What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-11-27 compared with 2022-11-28 · 752 added, 806 removed, 103 unchanged (94% of the section changed)

STATEMENTS AND SUPPLEMENTARY DATA

ANAVEX LIFE SCIENCES CORP.

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

LIFE SCIENCES CORP.

FINANCIAL STATEMENTS

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

of Directors and Shareholders

Anavex Life Sciences Corp.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting

of Anavex Life Sciences Corp.

(a Nevada corporation) and subsidiaries (the “Company”) as of September 30, 2022, based

on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal

control over financial reporting as of September 30, 2022, based on criteria established in the 2013 Internal Control—Integrated

Framework issued by COSO.

We also have audited, in accordance with the standards of

the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the

Company as of and for the year ended September 30, 2022, and our report dated November 28, 2022 expressed an unqualified opinion

on those financial statements.

We have audited the internal control over financial reporting of Anavex

Life Sciences Corp.

(a Nevada corporation) and subsidiaries (the “Company”) as of September 30, 2023, based on criteria established

in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting

as of September 30, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company

Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the

year ended September 30, 2023, and our report dated November 27, 2023 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining

effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial

reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility

is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting

firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal

control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal

control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating

effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in

the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial

The Company’s management is responsible for maintaining effective

internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included

in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an

opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered

with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial

reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting,

assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control

based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our

audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process

designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements

for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting

is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control

over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance

that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted

accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations

of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over

financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods

are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly

reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded

as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts

and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s

assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting

may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk

that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures

may deteriorate.

/s/ GRANT THORNTON LLP

Hartford, Connecticut

Melville, New York

November 27, 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

1 unchanged sentence

Opinion on the financial statements

We have audited the accompanying consolidated

balance sheet of Anavex Life Sciences Corp.

(a Nevada corporation) and subsidiaries (the “Company”) as of September

30, 2022, the related consolidated statements of operations and comprehensive loss, changes in

stockholders’ equity, and cash flows for the year ended September 30, 2022, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the financial position of the Company as of September

30, 2022, and the results of its operations and its cash flows

for the year ended September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of

the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over

financial reporting as of September 30, 2022, based on criteria established in the 2013 Internal Control - Integrated Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated November

28, 2022 expressed an unqualified opinion.

We have audited the accompanying consolidated balance sheets of Anavex

Life Sciences Corp.

(a Nevada corporation) and subsidiaries (the “Company”) as of September 30, 2023 and 2022, the related

consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the two

years in the period ended September 30, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of September 30, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended

September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company

Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of

September 30, 2023, based on criteria established in the 2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission (“COSO”), and our report dated November 27, 2023 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the

Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public

accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement

of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included

examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating

the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

Critical audit matters are matters

arising from the current period audit of the financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

Critical audit matters are matters arising from the current period audit

of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts

or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

1 unchanged sentence

We have served as the Company’s auditor since 2022.

Hartford, Connecticut

Melville, New York

November 27, 2023

Report of Independent Registered

Public Accounting Firm

Shareholders and Board of Directors

of Independent Registered Public Accounting Firm

and Board of Directors

Life Sciences Corp.

York, New York

on the Consolidated Financial Statements

have audited the consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year

ended September 30, 2021, and the related notes (collectively referred to as the “consolidated financial statements”) of

Anavex Life Sciences Corp.

New York, New York

Opinion on the

Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Anavex Life

Sciences Corp.

(the “Company”) as of September 30, 2021, the related consolidated statements of operations and comprehensive

loss, stockholders’ equity, and cash flows for each of the two years in the period ended September 30, 2021, and the related notes

(collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the financial position of the Company at September 30, 2021, and the results of its operations

and its cash flows for each of the two years in the period ended September 30, 2021 , in conformity with accounting principles generally

accepted in the United States of America.

We also have audited, in accordance with the standards

of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial

reporting as of September 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated November 24,

2021 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be

independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of

the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

that our audits provide a reasonable basis for our opinion.

Critical Audit

Critical audit matters are matters arising from the

current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

(the “Company”).

In our opinion, the consolidated financial statements present fairly, in all

material respects, the results of the Company’s operations and cash flows for the year ended September 30, 2021 , in conformity

with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the PCAOB

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing

procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and

performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that

our audit provides a reasonable basis for our opinion.

Audit Matters

Critical audit matters

are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ BDO USA, LLP

We served as the Company’s auditor from 2013 to 2022.

New York, New York

November 24, 2021

/s/ BDO USA, P.C.

We served as the Company's

auditor from 2013 to 2022.

Life Sciences Corp.

BALANCE SHEETS

at September 30, 2022 and 2021

and cash equivalents

$ 149,157,861

$ 152,107,745

and tax receivables

expenses and other current assets

$ 152,704,603

$ 161,616,490

and Stockholders' Equity

liabilities (Note 3)

grant income (Note 4)

and Contingencies - Note 6

Consolidated Balance Sheets

thousands, except share and per share amounts)

September 30,

Cash and cash equivalents

Incentive and tax receivables

Prepaid expenses and other current assets

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

Accrued liabilities - Note 3

Deferred grant income - Note 4

Total Liabilities

Commitments and Contingencies - Note 6

Capital stock

10,000,000 preferred stock, par value $ 0.001 per share

200,000,000 common stock, par value $ 0.001 per share

and outstanding:

Issued and outstanding:

82,066,511 common shares (2022 - 77,942,815 )

paid-in capital

( 245,563,783 )

( 197,585,864 )

Stockholders' Equity

Liabilities and Stockholders' Equity

$ 152,704,603

$ 161,616,490

See Accompanying Notes to Consolidated Financial Statements

Additional paid-in capital

Accumulated deficit

Total Stockholders' Equity

Total Liabilities and Stockholders' Equity

Accompanying Notes to Consolidated Financial Statements

Life Sciences Corp.

Statements of Operations and Comprehensive Loss

the years ended September 30, 2022, 2021 and 2020

thousands, except share and per share amounts)

Ended September 30,

and administrative

and development

operating expenses

General and administrative

Research and development

Total operating expenses

Other income (expenses)

Research and development incentive income

Interest income, net

Foreign exchange (loss) gain, net

Total other income, net

Net loss before provision for income taxes

Income tax expense, current

Net loss and comprehensive loss

Net Loss per share

income (expenses)

and development incentive income

financing expense

exchange loss

other income, net

loss before provision for income taxes

tax expense, current

loss and comprehensive loss

Loss per share

Basic and diluted

Weighted average number of shares outstanding

average number of shares outstanding

Basic and diluted

See Accompanying Notes to Consolidated Financial Statements

Accompanying Notes to Consolidated Financial Statements

Life Sciences Corp.

STATEMENTS OF CASH FLOWS

the years ended September 30, 2023, 2022 and 2021

Cash Flows used in Operating Activities

Adjustments to reconcile net loss to net cash used in operations:

Stock-based compensation

Changes in working capital balances related to operations:

Incentive and tax receivables

Prepaid expenses and deposits

Accounts payable

Accrued liabilities

Deferred grant income

Net cash used in operating activities

Cash Flows provided by Financing Activities

Issuance of common shares

Share issue costs

Proceeds from exercise of warrants

Proceeds from exercise of stock options

Net cash provided by financing activities

Increase (decrease) in cash and cash equivalents during the period

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental Cash Flow Information

Cash paid for state and local minimum income taxes

See Accompanying Notes to Consolidated Financial Statements

thousands, except share and per share amounts)

Years ended September 30,

Flows used in Operating Activities

to reconcile net loss to net cash used in operations:

financing related charges

in working capital balances related to operations:

and tax receivables

expenses and deposits

cash used in operating activities

Flows provided by Financing Activities

of common shares

from exercise of warrants

from exercise of stock options

cash provided by financing activities

in cash and cash equivalents during the period

and cash equivalents, beginning of period

and cash equivalents, end of period

Cash Flow Information

paid for state and local minimum income taxes

Accompanying Notes to Consolidated Financial Statements

Life Sciences Corp.

