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Item 1A. Risk Factors

2023-11-27 compared with 2022-11-28 · 886 added, 847 removed, 579 unchanged (75% of the section changed)

In addition to other information in

this Annual Report on Form 10-K, the following risk factors should be carefully considered in evaluating our business because such

factors may have a significant impact on our business, operating results, liquidity and financial condition.

As a result of the

risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements.

risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business,

operating results, liquidity and financial condition.

If any such risks occur, our business, operating results, liquidity and financial

condition could be materially affected in an adverse manner.

Under such circumstances, the trading price of our securities could

decline, and you may lose all or part of your investment.

Risk Factor Summary

The following is a summary of the risks and

uncertainties that could cause our business, financial condition or operating results to be harmed.

We encourage you to carefully

review the full risk factors contained in this report in their entirety for additional information regarding these risks and uncertainties.

commercialize

collaborators,

profitability

understanding

neurodegenerative

non-compliance

acquisitions,

collaboration

opportunities,

internationally

carryforwards

administrative

pharmaceutical

reimbursement

commercialize

relationships

confidentiality

● Intellectual

commercialization

confidentiality

In addition to other information in this Annual

Report on Form 10-K, the following risk factors should be carefully considered in evaluating our business because such factors

may have a significant impact on our business, operating results, liquidity and financial condition.

As a result of the risk factors

set forth below, actual results could differ materially from those projected in any forward-looking statements.

Additional risks

and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, operating

results, liquidity and financial condition.

If any such risks occur, our business, operating results, liquidity and financial condition

could be materially affected in an adverse manner.

Under such circumstances, the trading price of our securities could decline,

and you may lose all or part of your investment.

Risks Related to our Company

We have had a history of losses

and no revenue, which raises a risk regarding our ability to continue as a going concern in the future.

We have had a history of losses and no

revenue, which raises a risk regarding our ability to continue as a going concern in the future.

Since inception through September 30, 2023,

we have accumulated a deficit of approximately $293 million.

We can offer no assurance that we will ever operate profitably

or that we will generate positive cash flow in the future.

We can offer no assurance that we will ever operate profitably or

that we will generate positive cash flow in the future.

To date, we have not generated any revenues from our operations.

history of losses and no revenues creates a greater risk of our continued ability to continue as a going concern in the future.

As a result, our management expects the business to continue to experience negative cash flows for the foreseeable future and cannot

predict when, if ever, our business might become profitable.

We will need to raise additional funds, and such funds may not be

available on commercially acceptable terms, if at all.

If we are unable to raise funds on acceptable terms, we may not be able

to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements.

This may seriously harm our business, financial condition and results of operations.

of losses and no revenues creates a greater risk of our continued ability to continue as a going concern in the future.

our management expects the business to continue to experience negative cash flows for the foreseeable future and cannot predict

when, if ever, our business might become profitable.

We will need to raise additional funds, and such funds may not be available

on commercially acceptable terms, if at all.

If we are unable to raise funds on acceptable terms, we may not be able to execute

our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements.

may seriously harm our business, financial condition and results of operations.

We are an early clinical stage pharmaceutical

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Moreover, we cannot be certain that our research and development

efforts will be successful or, if successful, that our potential drug compounds will ever be approved for sales to pharmaceutical

efforts will be successful or, if successful, that our potential drug compounds will ever be approved for sale to pharmaceutical

companies or generate commercial revenues.

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If we fail to become profitable, we may suspend or cease operations.

We will need additional funding

and may be unable to raise additional capital when needed, which would force us to delay, reduce or eliminate our research and

development activities.

We will need additional funding and may

be unable to raise additional capital when needed, which would force us to delay, reduce or eliminate our research and development

To date, we have funded our operations primarily

through private placement of our equity securities, grants and our “at the market offering” in connection with an Amended

and Restated Sales Agreement, dated May 1, 2020, with Cantor Fitzgerald & Co.

and SVB Leerink LLC (the “Sales Agents”),

pursuant to which we may offer and sell shares of common stock registered under an effective registration statement from time to

time through the Sales Agents.

We will need to raise additional

funding and the current economic conditions may have a negative impact on our ability to raise additional needed capital on terms

that are favorable to our Company or at all.

We may not be able to generate significant revenues for several years, if at all.

Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt financing.

through private placement of our equity securities, and grants or draws under our “at the market offering” in connection

with an Amended and Restated Sales Agreement, dated May 1, 2020, with Cantor Fitzgerald & Co.

and SVB Leerink LLC (the “Sales

Agents”), pursuant to which we may offer and sell shares of common stock registered under an effective registration statement

from time to time through the Sales Agents or the through the Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln

Park”) pursuant to which the Company may direct Lincoln Park to purchase shares of common stock registered under an effective

registration statement.

The Company currently does not have access to sell shares under the Sales Agreement.

We will need to raise

additional funding and the current economic conditions may have a negative impact on our ability to raise additional needed capital

on terms that are favorable to our Company or at all.

We may not be able to generate significant revenues for several years, if

Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt

We cannot be certain that additional funding will be available on acceptable terms, or at all.

If adequate funds are not available,

we may be required to delay, reduce the scope of, or eliminate one or more of our research and development activities.

If adequate funds are

not available, we may be required to delay, reduce the scope of, or eliminate one or more of our research and development activities.

Risks Related to our Business

Even if we are able to develop

our potential drug compounds, we may not be able to receive regulatory approval, or if approved, we may not be able to generate

significant revenues or successfully commercialize our products, which will adversely affect our financial results and financial

condition and we will have to delay or terminate some or all of our research and development plans which may force us to cease

Even if we are able to develop our potential

drug compounds, we may not be able to receive regulatory approval, or if approved, we may not be able to generate significant revenues

or successfully commercialize our products, which will adversely affect our financial results and financial condition and we will

have to delay or terminate some or all of our research and development plans which may force us to cease operations.

All of our potential drug compounds are exclusively

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These include:

the possibility that non-clinical

testing or clinical trials may show that our potential drug compounds are ineffective and/or cause harmful side effects;

regulators may not authorize

us to commence or continue a clinical trial or may impose a clinical hold or may limit the conduct of a clinical trial through the

imposition of a partial clinical hold;

the number of patients

required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be

slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration

of these clinical trials may be longer than we anticipate;

our third-party contractors,

including investigators, may fail to meet their contractual obligations to us in a timely manner, or at all, or may fail to comply

with regulatory requirements;

our potential drug compounds

may prove to be too expensive to manufacture or administer to patients;

our potential drug compounds

may fail to receive necessary regulatory approvals from the United States Food and Drug Administration or foreign regulatory authorities

in a timely manner, or at all;

even if our potential drug

compounds are approved, we may not be able to produce them in commercial quantities or at reasonable costs;

even if our potential drug

compounds are approved, they may not achieve commercial acceptance;

regulatory or governmental

authorities may apply restrictions to any of our potential drug compounds, which could adversely affect their commercial success;

the proprietary rights

of other parties may prevent us or our potential collaborative partners from marketing our potential drug compounds.

If we fail to develop our potential

drug compounds, our financial results and financial condition will be adversely affected, we will have to delay or terminate some

or all of our research and development plans and may be forced to cease operations.

Our research and development plans

will require substantial additional future funding which could impact our operations and financial condition.

It will take several years before we

can develop potentially marketable products, if at all.

Our research and development plans will require substantial additional

capital, arising from costs to:

conduct research, non-clinical testing and human clinical trials;

establish pilot scale and

commercial scale manufacturing processes and facilities;

establish and develop quality

control, regulatory, marketing, sales, finance and administrative capabilities to support these programs.

Our future operating and capital needs

will depend on many factors, including:

the pace of scientific

progress in our research and development programs and the magnitude of these programs;

the scope and results of pre-clinical testing and human clinical trials;

the time and costs involved

in obtaining regulatory approvals;

the time and costs involved

in preparing, filing, prosecuting, securing, maintaining and enforcing patents;

competing technological

and market developments;

our ability to establish

additional collaborations;

changes in our existing

collaborations;

the cost of manufacturing

the effectiveness of our

commercialization activities.

We base our outlook regarding the need

for funds on many uncertain variables.

Such uncertainties include the success of our research initiatives, regulatory approvals,

the timing of events outside our direct control such as negotiations with potential strategic partners and other factors.

these uncertain events can significantly change our cash requirements as they determine such one-time events as the receipt or

payment of major milestones and other payments.

Additional funds may be required to

support our operations and if we are unable to obtain them on favorable terms, we may be required to cease or reduce certain further

research and development programs of our drug product platform, sell some or all our intellectual property, merge with another

entity or scale back operations.

possibility that non-clinical testing or clinical trials may show that our potential drug compounds are ineffective and/or

cause harmful side effects;

may not authorize us to commence or continue a clinical trial or may impose a clinical hold or may limit the conduct of a

clinical trial through the imposition of a partial clinical hold;

number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these

clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than

we anticipate or the duration of these clinical trials may be longer than we anticipate;

third-party contractors, including investigators, may fail to meet their contractual obligations to us in a timely manner,

or at all, or may fail to comply with regulatory requirements;

potential drug compounds may prove to be too expensive to manufacture or administer to patients;

potential drug compounds may fail to receive necessary regulatory approvals from the United States Food and Drug Administration

or foreign regulatory authorities in a timely manner, or at all;

if our potential drug compounds are approved, we may not be able to produce them in commercial quantities or at reasonable

if our potential drug compounds are approved, they may not achieve commercial acceptance;

or governmental authorities may apply restrictions to any of our potential drug compounds, which could adversely affect their

commercial success;

proprietary rights of other parties may prevent us or our potential collaborative partners from marketing our potential drug

If we fail to develop our potential drug compounds,

our financial results and financial condition will be adversely affected, we will have to delay or terminate some or all of our

research and development plans and may be forced to cease operations.

Our research and development plans will

require substantial additional future funding which could impact our operations and financial condition.

It will take several years before we can develop

potentially marketable products, if at all.

Our research and development plans will require substantial additional capital, arising

from costs to:

research, non-clinical testing and human clinical trials;

pilot scale and commercial scale manufacturing processes and facilities;

and develop quality control, regulatory, marketing, sales, finance and administrative capabilities to support these programs.

Our future operating and capital needs will

depend on many factors, including:

pace of scientific progress in our research and development programs and the magnitude of these programs;

scope and results of pre-clinical testing and human clinical trials;

time and costs involved in obtaining regulatory approvals;

time and costs involved in preparing, filing, prosecuting, securing, maintaining and enforcing patents;

technological and market developments;

ability to establish additional collaborations;

in our existing collaborations;

cost of manufacturing scale-up;

effectiveness of our commercialization activities.

We base our outlook regarding the need for

funds on many uncertain variables.

Such uncertainties include the success of our research initiatives, regulatory approvals, the

timing of events outside our direct control such as negotiations with potential strategic partners and other factors.

uncertain events can significantly change our cash requirements as they determine such one-time events as the receipt or payment

of major milestones and other payments.

Additional funds may be required to support

our operations and if we are unable to obtain them on favorable terms, we may be required to cease or reduce certain further research

and development programs of our drug product platform, sell some or all our intellectual property, merge with another entity or

scale back operations.

