What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-11-25 compared with 2024-12-23 · 382 added, 207 removed, 646 unchanged (48% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Board of Directors and Stockholders

Anavex Life Sciences Corp.

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(a Nevada corporation) and subsidiaries (the “Company”) as of September 30, 2025 and 2024, the related

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

years in the period ended September 30, 2024, and the related notes (collectively referred to as the “financial statements”).

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

30, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2024,

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

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

years in the period ended September 30, 2025, and the related notes (collectively referred to as the “consolidated financial

statements”).

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

of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years

in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

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

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

September 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee

of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated November 25, 2025 expressed an

unqualified opinion.

Basis for 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 Public Company Accounting Oversight Board (United States) (“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.

These consolidated financial statements are the responsibility of the Company’s

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.

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of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control

over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control

over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

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

Such procedures

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

Our audits also included

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

of the financial statements.

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.

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Melville, New York

December 23, 2024

November 25, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Anavex Life Sciences Corp.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Anavex

Life Sciences Corp.

(a Nevada corporation) and subsidiaries (the “Company”) as of September 30, 2025, based on criteria established

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

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

as of September 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

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

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

year ended September 30, 2025, and our report dated November 25, 2025 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.

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

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

Melville, New York

November 25, 2025

Life Sciences Corp.

Balance Sheets

thousands, except share and per share amounts)

September 30,

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Accompanying Notes to Consolidated Financial Statements

Anavex Life Sciences Corp.

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

Life Sciences Corp.

Statements of Operations and Comprehensive Loss

thousands, except share and per share amounts)

Years Ended September 30,

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Total other income, net

Net loss before provision for income taxes

Income tax expense, current

Net loss and comprehensive loss

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Accompanying Notes to Consolidated Financial Statements

Anavex Life Sciences Corp.

Consolidated Statements of Cash Flows

(in thousands, except share and per share amounts)

Life Sciences Corp.

Statements of Cash Flows

thousands, except share and per share amounts)

Years ended September 30,

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Cash Flows provided by Financing Activities

Issuance of common shares

Issuance of common shares, net of share issue costs

Payment for taxes related to cashless exercise of options

Proceeds from exercise of stock options

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Cash paid for state and local franchise taxes

Common stock issued upon cashless exercise of stock options

Accompanying Notes to Consolidated Financial Statements

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$ ( 336,071 )

Shares issued under 2025 Sales Agreement

Shares issued pursuant to exercise of stock options

Shares issued pursuant to cashless exercise of stock options

Shares withheld related to cashless exercise of stock option

Share based compensation

Balance, September 30, 2025

$ ( 382,448 )

Accompanying Notes to Consolidated Financial Statements

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

Certain immaterial amounts from prior periods have

been reclassified to conform to the current year’s presentation.

All of the Company’s potential drug compounds

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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 revenue from our operations.

The Company expects the business to continue to experience negative cash

flows from operations for the foreseeable future and cannot predict when, if ever, our business might become profitable.

To date, the Company has not generated any revenue from our operations.

The Company expects the business to continue to experience negative

cash flows from operations for the foreseeable future and cannot predict when, if ever, its business might become profitable.

Management believes that the current working capital

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clinical trials.

Other than our rights related to the 2023 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.

Other than our rights related to the 2025 Sales Agreement

and the 2023 Purchase Agreement (as defined below in Note 5), there can be no assurance that additional financing will be available when

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

The Company will need to file a prospectus supplement

in order to access funds under the 2023 Purchase Agreement.

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

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 2

Note 2 Summary of Significant Accounting Policies

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estimates and assumptions related to accounting for research and development costs, incentive and tax receivables, valuation and recoverability

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

of deferred tax assets, share based compensation, and loss contingencies.

The Company bases its estimates and assumptions on current facts,

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 8

Principles of Consolidation

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commercial papers, and establishes diversification and credit quality requirements and limits investments by maturity and issuer.

Company currently maintains its investments at one large well known financial institution.

Company currently maintains the majority of its investments at one large well known financial institution.