Statements of Changes in Stockholders' Equity

the years ended September 30, 2022, 2021 and 2020

Balance, September 30, 2019

( 133,396,760

Shares issued under 2019 purchase agreement

Purchase shares

Commitment shares

Shares issued pursuant to cashless exercise of stock options

Shares issued under Sales Agreement

share issue costs

Share based compensation

Balance, September 30, 2020

( 159,677,230

Shares issued under 2019 purchase agreement

Purchase shares

Commitment shares

Shares issued pursuant to exercise of stock options

Shares issued under Sales Agreement

(in thousands, except share and per share amounts)

October 1, 2020

issued under 2019 purchase agreement

issued under Sales Agreement

share issue costs

Shares issued pursuant to registered direct offering

issued pursuant to registered direct offering

share issue costs

Shares issued pusuant to exercise of warrants

Share based compensation

Balance, September 30, 2021

( 197,585,864

Shares issued pursuant to exercise of stock options

Shares issued under Sales Agreement

issued pursuant to exercise of stock options

issued pursuant to exercise of warrants

based compensation

September 30, 2021

issued under Sales Agreement

share issue costs

Share based compensation

Balance, September 30, 2022

( 245,563,783

See Accompanying Notes to Consolidated Financial Statements

issued pursuant to exercise of stock options

based compensation

September 30, 2022

issued under 2023 purchase agreement

Initial Commitment shares

issued pursuant to exercise of stock options

based compensation

September 30, 2023

Accompanying Notes to Consolidated Financial Statements

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 1

Note 1 Business Description and Basis of Presentation

Anavex Life Sciences Corp.

the “Company”) is a clinical stage biopharmaceutical company engaged in the development of differentiated therapeutics by

applying precision medicine to central nervous system (“CNS”) diseases with high unmet need.

Anavex analyzes genomic data

from clinical studies to identify biomarkers, which are used to select patients that will receive the therapeutic benefit for the treatment

of neurodegenerative and neurodevelopmental diseases.

The Company’s lead compound ANAVEX ® 2-73 is being developed

to treat Alzheimer’s disease, Parkinson’s disease and potentially other central nervous system diseases, including rare diseases,

such as Rett syndrome, a rare severe neurological monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein

Basis of Presentation

These consolidated financial statements have been

prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and the instructions to Form

10-K and have been prepared under the accounting principles generally accepted in the United States of America (“U.S.

All of the Company’s potential drug compounds

are in the clinical development stage and the Company cannot be certain that its research and development efforts will be successful or,

if successful, that its potential drug compounds will ever be approved for sale or generate commercial revenues.

To date, we have not

generated any revenues from our operations.

The Company expects the business to continue to experience negative cash flows for the foreseeable

future and cannot predict when, if ever, its business might become profitable.

Management believes that the current working capital

position will be sufficient to meet the Company’s working capital requirements beyond the next 12 months after the date that these

consolidated financial statements are issued.

The process of drug development can be costly, and the timing and outcomes of clinical trials

is uncertain.

The assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change.

actual amount of the Company’s expenditures will vary depending upon a number of factors including but not limited to the design,

timing and duration of future clinical trials, the progress of the Company’s research and development programs and the level of

financial resources available.

The Company has the ability to adjust its operating plan spending levels based on the timing of future

clinical trials.

Other than our rights related to the Sales Agreement

(as defined below in Note 5), there can be no assurance that additional financing will be available to us when needed or, if available,

that it can be obtained on commercially reasonable terms.

If the Company is not able to obtain the additional financing on a timely basis,

if and when it is needed, it will be forced to delay or scale down some or all of its research and development activities.

Coronavirus Disease 2019 (COVID-19)

The recent global outbreak of COVID-19 did not have

a material impact on the Company’s result of operations or financial condition for the year ended September 30, 2022.

the future course of the pandemic could have adverse effects in the U.S and global economies and thus negatively impact our business

and financial results.

Note 2 Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the

date of the financial statements and the reported amounts of revenue and expenses in the reporting period.

The Company regularly evaluates

estimates and assumptions related to accounting for research and development costs, incentive income receivable, valuation and recoverability

of deferred tax assets, stock-based compensation and loss contingencies.

The Company bases its estimates and assumptions on current facts,

historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the

basis for making judgments about the book values of assets and liabilities and the accrual of costs and expenses that are not readily

apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from the Company’s

To the extent there are material differences between the estimates and the actual results, future results of operations will

30, 2023 – Page 9

1 Business Description and Basis of Presentation

Life Sciences Corp.

(“Anavex” or the “Company”) is a clinical stage biopharmaceutical company engaged in the

development of differentiated therapeutics by applying precision medicine to central nervous system (“CNS”) diseases with

high unmet need.

Anavex analyzes genomic data from clinical trials to identify biomarkers, which are used in the analysis of its clinical

trials for the treatment of neurodegenerative and neurodevelopmental diseases.

Company’s lead compound ANAVEX ® 2-73 (blarcamesine) is being developed to treat Alzheimer’s disease, Parkinson’s

disease and potentially other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological

monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”).

of Presentation

consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission

(“SEC”) and the instructions to Form 10-K and have been prepared under the accounting principles generally accepted in the

United States of America (“U.S.

of the Company’s potential drug compounds are in the clinical development stage and the Company cannot be certain that its research

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

companies or generate commercial revenues.

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

The Company expects the business

to continue to experience negative cash flows from operations for the foreseeable future and cannot predict when, if ever, our business

might become profitable.

believes that the current working capital position will be sufficient to meet the Company’s working capital requirements beyond

the next 12 months after the date that these consolidated financial statements are issued.

The process of drug development can be costly,

and the timing and outcomes of clinical trials are uncertain.

The assumptions upon which the Company has based its estimates are

routinely evaluated and may be subject to change.

The actual amount of the Company’s expenditures will vary depending upon

a number of factors including but not limited to the design, timing and duration of future clinical trials, the progress of the Company’s

research and development programs and the level of financial resources available.

The Company has the ability to adjust its operating

plan spending levels based on the timing of future clinical trials.

than our rights related to the Purchase Agreement (as defined below in Note 5), there can be no assurance that additional financing will

be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.

If the Company is not able

to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all

of its research and development activities.

2 Summary of Significant Accounting Policies

preparation of financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in

the reporting period.

The Company regularly evaluates estimates and assumptions related to accounting for research and development costs,

incentive income receivable, valuation and recoverability of deferred tax assets, stock based compensation, and loss contingencies.

Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be

reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and

liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results experienced by

the Company may differ materially and adversely from the Company’s estimates.

To the extent there are material differences between

the estimates and the actual results, future results of operations will be affected.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 2

Principles of Consolidation

These consolidated financial statements include the

accounts of Anavex Life Sciences Corp.

and its wholly owned subsidiaries, Anavex Australia Pty Limited.

(“Anavex Australia”),

a company incorporated under the laws of Australia, Anavex Germany GmbH, a company incorporated under the laws of Germany, and Anavex

Canada Ltd., a company incorporated under the laws of the Province of Ontario, Canada.

All inter-company transactions and balances have

been eliminated.

Cash and equivalents

The Company considers only

those investments which are highly liquid, readily convertible to cash and that mature within three months from the date of purchase to

be cash equivalents .

30, 2023 – Page 10

of Consolidation

consolidated financial statements include the accounts of Anavex Life Sciences Corp.

and its wholly-owned subsidiaries, Anavex Australia

Pty Limited (“Anavex Australia”), a company incorporated under the laws of Australia, Anavex Germany GmbH, a company incorporated

under the laws of Germany, and Anavex Canada Ltd., a company incorporated under the laws of the Province of Ontario, Canada.

All inter-company

transactions and balances have been eliminated.

and equivalents

Company considers only those investments which are highly liquid, readily convertible to cash and that mature within three months from

the date of purchase to be cash equivalents.

liquid investments that are considered cash equivalents include money market accounts, money market funds and certificates

5 unchanged sentences

Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits.

Accounts are guaranteed by the

Federal Deposit Insurance Corporation (FDIC) up to $ 250,000 , under current regulations.

Accounts are guaranteed by

the Federal Deposit Insurance Corporation (FDIC) up to $ 250,000 under current regulations.

At September 30, 2023 and 2022, substantially

3 unchanged sentences

The Company has not experienced any losses in such accounts.

Research and Development Expenses

Research and development costs are expensed as incurred.

These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including preclinical studies,

clinical trials, manufacturing costs, employee salaries and benefits and stock-based compensation expense, contract services including

external research and development expenses incurred under arrangements with third parties such as contract research organizations (“CROs”),

facilities costs, overhead costs and other related expenses.

Milestone payments made by the Company to third parties are expensed when

the specific milestone has been achieved.

Manufacturing costs are expensed as incurred in accordance with Accounting Standard Codification

(“ASC”) 730, Research and Development, as these materials have no alternative future use outside of their intended use.

Nonrefundable advance payments for goods or services

that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods

are delivered, or the related services are performed, subject to an assessment of recoverability.

The Company makes estimates of costs

incurred in relation to external CROs, and clinical site costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes

progress of the studies including the phase or completion of events, invoices received and contracted costs.

Judgments and estimates are

made in determining the accrued balances at the end of any reporting period.

and Development Expenses

and development costs are expensed as incurred.

These expenses are comprised of the costs of the Company’s proprietary research

and development efforts, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits and stock-based

compensation expense, contract services including external research and development expenses incurred under arrangements with third parties

such as contract research organizations (“CROs”), facilities costs, overhead costs and other related expenses.

payments made by the Company to third parties are expensed when the specific milestone has been achieved.

Manufacturing costs are expensed

as incurred in accordance with Accounting Standard Codification (“ASC”) 730, Research and Development, as these materials

have no alternative future use outside of their intended use.

