Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to claims and legal proceedings
that arise during the course of business. The Company is currently subject to the following lawsuits:
On March 13, 2024, a shareholder class
action complaint was filed in the United States District Court for the Southern District of New York, and it named the Company and an
officer of the Company as Defendants. The complaint was amended on July 12, 2024 (the “Initial Action”). The complaint alleged
violations of the Securities and Exchange Act of 1934 associated with disclosures and statements made with respect to certain clinical
trials for ANAVEX ® 2-73 related to Rett syndrome. This lawsuit was dismissed by the United States District Court for the
Southern District of New York on June 18, 2025. The plaintiff filed a notice of appeal on July 17, 2025. Briefing on the appeal concluded
October 30, 2025. No decision has been entered. No amount has been recorded in our 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 May 8, 2024,
a similar complaint was filed in the same court by Kenneth Downing, a purported shareholder of the Company, against the same defendants.
The Company believed that this lawsuit was without merit and filed a motion to dismiss the complaint. Plaintiff Downing voluntarily dismissed
this complaint subsequent to the filing of the motion to dismiss.
On or about May 13, 2024, a derivative
lawsuit was filed against the Company (as nominal defendant), an officer of the Company, and members of the Company’s Board of Directors
in the U.S. District Court for the District of Nevada by another purported shareholder. The complaint asserts various common law claims
(including breach of fiduciary duty) and violation of Section 14(a)of the Securities Exchange Act regarding the same or similar allegations
at issue in the purported class action lawsuit related to disclosures and statements made about certain clinical trials related to Rett
syndrome. On January 22, 2025, pursuant to a stipulation of the parties, the Court entered an order staying this purported derivative
lawsuit until the motion to dismiss filed by defendants in the Initial Action is decided by the U.S. District Court for the Southern District
of New York. The stay has been extended throughout the appeal. No amount has been recorded in our 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.
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On February 14, 2025, another derivative
lawsuit asserting state law breach of fiduciary duty and unjust enrichment claims based upon similar allegations was filed against the
Company (as nominal defendant), an officer of the Company, and members of the Company’s Board of Directors in the Supreme Court
for the State of New York, County of New York, by another purported shareholder. On August 18, 2025, pursuant to a stipulation of the
parties, the Court entered an order staying this purported derivative lawsuit until the appeal in the Initial Action is resolved. No amount
has been recorded in our consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes
that it is not probable that any loss will occur.
We know of no
other material pending legal or governmental proceedings, other than ordinary routine litigation incidental to our business, to which
our Company or our subsidiaries are a party or of which any of their property is subject. There are no other proceedings in which any
of our directors, officers or affiliates, or any registered or beneficial stockholder holding more than 5% of our shares, or any associate
of such persons, is an adverse party or has a material interest adverse to our or our subsidiaries’ interest.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II