<SEC-DOCUMENT>0001062993-15-001458.txt : 20150325
<SEC-HEADER>0001062993-15-001458.hdr.sgml : 20150325
<ACCEPTANCE-DATETIME>20150324212410
ACCESSION NUMBER:		0001062993-15-001458
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20150325
DATE AS OF CHANGE:		20150324

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ANAVEX LIFE SCIENCES CORP.
		CENTRAL INDEX KEY:			0001314052
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731]
		IRS NUMBER:				208365999
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-202533
		FILM NUMBER:		15723114

	BUSINESS ADDRESS:	
		STREET 1:		51 W 52ND STREET,
		STREET 2:		7TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10019-6163
		BUSINESS PHONE:		800-689-3939

	MAIL ADDRESS:	
		STREET 1:		51 W 52ND STREET,
		STREET 2:		7TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10019-6163

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Thrifty Printing Inc.
		DATE OF NAME CHANGE:	20050111
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>form424b3.htm
<DESCRIPTION>FORM 424B3
<TEXT>
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   <TITLE>Anavex Life Sciences Corp.: Form 424B3 - Filed by newsfilecorp.com</TITLE>
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<p align="right">Filed Pursuant to Rule 424(b)(3)<br>
Registration No. 333-202533</p>
<p align="center"><IMG src="forms1x3x1.jpg" border=0></p>
<P align=center><b>PROSPECTUS</b></P>
<P align=center><B>15,486,358 Shares of Common Stock </B></P>
<P align=justify>This prospectus relates to the sale or other disposition from
time to time of shares of common stock, par value $0.001 per share, of Anavex
Life Sciences Corp., a Nevada corporation, by certain of our security holders
(the &#147;<U>Selling Security Holders</U>&#148;). The shares offered for resale by this
prospectus include 15,486,358 shares of the Company&#146;s common stock issuable upon
exercise of the Series A Warrants (the &#147;<U>Series A Warrants</U>&#148;) issued by the
Company on March 18, 2014 which may be exercisable at a price of $0.30 per
share. </P>
<P align=justify>The Selling Security Holders may sell the shares of common
stock described in this prospectus in a number of different ways and at varying
prices. See &#147;Plan of Distribution&#148; for more information about how the Selling
Security Holders may sell the shares of common stock being registered pursuant
to this prospectus. </P>
<P align=justify>We will pay the expenses incurred in registering the shares,
including legal and accounting fees. See &#147;Plan of Distribution.&#148; </P>
<P align=justify>Our common stock is currently quoted on the OTC Markets - OTCQX
under the symbol &#147;AVXL.&#148; On February 24, 2015, the last reported sale price of
our common stock was $0.17 <B></B>per share.</P>
<P align=justify>This prospectus may only be used where it is legal to offer and
sell the shares covered by this prospectus. We have not taken any action to
register or obtain permission for this offering or the distribution of this
prospectus in any country other than the United States.<B> </B></P>
<P align=justify><B>Investing in our securities involves a high degree of risk.
See &#147;Risk Factors&#148; beginning on page 5 of this prospectus for a discussion of
information that should be considered in connection with an investment in our
securities. </B></P>
<P align=justify><B>Neither the Securities and Exchange Commission nor any state
securities regulators have approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense. </B></P>
<P align=center>The date of this prospectus is March 24, 2015.</P>
<P align=center>i </P>
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<P align=center><B>TABLE OF CONTENTS</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_5">PROSPECTUS
      SUMMARY </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_5">1 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_8">CORPORATE
      INFORMATION </A></TD>
    <TD align=left width="5%"><A
      href="#page_8">4 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_8">THE
      OFFERING </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_8">4 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_8">SECURITIES
      OFFERED </A></TD>
    <TD align=left width="5%"><A
      href="#page_8">4 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_9">RISK
      FACTORS </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_9">5 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_9">RISKS
      RELATED TO OUR BUSINESS </A></TD>
    <TD align=left width="5%"><A
      href="#page_9">5 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_15">RISKS
      RELATING TO OUR COMMON STOCK </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_15">11 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_19">SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS </A></TD>
    <TD align=left width="5%"><A
      href="#page_19">15 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_20">USE
      OF PROCEEDS </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_20">16 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_21">MARKET
      FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS </A></TD>
    <TD align=left width="5%"><A
      href="#page_21">17 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_23">SELLING
      SECURITY HOLDERS </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_23">19 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_41">MANAGEMENT&#146;S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </A></TD>
    <TD align=left width="5%"><A
      href="#page_41">37 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_47">BUSINESS </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_47">44 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_54">MANAGEMENT </A></TD>
    <TD align=left width="5%"><A
      href="#page_54">50 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_61">DESCRIPTION
      OF SECURITIES </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_61">57 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_61">PLAN
      OF DISTRIBUTION </A></TD>
    <TD align=left width="5%"><A
      href="#page_61">57 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_63">LEGAL
      MATTERS </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_63">59 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_63">EXPERTS </A></TD>
    <TD align=left width="5%"><A
      href="#page_63">59 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_63">WHERE
      YOU CAN FIND ADDITIONAL INFORMATION </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_63">59 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_64">DISCLOSURE
      OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITY </A></TD>
    <TD align=left width="5%"><A
      href="#page_64">60 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_65">FINANCIAL
      STATEMENTS </A></TD>
    <TD align=left width="5%" bgColor=#eeeeee><A
      href="#page_65">i </A></TD>
  </TR>
</TABLE>
<P align=justify>You should rely only on the information contained in this
prospectus. We have not, and the Selling Security Holders have not, authorized
any person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. This
prospectus is not an offer to sell, nor are the Selling Security Holders seeking
an offer to buy, securities in any state where the offer or solicitation is not
permitted. The information contained in this prospectus is complete and accurate
as of the date on the front cover of this prospectus, but information may have
changed since that date. We are responsible for updating this prospectus to
ensure that all material information is included and we will update this
prospectus to the extent required by law.</P>
<P align=justify>This prospectus includes statistical and other industry and
market data that we obtained from industry publications and research, surveys
and studies conducted by third parties. Industry publications and third-party
research, surveys and studies generally indicate that their information has been
obtained from sources believed to be reliable, although they do not guarantee
the accuracy or completeness of such information. While we believe that these
industry publications and third-party research, surveys and studies are
reliable, we have not independently verified such data and we do not make any
representation as to the accuracy of the information.</P>
<P align=center>ii </P>
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<P align=center><B>PROSPECTUS SUMMARY</B> </P>
<P align=justify><B><I>Anavex Life Sciences Corp., a Nevada corporation, is
referred to as &#147;</I></B><B><I><U>Anavex</U></I></B><B><I>,&#148;
&#147;</I></B><B><I><U>we</U></I></B><B><I>,&#148;
&#147;</I></B><B><I><U>us</U></I></B><B><I>,&#148;
&#147;</I></B><B><I><U>our</U></I></B><B><I>,&#148; or the
&#147;</I></B><B><I><U>Company</U></I></B><B><I>&#148; throughout this prospectus. The
items in the following summary are described in more detail later in this
prospectus. This summary does not contain all of the information you should
consider. Before investing in our securities, you should read the entire
prospectus carefully, including the &#147;Risk Factors&#148; beginning on page 5 and the
financial statements and related notes beginning on page F-1. </I></B></P>
<P align=center><B>Overview</B> </P>
<P align=justify><B><I>Our Current Business </I></B></P>
<P align=justify>We are a clinical stage biopharmaceutical company engaged in
the development of drug candidates to treat Alzheimer&#146;s disease, other central
nervous system (CNS) diseases, and various types of cancer. Our lead compounds
ANAVEX 2-73 and ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
(Aricept), are being developed to treat Alzheimer&#146;s disease and potentially
other central nervous system (CNS) diseases.</P>
<P align=justify>In December 2014 a Phase 2a clinical trial was initiated for
ANAVEX 2-73, which is being evaluated for the treatment of Alzheimer&#146;s disease.
The randomized trial is designed to assess the safety and exploratory efficacy
of ANAVEX 2-73 alone as well as in combination with donepezil (ANAVEX PLUS) in
patients with mild to moderate Alzheimer&#146;s disease. ANAVEX 2-73 targets sigma-1
and muscarinic receptors, which have been shown in preclinical studies to reduce
stress levels in the brain and to reverse the pathological hallmarks observed in
Alzheimer&#146;s disease. ANAVEX 2-73 showed no serious adverse events in a
previously performed Phase 1 study. In pre-clinical studies, ANAVEX 2-73
demonstrated anti-amnesic and neuroprotective properties in various animal
models including the transgenic mouse model Tg2576.</P>
<P align=justify>We intend to identify and initiate discussions with potential
partners in the next 12 months. Further, we may acquire or develop new
intellectual property and assign, license, or otherwise transfer our
intellectual property to further our goals.</P>
<P align=justify><B><I>Our Pipeline</I></B></P>
<P align=justify>Our pipeline includes one clinical drug candidate and several
compounds in different stages of pre-clinical study.</P>
<P align=justify>Our proprietary SIGMACEPTOR&#153; Discovery Platform produced small
molecule drug candidates with unique modes of action, based on our understanding
of sigma receptors. Sigma receptors may be targets for therapeutics to combat
many human diseases, including Alzheimer&#146;s disease. When bound by the
appropriate ligands, sigma receptors influence the functioning of multiple
biochemical signals that are involved in the pathogenesis (origin or
development) of disease.</P>
<P align=justify>Compounds that have been subjects of our research include the
following:</P>
<P align=justify><B>ANAVEX 2-73</B></P>
<P align=justify>ANAVEX 2-73 may offer a disease-modifying approach in
Alzheimer&#146;s disease (AD) by using ligands that activate sigma-1 receptors.</P>
<P align=justify>In AD animal models, ANAVEX 2-73 has shown pharmacological,
histological and behavioral evidence as a potential neuroprotective,
anti-amnesic, anti-convulsive and anti-depressive therapeutic agent, due to its
potent affinity to sigma-1 receptors and moderate affinities to M1-4 type
muscarinic receptors. In addition, ANAVEX 2-73 has shown a potential dual
mechanism which may impact both amyloid and tau pathology. In a transgenic AD
animal model Tg2576 ANAVEX 2-73 induced a statistically significant
neuroprotective effect against the development of oxidative stress in the mouse
brain, as well as significantly increased the expression of functional and
synaptic plasticity markers that is apparently amyloid-beta independent. It also
statistically alleviated the learning and memory deficits developed over time in
the animals, regardless of sex, both in terms of spatial working memory and
long-term spatial reference memory.</P>
<P align=center>1</P>
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<P align=justify>Based on the results of pre-clinical testing, we initiated and
completed a Phase 1 single ascending dose (SAD) clinical trial of ANAVEX 2-73 in
2011. In this Phase 1 SAD trial, the maximum tolerated single dose was defined
per protocol as 55-60 mg. This dose is above the equivalent dose shown to have
positive effects in mouse models of AD. There were no significant changes in
laboratory or electrocardiogram (ECG) parameters. ANAVEX 2-73 was well tolerated
below the 55-60 mg dose with only mild adverse events in some subjects. Observed
adverse events at doses above the maximum tolerated single dose included
headache and dizziness, which were moderate in severity and reversible. These
side effects are often seen with drugs that target central nervous system (CNS)
conditions, including AD.</P>
<P align=justify>The ANAVEX 2-73 Phase 1 SAD trial was conducted as a
randomized, placebo-controlled study. Healthy male volunteers between the ages
of 18 and 55 received single, ascending oral doses over the course of the trial.
Study endpoints included safety and tolerability together with pharmacokinetic
parameters. Pharmacokinetics includes the absorption and distribution of a drug,
the rate at which a drug enters the blood and the duration of its effect, as
well as chemical changes of the substance in the body. This study was conducted
in Germany in collaboration with ABX-CRO, a clinical research organization that
has conducted several Alzheimer&#146;s disease studies, and the Technical University
of Dresden.</P>
<P align=justify><B>ANAVEX PLUS</B></P>
<P align=justify>ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
(Aricept&#174;) is a potential novel combination drug for Alzheimer&#146;s disease.
Aricept&#174; (donepezil) is now generic. ANAVEX 2-73 showed in combination with
donepezil an unexpected and clear synergic effect of memory improvement by up to
80% in animal models. A patent application was filed in the US for the
combination of donepezil and ANAVEX 2-73 and if granted would give patent
protection at least until 2033.</P>
<P align=justify>In a humanized calibrated cortical network computer model the
unexpected pre-clinical synergy between ANAVEX 2-73 and donepezil was confirmed
and ANAVEX PLUS showed an anticipated ADAS-Cog response of 7 points at 12 weeks
and 5.5 points at 26 weeks, which represents more than 2x the ADAS-Cog of
donepezil alone.</P>
<P align=justify><B>ANAVEX 3-71 </B></P>
<P align=justify>ANAVEX 3-71, previously named AF710B is a preclinical drug
candidate with a novel mechanism of action via sigma-1 receptor activation and
M1 muscarinic allosteric modulation, which has shown to enhance neuroprotection
and cognition in Alzheimer's disease. ANAVEX 3-71 is a CNS-penetrable
mono-therapy that bridges treatment of both cognitive impairments with disease
modifications. It is highly effective in very small doses against the major
Alzheimer's hallmarks in transgenic (3xTg-AD) mice, including cognitive
deficits, amyloid and tau pathologies, and also has beneficial effects on
inflammation and mitochondrial dysfunctions. ANAVEX 3-71 indicates extensive
therapeutic advantages in Alzheimer's and other protein-aggregation-related
diseases given its ability to enhance neuroprotection and cognition via sigma-1
receptor activation and M1 muscarinic allosteric modulation.</P>
<P align=justify><B>ANAVEX 1-41 </B></P>
<P align=justify>ANAVEX 1-41 is a sigma-1 agonist. Pre-clinical tests revealed
significant neuroprotective benefits (i.e., protects nerve cells from
degeneration or death) through the modulation of endoplasmic reticulum,
mitochondrial and oxidative stress, which damages and destroys cells and is
believed by some scientists to be a primary cause of AD. In addition, in animal
models, ANAVEX 1-41 prevented the expression of caspase-3, an enzyme that plays
a key role in apoptosis (programmed cell death) and loss of cells in the
hippocampus, the part of the brain that regulates learning, emotion and memory.
These activities involve both muscarinic and sigma-1 receptor systems through a
novel mechanism of action. </P>
<P align=center>2</P>
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<P align=justify><B>ANAVEX 1037 </B></P>
<P align=justify>ANAVEX 1037 is designed for the treatment of prostate cancer.
It is a low molecular weight, synthetic compound exhibiting high affinity for
sigma-1 receptors at nanomolar levels and moderate affinity for sigma-2
receptors and sodium channels at micromolar levels. In advanced pre-clinical
studies, this compound revealed antitumor potential with no toxic side effects.
It has also been shown to selectively kill human cancer cells without affecting
normal/healthy cells and also to significantly suppress tumor growth in
immune-deficient mice models. Scientific publications describe sigma receptor
ligands positively, highlighting the possibility that these ligands may stop
tumor growth and induce selective cell death in various tumor cell lines. Sigma
receptors are highly expressed in different tumor cell types. Binding by
appropriate sigma-1 and/or sigma-2 ligands can induce selective apoptosis. In
addition, through tumor cell membrane reorganization and interactions with ion
channels, our drug candidates may play an important role in inhibiting the
processes of metastasis (spreading of cancer cells from the original site to
other parts of the body), angiogenesis (the formation of new blood vessels) and
tumor cell proliferation.</P>
<P align=justify>Our compounds are in the pre-clinical and clinical testing
stages of development, and there is no guarantee that the activity demonstrated
in pre-clinical models will be shown in human testing.</P>
<P align=justify><B><I>Our Target Indications</I></B></P>
<P align=justify>We have developed compounds with potential application to two
broad categories and several specific indications. The two categories are
diseases of the central nervous system, and cancer. Specific indications
include: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left valign="top">
    <LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Alzheimer&#146;s disease &#150; In 2014, an estimated 5.2 million
      Americans are suffering from Alzheimer&#146;s disease. The Alzheimer&#146;s
      Association&#174; reports that by 2025, 7.1 million Americans will be afflicted
      by the disease, a 40 percent increase from currently affected patients.