Nonrefundable

advance payments for goods or services that will be used or rendered for future research and development activities are deferred and

amortized over the period that the goods are delivered, or the related services are performed, subject to an assessment of recoverability.

The Company makes estimates of costs incurred in relation to external CROs, and clinical site costs.

When evaluating the adequacy of

the accrued liabilities, the Company analyzes progress of the trials and studies including the phase or completion of events, invoices

received and contracted costs.

Judgments and estimates are made in determining the accrued balances at the end of any reporting period.

Actual results could differ from the Company’s estimates.

The Company’s historical accrual estimates have not been materially different from actual costs.

The Company’s historical accrual estimates have not been materially

different from actual costs.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 3

In addition, the Company incurs expenses in respect

of intellectual property costs relating to patents and trademarks.

The probability of success and length of time to develop commercial

applications of the drugs subject to the underlying patent and trademark costs is difficult to determine and numerous risks and uncertainties

exist with respect to the timely completion of the development projects.

There is no assurance the drugs subject to the underlying patents

and trademarks will ever be successfully commercialized.

Due to these risks and uncertainties, the patent and

trademark costs do not meet the definition of an asset and thus are expensed as incurred within general and administrative expenses.

Research and Development Incentive Income

The Company is eligible to obtain certain research

and development tax credits, including the Australian research and development tax incentive credit (the “Australia R&D credit”)

through a program administered through the Australian Tax Office (the “ATO”) and AusIndustry, a division of the Australian

Government’s Department of Industry, Innovation and Science (“AusIndustry”), which provides for a cash refund based

on a percentage of eligible research and development activities undertaken in Australia by the Company’s wholly owned subsidiary,

Anavex Australia.

Anavex Australia is also eligible under the Australia R&D credit program to receive the cash refund for certain

research and development expenses incurred by Anavex Australia outside of Australia, to the extent such expenses are pre-approved by AusIndustry

pursuant to an advanced overseas finding application.

The Australia R&D credit program is available

to eligible companies with an annual aggregate revenue of less than $20.0 million Australian during the reimbursable period.

The tax incentives are available on the basis of specific

criteria with which the Company must comply.

Although the tax incentive may be administered through the local tax authority, the Company

has accounted for the incentives outside of the scope of ASC Topic 740, Income Taxes (“ASC 740”), since the incentives are

not linked to the Company’s taxable income and can be realized regardless of whether the Company has generated taxable income in

the respective jurisdictions.

With respect to the Australia R&D credit, as there

is no authoritative guidance under GAAP for accounting for grants to for-profit business entities, the Company accounts for the grant

by analogy to IAS20 Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”).

recognizes the Research and Development Incentive income as it incurs costs eligible for reimbursement under the Australia R&D credit

Program when it is reasonably assured that the cash incentive will be received, as evidenced through enrollment in the program and when

the applicable conditions under the program have been met.

The Company accrues for the amount of cash refund it expects to receive in

relation to research and development expenses outside of Australia only to the extent it has received advanced approval from AusIndustry,

pursuant to an approved advanced overseas finding application.

In addition, Anavex Australia and Anavex Canada incur

Goods and Services Tax (GST) on certain services provided by local vendors.

As a domestic entity in those jurisdictions, Anavex Australia

and Anavex Canada are entitled to a refund of the GST paid.

Similarly, Anavex Germany incurs Value Added Tax (VAT) on certain services

provided by local vendors, to which it is entitled to a refund of such VAT paid.

The Company’s estimate of the amount of cash refund

it expects to receive related to GST and VAT incurred is included in Incentive and tax receivables in the accompanying consolidated balance

Basic and Diluted Loss per Share

Basic income/(loss) per common share is computed by

dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the sum of (1) the

weighted-average number of common shares outstanding during the period, (2) the dilutive effect of the assumed exercise of options and

warrants using the treasury stock method and (3) the dilutive effect of other potentially dilutive securities.

For purposes of the diluted

net loss per share calculation, options and warrants are potentially dilutive securities and are excluded from the calculation of diluted

net loss per share because their effect would be anti-dilutive.

30, 2023 – Page 11

addition, the Company incurs expenses in respect of intellectual property costs relating to patents and trademarks.

The probability of

success and length of time to develop commercial applications of the drugs subject to the underlying patent and trademark costs is difficult

to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects.

assurance the drugs subject to the underlying patents and trademarks will ever be successfully commercialized.

to these risks and uncertainties, the patent and trademark costs do not meet the definition of an asset and thus are expensed as incurred

within general and administrative expenses.

and Development Incentive Income

Company is eligible to obtain certain research and development tax credits, including, through its wholly owned subsidiary Anavex Australia,

the Australian research and development tax incentive credit (the “Australia R&D credit”) through a program administered

through the Australian Tax Office (the “ATO”) and AusIndustry, a division of the Australian Government’s Department

of Industry, Innovation and Science (“AusIndustry”).

The Australia R&D credit program provides for a cash refund based

on a percentage of eligible research and development activities undertaken in Australia by Anavex Australia.

Anavex Australia is also

eligible under the Australia R&D credit program to receive the cash refund for certain research and development expenses incurred

by Anavex Australia outside of Australia, to the extent such expenses are pre-approved by AusIndustry pursuant to an advanced overseas

finding application.

Australia R&D credit program is available to eligible companies with an annual aggregate revenue of less than $20.0 million Australian

during the reimbursable period at a rate of 18.5% above the claimant’s company tax rate in Australia.

tax incentives are available on the basis of specific criteria with which the Company must comply.

Although the tax incentive may be

administered through the local tax authority, the Company has accounted for the incentives outside of the scope of ASC Topic 740, Income

Taxes (“ASC 740”), since the incentives are not linked to the Company’s taxable income and can be realized regardless

of whether the Company has generated taxable income in the respective jurisdictions.

respect to the Australia R&D credit, as there is no authoritative guidance under GAAP for accounting for grants to for-profit business

entities, the Company accounts for the grant by analogy to IAS20 Accounting for Government Grants and Disclosure of Government Assistance

The Company recognizes the Research and Development Incentive income as it incurs costs eligible for reimbursement

under the Australia R&D credit program when it is reasonably assured that the cash incentive will be received, as evidenced through

enrollment in the program and when the applicable conditions under the program have been met.

The Company accrues for the amount of cash

refund it expects to receive in relation to research and development expenses outside of Australia only to the extent it has received

advanced approval from AusIndustry, pursuant to an approved advanced overseas finding application.

addition, Anavex Australia and Anavex Canada incur Goods and Services Tax (GST) on certain services provided by local vendors.

As a domestic

entity in those jurisdictions, Anavex Australia and Anavex Canada are entitled to a refund of the GST paid.

Similarly, Anavex Germany

incurs Value Added Tax (VAT) on certain services provided by local vendors, to which it is entitled to a refund of such VAT paid.

Company’s estimate of the amount of cash refund it expects to receive related to GST and VAT incurred is included in Incentive

and tax receivables in the accompanying consolidated balance sheets.

Company expenses amounts paid to acquire licenses associated with products under development when the ultimate recovery of the amounts

paid is uncertain and the technology has no alternative future use when acquired.

Acquisitions of technology licenses are charged to

expense or capitalized based on management’s assessment regarding the ultimate recoverability of the amounts paid and the potential

for alternative future use.

The Company has determined that the technological feasibility for its product candidates is reached when

the requisite regulatory approvals are obtained to make the product available for sale.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 4

As of September 30, 2022, diluted loss per share excludes

13,329,616 potentially dilutive common shares (2021 – diluted loss per share excludes 11,540,903 potentially dilutive common shares;

2020 – diluted loss per share excludes 10,576,266 potentially dilutive common shares) related to outstanding options and warrants,

as their effect was anti-dilutive.

30, 2023 – Page 12

and Diluted Loss per Share

income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the weighted average number

of common shares outstanding during the period.

Diluted income/(loss) per common share is computed by dividing net income/(loss) available

to common stockholders by the sum of (1) the weighted-average number of common shares outstanding during the period, (2) the dilutive

effect of the assumed exercise of options and warrants using the treasury stock method and (3) the dilutive effect of other potentially

dilutive securities.

For purposes of the diluted net loss per share calculation, options and warrants are potentially dilutive securities

and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.

of September 30, 2023, diluted loss per share excludes 14,271,780 potentially dilutive common shares (2022 – 13,329,616 ;

11,540,903 ) related to outstanding options and warrants, as their effect was anti-dilutive.

book value of the Company’s financial instruments, consisting of cash and equivalents, incentive and tax receivables, accounts

payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments.

Unless otherwise noted,

it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these

financial instruments.

The book value of the Company’s financial instruments,

consisting of cash and equivalents, incentive and tax receivables, accounts payable and accrued liabilities approximate their fair value

due to the short-term maturity of such instruments.