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

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 3

Nonrefundable advance payments for goods or services

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and trademarks will ever be successfully commercialized.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 9

Due to these risks and uncertainties, the patent and

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 4

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

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 10

Basic and Diluted Loss per Share

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As of September 30, 2025, diluted loss per share excludes

15,047,754 potentially dilutive common shares (2023 – 14,271,780 ) related to outstanding options and warrants, as their effect was

anti-dilutive.

14,971,583 potentially dilutive common shares (2024 - 15,047,754 ;

2023 – 14,271,780 ) related to outstanding options and warrants,

as their effect was anti-dilutive.

Financial Instruments

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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.

The Company determines and presents operating segments

based on the information that is internally provided to the Company’s chief operating decision maker (“CODM”), its Chief

Executive Officer, in accordance with ASC 280, Segment Reporting.

The Company has determined that it operates in a single business segment,

which is a clinical-stage biopharmaceutical company developing differentiated therapeutics by applying precision medicine to central nervous

system (“CNS”) diseases with high unmet need.

Refer to Note 8 – Segmented Information for further information related

to the Company’s segment.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 5

Grant income is recognized at the fair value of the

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 11

The Company follows the provisions of ASC 740 regarding

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of the performance criteria.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 6

The Company uses the Black-Scholes option valuation

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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.

Historically, the Company’s historical share option exercise experience

did not provide sufficient basis for estimating the expected term.

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

changes over the expected term.

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

The Company has not paid

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

These assumptions consist

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

in these assumptions can materially affect the fair value estimates.

has not paid any dividends on its common stock historically, therefore no assumption of dividend payments is made in the model.

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

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

The purchase price of share-based compensation awards

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from the Company’s treasury.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 12

Fair Value Measurements

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Recently Adopted Accounting Pronouncements

On October 1, 2022, the Company

adopted Accounting Standards Update (ASU) 2021-10, 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.

Recent Accounting Pronouncements

In November 2023, the Financial

Accounting Standards Board (FASB) issued ASU No.

In November 2023, the Financial Accounting Standards

Board (FASB) issued ASU No.

2023-07, “Segment Reporting:

Improvements to Reportable Segment Disclosures.”

This guidance requires disclosure of incremental segment information on an annual and interim basis.

This amendment is effective for our

fiscal year ending September 30, 2025 and our interim periods within the fiscal year ending September 30, 2026.

The Company is currently

assessing the impact of this guidance on its disclosures.

Improvements to Reportable Segment Disclosures.” This guidance requires

disclosure of incremental segment information on an annual and interim basis, including disclosure of the title and position of the Chief

Operating Decision Maker and requires that a public entity that has a single reportable segment to provide all the disclosures required

by the amendments in ASU No.

The Company adopted the new standard effective September 30, 2025, and for subsequent interim periods.

Since ASU No.

2023-07 addresses only disclosures, the adoption of ASU No.

2023-07 did not have a significant impact on the Company’s

consolidated financial statements.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 7

Recent Accounting Pronouncements

In December 2023, the FASB

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The Company is currently assessing the impact of this guidance on its disclosures.

In November 2024, the FASB

issued ASU No.

2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures.

amendments in ASU No.

2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures

in the notes to the financial statements for certain categories of expenses that are included on the face of the financial statements.

The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after

December 15, 2027, with early adoption permitted.

The Company is currently assessing the impact of this guidance on its disclosures.

Note 3 Accrued Liabilities

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 13

Schedule of principal components of accrued liabilities

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Accrued compensation and benefits

Fixed contract accruals

Milestone-based contract accruals

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the year ended September 30, 2025, the Company recognized $ 37,000 (2024:

$ 25,000 ) of this grant on its statements of operations within

grant income.

$ 25,000 ) of this grant on its statements of operations

within grant income.

At September 30, 2025 an amount of $ 0.8 million (2024:

$ 0.9 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.

The Company will recognize this income on its

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

$ 0.8 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.