If we or any companion diagnostic collaborator

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to identify biomarkers, which we use in the analysis of our clinical trials.

Identification of these patients will

require the use and development of companion diagnostics.

According to the FDA’s 2014 guidance document on In Vitro Companion

Diagnostic Devices, for novel therapeutic products that depend on the use of a diagnostic test and where the diagnostic device

could be essential for the safe and effective use of the corresponding therapeutic product, the premarket application for the companion

diagnostic device should be developed and approved or cleared contemporaneously with the therapeutic.

We do not have experience or capabilities

in developing or commercializing diagnostics.

It may be necessary to resolve issues such as selectivity/specificity, analytical

validation, reproducibility, or clinical validation of companion diagnostics during the development and regulatory approval processes.

Moreover, even if data from preclinical studies and early clinical trials appear to support development of a companion diagnostic

for a drug candidate, data generated in later clinical trials may fail to support the analytical and clinical validation of the

companion diagnostic.

We and our future collaborators may encounter difficulties in developing, obtaining regulatory approval for,

manufacturing and commercializing companion diagnostics similar to those we face with respect to our drug candidates, including

issues with achieving regulatory clearance or approval, production of sufficient quantities at commercial scale and with appropriate

quality standards, and in gaining market acceptance.

If we are unable to successfully develop companion diagnostics for our drug

candidates, or experience delays in doing so, the development of these drug candidates may be adversely affected, these drug candidates

may not obtain marketing approval, and we may not realize the full commercial potential of any of these therapeutics that have

or may obtain marketing approval.

We may not be able to enter into arrangements with another diagnostic company to develop and

obtain regulatory approval for of an alternative diagnostic test for use in connection with the development and commercialization

of our drug candidates or do so on commercially reasonable terms, which could adversely affect and/or delay the development or

commercialization of our therapeutic candidates or therapeutics.

Companion diagnostics are subject to

regulation by the FDA and comparable foreign regulatory authorities as medical devices and will likely require separate regulatory

approval prior to commercialization.

If we or third parties are unable to successfully develop companion diagnostics for our drug

candidates, or experience delays in doing so:

appropriately

Even if our drug candidates and any

associated companion diagnostics are approved for marketing, the need for companion diagnostics may slow or limit adoption of our

drug candidates.

Our drug candidates may be perceived negatively compared to alternative treatments that do not require the use

of companion diagnostics, either due to the additional cost of the companion diagnostic or the need to complete additional prior

to administering our drug candidates.

Identification of these patients will require

the use and development of companion diagnostics.

According to the FDA’s 2014 guidance document on In Vitro Companion Diagnostic

Devices, for novel therapeutic products that depend on the use of a diagnostic test and where the diagnostic device could be essential

for the safe and effective use of the corresponding therapeutic product, the premarket application for the companion diagnostic

device should be developed and approved or cleared contemporaneously with the therapeutic.

We do not have experience or capabilities in

developing or commercializing diagnostics.

It may be necessary to resolve issues such as selectivity/specificity, analytical validation,

reproducibility, or clinical validation of companion diagnostics during the development and regulatory approval processes.

even if data from preclinical studies and early clinical trials appear to support development of a companion diagnostic for a drug

candidate, data generated in later clinical trials may fail to support the analytical and clinical validation of the companion

We and our future collaborators may encounter difficulties in developing, obtaining regulatory approval for, manufacturing

and commercializing companion diagnostics similar to those we face with respect to our drug candidates, including issues with achieving

regulatory clearance or approval, production of sufficient quantities at commercial scale and with appropriate quality standards,

and in gaining market acceptance.

If we are unable to successfully develop companion diagnostics for our drug candidates, or experience

delays in doing so, the development of these drug candidates may be adversely affected, these drug candidates may not obtain marketing

approval, and we may not realize the full commercial potential of any of these therapeutics that have or may obtain marketing approval.

We may not be able to enter into arrangements with another diagnostic company to develop and obtain regulatory approval for of

an alternative diagnostic test for use in connection with the development and commercialization of our drug candidates or do so

on commercially reasonable terms, which could adversely affect and/or delay the development or commercialization of our therapeutic

candidates or therapeutics.

Companion diagnostics are subject to regulation

by the FDA and comparable foreign regulatory authorities as medical devices and will likely require separate regulatory approval

prior to commercialization.

If we or third parties are unable to successfully develop companion diagnostics for our drug candidates,

or experience delays in doing so:

development of these drug candidates may be delayed because it may be difficult to identify patients for enrollment in our

clinical trials in a timely manner;

drug candidates may not receive marketing approval if their safe and effective use depends on a companion diagnostic;

may not realize the full commercial potential of these drug candidates that receive marketing approval if, among other reasons,

we are unable to appropriately identify patients or types of tumors targeted by these drug candidates.

Even if our drug candidates and any associated

companion diagnostics are approved for marketing, the need for companion diagnostics may slow or limit adoption of our drug candidates.

Our drug candidates may be perceived negatively compared to alternative treatments that do not require the use of companion diagnostics,

either due to the additional cost of the companion diagnostic or the need to complete additional prior to administering our drug

If any of these events were to occur, our business

and growth prospects would be harmed materially.

All but one of our

clinical trials to date have been conducted outside the United States,

All but one of our clinical

trials to date have been conducted outside the United States,

and the FDA and other foreign

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Fast Track designation or breakthrough therapy designation may not actually lead to a faster FDA review and approval process.

For some of our compounds, including

ANAVEX ® 2-73, we hope to benefit from the FDA’s fast track and priority review programs.

In February 2020,

the FDA granted Fast Track designation for the ANAVEX ® 2-73 clinical development program for the treatment of Rett

Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority

review and the ability to submit a rolling application for regulatory review.

Fast Track designation applies to both the product

candidate and the specific indication for which it is being studied.

If any of our compounds receive Fast Track designation but

do not continue to meet the criteria for Fast Track designation, or if our clinical trials are delayed, suspended or terminated,

or put on clinical hold due to unexpected adverse events or issues with clinical supply, we will not receive the benefits associated

with the Fast Track program.

Furthermore, Fast Track designation does not change the standards for approval.

The receipt of Fast

Track designation for a compound may not result in a faster development or regulatory review or approval process compared to products

considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.

In addition, even if

any product candidate qualifies for Fast Track designation, the FDA may later decide that the product candidates no longer meet

the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Fast Track designation

alone does not guarantee qualification for the FDA’s priority review procedures.

For some of our compounds, including ANAVEX ® 2-73,

we hope to benefit from the FDA’s fast track and priority review programs.

In February 2020, the FDA granted Fast Track designation

for the ANAVEX ® 2-73 clinical development program for the treatment of Rett syndrome.

Programs with Fast Track designation

may benefit from early and frequent communications with the FDA, potential priority review and the ability to submit a rolling

application for regulatory review.

Fast Track designation applies to both the product candidate and the specific indication for

which it is being studied.

If any of our compounds receive Fast Track designation but do not continue to meet the criteria for

Fast Track designation, or if our clinical trials are delayed, suspended or terminated, or put on clinical hold due to unexpected

adverse events or issues with clinical supply, we will not receive the benefits associated with the Fast Track program.

Fast Track designation does not change the standards for approval.

The receipt of Fast Track designation for a compound may not

result in a faster development or regulatory review or approval process compared to products considered for approval under conventional

FDA procedures and does not assure ultimate approval by the FDA.

In addition, even if any product candidate qualifies for Fast

Track designation, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide

that the time period for FDA review or approval will not be shortened.

Fast Track designation alone does not guarantee qualification

for the FDA’s priority review procedures.

Under FDA policies, a compound is eligible

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compounds will delay revenue from their potential sales and will increase the capital necessary to fund these compound development

We have received orphan drug designation for several

of our compounds, but we may be unable to maintain any benefits associated with orphan drug designation, including market exclusivity.

Under the Orphan Drug Act, the FDA may

grant orphan designation to a drug intended to treat a rare disease or condition or for which there is no reasonable expectation

that the cost of developing and making available in the United States a drug for a disease or condition will be recovered from

sales in the United States for that drug.

We have received orphan drug designation for several of our

compounds, but we may be unable to maintain any benefits associated with orphan drug designation, including market exclusivity.

Under the Orphan Drug Act, the FDA may grant

orphan designation to a drug intended to treat a rare disease or condition or for which there is no reasonable expectation that

the cost of developing and making available in the United States a drug for a disease or condition will be recovered from sales

in the United States for that drug.

If a product that has orphan drug designation subsequently receives the first FDA approval

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seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.

We have received orphan drug designation

for several of our compounds, but we may not be able to obtain or maintain orphan drug exclusivity in the United States for hose

We may not be the first to obtain marketing approval of any compound for which we have obtained orphan drug designation

for the orphan-designated indication due to the uncertainties associated with developing pharmaceutical products.

exclusive marketing rights in the United States may be limited if we seek FDA marketing approval for an indication broader than

the orphan designated indication.

Additionally, any compound with orphan drug designation may lose such designation if the FDA

later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient

quantities of the product to meet the needs of patients with the rare disease or condition.

Even after an orphan drug is approved,

the FDA can subsequently approve the same drug with the same active moiety for the same condition if the FDA concludes that the

later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

addition, others may obtain orphan drug exclusivity for products addressing the same diseases or conditions as products we are

developing, thus limiting our ability to compete in the markets addressing such diseases or conditions for a significant period

Orphan drug designation neither shortens the development

time or regulatory review time of a drug nor gives the product candidate any advantage in the regulatory review or approval process

or entitles the product candidate to priority review.

If we fail to demonstrate efficacy

in our non-clinical studies and clinical trials our future business prospects, financial condition and operating results will be

materially adversely affected.

We have received orphan drug designation for

several of our compounds, but we may not be able to obtain or maintain orphan drug exclusivity in the United States for hose compounds.

We may not be the first to obtain marketing approval of any compound for which we have obtained orphan drug designation for the

orphan-designated indication due to the uncertainties associated with developing pharmaceutical products.

In addition, exclusive

marketing rights in the United States may be limited if we seek FDA marketing approval for an indication broader than the orphan

designated indication.

Additionally, any compound with orphan drug designation may lose such designation if the FDA later determines

that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the

product to meet the needs of patients with the rare disease or condition.

Even after an orphan drug is approved, the FDA can subsequently

approve the same drug with the same active moiety for the same condition if the FDA concludes that the later drug is clinically

superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

In addition, others

may obtain orphan drug exclusivity for products addressing the same diseases or conditions as products we are developing, thus

limiting our ability to compete in the markets addressing such diseases or conditions for a significant period of time.

drug designation neither shortens the development time or regulatory review time of a drug nor gives the product candidate any

advantage in the regulatory review or approval process or entitles the product candidate to priority review.

If we fail to demonstrate efficacy in

our non-clinical studies and clinical trials our future business prospects, financial condition and operating results will be materially

adversely affected.

The success of our research and development

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do not support further development.

Moreover, success in non-clinical testing

and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results

of later clinical trials will replicate the results of prior clinical trials and non-clinical testing.

