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Item 2. Management’s Discussion and Analysis

2026-02-09 compared with 2025-08-12 · 284 added, 419 removed, 605 unchanged (54% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

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our product candidates’ ability to demonstrate efficacy or an acceptable safety profile;

our ability to secure regulatory approval of our product candidates and commercialize such product candidates;

our ability to obtain the support of qualified scientific collaborators;

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our ability to defend against claims of intellectual property infringement;

our ability to comply with the maintenance requirements of the government patent agencies;

our ability to protect our intellectual property rights throughout the world;

our ability to compete in the highly competitive biotechnology and pharmaceutical industries;

the anticipated start dates, durations and completion dates of our ongoing and future clinical trials;

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our anticipated future regulatory submissions and our ability to receive regulatory approvals to develop and market our product candidates, including any orphan drug or Fast Track designations;

the timing and likelihood of the accomplishment of various scientific, clinical, regulatory filings and approvals and other product development objectives, including the timing of a decision by the European Medicines Agency, or EMA, regarding whether to approve the Marketing Authorization Application, or MAA, for blarcamesine for the treatment of Alzheimer’s disease;

the timing and likelihood of the accomplishment of various scientific, clinical, regulatory filings and approvals and other product development objectives, including the timing of a decision by the European Medicines Agency(“EMA”), regarding whether to approve the Marketing Authorization Application (“MAA”), for blarcamesine for the treatment of Alzheimer’s disease;

our anticipated future cash position and ability to obtain funding for our operations.

We have based these forward-looking statements largely

on our current expectations and projections about future events, including the responses we expect from the FDA and other regulatory authorities

and financial trends that we believe may affect our financial condition, results of operations, business strategy, preclinical studies

and clinical trials, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions

including without limitation the risks described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed

with the Securities and Exchange Commission on December 23, 2024 and the risks described in Part II, Item 1A of this Quarterly Report

on Form 10-Q.

on our current expectations and projections about future events, including the responses we expect from the FDA, EMA and other regulatory

authorities and financial trends that we believe may affect our financial condition, results of operations, business strategy, preclinical

studies and clinical trials, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and

assumptions including without limitation the risks described in “Risk Factors” in Part I, Item 1A of our Annual Report on

Form 10-K filed with the Securities and Exchange Commission on November 25, 2025.

These risks are not exhaustive.

Other sections of this Quarterly Report on Form 10-Q include additional factors which could

adversely impact our business and financial performance.

Other sections of this

Quarterly Report on Form 10-Q include additional factors which could adversely impact our business and financial performance.

we operate in a very competitive and rapidly changing environment.

New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the

impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ

materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions

of future events.

We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved

or occur and actual results could differ materially from those projected in the forward-looking statements.

Except as required by applicable

laws including the securities laws of the United States, we assume no obligation to update or supplement forward-looking statements.

New risk factors emerge from time to time, and it is not possible for

our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor,

or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

not rely upon forward-looking statements as predictions of future events.

We cannot assure you that the events and circumstances reflected

in the forward-looking statements will be achieved or occur and actual results could differ materially from those projected in the forward-looking

Except as required by applicable laws including the securities laws of the United States, we assume no obligation to update

or supplement forward-looking statements.

As used in this Quarterly Report on Form 10-Q, the

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or receptor occupancy with SIGMAR1 in the brain.

Reyes S et al.,

Reyes S et al., Sci Rep.

Cellular Homeostasis

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trial have allowed participants who completed the 52-week Part B of the trial to continue taking ANAVEX ® 2-73, providing

an opportunity to gather extended safety data for a cumulative time period of five years.

In August 2020, patients completing these Phase

2a trial extensions were granted continued access to treatment with ANAVEX ® 2-73 through the Australian Government Department

an opportunity to gather extended safety data for a cumulative period of five years.

In August 2020, patients completing these Phase 2a

trial extensions were granted continued access to treatment with ANAVEX ® 2-73 through the Australian Government Department

of Health – Therapeutic Goods Administration’s compassionate use Special Access Scheme.

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More than 33,000 genes were analyzed

using unbiased, data driven, machine learning, artificial intelligence (AI) system for analyzing DNA and RNA data in patients treated

with ANAVEX ® 2-73.

The analysis identified genetic variants that impacted response to ANAVEX ® 2-73, among

them variants related to the SIGMAR1, the target for ANAVEX ® 2-73.

Results showed that trial participants with the common

SIGMAR1 wild type gene variant, which is estimated to be about 80% of the population worldwide, demonstrated improved cognitive (MMSE)

and functional (ADCS-ADL) scores.

The results from this evaluation supported the continued evaluation of genomic information in subsequent

clinical trials, since these signatures can now be applied to neurological indications tested in future clinical trials with ANAVEX ® 2-73

including Alzheimer’s disease, Parkinson’s disease dementia and Rett syndrome.

using unbiased, data driven, machine learning, artificial intelligence (“AI”) system for analyzing DNA and RNA data in patients

treated with ANAVEX ® 2-73.

The analysis identified genetic variants that impacted response to ANAVEX ® 2-73,

among them variants related to the SIGMAR1, the target for ANAVEX ® 2-73.

Results showed that trial participants with the

common SIGMAR1 wild type gene variant, which is estimated to be about 80% of the population worldwide, demonstrated improved cognitive

(MMSE) and functional (ADCS-ADL) scores.

The results from this evaluation supported the continued evaluation of genomic information in

subsequent clinical trials, since these signatures can now be applied to neurological indications tested in future clinical trials with

ANAVEX ® 2-73 including Alzheimer’s disease, Parkinson’s disease dementia and Rett syndrome.

ANAVEX ® 2-73

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placebo, respectively.

The functional co-primary endpoint, ADCS-ADL, was trending in a positive direction but did not reach

The functional co-primary endpoint, ADCS-ADL,

was trending in a positive direction but did not reach

significance at Week 48.

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In November 2024, we announced the submission of a

Marketing Authorisation Application (“MAA”) to the European Medicines Agency (EMA), under the centralized procedure, for ANAVEX ® 2-73

for the treatment of Alzheimer’s disease and, in December 2024, the EMA accepted the submission for scientific review.

if approved, would allow direct market access throughout the European Union for oral ANAVEX ® 2-73 (blarcamesine) for the

treatment of Alzheimer’s disease.

A company seeking to market a new pharmaceutical product through the centralized procedure must

file safety data and efficacy data as part of the MAA.