The Company will recognize this income

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

Research and development

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 8

During the year ended September

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$ 2.3 million (AUD 3.5

million)) in respect of the Australia R&D credit for eligible research and development expenses incurred during the year.

is included within Other income (expense) on the consolidated statements of operations and comprehensive loss.

$ 2.7 million (AUD 4.1 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 and comprehensive

At September 30, 2025, Incentive

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to incur eligible research and development expenditures.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 14

Although the Company believes

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

2025 Sales Agreement

On July 25, 2025, the Company entered into a Sales

Agreement (the “2025 Sales Agreement”) with TD Securities (USA) LLC (the “Sales Agent”).

Pursuant to the 2025

Sales Agreement, the Company may offer and sell up to an aggregate offering price of $ 150 million (the “Offering”) in shares

of common stock from time to time through the Sales Agent.

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

instructions and subject to the terms and conditions of the 2025 Sales Agreement, the Sales Agent may sell shares of common stock by methods

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

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

the Company’s prior written consent.

The Company is not obligated to make any sales of shares under the 2025 Sales Agreement.

Company or the Sales Agent may suspend or terminate the Offering upon notice to the other party, subject to certain conditions.

Agent will act as sales agent on a commercially reasonable efforts basis consistent its normal trading and sales practices, applicable

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

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 9

The Company has agreed to pay the Sales Agent commissions

for its services of up to 3.0% of the gross proceeds from the sale of shares of common stock pursuant to the Sales Agreement.

Company has also agreed to provide the Sales Agent with customary indemnification and contribution rights.

During the year ended September 30, 2025, the Company

issued 927,910 shares of common stock for net proceeds of $ 9.2 million pursuant to the 2025 Sales Agreement.

2023 Purchase Agreement

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During the year ended September 30, 2025, the Company

did not issue any shares of common stock under the 2023 Purchase Agreement.

During the year ended September 30, 2024, the Company issued

to Lincoln Park an aggregate of 2,455,646 shares of common stock under the 2023 Purchase Agreement, including 2,450,000 shares of common

stock for an aggregate purchase price of $ 11.3 million and 5,646 commitment shares.

During the year ended September 30, 2023, the Company

issued to Lincoln Park an aggregate of 3,288,943 shares of common stock under the 2023 Purchase Agreement, including 3,275,000 shares

of common stock for an aggregate purchase price of $ 11,283,200 and 5,646 commitment shares.

During the year ended September 30, 2023,

the Company issued to Lincoln Park an aggregate of 3,288,943 shares of common stock under the 2023 Purchase Agreement, including 3,275,000

shares of common stock for aggregate proceeds of $ 27.9 million and 13,943 commitment shares.

At September 30, 2024, an amount of $ 110.8 million

remained available under the 2023 Purchase Agreement.

2020 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 “2020 Sales Agreement”) with Cantor Fitzgerald &

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

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

of common stock for aggregate proceeds of $ 27.9 million and 13,943 commitment shares.

At September 30, 2025, there was an unused amount

of $ 110.8 million under the 2023 Purchase Agreement.

The Company will need to file a prospectus supplement in order to access funds under

the 2023 Purchase Agreement.

Exercise of Stock Options

During the year ended September 30, 2025, the Company

issued 217,503 shares of common stock to the Company’s Chief Executive Officer upon a net exercise of an option to purchase 500,000 shares

of common stock at an exercise price of $ 0.92 per share.

In connection with the exercise, the Company withheld 47,745 shares

of common stock as consideration of the exercise price of $ 0.46 million and 234,752 shares of common stock as consideration

for the payment of $ 2.3 million in connection with tax withholding obligations associated with the exercise.

The number of shares

withheld were based upon a market price of $ 9.63 per share as determined by reference to the average high and low sales price reported

on the Nasdaq stock exchange on the date of exercise.

During the year ended September 30, 2025, the Company

issued 38,651 shares of common stock to a director of the Company upon a net exercise of an option to purchase 50,000 shares

of common stock at an exercise price of $ 1.76 per share.

The Company withheld 11,349 shares of common stock as consideration of the

exercise price of $ 88,000 .