Moreover, success in non-clinical testing and

early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of

later clinical trials will replicate the results of prior clinical trials and non-clinical testing.

The clinical trial process

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approval can take many years and 10-12 years is not unusual for certain compounds.

If any of our future clinical development

potential drug compounds become the subject of problems, our ability to sustain our development programs will become critically

For example, efficacy or safety concerns may arise, whether or not justified, that could lead to the suspension or

termination of our clinical programs.

If any of our future clinical development potential

drug compounds become the subject of problems, our ability to sustain our development programs will become critically compromised.

For example, efficacy or safety concerns may arise, whether or not justified, that could lead to the suspension or termination

of our clinical programs.

Examples of problems that could arise include, among others:

efficacy or safety concerns

with the potential drug compounds, even if not justified;

manufacturing difficulties

regulatory proceedings

subjecting the potential drug compounds to potential recall;

publicity affecting doctor

prescription or patient use of the potential drug compounds;

pressure from competitive

introduction of more effective

Each clinical phase is designed to test

attributes of the drug and problems that might result in the termination of the entire clinical plan can be revealed at any time

throughout the overall clinical program.

The failure to demonstrate efficacy in our clinical trials would have a material adverse

effect on our future business prospects, financial condition and operating results.

If we do not obtain the support

of qualified scientific collaborators, our revenue, growth and profitability will likely be limited, which would have a material

adverse effect on our business.

We will need to establish relationships

with leading scientists and research institutions.

We believe that such relationships are pivotal to establishing products using

our technologies as a standard of care for various indications.

Additionally, although in discussion, there is no assurance that

our current research partners will continue to work with us or that we will be able to attract additional research partners.

we are not able to establish scientific relationships to assist in our research and development, we may not be able to successfully

or safety concerns with the potential drug compounds, even if not justified;

manufacturing

difficulties or concerns;

proceedings subjecting the potential drug compounds to potential recall;

affecting doctor prescription or patient use of the potential drug compounds;

from competitive products;

of more effective treatments.

Each clinical phase is designed to test attributes

of the drug and problems that might result in the termination of the entire clinical plan can be revealed at any time throughout

the overall clinical program.

The failure to demonstrate efficacy in our clinical trials would have a material adverse effect on

our future business prospects, financial condition and operating results.

If we do not obtain the support of qualified

scientific collaborators, our revenue, growth and profitability will likely be limited, which would have a material adverse effect

on our business.

We will need to establish relationships with

leading scientists and research institutions.

We believe that such relationships are pivotal to establishing products using our

technologies as a standard of care for various indications.

Additionally, although in discussion, there is no assurance that our

current research partners will continue to work with us or that we will be able to attract additional research partners.

are not able to establish scientific relationships to assist in our research and development, we may not be able to successfully

develop our potential drug compounds.

If this happens, our business will be adversely affected.

We may not be able to develop,

market or generate sales of our products to the extent anticipated.

We may not be able to develop, market

or generate sales of our products to the extent anticipated.

Our business may fail and investors could lose all their investment

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the market and generate sales of those products may be limited by a number of factors, including the following:

If our competitors receive

regulatory approvals for and begin marketing similar products in the United States, the European Union, Japan and other territories

before we do, greater awareness of their products as compared to ours will cause our competitive position to suffer;

Information from our competitors

or the academic community indicating that current products or new products are more effective or offer compelling other benefits

than our future products could impede our market penetration or decrease our future market share;

The pricing and reimbursement

environment for our future products, as well as pricing and reimbursement decisions by our competitors and by payers, may have an

effect on our revenues.

If this happens, our business will be

adversely affected.

our competitors receive regulatory approvals for and begin marketing similar products in the United States, the European Union,

Japan and other territories before we do, greater awareness of their products as compared to ours will cause our competitive

position to suffer;

from our competitors or the academic community indicating that current products or new products are more effective or offer

compelling other benefits than our future products could impede our market penetration or decrease our future market share;

pricing and reimbursement environment for our future products, as well as pricing and reimbursement decisions by our competitors

and by payers, may have an effect on our revenues.

If this happens, our business will be adversely

None of our potential drug compounds

may reach the commercial market for a number of reasons and our business may fail.

Successful research and development

of pharmaceutical products is high risk.

Successful research and development of pharmaceutical

products is high risk.

Most products and development candidates fail to reach the market.

Our success depends

on the discovery of new drug compounds that we can commercialize.

It is possible that our products may never reach the market for

a number of reasons.

They may be found ineffective or may cause harmful side-effects during non-clinical testing or clinical trials

or fail to receive necessary regulatory approvals.

We may find that certain products cannot be manufactured at a commercial scale

and, therefore, they may not be economical to produce.

Our potential products could also fail to achieve market acceptance or be

precluded from commercialization by proprietary rights of third parties.

Our patents, patent applications, trademarks and other

intellectual property may be challenged, and this may delay or prohibit us from effectively commercializing our products.

we do not expect our potential drug compounds to be commercially available for a number of years, if at all.

If none of our potential

drug compounds reach the commercial market, our business will likely fail and investors will lose all of their investment in our

If this happens, our business will be adversely affected.

If our competitors succeed in

developing products and technologies faster or that are more effective or with a better profile than our own, or if scientific

developments change our understanding of the potential scope and utility of our potential products, then our technologies and future

products may be rendered undesirable or obsolete.

We face significant competition from

industry participants that are pursuing technologies in similar disease states to those that we are pursuing and are developing

pharmaceutical products that are competitive with our products.

Nearly all of our industry competitors have greater capital resources,

larger overall research and development staffs and facilities, and a longer history in drug discovery and development, obtaining

regulatory approval and pharmaceutical product manufacturing and marketing than we do.

With these additional resources, our competitors

may be able to respond to the rapid and significant technological changes in the biotechnology and pharmaceutical industries faster

Our success depends on the discovery

of new drug compounds that we can commercialize.

It is possible that our products may never reach the market for a number of reasons.

They may be found ineffective or may cause harmful side-effects during non-clinical testing or clinical trials or fail to receive

necessary regulatory approvals.

We may find that certain products cannot be manufactured at a commercial scale and, therefore,

they may not be economical to produce.

Our potential products could also fail to achieve market acceptance or be precluded from

commercialization by proprietary rights of third parties.

Our patents, patent applications, trademarks and other intellectual property

may be challenged, and this may delay or prohibit us from effectively commercializing our products.

Furthermore, we do not expect

our potential drug compounds to be commercially available for a number of years, if at all.

If none of our potential drug compounds

reach the commercial market, our business will likely fail and investors will lose all of their investment in our Company.

happens, our business will be adversely affected.

If our competitors succeed in developing

products and technologies faster or that are more effective or with a better profile than our own, or if scientific developments

change our understanding of the potential scope and utility of our potential products, then our technologies and future products

may be rendered undesirable or obsolete.

We face significant competition from industry

participants that are pursuing technologies in similar disease states to those that we are pursuing and are developing pharmaceutical

products that are competitive with our products.

Nearly all of our industry competitors have greater capital resources, larger

overall research and development staffs and facilities, and a longer history in drug discovery and development, obtaining regulatory

approval and pharmaceutical product manufacturing and marketing than we do.

With these additional resources, our competitors may

be able to respond to the rapid and significant technological changes in the biotechnology and pharmaceutical industries faster

Our future success will depend in large part on our ability to maintain a competitive position with respect to these

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We have advanced our research and development

efforts on the treatment of neurodegenerative and central nervous system, or CNS, disorders, a field that has seen very limited success

in product development.

We have advanced our research

and development efforts on addressing neurodegenerative, neurodevelopmental and CNS disorders.

Collectively, efforts by pharmaceutical

companies in the field of neurodegenerative, neurodevelopmental and CNS disorders have seen very limited successes in product

The development of neurodegenerative and CNS therapies presents unique challenges, including an imperfect understanding of

the biology, the presence of the blood brain barrier, or BBB, that can restrict the flow of drugs to the brain, a frequent lack of translatability

of preclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be

too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.

efforts on the treatment of neurodegenerative and central nervous system, or CNS, disorders, a field that has seen very limited

success in product development.

We have advanced our

research and development efforts on addressing neurodegenerative, neurodevelopmental and CNS disorders.

Collectively, efforts by

pharmaceutical companies in the field of neurodegenerative, neurodevelopmental and CNS disorders have seen very limited

successes in product development.

The development of neurodegenerative and CNS therapies presents unique challenges, including

an imperfect understanding of the biology, the presence of the blood brain barrier, or BBB, that can restrict the flow of drugs

to the brain, a frequent lack of translatability of preclinical study results in subsequent clinical trials and dose selection,

and the product candidate having an effect that may be too small to be detected using the outcome measures selected in clinical

trials or if the outcomes measured do not reach statistical significance.

Our reliance on third parties, such as

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from a failure to comply with these laws or regulations.

If we fail to compete successfully

with respect to partnering, licensing, mergers, acquisitions, joint venture and other collaboration opportunities, we may be limited

If we fail to compete successfully with

respect to partnering, licensing, mergers, acquisitions, joint venture and other collaboration opportunities, we may be limited

in our ability to research and develop our potential drug compounds.

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institutions, reducing the pool of available opportunities.

Universities and public and private

research institutions also compete with us.

While these organizations primarily have educational or basic research objectives,

they may develop proprietary technology and acquire patent applications and patents that we may need for the development of our

potential drug compounds.

Universities and public and private research

institutions also compete with us.

While these organizations primarily have educational or basic research objectives, they may

develop proprietary technology and acquire patent applications and patents that we may need for the development of our potential

drug compounds.

In some instances, we will attempt to license this proprietary technology, if available.

These licenses

may not be available to us on acceptable terms, if at all.

If we are unable to compete successfully with respect to acquisitions,

joint venture and other collaboration opportunities, we may be limited in our ability to develop new products.

The use of any of our products

in clinical trials may expose us to liability claims, which may cost us significant amounts of money to defend against or pay out,

causing our business to suffer.

The nature of our business exposes us

to potential liability risks inherent in the testing, manufacturing and marketing of our products.

We currently have one drug compound

in clinical trials, however, when any of our products enter clinical trials or become marketed products, they could potentially

harm people or allegedly harm people possibly subjecting us to costly and damaging product liability claims.

Some of the patients

who participate in clinical trials are already ill when they enter a trial or may intentionally or unintentionally fail to meet

the exclusion criteria.

The waivers we obtain may not be enforceable and may not protect us from liability or the costs of product

liability litigation.

Although we intend to obtain product liability insurance, which we believe is adequate, we are subject to

the risk that our insurance will not be sufficient to cover claims.

The insurance costs along with the defense or payment of liabilities

above the amount of coverage could cost us significant amounts of money and management distraction from other elements of the business,

causing our business to suffer.

If we are unable to safeguard

against security breaches with respect to our information systems, our business may be adversely affected.

In the course of our business, we gather,

transmit and retain confidential information through our information systems.

Although we endeavor to protect confidential information

through the implementation of security technologies, processes and procedures, it is possible that an individual or group could

defeat security measures and access sensitive information about our business and employees.