Unless otherwise noted, it is management’s opinion that the Company is not exposed

to significant interest, currency or credit risks arising from these financial instruments.

Foreign Currency Translation

The functional currency of the Company is the US dollar.

Monetary items denominated in a foreign currency are translated into US dollars at exchange rates prevailing at the balance sheet date

and non-monetary items are translated at exchange rates prevailing when the assets were acquired, or obligations incurred.

Foreign currency

denominated expense items are translated at exchange rates prevailing on the transaction date.

Unrealized gains or losses arising from

the translations are credited or charged to income in the period in which they occur.

The Company has determined that the functional currency

of Anavex Australia Pty Limited, Anavex Germany GmbH, and Anavex Canada Ltd.

is also the US dollar.

Segment and Geographic Reporting

Operating segments are defined as components of an

enterprise for which separate discrete information is available for evaluation by the chief operating decision maker or decision-making

group, in deciding how to allocate resources and in assessing performance.

The Company views its operations and manages its business as

one operating segment, which is the business of developing novel therapies for the management of CNS diseases.

Grant income is recognized at the fair value of the

grant when it is received, and all substantive conditions have been satisfied.

Grants received from government and other agencies in advance

of the specific research and development costs to which they relate are deferred and recognized in the consolidated statement of operations

in the period they are earned and when the related research and development costs are incurred.

The Company follows the provisions of ASC 740, which

requires the asset and liability method of accounting for income taxes.

Under the asset and liability method, deferred tax assets and

liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying

amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted

tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Currency Translation

functional currency of the Company is the US dollar.

Monetary items denominated in a foreign currency are translated into US dollars

at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets

were acquired, or obligations incurred.

Foreign currency denominated expense items are translated at exchange rates prevailing on the

transaction date.

Unrealized gains or losses arising from the translations are credited or charged to income in the period in which they

Company has determined that the functional currency of Anavex Australia Pty Limited, Anavex Germany GmbH, and Anavex Canada Ltd.

the US dollar.

and Geographic Reporting

segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief

operating decision maker or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company views

its operations and manages its business as one operating segment, which is the business of developing novel therapies for the management

of CNS diseases.

income is recognized at the fair value of the grant when it is received, and all substantive conditions have been satisfied.

Grants received

from government and other agencies in advance of the specific research and development costs to which they relate are deferred and recognized

in the consolidated statements of operations in the period they are earned, typically when the related research and development costs

are incurred.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 5

The Company follows the provisions of ASC

740 regarding accounting for uncertainty in income taxes.

The Company initially recognizes tax positions in the financial statements

when it is more likely than not the position will be sustained upon examination by the tax authorities.

Such tax positions are

initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon

ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts.

Application requires

numerous estimates based on available information.

The Company considers many factors when evaluating and estimating its tax positions

and tax benefits, and its recognized tax positions and tax benefits may not accurately anticipate actual outcomes.

30, 2023 – Page 13

Company follows the provisions of ASC 740, which requires the asset and liability method of accounting for income taxes.

Under the asset

and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences

between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets

and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences

are expected to be recovered or settled.

Company follows the provisions of ASC 740 regarding accounting for uncertainty in income taxes.

The Company initially recognizes tax

positions in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.

Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being

realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts.

requires numerous estimates based on available information.

The Company considers many factors when evaluating and estimating its tax

positions and tax benefits, and its recognized tax positions and tax benefits may not accurately anticipate actual outcomes.

As additional

information is obtained, there may be a need to periodically adjust the recognized tax positions and tax benefits.

These periodic

adjustments may have a material impact on the consolidated statements of operations.

At September 30, 2022 the Company did no t

have any uncertain tax positions.

The Company recognizes interest and penalties

related to current income tax expense on the interest income, net line, in the accompanying consolidated statement of operations.

Accrued interest and penalties, if any, are included in accrued liabilities on the consolidated balance sheets.

There were no

interest and penalties related to current income tax expense during the years ended September 30, 2022, 2021 and 2020.

Stock-based Compensation

The Company accounts for all stock-based payments

and awards under the fair value method.

The fair value of all share purchase options and warrants

are expensed over their contractual vesting period, or over the expected performance period for only the portion of awards expected to

vest, in the case of milestone-based vesting, with a corresponding increase to additional paid-in capital.

Compensation costs for stock-based payments with graded

vesting are recognized on a straight-line basis.

Stock based compensation expense is adjusted for actual forfeitures of unvested awards

as they occur.

The Company has granted share purchase option awards

that vest upon achievement of certain performance criteria, or milestone-based awards.

The Company estimates an implicit service period

for achieving performance criteria for each award and recognizes the resulting fair value as expense over the implicit service period

when it concludes that achieving the performance criteria is probable.

The Company periodically reviews and updates as appropriate its

estimates of implicit service periods and conclusions on achieving the performance criteria.

Performance awards vest upon achievement

of the performance criteria.

The Company uses the Black-Scholes option valuation

model to calculate the fair value of share purchase options and warrants at the date of the grant.

This model requires the input of subjective

assumptions, including the expected price volatility and expected life of each award.

These periodic adjustments

may have a material impact on the consolidated statements of operations.

Company recognizes interest and penalties related to current income tax expense on the interest income, net line, in the accompanying

consolidated statements of operations.

Accrued interest and penalties, if any, are included in accrued liabilities on the consolidated

balance sheets.

Company accounts for all stock-based payments and awards under the fair value method.

fair value of all share purchase options and warrants are expensed over their contractual vesting period, or over the expected performance

period for only the portion of awards expected to vest, in the case of milestone-based vesting, with a corresponding increase to additional

paid-in capital.

costs for stock-based payments with graded vesting are recognized on a straight-line basis.

Stock based compensation expense is adjusted

for actual forfeitures of unvested awards as they occur.

Company has granted share purchase option awards that vest upon achievement of certain performance criteria, or milestone-based awards.

The Company estimates an implicit service period for achieving performance criteria for each award and recognizes the resulting fair

value as expense over the implicit service period when it concludes that achieving the performance criteria is probable.

periodically reviews and updates as appropriate its estimates of implicit service periods and conclusions on achieving the performance

Performance awards vest upon achievement of the performance criteria.

Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options and warrants at the date

of the grant.

This model requires the input of subjective assumptions, including the expected price volatility and expected life of each award.

The Company uses the U.S.

Treasury daily treasury

yield curve rates for the expected term of the option as the risk-free rate.

The expected term represents the period that options granted

are expected to be outstanding using the simplified method.

The Company’s historical share option exercise experience does not provide

a reasonable basis for estimating the expected term.

Expected volatility is based on the average of the daily share price changes over

the expected term.

The Company does not estimate forfeitures and elects to record actual forfeitures as they occur.

The Company has not

paid any dividends on its common stock historically, therefore no assumption of dividend payments is made in the model.

These assumptions

consist of estimates of future market conditions, which are inherently uncertain, and therefore, are subject to management’s judgment.

Treasury daily treasury yield curve rates for the expected term of the option as the risk-free rate.

term represents the period that options granted are expected to be outstanding using the simplified method.

The Company’s historical

share option exercise experience does not provide sufficient basis for estimating the expected term.

Expected volatility is based on

the average of the daily share price changes over the expected term.

The Company does not estimate forfeitures and elects to record actual

forfeitures as they occur.

The Company has not paid any dividends on its common stock historically, therefore no assumption of dividend

payments is made in the model.

These assumptions consist of estimates of future market conditions, which are inherently uncertain, and

therefore, are subject to management’s judgment.

Changes in these assumptions can materially affect the fair value estimates.

The purchase price of options or warrants may be paid

in cash or, if approved by the Company’s compensation committee in advance, “net settled” in shares of the Company’s

common stock.

In a net settlement of an option or warrant, the Company does not receive payment of the exercise price from the holder

but reduces the number of shares of common stock issued upon the exercise of the stock option or warrant by the smallest number of whole

shares that have an aggregate fair market value equal to or over the aggregate exercise price for the option shares covered by the option

or warrant exercised.

Shares issued pursuant to the exercise of options and warrants are issued from the Company’s treasury.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 6

Fair Value Measurements

Fair value is defined as the exchange price that would

be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or

liability in an orderly transaction between market participants at the measurement date.

Assets and liabilities that are measured at fair

value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value.

This hierarchy maximizes

the use of observable inputs and minimizes the use of unobservable inputs.

The three levels of inputs used to measure fair value are as

Level 1 - quoted prices (unadjusted) in active

markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2 - observable inputs other than Level 1, quoted

prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets

that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable;

Level 3 - assets and liabilities whose significant

value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.

At September 30, 2022 and 2021, the Company did not

have any Level 2 or Level 3 assets or liabilities.

Recently Adopted Accounting Pronouncements

Effective October 1, 2021, the Company adopted Accounting

Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes (ASC 740)”, which is intended to

simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740

and clarifying and amending existing guidance to improve consistent application.