The number of shares withheld were based upon a market price of $ 7.75 per share as determined by reference

to the average high and low sales price reported on the Nasdaq stock exchange on the date of exercise

Life Sciences Corp.

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30, 2025 – Page 10

During the years ended September 30, 2024 and 2023,

no shares were sold pursuant to the Offering.

At September 30, 2023, an amount of $ 142.4 million was registered pursuant to an effective

registration statement.

On July 24, 2024, the Company terminated the 2020

Sales Agreement.

During the year ended September 30, 2025, the Company

issued 42,452 shares of common stock to the Company’s Chief Executive Officer upon a net exercise of an option to purchase 187,500 shares

of common stock at an exercise price of $ 5.04 per share.

In connection with the exercise, the Company withheld 98,643 shares

of common stock as consideration of the exercise price of $ 0.9 million and 46,405 shares of common stock as consideration

for the payment of $ 0.4 million in connection with tax withholding obligations associated with the exercise.

The number of shares

withheld were based upon a market price of $ 9.58 per share as determined by reference to the closing price reported

on the Nasdaq stock exchange on the date of exercise.

Note 6 Commitments and Contingencies

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named the Company and an officer of the Company as Defendants.

The complaint was amended on July 12, 2024.

The complaint alleges violations

of the Securities and Exchange Act of 1934 associated with disclosures and statements made with respect to certain clinical trials for

ANAVEX ® 2-73 related to Rett syndrome.

The complaint seeks unspecified damages, as well as costs, including counsel and

expert witness fees, on behalf of a class of investors.

The Company believes the lawsuit is without merit and the Company denies

any liability or wrongdoing and has filed motions to dismiss the complaints, which is awaiting a decision by the Court.

No amount has

been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes

that it is not probable that any loss will occur.

The complaint was amended on July 12, 2024 (the “Initial Action”).

The complaint alleged violations of the Securities and Exchange Act of 1934 associated with disclosures and statements made with respect

to certain clinical trials for ANAVEX ® 2-73 related to Rett syndrome.

This lawsuit was dismissed by the United States District

Court for the Southern District of New York on June 18, 2025.

The plaintiff filed a notice of appeal on July 17, 2025.

Briefing on the

appeal concluded October 30, 2025.

No decision has been entered.

No amount has been recorded in these consolidated financial statements

for any loss contingencies associated with this lawsuit as the Company believes that it is not probable that any loss will occur.

Life Sciences Corp.

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clinical trials related to Rett syndrome .

The Company believes this lawsuit is without merit and the Company denies any liability or wrongdoing.

The parties are currently due to file a proposed schedule for the anticipated motion to dismiss by the Company and the officer of the

Company (the other named defendants have not been served with the complaint) on or before January 15, 2025.

No amount has been recorded

in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is

not probable that any loss will occur.

On January 22, 2025, pursuant to a stipulation of the parties, the Court entered an order staying

this purported derivative lawsuit until the motion to dismiss filed by defendants in the Initial Action is decided by the U.S.

Court for the Southern District of New York.

The stay has been extended through the appeal.

No amount has been recorded in these

consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is not probable

that any loss will occur.

14, 2025, another derivative lawsuit asserting state law breach of fiduciary duty and unjust enrichment claims based upon similar allegations

was filed against the Company (as nominal defendant), an officer of the Company, and members of the Company’s Board of Directors

in the Supreme Court for the State of New York, County of New York, by another purported shareholder.

On August 18, 2025, pursuant to

a stipulation of the parties, the Court entered an order staying this purported derivative lawsuit until the appeal in the Initial Action

No amount has been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit

as the Company believes that it is not probable that any loss will occur.

We know of no

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Share Purchase Warrants

A summary of the status of the Company’s outstanding

share purchase warrants is presented below:

Schedule of share purchase warrants outstanding

Number of Warrants

Weighted Average Exercise Price

Balance, September 30, 2023

Balance, September 30, 2024

At September 30, 2024, the Company had 10,000 share

purchase warrants outstanding exercisable at $ 12.00 per share until April 21, 2026 .