Any misappropriation, loss or other

unauthorized disclosure of confidential information gathered, stored or used by us could have a material impact on the operation

of our business, including damaging our reputation with our employees, third parties and investors.

We could also incur significant

costs implementing additional security measures and organizational changes, implementing additional protection technologies, training

employees or engaging consultants.

In addition, we could incur increased litigation as a result of any potential cyber-security

We are not aware that we have experienced any material misappropriation, loss or other unauthorized disclosure of confidential

or personally identifiable information as a result of a cyber-security breach or other act, however, a cyber-security breach or

other act and/or disruption to our information technology systems could have a material adverse effect on our business, prospects,

financial condition or results of operations.

Even if we receive regulatory

approval for one or more compounds, we will be subject to continuing regulatory obligations and ongoing regulatory review, which

may result in significant additional expense.

Additionally, our compounds, if approved, could be subject to labeling and other

restrictions on marketing or withdrawal from the market, and we may be subject to penalties, if we fail to comply with regulatory

requirements or if we experience unanticipated problems with our compounds, when and if any of them are approved.

Following potential approval of any

our compounds, the FDA may impose significant restrictions on a drug’s indicated uses or marketing or require potentially

costly and time-consuming post-approval studies, post-market surveillance or clinical trials to monitor the safety and efficacy

The FDA may also require a Risk Evaluation and Mitigation Strategy (“REMS”) as a condition of approval

of one or more of our compounds, which could include requirements for a medication guide, physician communication plans or additional

elements to ensure safe use of the drug.

Additional REMS elements may include restricted distribution methods, patient registries

and other risk minimization tools.

In addition, if the FDA or a comparable

foreign regulatory authority approves one or more of our compounds, the manufacturing processes, labeling, packaging, distribution,

adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for the approved drug will be subject

to additional and potentially extensive ongoing regulatory requirements.

These requirements include submissions of safety and other

post-marketing information and reports, establishment registration, as well as continued compliance with cGMPs and GCP requirements

for any clinical trials that we conduct post-approval.

Later discovery of previously unknown problems with our products, including

adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure

to comply with regulatory requirements, may result in, among other things:

● restrictions

on the marketing or manufacturing of our products, withdrawal of the product from the market

or voluntary or mandatory product recalls;

restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds

on clinical trials;

● restrictions

on product distribution or use, or requirements to conduct post-marketing studies or clinical

These licenses may not

be available to us on acceptable terms, if at all.

If we are unable to compete successfully with respect to acquisitions, joint

venture and other collaboration opportunities, we may be limited in our ability to develop new products.

The use of any of our products in clinical

trials may expose us to liability claims, which may cost us significant amounts of money to defend against or pay out, causing

our business to suffer.

The nature of our business exposes us to potential

liability risks inherent in the testing, manufacturing and marketing of our products.

We currently have one drug compound in clinical

trials, however, when any of our products enter clinical trials or become marketed products, they could potentially harm people

or allegedly harm people possibly subjecting us to costly and damaging product liability claims.

Some of the patients who participate

in clinical trials are already ill when they enter a trial or may intentionally or unintentionally fail to meet the exclusion criteria.

The waivers we obtain may not be enforceable and may not protect us from liability or the costs of product liability litigation.

Although we intend to obtain product liability insurance, which we believe is adequate, we are subject to the risk that our insurance

will not be sufficient to cover claims.

The insurance costs along with the defense or payment of liabilities above the amount of

coverage could cost us significant amounts of money and management distraction from other elements of the business, causing our

business to suffer.

If our information systems or data, or

those of third parties upon whom we rely, are or were compromised, our business may be adversely affected.

In the course of our business, we, or third

parties upon which we rely, may gather, collect, receive, use, transmit, store/retain or dispose of data and confidential information

(such as confidential employee information or health-related data), sensitive data, intellectual property and trade secrets.

Cyberattacks,

malicious internet-based activity, online and offline fraud and other similar activities threaten the confidentiality, integrity,

and availability of our sensitive information and information technology systems, and those of the third parties upon which we

We, and the third parties upon which we may rely, may be subject to a variety of these evolving threats.

endeavor to protect confidential information through the implementation of security technologies, processes and procedures, it

is possible that an individual or group could defeat security measures and access sensitive information about our business and

The existence of a remote workforce also poses increased risks to our information technology

systems and data, as more of our employees work from home, utilizing network connections outside our premises.

Any misappropriation, loss or other unauthorized

disclosure of confidential information gathered, stored or used by us or by third parties on our behalf, could have a material

impact on the operation of our business, including damaging our reputation with our employees, third parties and investors.

could also incur significant costs implementing additional security measures and organizational changes, implementing additional

protection technologies, training employees or engaging consultants.

contracts with third parties upon which we may rely, may not contain limitations of liability, and even where they do, there can

be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims

related to our data privacy and security obligations.

In addition, we could incur increased litigation as a result of any

potential cyber-security breach and our insurance coverage may not be adequate or sufficient in type

or amount to protect us from or to mitigate liabilities arising out of our privacy and security practices.

We are not aware that we have experienced any

material misappropriation, loss or other unauthorized disclosure of confidential or personally identifiable information as a result

of a cyber-security breach or other act, however, a cyber-security breach or other act and/or disruption to our information technology

systems could have a material adverse effect on our business, prospects, financial condition or results of operations.

Even if we receive regulatory approval

for one or more compounds, we will be subject to continuing regulatory obligations and ongoing regulatory review, which may result

in significant additional expense.

Additionally, our compounds, if approved, could be subject to labeling and other restrictions

on marketing or withdrawal from the market, and we may be subject to penalties, if we fail to comply with regulatory requirements

or if we experience unanticipated problems with our compounds, when and if any of them are approved.

Following potential approval of any our compounds,

the FDA may impose significant restrictions on a drug’s indicated uses or marketing or require potentially costly and time-consuming

post-approval studies, post-market surveillance or clinical trials to monitor the safety and efficacy of the drug.

also require a Risk Evaluation and Mitigation Strategy (“REMS”) as a condition of approval of one or more of our compounds,

which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use

Additional REMS elements may include restricted distribution methods, patient registries and other risk minimization

In addition, if the FDA or a comparable foreign

regulatory authority approves one or more of our compounds, the manufacturing processes, labeling, packaging, distribution, adverse

event reporting, storage, advertising, promotion, import, export and recordkeeping for the approved drug will be subject to additional

and potentially extensive ongoing regulatory requirements.

These requirements include submissions of safety and other post-marketing

information and reports, establishment registration, as well as continued compliance with cGMPs and GCP requirements for any clinical

trials that we conduct post-approval.

Later discovery of previously unknown problems with our products, including adverse events

of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply

with regulatory requirements, may result in, among other things:

on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product

restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials;

on product distribution or use, or requirements to conduct post-marketing studies or clinical trials;

seizure or detention, or refusal to permit the import or export of our products;

● injunctions

or the imposition of civil or criminal penalties;

by the FDA to approve pending applications or supplements to approved applications filed

by us or suspension or revocation of approvals.

The occurrence of any event or penalty

described above may limit our ability to commercialize our compounds and generate revenue, and could require us to expend significant

time and resources in response or generate negative publicity.

If any of our compounds are approved,

our product labeling, advertising and promotion will also be subject to regulatory requirements and ongoing regulatory review.

The FDA strictly regulates the promotional claims that may be made about drug products.

In particular, a drug may not be promoted

for uses that are not approved by the FDA as reflected in the drug’s approved labeling.

If we receive marketing approval

for a compound, physicians may nevertheless lawfully prescribe it to their patients in a manner that is inconsistent with the approved

While the FDA recently clarified that mere knowledge that a physician is prescribing an approved drug for off label use

is not sufficient to constitute unlawful off-label promotion, if we are found to have actively promoted such off label uses, we

may become subject to significant liability under the FDCA.

The federal government has levied large civil and criminal fines against

companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion.

Additionally,

promotion for off label uses could result in significant liability under the False Claims Act.

The FDA has also requested that

companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

The FDA’s and other regulatory

authorities’ policies are subject to change at any time, and additional government regulations may be enacted that could

prevent, limit or delay regulatory approval of our compounds.

If we are unable to timely adapt to changes in existing requirements

or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance post-marketing, we may

lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability.

by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation

of approvals.

The occurrence of any event or penalty described

above may limit our ability to commercialize our compounds and generate revenue, and could require us to expend significant time

and resources in response or generate negative publicity.

If any of our compounds are approved, our product

labeling, advertising and promotion will also be subject to regulatory requirements and ongoing regulatory review.

The FDA strictly

regulates the promotional claims that may be made about drug products.

In particular, a drug may not be promoted for uses that

are not approved by the FDA as reflected in the drug’s approved labeling.

If we receive marketing approval for a compound,

physicians may nevertheless lawfully prescribe it to their patients in a manner that is inconsistent with the approved label.

the FDA recently clarified that mere knowledge that a physician is prescribing an approved drug for off label use is not sufficient

to constitute unlawful off-label promotion, if we are found to have actively promoted such off label uses, we may become subject

to significant liability under the FDCA.

The federal government has levied large civil and criminal fines against companies for

alleged improper promotion and has enjoined several companies from engaging in off-label promotion.

Additionally, promotion for

off label uses could result in significant liability under the False Claims Act.

The FDA has also requested that companies enter

into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

The FDA’s and other regulatory authorities’

policies are subject to change at any time, and additional government regulations may be enacted that could prevent, limit or delay

regulatory approval of our compounds.

If we are unable to timely adapt to changes in existing requirements or the adoption of new

requirements or policies, or if we are not able to maintain regulatory compliance post-marketing, we may lose any marketing approval

that we may have obtained, and we may not achieve or sustain profitability.

Finally, we cannot predict the likelihood,

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normal course, our business may be negatively impacted.

The COVID-19 coronavirus could

adversely impact our business, including our clinical trials, and financial condition.

In December 2019, a novel strain of

coronavirus, COVID-19, was reported to have surfaced in Wuhan, China.

Since then, the COVID-19 coronavirus has spread to multiple

countries, including the United States, Australia and European and Asia-Pacific countries, including countries in which we have

planned or active clinical trial sites.

As the COVID-19 coronavirus continues to spread around the globe, we may experience disruptions

that could potentially impact our business and clinical trials.

The extent to which the COVID-19 coronavirus

may impact our future business operations, including our clinical trials, and financial condition will depend on future developments,

which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the

duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures

or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the

Moreover, to the

extent the COVID-19 pandemic adversely affects our business, financial condition and results of operations, it may also have the

effect of heightening many of the other risks described in this “Risk Factors” section.

We receive Australian government

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funding of future research and development projects.

Our subsidiary, Anavex Australia Pty

Ltd., is incorporated in Australia where we are currently engaged in research and development activities for ANAVEX ® 2-73

Our subsidiary, Anavex Australia Pty Ltd.,

is incorporated in Australia where we are currently engaged in research and development activities for ANAVEX ® 2-73

and ANAVEX ® 3-71.

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and development expenditures made.