After the EMA evaluates the MAA, it provides a recommendation to the European Commission

(“EC”) and the EC then approves or denies the MAA.

Throughout the scientific review process with the EMA, we may receive feedback

or comments which, while not a conclusive decision, could suggest the application provided is insufficient to support the marketing authorization.

We may not be able to sufficiently address these comments or requests.

Alternatively, these comments or requests could lead us to decide,

after consultation with our advisors or the regulatory authorities, to withdraw or amend our MAA for blarcamesine.

The Company plans to

announce the results when the EMA review and decision-making is finished and does not plan to provide interim updates.

Marketing Authorisation Application (“MAA”) to the European Medicines Agency (“EMA”), under the centralized procedure,

for ANAVEX ® 2-73 for the treatment of Alzheimer’s disease and, in December 2024, the EMA accepted the submission for

scientific review.

The MAA, if approved, would allow direct market access throughout the European Union for oral ANAVEX ® 2-73

(blarcamesine) for the treatment of Alzheimer’s disease.

A company seeking to market a new pharmaceutical product through the centralized

procedure must file safety data and efficacy data as part of the MAA.

After the EMA evaluates the MAA, it provides a recommendation to

the European Commission (“EC”) and the EC then approves or denies the MAA.

On December 12, 2025, we announced that the Committee

for Medicinal Products for Human Use (“CHMP”) of the EMA rendered a negative trend-vote following an oral examination of our

On December 18, 2025 we announced that we have requested a re-examination of the MAA.

The re-examination procedure is led by a different

rapporteur and co-rapporteur, who will conduct a new evaluation of our MAA for blarcamesine.

We have also requested that the EMA consult

a Scientific Advisory Group as part of this process to provide an independent recommendation.

A long-term open label extension study of ANAVEX ® 2-73,

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The trial extension demonstrated

that blarcamesine-treated patients continued to accrue benefit through up to 4 years, as measured by the clinical endpoints

ADAS-Cog13 and ADCS-ADL.

Delayed-start analysis of treatment with oral blarcamesine was significant, reflecting the importance of

early treatment initiation.

No new safety findings were observed with continued blarcamesine treatment over three years, confirming

good comparative safety profile and no associated neuroimaging adverse events.

that blarcamesine-treated patients continued to accrue benefit through up to 192 weeks, as measured by the clinical endpoints ADAS-Cog13

P = 0.0165) and ADCS-ADL (+4.30, P = 0.0206).

No new safety findings were observed with continued blarcamesine treatment

over three years, confirming good comparative safety profile and no associated neuroimaging adverse events.

Delayed-start analysis

of treatment with oral blarcamesine was significant, reflecting the importance of early treatment initiation.

Additional precision medicine population 48-week data

demonstrates cognitive stabilization in early Alzheimer’s disease.

Cognitive outcomes observed in the oral blarcamesine 30 mg precision

medicine cohort move toward normal aging profiles across validated clinical scales.

For ADAS-Cog13, blarcamesine showed a 48-week change

from baseline of 0.853 compared to ~1 point typical annual decline in prodromal (pre-dementia) aging adults.

For CDR-SB, blarcamesine

demonstrated a change from baseline of 0.465, aligning with the 0-0.5 point annual range seen in prodromal aging.

These data are similar

to referenced barely detectable prodromal Alzheimer’s disease decline, in spite of the more advanced stage of Alzheimer’s

disease impairment at baseline of the blarcamesine population.

Further posthoc analysis demonstrates continued long-term

benefit from oral blarcamesine compared to decline observed in the Alzheimer’s Disease Neuroimaging Initiative (ADNI) control group.

Externally matched control participants from the ADNI database were compared with participants over the 144-week period of ANAVEX Ò 2-73-AD-004

and its ATTENTION-AD (ANAVEX Ò 2-73-AD-EP-004) open-label extension (OLE) Phase

IIb/III trial.

[1] For ADAS-Cog13, total score ranges from 0

to 85 with higher scores indicating increased cognitive impairment.

In the intent-to-treat (ITT) population, significantly

less cognitive decline was observed for the blarcamesine participants compared to the ADNI control group at 48 weeks with a significant,

and clinically meaningful difference in mean change from baseline ADAS-Cog13 total score of −2.68 points ( p < 0.0001).

raw data was used.

Scheduled visits were [OLE Week 0 = Combined Week 48], [OLE Week 48 = Combined Week 96], [OLE Week 96 = Combined Week

Combined = DB (double-blind) + OLE (open-label-extension) trials.

Up to 144 weeks ADNI control group data was available.

[2] ADAS-Cog13 scores LS mean difference between the treatment

groups being larger than 2 points are considered clinically meaningful improvements:

Muir RT, Hill MD, Black SE, Smith EE.

Minimal clinically

important difference in Alzheimer's disease:

Rapid review.

Alzheimers Dement.

2024;20(5):3352-3363.

Over the course of the open-label extension study

at time point 96 weeks, these two groups diverged sharply, with statistically significant differences in mean change in ADAS-Cog13 total

score at 96 weeks of −6.41 points ( p < 0.0001).

The difference between groups continues to increase at 144 weeks (ADAS-Cog13

total score difference of −12.78 points;

The results provide evidence of the significant beneficial

therapeutic effect of blarcamesine, which positively separates from the ADNI control group with duration of treatment.

Parkinson’s Disease

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relevant doses including in people with Parkinson’s disease.

This study is currently in the planning stage.

Rett Syndrome

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removed after the Company satisfactorily provided the additional information requested.

At the present time, the Company does not plan

to conduct a clinical trial in the United States.

The following is a summary of clinical trials conducted by the Company in Rett Syndrome.

The first Phase 2 trial, (ANAVEX ® 2-73-RS-001), took place in the United States, and was completed in December 2020.

trial was a randomized double-blind, placebo-controlled safety, tolerability, PK and efficacy trial of oral liquid ANAVEX ® 2-73

formulation in 25 adult female patients with Rett syndrome over a 7-week treatment period including ANAVEX ® 2-73-specific

genomic precision medicine biomarkers.

The following is a summary of clinical trials

conducted by the Company in Rett syndrome.

The first Phase 2 trial, (ANAVEX ® 2-73-RS-001), took place in the United States,

and was completed in December 2020.

This trial was a randomized double-blind, placebo-controlled safety, tolerability, PK and efficacy

trial of oral liquid ANAVEX ® 2-73 formulation in 25 adult female patients with Rett syndrome over a 7-week treatment period

including ANAVEX ® 2-73-specific genomic precision medicine biomarkers.