At September 30, 2025 and 2024, the Company had 10,000

share purchase warrants outstanding exercisable at $ 12.00 per share until April 21, 2026.

Stock–based Compensation

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

30, 2024, 5,267,500 options had been issued under the 2022 Plan and 5,462,202 options were available for issue under the 2022 Plan.

On April 17, 2025, the Board approved an amendment

to the 2022 Plan (the “Amendment”).

The Amendment was approved by the stockholders on June 10, 2025.

The Amendment increased

the number of shares of common stock reserved for issuance under the 2022 Plan by 4,000,000 shares for a total of 14,000,000 .

addition, the Amendment established a minimum vesting period of one year for all awards granted under the 2022 Plan and limited the discretion

to accelerate the vesting of awards upon a separation from service, with limited exceptions permitted.

Finally, the Amendment prohibited

liberal share recycling provisions.

At September 30, 2025, 6,504,829 options had been

issued under the 2022 Plan and 8,436,882 options were available for issue under the 2022 Plan.

The following summarizes information about stock option

activity during the years ended September 30, 2024 and 2023:

activity during the years ended September 30, 2025:

Schedule of stock option activity

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Aggregate intrinsic value

Outstanding, October 1, 2022

Outstanding, September 30, 2024

( 1,383,988 )

Outstanding, September 30, 2025

Exercisable, September 30, 2025

The following summarizes information about stock options

at September 30, 2024 by a range of exercise prices:

Life Sciences Corp.

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30, 2025 – Page 13

The following summarizes information about stock options

at September 30, 2025 by a range of exercise prices:

Schedule of summarizes information about stock options

Range of exercises prices

contractual life

Number of outstanding

Weighted average remaining contractual life

Weighted average exercise

Number of vested

Weighted average exercise

The weighted average per share fair value of options

vested at September 30, 2025 was $ 4.83 (2024:

At September 30, 2024, the weighted average contractual life of options outstanding

was 5.48 years (2023:

At September 30, 2025, the weighted average contractual life of options

outstanding was 5.22 years (2024:

6.0 years) and for options exercisable was 4.11 years (2024:

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expense of $ 11.5 million during the year ended September 30, 2025 (2024:

$ 16.4 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):

$ 9.4 million;

$ 16.4 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

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The fair value of stock compensation charges recognized

during the years ended September 30, 2024 and 2023 was determined with reference to the quoted market price of the Company’s shares

on the grant date.

during the years ended September 30, 2025, 2024 and 2023 was determined with reference to the quoted market price of the Company’s

shares on the grant date.

Life Sciences Corp.

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The Company’s U.S.

and foreign loss before income

and foreign losses before income

taxes are set forth below (in thousands):

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United States

The components of net deferred income tax assets as of September 30, 2024

and 2023 are as follows (in thousands):

During the years ended September 30, 2025, 2024 and 2023, there were no

current or deferred income tax provisions (benefits) for any U.S.

federal, state & local, and foreign jurisdictions.

The components

of net deferred income tax assets as of September 30, 2025 and 2024 are as follows (in thousands):

Schedule of components of net deferred income tax assets

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$ 128.5 million) of which $37.7 million will begin to expire in

2025 and $90.8 million can be carried forward indefinitely , state and local net operating loss carryforwards of approximately $ 16.9 million

2026 and $111.2 million can be carried forward indefinitely, state and local net operating loss carryforwards of approximately $ 19.1

million (2024:

$ 16.9 million) which will begin to expire in 2036 , and Research and Development tax credits of approximately $ 5.3 million

$ 4.3 million) which will begin to expire in 2029 .

The calculation of the Research and Development tax credits, by their nature, involve

estimates and subjectivity.

The calculation of the Research and Development tax credits, by their nature,

involve estimates and subjectivity.

If examined by the U.S.

federal and state tax authorities, it is possible that some portion of these credit

carryforwards would be disputed by the tax authorities.

federal and state tax authorities, it is possible that some portion of these

credit carryforwards would be disputed by the tax authorities.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 15

The Company had approximately $ 17.1 million (approximately

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indefinite life, available to offset future taxable income in those jurisdictions.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2024 – Page 20

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 valuation

allowance has been established at September 30, 2024 and 2023.