Certain research and development expenses

incurred outside of Australia are also eligible for the Australian research and development tax incentive program,

provided we obtain an Advance Overseas Finding from AusIndustry, a division of the Australian Government’s Department of

Industry, Innovation and Science (“AusIndustry”).

To receive an Advance Overseas Finding, the expenses must have

been for eligible research and development activities, as determined by AusIndustry, and the expenditures must have a scientific

link to the Australian activities, be unable to be conducted in Australia and the total actual and reasonably anticipated

overseas costs must be expected to be less than the total actual and reasonably anticipated expenditures for activities conducted

within Australia, as determined by AusIndustry at the time of application for an Advance Overseas Finding (“OSF”).

This OSF binds

both AusIndustry and the Commissioner of Taxation for three income years.

Certain research and development expenses incurred

outside of Australia are also eligible for the Australian research and development tax incentive program, provided

we obtain an Advance Overseas Finding from AusIndustry, a division of the Australian Government’s Department of Industry,

Innovation and Science (“AusIndustry”).

To receive an Advance Overseas Finding, the expenses must have been for

eligible research and development activities, as determined by AusIndustry, and the expenditures must have a scientific link to

the Australian activities, be unable to be conducted in Australia and the total actual and reasonably anticipated overseas

costs must be expected to be less than the total actual and reasonably anticipated expenditures for activities conducted within

Australia, as determined by AusIndustry at the time of application for an Advance Overseas Finding (“OSF”).

This OSF binds both

AusIndustry and the Commissioner of Taxation for three income years.

However, for compliance purposes, specific issue guidance

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of the binding three-year period with respect to OSF applicable to some of its programs being claimed in Australia.

To the extent that some or all of our

research and development expenditures are deemed to be “ineligible,” then our refunds may decrease or be eliminated.

In addition, the Australian government may in the future modify the requirements of, reduce the amounts of the refunds

available under, or discontinue the Research and Development Tax Incentive program.

Any such change to our anticipated

refunds or change to the Research and Development Tax Incentive program would have a negative effect on our future cash

To the extent that some or all of our research

and development expenditures are deemed to be “ineligible,” then our refunds may decrease or be eliminated.

the Australian government may in the future modify the requirements of, reduce the amounts of the refunds available under,

or discontinue the Research and Development Tax Incentive program.

Any such change to our anticipated refunds or change

to the Research and Development Tax Incentive program would have a negative effect on our future cash flows.

A variety of risks are associated with

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in foreign countries, including:

different standards of care in various countries that could complicate

the evaluation of our product candidates;

different United States and foreign drug import and export rules;

reduced protection for intellectual property rights in certain countries;

unexpected changes in tariffs, trade barriers and regulatory requirements;

economic weakness, including inflation, or political instability in

particular foreign economies and markets;

compliance with tax, employment, immigration, and labor laws for employees

living or traveling abroad;

compliance with the FCPA and other anti-corruption and anti-bribery

foreign taxes, including withholding of payroll taxes;

foreign currency fluctuations, which could result in increased operating

expenses and reduced revenue, and other obligations incident to doing business in another country;

workforce uncertainty in countries where labor unrest is more common

than in the United States;

production shortages resulting from any events affecting raw material

supply or manufacturing capabilities abroad;

different payor reimbursement regimes, governmental payors or patient

self-pay systems and price controls;

potential liability resulting from development work conducted by foreign

business interruptions resulting from natural disasters, outbreaks

of contagious diseases, such as COVID-19, or geopolitical actions, including war and terrorism, or systems failure including cybersecurity

compliance with evolving and expansive foreign regulatory requirements,

including data privacy laws (such as the GDPR).

standards of care in various countries that could complicate the evaluation of our product candidates;

United States and foreign drug import and export rules;

protection for intellectual property rights in certain countries;

changes in tariffs, trade barriers and regulatory requirements;

weakness, including inflation, or political instability in particular foreign economies and markets;

with tax, employment, immigration, and labor laws for employees living or traveling abroad;

with the FCPA and other anti-corruption and anti-bribery laws;

taxes, including withholding of payroll taxes;

currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident

to doing business in another country;

uncertainty in countries where labor unrest is more common than in the United States;

shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

different payor

reimbursement regimes, governmental payors or patient self-pay systems and price controls;

potential liability

resulting from development work conducted by foreign partners;

business interruptions

resulting from natural disasters, outbreaks of contagious diseases, such as COVID-19, or geopolitical actions, including war

and terrorism, or systems failure including cybersecurity breaches;

compliance with

evolving and expansive foreign regulatory requirements, including data privacy laws (such as the GDPR).

Additionally, in connection with the ongoing

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ability to use our net operating loss (“NOL”) carryforwards and certain tax credit carryforwards may be subject to

As of September 30, 2022, we had $123.4 million

As of September 30, 2023, we had approximately

$126.3 million of U.S.

federal and $192.0 million of state and local NOL carryforwards.

We had approximately $10.6 million of NOL carryforwards

in Australia as of the same period.

We had approximately $12.9 million of NOL

carryforwards in Australia as of the same period.

Our NOL carryforwards are subject to review and possible adjustment by the U.S.

and state tax

In addition, under Sections 382 and 383 of the Code and corresponding provisions of state law, if a corporation undergoes

an “ownership change,” which is generally defined as a greater than 50% change (by value) in its equity ownership over

a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and research and development credits

to offset its post-change income may be limited.

This could limit the amount of NOLs or research and development credit carryforwards

that we can utilize annually to offset future taxable income or tax liabilities.

Subsequent ownership changes and changes to the

tax rules in respect of the utilization of NOLs and research and development credits carried forward may further affect the

limitation in future years.

In addition, at the state level, there may be periods during which the use of NOLs is suspended or

otherwise limited, which could accelerate or permanently increase state taxes owed.

and state tax authorities.

In addition, under Sections 382 and 383 of the Code and corresponding provisions of state law, if a

corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change (by value) in

its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and research

and development credits to offset its post-change income may be limited.

This could limit the amount of NOLs or research and development

credit carryforwards that we can utilize annually to offset future taxable income or tax liabilities.

Subsequent ownership changes

and changes to the U.S.

tax rules in respect of the utilization of NOLs and research and development credits carried forward may

further affect the limitation in future years.

In addition, at the state level, there may be periods during which the use of NOLs

is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

We conducted a Section 382 study during the

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Subsequent ownership changes in future years could trigger additional limitations of

During the year ended September 30, 2022, we determined that there were no changes in ownership pursuant to Section 382.

During the year ended September 30, 2023 and 2022, we determined that there were no changes in ownership pursuant to

We are subject to healthcare laws and

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laws and regulations include, but are not limited to, the following:

federal Anti-Kickback Statute,

which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing

remuneration, including any kickback, bribe or rebate, directly or indirectly, in cash or in kind, to induce or reward, or

in return for, either the referral of an individual for, or the purchase or lease, order or recommendation of, any item, good,

facility or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

federal civil and criminal false

claims laws and civil monetary penalties laws, including the civil False Claims Act, which impose criminal and civil penalties,

including those from civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly

presenting, or causing to be presented, claims for payment that are false or fraudulent or making a false statement to avoid,

decrease, or conceal an obligation to pay money to the federal government;

The Stark Law prohibits a physician from making referrals for certain “designated

health services” payable by Medicare to an entity in which the physician or an immediate family member of such physician has an

ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception

There are a number of exceptions to the Stark Law.

Such exceptions permit certain payments and arrangements that, although they

would otherwise potentially implicate the Stark Law, are not treated as a violation under the same if the requirements of the specific

exceptions are met.

HIPAA, which among other things, created additional federal criminal statutes

that impose criminal and civil liability for, such actions as executing or attempting to execute a scheme to defraud any healthcare benefit

program or knowingly and willingly falsifying, concealing or covering up a material fact or making false statements relating to healthcare

The privacy and security provisions of HIPAA, which impose certain requirements

on covered entities and their business associates, including mandatory contractual terms, with respect to safeguarding the privacy, security

and transmission of individually identifiable health information;

federal transparency requirements

under the Physician Payments Sunshine Act, enacted as part of the Affordable Care Act that require applicable manufacturers

of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s

Health Insurance Program, with specific exceptions, to track and annually report to CMS payments and other transfers of value

provided to physicians, certain other healthcare providers (such as physicians assistants and nurse practitioners),and teaching

hospitals, as well as ownership and investment interests held by physicians or their immediate family members;

analogous state or foreign laws and

regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party

payor, including commercial insurers, state marketing and/or transparency laws applicable to manufacturers that may be broader

in scope than the federal requirements, state laws that require biopharmaceutical companies to comply with the biopharmaceutical

industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government

and state laws governing the privacy and security of health information in certain circumstances, many of which differ from

each other in significant ways and may not have the same effect as HIPAA, thus complicating compliance efforts.

Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering,

receiving or providing remuneration, including any kickback, bribe or rebate, directly or indirectly, in cash or in kind,

to induce or reward, or in return for, either the referral of an individual for, or the purchase or lease, order or recommendation

of, any item, good, facility or service, for which payment may be made under federal healthcare programs such as Medicare

and Medicaid;

federal civil

and criminal false claims laws and civil monetary penalties laws, including the civil False Claims Act, which impose criminal

and civil penalties, including those from civil whistleblower or qui tam actions, against individuals or entities for, among

other things, knowingly presenting, or causing to be presented, claims for payment that are false or fraudulent or making

a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government;

The Stark Law prohibits

a physician from making referrals for certain “designated health services” payable by Medicare to an entity in

which the physician or an immediate family member of such physician has an ownership or investment interest or with which

the physician has entered into a compensation arrangement, unless a statutory exception applies.

There are a number of exceptions

to the Stark Law.

Such exceptions permit certain payments and arrangements that, although they would otherwise potentially

implicate the Stark Law, are not treated as a violation under the same if the requirements of the specific exceptions are

HIPAA, which among

other things, created additional federal criminal statutes that impose criminal and civil liability for, such actions as executing

or attempting to execute a scheme to defraud any healthcare benefit program or knowingly and willingly falsifying, concealing

or covering up a material fact or making false statements relating to healthcare matters;

The privacy and

security provisions of HIPAA, which impose certain requirements on covered entities and their business associates, including

mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable

health information;

federal transparency

requirements under the Physician Payments Sunshine Act, enacted as part of the Affordable Care Act that require applicable

manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid

or the Children’s Health Insurance Program, with specific exceptions, to track and annually report to CMS payments and

other transfers of value provided to physicians, certain other healthcare providers (such as physicians assistants and nurse

practitioners),and teaching hospitals, as well as ownership and investment interests held by physicians or their immediate

family members;

analogous state

or foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed

by any third-party payor, including commercial insurers, state marketing and/or transparency laws applicable to manufacturers

that may be broader in scope than the federal requirements, state laws that require biopharmaceutical companies to comply

with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated

by the federal government and state laws governing the privacy and security of health information in certain circumstances,

many of which differ from each other in significant ways and may not have the same effect as HIPAA, thus complicating compliance

Ensuring that our business arrangements with

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our business operations.

In the United States, there have been, and continue to be proposed and enacted

legislation at the federal and state levels designed to, among other things, bring more transparency to drug pricing, review the relationship

between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement

methodologies for drugs.