The primary endpoint of the trial was safety.

The dosing of 5 mg ANAVEX ® 2-73 was

well-tolerated and demonstrated dose-proportional PK.

All secondary efficacy endpoints of the trial showed statistically significant and

clinically meaningful response in the Rett Syndrome Behaviour Questionnaire (“RSBQ”) response, when compared to placebo, in

the intent to treat (“ITT”) cohort (all participants, p = 0.011).

66.7% of ANAVEX ® 2-73 treated subjects showed

a statistically significant improvement in RSBQ response as compared to 10% of the subjects on placebo in the ITT cohort (all participants,

ANAVEX ® 2-73 treatment resulted in a sustained improvement in CGI-I response throughout the 7-week clinical

trial, when compared to placebo in the ITT cohort (all participants, p = 0.014).

Consistent with previous ANAVEX ® 2-73 clinical

trials, patients carrying the common form of the SIGMAR1 gene treated with ANAVEX ® 2-73 experienced stronger improvements

dosing of 5 mg ANAVEX ® 2-73 was well-tolerated and demonstrated dose-proportional PK.

All secondary efficacy endpoints of

the trial showed statistically significant and clinically meaningful response in the Rett Syndrome Behaviour Questionnaire (“RSBQ”)

response, when compared to placebo, in the intent to treat (“ITT”) cohort (all participants, p = 0.011).

66.7% of ANAVEX ® 2-73

treated subjects showed a statistically significant improvement in RSBQ response as compared to 10% of the subjects on placebo in the

ITT cohort (all participants, p = 0.011).

ANAVEX ® 2-73 treatment resulted in a sustained improvement in CGI-I response throughout

the 7-week clinical trial, when compared to placebo in the ITT cohort (all participants, p = 0.014).

Consistent with previous ANAVEX ® 2-73

clinical trials, patients carrying the common form of the SIGMAR1 gene treated with ANAVEX ® 2-73 experienced stronger improvements

in the prespecified efficacy endpoints.

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As part of some of our clinical trials, we have incorporated

a genomic analysis to better understand potential populations for whom our clinical programs might benefit.

A full genomic analysis of

Alzheimer’s disease patients treated with ANAVEX ® 2-73 (blarcamesine) has helped us identify actionable genetic variants.

A significant impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ® 2-73 (blarcamesine) and COMT, a gene

involved in memory function, on the drug response level was identified, leading to an early ANAVEX ® 2-73 (blarcamesine)

specific biomarker hypothesis.

We believe that excluding patients with SIGMAR1 identified biomarker variant (approximately 10%-20%

of the population) in prospective studies would identify approximately 80%-90% patients that would display clinically significant improved

functional and cognitive scores.

The consistency between the identified DNA and RNA data related to ANAVEX ® 2-73 (blarcamesine),

which are considered independent of Alzheimer’s disease pathology, as well as multiple endpoints and time-points, provides support

for the potential precision medicine clinical development of ANAVEX ® 2-73 (blarcamesine) by using genetic biomarkers identified

a genomic analysis to better understand potential populations whom our clinical programs might benefit.

A full genomic analysis of Alzheimer’s

disease patients treated with ANAVEX ® 2-73 (blarcamesine) has helped us identify actionable genetic variants.

A significant

impact of the genomic biomarkers SIGMAR1, the direct target of ANAVEX ® 2-73 (blarcamesine) and COMT, a gene involved in

memory function, on the drug response level was identified, leading to an early ANAVEX ® 2-73 (blarcamesine) specific biomarker

We believe that excluding patients with SIGMAR1 identified biomarker variant (approximately 10%-20% of the population)

in prospective studies would identify approximately 80%-90% patients that would display clinically significant improved functional and

cognitive scores.

The consistency between the identified DNA and RNA data related to ANAVEX ® 2-73 (blarcamesine), which

are considered independent of Alzheimer’s disease pathology, as well as multiple endpoints and time-points, provides support for

the potential precision medicine clinical development of ANAVEX ® 2-73 (blarcamesine) by using genetic biomarkers identified

within the trial population itself to either confirm the mechanism of action of ANAVEX ® 2-73 (blarcamesine) or target patients

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The FDA has granted Orphan Drug Designation to ANAVEX ® 3-71 for the

treatment of FTD.

treatment of Frontotemporal Demetia (“FTD”).

During pathological conditions ANAVEX ® 3-71

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negative, and cognitive symptoms of schizophrenia.

we announced the completion of enrollment of Part B of the placebo-controlled Phase 2 study, which includes more participants and a longer

treatment duration, and will provide more comprehensive data on the efficacy and safety of ANAVEX ® 3-71 in schizophrenia.

We expect to report top-line data of the Phase 2 ANAVEX ® 3-71-SZ-001 clinical trial in the second half of 2025.

we announced the completion of enrollment of Part B of the study, which included more participants and a longer treatment duration.

top-line data of the Phase 2 ANAVEX ® 3-71-SZ-001 clinical was announced in October 2025.

The study successfully achieved

its primary endpoint, demonstrating that ANAVEX ® 3-71 was safe and well-tolerated.

The safety profile was consistent with

previous studies of ANAVEX ® 3-71 in healthy volunteers, with no serious treatment-emergent adverse events (TEAEs) and no

severe TEAEs reported in either Part A or Part B of the study.

In addition to meeting the primary safety endpoint, secondary and exploratory

analyses revealed encouraging trends in several outcome measures.

The study demonstrated positive trends in objective electroencephalography

(EEG) and event-related potential (ERP) biomarkers of schizophrenia.

Furthermore, neuroinflammatory biomarker assessments showed that

glial fibrillary acidic protein (GFAP), a marker of neuroinflammation, was reduced in participants receiving ANAVEX ® 3-71

compared to placebo.

This reduction in neuroinflammatory markers suggests a potential disease-modifying effect that may become more pronounced

with longer treatment durations.

ANAVEX ® 1-41

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Central Nervous System Diseases

Alzheimer’s disease – An estimated 7.2

million Americans aged 65 and older are living with Alzheimer’s dementia in 2025, according to the Alzheimer’s Association ® .

The Alzheimer’s Association ® estimates that the annual number of new cases of Alzheimer’s and other dementias

is projected to double by 2050.

Medications on the market today treat only the symptoms of Alzheimer’s disease and do not have the

ability to stop its onset or its progression.