There was no material impact on the Company’s operations,

financial condition, or cash flows.

In November 2021, the Financial Accounting Standards

Board (“FASB”) issued ASU 2021-10, “Government Assistance (Topic 832):

Disclosures by Business Entities about Government

Assistance” (“ASU 2021-10”).

ASU 2021-10 increases the transparency of government assistance including

the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance

on an entity’s financial statements.

ASU 2021-10 is effective for fiscal years beginning after December 15, 2021, with

early adoption permitted.

Upon implementation, the Company may use either a prospective or retrospective method of adoption when adopting

The adoption of ASU 2021-10 will impact the disclosures related to the research and development incentive income that the Company

receives from the ATO for its clinical trials in Australia.

The Company currently plans to adopt the provisions of this ASU on October

Note 3 Accrued Liabilities

The principal components of accrued liabilities consist of:

Schedule of components of accrued liabilities

Accrued clinical site and patient visits costs

Accrued compensation and benefits

Fixed contract accruals

All other accrued liabilities

Total accrued liabilities

30, 2023 – Page 14

purchase price of options or warrants may be paid in cash or, if approved by the Company’s compensation committee (or in the case

of warrants by the Board of Directors) in advance, “net settled” in shares of the Company’s common stock.

settlement of an option or warrant, the Company does not receive payment of the exercise price from the holder but reduces the number

of shares of common stock issued upon the exercise of the stock option or warrant by the smallest number of whole shares that have an

aggregate fair market value equal to or over the aggregate exercise price for the option shares covered by the option or warrant exercised.

Shares issued pursuant to the exercise of options and warrants are issued from the Company’s treasury.

Value Measurements

value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal

or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs

used to measure fair value.

This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs.

levels of inputs used to measure fair value are as follows:

1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at

the measurement date;

2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for

identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose

significant value drivers are observable;

3 - assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant

to the fair value of the assets or liabilities.

September 30, 2023 and 2022, the Company did not have any Level 2 or Level 3 assets or liabilities.

Adopted Accounting Pronouncements

October 1, 2021, the Company adopted Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income

Taxes (ASC 740)”, which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions

to the general principles in Topic 740 and clarifying and amending existing guidance to improve consistent application.

material impact on the Company’s operations, financial condition, or cash flows.

October 1, 2022, the Company adopted ASU 2021-10, Annual Disclosure Requirements for Business Entities Receiving Government Assistance

(Topic 832) – Disclosures by Business Entities about Government Assistance, which requires business entities to disclose information

about transactions with a government that are accounted for by applying a grant or contribution model by analogy.

For transactions within

scope, the new standard requires the disclosure of information about the nature of the transaction, including significant terms and conditions,

as well as the amounts and specific financial statement line items affected by the transaction.

The disclosure of the Company’s

research and development tax incentive income and receivable is detailed in Note 4.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 7

Note 4 Other Income

During the year ended September

30, 2022, the Company received $ 0 (2021:

$ 0 ) of a $ 995,862 research grant awarded during the year ended September 30,

2021, by the Michael J.

30, 2023 – Page 15

3 Accrued Liabilities

principal components of accrued liabilities consist of (in thousands):

Schedule of principal components of accrued liabilities

clinical site and patient visits costs

compensation and benefits

contract accruals

based contract accruals

other accrued liabilities

accrued liabilities

4 Other Income

the year ended September 30, 2023, the Company received $ 0.5 million (2022:

$ 0.5 million) of a $ 1 .0 million research grant awarded

during the year ended September 30, 2021, by the Michael J.

Fox Foundation for Parkinson’s Research.

The grant will be used to fund a clinical trial of the Company’s

lead compound, ANAVEX ® 2-73 related to Parkinson’s disease.

The grant income is

being deferred when received and amortized to other income as the related research and development expenditures are incurred.

the year ended September 30, 2022, the Company recognized $Nil 0 (2021:

$Nil 0 ) of this grant on its statements of

The grant will be used to

fund a clinical trial of the Company’s lead compound, ANAVEX ® 2-73 (blarcamesine) related to Parkinson’s disease.

grant income was deferred when received and amortized to other income as the related research and development expenditures are incurred.

During the year ended September 30, 2023, the Company recognized $ 25,000 (2022:

$ 54,100 ) of this grant on its statements of

operations within grant income.

At September 30, 2022 an amount of $ 443,831 (2021:

$ 443,831 ) of this grant is recorded as deferred

At September 30, 2023 an amount of $ 0.9 million (2022:

$ 0.4 million) of this grant is recorded as deferred

grant income, representing the amount of this grant which has not yet been amortized to other income.

During the year ended September

30, 2017, the Company was awarded grant funding in the amount of $ 597,886 .

The grant was received in equal quarterly installments over

a period of two years ending during the year ended September 30, 2020, in exchange for a commitment to complete clinical testing for a

therapeutic drug candidate for the treatment of Rett syndrome.

The grant income was deferred

when received and amortized to other income as the related research and development expenditures were incurred.

During the year ended

September 30, 2020, the Company recognized $ 149,888 of this grant on its statement of operations as a component of other income.

30, 2020, the Company had recognized the full amount of grant funding.

Research and development

incentive income

Research and development

incentive income represents income earned by the Company’s Australian subsidiary, of the Australian research and development tax

incentive credit (the “tax incentive credit”).

During the year ended September

30, 2022, the Company recorded research and development incentive income of $ 3,323,011 (AUD 4,468,246 ) (2021:

$ 4,547,099 (AUD 6,068,993 );

$ 4,375,025 (AUD 6,392,266 )) in respect of the tax incentive credit for eligible research and development expenses incurred during

The Company evaluates its

eligibility under the tax incentive program as of each balance sheet date based on the most current and relevant data available.

the Company believes that it complies with all the relevant conditions of the program, as a matter of course, the Company may be subject

to pre-issue review or audit by the ATO and, the ATO may have different interpretations of certain eligibility requirements.

the Company’s tax incentive claims from 2018 to 2022 are open to potential review or audit by the ATO.

Note 5 Equity Offerings

Common shares are voting and are entitled to dividends

as declared at the discretion of the Board of Directors.

Preferred Stock

The Company’s Board of Directors (the “Board”) has

the authority to issue preferred stock in one or more series and to fix the rights, preferences, privileges, restrictions and the number

of shares constituting any series or the designation of the series.

Registered Direct Offering

On June 22, 2021, the Company and Deep Track Capital

entered into a securities purchase agreement pursuant to which the Company sold to Deep Track Capital an aggregate of 2,380,953 shares

of common stock at $21 per share in a registered direct offering, for gross proceeds of $50,000,013.

Net proceeds of the offering were

$46,902,981 after deducting offering fees and expenses.

The Company will recognize this

income on its statements of operations as the related expenditures are incurred to offset the income.

and development incentive income

and development incentive income represents the income earned by Anavex Australia of the Australia R&D credit.

This cash incentive

is received by Anavex Australia, upon filing of a claim in connection with Anavex Australia’s annual income tax return.

the year ended September 30, 2023, the Company recorded research and development incentive income of $ 2.7 million (AUD 4.1 million) (2022:

$ 3.3 million (AUD 4.5 million);

$ 4.5 million (AUD 6.1 million)) in respect of the Australia R&D credit for eligible research

and development expenses incurred during the year.

This amount is included within Other income (expense) on the consolidated statements

of operations.

September 30, 2023, Incentive and tax receivables includes $ 2.5 million (AUD 3.9 million) (2022:

$ 2.9 million (AUD 4.5 million) relating

to Australia R&D credits earned during the year that are expected to be reimbursed upon filing of the Company’s annual claim

under this program.

Australia R&D credit program is a self-assess program whereby the Company must assess its eligibility each year to determine (i)

if the entity is eligible (ii) if the specific R&D activities are eligible and (iii) if the individual R&D expenditures have

nexus to such R&D activities.

The Company evaluates its eligibility under the tax incentive program as of each balance sheet date

based on the most current and relevant data available.

Anavex Australia is able to continue to claim the R&D tax incentive for as

long as it remains eligible and continues to incur eligible research and development expenditures.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 8

Sales Agreement

The Company entered into a Controlled Equity Offering

Sales Agreement on July 6, 2018, which was amended and restated on May 1, 2020 (the “Sales Agreement”) with Cantor Fitzgerald &

and SVB Leerink LLC (together the “Sales Agents”), pursuant to which the Company may offer and sell shares of common stock

registered under an effective registration statement from time to time through the Sales Agents (the “Offering”).

Upon delivery of a placement notice based on the Company’s

instructions and subject to the terms and conditions of the Sales Agreement, the Sales Agents may sell the Shares by methods deemed to

be an “at the market offering” offering, in negotiated transactions at market prices prevailing at the time of sale or at

prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to

the prior written consent of the Company.

The Company is not obligated to make any sales of Shares under the Sales Agreement.

or Sales Agents may suspend or terminate the offering of Shares upon notice to the other party, subject to certain conditions.