For example, in July 2021, the Biden administration released an executive order, “Promoting Competition

in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on

September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform

and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can

take to advance these principles.

In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source

drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases

that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to

legal challenges.

It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical

If any of our products are subject to such negotiation, we may lose a significant amount of the revenues expected during the

full life cycle of these products.

Further, the Biden administration released an additional executive order on October 14, 2022, directing

HHS to submit a report within 90 days on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models

In the United States, there have been, and

continue to be proposed and enacted legislation at the federal and state levels designed to, among other things, bring more transparency

to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare,

and reform government program reimbursement methodologies for drugs.

For example, in July 2021, the Biden administration released

an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription

In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High

Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress

could pursue as well as potential administrative actions HHS can take to advance these principles.

In addition, the IRA, among

other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2)

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions

will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

It is currently

unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.

If any of our

products are subject to such negotiation, we may lose a significant amount of the revenues expected during the full life cycle

of these products.

Further, the Biden administration released an additional executive order on October 14, 2022, directing HHS

to submit a report within 90 days on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models

for lowering drug costs for Medicare and Medicaid beneficiaries.

We expect that additional U.S.

federal healthcare reform measures

will be adopted in the future, any of which could limit the amounts that the U.S.

federal government will pay for healthcare products

and services, which could result in reduced demand for our product candidates or additional pricing pressures.

federal healthcare reform

measures will be adopted in the future, any of which could limit the amounts that the U.S.

federal government will pay for healthcare

products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

The coverage and reimbursement status

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commercialization of, and obtaining a satisfactory financial return on, any product we develop may not be possible.

Third-party payors are

increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition

to their safety and efficacy.

In order to obtain coverage and reimbursement for any product that might be approved for marketing, we

may need to conduct expensive studies in order to demonstrate the medical necessity and cost-effectiveness of any products, which would

be in addition to the costs expended to obtain regulatory approvals.

Third-party payors may not consider our compounds to be medically

necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may

not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our

investment in drug development.

Additionally, we or our collaborators may develop companion diagnostic tests for use with our

product candidates.

Companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement

for their companion pharmaceutical or biological products.

Similar challenges to obtaining coverage and reimbursement, applicable to

pharmaceutical or biological products, will apply to companion diagnostics.

Our inability to promptly obtain

coverage and adequate reimbursement from third-party payors for the product candidates, and for us or our collaborators to obtain coverage

and adequate reimbursement for related companion diagnostic tests that may be developed, could have a material and adverse effect on

our business, financial condition, results of operations and prospects.

Third-party payors

are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services,

in addition to their safety and efficacy.

In order to obtain coverage and reimbursement for any product that might be approved

for marketing, we may need to conduct expensive studies in order to demonstrate the medical necessity and cost-effectiveness of

any products, which would be in addition to the costs expended to obtain regulatory approvals.

Third-party payors may not consider

our compounds to be medically necessary or cost-effective compared to other available therapies, or the rebate percentages required

to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient

to realize an appropriate return on our investment in drug development.

Additionally, we or our collaborators may develop

companion diagnostic tests for use with our product candidates.

Companion diagnostic tests require coverage and reimbursement separate

and apart from the coverage and reimbursement for their companion pharmaceutical or biological products.

Similar challenges to

obtaining coverage and reimbursement, applicable to pharmaceutical or biological products, will apply to companion diagnostics.

Our inability to promptly obtain coverage and adequate reimbursement from third-party payors for the

product candidates, and for us or our collaborators to obtain coverage and adequate reimbursement for related companion diagnostic

tests that may be developed, could have a material and adverse effect on our business, financial condition, results of operations

and prospects.

Risks Related to our Common Stock

A decline in the price of our

common stock could affect our ability to raise further working capital and adversely impact our operations and would severely dilute

existing or future investors if we were to raise funds at lower prices.

A prolonged decline in the price of

our common stock could result in a reduction in our ability to raise capital.

Because our operations have been financed through

the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our continued operations.

Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and

would have a significant negative effect on our business plans and operations, including our ability to develop new products and

continue our current operations.

If our stock price declines, there can be no assurance that we can raise additional capital or

generate funds from operations sufficient to meet our obligations.

We believe the following factors could cause the market price

of our common stock to continue to fluctuate widely and could cause our common stock to trade at a price below the price at which

you purchase your shares of common stock:

actual or anticipated variations

in our quarterly operating results;

announcements of new services,

products, acquisitions or strategic relationships by us or our competitors;

changes in accounting treatments

or principles;

changes in earnings estimates

by securities analysts and in analyst recommendations;

general political, economic,

regulatory and market conditions.

The market price for our common stock

may also be affected by our ability to meet or exceed expectations of analysts or investors.

Any failure to meet these expectations,

even if minor, could materially adversely affect the market price of our common stock.

If we issue additional shares

of common stock in the future, it will result in the dilution of our existing stockholders and may cause the share price of our

common stock to fall.

We have 200,000,000 shares of common

stock authorized for issuance and we also have 10,000,000 shares of preferred stock authorized.

Our Board of Directors has the

authority to issue additional shares of preferred and common stock up to the authorized capital stated in the articles of incorporation.

A decline in the price of our common

stock could affect our ability to raise further working capital and adversely impact our operations and would severely dilute existing

or future investors if we were to raise funds at lower prices.

A prolonged decline in the price of our common

stock could result in a reduction in our ability to raise capital.

Because our operations have been financed through the sale of

equity securities, a decline in the price of our common stock could be especially detrimental to our continued operations.

reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would

have a significant negative effect on our business plans and operations, including our ability to develop new products and continue

our current operations.

If our stock price declines, there can be no assurance that we can raise additional capital or generate

funds from operations sufficient to meet our obligations.

We believe the following factors could cause the market price of our

common stock to continue to fluctuate widely and could cause our common stock to trade at a price below the price at which you

purchase your shares of common stock:

actual or anticipated

variations in our quarterly operating results;

announcements of

new services, products, acquisitions or strategic relationships by us or our competitors;

changes in accounting

treatments or principles;

changes in earnings

estimates by securities analysts and in analyst recommendations;

general political,

economic, regulatory and market conditions.

The market price for our common stock may also

be affected by our ability to meet or exceed expectations of analysts or investors.

Any failure to meet these expectations, even

if minor, could materially adversely affect the market price of our common stock.

If we issue additional shares of common

stock in the future, it will result in the dilution of our existing stockholders and may cause the share price of our common stock

We have 200,000,000 shares of common stock

authorized for issuance and we also have 10,000,000 shares of preferred stock authorized.

Our Board of Directors has the authority

to issue additional shares of preferred and common stock up to the authorized capital stated in the articles of incorporation.

Our Board of Directors may choose to issue some or all such shares of common stock to acquire one or more businesses or to provide

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by many factors, including the following:

announcements of new data, clinical trial results or those of companies that are perceived to be similar to us;

announcements related to any delays in any preclinical or clinical trials related to our products;

announcements related to our products’ ability to demonstrate efficacy or an acceptable safety profile of our product candidates or similar announcements by companies that are perceived to be similar to us;

our ability to meet or exceed expectations of analysts or investors;

news that the number of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or the duration of these clinical trials may be longer than we anticipate;

actions taken by regulatory agencies with respect to our product candidates or the progress of our clinical trials, including with respect to any fast track or orphan drug designations;

announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors;

grants awarded to us or companies that are perceived to be similar to us from outside entities;

variations in our financial results or those of companies that are perceived to be similar to us;

trading volume of our common stock;

developments concerning our collaborations or partners;

the impact of the COVID-19 outbreak and its effect on us;

the perception of the biotechnology or pharmaceutical industries by the public, legislatures, regulators and the investment community;

developments or disputes concerning intellectual property rights;

significant lawsuits, including patent or stockholder litigation;

our ability or inability to raise additional capital and the terms on which we raise it;

sales of our common stock by us or our stockholders;

declines in the market prices of stocks generally or of companies that are perceived to be similar to us;

general economic, industry and market conditions.

announcements of

new data, clinical trial results or those of companies that are perceived to be similar to us;

announcements related

to any delays in any preclinical or clinical trials related to our products;

announcements related

to our products’ ability to demonstrate efficacy or an acceptable safety profile of our product candidates or similar

announcements by companies that are perceived to be similar to us;

our ability to meet

or exceed expectations of analysts or investors;

news that the number

of patients required for clinical trials for our drug candidates may be larger than we anticipate, enrollment in these clinical

trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate

or the duration of these clinical trials may be longer than we anticipate;

actions taken by

regulatory agencies with respect to our product candidates or the progress of our clinical trials, including with respect

to any fast track or orphan drug designations;

announcements of

significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration

partners or our competitors;

grants awarded to

us or companies that are perceived to be similar to us from outside entities;

variations in our

financial results or those of companies that are perceived to be similar to us;

trading volume of

our common stock;

developments concerning

our collaborations or partners;

the impact of the

COVID-19 outbreak and its effect on us;

the perception of

the biotechnology or pharmaceutical industries by the public, legislatures, regulators and the investment community;

developments or

disputes concerning intellectual property rights;

significant lawsuits,

including patent or stockholder litigation;

our ability or inability

to raise additional capital and the terms on which we raise it;

sales of our common

stock by us or our stockholders;

declines in the

market prices of stocks generally or of companies that are perceived to be similar to us;

general economic,

industry and market conditions.

In addition, companies trading in the stock

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you purchase our shares at a rate that is significantly disconnected from our underlying value.

If we fail to maintain

an effective system of internal control over financial reporting, we may not be able to accurately report our financial results

or prevent fraud.

As a result, stockholders could lose confidence in our financial and other public reporting, which would harm

our business and the trading price of our common stock.

Pursuant to Section 404

of the Sarbanes-Oxley Act, our management is required to report upon the effectiveness of our internal control over financial reporting.

We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial

reporting in the future.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to

accurately report our financial condition, results of operations or cash flows.

If we are unable to conclude that our internal

control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material

weakness or significant deficiency in our internal control over financial reporting, investors may lose confidence in the accuracy

and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions

or investigations by the Nasdaq Stock Market, the SEC or other regulatory authorities.

Failure to remedy any material weakness

in our internal control over financial reporting, or to implement or maintain other effective control systems required of public

companies, could also restrict our future access to the capital markets.

Our disclosure

controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to the

periodic reporting requirements of the Exchange Act.

We designed our disclosure controls and procedures to reasonably assure that

information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management,

and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can

provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations

include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or

For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement

causing us to fail to make a required related party transaction disclosure.

Additionally, controls can be circumvented by the

individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.

because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Risks Related to our Intellectual

If we are unable to obtain and

maintain sufficient intellectual property protection for our product candidates, or if the scope of the intellectual property protection

If we fail to maintain an effective system

of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the

trading price of our common stock.

Pursuant to Section 404 of the Sarbanes-Oxley

Act, our management is required to report upon the effectiveness of our internal control over financial reporting.

We cannot assure

you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately

report our financial condition, results of operations or cash flows.