We believe that there is an urgent and unmet need for both a disease modifying cure for

Alzheimer’s disease as well as for better symptomatic treatments.

Parkinson’s disease – Parkinson’s

disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement.

It is associated

with degeneration of the basal ganglia of the brain and deficiency of the neurotransmitter dopamine.

Parkinson’s disease currently

is estimated to afflict more than 10 million people worldwide, typically middle-aged and elderly people.

The Parkinson’s disease

market is expected to reach $11.5 billion by 2029, according to GlobalData.

Rett syndrome – Rett syndrome is a rare X-linked

genetic neurological and developmental disorder that affects the way the brain develops, including protein transcription, which is altered

and as a result leads to severe disruptions in neuronal homeostasis.

It is considered a rare, progressive neurodevelopmental disorder

and is caused by a single mutation in the MECP2 gene.

Because males have a different chromosome combination from females, boys who have

the genetic MECP2 mutation are affected in devastating ways.

Alzheimer’s disease – An estimated 7.2 million Americans aged 65 and older are living with Alzheimer’s dementia in 2025, according to the Alzheimer’s Association ® .

The Alzheimer’s Association ® estimates that the annual number of new cases of Alzheimer’s and other dementias is projected to double by 2050.

Medications on the market today treat only the symptoms of Alzheimer’s disease and do not have the ability to stop its onset or its progression.

We believe that there is an urgent and unmet need for both a disease modifying cure for Alzheimer’s disease as well as for better symptomatic treatments.

Parkinson’s disease – Parkinson’s disease is a progressive disease of the nervous system marked by tremors, muscular rigidity, and slow, imprecise movement.

It is associated with degeneration of the basal ganglia of the brain and deficiency of the neurotransmitter dopamine.

Parkinson’s disease currently is estimated to afflict more than 10 million people worldwide, typically middle-aged and elderly people.

The Parkinson’s disease market is expected to reach $11.5 billion by 2029, according to GlobalData.

Rett syndrome – Rett syndrome is a rare X-linked genetic neurological and developmental disorder that affects the way the brain develops, including protein transcription, which is altered and as a result leads to severe disruptions in neuronal homeostasis.

It is considered a rare, progressive neurodevelopmental disorder and is caused by a single mutation in the MECP2 gene.

Because males have a different chromosome combination from females, boys who have the genetic MECP2 mutation are affected in devastating ways.

Most of them die before birth or in early infancy.

For females who survive

infancy, Rett syndrome leads to severe impairments, affecting nearly every aspect of the child’s life;

severe mental retardation,

their ability to speak, walk and eat, sleeping problems, seizures and even the ability to breathe easily.

Rett syndrome affects approximately

1 in every 10,000-15,000 females.

Schizophrenia - Schizophrenia is a persistent and

often disabling mental illness impacting how a person thinks, feels, and behaves, and affects nearly 24 million people worldwide, including

2.8 million people in the U.S., according to the World Health Organization.

For females who survive infancy, Rett syndrome leads to severe impairments, affecting nearly every aspect of the child’s life:

severe mental retardation, their ability to speak, walk and eat, sleeping problems, seizures and even the ability to breathe easily.

Rett syndrome affects approximately 1 in every 10,000-15,000 females.

Schizophrenia - Schizophrenia is a persistent and often disabling mental illness impacting how a person thinks, feels, and behaves, and affects nearly 24 million people worldwide, including 2.8 million people in the U.S., according to the World Health Organization.

It is characterized by three symptom domains:

positive symptoms

(hallucinations and delusions), negative symptoms (difficulty enjoying life and withdrawal from others), and cognitive impairment (deficits

in memory, concentration, and decision-making).

In part due to limitations with current treatments, people living with schizophrenia often

struggle to maintain employment, live independently, and manage relationships.

While current treatments can be effective in managing select

symptoms, approximately 34% of people do not respond to therapy, with an additional 50-60% experiencing only a partial improvement in

symptoms or unacceptable side effects.

Fragile X – Fragile X syndrome (FXS) is the

most prevalent genetic form of intellectual disability and autism spectrum disorder, primarily affecting boys.

As with most neurodevelopmental

disorders, FXS is considered a condition of synaptic development and function.

The disease has a range of clinical presentations depending

on the specific genetic changes associated with an “expansion” of the FMR1 gene.

The disease is characterized by deficits

in long-term potentiation and homeostatic plasticity.

positive symptoms (hallucinations and delusions), negative symptoms (difficulty enjoying life and withdrawal from others), and cognitive impairment (deficits in memory, concentration, and decision-making).

In part due to limitations with current treatments, people living with schizophrenia often struggle to maintain employment, live independently, and manage relationships.

While current treatments can be effective in managing select symptoms, approximately 34% of people do not respond to therapy, with an additional 50-60% experiencing only a partial improvement in symptoms or unacceptable side effects.

Fragile X – Fragile X syndrome (FXS) is the most prevalent genetic form of intellectual disability and autism spectrum disorder, primarily affecting boys.

As with most neurodevelopmental disorders, FXS is considered a condition of synaptic development and function.

The disease has a range of clinical presentations depending on the specific genetic changes associated with an “expansion” of the FMR1 gene.

The disease is characterized by deficits in long-term potentiation and homeostatic plasticity.

FXS has been detected in all populations and ethnic groups.

Researchers do not know

the exact number for how many Americans could have full mutation FXS.

Studies estimate that the disease affects approximately 1:4,000

males and 1:6,000 females.

Researchers do not know the exact number for how many Americans could have full mutation FXS.

Studies from the Centers for Disease Control (CDC) estimate that the disease affects approximately 1:4,000 males and 1:6,000-8,000 females.

Worldwide, more than 1,400,000 people could be affected by FXS.

Depression – Depression is a major cause

of morbidity worldwide according to the World Health Organization.

The global antidepressant drug market is projected to reach $21 billion

by 2030 according to Allied Market Research.

Depression – Depression is a major cause of morbidity worldwide according to the World Health Organization.

The global antidepressant drug market is projected to reach $21 billion by 2030 according to Allied Market Research.

Pharmaceutical treatment for depression has been historically dominated by blockbuster brands.

However, the dominance of the leading brands is waning, largely due to an increase in the number of approvals for antidepressant drugs.

Epilepsy – Epilepsy is a common chronic neurological

disorder characterized by recurrent unprovoked seizures.

These seizures are transient signs and/or symptoms of abnormal, excessive or

synchronous neuronal activity in the brain.