      Medications on the market today treat only the symptoms of AD and do not
      have the ability to stop its onset or its progression. There is an urgent
      and unmet need for both a disease modifying cure for Alzheimer&#146;s disease
      as well as for better symptomatic treatments. </P></TD></TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left valign="top"><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Depression - Depression is a major cause of morbidity
      worldwide according to the World Health Organization (WHO). Pharmaceutical
      treatment for depression is dominated by blockbuster brands, with the
      leading nine brands accounting for approximately 75% of total sales.
      However, the dominance of the leading brands is waning, largely due to the
      effects of patent expiration and generic competition. Our market research
      leads us to believe that the worldwide market for pharmaceutical treatment
      of depression exceeds $11 billion annually. </P></TD></TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left valign="top"><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>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, epilepsy affects 2.2 million Americans. Today,
      epilepsy is often controlled, but not cured, with medication that is
      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 generations anti-epileptic
      drugs. Decision Resources, one of the world&#146;s leading research and
      advisory firms for pharmaceutical and healthcare issues, finds that the
      epilepsy market will increase from $2.9 billion in 2011 to nearly$3.7
      billion in 2016. </P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD valign="top">&nbsp; </TD>
    <TD width="90%">
      <P align=justify>&nbsp;</P></TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left valign="top"><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Neuropathic Pain &#150; We define neuralgia, or neuropathic
      pain, as pain that is not related to activation of pain receptor cells in
      any part of the body. Neuralgia is more difficult to treat than some other
      types of pain because it does not respond well to normal pain medications.
      Special medications have become more specific to neuralgia and typically
      fall under the category of membrane stabilizing drugs or antidepressants.
      Our market research leads us to believe the worldwide market for
      pharmaceutical treatment of neuropathic pain exceeds $5 billion annually.      </P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="90%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Malignant Melanoma - Predominantly a skin cancer,
      malignant melanoma can also occur in melanocytes found in the bowel and
      the eye. Malignant melanoma accounts for 75% of all deaths associated with
      skin cancer. The treatment includes surgical removal of the tumor,
      adjuvant treatment, chemo and immunotherapy, or radiation therapy.
      According to IMS Health the worldwide Malignant Melanoma market is
      expected to grow from about $900 million in 2012 to $4.4 billion by 2022.      </P></TD></TR></TABLE>
<p align="center">3</p>
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  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Prostate Cancer &#150; Specific to men, prostate cancer is a
      form of cancer that develops in the prostate, a gland in the male
      reproductive system. The 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 from $8.1
      billion in 2012 to nearly $18.6 billion in 2017 according to BCC Research.
      </P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="90%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Pancreatic Cancer - Pancreatic cancer is a malignant
      neoplasm of the pancreas. In the United States approximately 45,000 new
      cases of pancreatic cancer will be diagnosed this year and approximately
      38,000 patients will die as a result of their cancer. Our market research
      leads us to believe that the market for the pharmaceutical treatment of
      pancreatic cancer will exceed $1.2 billion by 2015.
</P></TD></TR></TABLE>
<P align=justify><B>Corporate Information</B> </P>
<P align=justify>Our principal executive office is located at 51 W. 52<SUP>nd
</SUP>Street, 7<SUP>th </SUP>Floor, New York, NY 10019, and our telephone number
is 844.689.3939. Our website address is <U>www.anavex.com</U>. No information
found on our website is part of this prospectus. Also, this prospectus may
include the names of various government agencies or the trade names of other
companies. Unless specifically stated otherwise, the use or display by us of
such other parties&#146; names and trade names in this prospectus is not intended to
and does not imply a relationship with, or endorsement or sponsorship of us by,
any of these other parties. </P>
<P align=justify><B>The Offering </B></P>
<P align=justify>The shares of common stock offered for resale in this
prospectus include the following 15,486,358 shares of the Company&#146;s common stock
issuable upon exercise of the Series A Warrants having a term of five (5) years
and which are exercisable at an initial exercise price of $0.30 per share. </P>
<P align=justify><B>Securities Offered</B> </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=3 width="100%" border=0>

  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    noWrap align=left>Common Stock offered by the Selling Security Holders </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    noWrap align=left width="75%">15,486,358 shares consisting of shares
      underlying Series A Warrants issued to the Selling Security Holders </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    noWrap align=left>Common stock outstanding prior to the offering </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    noWrap align=left width="75%">56,441,000 shares of common stock </TD>
  </TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left>Use of proceeds </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left width="75%">We will not receive any proceeds upon the sale of
      shares of common stock by the Selling Security Holders in this offering.
      However, we received net proceeds of $9,299,160 upon the issuance of the
      Securities of which the Series A Warrants were a part and of which such
      Warrants the common stock underlies, and the exercise of each such Warrant
      may be effected at $0.30 per share of common stock. We retain broad
      discretion in determining how we allocate such cash. However, we expect
      that such cash will be used to further our business plan of advancing
      human clinical trials of AVAVEX 2-73 and for general corporate and
      administrative purposes. Although we have no specific plans for use of
      such cash as of the date of this prospectus, we believe that approximately
      65% of the proceeds received from the exercise of the Series A Warrants
      may be used towards our advancing human clinical trials of AVAVEX 2-73 and
      commercializing our intellectual property, and approximately 35% may be
      used for our general corporate and administrative activities. See &#147;Use of
      Proceeds.&#148; </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left>Risk factors </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left width="75%">This investment involves a high degree of risk. See
      &#147;Risk Factors&#148; for a discussion of factors you should consider carefully
      before making an investment decision. </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left>OTC Markets - OTCQX symbol </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left width="75%">AVXL </TD></TR></TABLE>
<p align="center">4</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<!--$$/page=--><A name=page_9></A>
<P align=center><B>RISK FACTORS</B> </P>
<P align=justify>Before you make a decision to invest in our securities, you
should consider carefully the risks described below, together with other
information in this prospectus. If any of the following events actually occur,
our business, operating results, prospects or financial condition could be
materially and adversely affected. This could cause the trading price of our
common stock to decline and you may lose all or part of your investment. The
risks described below are not the only ones that we face. Additional risks not
presently known to us or that we currently deem immaterial may also
significantly impair our business operations and could result in a complete loss
of your investment.</P>
<P align=justify><B><I>We have had a history of losses and no revenue, which
raise substantial doubt about our ability to continue as a going
concern.</I></B></P>
<P align=justify>Since inception on January 23, 2004 through December 31, 2014,
we have an accumulated deficit of $53,360,043. We can offer no assurance that we
will ever operate profitably or that we will generate positive cash flow in the
future. To date, we have not generated any revenues from our operations. Our
history of losses and no revenues raise substantial doubt about our ability to
continue as a going concern. As a result, our management expects the business to
continue to experience negative cash flow for the foreseeable future and cannot
predict when, if ever, our business might become profitable. We will need to
raise additional funds, and such funds may not be available on commercially
acceptable terms, if at all. If we are unable to raise funds on acceptable
terms, we may not be able to execute our business plan, take advantage of future
opportunities, or respond to competitive pressures or unanticipated
requirements. This may seriously harm our business, financial condition and
results of operations.</P>
<P align=justify><B><I>We are a clinical stage biopharmaceutical company and may
never be able to successfully develop marketable products or generate any
revenue. We have a very limited relevant operating history upon which an
evaluation of our performance and prospects can be made. There is no assurance
that our future operations will result in profits. If we cannot generate
sufficient revenues, we may suspend or cease operations.</I></B></P>
<P align=justify>We are an early development stage company and have not
generated any revenues to date and have no operating history. All of our
potential drug compounds are in the concept stage or early clinical development
stage. Moreover, we cannot be certain that our research and development efforts
will be successful or, if successful, that our potential drug compounds will
ever be approved for sales to pharmaceutical companies or generate commercial
revenues. We have no relevant operating history upon which an evaluation of our
performance and prospects can be made. We are subject to all of the business
risks associated with a new enterprise, including, but not limited to, risks of
unforeseen capital requirements, failure of potential drug compounds either in
non-clinical testing or in clinical trials, failure to establish business
relationships and competitive disadvantages against larger and more established
companies. If we fail to become profitable, we may suspend or cease
operations.</P>
<P align=justify><B><I>We will need additional funding and may be unable to
raise additional capital when needed, which would force us to delay, reduce or
eliminate our research and development activities.</I></B></P>
<P align=justify>We will need to raise additional funding and the current
economic conditions may have a negative impact on our ability to raise
additional needed capital on terms that are favorable to our Company or at all.
We may not be able to generate significant revenues for several years, if at
all. Until we can generate significant revenues, if ever, we expect to satisfy
our future cash needs through equity or debt financing. We cannot be certain
that additional funding will be available on acceptable terms, or at all. If
adequate funds are not available, we may be required to delay, reduce the scope
of, or eliminate one or more of our research and development activities.</P>
<P align=justify><B><I>Risks Related to our Business</I></B></P>
<P align=justify><B><I>Even if we are able to develop our potential drug
compounds, we may not be able to receive regulatory approval, or if approved, we
may not be able to generate significant revenues or successfully commercialize
our products, which will adversely affect our financial results and financial
condition and we will have to delay or terminate some or all of our research and
development plans which may force us to cease operations.</I></B></P>
<P align=center>5</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_10></A>
<P align=justify>All of our potential drug compounds will require extensive
additional research and development, including non-clinical testing and clinical
trials, as well as regulatory approvals, before we can market them. We cannot
predict if or when any of the potential drug compounds we intend to develop will
be approved for marketing. There are many reasons that we may fail in our
efforts to develop our potential drug compounds. These include:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the possibility that non-clinical testing or clinical
      trials may show that our potential drug compounds are ineffective and/or
      cause harmful side effects; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>our potential drug compounds may prove to be too
      expensive to manufacture or administer to patients; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>our potential drug compounds may fail to receive
      necessary regulatory approvals from the United States Food and Drug
      Administration or foreign regulatory authorities in a timely manner, or at
      all; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>even if our potential drug compounds are approved, we may
      not be able to produce them in commercial quantities or at reasonable
      costs; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>even if our potential drug compounds are approved, they
      may not achieve commercial acceptance; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>regulatory or governmental authorities may apply
      restrictions to any of our potential drug compounds, which could adversely
      affect their commercial success; and </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the proprietary rights of other parties may prevent us or
      our potential collaborative partners from marketing our potential drug
      compounds. </P></TD></TR></TABLE>
<P align=justify>If we fail to develop our potential drug compounds, our
financial results and financial condition will be adversely affected, we will
have to delay or terminate some or all of our research and development plans and
may be forced to cease operations.</P>
<P align=justify><B><I>Our research and development plans will require
substantial additional future funding which could impact our operational and
financial condition. Without the required additional funds, we will likely cease
operations.</I></B></P>
<P align=justify>It will take several years before we are able to develop
potentially marketable products, if at all. Our research and development plans
will require substantial additional capital, arising from costs to:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>conduct research, non-clinical testing and human studies;
      </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>establish pilot scale and commercial scale manufacturing
      processes and facilities; and </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>establish and develop quality control, regulatory,
      marketing, sales, finance and administrative capabilities to support these
      programs. </P></TD></TR></TABLE>
<P align=justify>Our future operating and capital needs will depend on many
factors, including:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the pace of scientific progress in our research and
      development programs and the magnitude of these programs; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the scope and results of pre-clinical testing and human
      studies; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the time and costs involved in obtaining regulatory
      approvals; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the time and costs involved in preparing, filing,
      prosecuting, securing, maintaining and enforcing patents; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>competing technological and market developments;
  </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>our ability to establish additional collaborations;
    </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>changes in our existing collaborations; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the cost of manufacturing scale-up; and </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>the effectiveness of our commercialization activities.
      </P></TD></TR></TABLE>
<P align=justify>We base our outlook regarding the need for funds on many
uncertain variables. Such uncertainties include the success of our research
initiatives, regulatory approvals, the timing of events outside our direct
control such as negotiations with potential strategic partners and other
factors. Any of these uncertain events can significantly change our cash
requirements as they determine such one-time events as the receipt or payment of
major milestones and other payments.</P>
<P align=center>6</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<P align=justify>Additional funds will be required to support our operations and
if we are unable to obtain them on favorable terms, we may be required to cease
or reduce further research and development of our drug product programs, sell
some or all of our intellectual property, merge with another entity or cease
operations.</P>
<P align=justify><B><I>If we fail to demonstrate efficacy in our non-clinical
studies and clinical trials our future business prospects, financial condition
and operating results will be materially adversely affected.</I></B></P>
<P align=justify>The success of our research and development efforts will be
greatly dependent upon our ability to demonstrate potential drug compound
efficacy in non-clinical studies, as well as in clinical trials. Non-clinical
studies involve testing potential drug compounds in appropriate non-human
disease models to demonstrate efficacy and safety. Regulatory agencies evaluate
these data carefully before they will approve clinical testing in humans. If
certain non-clinical data reveals potential safety issues or the results are
inconsistent with an expectation of the potential drug compound&#146;s efficacy in
humans, the regulatory agencies may require additional more rigorous testing
before allowing human clinical trials. This additional testing will increase
program expenses and extend timelines. We may decide to suspend further testing
on our potential drug compounds if, in the judgment of our management and
advisors, the non-clinical test results do not support further development.</P>
<P align=justify>Moreover, success in non-clinical testing and early clinical
trials does not ensure that later clinical trials will be successful, and we
cannot be sure that the results of later clinical trials will replicate the
results of prior clinical trials and non-clinical testing. The clinical trial
process may fail to demonstrate that our potential drug compounds are safe for
humans and effective for indicated uses. This failure would cause us to abandon
a drug candidate and may delay development of other potential drug compounds.
Any delay in, or termination of, our non-clinical testing or clinical trials
will delay the filing of an investigational new drug application and new drug
application with the Food and Drug Administration or the equivalent applications
with pharmaceutical regulatory authorities outside the United States and,
ultimately, our ability to commercialize our potential drug compounds and
generate product revenues. In addition, we expect that our early clinical trials
will involve small patient populations. Because of the small sample size, the
results of these early clinical trials may not be indicative of future
results.</P>
<P align=justify>Following successful non-clinical testing, potential drug
compounds will need to be tested in a clinical development program to provide
data on safety and efficacy prior to becoming eligible for product approval and
licensure by regulatory agencies. From the first human trial through to
regulatory approval can take many years and 10-12 years is not unusual for
certain compounds.</P>
<P align=justify>If any of our future clinical development potential drug
compounds become the subject of problems, our ability to sustain our development
programs will become critically compromised. For example, efficacy or safety
concerns may arise, whether or not justified, that could lead to the suspension
or termination of our clinical programs. Examples of problems that could arise
include, among others:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">efficacy or safety concerns with the potential
      drug compounds, even if not justified; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">manufacturing difficulties or concerns; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">regulatory proceedings subjecting the potential
      drug compounds to potential recall; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">publicity affecting doctor prescription or
      patient use of the potential drug compounds; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">pressure from competitive products; or </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">introduction of more effective treatments.
  </TD></TR></TABLE>
<P align=justify>Each clinical phase is designed to test attributes of the drug
and problems that might result in the termination of the entire clinical plan
can be revealed at any time throughout the overall clinical program. The failure
to demonstrate efficacy in our clinical trials would have a material adverse
effect on our future business prospects, financial condition and operating
results.</P>
<P align=justify><B><I>If we do not obtain the support of qualified scientific
collaborators, our revenue, growth and profitability will likely be limited,
which would have a material adverse effect on our business.</I></B></P>
<P align=center>7</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_12></A>
<P align=justify>We will need to establish relationships with leading scientists
and research institutions. We believe that such relationships are pivotal to
establishing products using our technologies as a standard of care for various
indications. Additionally, although in discussion, there is no assurance that
our current research partners will continue to work with us or that we will be
able to attract additional research partners. If we are not able to establish
scientific relationships to assist in our research and development, we may not
be able to successfully develop our potential drug compounds. If this happens,
our business will be adversely affected.</P>
<P align=justify><B><I>We may not be able to develop, market or generate sales
of our products to the extent anticipated. Our business may fail and investors
could lose all of their investment in our Company.</I></B></P>
<P align=justify>Assuming that we are successful in developing our potential
drug compounds and receiving regulatory clearances to market our products, our
ability to successfully penetrate the market and generate sales of those
products may be limited by a number of factors, including the following:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>If our competitors receive regulatory approvals for and
      begin marketing similar products in the United States, the European Union,
      Japan and other territories before we do, greater awareness of their
      products as compared to ours will cause our competitive position to
      suffer; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Information from our competitors or the academic
      community indicating that current products or new products are more
      effective or offer compelling other benefits than our future products
      could impede our market penetration or decrease our future market share;
      and </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>The pricing and reimbursement environment for our future
      products, as well as pricing and reimbursement decisions by our
      competitors and by payers, may have an effect on our revenues.
  </P></TD></TR></TABLE>
<P align=justify>If this happens, our business will be adversely affected.</P>
<P align=justify><B><I>None of our potential drug compounds may reach the
commercial market for a number of reasons and our business may fail.</I></B></P>
<P align=justify>Successful research and development of pharmaceutical products
is high risk. Most products and development candidates fail to reach the market.
Our success depends on the discovery of new drug compounds that we can
commercialize. It is possible that our products may never reach the market for a
number of reasons. They may be found ineffective or may cause harmful
side-effects during non-clinical testing or clinical trials or fail to receive
necessary regulatory approvals. We may find that certain products cannot be
manufactured at a commercial scale and, therefore, they may not be economical to
produce. Our potential products could also fail to achieve market acceptance or
be precluded from commercialization by proprietary rights of third parties. Our
patents, patent applications, trademarks and other intellectual property may be
challenged and this may delay or prohibit us from effectively commercializing
our products. Furthermore, we do not expect our potential drug compounds to be
commercially available for a number of years, if at all. If none of our
potential drug compounds reach the commercial market, our business will likely
fail and investors will lose all of their investment in our Company. If this
happens, our business will be adversely affected.</P>
<P align=justify><B><I>If our competitors succeed in developing products and
technologies that are more effective or with a better profile than our own, or
if scientific developments change our understanding of the potential scope and
utility of our potential products, then our technologies and future products may
be rendered undesirable or obsolete.</I></B></P>
<P align=justify>We face significant competition from industry participants that
are pursuing technologies in similar disease states to those that we are
pursuing and are developing pharmaceutical products that are competitive with
our products. Nearly all of our industry competitors have greater capital
resources, larger overall research and development staffs and facilities, and a
longer history in drug discovery and development, obtaining regulatory approval
and pharmaceutical product manufacturing and marketing than we do. With these
additional resources, our competitors may be able to respond to the rapid and
significant technological changes in the biotechnology and pharmaceutical
industries faster than we can. Our future success will depend in large part on
our ability to maintain a competitive position with respect to these
technologies. Rapid technological development, as well as new scientific
developments, may result in our products becoming obsolete before we can recover
any of the expenses incurred to develop them. For example, changes in our
understanding of the appropriate population of patients who should be treated
with a targeted therapy like we are developing may limit the drug&#146;s market
potential if it is subsequently demonstrated that only certain subsets of
patients should be treated with the targeted therapy.</P>
<P align=center>8</P>
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<P align=justify><B><I>Our reliance on third parties, such as university
laboratories, contract manufacturing organizations and contract or clinical
research organizations, may result in delays in completing, or a failure to
complete, non-clinical testing or clinical trials if they fail to perform under
our agreements with them.</I></B></P>
<P align=justify>In the course of product development, we may engage university
laboratories, other biotechnology companies or contract or clinical
manufacturing organizations to manufacture drug material for us to be used in
non-clinical and clinical testing and contract research organizations to conduct
and manage non-clinical and clinical studies. If we engage these organizations
to help us with our non-clinical and clinical programs, many important aspects
of this process have been and will be out of our direct control. If any of these
organizations we may engage in the future fail to perform their obligations
under our agreements with them or fail to perform non-clinical testing and/or
clinical trials in a satisfactory manner, we may face delays in completing our
clinical trials, as well as commercialization of any of our potential drug
compounds. Furthermore, any loss or delay in obtaining contracts with such
entities may also delay the completion of our clinical trials, regulatory
filings and the potential market approval of our potential drug compounds.</P>
<P align=justify><B><I>If we fail to compete successfully with respect to
partnering, licensing, mergers, acquisitions, joint venture and other
collaboration opportunities, we may be limited in our ability to research and
develop our potential drug compounds.</I></B></P>
<P align=justify>Our competitors compete with us to attract established
biotechnology and pharmaceutical companies or organizations for partnering,
licensing, mergers, acquisitions, joint ventures or other collaborations.
Collaborations include contracting with academic research institutions for the
performance of specific scientific testing. If our competitors successfully
enter into partnering arrangements or license agreements with academic research
institutions, we will then be precluded from pursuing those specific
opportunities. Since each of these opportunities is unique, we may not be able
to find a substitute. Other companies have already begun many drug development
programs, which may target diseases that we are also targeting, and have already
entered into partnering and licensing arrangements with academic research
institutions, reducing the pool of available opportunities.</P>
<P align=justify>Universities and public and private research institutions also
compete with us. While these organizations primarily have educational or basic
research objectives, they may develop proprietary technology and acquire patent
applications and patents that we may need for the development of our potential
drug compounds. In some instances, we will attempt to license this proprietary
technology, if available. These licenses may not be available to us on
acceptable terms, if at all. If we are unable to compete successfully with
respect to acquisitions, joint venture and other collaboration opportunities, we
may be limited in our ability to develop new products.</P>
<P align=justify><B><I>The use of any of our products in clinical trials may
expose us to liability claims, which may cost us significant amounts of money to
defend against or pay out, causing our business to suffer.</I></B></P>
<P align=justify>The nature of our business exposes us to potential liability
risks inherent in the testing, manufacturing and marketing of our products. We
currently have one drug compound in clinical trials, however, when any of our
products enter into clinical trials or become marketed products, they could
potentially harm people or allegedly harm people possibly subjecting us to
costly and damaging product liability claims. Some of the patients who
participate in clinical trials are already ill when they enter a trial or may
intentionally or unintentionally fail to meet the exclusion criteria. The
waivers we obtain may not be enforceable and may not protect us from liability
or the costs of product liability litigation. Although we intend to obtain
product liability insurance which we believe is adequate, we are subject to the
risk that our insurance will not be sufficient to cover claims. The insurance
costs along with the defense or payment of liabilities above the amount of
coverage could cost us significant amounts of money and management distraction
from other elements of the business, causing our business to suffer.</P>
<P align=center>9</P>
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<P align=justify><B><I>The patent positions of biopharmaceutical products and
processes are complex and uncertain and we may not be able to protect our
patented or other intellectual property. If we cannot protect this property, we
may be prevented from using it or our competitors may use it and our business
could suffer significant harm. Also, the time and money we spend on acquiring
and enforcing patents and other intellectual property will reduce the time and
money we have available for our research and development, possibly resulting in
a slow down or cessation of our research and development.</I></B></P>
<P align=justify>We hold ownership rights to one patent and five U.S. patent
applications with various international counterpart, all of which relate to drug
candidates. We are seeking the remaining rights as to one application, and
declarations from the same co-inventor. However, neither patents nor patent
applications ensure the protection of our intellectual property for a number of
reasons, including the following:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>Competitors may interfere with our patenting process in a
      variety of ways. Competitors may claim that they invented the claimed
      invention prior to us. Competitors may also claim that we are infringing
      their patents and restrict our freedom to operate. Competitors may also
      contest our patents and patent applications, if issued, by showing in
      various patent offices that, among other reasons, the patented subject
      matter was not original, was not novel or was obvious. In litigation, a
      competitor could claim that our patents and patent applications are not
      valid or enforceable for a number of reasons. If a court agrees, we would
      lose some or all of our patent protection. As a company, we have no
      meaningful experience with competitors interfering with our patents or
      patent applications.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>Because of the time, money and effort involved in
      obtaining and enforcing patents, our management may spend less time and
      resources on developing potential drug compounds than they otherwise
      would, which could increase our operating expenses and delay product
      programs.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>Issuance of a patent may not provide much practical
      protection. If we receive a patent of narrow scope, then it may be easier
      for competitors to design products that do not infringe our
    patent(s).</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>No patents have yet been issued in the United
    States.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD>
      <P align=justify>Our primary patent application for the combination of
      ANAVEX 2-73 with donepezil is pending only in the United States Patent and
      Trademark Office. The lack of patent protection in global markets may
      inhibit our ability to advance our compounds and may make Anavex less
      attractive to potential partners.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">6. </TD>
    <TD>
      <P align=justify>Defending a patent lawsuit takes significant time and can
      be very expensive.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">7. </TD>
    <TD>
      <P align=justify>If a court decides that our drug compound, its method of
      manufacture or use, infringes on the competitor&#146;s patent, we may have to
      pay substantial damages for infringement.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">8. </TD>
    <TD>
      <P align=justify>A court may prohibit us from making, selling or licensing
      the potential drug compound unless the patent holder grants a license. A
      patent holder is not required to grant a license. If a license is
      available, we may have to pay substantial royalties or grant cross
      licenses to our patents, and the license terms may be
  unacceptable.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">9. </TD>
    <TD>
      <P align=justify>Redesigning our potential drug compounds so that they do
      not infringe on other patents may not be possible or could require
      substantial funds and time.</P></TD></TR></TABLE>
<P align=justify>It is also unclear whether our trade secrets are adequately
protected. While we use reasonable efforts to protect our trade secrets, our
employees or consultants may unintentionally or willfully disclose our
information to competitors. Enforcing a claim that someone illegally obtained
and is using our trade secrets, like patent litigation, is expensive and time
consuming, and the outcome is unpredictable. In addition, courts outside the
United States are sometimes less willing to protect trade secrets. Our
competitors may independently develop equivalent knowledge, methods and
know-how.</P>
<P align=justify>We may also support and collaborate in research conducted by
government organizations, hospitals, universities or other educational
institutions. These research partners may be unable or unwilling to grant us
exclusive rights to technology or products derived from these collaborations
prior to entering into the relationship.</P>
<P align=justify>If we do not obtain required intellectual property licenses or
rights, we could encounter delays in our product development efforts while we
attempt to design around other patents or even be prohibited from developing,
manufacturing or selling potential drug compounds requiring these rights or
licenses. There is also a risk that disputes may arise as to the rights to
technology or potential drug compounds developed in collaboration with other
parties.</P>
<P align=center>10</P>
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<P align=justify><B><I>Our substantial debt and other financial obligations
could impair our financial condition and our ability to fulfill our debt
obligations. Any refinancing of this substantial debt could be at significantly
higher interest rates.</I></B></P>
<P align=justify>As of December 31, 2014, we had total liabilities of
$6,577,372 and accumulated deficit of $53,360,043. Our substantial indebtedness
and other current financial obligations and any that we may become a party to in
the future could:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>impair our ability to obtain financing in the future for
    working capital, capital expenditures, or general corporate purposes;    </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>have a material adverse effect on us if we fail to comply
      with financial and affirmative and restrictive covenants in debt
      agreements and an event of default occurs as a result of a failure that is
      not cured or waived; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>require us to dedicate a substantial portion of our cash
      flow for interest payments on our indebtedness and other financial
      obligations, thereby reducing the availability of our cash flow to fund
      working capital and capital expenditures; </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>limit our flexibility in planning for, or reacting to,
      changes in our business and the industry in which we operate; and place us
      at a competitive disadvantage compared to our competitors that have
      proportionally </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>less debt. </P></TD></TR></TABLE>
<P align=justify>If we are unable to meet our debt service obligations and other
financial obligations, we could be forced to restructure or refinance our
indebtedness and other financial transactions, seek additional equity capital,
sell our assets or curtail our operations. We might then be unable to obtain
such financing or capital or sell our assets on satisfactory terms, if at all.
Any refinancing of our indebtedness could be at significantly higher interest
rates, and/or incur significant transaction fees.</P>
<P align=justify><B><I>In the past we have experienced material weaknesses in
our internal control over financial reporting, which if continued, could impair
our financial condition.</I></B></P>
<P align=justify>As reported in our Annual Report on Form 10-K, our management
concluded that our internal control over financial reporting was not effective
as of September 30, 2014. Such ineffectiveness was due to material weaknesses
regarding our control environment (the maintenance of sufficient personnel with
an appropriate level of accounting knowledge, experience, and training in the
applicable of GAAP commensurate with our financial reporting requirements, and
an insufficient segregation of duties in our finance and accounting functions
due to limited personnel), a lack of monitoring controls to determine the
adequacy or our internal control over financial reporting and related policies,
and we did not establish and maintain effective controls to ensure the correct
application of GAAP related to equity transactions. Due to our size and nature,
segregation of all conflicting duties has not always been possible and may not
be economically feasible. We endeavor to take appropriate and reasonable steps
to make improvements to remediate these deficiencies, and intend to consider the
results of our remediation efforts and related testing as part of our year-end
2015 assessment of the effectiveness of our internal control over financial
reporting in light of our strategic plan and make any changes that our
management deems appropriate. If we have continued material weaknesses in our
internal financial reporting, our financial condition could be impaired.</P>
<P align=justify><B><I>Risks Related to our Common Stock</I></B></P>
<P align=justify><B><I>A decline in the price of our common stock could affect
our ability to raise further working capital and adversely impact our operations
and would severely dilute existing or future investors if we were to raise funds
at lower prices.</I></B></P>
<P align=justify>A prolonged decline in the price of our common stock could
result in a reduction in our ability to raise capital. Because our operations
have been financed through the sale of equity securities, a decline in the price
of our common stock could be especially detrimental to our continued operations.
Any reduction in our ability to raise equity capital in the future would force
us to reallocate funds from other planned uses and would have a significant
negative effect on our business plans and operations, including our ability to
develop new products and continue our current operations. If our stock price
declines, there can be no assurance that we can raise additional capital or
generate funds from operations sufficient to meet our obligations. We believe
the following factors could cause the market price of our common stock to
continue to fluctuate widely and could cause our common stock to trade at a
price below the price at which you purchase your shares of common stock:</P>
<P align=center>11</P>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">actual or anticipated variations in our
      quarterly operating results; </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">announcements of new services, products,
      acquisitions or strategic relationships by us or our competitors; </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">changes in accounting treatments or principles;
    </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">changes in earnings estimates by securities
      analysts and in analyst recommendations; and </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">general political, economic, regulatory and
      market conditions. </TD></TR></TABLE>
<P align=justify>The market price for our common stock may also be affected by
our ability to meet or exceed expectations of analysts or investors. Any failure
to meet these expectations, even if minor, could materially adversely affect the
market price of our common stock.</P>
<P align=justify><B><I>If we issue additional shares of common stock in the
future it will result in the dilution of our existing stockholders.</I></B></P>
<P align=justify>Our articles of incorporation authorize the issuance of
150,000,000 shares of common stock. Our board of directors has the authority to
issue additional shares of common stock up to the authorized capital stated in
the articles of incorporation. Our board of directors may choose to issue some
or all of such shares of common stock to acquire one or more businesses or to
provide additional financing in the future. The issuance of any such shares of
common stock will result in a reduction of the book value or market price of the
outstanding shares of our common stock. If we do issue any such additional
shares of common stock, such issuance also will cause a reduction in the
proportionate ownership and voting power of all other stockholders. Further, any
such issuance may result in a change of control of our corporation.</P>
<P align=justify><B><I>Trading of our common stock may be volatile and sporadic,
which could depress the market price of our common stock and make it difficult
for our stockholders to resell their shares.</I></B></P>
<P align=justify>There is currently a limited market for our common stock and
the volume of our common stock traded on any day may vary significantly from one
period to another. Our common stock is quoted on OTC Market&#146;s OTCQX. Trading in
stock quoted on OTC Market&#146;s OTCQX is often thin and characterized by wide
fluctuations in trading prices, due to many factors that may have little to do
with our operations or business prospects. The availability of buyers and
sellers represented by this volatility could lead to a market price for our
common stock that is unrelated to operating performance. Moreover, OTC Market&#146;s
OTCQX is not a stock exchange, and trading of securities quoted on OTC Market&#146;s
OTCQX is often more sporadic than the trading of securities listed on a stock
exchange like NASDAQ. There is no assurance that a sufficient market will
develop in the stock, in which case it could be difficult for our stockholders
to resell their stock.</P>
<P align=justify><B><I>Our stock is classed as a &#147;penny stock.&#148; Trading of our
stock may be restricted by the Securities and Exchange Commission&#146;s penny stock
regulations which may limit a stockholder&#146;s ability to buy and sell our
stock.</I></B></P>
<P align=justify>Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines &#147;penny stock&#148; to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and &#147;accredited investors.&#148; The term
&#147;accredited investor&#148; refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 (excluding
the value of the primary residence of such individuals) or annual income
exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules
require a broker-dealer, prior to a transaction in a penny stock not otherwise
exempt from the rules, to deliver a standardized risk disclosure document in a
form prepared by the Securities and Exchange Commission which provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction and monthly account statements showing
the market value of each penny stock held in the customer&#146;s account. The bid and
offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer&#146;s confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these
rules; the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser&#146;s written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.</P>
<P align=center>12</P>
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<P align=justify><B><I>The Financial Industry Regulatory Authority sales
practice requirements may also limit a stockholder&#146;s ability to buy and sell our
stock.</I></B></P>
<P align=justify>In addition to the &#147;penny stock&#148; rules described above, the
Financial Industry Regulatory Authority or FINRA has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low-priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer&#146;s financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low-priced securities
will not be suitable for at least some customers. The FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for shares of our common stock.</P>
<P align=justify><B><I>The sale or issuance of our common stock to Lincoln Park
may cause dilution and the sale of the shares of common stock acquired by
Lincoln Park, or the perception that such sales may occur, could cause the price
of our common stock to fall</I></B>.</P>
<P align=justify>On July 5, 2013, we entered into a Purchase Agreement (the
&#147;<U>Purchase Agreement</U>&#148;) with Lincoln Park Capital Fund, LLC (&#147;<U>Lincoln
Park</U>&#148;), pursuant to which Lincoln Park committed to purchase up to
$10,000,000 of our common stock. Concurrently with the execution of the Purchase
Agreement, we issued 341,858 shares of our common stock to Lincoln Park as a fee
for its commitment to purchase shares of our common stock under the Purchase
Agreement. The purchase shares that may be sold pursuant to the Purchase
Agreement may be sold by us to Lincoln Park at our discretion from time to time
over a 25-month period commencing after the SEC declared effective the related
registration statement. The purchase price for the shares that we may sell to
Lincoln Park under the Purchase Agreement will fluctuate based on the price of
our common stock. Depending on market liquidity at the time, sales of such
shares may cause the trading price of our common stock to fall.</P>
<P align=justify>We generally have the right to control the timing and amount of
any sales of our shares to Lincoln Park, except that, pursuant to the terms of
our agreements with Lincoln Park, we would be unable to sell shares to Lincoln
Park if and when the closing sale price of our common stock is below $0.50 per
share, subject to adjustment as set forth in the Purchase Agreement. Additional
sales of our common stock, if any, to Lincoln Park will depend upon market
conditions and other factors to be determined by us. Lincoln Park may ultimately
purchase all of the shares of our common stock that may be sold pursuant to the
Purchase Agreement and, after it has acquired shares, Lincoln Park may sell all,
some or none of those shares. Therefore, sales to Lincoln Park by us could
result in substantial dilution to the interests of other holders of our common
stock. Additionally, the sale of a substantial number of shares of our common
stock to Lincoln Park, or the anticipation of such sales, could make it more
difficult for us to sell equity or equity-related securities in the future at a
time and at a price that we might otherwise wish to effect sales.</P>
<P align=center>13</P>
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<a name=page_18></a>
<P align=justify><B><I>The exercise or conversion of the Warrants and Debentures
issued to Private Placement Investors and Placement Agent may cause
dilution.</I></B></P>
<P align=justify>On March 13, 2014, we entered into a Securities Purchase
Agreement (the &#147;<U>Securities Purchase</U> <U>Agreement</U>&#148;) with the certain
investors pursuant to which the Company agreed to sell, and the investors agreed
to purchase, Senior Convertible Debentures due March 18, 2044 (the
&#147;<U>Debentures</U>&#148;) in the aggregate principal amount of $10,000,000. In
addition to the Debentures, we agreed to issue to the investors and the
placement agent two (2) series of warrants, including the Series A Warrants,
representing the right to purchase up to an aggregate of 67,666,666 shares of
the Company&#146;s common stock (the &#147;<U>Warrants</U>&#148; and together with the
Debentures, the &#147;<U>Securities</U>&#148;, and the transaction, the
&#147;<U>Investment</U>&#148;). The Series A Warrants give the holders rights to purchase
up to 33,333,333 shares of common stock. The purchase and sale of the Securities
was consummated on March 18, 2014, and resulted in gross proceeds to the Company
in the amount of $10,000,000, before deducting agent fees and other
transaction-related expenses. The exercise or conversion of the Securities could
result in the dilution to the interests of other holders of our common
stock.</P>
<P align=center>14</P>
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<P align=center><B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B> </P>
<P align=justify>This prospectus contains forward-looking statements that
involve substantial risks and uncertainties. The forward-looking statements are
contained principally in the sections entitled &#147;Prospectus Summary,&#148; &#147;Risk
Factors,&#148; &#147;Management&#146;s Discussion and Analysis of Financial Condition and
Results of Operations&#148; and &#147;Business&#148; but are also contained elsewhere in this
prospectus. In some cases, you can identify forward-looking statements by the
words &#147;may,&#148; &#147;might,&#148; &#147;will,&#148; &#147;could,&#148; &#147;would,&#148; &#147;should,&#148; &#147;expect,&#148; &#147;intend,&#148;
&#147;plan,&#148; &#147;objective,&#148; &#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;predict,&#148; &#147;project,&#148;
&#147;potential,&#148; &#147;continue&#148; and &#147;ongoing,&#148; or the negative of these terms, or other
comparable terminology intended to identify statements about the future. These
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, levels of activity, performance or achievements to
be materially different from the information expressed or implied by these
forward-looking statements.</P>
<P align=justify>The forward-looking statements contained in this prospectus
involve a number of risks and uncertainties, many of which are outside of our
control. Factors that could cause actual results to differ materially from
projected results include, but are not limited to, those discussed in &#147;Risk
Factors&#148; elsewhere in this prospects. Readers are expressly advised to review
and consider those Risk Factors, which include risks associated with (1) our
ability to successfully conduct clinical and pre-clinical trials for our product
candidates, (2) our ability to obtain required regulatory approvals to develop
and market our product candidates, (3) our ability to raise additional capital
on favorable terms, (4) our ability to execute our development plan on time and
on budget, (5) our ability to obtain commercial partners, (6) our ability,
whether alone or with commercial partners, to successfully commercialize any of
our product candidates that may be approved for sale, and (7) our ability to
identify and obtain additional product candidates. Although we believe that the
assumptions underlying the forward-looking statements contained in this
prospectus are reasonable, any of the assumptions could be inaccurate, and
therefore there can be no assurance that such statements will be accurate. In
light of the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information should not be
regarded as a representation by us or any other person that the results or
conditions described in such statements or our objectives and plans will be
achieved. Furthermore, past performance in operations and share price is not
necessarily indicative of future performance. Except as required by applicable
laws including the securities laws of the United States, we disclaim any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. </P>
<P align=center>15</P>
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<P align=center><B>USE OF PROCEEDS</B> </P>
<P align=justify>This prospectus relates to shares of our common stock that may
be offered and sold from time to time by the Selling Security Holders. We will
not receive any proceeds upon the sale of shares of common stock by the Selling
Security Holders in this offering. However, we received net proceeds of
$9,299,160 upon the issuance of the Securities of which the Series A Warrants
were a part and of which such Warrants the common stock underlies, and the
exercise of each such Warrant may be effected at $0.30 per share of common
stock. We retain broad discretion in determining how we allocate such cash.
However, we expect that such cash will be used to further our business plan of
advancing human clinical trials of AVAVEX 2-73 and for general corporate and
administrative purposes. Although we have no specific plans for use of such cash
as of the date of this prospectus, we believe that approximately 65% of the
proceeds received from the exercise of the Series A Warrants may be used towards
our advancing human clinical trials of AVAVEX 2-73 and commercializing our
intellectual property, and approximately 35% may be used for our general
corporate and administrative activities related to our operations as a reporting
public company and related corporate compliance requirements.</P>
<P align=center>16</P>
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<P align=center><B>MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS</B>
</P>
<P align=justify><B><I>Market information</I></B> </P>
<P align=justify>Our common stock is quoted on the OTCQX under the symbol
&#147;AVXL.&#148;</P>
<P align=justify>The following table shows the quarterly range of high and low
bid information for our common stock over the fiscal quarters for the last two
fiscal years as quoted on OTCQX. We obtained the following high and low bid
information from the OTC-Markets. These over-the-counter market quotations
reflect inter-dealer prices without retail mark-up, mark-down or commission, and
may not represent actual transactions. Investors should not rely on historical
prices of our common stock as an indication of its future price performance. On
February 24, 2015, the closing price of our common stock as reported by OTCQX was
$0.17 per share.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;Quarter Ended </TD>
    <TD vAlign=bottom noWrap align=center width="27%">High </TD>
    <TD vAlign=bottom noWrap align=center width="27%">Low </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left bgColor=#e6efff>December 31, 2014 </TD>
    <TD vAlign=bottom noWrap align=center width="27%" bgColor=#e6efff>$0.21
</TD>
    <TD vAlign=bottom noWrap align=center width="27%" bgColor=#e6efff>$0.16
  </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>September 30, 2014 </TD>
    <TD vAlign=bottom align=center width="27%">$0.35 </TD>
    <TD vAlign=bottom align=center width="27%">$0.18 </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>June 30, 2014 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$046 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$0.27 </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>March 31, 2014 </TD>
    <TD vAlign=bottom align=center width="27%">$0.53 </TD>
    <TD vAlign=bottom align=center width="27%">$0.25 </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>December 31, 2013 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$0.65 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$0.25 </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>September 30, 2013 </TD>
    <TD vAlign=bottom align=center width="27%">$0.75 </TD>
    <TD vAlign=bottom align=center width="27%">$0.49 </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>June 30, 2013 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$0.83 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$0.45 </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>March 31, 2013 </TD>
    <TD vAlign=bottom align=center width="27%">$0.81 </TD>
    <TD vAlign=bottom align=center width="27%">$0.51 </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>December 31, 2012 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$1.12 </TD>
    <TD vAlign=bottom align=center width="27%" bgColor=#e6efff>$0.72
  </TD></TR></TABLE>
<P align=justify><B><I>Transfer Agent</I></B> </P>
<P align=justify>Shares of our common stock are issued in registered form. The
Nevada Agency and Transfer Company, 50 West Liberty Street, Reno, Nevada
(Telephone: (775) 322-0626; Facsimile: (775) 322-5623) is the registrar and
transfer agent for shares of our common stock. </P>
<P align=justify><B><I>Holders of Common Stock </I></B></P>
<P align=justify>As of February 13, 2015, there were approximately 79 holders of
record of our common stock. As of such date, 56,441,000 shares of our common
stock were issued and outstanding.</P>
<P align=justify><B><I>Dividends </I></B></P>
<P align=justify>We have not paid any cash dividends on our common stock and
have no intention of paying any dividends on the shares of our common stock. Our
current policy is to retain earnings, if any, for use in our operations and in
the development of our business. Our future dividend policy will be determined
from time to time by our board of directors. </P>
<P align=justify><B><I>Securities Authorized for Issuance under Equity
Compensation Plans or Individual Compensation Arrangements </I></B></P>
<P align=justify>The following table summarizes certain information regarding
our equity compensation plan or individual compensation arrangements as at
September 30, 2014:</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=center  colSpan=4><B>Equity
      Compensation Plan Information</B> </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=center  rowSpan=4>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=center width="25%"
      rowSpan=4><BR><BR><BR><B>Number of securities</B> </TD>
    <TD vAlign=bottom noWrap align=center width="25%"
      rowSpan=4><BR><BR><BR><B>Weighted-average</B> </TD>
    <TD vAlign=bottom noWrap align=center width="25%" rowSpan=4><B>Number of
      securities</B> <BR><B>remaining available</B> <BR><B>for future
      issuances</B> <BR><B>under equity</B> </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<p align="center">17</p>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=center rowSpan=5><BR><BR><B>Plan Category</B> <BR><BR></TD>
    <TD noWrap align=center width="25%" rowSpan=5><B>to be issued upon</B>
      <BR><B>exercise of</B> <BR><B>outstanding options,</B> <BR><B>warrants and
      rights</B> <BR><B>(a)</B> </TD>
    <TD noWrap align=center width="25%" rowSpan=5><B>exercise price of</B>
      <BR><B>outstanding options,</B> <BR><B>warrants and rights</B>
      <BR><B>(b)</B> <BR></TD>
    <TD noWrap align=center width="25%" rowSpan=5><B>compensation plans</B>
      <BR><B>(excluding securities</B> <BR><B>reflected in column</B>
      <BR><B>(a))</B> <BR><B>(c)</B> </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>Equity compensation plans <BR>approved by
      security <BR>holders </TD>
    <TD align=right width="25%" rowSpan=3><BR><BR>3,170,000 </TD>
    <TD align=right width="25%" rowSpan=3><BR><BR>0.70 </TD>
    <TD align=right width="25%" rowSpan=3><BR><BR>830,000 </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>Equity compensation plans <BR>not approved by
      security <BR>holders </TD>
    <TD align=right width="25%" rowSpan=3><BR><BR>Nil </TD>
    <TD align=right width="25%" rowSpan=3><BR><BR>NA </TD>
    <TD align=right width="25%" rowSpan=3><BR><BR>NA </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="25%"><B>3,170,000</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="25%"><B>0.70</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="25%"><B>830,000</B> </TD></TR></TABLE></DIV>
<P align=justify><B><I>Stock Option Plan</I></B> </P>
<P align=justify>On April 17, 2007, our directors adopted the 2007 Stock Option
Plan. On May 25, 2007, our stockholders ratified and approved the 2007 Stock
Option Plan at the annual meeting of stockholders. As of September 30, 2014,
3,170,000 options have been granted to employees, directors, officers and
consultants of our company.</P>
<P align=justify>The purpose of the 2007 Stock Option Plan is to retain the
services of valued key employees and consultants of our company and such other
persons as will be select in accordance with the 2007 Stock Option Plan, and to
encourage such persons to acquire a greater proprietary interest in our company,
thereby strengthening their incentive to achieve the objectives of the
shareholders of our company, and to serve as an aid and inducement in the hiring
of new employees and to provide an equity incentive to consultants.</P>
<P align=justify>On February 2, 2011 we amended and restated our 2007 stock
option plan to increase the number of shares authorized to be issued under the
plan to 4,000,000. </P>
<P align=justify><B><I>Recent Sales of Unregistered Securities</I></B> </P>
<P align=justify>Since the beginning of our fiscal year ended September 30,
2014, we have not sold any equity securities that were not registered under the
Securities Act of 1933 that were not previously reported in a quarterly report
on Form 10-Q or in a current report on Form 8-K. </P>
<P align=justify><B><I>Purchases of Equity Securities by Our Company and
Affiliated Purchasers </I></B></P>
<P align=justify>None.</P>
<P align=center>18</P>
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<P align=center><B>SELLING SECURITY HOLDERS </B></P>
<P align=justify>When we refer to &#147;Selling Security Holders&#148; in this prospectus,
we mean those persons listed in the table below, and the pledgees, donees,
permitted transferees, assignees, successors, and others who later come to hold
any of the Selling Security Holders&#146; interests in shares of our common stock
other than through a public sale. </P>
<P align=justify>The following table sets forth as of the date of this
prospectus the name of each Selling Security Holder for whom we have registered
shares of common stock for resale to the public and the number of shares of
common stock that each Selling Security Holder may offer pursuant to this
prospectus. The information set forth below is based on information known to us.
The common stock being offered by the Selling Security Holders consists of
15,486,358 shares of the common stock issuable upon conversion of the Series A
Warrants having a term of five (5) years and which are convertible at an initial
conversion price of $0.30 per share. </P>
<P align=justify>The Company initially intended to register all of the shares of
common stock underlying all of the Securities sold under the March, 2014
Securities Purchase Agreement pursuant to its obligations to do so under the
applicable definitive documents enforceable by the Selling Security Holders to
register a secondary offering on such Selling Security Holders&#146; behalf. However,
in consideration of comments received from the U.S. Securities and Exchange
Commission regarding the size of the shares registered by the Company in the
Company&#146;s Registration Statement on Form S-1 that went effective on July 23,
2014 regarding shares underlying the Securities, the Company has registered
hereunder 15,486,358 shares of common stock underlying the Series A
Warrants.</P>
<P align=justify>Based on information known to us or provided to us by each
Selling Security Holder and as of the date the information was known to us or
was provided to us, the Selling Security Holders hold the security interests in
the Company as described in the table below. We cannot advise you as to whether
the Selling Security Holders will exercise their rights under the Series A
Warrants or if the Selling Security Holders will sell any or all of the shares
of common stock in the event their rights under the Series A Warrants are
exercised.</P>
<P align=justify>Beneficial ownership is determined in accordance with SEC rules
and includes voting or investment power with respect to the securities. However,
the Series A Warrants are subject to certain limitations upon exercise, pursuant
to the terms of the Debentures, that provide that the Selling Security Holder
may not exercise its Series A Warrant if the exercise would cause a holder&#146;s
beneficial ownership of our common stock (excluding shares underlying any of
their unconverted Series A Warrant) to exceed 4.99% or 9.99%, as the case may
be, of the outstanding shares of common stock. Therefore, although they are
included in the table below, the number of shares of common stock for some
listed persons may include shares that may not be purchased during a given
60-day period used for purpose of determining beneficial ownership.</P>
<P align=justify>Except for relationships noted in the Selling Security Holder
table, none of the Selling Security Holders has, or within the past three years
has had, any position, office or material relationship with us or any of our
predecessors or affiliates.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD vAlign=center noWrap align=center
      rowSpan=12><BR><BR><BR><BR><BR><BR><B>Selling Security</B>
      <BR><B>Holder</B> <BR><BR><BR><BR></TD>
    <TD vAlign=center noWrap align=center width="16%"
      rowSpan=12><BR><BR><B>Shares</B> <BR><B>Beneficially</B> <BR><B>Owned</B>
      <BR><B>Prior to</B> <BR><B>Offering</B>
      <BR><B>(#)</B><B><SUP>(1)</SUP></B> <BR><BR><BR><BR></TD>
    <TD vAlign=center noWrap align=center width="16%"
      rowSpan=12><BR><B>Percentage of</B> <BR><B>Outstanding</B>
      <BR><B>Shares</B> <BR><B>Beneficially</B> <BR><B>Owned Before</B>
      <BR><B>this Offering</B><B><SUP>(4)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=center noWrap align=center width="16%"
      rowSpan=12><BR><BR><B>Number of</B> <BR><B>Shares being</B>
      <BR><B>Registered/offered</B> <BR><B>and sold in this</B> <BR><B>Offering
      (#)</B><B><SUP>(2)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=center noWrap align=center width="16%" rowSpan=12><B>Number
      of</B> <BR><B>Shares</B> <BR><B>Beneficially</B> <BR><B>Owned</B>
      <BR><B>Post</B> <BR><B>Offering</B> <BR><B>(3)</B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=center noWrap align=center width="16%" rowSpan=12><B>Percentage
      of</B> <BR><B>Outstanding</B> <BR><B>Shares</B> <BR><B>Beneficially</B>
      <BR><B>Owned</B> <BR><B>Post Offering</B> <BR><B>(4)</B>
    <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD vAlign=top align=left rowSpan=2>Auriga Global <BR>Investors SU, SA </TD>
    <TD vAlign=top align=center width="16%" rowSpan=2>2,728,776
      <B><SUP>(5)</SUP></B> <BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=2>4.99% <BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=2>1,548,636 <BR></TD>
    <TD vAlign=top align=center width="16%"
      rowSpan=2>2,728,776<B><SUP>(5)</SUP></B> <BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=2>4.99% <BR></TD></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<p align="center">19</p>
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noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left rowSpan=6>Auriga Investors- <BR>Montserrat Global
      <BR>Fund <BR><BR><BR></TD>
    <TD vAlign=top noWrap align=center width="16%" rowSpan=6>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top noWrap align=center width="16%" rowSpan=6>4.99%
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top noWrap align=center width="16%" rowSpan=6>774,318
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top noWrap align=center width="16%" rowSpan=6>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top noWrap align=center width="16%" rowSpan=6>4.99%
      <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>Hudson Bay Master <BR>Fund LTD <BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,322,954
<BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>DAFNA <BR>LifeScience LP <BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>1,198,830
<BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=7>DAFNA <BR>LifeScience Market <BR>Neutral L.P.
      <BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=7>1,386,000
      <BR><BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=7>2.53%
      <BR><BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=7>214,641
      <BR><BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=7>1,171,359
      <BR><BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=7>2.14%
      <BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>DAFNA <BR>LifeScience Select <BR>L.P. <BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>909,483 <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>Joann Mostovoy <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>774,318 <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=4>4.99% <BR><BR><BR></TD></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>Sabby Healthcare <BR>Volatility Master <BR>Fund,
      Ltd. <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>4.99%
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>3,097,271
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>4.99%
      <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>Sabby Volatility <BR>Warrant Master <BR>Fund,
      Ltd. <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>4.99%
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>1,548,636
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>2,728,776
      <B><SUP>(5)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>4.99%
      <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>Sphera Global <BR>Healthcare Master <BR>Fund
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>5,463,022
      <B><SUP>(6)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>9.99%
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>2,931,877
      <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%"
      rowSpan=6>5,463,022<B><SUP>(6)</SUP></B> <BR><BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=6>9.99%
      <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>HFR HE Sphera <BR>Global Healthcare <BR>Master
      Trust </TD>
    <TD vAlign=top align=center width="16%" rowSpan=3>1,068,000 <BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=3>1.95% <BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=3>165,394 <BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=3>902,606 <BR><BR></TD>
    <TD vAlign=top align=center width="16%" rowSpan=3>1.65% <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left colSpan=2>(*) Less than 1%. </TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left>(1) </TD>
    <TD align=left width="90%">Includes all shares of common stock
      beneficially owned by the Selling Security Holders as of January 26,
      2015, including shares of common stock the Selling Security Holder has the
      right to acquire within 60 days upon exercise or conversion of the
      Securities.</TD>
  </TR></TABLE>
<p align="center">20</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_25></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The numbers in the column reflect the number of shares of
      the common stock issuable upon conversion of the Series A Warrants that
      are being registered hereunder.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>Assumes that all underlying shares of the Series A
      Warrants registered hereunder have been issued to and sold by the
      respective Selling Security Holder.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(4) </TD>
    <TD>
      <P align=justify>Based on 54,684,905 shares of common stock issued and
      outstanding as of January 1, 2015.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(5) </TD>
    <TD>
      <P align=justify>Includes shares issuable upon exercise/conversion of the
      Securities up to a 4.99% limitation applicable thereto.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(6) </TD>
    <TD>
      <P align=justify>Includes shares issuable upon exercise/conversion of the
      Securities up to a 9.99% limitation applicable
thereto.</P></TD></TR></TABLE>
<P align=justify><B><I>Voting/Dispositive Power for Selling Security Holders
</I></B></P>
<P align=justify>Set forth below is the natural person or persons who exercise
the sole or shared voting and/or dispositive powers with respect to the shares
to be offered by the Selling Security Holders that are legal entities. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=center rowSpan=2>Selling Security Holder Entity <BR></TD>
    <TD noWrap align=center width="33%" rowSpan=2>Natural Person(s) Who
      Exercise Sole <BR>or Shared Voting Powers </TD>
    <TD noWrap align=center width="33%" rowSpan=2>Natural Person(s) Who
      Exercise <BR>Sole or Shared Dispositive Powers </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD noWrap align=left>Auriga Global Investors SU, SA </TD>
    <TD noWrap align=left width="33%">Dr. Raj Mehra </TD>
    <TD noWrap align=left width="33%">Dr. Raj Mehra </TD></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Auriga Investors-Montserrat <BR>Global Fund </TD>
    <TD align=left width="33%" rowSpan=2>Dr. Raj Mehra <BR></TD>
    <TD align=left width="33%" rowSpan=2>Dr. Raj Mehra <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left>Hudson Bay Master Fund LTD<SUP>(1)</SUP> </TD>
    <TD align=left width="33%">Sander Gerber </TD>
    <TD align=left width="33%">Sander Gerber </TD></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>DAFNA LifeScience LP <BR></TD>
    <TD align=left width="33%" rowSpan=2>Fariba Ghodsian, C.I.O.; Nathan
      <BR>Fischel, C.E.O. </TD>
    <TD align=left width="33%" rowSpan=2>Fariba Ghodsian, C.I.O.; Nathan
      <BR>Fischel, C.E.O. </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>DAFNA LifeScience Market <BR>Neutral L.P. </TD>
    <TD align=left width="33%" rowSpan=2>Fariba Ghodsian, C.I.O.; Nathan
      <BR>Fischel, C.E.O. </TD>
    <TD align=left width="33%" rowSpan=2>Fariba Ghodsian, C.I.O.; Nathan
      <BR>Fischel, C.E.O. </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>DAFNA LifeScience Select L.P. <BR></TD>
    <TD align=left width="33%" rowSpan=2>Fariba Ghodsian, C.I.O.; Nathan
      <BR>Fischel, C.E.O. </TD>
    <TD align=left width="33%" rowSpan=2>Fariba Ghodsian, C.I.O.; Nathan
      <BR>Fischel, C.E.O. </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Sabby Healthcare Volatility <BR>Master Fund, Ltd.
      <SUP>(2)</SUP> </TD>
    <TD align=left width="33%" rowSpan=2>Hal Mintz <BR></TD>
    <TD align=left width="33%" rowSpan=2>Hal Mintz <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Sabby Volatility Warrant Master <BR>Fund, Ltd.
      <SUP>(2)</SUP> </TD>
    <TD align=left width="33%" rowSpan=2>Hal Mintz <BR></TD>
    <TD align=left width="33%" rowSpan=2>Hal Mintz <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Sphera Global Healthcare Master <BR>Fund
      <SUP>(3)</SUP> </TD>
    <TD align=left width="33%" rowSpan=2>Doron Breen <BR></TD>
    <TD align=left width="33%" rowSpan=2>Doron Breen <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>HFR HE Sphera Global <BR>Healthcare Master Trust
      <SUP>(3)</SUP> </TD>
    <TD align=left width="33%" rowSpan=2>Doron Breen <BR></TD>
    <TD align=left width="33%" rowSpan=2>Doron Breen <BR></TD></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<P align=justify>(1) Hudson Bay Capital Management LP serves as investment
manager of Hudson Bay Master Fund Ltd., and as such, has voting and dispositive
powers over the Securities. Sander Gerber is the managing member of Hudson Bay
Capital GP LLC, which is the general partner of Hudson Bay Capital Management
LP. Sander Gerber disclaims beneficial ownership over the Securities.</P>
<P align=justify>(2) Sabby Management, LLC serves as the investment manager of
Sabby Healthcare Volatility Master Fund, Ltd. and Sabby Volatility Warrant
Master Fund, Ltd. Hal Mintz is the manager of Sabby Management, LLC. Each of
Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the
Securities covered by the Form S-1 except to the extent of its pecuniary
interest therein. </P>
<P align=justify>(3) Sphera Global Healthcare Management L.P. has the sole
voting and dispositive powers over the Securities. Doron Breen is the natural
person exercising such control at such entity. </P>
<P align=center>21</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_26></A>
<P align=justify><B><I>Value of the Securities as of the Investment Date
</I></B></P>
<P align=justify>On the date of the sale of the Securities, March 18, 2014, the
closing price of our common stock was $0.44 per share. As such, the dollar value
of the total 33,333,333 shares underlying the Series A Warrants would be
$14,666,666. The dollar value of the 101,000,004 shares underlying all of the
Securities would be $44,440,002, and the dollar value of the 15,486,358 shares
of common stock registered hereunder underlying the Debentures would be
$6,813,997.</P>
<P align=justify><B><I>Payments in Connection with Sale of the Securities
</I></B></P>
<P align=justify>Set forth in the chart below is the dollar amount of each
payment (including the value of any payments to be made in common stock) in
connection with the issuance of the Securities to the Selling Security Holders
made by the Company or that may be required to made by the Company to any
Selling Security Holder, any affiliate of a Selling Security Holder, or any
person with whom any Selling Security Holder has a contractual relationship
regarding the Investment (including any interest payments, liquidated damages,
payments made to &#147;finders&#148; or &#147;placement agents,&#148; and any other payments or
potential payments):</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;<U>Selling Security Holders</U> </TD>
    <TD noWrap align=center width="50%"><U>Dollar Amount/Payment</U> </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left>Auriga Global Investors SU, SA<SUP>(1)</SUP> </TD>
    <TD noWrap align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Auriga Investors-Montserrat Global Fund<SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Hudson Bay Master Fund LTD<SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>DAFNA LifeScience LP<SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>DAFNA LifeScience Market Neutral L.P. <SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>DAFNA LifeScience Select L.P. <SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Joann Mostovoy<SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Sabby Healthcare Volatility Master Fund, Ltd.
      <SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Sabby Volatility Warrant Master Fund, Ltd. <SUP>(1)</SUP>
    </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Sphera Global Healthcare Master Fund<SUP>(1)</SUP> </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>HFR HE Sphera Global Healthcare Master Trust<SUP>(1)</SUP>
    </TD>
    <TD align=center width="50%">- </TD></TR>
  <TR vAlign=top>
    <TD align=left>Maxim Partners LLC<SUP>(2)</SUP> </TD>
    <TD align=center width="50%">$700,840.00 </TD></TR></TABLE></DIV>
<P align=justify><SUP>(1) </SUP>The Company was not required to pay, and no
Selling Security Holder having shares registered hereunder has received payment
from the Company, in connection with the Securities Purchase Agreement. </P>
<P align=justify><SUP>(2)</SUP>Maxim Partners LLC is an affiliate of Maxim.
Maxim served as the exclusive placement agent in connection with the Securities
Purchase Agreement. Maxim was paid $700,840.00 and was issued Warrants, in the
name of Maxim Partners LLC, representing the right to purchase up to an
aggregate of 1,000,000 shares of Common Stock. Maxim Partners LLC is not a
Selling Security Holder hereunder and its shares underlying such Warrants are
not being registered in this registration statement. </P>
<P align=justify>The net proceeds received by the Company in connection with the
issuance of the Securities pursuant to the Securities Purchase Agreement was
$9,299,160. No cash amounts are due and payable on the principal amount
outstanding on the Debentures in the first year following their sale, and no
scheduled interest payments will be due thereon.</P>
<P align=center>22</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_27></A>
<P align=justify><B><I>Total Profit to Selling Security Holders for the
Registered Shares </I></B></P>
<P align=justify>The table below provides the total value the Selling Security
Holders could realize as a result of the conversion discount for the common
stock underlying all of the Series A Warrants registered hereunder:</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center
    bgColor=#eeeeee><BR><BR>Selling Security <BR>Holder
      <BR><BR><BR><BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="12%"
    bgColor=#eeeeee><BR>Market <BR>Price Per <BR>Share <SUP>(1)</SUP>
      <BR><BR><BR><BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="12%"
    bgColor=#eeeeee><BR><BR>Type of <BR>Security <SUP>(2)</SUP>
      <BR><BR><BR><BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="12%"
    bgColor=#eeeeee><BR><BR>
    Conversion <BR>Price <SUP>(3)</SUP>
      <BR><BR><BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="12%"
    bgColor=#eeeeee>Underlying <BR>Common Stock <BR>Registered in <BR>this
      <BR>Registration <BR>Statement <SUP>(4)</SUP> <BR><BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="12%"
    bgColor=#eeeeee><BR><BR>Market <BR>Price <SUP>(5)</SUP>
      <BR><BR><BR><BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="12%"
    bgColor=#eeeeee><BR><BR>Value of <BR>Shares <SUP>(6)</SUP>
      <BR><BR><BR><BR><BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=center width="12%"
    bgColor=#eeeeee>Total <BR>Possible <BR>Discount To <BR>Market
      <BR>Price<SUP>(7)</SUP> <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top" bgColor=#ffffff>Auriga Global <BR>
      Investors SU, SA <BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>$0.44 <BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>Series A <BR>
      Warrant </TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$0.30 <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>1,548,636
    <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$681,399.84
      <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$464,590.80
      <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$216,809.04
      <BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top"
      bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Auriga Investors- <BR>
      Montserrat <BR>Global Fund <BR></TD>
    <TD width="12%" align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">$0.44 <BR></TD>
    <TD width="12%" align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Series A <BR>
      Warrant <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top align=center
    width="12%" bgColor=#eeeeee>$0.30 <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>774,318
      <BR>      <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$340,699.92
      <BR>      <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$232,295.40
      <BR>      <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$108,404.52
      <BR>      <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top" bgColor=#ffffff>Hudson Bay <BR>
      Master Fund LTD <BR><BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>$0.44 <BR>
      <BR><BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>Series A <BR>
      Warrant
    <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$0.30
    <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>2,322,954
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$1,022,099.76
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$696,886.20
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$325,213.56
      <BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top"
      bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">DAFNA <BR>
      LifeScience LP <BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#eeeeee>$0.44 <BR>
      <BR></TD>
    <TD width="12%" align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Series A <BR>
      Warrant <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$0.30 <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>1,198,830
    <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$527,485.20
      <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$359,649.00
      <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$167,386.20
      <BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top" bgColor=#ffffff>DAFNA <BR>
      LifeScience <BR>Market Neutral
      <BR>L.P. <BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>$0.44 <BR>
      <BR><BR><BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>Series A <BR>
      Warrant
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$0.30
      <BR><BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>214,641
      <BR><BR><BR>      <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$94,442.04
      <BR><BR><BR>      <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$64,392.30
      <BR><BR><BR>      <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$30,049.74
      <BR><BR><BR>      <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top"
      bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">DAFNA <BR>
      LifeScience <BR>Select L.P. <BR></TD>
    <TD width="12%" align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">$0.44 <BR>
      <BR></TD>
    <TD width="12%" align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Series A <BR>
      Warrant <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top align=center
    width="12%" bgColor=#eeeeee>$0.30 <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>909,483
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$400,172.52
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$272,844.90
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$127,327.62
      <BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top" bgColor=#ffffff>Joann Mostovoy <BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>$0.44 <BR></TD>
    <TD width="12%" align=center valign="top" bgColor=#ffffff>Series A <BR>
      Warrant </TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$0.30 <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>774,318 <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$340,699.92
<BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$232,295.40
<BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff>$108,404.52
  <BR></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="top"
      bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Sabby Healthcare <BR>
      Volatility Master <BR>Fund, Ltd.
    <BR></TD>
    <TD width="12%" align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">$0.44 <BR>
      <BR></TD>
    <TD width="12%" align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Series A <BR>
      Warrant <BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top align=center
    width="12%" bgColor=#eeeeee>$0.30 <BR><BR></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top align=center
    width="12%" bgColor=#eeeeee>3,097,271 <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$1,362,799.24
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$929,181.30
      <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee>$433,617.94
      <BR><BR><BR></TD></TR>
  <TR vAlign=top>
    <TD rowSpan=2 align=left valign="top" bgColor=#ffffff>Sabby Volatility Warrant Master
      Fund, Ltd. <BR></TD>
    <TD width="12%" rowSpan=2 align=center valign="top" bgColor=#ffffff>$0.44
    <BR>
    <BR></TD>
    <TD width="12%" rowSpan=2 align=center valign="top" bgColor=#ffffff>Series A
      <BR>
      Warrant <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff rowSpan=2>$0.30
      <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff
      rowSpan=2>1,548,636 <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff
      rowSpan=2>$681,399.84 <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff
      rowSpan=2>$464,590.80 <BR><BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#ffffff
      rowSpan=2>$216,809.04 <BR><BR><BR></TD></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD
    rowSpan=3 align=left valign="top" bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Sphera Global <BR>
      Healthcare <BR>Master Fund </TD>
    <TD width="12%" rowSpan=3 align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">$0.44 <BR></TD>
    <TD width="12%" rowSpan=3 align=center valign="top"
    bgColor=#eeeeee style="BORDER-BOTTOM: #000000 1px solid">Series A <BR>
      Warrant </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top align=center
    width="12%" bgColor=#eeeeee rowSpan=3>$0.30 <BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee
      rowSpan=3>2,931,877 <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee
      rowSpan=3>$1,290,025.88 <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee
      rowSpan=3>$879,563.10 <BR><BR></TD>
    <TD vAlign=top align=center width="12%" bgColor=#eeeeee
      rowSpan=3>$410,462.72 <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<p align="center">23</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_28></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left rowSpan=4>HFR HE Sphera <BR>Global <BR>Healthcare
      <BR>Master Trust </TD>
    <TD noWrap align=center width="12%" rowSpan=4>$0.44 <BR>
      <BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4>Series A <BR>
      Warrant
    <BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4>$0.30 <BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4>165,394 <BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4>$72,773.36 <BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4>$49,618.20 <BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4>$23,155.16 <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<P align=justify><SUP>(1)</SUP>Market price per share of the common stock
underlying the Series A Warrants on the date of the issuance of the Series A
Warrants. </P>
<P align=justify><SUP>(2) </SUP>The shares of common stock set forth in this
table are the amount underlying the Series A Warrants registered in this
registration statement.</P>
<P align=justify><SUP>(3) </SUP>Exercise price per share of the underlying
common stock on the date of the issuance of the Series A Warrants is calculated
using the fixed exercise price per share set forth in the Series A Warrants.
</P>
<P align=justify><SUP>(4)</SUP> The amount of shares underlying each Series A
Warrant for each Selling Security Holder registered hereunder.</P>
<P align=justify><SUP>(5) </SUP>Market price of the number of shares underlying
the registered shares, calculated by using the common stock&#146;s market price per
share on the date of the issuance of the Series multiplied by the number of
registered shares underlying the Series A Warrants.</P>
<P align=justify><SUP>(6) </SUP>Value of shares underlying the Series A Warrants
using the exercise price on the date of sale multiplied by the number of
registered shares the Selling Security Holders may receive under the Series A
Warrants. Note: the Series A Warrants have fixed exercise prices.</P>
<P align=justify><SUP>(7) </SUP>Total possible discount to the market price as
of the date of the issuance of the Series A Warrants calculated by subtracting
the conversion price on the date of the issuance of the Series A Warrants from
the market price of the registered shares underlying the Series A Warrants on
that date.</P>
<P align=justify>There are no set, or prescribed, pre-determined adjustments to
the conversion price per share under the Series A Warrants.</P>
<P align=justify><B><I>Total Profit to Selling Security Holders </I></B></P>
<P align=justify>The table below provides the total value the Selling Security
Holders and placement agent could realize, calculated as of the date of the
Investment transaction, as a result of the conversion discount for the common
stock underlying all of the Securities if all of such shares could be sold
hereunder. Note that the Selling Security Holders are not registering the total
possible number of shares underlying the Securities, rather only 15,486,358
shares underlying the Securities (specifically, underlying the Series A
Warrants) are being registered hereunder. </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=center rowSpan=7>Selling <BR>Security <BR>Holder
      <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>Market <BR>Price Per
      <BR>Share <SUP>(1)</SUP> <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>Type of <BR>Security
      <SUP>(2)</SUP> <BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>Conversion <BR>Price
      <SUP>(3)</SUP> <BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>Total <BR>Possible
      <BR>Shares <BR>Underlying <BR>Securities <BR>(4) <BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>Combined <BR>Market Price
      <BR>(5) <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>Total Value <BR>of
      <BR>Shares <SUP>(6)</SUP> <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>Total Possible <BR>Discount
      To <BR>Market Price <BR>(7) <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=4>Auriga Global <BR>
      Investors SU, <BR>SA </TD>
    <TD align=center width="12%" rowSpan=4>$0.44 </TD>
    <TD align=center width="12%" rowSpan=3>Debenture <BR></TD>
    <TD align=center width="12%" rowSpan=3>$0.30 <BR></TD>
    <TD align=center width="12%" rowSpan=3>3,333,334 <BR></TD>
    <TD align=center width="12%" rowSpan=3>$1,466,666.96 <BR></TD>
    <TD align=center width="12%" rowSpan=3>$1,000,000.20 <BR></TD>
    <TD align=center width="12%" rowSpan=3>$466,666.76 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=center width="12%">Series A </TD>
    <TD align=center width="12%">$0.30 </TD>
    <TD align=center width="12%">3,333,333 </TD>
    <TD align=center width="12%">$1,466,666.52 </TD>
    <TD align=center width="12%">$999,999.90 </TD>
    <TD align=center width="12%">$466,666.62 </TD></TR></TABLE></DIV>
<p align="center">24<BR>
</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_29></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD
      rowSpan=17 align=left valign="middle" noWrap bgColor=#ffffff><BR>
      <BR>      </TD>
    <TD width="12%"
      rowSpan=17 align=center valign="middle" noWrap bgColor=#ffffff>&nbsp;</TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=3>Warrant <BR><BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=3><BR><BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=3><BR><BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=3><BR><BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=3><BR><BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=3><BR><BR></TD></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=5>Series B <BR>Warrant <BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=5>$0.42 <BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=5>3,333,333 </TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=5>$1,466,666.52 <BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=5>$1,399,999.86 </TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=5>$66,666.66 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=9>Debenture/ <BR>Series A <BR>Warrant/Series <BR>B <BR>Warrant      </TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=9>- <BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=9>10,000,000 <BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=9>$4,400,000<BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=9>$3,399,999.96 <BR></TD>
    <TD vAlign=middle noWrap align=center width="12%" bgColor=#ffffff
      rowSpan=9>$1,000,000.04 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=21 valign="middle" bgColor=#eeeeee>Auriga
      <BR>
      Investors- <BR>Montserrat <BR>Global Fund      </TD>
    <TD width="12%"
      rowSpan=21 align=center valign="middle" bgColor=#eeeeee>$0.44      </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=11>      Debenture</TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=11>$0.30 </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=11>      1,666,667 </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=11>$733,333.48 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=11>$500,000.10 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=11>$233,333.38 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR>
    <TD vAlign=middle align=center bgColor=#eeeeee>      Series A <br>
      Warrant </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$0.30 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>1,666,667 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$733,333.48 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$500,000.10 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$233,333.38 </TD>
  </TR>
  <TR>
    <TD vAlign=middle align=center bgColor=#eeeeee>Series B <br>
      Warrant </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$0.42 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>1,666,667 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$733,333.48 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$700,000.14 </TD>
    <TD vAlign=middle align=center bgColor=#eeeeee>$33,333.34 </TD>
  </TR>
  <TR>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=8>Debenture/ <BR>Series A <BR>Warrant/Series <BR>B <BR>Warrant      <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=8>- </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=8>5,000,001 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=8>$2,200,000.44 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=8>$1,700,000.34 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#eeeeee
      rowSpan=8>$500,000.10 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=18 valign="middle" bgColor=#ffffff>Hudson Bay
      <BR>Master Fund <BR>LTD </TD>
    <TD width="12%"
      rowSpan=18 align=center valign="middle" bgColor=#ffffff>$0.44      </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=3>Debenture <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=3>$0.30 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=3>5,000,000 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=3>$2,200,000 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=3>$1,500,000 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=3>$700,000 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=4>Series A <BR>Warrant <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=4>$0.30 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=4>5,000,000 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=4>$2,200,000 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=4>$1,500,000 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=4>$700,000 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=5>Series B <BR>Warrant <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=5>$0.42 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=5>5,000,000 <BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=5><BR>$2,200,000 <BR><BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=5><BR>$2,100,000 <BR><BR></TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=5><BR>$100,000 <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=6>Debenture/ <BR>Series A <BR>Warrant/Se <BR>ries B
      <BR>Warrant </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=6>- </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=6>15,000,000 </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=6>$660,000 </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=6>$5,100,000 </TD>
    <TD vAlign=middle align=center width="12%" bgColor=#ffffff
      rowSpan=6>$1,500,000 </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE>
</DIV>
<p align="center">25</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_30></A>
<TABLE width="100%" border=1 cellPadding=3 cellSpacing=0
borderColor=#000000
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR>
    <TD vAlign=center align=left>&nbsp;</TD>
    <TD vAlign=center align=center width="12%">&nbsp;</TD>
    <TD vAlign=center align=center width="12%">&nbsp;</TD>
    <TD vAlign=center align=center width="12%">&nbsp;</TD>
    <TD vAlign=center align=center width="12%">&nbsp;</TD>
    <TD vAlign=center align=center width="12%">&nbsp;</TD>
    <TD vAlign=center align=center width="12%">&nbsp;</TD>
    <TD vAlign=center align=center width="12%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD rowSpan=3 align=left vAlign=center bgcolor="#EEEEEE"><BR>
      DAFNA <BR>
      LifeScience <BR>
      LP <BR>
    <BR></TD>
    <TD width="12%" rowSpan=3 align=center vAlign=center bgcolor="#EEEEEE"><BR>
    $0.44 <BR></TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Debenture </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$0.30 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">2,580,400 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$1,135,376 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$774,120 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$361,256 </TD>
  </TR>
  <TR vAlign=top>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Series A <BR>
    Warrant </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$0.30 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">2,580,400 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$1,135,376 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$774,120 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$361,256 </TD>
  </TR>
  <TR vAlign=top>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Series B <BR>
    Warrant </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$0.42 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">2,580,400 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$1,135,376 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$1,083,768 </TD>
    <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$51,608 </TD>
  </TR>
</TABLE>
<BR>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top>
      <TD align=left vAlign=center bgcolor="#EEEEEE">&nbsp;</TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">&nbsp;</TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Debenture/ <BR>
        Series A <BR>
        Warrant/Series B <BR>
        Warrant </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">- </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">7,741,200 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$3,406,128 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$2,632,008 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$774,120 </TD>
    </TR>
    <TR vAlign=top>
      <TD vAlign=center align=left rowSpan=4><BR>
          <BR>
        DAFNA <BR>
        LifeScience <BR>
        Market <BR>
        Neutral L.P. <BR></TD>
      <TD vAlign=center align=center width="12%" rowSpan=4><BR>
          <BR>
        $0.44 <BR></TD>
      <TD vAlign=center align=center width="12%">Debenture </TD>
      <TD vAlign=center align=center width="12%">$0.30 </TD>
      <TD vAlign=center align=center width="12%">&nbsp;462,000 </TD>
      <TD vAlign=center align=center width="12%">$203,280 </TD>
      <TD vAlign=center align=center width="12%">&nbsp; &nbsp;$138,600 </TD>
      <TD vAlign=center align=center width="12%">&nbsp; &nbsp;$64,680 </TD>
    </TR>
    <TR vAlign=top>
      <TD vAlign=center align=center width="12%">Series A <BR>
        Warrant </TD>
      <TD vAlign=center align=center width="12%">$0.30 </TD>
      <TD vAlign=center align=center width="12%">462,000 </TD>
      <TD vAlign=center align=center width="12%">$203,280 </TD>
      <TD vAlign=center align=center width="12%">$138,600 </TD>
      <TD vAlign=center align=center width="12%">$64,680 </TD>
    </TR>
    <TR vAlign=top>
      <TD vAlign=center align=center width="12%">Series B <BR>
        Warrant </TD>
      <TD vAlign=center align=center width="12%">$0.42 </TD>
      <TD vAlign=center align=center width="12%">462,000 </TD>
      <TD vAlign=center align=center width="12%">$203,280 </TD>
      <TD vAlign=center align=center width="12%">$194,040 </TD>
      <TD vAlign=center align=center width="12%">$9,240 </TD>
    </TR>
    <TR vAlign=top>
      <TD vAlign=center align=center width="12%">Debenture/ <BR>
        Series A <BR>
        Warrant/Series B <BR>
        Warrant </TD>
      <TD vAlign=center align=center width="12%">- </TD>
      <TD vAlign=center align=center width="12%">1,386,000 </TD>
      <TD vAlign=center align=center width="12%">$609,840 </TD>
      <TD vAlign=center align=center width="12%">$471,240 </TD>
      <TD vAlign=center align=center width="12%">$138,600 </TD>
    </TR>
    <TR vAlign=top>
      <TD rowSpan=4 align=left vAlign=center bgcolor="#EEEEEE"><BR>
        DAFNA <BR>
        LifeScience <BR>
        Select L.P. <BR>
        <BR></TD>
      <TD width="12%" rowSpan=4 align=center vAlign=center bgcolor="#EEEEEE"><BR>
        $0.44 <BR></TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Debenture </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$0.30 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">&nbsp;1,957,600 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$861,344 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">&nbsp; &nbsp;$587,280 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">&nbsp; &nbsp;$274,064 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Series A <BR>
        Warrant </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$0.30 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">1,957,600 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$861,344 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$587,280 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$274,064 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Series B <BR>
        Warrant </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$0.42 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">1,957,600 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$861,344 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$822,192 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$39,152 </TD>
    </TR>
    <TR vAlign=top>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">Debenture/ </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">- </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">&nbsp;5,872,800 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">$2,584,032 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">&nbsp; &nbsp;$1,996,752 </TD>
      <TD width="12%" align=center vAlign=center bgcolor="#EEEEEE">&nbsp; &nbsp;$587,280 </TD>
    </TR>
  </TABLE>
</DIV>
<p align="center">26</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_31></A>
<table width="100%" border="1" cellpadding="3" cellspacing="0"
bordercolor="#000000"
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <tr valign="top">
    <td
rowspan="7" align="left" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">&nbsp;</td>
    <td width="12%"
      rowspan="7" align="center" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">&nbsp;</td>
    <td width="12%" rowspan="7" align="center" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">Series A <br>
      Warrant/Series<br>
      B <br>
      Warrant </td>
    <td width="12%"
      rowspan="7" align="center" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">&nbsp;</td>
    <td width="12%"
      rowspan="7" align="center" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">&nbsp;</td>
    <td width="12%"
      rowspan="7" align="center" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">&nbsp;</td>
    <td width="12%"
      rowspan="7" align="center" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">&nbsp;</td>
    <td width="12%"
      rowspan="7" align="center" valign="middle" nowrap="nowrap" bgcolor="#eeeeee">&nbsp;</td>
  </tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr></tr>
  <tr></tr>
  <tr></tr>
  <tr valign="top">
    <td
      rowspan="20" align="left" valign="middle" bgcolor="#ffffff"> Joann<br>
      Mostovoy </td>
    <td width="12%"
      rowspan="20" align="center" valign="middle" bgcolor="#ffffff"> $0.44 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">Debenture </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$0.30 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">1,666,667 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$733,333.48 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$500,000.10 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$233,333.38 </td>
  </tr>
  <tr></tr>
  <tr></tr>
  <tr valign="top">
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">Series A<br>
      Warrant </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$0.30 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">1,666,667 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$733,333.48 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$500,000.10 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$233,333.38 </td>
  </tr>
  <tr valign="top"></tr>
  <tr></tr>
  <tr></tr>
  <tr valign="top">
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">Series B <br>
      Warrant </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$0.42 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">1,666,667 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$733,333.48 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$700,000.14 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$33,333.34 </td>
  </tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr>
    <td width="12%" rowspan="9" align="center" valign="middle" bgcolor="#ffffff"> Debenture/<br>
      Series A
      Warrant/Series <br>
      B <br>
      Warrant </td>
    <td width="12%" rowspan="9" align="center" valign="middle" bgcolor="#ffffff"> - </td>
    <td width="12%"
      rowspan="9" align="center" valign="middle" bgcolor="#ffffff"> 5,000,001 </td>
    <td width="12%"
      rowspan="9" align="center" valign="middle" bgcolor="#ffffff"> $2,200,000.44 </td>
    <td width="12%"
      rowspan="9" align="center" valign="middle" bgcolor="#ffffff"> $1,700,000.34 </td>
    <td width="12%"
      rowspan="9" align="center" valign="middle" bgcolor="#ffffff"> $500,000.10 </td>
  </tr>
  <tr></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr></tr>
  <tr></tr>
  <tr>
    <td rowspan="7" valign="middle" bgcolor="#eeeeee"> Sabby <br>
      Healthcare<br>
      Volatility<br>
      Master
      Fund,<br>
      Ltd. </td>
    <td width="12%" rowspan="7" align="center" valign="middle" bgcolor="#eeeeee"> $0.44 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#eeeeee"> Debenture </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#eeeeee"> $0.30 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#eeeeee"> 6,666,667 </td>
    <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#eeeeee"> $2,933,333.48 </td>
    <td width="12%"
      rowspan="3" align="center" valign="middle" bgcolor="#eeeeee"> $2,000,000.10</td>
    <td width="12%"
  rowspan="3" align="center" valign="middle" bgcolor="#eeeeee"> $933,333.38</td>
  </tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top">
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#eeeeee"> Series A <br>
      Warrant </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#eeeeee"> $0.30 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#eeeeee"> 6,666,667 </td>
    <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#eeeeee"> $2,933,333.48 </td>
    <td width="12%"
      rowspan="4" align="center" valign="middle" bgcolor="#eeeeee"> $2,000,000.10 </td>
    <td width="12%"
      rowspan="4" align="center" valign="middle" bgcolor="#eeeeee"> $933,333.38 </td>
  </tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr></tr>
</table>
<br>
<div>
  <table
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
bordercolor="#000000" cellspacing="0" cellpadding="3" width="100%" border="1">
    <tr valign="top">
      <td align="left" valign="middle" bgcolor="#EEEEEE">&nbsp;</td>
      <td width="12%" align="center" valign="middle" bgcolor="#EEEEEE">&nbsp;</td>
      <td width="12%" align="center" valign="middle" bgcolor="#EEEEEE">Series B
        Warrant        </td>
      <td width="12%" align="center" valign="middle" bgcolor="#EEEEEE">$0.42        </td>
      <td width="12%" align="center" valign="middle" bgcolor="#EEEEEE">6,666,667        </td>
      <td width="12%" align="center" valign="middle" bgcolor="#EEEEEE">$2,933,333.48        </td>
      <td width="12%" align="center" valign="middle" bgcolor="#EEEEEE">$2,800,000.14        </td>
      <td width="12%" align="center" valign="middle" bgcolor="#EEEEEE">$133,333.34        </td>
    </tr>

    <tr valign="top">
      <td align="left" valign="middle" bgcolor="#EEEEEE">&nbsp;</td>
      <td align="center" valign="middle" bgcolor="#EEEEEE">&nbsp;</td>
      <td align="center" valign="middle" bgcolor="#EEEEEE">Debenture/
        <br>
        Series A
        Warrant/Series<br>
        B<br>
      Warrant </td>
      <td align="center" valign="middle" bgcolor="#EEEEEE">- </td>
      <td align="center" valign="middle" bgcolor="#EEEEEE">20,000,001</td>
      <td align="center" valign="middle" bgcolor="#EEEEEE">$8,800,000.44 </td>
      <td align="center" valign="middle" bgcolor="#EEEEEE">$6,800,000.34 </td>
      <td align="center" valign="middle" bgcolor="#EEEEEE">$2,000,000.10 </td>
    </tr>
    <tr valign="top">
      <td rowspan="2" align="left" valign="middle" bgcolor="#ffffff">Sabby
        <br>
        Volatility
        <br>
        Warrant<br>
        Master Fund,<br>
      Ltd. </td>
      <td width="12%" rowspan="2" align="center" valign="middle" bgcolor="#ffffff">$0.44 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">Debenture </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$0.30 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">3,333,334 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$1,466,666.96 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$1,000,000.20 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$466,666.76 </td>
    </tr>

    <tr valign="top">
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">Series A
        <br>
        Warrant </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$0.30 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">3,333,333 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$1,466,666.52 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$999,999.90 </td>
      <td width="12%" align="center" valign="middle" bgcolor="#ffffff">$466,666.62 </td>
    </tr>
  </table>
</div>
<p align="center">27</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_32></A>
<div>
  <table
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
bordercolor="#000000" cellspacing="0" cellpadding="3" width="100%" border="1">
    <tr>
      <td nowrap="nowrap" align="left" bgcolor="#ffffff"
      rowspan="12">&nbsp;</td>
      <td width="12%"
      rowspan="12" align="center" valign="middle" nowrap="nowrap" bgcolor="#ffffff">&nbsp;</td>
      <td width="12%" align="center" valign="middle" nowrap="nowrap" bgcolor="#ffffff">&nbsp;</td>
      <td width="12%" align="center" valign="middle" nowrap="nowrap" bgcolor="#ffffff">&nbsp;</td>
      <td width="12%" align="center" valign="middle" nowrap="nowrap" bgcolor="#ffffff">&nbsp;</td>
      <td width="12%" align="center" valign="middle" nowrap="nowrap" bgcolor="#ffffff">&nbsp;</td>
      <td width="12%" align="center" valign="middle" nowrap="nowrap" bgcolor="#ffffff">&nbsp;</td>
      <td width="12%" align="center" valign="middle" nowrap="nowrap" bgcolor="#ffffff">&nbsp;</td>
    </tr>
    <tr valign="top">
      <td width="12%" rowspan="4" align="center" nowrap="nowrap" bgcolor="#ffffff">Series B <br />
        Warrant </td>
      <td width="12%" rowspan="4" align="center" nowrap="nowrap" bgcolor="#ffffff">$0.42 </td>
      <td width="12%" rowspan="4" align="center" nowrap="nowrap" bgcolor="#ffffff">3,333,333 </td>
      <td width="12%"
      rowspan="4" align="center" nowrap="nowrap" bgcolor="#ffffff">$1,466,666.52 </td>
      <td width="12%"
      rowspan="4" align="center" nowrap="nowrap" bgcolor="#ffffff">$1,399,999.86 </td>
      <td width="12%" rowspan="4" align="center" nowrap="nowrap" bgcolor="#ffffff">$66,666.66 </td>
    </tr>
    <tr valign="top"></tr>
    <tr></tr>
    <tr></tr>
    <tr>
      <td width="12%"
      rowspan="7" align="center" nowrap="nowrap" bgcolor="#ffffff"> Debenture/ <br />
        Series A <br />
        Warrant/Series<br />
        B <br />
        Warrant </td>
      <td width="12%" rowspan="7" align="center" nowrap="nowrap" bgcolor="#ffffff"> - </td>
      <td width="12%"
      rowspan="7" align="center" nowrap="nowrap" bgcolor="#ffffff"> 10,000,000 </td>
      <td width="12%"
      rowspan="7" align="center" nowrap="nowrap" bgcolor="#ffffff"> $4,400,000 </td>
      <td width="12%"
      rowspan="7" align="center" nowrap="nowrap" bgcolor="#ffffff"> $3,399,999.96 </td>
      <td width="12%"
      rowspan="7" align="center" nowrap="nowrap" bgcolor="#ffffff"> $1,000,000.04 </td>
    </tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr></tr>
    <tr valign="top">
      <td
      rowspan="30" align="left" valign="middle" bgcolor="#eeeeee"> Sphera Global
        <br>
        Healthcare
        <br>
        Master Fund </td>
      <td width="12%"
      rowspan="30" align="center" valign="middle" bgcolor="#eeeeee"> $0.44 </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">Debenture </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$0.30 </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">6,310,667 </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$2,776,693.48 </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$1,893,200.10 </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$883,493.38 </td>
    </tr>
    <tr valign="top">
      <td align="center" valign="middle" bgcolor="#eeeeee">Series A
        Warrant</td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$0.30</td>
      <td align="center" valign="middle" bgcolor="#eeeeee">6,310,667 </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$2,776,693.48</td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$1,893,200.10 </td>
      <td align="center" valign="middle" bgcolor="#eeeeee">$883,493.38 </td>
    </tr>
    <tr valign="top">
      <td width="12%" rowspan="8" align="center" valign="middle" bgcolor="#eeeeee">Series B
        Warrant </td>
      <td width="12%" rowspan="8" align="center" valign="middle" bgcolor="#eeeeee">$0.42</td>
      <td width="12%" rowspan="8" align="center" valign="middle" bgcolor="#eeeeee">6,310,667</td>
      <td width="12%" rowspan="8" align="center" valign="middle" bgcolor="#eeeeee">$2,776,693.48 </td>
      <td width="12%" rowspan="8" align="center" valign="middle" bgcolor="#eeeeee">$2,650,480.14 </td>
      <td width="12%" rowspan="8" align="center" valign="middle" bgcolor="#eeeeee">$126,213.34 </td>
    </tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr></tr>
    <tr></tr>
    <tr valign="top">
      <td width="12%" rowspan="20" align="center" valign="middle" bgcolor="#eeeeee"> Debenture/
        Series A
        Warrant/Series
        B
        Warrant </td>
      <td width="12%" rowspan="20" align="center" valign="middle" bgcolor="#eeeeee"> - </td>
      <td width="12%" rowspan="20" align="center" valign="middle" bgcolor="#eeeeee"> 18,932,001 </td>
      <td width="12%" rowspan="20" align="center" valign="middle" bgcolor="#eeeeee"> $8,330,080.44 </td>
      <td width="12%" rowspan="20" align="center" valign="middle" bgcolor="#eeeeee">$6,436,880.34 </td>
      <td width="12%" rowspan="20" align="center" valign="middle" bgcolor="#eeeeee">$1,893,200.10 </td>
    </tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr></tr>
    <tr></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr></tr>
    <tr></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr></tr>
    <tr></tr>
    <tr valign="top">
      <td
      rowspan="18" align="left" valign="middle" bgcolor="#ffffff"> HFR HE
        <br>
        Sphera Global
        <br>
        Healthcare
        <br>
        Master Trust </td>
      <td width="12%"
      rowspan="18" align="center" valign="middle" bgcolor="#ffffff"> $0.44 </td>
      <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">Debenture </td>
      <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$0.30 </td>
      <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">356,000 </td>
      <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$156,640 </td>
      <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$106,800 </td>
      <td width="12%" rowspan="3" align="center" valign="middle" bgcolor="#ffffff">$49,840 </td>
    </tr>
    <tr></tr>
    <tr></tr>
    <tr valign="top">
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">Series A <br />
        Warrant </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$0.30 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">356,000 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$156,640 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$106,800 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$49,840 </td>
    </tr>
    <tr valign="top"></tr>
    <tr></tr>
    <tr></tr>
    <tr valign="top">
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">Series B<br />
        Warrant </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$0.42 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">356,000 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$156,640 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$149,520 </td>
      <td width="12%" rowspan="4" align="center" valign="middle" bgcolor="#ffffff">$7,120 </td>
    </tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top">
      <td width="12%" rowspan="7" align="center" valign="middle" bgcolor="#ffffff"> Debenture/<br />
        Series A <br />
        Warrant/Series<br />
        B <br />
        Warrant </td>
      <td width="12%" rowspan="7" align="center" valign="middle" bgcolor="#ffffff"> - </td>
      <td width="12%"
      rowspan="7" align="center" valign="middle" bgcolor="#ffffff"> 1,068,000 </td>
      <td width="12%"
      rowspan="7" align="center" valign="middle" bgcolor="#ffffff"> $469,920 </td>
      <td width="12%"
      rowspan="7" align="center" valign="middle" bgcolor="#ffffff"> $363,120 </td>
      <td width="12%"
      rowspan="7" align="center" valign="middle" bgcolor="#ffffff"> $106,800 </td>
    </tr>
    <tr></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
    <tr valign="top"></tr>
  </table>
</div>
<p align="center">28</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_33></A><BR>
<table
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
bordercolor="#000000" cellspacing="0" cellpadding="3" width="100%" border="1">
  <tr valign="top">
    <td nowrap="nowrap" align="left" bgcolor="#eeeeee" rowspan="3">Maxim
      Partners LLC </td>
    <td nowrap="nowrap" align="center" width="12%" bgcolor="#eeeeee" rowspan="3">$0.44 </td>
    <td nowrap="nowrap" align="center" width="12%" bgcolor="#eeeeee" rowspan="3">Debenture </td>
    <td nowrap="nowrap" align="center" width="12%" bgcolor="#eeeeee" rowspan="3">- </td>
    <td nowrap="nowrap" align="center" width="12%" bgcolor="#eeeeee" rowspan="3">- </td>
    <td nowrap="nowrap" align="center" width="12%" bgcolor="#eeeeee" rowspan="3">- </td>
    <td nowrap="nowrap" align="center" width="12%" bgcolor="#eeeeee" rowspan="3">- </td>
    <td nowrap="nowrap" align="center" width="12%" bgcolor="#eeeeee"
  rowspan="3">&nbsp;</td>
  </tr>
  <tr valign="top"></tr>
  <tr></tr>
  <tr valign="top">
    <td align="left" bgcolor="#eeeeee"
      rowspan="15">&nbsp;</td>
    <td align="center" width="12%" bgcolor="#eeeeee"
      rowspan="15">&nbsp;</td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="5">Series A
      Warrant </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="5">$0.30 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="5">500,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="5">$220,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="5">$150,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="5">$70,000 </td>
  </tr>
  <tr valign="top"></tr>
  <tr></tr>
  <tr></tr>
  <tr></tr>
  <tr valign="top">
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="4">Series B
      Warrant </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="4">$0.42 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="4">500,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="4">$220,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="4">$210,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="4">$10,000 </td>
  </tr>
  <tr valign="top"></tr>
  <tr></tr>
  <tr></tr>
  <tr>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="6"> Debenture/
      <br>
      Series A
      <br>
      Warrant/Series
      <br>
      B
      <br>
      Warrant </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="6"> - </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="6"> 1,000,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee"
      rowspan="6"> $440,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee"
      rowspan="6"> $360,000 </td>
    <td align="center" width="12%" bgcolor="#eeeeee" rowspan="6"> $80,000 </td>
  </tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
  <tr valign="top"></tr>
</table>
<P style="MARGIN-LEFT: 5%" align=justify><SUP>(1)</SUP> Market price per share
of the common stock underlying the Securities on the date of the sale of the
Securities.<BR><SUP>(2) </SUP>The shares of common stock set forth in this table
are the total amount underlying Debentures, Series A Warrants and Series B
Warrants that were sold in the Investment
transaction.<BR><SUP>(3)</SUP>Conversion/exercise price per share of the
underlying common stock on the date of the sale of the Securities is calculated
using the fixed conversion/exercise price per share set forth in the
Securities.<BR><SUP>(4) </SUP>Total possible shares underlying the Securities
(assuming no interest payments and complete conversion throughout the term).