If we are unable to conclude that our internal control over

financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness

or significant deficiency in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness

of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations

by the Nasdaq Stock Market, the SEC or other regulatory authorities.

Failure to remedy any material weakness in our internal control

over financial reporting, or to implement or maintain other effective control systems required of public companies, could also

restrict our future access to the capital markets.

Our disclosure controls and procedures

may not prevent or detect all errors or acts of fraud.

We are subject to the periodic reporting requirements

of the Exchange Act.

We designed our disclosure controls and procedures to reasonably assure that information we must disclose

in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized

and reported within the time periods specified in the rules and forms of the SEC.

We believe that any disclosure controls and procedures

or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance

that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making

can be faulty, and that breakdowns can occur because of simple error or mistake.

For example, our directors or executive officers

could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required related party transaction

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people

or by an unauthorized override of the controls.

Accordingly, because of the inherent limitations in our control system, misstatements

due to error or fraud may occur and not be detected.

Risks Related to our Intellectual Property

If we are unable to obtain and maintain

sufficient intellectual property protection for our product candidates, or if the scope of the intellectual property protection

obtained is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to

ours, and our ability to successfully commercialize our product candidates that we may pursue may be impaired.

Our success depends in large part on

our ability to obtain and maintain protection of our intellectual property, particularly patents, in the United States and other

countries with respect to our product candidates and technology.

Our success depends in large part on our ability

to obtain and maintain protection of our intellectual property, particularly patents, in the United States and other countries

with respect to our product candidates and technology.

We seek to protect our proprietary position by filing patent applications

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patents related

to ANAVEX ® 2-73 are directed to a dosage form comprising certain doses of ANAVEX ® 2-73 and donepezil,

and the coverage is limited to the United States only.

We may not be able to obtain patent protection for ANAVEX ® 2-73

as a single drug or in other jurisdictions.

to ANAVEX ® 2-73 are directed to ANAVEX®2-73 in its various optical or crystal forms, its therapeutic indications,

and dosage forms comprising certain doses of ANAVEX ® 2-73 combined with another therapeutic agent.

We may not be

able to obtain broader scope patent protection for ANAVEX ® 2-73 as a single drug or in other jurisdictions.

The patent position of biotechnology and pharmaceutical

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Further, we may not be aware of all third-party intellectual property rights potentially

relating to our product candidates.

Publications of discoveries in the scientific literature often lag behind the actual discoveries,

and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or,

in some cases, not at all.

Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in

our patents or pending patent applications, or that we were the first to file for patent protection of such inventions.

the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

Our pending and future

patent applications may not result in patents being issued that protect our product candidates, in whole or in part, or which effectively

prevent others from commercializing competitive product candidates.

Even if our patent applications issue as patents, they may

not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise

provide us with any competitive advantage.

Our competitors may be able to circumvent our patents by developing similar or alternative

product candidates in a non-infringing manner.

relating to and/or interfering with our product candidates.

Publications of discoveries in the scientific literature often lag

behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published

until 18 months after filing or, in some cases, not at all.

Therefore, we cannot know with certainty whether we were the first

to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection

of such inventions.

As a result, the issuance, scope, validity, enforceability and/or commercial value of our patent rights are

highly uncertain.

Our pending and future patent applications may not result in patents being issued that protect our product candidates,

in whole or in part, or which could effectively prevent others from commercializing competitive product candidates.

patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent

competitors from competing with us or otherwise provide us with any competitive advantage.

Our competitors may be able to circumvent

our patents by developing similar or alternative product candidates in a non-infringing manner.

Moreover, we may be subject to a third-party

preissuance submission of prior art to the United States Patent and Trademark Office, or the USPTO, or become involved in opposition,

pre-issuance submission of prior art to the United States Patent and Trademark Office, or the USPTO, or become involved in opposition,

derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or

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of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product

In addition, the issuance of a patent

is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or

patent offices in the United States and abroad.

Such challenges may result in loss of exclusivity or freedom to operate or in patent

claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from

using or commercializing similar or identical product candidates, or limit the duration of the patent protection of our product

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents

protecting such candidates might expire before or shortly after such candidates are commercialized.

As a result, our patent portfolio

may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.

We hold ownership or exclusive rights to seventeen

patents, nineteen U.S.

In addition, the issuance of a patent is not

conclusive as to its inventorship, scope, validity and/or enforceability, and our patents may be challenged in the courts or patent

offices in the United States and abroad.

Such challenges may result in loss of exclusivity or freedom to operate or in patent claims

being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using

or commercializing similar or identical product candidates, or limit the duration of the patent protection of our product candidates.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting

such candidates might expire before or shortly after such candidates are commercialized.

As a result, our patent portfolio may

not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.

We hold ownership or exclusive rights to twenty-two

patents, twenty-three U.S.

patent applications, and various PCT or ex-U.S.

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intellectual property for a number of reasons, including the following:

Competitors may interfere with our patenting process in a variety of ways.

Competitors may claim that Anavex is not entitled to an issued patent for a variety of legal reasons.

Competitors may also claim that we are infringing their patents and restrict our freedom to operate.

If a court or, in some circumstances, a board of a national patent authority, agrees, we would lose some or all of our patent protection.

As a company, we have no meaningful experience with competitors interfering with our patents or patent applications.

Because of the time, money and effort involved in obtaining and enforcing patents, our management may spend less time and resources on developing potential drug compounds than they otherwise would, which could increase our operating expenses and delay product programs.

Issuance of a patent may not provide significant practical protection.

If we receive a patent of narrow scope, then it may be possible for competitors to design products that do not infringe our patent(s).

Anavex is seeking patent protection for a number of indications, combination products and drug regimens.

The lack of patent protection in global markets for a specific end product or indication may inhibit our ability to advance our compounds and may make Anavex less attractive to potential partners.

Defending a patent lawsuit takes significant time and can be very expensive.

If a court decides that an Anavex compound, its method of manufacture or use, infringes on the competitor’s patent, we may have to pay substantial damages for infringement.

A court may prohibit us from making, selling or licensing the potential drug compound unless the patent holder grants a license.

A patent holder is not required to grant a license.

If a license is available, we may have to pay substantial royalties or grant cross licenses to our patents, and the license terms may be unacceptable.

Redesigning our potential drug compounds so that they do not infringe on other patents may not be possible or could require substantial funds and time.

It is also unclear whether our trade

secrets are adequately protected.

While we use reasonable efforts to protect our trade secrets, our employees or consultants may

unintentionally or willfully disclose our information to competitors.

Enforcing a claim that someone illegally obtained and is

using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable.

courts outside the United States are sometimes less willing to protect trade secrets.

Our competitors may independently develop

equivalent knowledge, methods and know-how.

We may also support and collaborate

in research conducted by government organizations, hospitals, universities or other educational institutions.

These research partners

may be unable or unwilling to grant us exclusive rights to technology or products derived from these collaborations.

not obtain required intellectual property licenses or rights, we could encounter delays in our product development efforts while

we attempt to design around other patents or even be prohibited from developing, manufacturing or selling potential drug compounds

requiring these rights or licenses.

There is also a risk that legal disputes may arise as to the rights to technology or potential

drug compounds developed in collaboration with other parties, all with attendant risk, distraction, expense, and lack of predictability.

Competitors may

interfere with our patenting process in a variety of ways.

Competitors may claim that Anavex is not entitled to an issued

patent for a variety of legal reasons.

Competitors may also claim that we are infringing their patents and restrict our freedom

If a court or, in some circumstances, a board of a national patent authority, agrees, we would lose some or all

of our patent protection.

As a company, we have no meaningful experience with competitors interfering with our patents or

patent applications.

Because of the time,

money and effort involved in obtaining and enforcing patents, our management may spend less time and resources on developing

potential drug compounds than they otherwise would, which could increase our operating expenses and delay product programs.

Issuance of a patent

may not provide significant practical protection.

If we receive a patent of narrow scope, then it may be possible for competitors

to design products that do not infringe our patent(s).

Anavex is seeking

patent protection for a number of indications, combination products and drug regimens.

The lack of patent protection in global

markets for a specific end product or indication may inhibit our ability to advance our compounds and may make Anavex less

attractive to potential partners.

Defending a patent

lawsuit takes significant time and can be very expensive.

If a court decides

that an Anavex compound, its method of manufacture or use, infringes on a competitor’s patent, we may have to pay substantial

damages for infringement.

A court may prohibit

us from making, selling or licensing the potential drug compound unless the patent holder grants a license.

A patent holder

is not required to grant a license.

If a license is available, we may have to pay substantial royalties or grant cross licenses

to our patents, and the license terms may be unacceptable.

Redesigning our

potential drug compounds so that they do not infringe on other patents may not be possible or could require substantial funds

It is also unclear whether our trade secrets

are adequately protected.

While we use reasonable efforts to protect our trade secrets, our employees or consultants may unintentionally

or willfully disclose our information to competitors.

Enforcing a claim that someone illegally obtained and is using our trade

secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable.

In addition, courts outside

the United States are sometimes less willing to protect trade secrets.

Our competitors may independently develop equivalent knowledge,

methods and know-how.

We may also support and collaborate in research

conducted by government organizations, hospitals, universities or other educational institutions.

These research partners may be

unable or unwilling to grant us exclusive rights to technology or products derived from these collaborations.

If we do not obtain required intellectual property

licenses or rights, we could encounter delays in our product development efforts while we attempt to design around other patents

or even be prohibited from developing, manufacturing or selling potential drug compounds requiring these rights or licenses.

is also a risk that legal disputes may arise as to the rights to technology or potential drug compounds developed in collaboration

with other parties, all with attendant risk, distraction, expense, and lack of predictability.

Patent terms may be inadequate to protect

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Patent term extension also may be available in certain foreign countries upon regulatory approval of our product

Nevertheless, we may not be granted patent term extension either in the United States or in any foreign country because

of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within

applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.

Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental

authority could be less than we request.

If we are unable to obtain patent term extension or restoration, or the term of any such

extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened

and our competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be

reduced, possibly materially.

Nevertheless, we may not be granted patent term extension either in the United States

or in any foreign country because of, for example, failing to exercise due diligence during the testing phase or regulatory review

process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing

to satisfy applicable requirements.

Moreover, the term of extension, as well as the scope of patent protection during any such

extension, afforded by the governmental authority could be less than what we request.

If we are unable to obtain patent term extension

or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively

market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration

sooner, and our revenue could be reduced, possibly materially.

Also, there are detailed rules and requirements

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version of such product candidate.

If we fail to comply with our

obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions

to our business relationships with our licensors, we could lose intellectual property rights that are important to our business.

We are party to an exclusive license

agreement with Life Science Research Israel Ltd., with respect to certain in-licensed intellectual property related to our ANAVEX ® 3-71

If we fail to comply with our obligations

in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to

our business relationships with our licensors, we could lose intellectual property rights that are important to our business.

We are party to an exclusive license agreement

with Life Science Research Israel Ltd., with respect to certain in-licensed intellectual property related to our ANAVEX ® 3-71

product candidate, and we may need to obtain additional licenses from others in the future.