According to the Centers for Disease Control and Prevention, in 2015 epilepsy affected 3.4

million Americans.

Today, epilepsy is often controlled, but not cured, with medications that are categorized as older traditional anti-epileptic

drugs and second-generation anti-epileptic drugs.

Because epilepsy afflicts sufferers in different ways, there is a need for drugs used

in combination with both traditional anti-epileptic drugs and second generation anti-epileptic drugs.

Epilepsy – Epilepsy is a common chronic neurological disorder characterized by recurrent unprovoked seizures.

These seizures are transient signs and/or symptoms of abnormal, excessive or synchronous neuronal activity in the brain.

According to the Centers for Disease Control and Prevention, data from 2021 and 2022 suggest epilepsy affects roughly 3.4 million Americans.

Today, epilepsy is often controlled, but not cured, with medications that are categorized as older traditional anti-epileptic drugs and second-generation anti-epileptic drugs.

Because epilepsy afflicts sufferers in different ways, there is a need for drugs used in combination with both traditional anti-epileptic drugs and second generation anti-epileptic drugs.

Infantile Spasms – Infantile spasms are a rare and severe form of epilepsy that typically begin in infancy.

These spasms are characterized by sudden, jerking movements and are often accompanied by developmental delays and abnormal brain wave patterns, requiring immediate medical attention.

Infantile spasms are rare, affecting approximately 1 in 2,000 to 4,000 live births according to the Epilepsy Foundation, 2024.

While the condition is uncommon, it represents a significant proportion of epilepsy cases in infants and young children.

The prognosis varies based on the underlying cause, but early treatment can improve outcomes in many cases.

Frontotemporal Dementia – Frontotemporal Dementia (FTD) is a group of neurodegenerative disorders that primarily affect the frontal and temporal lobes of the brain, leading to changes in behavior, personality, language, and movement.

It is a major cause of dementia in individuals under the age of 65.

FTD is the second most common cause of dementia in individuals under 65, accounting for 10-20% of all dementia cases in this age group according to the FTD Disorders Registry, 2024.

It is estimated to affect around 50,000 to 60,000 people in the United States, with similar rates worldwide.

The onset typically occurs between the ages of 45 and 65, making it a significant concern for younger adults.

Angelman Syndrome – Angelman Syndrome is a rare genetic disorder that affects the nervous system, leading to developmental delays, movement and balance issues, minimal to no speech, and frequent seizures.

Despite these challenges, individuals with Angelman Syndrome often exhibit a happy demeanor, with frequent smiling and laughter.

Angelman Syndrome is estimated to affect 1 in 15,000 to 20,000 live births worldwide according to the Angelman Syndrome Foundation, 2024.

Both males and females are equally impacted by this condition.

Despite its rarity, Angelman Syndrome often goes undiagnosed or is misdiagnosed, delaying crucial interventions that can improve quality of life.

Neuropathic Pain – We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor cells in any part of the body.

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Special medications have become more specific to neuralgia and typically fall under the category of membrane stabilizing drugs or antidepressants.

Malignant Melanoma – Predominantly a skin cancer,

malignant melanoma can also occur in melanocytes found in the bowel and the eye.

Malignant melanoma accounts for a large majority of skin

cancer deaths.

Stroke – A stroke is a medical emergency that occurs when blood flow to the brain is interrupted, either due to a blocked artery (ischemic stroke) or a ruptured blood vessel (hemorrhagic stroke).

This disruption leads to brain cell death, resulting in physical, cognitive, and emotional impairments.

Stroke is a leading cause of death and disability worldwide, affecting nearly 800,000 people annually in the United States alone.

Globally, approximately 12.2 million new strokes occur each year.

Stroke disproportionately impacts older adults, but it can occur at any age, with an increasing incidence in younger populations due to risk factors like hypertension and diabetes.

Malignant Melanoma – Predominantly a skin cancer, malignant melanoma can also occur in melanocytes found in the bowel and the eye.

Malignant melanoma accounts for a large majority of skin cancer deaths.

The treatment includes surgical removal of the tumor, adjuvant treatment, chemo and immunotherapy, or radiation therapy.

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the worldwide malignant melanoma market is expected to grow to $7.5 billion by 2029.

Prostate Cancer – Specific to men, prostate

cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system.

Cancer cells may metastasize from the

prostate to other parts of the body, particularly the bones and lymph nodes.

Drug therapeutics for prostate cancer are expected to increase

to nearly $10.1 billion by the end of 2030 according to Market Research Future.

Prostate Cancer – Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male reproductive system.

Cancer cells may metastasize from the prostate to other parts of the body, particularly the bones and lymph nodes.

Drug therapeutics for prostate cancer are expected to increase to nearly $10.1 billion by the end of 2030 according to Market Research Future.

Pancreatic Cancer – Pancreatic cancer is a malignant neoplasm of the pancreas.

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We hold ownership or exclusive rights to thirty (30)

patents, twenty (20) pending U.S.

patents, seventeen (17) pending U.S.

patent applications, and numerous PCT and ex-U.S.

patent applications relating to our drug

candidates, methods associated therewith, and to our research programs.

We own one issued U.S.

patent entitled “ANAVEX ® 2-73

and certain anticholinesterase inhibitors composition and method for neuroprotection,” which claims a composition of matter of ANAVEX ® 2-73,

a synergistic neuroprotective compound, combined with donepezil and other cholinesterase inhibitors.

This patent is expected to expire

in June 2034, absent any patent term extension for regulatory delays.

We own another issued U.S.

patent entitled “A2-73

crystalline polymorph compositions of matter and methods of use thereof”.

It claims crystals of A2-73 freebase or its fumarate salt,

dosage forms and pharmaceutical formulations.

This patent is expected to expire in July 2039, absent any patent term extension for regulatory

We own five issued U.S.

patents each with claims directed

to crystalline forms of ANAVEX ® 2-73.

The first of these five patents claims crystalline forms of ANAVEX ® 2-73,

dosage forms and compositions containing crystalline ANAVEX ® 2-73, and methods of treatment for Alzheimer’s disease

This patent is expected to expire in July 2036, absent any patent term extension for regulatory delays.

The second of these

five patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73, and methods of treatment

for Alzheimer’s disease using the compositions.

This patent is expected to expire in June 2036, absent any patent term extension

for regulatory delays.

The third of these five patents claims pharmaceutical compositions containing a crystalline form of ANAVEX ® 2-73,

and methods of treating for Alzheimer’s disease using the compositions.