Agents will act as agents on a commercially reasonable efforts basis consistent with their normal trading and sales practices and applicable

state and federal law, rules and regulations and the rules of Nasdaq.

The Company has agreed to pay the Sales Agents

commissions for their services of up to 3.0 %

of the gross proceeds from the sale of the Shares pursuant to the Sales Agreement.

The Company also agreed to provide the Sales

Agents with customary indemnification and contribution rights.

30, 2023 – Page 16

the Company believes that it has complied with all the relevant conditions of eligibility under the program for all periods claimed,

the ATO has the right to review the Company’s qualifying programs and related expenditures for a period of four years.

a review were to occur, the ATO may have different interpretations of certain eligibility requirements.

If the ATO disagreed with the

Company’s assessments and any related subsequent appeals, it could require adjustment to and repayment of current or previous years’

claims already received.

Additionally, if the Company was unable to demonstrate a reasonably arguable position taken on such claims,

the ATO could also assess penalties and interest on such adjustment.

the Company’s tax incentive claims from 2019 to 2022 are open to potential review by the ATO.

Additionally, the period open for

review is indefinite if the ATO suspects fraud.

The Company has not provided any allowance for any such potential adjustments, should

they occur in the future.

5 Equity Offerings

shares are voting and are entitled to dividends as declared at the discretion of the Board of Directors.

Company’s Board of Directors (the “Board”) has the authority to issue preferred stock in one or more series

and to fix the rights, preferences, privileges, restrictions and the number of shares constituting any series or the designation of the

Direct Offering

June 22, 2021, the Company and Deep Track Capital entered into a securities purchase agreement pursuant to which the Company sold to

Deep Track Capital an aggregate of 2,380,953 shares of common stock at $ 21 per share in a registered direct offering, for gross proceeds

of $ 50 million.

Net proceeds of the offering were $ 46,902,981 after deducting offering fees and expenses.

Company entered into a Controlled Equity Offering Sales Agreement on July 6, 2018, which was amended and restated on May 1, 2020 (the

“Sales Agreement”) with Cantor Fitzgerald & Co.

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

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

through the Sales Agents (the “Offering”).

delivery of a placement notice based on the Company’s instructions and subject to the terms and conditions of the Sales Agreement,

the Sales Agents may sell the Shares by methods deemed to be an “at the market offering” offering, in negotiated transactions

at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted

by law, including negotiated transactions, subject to the prior written consent of the Company.

The Company is not obligated to make

any sales of Shares under the Sales Agreement.

The Company or Sales Agents may suspend or terminate the offering of Shares upon notice

to the other party, subject to certain conditions.

The Sales Agents will act as agent on a commercially reasonable efforts basis consistent

with their normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of

Company has agreed to pay the Sales Agents commissions for their services of up to 3.0 % of the gross proceeds from the sale of the Shares

pursuant to the Sales Agreement.

The Company also agreed to provide the Sales Agents with customary indemnification and contribution

During the year ended September 30, 2023, no shares were sold pursuant to the Offering.

During the year ended September 30, 2022,

shares were sold pursuant to the Offering for gross proceeds of $ 20,984,667

(net proceeds of $ 20,261,425

after deducting offering expenses) (2021:

shares were sold for gross proceeds of $ 79,107,550 ,

net proceeds of $ 76,670,027 ;

shares were sold for gross proceeds of $ 7,499,900 ,

net proceeds of $ 7,096,136 ).

At September 30, 2022, an amount of $ 142,407,882

$ 163,392,550 )

was registered pursuant to an effective registration statement and available to be sold under the Sales Agreement.

1,623,813 shares were sold pursuant to the Offering for gross proceeds of $ 21 .0 million (net proceeds of $ 20.3 million after deducting

offering expenses) (2021:

5,634,576 shares were sold for gross proceeds of $ 79.1 million, net proceeds of $ 76.7 million).

30, 2023, an amount of $ 142.4 million (2022:

$ 142.4 million) was registered pursuant to an effective registration statement.

currently does not have access to sell shares of common stock under the Sales Agreement.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2023 – Page 17

Purchase Agreement

On June 7, 2019, the Company entered into a $50,000,000

purchase agreement (the “2019 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), as amended

on July 1, 2020, pursuant to which the Company had the right to sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase,

up to $ 50,000,000 in value of its shares of common stock from time to time over a three-year period until July 1, 2022.

In consideration for entering into the 2019 Purchase

Agreement, the Company issued to Lincoln Park 324,383 shares of common stock as a commitment fee during the year ended September 30, 2019

and agreed to issue up to 162,191 shares pro rata, when and if, Lincoln Park purchased, at the Company’s discretion, the $ 50,000,000

aggregate commitment.

During the year ended September 30, 2022, the Company

did not issue any shares to Lincoln Park under the 2019 Purchase Agreement.

During the year ended September 30, 2021, the Company

issued to Lincoln Park an aggregate of 4,086,209 (2020:

7,633,527 ) shares of common stock under the 2019 Purchase Agreement, including

4,007,996 (2020:

7,564,584 ) shares of common stock for an aggregate purchase price of $ 24,111,198 (2020:

February 3, 2023, the Company entered into a $150.0 million purchase agreement (the “2023 Purchase Agreement”) with Lincoln

Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company has the right to sell and issue to Lincoln Park, and

Lincoln Park is obligated to purchase, up to $ 150 .0 million in value of its shares of common stock from time to time over a three-year

period until February 3, 2026.

consideration for entering into the 2023 Purchase Agreement, the Company issued to Lincoln Park 75,000 shares of common stock as a commitment

fee (the “initial commitment shares”) and agreed to issue up to an additional 75,000 shares pro rata, when and if, Lincoln

Park purchased, at the Company’s discretion, the $ 150 .0 million aggregate commitment.

The Company determined the fair value of

the initial commitment shares was $ 0.8 million with reference to the closing price of the Company’s shares on the Purchase Agreement

In addition, the Company incurred third party expenses of $ 0.1 million in connection with entering into the Purchase Agreement.

These amounts were expensed to other financing expense on the statements of operations during the year ended September 30, 2023.

the year ended September 30, 2023, the Company issued to Lincoln Park an aggregate of 3,288,943 (2022:

0 ) shares of common stock under

the 2023 Purchase Agreement, including 3,275,000 (2022:

0 ) shares of common stock for aggregate proceeds of $ 27.9 million (2022:

and 13,943 (2022:

0 ) commitment shares.

At September 30, 2022 and 2021, no shares remained

available for issuance under the 2019 Purchase Agreement.

Note 6 Commitments and Contingencies

the year ended September 30, 2022, the Company incurred office lease expense of $ 72,865 (2021:

September 30, 2023, an amount of $ 122.1 million remained available under the 2023 Purchase Agreement.

Purchase Agreement

June 7, 2019, the Company entered into a $50.0 million purchase agreement (the “2019 Purchase Agreement”) with Lincoln Park,

as amended on July 1, 2020, pursuant to which the Company had the right to sell and issue to Lincoln Park, and Lincoln Park was obligated

to purchase, up to $ 50 .0 million in value of its shares of common stock from time to time over a three-year period until July 1, 2022.

the year ended September 30, 2023 and 2022, the Company did not issue any shares to Lincoln Park under the 2019 Purchase Agreement.

the year ended September 30, 2021, the Company issued to Lincoln Park an aggregate of 4,086,209 shares of common stock under the 2019

Purchase Agreement, including 4,007,996 shares of common stock for an aggregate purchase price of $ 24.1 million and 78,213 commitment

September 30, 2023 and 2022, no shares remained available for issuance under the 2019 Purchase Agreement.

6 Commitments and Contingencies

Company leases office space under an operating lease with an initial term of 12 months or less.

Under the terms of the office lease,

the Company is required to pay its proportionate share of operating costs.

operating lease costs were as follows (in thousands):

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 9

Employee 401(k) Benefit Plan

30, 2023 – Page 18

Schedule of operating lease costs

Operating lease costs

401(k) Benefit Plan

Company has a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code.

The plan covers all United States based

United States based employees eligible to participate in the plan may contribute up to the current statutory limits under the

Internal Revenue Service regulations.

The 401(k) plan permits the Company to make additional matching contributions on behalf of contributing

During the year ended September 30, 2022, the Company made $ 158,112 (2021:

$ 98,058 ) in matching contributions

under the 401(k) plan.

is subject to claims and legal proceedings that arise in the ordinary course of business.

Such matters are inherently uncertain, and there

can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter

will not have a material adverse effect upon the Company’s consolidated financial statements.

The Company does not believe that

any of such pending claims and legal proceedings will have a material adverse effect on its consolidated financial statements.

Share Purchase Warrants

The following table summarizes the warrant activity

during the years ended September 30, 2022:

Schedule of exercisable share purchase warrants outstanding

Balance, September 30, 2021

Balance, September 30, 2022

On September 30, 2022, the Company had share purchase

warrants outstanding as follows:

The plan covers all United States

based employees.