The 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.

The Company evaluates its valuation allowance

requirements based on available evidence.

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

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

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

benefit of these assets, a full valuation allowance has been established at September 30, 2025 and 2024.

During the year ended

September 30, 2025, the valuation allowance increased by $ 16.3

million (2024:

The Tax Cuts and Jobs Act of 2017 (TCJA) has

modified the treatment of IRC 174 expenses related to research and development for tax years beginning after December 31, 2021.

Under the TCJA, the Company must capitalize the expenditures related to research and development activities and amortize them over

5 years for U.S.

activities and over 15 years for non-U.S.

activities using a mid-year convention.

Therefore, the capitalization of research and development costs in accordance

with IRC 174 has resulted in a gross deferred tax assets at September 30, 2024 of $ 15.1 million (2023:

Therefore, the capitalization of

research and development costs in accordance with IRC 174 has resulted in a net deferred tax assets at September 30, 2025 of $ 20.7

million (2024:

On July 4, 2025, the United States President signed into law the One Big Beautiful Bill Act (“OBBBA”), a

budget reconciliation package that changes many key provisions of the U.S.

federal income tax code, including extensions of various

expiring provisions from the TCJA.

The new legislation, which will be effective for the Company beginning in fiscal 2026, will now

allow for more tax-payer favorable treatment of domestic research and development expenditures for US income tax purposes.

Uncertain Tax Positions

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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.

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, 2024 and 2023 the Company determined that there were no changes in ownership pursuant to Section 382.

The Company conducts a Section 382 study annually

and has 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 Section 382.

Subsequent ownership changes in future years could trigger

additional limitations of the Company’s NOLs .

During the year ended September 30, 2025, the

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

As of September 30, 2025, the Company did not provide

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if and when remittance occur.

8 Subsequent Events

As of September 30, 2025 and 2024, the Company had determined that no liabilities

for uncertain tax positions, interest or penalties were required to be recorded.

Note 8 Segmented Information

Operating segments are defined as components of an

entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker (“CODM”)

in deciding how to allocate resources and assess performance.

The Company’s CODM is the Chief Executive Officer.

The Company has

determined that it operates in a single operating segment, which consists of the development of clinical and preclinical product candidates

focused on advancing novel therapeutics for CNS diseases and disorders, and related administrative activities.

Life Sciences Corp.

to the Consolidated Financial Statements

30, 2025 – Page 16

The accounting policies of the segment are the same

as those described in the summary of significant accounting policies.

The CODM evaluates performance and allocates resources based on

consolidated net loss, as presented in the Company’s consolidated statement of operations, and monitors forecast-to-actual variances

for significant expense categories given their direct relationship to cash burn.

The CODM also reviews the consolidated balance sheet

to assess liquidity, funding capacity, and segment assets, which are reported as total consolidated assets.

The CODM receives and reviews financial information

on a consolidated basis and does not assess performance or allocate resources based on geographic regions.

In addition, management does

not internally organize or evaluate operating results by geography.

Accordingly, management has determined that it is not required to

present financial information disaggregated by geographic region under ASC 280.

The table below summarizes the significant expense categories regularly

reviewed by the CODM for the years ended September 30, 2025, 2024 and 2023 (in thousands):

Schedule of summarizes the significant expenses

Research and development costs

Preclinical studies

Clinical trials

Personnel costs

Non-cash share-based compensation

Other research and development costs (a)

Total research and development costs

General and administrative costs

Personnel costs

Non-cash share-based compensation

Other general and administrative costs (b)

Total general and administrative costs

(a) Other research and development costs include, but are not limited to, publications, sponsorships, membership fees, scientific conferences,

and medical affairs strategy and branding.

(b) Other general and administrative expenses include, but are not limited to, office rent, public company reporting requirements including

professional fees, insurance, and other general operating expenses not otherwise included in research and development expenses.

Note 9 Subsequent Events

The Company evaluates subsequent events occurring

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data