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could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

Moreover, disputes may arise regarding

intellectual property subject to a licensing agreement, including:

Moreover, disputes may arise regarding intellectual

property subject to a licensing agreement, including:

scope of rights granted under the license agreement and other interpretation-related issues;

extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject

to the licensing agreement;

extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is

not subject to the licensing agreement;

sublicensing of patent and other rights under our collaborative development relationships;

diligence obligations under the license agreement and what activities satisfy those diligence obligations;

inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors

and us and our partners;

inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by

our licensors and us and our partners;

priority of invention of patented technology.

In addition, the agreements under which

we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements

In addition, the agreements under which we

currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements

may be susceptible to multiple interpretations.

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on our business, financial conditions, results of operations, and prospects.

If we do not obtain required intellectual

property licenses or rights, we could encounter delays in our product development efforts while we attempt to design around other

patents or even be prohibited from developing, manufacturing or selling potential drug compounds requiring these rights or licenses.

There is also a risk that legal disputes may arise as to the rights to technology or potential drug compounds developed in collaboration

If we do not obtain required intellectual property

licenses or rights, we could encounter delays in our product development efforts while we attempt to design around other patents

or even be prohibited from developing, manufacturing or selling potential drug compounds requiring these rights or licenses.

is also a risk that legal disputes may arise as to the rights to technology or potential drug compounds developed in collaboration

with other parties, all with attendant risk, distraction, expense, and lack of predictability.

Third-party claims of intellectual

property infringement may prevent or delay our development and commercialization efforts.

Third-party claims of intellectual property

infringement may prevent or delay our development and commercialization efforts.

Our success will also depend in part on our

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rights owned or controlled by third parties.

We have not conducted

extensive freedom of use patent searches and no assurance can be given that patents do not exist or could be issued which would

have an adverse effect on our ability to market our technology or maintain our competitive position with respect to our technology.

Because patent applications can take many years to issue, there may be currently pending patent applications which may later result

in issued patents that our product candidates may infringe.

In addition, third parties may obtain patents in the future and claim

that use of our technologies infringes upon these patents.

If our compounds or other subject matter are claimed under other United

States patents or other international patents or are otherwise protected by third party proprietary rights, we may be subject to

infringement actions.

In such event, we may challenge the validity of such patents or other proprietary rights or we may be required

to obtain licenses from such companies in order to develop, manufacture or market our technology.

There can be no assurances that

we would be successful in a challenge or be able to obtain such licenses or that such licenses, if available, could be obtained

on commercially reasonable terms.

Furthermore, the failure to succeed in a challenge, develop a commercially viable alternative

or obtain needed licenses could be materially adverse.

Adverse consequences include delays in marketing some or all of our potential

drug compounds based on our drug technology or the inability to proceed with the development, manufacture or sale of potential

drug compounds requiring such licenses.

If we defend ourselves against charges of patent infringement or to protect our proprietary

rights against third parties, substantial costs will be incurred regardless of whether we are successful.

Such proceedings are

typically protracted with no certainty of success.

An adverse outcome could subject us to significant liabilities to third parties

and force us to curtail or cease the research and development of our technology.

Parties making claims against us may

obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize ANAVEX ® 2-73

We have not conducted extensive freedom of use patent searches and no assurance can

be given that patents do not exist or could be issued which would have an adverse effect on our ability to market our technology

or maintain our competitive position with respect to our technology.

Because patent applications can take many years to issue,

there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe.

In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.

If our compounds or other subject matter are claimed under other United States patents or other international patents or are otherwise

protected by third party proprietary rights, we may be subject to infringement actions.

In such event, we may challenge the validity

of such patents or other proprietary rights, or we may be required to obtain licenses from such companies in order to develop,

manufacture or market our technology.

There can be no assurances that we would be successful in a challenge or be able to obtain

such licenses or that such licenses, if available, could be obtained on commercially reasonable terms.

Furthermore, the failure

to succeed in a challenge, develop a commercially viable alternative or obtain needed licenses could be materially adverse.

consequences include delays in marketing some or all of our potential drug compounds based on our drug technology or the inability

to proceed with the development, manufacture or sale of potential drug compounds requiring such licenses.

If we defend ourselves

against charges of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred

regardless of whether we are successful.

Such proceedings are typically protracted with no certainty of success.

An adverse outcome

could subject us to significant liabilities to third parties and force us to curtail or cease the research and development of our

Parties making claims against us may obtain

injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize ANAVEX ® 2-73

or our other product candidates.

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have a material adverse effect on our business, results of operations, financial condition and prospects.

If we are unable to protect the

confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would

If we are unable to protect the confidentiality

of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.

While we use reasonable efforts to protect

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Our competitors may independently develop equivalent knowledge, methods and know-how.

We seek to protect our confidential

proprietary information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants,

scientific advisors, contractors and collaborators.

We seek to protect our confidential proprietary

information, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific

advisors, contractors and collaborators.

These agreements are designed to protect our proprietary information.

we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade

secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access

to our trade secrets or independently develop substantially equivalent information and techniques.

For example, any of these parties

may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain

adequate remedies for such breaches.

We also seek to preserve the integrity and confidentiality of our confidential proprietary

information by maintaining physical security of our premises and physical and electronic security of our information technology

systems, but it is possible that these security measures could be breached.

If any of our confidential proprietary information

were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from

using that technology or information to compete with us, which could harm our competitive position.

However, we cannot

be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets

and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our

trade secrets or independently develop substantially equivalent information and techniques.

For example, any of these parties may

breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate

remedies for such breaches.

We also seek to preserve the integrity and confidentiality of our confidential proprietary information

by maintaining physical security of our premises and physical and electronic security of our information technology systems, but

it is possible that these security measures could be breached.

If any of our confidential proprietary information were to be lawfully

obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology

or information to compete with us, which could harm our competitive position.

We may be subject to claims that our

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in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Although we are not currently involved

in any litigation, we may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could

be expensive, time consuming and unsuccessful and could harm our business.

Competitors may infringe our patents

or other intellectual property.

Although we are not currently involved in any litigation, if we were to initiate legal proceedings

against a third party to enforce a patent covering ANAVEX ® 2-73 or our other product candidates, the defendant could

counterclaim that the patent covering our product candidate is invalid and/or unenforceable.

In patent litigation in the United

States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.

Grounds for a validity challenge could

be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, written description

or non-enablement.

Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of

the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution.

The outcome following

legal assertions of invalidity and unenforceability is unpredictable.

Interference or derivation proceedings

provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with

respect to our patents or patent applications.

An unfavorable outcome could require us to cease using the related technology or

to attempt to license rights to it from the prevailing party.

Our business could be harmed if the prevailing party does not offer

us a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access

to the same technology.

Our defense of litigation or interference or derivation proceedings may fail and, even if successful, may

result in substantial costs and distract our management and other employees.

In addition, the uncertainties associated with litigation

could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our

research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring

ANAVEX ® 2-73 or our other product candidates to market.

We may become involved in lawsuits to

protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful and could

harm our business.

Competitors may infringe our patents or other

intellectual property.

Although we are not currently involved in any litigation, if we were to initiate legal proceedings against

a third party to enforce a patent covering ANAVEX ® 2-73 or our other product candidates, the defendant could counterclaim

that the patent covering our product candidate is invalid and/or unenforceable.

In patent litigation in the United States, defendant

counterclaims alleging invalidity and/or unenforceability are commonplace.

Grounds for a validity challenge could be an alleged

failure to meet any of several statutory requirements, including lack of novelty, obviousness, written description or non-enablement.

Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld

relevant information from the USPTO, or made a misleading statement, during prosecution.

The outcome following legal assertions

of invalidity and unenforceability is unpredictable.

Interference or derivation proceedings provoked

by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect

to our patents or patent applications.

An unfavorable outcome could require us to cease using the related technology or to attempt

to license rights to it from the prevailing party.

Our business could be harmed if the prevailing party does not offer us a license

on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access to the same

Our defense of litigation or interference or derivation proceedings may fail and, even if successful, may result in

substantial costs and distract our management and other employees.

In addition, the uncertainties associated with litigation could

have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research

programs, license necessary technology from third parties, or enter into development partnerships that would help us bring ANAVEX ® 2-73

or our other product candidates to market.

We may be subject to claims challenging

the inventorship of our patents and other intellectual property.

We or our licensors may be subject to

claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade

secrets, or other intellectual property as an inventor or co-inventor.

For example, we or our licensors may have inventorship disputes

arise from conflicting obligations of employees, consultants or others who are involved in developing our product candidates.

We or our licensors may be subject to claims

that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade secrets,

or other intellectual property as an inventor or co-inventor.

For example, we or our licensors may have inventorship disputes arise

from conflicting obligations of employees, consultants or others who are involved in developing our product candidates.

may be necessary to defend against these and other claims challenging inventorship or our or our licensors’ ownership of

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the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

Obtaining and maintaining our

patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed

by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees,

annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various

governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications.

We have systems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these

fees due to non-U.S.

Obtaining and maintaining our patent

protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental

patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity

fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental

patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications.

We have systems

in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to

patent agencies.

The USPTO and various non-U.S.

governmental patent agencies require compliance with a number

of procedural, documentary, fee payment and other similar provisions during the patent application process.

We employ reputable

law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late

fee or by other means in accordance with the applicable rules.

However, there are situations in which non-compliance can result

in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant

jurisdiction.

In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse

effect on our business.

We may not be able to protect

our intellectual property rights throughout the world.

Filing, prosecuting and defending patents

on our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property

rights in some countries outside the United States can be less extensive than those in the United States.

In addition, the laws

of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United

States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

governmental patent agencies require compliance with a number of procedural,

documentary, fee payment and other similar provisions during the patent application process.

We employ reputable law firms and

other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other

means in accordance with the applicable rules.

However, there are situations in which non-compliance can result in abandonment

or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect

on our business.

We may not be able to protect our intellectual

property rights throughout the world.

Filing, prosecuting and defending patents on

our product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights

in some countries outside the United States can be less extensive than those in the United States.

In addition, the laws of some

foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States,

or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also

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to protect and enforce our intellectual property in the future.

The risk factors disclosed in this Annual

Report on Form 10-K could materially and adversely affect our business, financial condition and results of operations.

described herein are not the only risks we face.

Our operations could also be affected by additional factors that are not presently

known to us or by factors that we currently consider immaterial to our business.

The risk factors disclosed in this Annual Report

on Form 10-K could materially and adversely affect our business, financial condition and results of operations.

The risks described

herein are not the only risks we face.

Our operations could also be affected by additional factors that are not presently known

to us or by factors that we currently consider immaterial to our business.

STAFF COMMENTS

We do not own any real property.

maintain a corporate head office at 630 5th Avenue, 20th Floor, New York, NY, USA.

a corporate head office at 630 5th Avenue, 20th Floor, New York, NY, USA.

Our lease costs for this office are approximately $10,000

$9,500 per month.

We believe our offices are suitable and adequate to operate our business currently, as they provide us with sufficient

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors