 159,677,230 ) $ 27,236,569 Shares issued under 2019 Purchase Agreement Purchase shares 4,007,996 4,008 24,107,190 — 24,111,198 Commitment shares 78,213 78 ( 78 ) — — Shares issued under Sales Agreement 5,634,576 5,634 79,101,914 — 79,107,548 Less: share issue costs — — ( 2,437,523 ) — ( 2,437,523 ) Shares issued pursuant to registered direct offering, net of share issuance costs 2,380,953 2,381 49,997,619 — 50,000,000 Less: share issue costs — — ( 3,095,938 ) — ( 3,095,938 ) Shares issued upon exercise of options 652,897 653 1,867,755 — 1,868,408 Shares issued pursuant to exercise of warrants 350,000 350 1,466,150 — 1,466,500 Stock based compensation — — 5,079,395 — 5,079,395 Net loss — — — ( 26,190,428 ) ( 26,190,428 ) Balance, June 30, 2021 75,149,833 $ 75,151 $ 342,938,236 $ ( 185,867,658 ) $ 157,145,729 See Accompanying Notes to Condensed Consolidated Interim Financial Statements 7 Anavex Life Sciences Corp. Interim Condensed Consolidated Statements of Cash Flows For the nine months ended June 30, 2022 and 2021 (Unaudited) 2022 2021 Cash flows used in operating activities Net loss $ ( 33,687,519 ) $ ( 26,190,428 ) Adjustments to reconcile net loss to net cash used in operations: Stock-based compensation 12,336,844 5,079,395 Changes in working capital balances: Incentive and tax receivables 2,577,002 ( 3,751,918 ) Prepaid expenses and other current assets ( 106,414 ) 185,641 Accounts payable ( 1,612,889 ) 187,653 Accrued liabilities 299,047 1,336,660 Deferred grant income — 443,831 Net cash used in operating activities ( 20,193,929 ) ( 22,709,166 ) Cash flows provided by financing activities Issuance of common shares 20,982,148 153,218,746 Share issue costs ( 706,802 ) ( 5,533,461 ) Proceeds from exercise of warrants — 1,466,500 Proceeds from exercise of stock options 1,010,190 1,868,408 Net cash provided by financing activities 21,285,536 151,020,193 Increase in cash and cash equivalents during the period 1,091,607 128,311,027 Cash and cash equivalents, beginning of period 152,107,745 29,249,018 Cash and cash equivalents, end of period $ 153,199,352 $ 157,560,045 Supplemental Cash Flow Information Cash paid for state and local minimum income taxes $ 141,374 $ 98,281 See Accompanying Notes to Condensed Consolidated Interim Financial Statements 8 Anavex Life Sciences Corp. Notes to the Condensed Consolidated Interim Financial Statements June 30, 2022 (Unaudited) Note 1 Description of Business and Basis of Presentation Description of 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 studies to identify biomarkers, which are used to select patients that will receive the therapeutic benefit for the treatment of neurodegenerative and neurodevelopmental diseases. The Company’s lead compound ANAVEX ® 2-73 is being developed to treat Alzheimer’s disease, Parkinson’s disease and potentially other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”). Basis of Presentation These unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. Accordingly, certain information and note disclosures normally included in the annual financial statements in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the disclosures are adequate to make the information presented not misleading. These accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained herein. The consolidated balance sheet as of September 30, 2021 was derived from the audited annual financial statements but does not include all disclosures required by U.S. GAAP. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended September 30, 2021 filed with the SEC on November 24, 2021. The Company follows the same accounting policies in the preparation of interim reports. Operating results for the three and nine months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending September 30, 2022. 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, we have not generated any revenues 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, our business might become profitable. 9 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited Note 1 Description of Business and Basis of Presentation – (Continued) Liquidity – (Continued) 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 interim condensed consolidated financial statements are issued. The process of drug development can be costly, and the timing and outcomes of clinical trials is 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 Sales Agreement (as defined below in Note 5), there can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. 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. 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 income receivable, valuation and recoverability of deferred tax assets, asset impairment, stock-based compensation, and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors, including the potential future effects of COVID-19, 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. 10 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) Note 1 Description of Business and Basis of Presentation – (Continued) 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. Fair Value Measurements The fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; 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 June 30, 2022 and September 30, 2021, the Company did not have any Level 3 assets or liabilities. Basic and Diluted Loss per Share 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 June 30, 2022, loss per share excludes 13,194,616 (September 30, 2021 – 11,540,903 ) potentially dilutive common shares related to outstanding options and warrants, as their effect was anti-dilutive. 11 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) Note 2 Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements Effective October 1, 2021, the Company adopted ASU 2019-12, “Simplifying the Accounting for Income Taxes (ASC 740)”, which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying and amending existing guidance to improve consistent application. There was no material impact on the Company’s operations, financial condition, or cash flows. Note 3 Other Income Grant Income During the year ended September 30, 2021, the Company received $ 497,931 of a $ 995,862 research grant awarded by the Michael J. Fox Foundation for Parkinson’s Research. The grant will be used to fund a clinical trial of the Company’s lead compound, ANAVEX ® 2-73 related to Parkinson’s disease. The grant income is being deferred when received and amortized to other income as the related research and development expenditures are incurred. During the three and nine months ended June 30, 2022, the Company did no t recognize any of this grant on its statements of operations (2021: $ 43,280 and $ 54,100 respectively). At June 30, 2022, an amount of $ 443,831 (September 30, 2021: $ 443,831 ) of this grant is recorded as deferred grant income, representing the amount of this grant which has not yet been amortized to other income. The Company will recognize this income on its statement of operations as the relating expenditures are incurred to offset the income. Research and development incentive income Research and development incentive income represents the receipt by Anavex Australia, of the Australian research and development incentive credit, (the “R&D Incentive Credit”). During the three and nine months ended June 30, 2022 the Company recorded research and development incentive income of $ 682,432 (AUD 954,986 ) and $ 2,328,675 (AUD 3,218,303 ) (2021: $ 1,363,661 (AUD 1,770,444 ) and $ 3,593,856 (AUD 4,750,539 )), respectively, related to the R&D Incentive Credit for eligible research and development expenses incurred during the period. Note 4 Accrued liabilities The principal components of accrued liabilities consists of: Schedule of Accrued Liabilities June 30, September 30, 2022 2021 Clinical site costs and patient visits 2,138,505 2,035,800 Accrued compensation and benefits 889,616 1,201,903 Fixed contract accruals 334,887 649,649 Accrued license fees payables 500,000 — All other accrued liabilities 2,050,813 1,727,422 Total accrued liabilities 5,913,821 5,614,774 12 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) 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 (the “Board”). Preferred Stock The Company’s 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 of the designation of the series. Sales Agreement The Company entered into a Controlled Equity Offering Sales Agreement on July 6, 2018, which was amended and restated on May 1, 2020 (the “Sales Agreement”) with Cantor Fitzgerald & Co. and SVB Leerink LLC (together the “Sales Agents”), pursuant to which the Company may offer and sell shares of common stock registered under an effective registration statement from time to time through the Sales Agents (the “Offering”). Upon delivery of a placement notice based on the Company’s instructions and subject to the terms and conditions of the Sales Agreement, the Sales Agents may sell the Shares by methods deemed to be an “at the market offering” 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 prior written consent of the Company. The Company is not obligated to make any sales of Shares under the Sales Agreement. The Company or Sales Agents may suspend or terminate the offering of Shares upon notice to the other party, subject to certain conditions. The Sales Agents will act as agent on a commercially reasonable efforts basis consistent with their normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of Nasdaq. The Company has agreed to pay the Sales Agents commissions for their services of up to 3.0 % of the gross proceeds from the sale of the Shares pursuant to the Sales Agreement. The Company also agreed to provide the Sales Agents with customary indemnification and contribution rights. During the nine months ended June 30, 2022, 1,623,566 shares were sold pursuant to the Offering for gross proceeds of $ 20,982,148 (net proceeds of $ 20,258,981 after deducting offering expenses) (2021: 5,634,576 shares were sold for gross proceeds of $ 79,107,548 (net proceeds of $ 76,670,025 after deducting offering expenses)). At June 30, 2022, an amount of $ 142,410,402 (September 30, 2021: $ 163,392,550 ) was registered pursuant to an effective registration statement and remained available to be sold under the Sales Agreement. 13 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) Note 5 Equity Offerings – (continued) 2019 Purchase Agreement On June 7, 2019, the Company entered into a $50,000,000 purchase agreement (the “2019 Purchase Agreement”) with Lincoln Park, as amended on July 1, 2020, pursuant to which the Company had the right to sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $ 50,000,000 in value of its shares of common stock from time to time over a three-year period until July 1, 2022. In consideration for entering into the 2019 Purchase Agreement, the Company issued to Lincoln Park 324,383 shares of common stock as a commitment fee during the year ended September 30, 2019 and agreed to issue up to 162,191 shares pro rata, when and if, Lincoln Park purchased, at the Company’s discretion, the $ 50,000,000 aggregate commitment. At June 30, 2022 and September 30, 2021, no shares remained available for issuance under the 2019 Purchase Agreement. During the nine months ended June 30, 2021, the Company issued to Lincoln Park an aggregate of 4,086,209 shares of common stock including 4,007,996 shares of common stock for an aggregate purchase price of $ 24,111,198 and 78,213 commitment shares. Note 6 Commitments and Contingencies a) Leases During the three and nine months ended June 30, 2022, the Company incurred office lease expense of $ 21,015 and $ 42,348 (2021: $ 18,994 and $ 117,284 ), respectively. b) 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. During the three and nine months ended June 30, 2022, the Company made $ 27,358 and $ 120,979 (2021: $ 28,221 and $ 102,261 ), respectively, in matching contributions under the 401(k) plan. c) 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. 14 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) Note 6 Commitments and Contingencies – (Continued) d) Share Purchase Warrants A summary of the status of the Company’s outstanding share purchase warrants is presented below: Schedule of exercisable share purchase warrants outstanding Weighted Average Number of Exercise Price Shares ($) Balance, September 30, 2020 500,000 3.88 Granted 60,000 12.00 Exercised ( 350,000 ) 4.19 Balance, September 30, 2021 210,000 5.69 Forfeited ( 50,000 ) 12.00 Balance, June 30, 2022 160,000 3.72 At June 30, 2022, the Company had share purchase warrants outstanding as follows Schedule of share purchase warrants outstanding Number Exercise Price Expiry Date 150,000 $ 3.17 May 6, 2024 10,000 $ 12.00 April 21, 2026 160,000 e) 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 6,050,553 shares, subject to adjustment in the event of a change of the Company’s capitalization. 15 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) Note 6 Commitments and Contingencies – (Continued) e) Stock-based Compensation Plan – (Continued) 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. The maximum number of our common shares reserved for issue under the plan was 6,000,000 shares, subject to adjustment in the event of a change of the Company’s capitalization. During the nine months ended June 30, 2022, 406,453 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, 10,000,000 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. At June 30, 2022, 1,298,000 options had been issued under the 2022 Plan and 9,108,453 options were available for issue under the 2022 Plan, subject to stockholder approval. 16 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) Note 6 Commitments and Contingencies – (Continued) e) Stock-based Compensation Plan – (Continued) A summary of the status of Company’s outstanding stock options is presented below: Schedule of outstanding stock purchase options Weighted Average Weighted Average Aggregate Number of Exercise Price Grant Date Fair Value intrinsic value Shares ($) ($) ($) Outstanding, September 30, 2020 10,076,266 3.48 14,982,581 Granted 2,732,000 12.55 9.32 Forfeited ( 55,834 ) 3.04 2.43 Exercised ( 1,421,529 ) 2.89 2.43 24,446,305 Outstanding, September 30, 2021 11,330,903 5.74 140,132,451 Granted 2,208,000 10.07 6.99 Forfeited ( 103,750 ) 5.39 4.04 Exercised ( 400,537 ) 2.52 1.88 Outstanding, June 30, 2022 13,034,616 6.57 58,809,090 Exercisable, June 30, 2022 8,562,530 4.11 52,439,132 The following summarizes information about stock options at June 30, 2022 by a range of exercise prices: Schedule Of Share-based Payment Arrangement, Option, Activity Weighted average Number of remaining Number of Weighted Range of exercise prices outstanding contractual Weighted average vested average From To options life (in years) exercise price options exercise price $ 0.92 2.96 3,903,762 5.38 2.30 3,868,762 2.29 $ 3.15 4.80 2,078,800 5.59 3.30 2,058,800 3.28 $ 5.04 8.98 3,957,054 6.32 6.28 2,356,221 6.30 $ 10.09 17.03 1,798,000 9.38 11.05 209,997 14.40 $ 18.11 24.58 1,297,000 9.08 19.39 68,750 24.03 13,034,616 8,562,530 The weighted average grant date fair value of options vested during the three and nine months ended June 30, 2022 was $ 3.83 (2021: $ 3.16 ). At June 30, 2022, the weighted average contractual life of options outstanding was 6.62 years (September 30, 2021: 6.65 years) and for options exercisable was 5.21 years (September 30, 2021: 5.80 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 June 30, 2022. 17 Anavex Life Sciences Corp. Notes to the Interim Condensed Consolidated Financial Statements June 30, 2022 (Unaudited) Note 6 Commitments and Contingencies – (Continued) e) Stock-based Compensation Plan – (Continued) During the three and nine months ended June 30, 2022, the Company recognized stock-based compensation expense of $ 3,988,614 and $ 12,336,844 (2021: $ 2,293,925 and $ 5,079,395 ), respectively, in connection with the issuance and vesting of stock options and warrants in exchange for services. These amounts have been included in general and administrative expenses and research and development expenses on the Company’s statement of operations as follows: Schedule of general and administrative expenses and research and development expenses Three months ended June 30, Nine months ended June 30, 2022 2021 2022 2021 General and administrative $ 1,490,267 $ 1,048,606 $ 4,739,021 $ 2,265,387 Research and development 2,498,347 1,245,319 7,597,823 2,814,008 Total stock-based compensation $ 3,988,614 $ 2,293,925 $ 12,336,844 $ 5,079,395 An amount of approximately $ 24,276,312 in stock-based compensation is expected to be recorded over the remaining term of such options through fiscal 2025. The fair value of each option award granted during the three and nine months ended June 30, 2022 and 2021 is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions: Schedule of weighted average assumptions for fair value of each option award 2022 2021 Risk-free interest rate 3.10 % 0.71 % Expected life of options (years) 5.51 5.66 Annualized volatility 84.12 % 95.87 % Dividend rate 0.00 % 0.00 % The fair value of stock compensation charges recognized during the three and nine months ended June 30, 2022 and 2021 was determined with reference to the quoted market price of the Company’s shares on the grant date. 18