This patent is expected to expire in June 2037, absent any

patent term extension for regulatory delays.

The fourth patent claims method of making certain crystalline forms of ANAVEX ® 2-73.

This patent is expected to expire in October 2036, absent any patent term extension for regulatory delays.

The fifth patent claims crystalline

forms of the dihydrogen phosphate salt of ANAVEX ® 2-73 and dosage forms (including transdermal and oral dosage forms) and

pharmaceutical compositions containing the same.

This patent is expected to expire in July 2039, absent any patent term extension for

regulatory delays.

We also own three issued U.S.

patents for seizure

The first of these three patents claims methods and dosage forms for treating seizures, the dosage forms containing a low-dose

anti-epilepsy drug combined with either:

(i) ANAVEX ® 2-73 and its active metabolite ANAVEX ® 19-144;

ANAVEX ® 19-144.

The second of these three patents further claims a combination seizure treatment involving administration

of an anti-epilepsy drug combined with (i) ANAVEX ® 19-144, or (ii) ANAVEX ® 19-144 and ANAVEX ® 2-73.

The third of these three patents claims a dosage form for seizure reduction, comprising (i) ANAVEX ® 19-144, (ii) ANAVEX ® 2-73,

or (iii) a combination of ANAVEX ® 19-144 and ANAVEX ® 2-73;

and optionally further comprising a low-dose anti-epilepsy

All three patents are expected to expire in October 2035, absent any patent term extension for regulatory delays.

We also own four issued U.S.

patents with claims directed

to treating neurodevelopmental disorders.

These patents claim methods for treating a neurodevelopmental disorder, multiple sclerosis,

their related biochemical and functional abnormalities, or loss-of-function associated with a neurodevelopmental disorder, by administering

ANAVEX ® 2-73, ANAVEX ® 19-144, and/or ANAVEX ® 1-41 (another sigma receptor ligand similar to

ANAVEX ® 2-73), or compositions thereof.

All four patents are expected to expire in January 2037, absent any patent term

extension for regulatory delays.

In addition, we own one issued U.S.

patent with claims

directed to methods of treating melanoma with a compound related to ANAVEX ® 2-73.

This patent is expected to expire in February

2030, absent any patent term extension for regulatory delays.

We also own an issued U.S.

patent that claims crystalline

forms of ANAVEX ® 19-144, dosage forms and compositions containing the crystalline forms of ANAVEX ® 19-144,

and methods of treatment for Alzheimer’s disease.

This patent is expected to expire in July 2036, absent any patent term extension

for regulatory delays.

Further, we own two issued U.S.

patents with claims

directed to methods of treating cardiac dysfunction with ANAVEX ® 2-73.

These patents are expected to expire in July 2038,

absent any patent term extension for regulatory delays.

Additionally, we own three issued U.S.

patents for the treatment of insomnia,

anxiety, or agitation.

The first of the three patents claims methods of treating insomnia or anxiety with ANAVEX ® 2-73,

ANAVEX ® 19-144, and/or ANAVEX ® 1-41.

This patent is expected to expire in September 2038.

The second and third

of the three patents claim dosage forms comprising any of, or any combination of ANAVEX ® 2-73, ANAVEX ® 19-144,

and/or ANAVEX ® 1-41.

These patents are expected to expire in July 2037, absent any patent term extension for regulatory

Further, we own one issued U.S.

patent with claims

directed to a method of treating systolic hypertension using ANAVEX ® 2-73.

This patent is expected to expire in July 2039,

absent any patent term extension for regulatory delays.

Additionally, we own one issued U.S.

patent with claims directed to pharmaceutical

dosage forms of the (-) enantiomer of ANAVEX ® 2-73.

This patent is expected to expire in July 2036, absent any patent term

extension for regulatory delays.

We also own three (3) issued U.S.

patents related

to ANAVEX ® 1066.

The first of these three patents claims methods for treating or preventing pain using the (+) ANAVEX ® 1066

The second patent claims methods for treating or preventing pain using the (-) ANAVEX ® 1066 isomer.

The third patent

claims dosage forms and pharmaceutical compositions comprising the (+) ANAVEX ® 1066 isomer.

All three patents are expected

to expire in November 2036, absent any patent term extension for regulatory delays.

For ANAVEX ® 2-73, ANAVEX ® 19-144,

ANAVEX ® 1-41, and ANAVEX ® 1066, we also have granted or pending applications in Australia, Canada, China,

Europe, Japan, and Hong Kong, which are expected to expire after 2035.

With regard to ANAVEX ® 3-71, we own

exclusive rights to two issued U.S.

patents with claims respectively directed to the ANAVEX ® 3-71 compound and methods of

treating various diseases including Alzheimer’s with the same.

These patents are expected to expire in April 2030, and January 2030,

respectively, absent any patent term extension for regulatory delays.

We also own exclusive rights to related patents or applications

that are granted or pending in Australia, Canada, China, Europe, Japan, Korea, New Zealand, Russia, and South Africa, which are expected

to expire in January 2030.

We also own other patent applications and certain

granted foreign patents directed to enantiomers, crystals, formulations, uses, and patient selection methods that may provide additional

protection for one or more of our product candidates.

We regard patents and other intellectual property

rights as corporate assets.

Accordingly, we attempt to optimize the value of intellectual property in developing our business strategy

including the selective development, protection, and exploitation of our intellectual property rights.

In addition to filings made with

intellectual property authorities, we protect our intellectual property and confidential information by means of carefully considered

processes of communication and the sharing of information, and by the use of confidentiality and non-disclosure agreements and provisions

for the same in contractor’s agreements.

While no agreement offers absolute protection, such agreements provide some form of recourse

in the event of disclosure, or anticipated disclosure.

patents and patent applications relating

to our drug candidates, methods associated therewith, and to our research programs.

intellectual property position, like that of many biomedical companies, is uncertain and involves complex legal and technical questions

for which important legal principles are unresolved.

For more information regarding challenges to our existing or future patents, see

“Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December

For more information regarding our patents, patent applications, and challenges to

our existing or future patents, see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities

and Exchange Commission on November 25, 2025.

Financial Overview

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expenses and professional services.

Comparison of the three- and nine- months ended

June 30, 2025 and 2024

Comparison of the three-months ended December 31,

2025 and 2024

Operating Expenses

Total operating expenses for the three months ended

June 30, 2025 were $14.5 million, compared to $14.6 million for the comparable three months ended June 30, 2024.