United States based employees eligible to participate in the plan may contribute up to the current statutory limits

under the Internal Revenue Service regulations.

The 401(k) plan permits the Company to make additional matching contributions on behalf

of contributing employees.

the year ended September 30, 2023, the Company made matching contributions under the 401(k) plan as follows (in thousands):

Schedule of contributions under the plan

Contributions

to 401(k) plan

Company is subject to claims and legal proceedings that arise in the ordinary course of business.

Such matters are inherently uncertain,

and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of

any such matter will not have a material adverse effect upon the Company’s consolidated financial statements.

The Company does

not believe that any of such pending claims and legal proceedings will have a material adverse effect on its consolidated financial statements.

Purchase Warrants

September 30, 2023 and 2022, the Company had 160,000 warrants outstanding at a weighted average exercise price of $ 3.72 as follows:

Schedule of share purchase warrants outstanding

1 unchanged sentence

April 21, 2026

Stock–based Compensation

Compensation Plan

Stock Option Plan

On September 18, 2015, the Company’s board of

directors approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which provided for the grant of stock options and restricted

stock awards to directors, officers, employees and consultants of the Company.

The maximum number of our common shares reserved for

issue under the plan was 6,050,553 shares, subject to adjustment in the event of a change of the Company’s capitalization.

September 18, 2015, the Company’s board of directors approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which

provided for the grant of stock options and restricted stock awards to directors, officers, employees and consultants of the Company.

maximum number of our common shares reserved for issue under the plan was 6,050,553 shares, subject to adjustment in the event of a change

of the Company’s capitalization.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 10

30, 2023 – Page 19

Stock Option Plan

On January 15, 2019, the Board approved the 2019 Omnibus

Incentive Plan (the “2019 Plan”), which provides for the grant of stock options and restricted stock awards to directors,

officers, employees, consultants and advisors of the Company.

The maximum number of our common shares reserved for

issue under the plan was 6,000,000 shares, subject to adjustment in the event of a change of the Company’s capitalization.

During the year ended September 30, 2022, 406,453

options previously available under the 2019 Plan and the 2015 Plan became available under the 2022 Plan (as defined below).

January 15, 2019, the Board approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which provides for the grant of stock

options and restricted stock awards to directors, officers, employees, consultants and advisors of the Company.

maximum number of our common shares reserved for issue under the plan was 6,000,000 shares, subject to adjustment in the event of a change

of the Company’s capitalization.

the year ended September 30, 2022, 406,453 options previously available under the 2019 Plan and the 2015 Plan became available under

the 2022 Plan (as defined below).

Stock Option Plan

On March 25, 2022, the Board approved the 2022 Omnibus

Incentive Plan (the “2022 Plan”).

The 2022 Plan was approved by stockholders on May 24, 2022.

Under the terms of the 2022

Plan, 10,000,000 additional shares of Common Stock will be available for issuance under the 2022 Plan.

Any awards outstanding under a previous stock option plan will remain subject to and be paid under

such plan, and any shares subject to outstanding awards under a previous plan that subsequently cease to be subject to such awards (other

than by reason of settlement of the awards in shares) will automatically become available for issuance under the 2022 Plan.

The 2022 Plan provides that it may be administered

by the Board, or the Board may delegate such responsibility to a committee.

The exercise price will be determined by the Board at the

time of grant shall be at least equal to the fair market value on such date.

If the grantee is a 10% stockholder on the grant date, then

the exercise price shall not be less than 110% of fair market value of the Company’s shares of common stock on the grant date.

options may be granted under the 2022 Plan for an exercise period of up to ten years from the date of grant of the option or such lesser

periods as may be determined by the Board, subject to earlier termination in accordance with the terms of the 2022 Plan.

30, 2022, 2,058,000 options had been issued under the 2022 Plan and 8,363,453 options were available for issue under the 2022 Plan.

The following summarizes information about stock option

activity during the year ended September 30, 2022:

Schedule of outstanding stock purchase options

March 25, 2022, the Board approved the 2022 Omnibus Incentive Plan (the “2022 Plan”).

The 2022 Plan was approved by stockholders

on May 24, 2022.

Under the terms of the 2022 Plan, 10,000,000 additional shares of Common Stock will be available for issuance under

the plan, in addition to the shares available under the 2019 Plan and the 2015 Plan.

Any awards outstanding under a previous stock option

plan will remain subject to and be paid under such plan, and any shares subject to outstanding awards under a previous plan that subsequently

cease to be subject to such awards (other than by reason of settlement of the awards in shares) will automatically become available for

issuance under the 2022 Plan.

2022 Plan provides that it may be administered by the Board, or the Board may delegate such responsibility to a committee.

price will be determined by the Board at the time of grant shall be at least equal to the fair market value on such date.

If the grantee

is a 10% stockholder on the grant date, then the exercise price shall not be less than 110% of fair market value of the Company’s

shares of common stock on the grant date.

Stock options may be granted under the 2022 Plan for an exercise period of up to ten years

from the date of grant of the option or such lesser periods as may be determined by the Board, subject to earlier termination in accordance

with the terms of the 2022 Plan.

At September 30, 2023, 3,849,917 options had been issued under the 2022 Plan and 6,661,535 options were

available for issue under the 2022 Plan, subject to stockholder approval.

following summarizes information about stock option activity during the years ended September 30, 2023 and 2022:

Schedule of stock option activity

Weighted Average

Average Grant

Aggregate intrinsic

Exercise Price

Date Fair Value

intrinsic value

September 30, 2021

1 unchanged sentence

September 30, 2023

following summarizes information about stock options at September 30, 2023 by a range of exercise prices:

Schedule of summarizes information about stock options

Range of exercises

vested options

exercise price

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 11

The following summarizes information about stock options

at September 30, 2022 by a range of exercise prices:

Summarizes information about stock options

Range of exercise

contractual life

vested options

The weighted average per share fair value of options

vested during the year ended September 30, 2022 was $ 4.69 (2021:

$ 2.54 , 2020:

At September 30, 2022, the weighted average contractual

life of options outstanding was 6.4 years (2021:

6.8 years) and for options exercisable was 5.1 years (2021:

The aggregate intrinsic value is calculated as the

difference between the exercise price of the underlying awards and the quoted market price of the Company’s stock for the options

that were in-the-money at September 30, 2022.

The Company recognized stock-based compensation

expense of $ 18,379,242 during the year ended September 30, 2022 (2021:

30, 2023 – Page 20

weighted average per share fair value of options vested during the year ended September 30, 2023 was $ 3.94 (2022:

$ 4.69 , 2021:

$ 4,876,906 ) in connection with the issuance and

vesting of stock options and warrants in exchange for services.

These amounts have been included in general and administrative

expenses and research and development expenses on the Company’s consolidated statements of operations as follows:

At September 30, 2023, the weighted average contractual life of options outstanding was 6.0 years (2022:

6.4 years) and for options exercisable

was 4.75 years (2022:

aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price

of the Company’s stock for the options that were in-the-money at September 30, 2023.

Company recognized stock-based compensation expense of $ 16.4 million during the year ended September 30, 2023 (2022:

$ 18.4 million;

$ 8.2 million) in connection with the issuance and vesting of stock options in exchange for services.

These amounts have been included

in general and administrative expenses and research and development expenses on the Company’s consolidated statements of operations

as follows (in thousands):

Schedule of general and administrative expenses and research and development expenses

General and administrative

Research and development

Total stock-based compensation

An amount of approximately $ 19,032,000 in stock-based

compensation is expected to be recorded over the remaining term of such options and warrants through fiscal 2025.

The fair value of each option and

warrant award is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions:

and administrative

and development

stock-based compensation

amount of approximately $ 14.1 million in stock-based compensation is expected to be recorded over the remaining term of such options

and warrants through fiscal 2026.

fair value of each option and warrant award is estimated on the date of grant using the Black Scholes option pricing model based on the

following weighted average assumptions:

Schedule of weighted average assumptions for fair value of each option award

Risk-free interest rate

Expected life of options (years)

Annualized volatility

Dividend rate

The fair value of stock compensation charges recognized

during the years ended September 30, 2022, 2021 and 2020 was determined with reference to the quoted market price of the Company’s

shares on the grant date.

interest rate

life of options (years)

fair value of stock compensation charges recognized during the years ended September 30, 2023, 2022 and 2021 was determined with reference

to the quoted market price of the Company’s shares on the grant date.