Total operating expenses

for the nine months ended June 30, 2025 were $40.6 million, compared to $38.6 million for the comparable nine months ended June 30, 2024.

December 31, 2025 were $6.8 million, compared to $13.6 million for the comparable three months ended December 31, 2024.

Our research and development expenses for the three

months ended June 30, 2025 were $10.0 million, as compared to $11.8 million for the three months ended June 30, 2024.

Our research and

development expenses for the nine months ended June 30, 2025 were $30.3 million, compared to $30.2 million in the comparable nine months

ended June 30, 2024.

months ended December 31, 2025 were $4.7 million, as compared to $10.4 million for the three months ended December 31, 2024.

The decrease in research and development expenses

during the three-month period is primarily related to the following:

(i) a decrease of approximately $1.9 million over the comparable periods relating to the completion of a large

manufacturing campaign for ANAVEX ® 2-73 for potential commercial use, and to support the MAA;

(ii) a decrease of approximately $1.0 million related to our Alzheimer’s program, as a result of the

completion of the Phase 2b/3 open label extension in June 2024.

These decreases were partially offset by an increase

of approximately $1.1 million in stock-based compensation charges due to a new grant of milestone-based options to existing staff in March

2025, which expense is being recorded over the expected vesting period.

Research and development expenses were consistent

during the nine-month period as related to the comparable nine-month period.

An increase of approximately $3.6 million over the comparable

period relating to expenditures on the ANAVEX ® 3-71-SZ-001 clinical trial, which commenced in March 2024 was offset by (i)

a decrease of approximately $3.0 million in expenditures over the comparable period relating to our Alzheimer’s program, as a result

of the completion of the Phase 2b/3 clinical trial open label extension in June 2024 and (ii) a decrease of approximately $0.7 million

relating to the manufacturing activities for Anavex ® 3-71 completed in the comparable period, for use in future clinical

(i) a decrease of approximately $1.7 million over the comparable period relating to completed manufacturing

activities of ANAVEX ® 2-73 for potential commercial use, and to support the MAA;

(ii) a decrease of approximately $1.5 million over the comparable period relating to completion of the ANAVEX ® 3-71-SZ-001

clinical trial;

(iii) a decrease of approximately $0.6 million related to completion of

biomarker and MRI imaging analysis in the comparable period relating to ANAVEX ® 2-73 in Alzheimer’s disease ;

(iv) a decrease of approximately $0.4 million related to completion of biomarker and additional statistical

programming in the comparable period related to our Rett programs;

(v) a decrease of approximately $1.4 million in personnel and consultant costs over the comparable period

relating to personnel engaged to assist in and support the MAA, a reduction in staffing over the comparable period, and a reduction in

accrued bonus compensation for existing staff.

The following table summarizes our research and development

expenses for the three- and nine-months ended June 30, 2025 and 2024 (in thousands):

Three months ended June 30,

Nine months ended June 30,

expenses for the three-months ended December 31, 2025 and 2024 (in thousands):

Cost of external service providers

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Total research and development costs

During the three- and nine-months ended June 30, 2025

and 2024, external service provider costs by product candidate was as follows (in thousands):

Three months ended June 30,

Nine months ended June 30,

During the three-months ended December 31, 2025 and

2024, external service provider costs by product candidate was as follows (in thousands):

ANAVEX ® 2-73

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Total external service provider costs

General and administrative expenses were $4.5 million for the three months ended

June 30, 2025, as compared to $2.8 million for the same quarter of fiscal 2024.

General and administrative expenses were $2.1 million

for the nine months ended June 30, 2025, as compared to $8.4 million for the nine months ended June 30, 2024.

In both periods the increases

were primarily related to corporate legal fees and intellectual property legal fees associated with legal matters and patent filings and

In the three month period, the increase was also related to an increase in non-cash stock based compensation charges associated

with a new grant of milestone-based options to existing staff in March 2025.

for the three months ended December 31, 2025, as compared to $3.1 million for the same quarter of fiscal 2024.

The decrease was primarily

related to a decrease in legal and professional fees of approximately $0.3 million, as well as a decrease in personnel costs of $0.6 million,

mostly related to a decrease in stock based compensation expense of $0.3 million as a result of the vesting of previously issued milestone

options, and due to the forfeiture of options, and a reduction in accrued bonus compensation for existing staff of $0.3 million.

Other income (net)

Net other income for the three-months ended June 30,

2025 was $1.2 million, as compared to $2.4 million for the comparable three-months ended June 30, 2024.

Net other income for the nine

months ended June 30, 2025 was $4.0 million as compared to $7.2 million for the comparable nine months ended June 30, 2024.

In both periods,

the decrease in other income is related to a decrease of research and development incentive income, as a result of the completion of Australian

clinical trials, as well as a decrease in interest income as a result of lower cash balances and market interest rates.

Net loss for the three-months ended June 30, 2025,

Net other income for the three-months ended December

31, 2025 was $1.1 million, as compared to $1.5 million for the comparable three-months ended December 31, 2024.

The decrease is primarily

related to (i) a decrease in research and development incentive income of $0.4 million, as a result of the completion of our clinical

trials in Australia and (ii) a decrease in interest income of $0.3 million as a result of decreased market wide interest rates.

partially offset by a decrease in foreign exchange loss as a result of the stabilization of the Australian dollar against the US dollar,

and the reduced incentive and tax receivable balance denominated in Australian dollars, as compared to the prior year period.

Net loss for the three-months ended December 31, 2025,

was $5.7 million, or $0.06 per share, as compared to $12.1 million, or $0.14 per share in the comparative quarter of fiscal 2024.

Net loss for the nine-months ended June 30, 2025,

was $36.6 million, or $0.43 per share, as compared to $31.4 million, or $0.38 per share for the nine-months ended June 30, 2024.

in net loss is primarily related to the net increases in operating expenses and net decreases in other income, as more fully described

Liquidity and Capital Resources

Working Capital (in thousands)

June 30, 2025

December 31, 2025

September 30, 2025

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Working Capital

On June 30, 2025, we had net current assets of $91.0

million, a decrease of approximately $29.3 million from our year ended September 30, 2024.

The decrease in net current assets primarily

relates to cash utilized in operations during the period.

On December 31, 2025, we had net current assets of

$126.6 million, an increase of approximately $31.2 million from our year ended September 30, 2025.

The increase in net current assets

is primarily related to cash received from the issuance of common shares pursuant to the 2025 Sales Agreement.

continue to use our capital resources to advance our clinical trials for ANAVEX ® 2-73 and ANAVEX ® 3-71, and

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The following

table summarizes cash flows during the nine months ended June 30, 2025 and 2024 (in thousands):

table summarizes cash flows during the three months ended December 31, 2025 and 2024 (in thousands):

Net cash flows used in operating activities

Net cash flows (used in) provided by financing activities

Decrease in cash and cash equivalents

Net cash flows provided by financing activities

Increase (decrease) in cash and cash equivalents

Cash flow used in operating activities

Net cash used in operating activities for the nine-months

ended June 30, 2025 was $30.4 million, compared to $24.2 million during the comparable period ended June 30, 2024.

The principal reason

for this is due to a net increase in net loss over the comparable period, as described above, as well as a decrease in working capital

balances during the period, as compared to the prior period.

Net cash used in operating activities for the three-months

ended December 31, 2025 was $7.2 million, compared to $12.1 million during the comparable period ended December 31, 2024.

The principal

reason for this change is due to the decrease in net loss due to the decrease in operating expenditures, as described above.

Cash flow provided by financing activities

Cash flows used in financing activities for the nine-month

period ended June 30, 2025 was $0.6 million, compared to cash provided from financing activities of $11.9 million during the comparable

nine-month period ended June 30, 2024.

During the nine months ended June 30, 2025, we received

$1.7 million in cash from the exercise of stock options by our employees.

We utilized $2.3 million to satisfy tax withholding obligations

associated with the net exercise of an employee stock option to our CEO, in exchange for the withholding of shares.

During the nine months ended June 30, 2024, cash provided

by financing activities was primarily attributable to cash received from the issuance of common shares at various market prices under

the 2023 Purchase Agreement.

Cash flows provided by financing activities for the

three-month period ended December 31, 2025 was $36.3 million, compared to $0.7 million during the comparable three-month period ended

December 31, 2024.

During the three months ended December 31, 2025, cash

provided by financing activities was related to cash received from the issuance of common shares pursuant to the 2025 Sales Agreement.

During the three months ended December 31, 2024, cash

provided by financing activities was primarily attributable to cash received from the exercise of stock options by our employees.

Other Financings

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

Pursuant to the 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.

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 our instructions

and subject to the terms and conditions of the 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 our prior written

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 our prior

written consent.

We are not obligated to make any sales of shares under the 2025 Sales Agreement.

We or the Sales Agent may suspend or terminate the

Offering upon notice to the other party, subject to certain conditions.

The Sales Agent will act as sales agent on a commercially reasonable

efforts basis consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the

rules of Nasdaq.

We or the Sales Agent may suspend or

terminate the Offering upon notice to the other party, subject to certain conditions.

The Sales Agent will act as sales agent on a commercially

reasonable efforts basis consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations

and the rules of Nasdaq.

We have agreed to pay the Sales Agent commissions

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

During the three months ended December 31, 2025, the

Company issued an aggregate of 6,003,237 shares of Common Stock under the 2025 Sales Agreement for net proceeds of $36.3 million, after

deducting commissions.

At December 31, 2025, there was an unused amount of

$103.3 million under the 2025 Sales Agreement.

2023 Purchase Agreement

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purchase agreement (the “2023 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant

to which we have the right to sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $150.0 million in value

of our shares of Common Stock from time to time over a three-year period until February 3, 2026.

On any business day and subject to having an effective

registration statement and subject to certain customary conditions, we may direct Lincoln Park to purchase up to 200,000 shares of Common

Stock (such purchases, “Regular Purchases”).

The amount of a Regular Purchase may increase under certain circumstances based

on the market price of the Common Stock;

provided, however, that Lincoln Park’s committed obligation under any Regular Purchase

shall not exceed $4.0 million.

The purchase price of shares of Common Stock will be based on the then prevailing market prices of such

shares at the time of sales as described in the 2023 Purchase Agreement.

There are no limits on the price per share that Lincoln Park

may pay to purchase Common Stock under the 2023 Purchase Agreement.

In addition, if we have directed Lincoln Park to purchase the full

amount of Common Stock available as a Regular Purchase on a given day, we may direct Lincoln Park to purchase additional amounts as “accelerated

purchases” and “additional accelerated purchases,” each as set forth in the 2023 Purchase Agreement.

The 2023 Purchase Agreement limits the Company’s

sale of shares of Common Stock to Lincoln Park to 15,606,426 shares of Common Stock, representing 19.99% of the shares of the Common Stock

outstanding on the date of the 2023 Purchase Agreement unless (i) stockholder approval is obtained to issue more than such amount or (ii)

the average price of all applicable sales of Common Stock to Lincoln Park under the 2023 Purchase Agreement equals or exceeds the lower

of (A) the closing price of the Common Stock on the Nasdaq Capital Market immediately preceding the Execution Date or (B) the average

of the closing price of the Common Stock on the Nasdaq Capital Market for the five Business Days immediately preceding the Execution Date.

The 2023 Purchase Agreement also prohibits the Company

from directing Lincoln Park to purchase any shares of Common Stock if those shares, when aggregated with all other shares of Common Stock

then beneficially owned by Lincoln Park and its affiliates, would result in Lincoln Park and its affiliates having beneficial ownership,

at any single point in time, of more than 4.99% of the then total outstanding shares of Common Stock, as calculated pursuant to Section

13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder.

to which we had the right to sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $150.0 million in value

of our shares of Common Stock from time to time over a three-year period.

In consideration for entering into the 2023 Purchase

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the “commitment shares”), when and if, Lincoln Park purchased, at the Company’s discretion, the $150.0 million aggregate

During the nine-months ended June 30, 2025, the Company

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

During the nine-month period ended June 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.

On June 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.

During the three-month period ended December 31, 2025

and 2024, the Company did not issue any shares of common stock under the 2023 Purchase Agreement.

On December 31, 2025, there was an unused

amount of $110.8 million under the 2023 Purchase Agreement.

The 2023 Purchase Agreement expired on February 3, 2026.

Off-Balance Sheet Arrangements

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changes in the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended September 30,

2024, as filed with the SEC on December 23, 2024.

2025, as filed with the SEC on November 25, 2025.

RECENT ACCOUNTING PRONOUNCEMENTS

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Accounting Pronouncements” in notes to our Condensed Consolidated Interim Financial Statements included in this Form 10-Q.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

Not required for smaller reporting companies.

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-Q

Item 2. Management’s Discussion and Analysis