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 12

Note 7 Income Taxes

The Company’s U.S.

and foreign loss before income

taxes are set forth below:

Schedule of Income before Income Tax, Domestic and Foreign

United States

The components of net deferred income tax assets as of September 30, 2022

and 2021 are as follows:

Schedule of deferred tax asset and liabilities

Net operating loss carryforwards

Research and development tax credit carryforwards

Stock-based compensation

Unpaid charges

Intangible asset costs

Foreign exchange and other

Valuation allowance of deferred tax assets

Net deferred tax assets

A reconciliation of income tax expense at the statutory

federal income tax rate and income taxes as reflected in the consolidated financial statements for the years ended September 30, 2022

and 2021 is as follows:

Schedule of Effective Income Tax Rate Reconciliation

Income tax benefit at statutory federal rate

Foreign income taxed at other rates

Permanent differences relating to stock based compensation

Permanent differences relating to Section 162(m)

Other permanent differences

Adjustment to tax assets based on Section 382

Research and development credits, net

State and local taxes

Adjustment to true up to prior years' tax provision

Effect of change in statutory tax rates

State minimum and excise taxes

Change in valuation allowances

Income tax expense

As of September 30, 2022, the Company had U.S.

net operating loss carryforwards of approximately $ 123.4 million (2021:

$ 101.6 million) of which $37.7 million will begin to expire in

2025 and $85.7 million can be carried forward indefinitely , state and local net operating loss carryforwards of approximately $ 199.0 million

$ 177.7 million) which will begin to expire in 2036 , and Research and Development tax credits of $ 2.2 million (2021:

$ 1.6 million)

which will begin to expire in 2029.

The Company had approximately $ 10.6 million (approximately AU$ 14.9 million) (2021:

$ 7.9 million (approximately

AU$ 11.2 million)) of net operating loss carryforwards in Australia, which have an indefinite life, available to offset future taxable

income in those jurisdictions.

The Company evaluates its valuation allowance

requirements based on available evidence.

When circumstances change, and this causes a change in management’s judgment about

the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income.

Because management of the Company does not currently believe that it is more likely than not that the Company will receive the

benefit of these assets, a full valuation allowance has been established at September 30, 2022 and 2021.

30, 2023 – Page 21

7 Income Taxes

Company’s U.S.

and foreign loss before income taxes are set forth below (in thousands):

Schedule of loss before

components of net deferred income tax assets as of September 30, 2023, 2022 and 2021 are as follows (in thousands):

Schedule of components of

net deferred income tax assets

operating loss carryforwards

and development tax credit carryforwards

and development capitalization

exchange and other

allowance of deferred tax assets

deferred tax assets

reconciliation of income tax expense at the statutory federal income tax rate and income taxes as reflected in the consolidated financial

statements for the years ended September 30, 2023, 2022 and 2021 is as follows (in thousands):

of reconciliation of income tax expense

tax benefit at statutory federal rate

income taxed at other rates

differences relating to stock based compensation

differences relating to GILTI inclusion

differences relating to Section 162(m)

permanent differences

to tax assets based on Section 382

and development credits, net

and local taxes

to true up to prior years' tax provision

of change in statutory tax rates

minimum and excise taxes

in valuation allowances

Life Sciences Corp.

to the Consolidated Financial Statements

September 30, 2022 Page 13

The Company files income tax returns in the U.S.

jurisdiction and various state and local and foreign jurisdictions.

The Company’s tax returns are subject to tax examinations by

federal and state tax authorities, or examinations by foreign tax authorities until the respective statutes of limitation expire.

The Company is subject to tax examinations by tax authorities for all taxation years commencing on or after 2018.

Under the provisions of the Internal Revenue Code,

the net operating loss (“NOL”) carryforwards are subject to review and possible adjustment by the Internal Revenue Service

and state tax authorities.

Under Section 382 of the Internal Revenue Code, NOL and tax credit carryforwards may become subject to an annual

limitation in the event of an over 50% cumulative change in the ownership interest of significant stockholders over a three-year period,

as well as similar state tax provisions.

The Company conducted a Section 382 study during

the year ended September 30, 2021 and determined that, during the year ended September 30, 2015, there was a change in ownership

which resulted in $25.8 million of federal NOLs being subject to an annual limitation of $439,914.

During the year ended September 30, 2021,

the Company reduced its federal NOLs by $12.1 million and its Research and Development tax credit carryforwards by $0.8 million,

which are the amount of tax assets that will expire unutilized pursuant to the Section 382 study.

This resulted in a reduction of

$2.5 million of NOLs and $0.8 million of research and development credits and a corresponding reduction in the valuation allowance

of $ 3.3 million,

which was recorded in the 2021 fiscal year.

Subsequent ownership changes in future years could trigger additional limitations of the

Company’s NOLs .

During the year ended September 30, 2022 the Company determined that

there were no changes in ownership pursuant to Section 382.

As of September 30, 2022, the Company did not provide

any foreign withholding taxes related to its foreign subsidiaries’ undistributed earnings, as such earnings have been retained and

are intended to be indefinitely reinvested to fund ongoing operations of the foreign subsidiaries.

It is not practicable to estimate the

amount of taxes that would be payable upon remittance of these earnings, because such tax, if any, is dependent upon circumstances existing

if and when remittance occur.

30, 2023 – Page 22

of September 30, 2023, the Company had U.S.

federal net operating loss carryforwards of approximately $ 126.3 million (2022:

$ 123.4 million)

of which $37.7 million will begin to expire in 2025 and $88.6 million can be carried forward indefinitely , state and local net operating

loss carryforwards of approximately $ 16.6 million (2022:

$ 17.2 million) which will begin to expire in 2036 , and Research and Development

tax credits of approximately $ 2.7 million (2022:

$ 2.2 million) which will begin to expire in 2029 .

The Company had approximately $ 12.9

million (approximately AU$ 20.1 million) (2022:

$ 10.6 million (approximately AU$ 14.9 million)) of net operating loss carryforwards in

Australia, which have an indefinite life, available to offset future taxable income in those jurisdictions.

Company evaluates its valuation allowance requirements based on available evidence.

When circumstances change, and this causes a change

in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is

reflected in current income.

Because management of the Company does not currently believe that it is more likely than not that the Company

will receive the benefit of these assets, a valuation allowance has been established at September 30, 2023 and 2022.

Tax Cuts and Jobs Act of 2017 (TCJA) has modified the IRC 174 expenses related to research and development for tax years beginning after

December 31, 2021.

Under the TCJA, the Company must now capitalize the expenditures related to research and development activities and

amortize over five years for U.S.

activities and 15 years for non-U.S.

activities using a mid-year convention.

Therefore, the capitalization

of research and development costs in accordance with IRC 174 resulted in a gross deferred tax asset of $ 7.2 million.

Tax Positions

Company files income tax returns in the U.S.

federal jurisdiction and various state and local and foreign jurisdictions.

The Company’s

tax returns are subject to tax examinations by U.S.

federal and state tax authorities, or examinations by foreign tax authorities until

the respective statutes of limitation expire.

The Company is subject to tax examinations by tax authorities for all taxation years commencing

on or after 2005.

the provisions of the Internal Revenue Code, the net operating loss (“NOL”) carryforwards are subject to review and possible

adjustment by the Internal Revenue Service and state tax authorities.

Under Section 382 of the Internal Revenue Code, NOL and tax credit

carryforwards may become subject to an annual limitation in the event of an over 50% cumulative change in the ownership interest of significant

stockholders over a three-year period, as well as similar state tax provisions.

Company conducted a Section 382 study during the year ended September 30, 2021 and determined that, during the year ended September 30,

2015, there was a change in ownership which resulted in $ 25.8 million of federal NOLs being subject to an annual limitation.

year ended September 30, 2021, the Company reduced its federal NOLs by $ 12.1 million and its Research and Development tax credit carryforwards

by $ 0.8 million, which are the amount of tax assets that will expire unutilized pursuant to the Section 382 study.

This resulted in a

reduction of $ 2.5 million of NOLs and $ 0.8 million of research and development credits and a corresponding reduction in the valuation

allowance of $ 3.3 million, which was recorded in the 2021 fiscal year.

Subsequent ownership changes in future years could trigger additional

limitations of the Company’s NOLs .

During the year ended September 30, 2023 and 2022 the

Company determined that there were no changes in ownership pursuant to Section 382.

of September 30, 2023, the Company did not provide any foreign withholding taxes related to its foreign subsidiaries’ undistributed

earnings, as such earnings have been retained and are intended to be indefinitely reinvested to fund ongoing operations of the foreign

subsidiaries.

It is not practicable to estimate the amount of taxes that would be payable upon remittance of these earnings, because

such tax, if any, is dependent upon circumstances existing if and when remittance occur.

8 Subsequent Events

Company evaluates subsequent events occurring between the most recent balance sheet date and the date the financial statements are available

to be issued in order to determine whether the subsequent events are to be recorded and/or disclosed in the Company’s financial

statements and footnotes.

The financial statements are considered to be available to be issued at the time they are filed with the Securities

and Exchange Commission (SEC).

were no subsequent events or transactions that required recognition or disclosure in the consolidated financial statements.

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL MATTERS

1 unchanged sentence

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What changed 10-K

Item 8. Financial Statements and Supplementary Data