Note: the number listed does not take into account that each Selling Security
Holder is subject to a 4.99% conversion cap, except for Sphera Global Healthcare
Master Fund and HFR HE Sphera Global Healthcare Master Trust, which are subject
to a 9.99% conversion cap.<BR><SUP>(5) </SUP>Combined market price of the total
number of shares underlying the Securities, calculated by using the common
stock&#146;s market price per share on the date of the sale of the Securities
multiplied by the total possible shares underlying the Securities.<SUP><BR>(6)
</SUP>Total value of shares underlying the Securities using the conversion price
on the date of sale multiplied by the total number of shares the Selling
Security Holders may receive under the Securities. Note: the Debentures and
Warrants have fixed conversion prices.<BR><SUP>(7) </SUP>Total possible discount
to the market price as of the date of the sale of the Securities calculated by
subtracting the total conversion price on the date of the sale of the Securities
from the combined market price of the total number of shares underlying the
Securities on that date.</P>
<P align=justify>There are no set, or prescribed, pre-determined adjustments to
the exercise price per share under the Series A Warrants.</P>
<P align=justify><B><I>Total Profits from Other Company Securities Held by the
Selling Security Holders </I></B></P>
<P align=justify>The following table sets forth information regarding
non-Investment transaction issued Company securities held by the Selling
Security Holders:**</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=center rowSpan=5>Selling Security <BR>Holder
    <BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>Total Possible
      <BR>Profit<SUP>(1)</SUP> <BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>Total Possible
      <BR>Shares<SUP>(2)</SUP> <BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>Combined <BR>Market
      <BR>Price<SUP>(3)</SUP> <BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>Total <BR>Possible
      <BR>Shares <BR>Receivable<SUP>(4)</SUP> <BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>Total <BR>Possible
      <BR>Discount To <BR>Market <BR>Price(5) </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE>
<p align="center">29</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left rowSpan=3>Auriga Global <BR>Investors SU, SA <BR></TD>
    <TD noWrap align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD noWrap align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD noWrap align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD noWrap align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD noWrap align=center width="16%" rowSpan=3><BR>- <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=6><BR>Auriga Investors- <BR>Montserrat <BR>Global Fund
    <BR><BR></TD>
    <TD align=center width="16%" rowSpan=6><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6><BR>- <BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=5><BR>Hudson Bay <BR>Master Fund <BR>LTD <BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=4><BR>DAFNA <BR>LifeScience LP <BR></TD>
    <TD align=center width="16%" rowSpan=4><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=4><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=4><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=4><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=4><BR>- <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=5>DAFNA <BR>LifeScience <BR>Market Neutral <BR>L.P.
      <BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>DAFNA <BR>LifeScience <BR>Select L.P. </TD>
    <TD align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD align=center width="16%" rowSpan=3><BR>- <BR></TD>
    <TD align=center width="16%" rowSpan=3><BR>- <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Joann Mostovoy <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=7><BR><BR>Sabby Healthcare <BR>Volatility Master <BR>Fund,
      Ltd. <BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD></TR>
  <TR></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=7><BR><BR>Sabby Volatility <BR>Warrant Master <BR>Fund, Ltd.
      <BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7><BR><BR>- <BR><BR><BR><BR></TD></TR>
  <TR></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=5><BR>Sphera Global <BR>Healthcare <BR>Master Fund <BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR>- <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=5><BR>HFR HE Sphera <BR>Global <BR>Healthcare <BR>Master Trust
    </TD>
    <TD align=center width="16%" rowSpan=5><BR><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR><BR>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=5><BR><BR>- <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<p align="center">30</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_35></A>
<P align=justify><SUP>(1) </SUP>The total possible profit to be realized as a
result of any conversion discounts for securities underlying any other warrants,
options, notes, or other securities of the issuer that are held by the Selling
Security Holders or any affiliates of the Selling Security
Holders.<BR><SUP>(2)</SUP> The total possible shares to be received under the
particular securities (assuming complete conversion/exercise).<BR>
<SUP>(3)</SUP>The combined market price of the total number of underlying
shares, calculated by using the market price per share on the date of the sale
of that other security and the total possible shares to be received.<SUP>
<BR></SUP><SUP>(4) </SUP>The total possible shares to be received and the
combined conversion price of the total number of shares underlying that other
security calculated by using the conversion price on the date of the sale of
that other security and the total possible number of underlying shares.<SUP>
<BR></SUP><SUP>(5)</SUP> The total possible discount to the market price as of
the date of the sale of that other security, calculated by subtracting the total
conversion/exercise price on the date of the sale of that other security from
the combined market price of the total number of underlying shares on that
date.<BR>**To the knowledge of the Company, none of the Selling Security
Holders, nor their affiliates, own of record any securities underlying any other
warrants, options, notes, or other securities of the Company.</P>
<P align=justify><B><I>Gross Proceeds, Payments Made to Selling Security Holders
</I></B></P>
<P align=justify>The following table sets forth the gross proceeds paid or
payable to the Company in the Securities Purchase Agreement, all payments that
have been made or that may be required to be made by the Company, the resulting
net proceeds to the Company, and the combined total possible profit to be
realized as a result of any conversion discounts regarding the securities under
all securities held by the Selling Security Holders and the placement agent.
</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=center rowSpan=5><BR>Selling Security <BR>Holder
    <BR></TD>
    <TD noWrap align=center width="20%" rowSpan=5><BR>Gross Proceeds <BR>      Payable to Issuer <sup>(1)</sup><BR></TD>
    <TD noWrap align=center width="20%" rowSpan=5><BR>Payments Made To
      <BR>      Selling Security<sup>(2) </sup><BR>
      Holders <BR></TD>
    <TD noWrap align=center width="20%" rowSpan=5><BR>Resulting Net <BR>      Proceeds <sup>(3)</sup>      <BR></TD>
    <TD noWrap align=center width="20%" rowSpan=5><BR>Combined Total <BR>
    Possible Profit<sup>(4) </sup><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=bottom></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Auriga Global <BR>Investors SU, SA </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$1,000,000.00 <BR></TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">- <BR></TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$1,000,000.00 <BR></TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$1,000,000.00 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>Auriga Investors- <BR>Montserrat <BR>Global Fund    </TD>
    <TD width="20%" rowSpan=3 align=center valign="middle"><BR>$500,000.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle"><BR>- <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle"><BR>$500,000.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle"><BR>$500,000.00 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>Hudson Bay <BR>Master Fund <BR>LTD </TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">$1,500,000.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">- <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">$1,500,000.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">$1,500,000.00 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>DAFNA <BR>LifeScience LP </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$774,120.00 </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">- </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$774,120.00 </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$774,120.00 </TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>DAFNA <BR>LifeScience <BR>Market Neutral <BR>L.P.    </TD>
    <TD width="20%" rowSpan=4 align=center valign="middle"><BR>$138,600.00 <BR><BR></TD>
    <TD width="20%" rowSpan=4 align=center valign="middle"><BR>- <BR><BR></TD>
    <TD width="20%" rowSpan=4 align=center valign="middle"><BR>$138,600.00 <BR><BR></TD>
    <TD width="20%" rowSpan=4 align=center valign="middle"><BR>$138,600.00 <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>DAFNA <BR>LifeScience <BR>Select L.P. </TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">$587,280.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">- <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">$587,280.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle">$587,280.00 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR></TABLE>
</DIV>
<p align="center">31</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR>
    <TD noWrap align=left>&nbsp;</TD>
    <TD noWrap align=center width="20%">&nbsp;</TD>
    <TD noWrap align=center width="20%">&nbsp;</TD>
    <TD noWrap align=center width="20%">&nbsp;</TD>
    <TD noWrap align=center width="20%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left rowSpan=3>Joann Mostovoy <BR><BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle" noWrap>$500,000.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle" noWrap>- <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle" noWrap>$500,000.00 <BR></TD>
    <TD width="20%" rowSpan=3 align=center valign="middle" noWrap>$500,000.00 <BR></TD></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=6>Sabby Healthcare <BR>
      Volatility Master <BR>Fund, Ltd.        <BR></TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$2,000,000.00    </TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">- </TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$2,000,000.00    </TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$2,000,000.00    </TD>
  </TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=6>Sabby Volatility <BR>
      Warrant Master <BR>Fund, Ltd.        <BR></TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$1,000,000.00    </TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">-<BR></TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$1,000,000.00
    <BR></TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$1,000,000.00
    <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=5>Sphera Global <BR>
      Healthcare <BR>Master Fund <BR></TD>
    <TD width="20%" rowSpan=5 align=center valign="middle"><BR>
      $1,893,200.00 <BR>
      <BR></TD>
    <TD width="20%" rowSpan=5 align=center valign="middle"><BR>
      - <BR>
      <BR></TD>
    <TD width="20%" rowSpan=5 align=center valign="middle"><BR>
      $1,893,200.00 <BR>
      <BR></TD>
    <TD width="20%" rowSpan=5 align=center valign="middle"><BR>
      $1,893,198.00
<BR>
<BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR>
    <TD rowSpan=6>HFR HE Sphera <BR>
      Global <BR>Healthcare <BR>Master Trust
      <BR></TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$106,800.00 </TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">- <BR></TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$106,800.00 <BR></TD>
    <TD width="20%" rowSpan=6 align=center valign="middle">$106,800.00
  <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Maxim Partners <BR>LLC<SUP>(5)</SUP> </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$0.00.00 </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$700,840.00 </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">($700,840.00) </TD>
    <TD width="20%" rowSpan=2 align=center valign="middle">$80,000.00 </TD>
  </TR>
  <TR vAlign=top></TR></TABLE></DIV>
<P align=justify><SUP>(1) </SUP>Gross proceeds paid or payable to the Company in
the Investment transaction.<BR><SUP>(2)</SUP> All payments that have been made
or that may be required to be made by the Company in connection with the
issuance of Warrants and Debentures to the Selling Security Holders or the
placement agent, any affiliate of a Selling Security Holder or the placement
agent, or any person with whom any Selling Security Holder or the placement
agent has a contractual relationship regarding the Investment transaction
(including any interest payments, liquidated damages, payments made to &#147;finders&#148;
or &#147;placement agents,&#148; and any other payments or potential payments).<SUP>
<BR></SUP><SUP>(3) </SUP>Resulting net proceeds to the Company. Note that these
figures do not include the $4,000 fee paid to the Investment transaction&#146;s
escrow agent, or the $30,000 fee paid to the placement agent&#146;s
attorneys.<BR><SUP>(4) </SUP>Combined total possible profit to be realized as a
result of any conversion discounts regarding the common stock underlying the
Securities, options, notes, or other securities of the issuer that are held by
the Selling Security Holders or any affiliates of the Selling Security Holders
and the placement agent.<BR><SUP>(5) </SUP>Maxim Partners LLC is an affiliate of
Maxim. Maxim served as the exclusive placement agent in connection with the
Investment transaction. Maxim was paid $700,840.00 and was issued Warrants, in
the name of Maxim Partners LLC, representing the right to purchase up to an
aggregate of 1,000,000 shares of Common Stock. Maxim Partners LLC is not a
Selling Security Holder&#146;s shares underlying such Warrants are not being
registered in this registration statement.</P>
<P align=justify>The total amount of all payments as disclosed ($700,840)
divided by the net proceeds from the issuer from the sale of the Debentures
($9,299,160) is 7.54%, which averages over the thirty (30) year term of the
Debentures to 0.25% . The total possible discount to the market price of the
shares underlying the Debentures ($4,666,666.04) divided by the net proceeds
from the issuer from the sale of the Debentures ($9,299,160) is 50.18%, which
averages over the thirty (30) year term of the Debentures to 1.67% . </P>
<P align=center>32</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_37></A>
<P align=justify><B><I>Prior Securities Transactions between the Company and
Selling Security Holders </I></B></P>
<P align=justify>The following table that describes all prior securities
transactions between the Company (or any of its predecessors) and the Selling
Security Holders, any affiliates of the Selling Security Holders, or any person
with whom any Selling Security Holder has a contractual relationship regarding
the transaction (or any predecessors of those persons), and the placement
agent:*</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=center rowSpan=12>Selling <BR>Security <BR>Holder
      <BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=12>Date of
      <BR>Transaction<SUP>(1) </SUP><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=12># of Shares <BR>Outstanding
      <BR>Prior To <BR>Transaction<SUP>(2)
    </SUP><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=12># of Shares <BR>Outstanding
      <BR>Prior To <BR>Transaction <BR>&amp; Held by <BR>Non-Selling
      <BR>Security <BR>Holders<SUP>(3)</SUP> <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=12># of Shares
      <BR>Issued<SUP>(4)</SUP> <BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=12>% Of Total <BR>Issued &amp;
      <BR>Outstanding <BR>(5) <BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=12>Market Price <BR>Per Share
      Prior <BR>To <BR>Transaction<SUP>(6)</SUP>
    <BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=12>Current <BR>Market
      <BR>Price Per <BR>Share<SUP>(7)</SUP>
  <BR><BR><BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>Auriga Global <BR>Investors SU, <BR>SA
      <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>Auriga <BR>Investors- <BR>Montserrat <BR>Global
      Fund <BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>Hudson Bay <BR>Master Fund <BR>LTD <BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>DAFNA <BR>LifeScience <BR>LP <BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>DAFNA <BR>LifeScience <BR>Market <BR>Neutral L.P.
      <BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>DAFNA <BR>LifeScience <BR>Select L.P. <BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>Joann <BR>Mostovoy <BR></TD>
    <TD align=center width="12%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="12%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="12%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="12%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="12%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="12%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="12%" rowSpan=3>- <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left>Sabby </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD>
    <TD align=center width="12%">- </TD></TR></TABLE></DIV>
<p align="center">33</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left rowSpan=4>Healthcare <BR>Volatility <BR>Master Fund,
      Ltd. <BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4>&nbsp;</TD>
    <TD noWrap align=center width="12%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=4><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD noWrap align=left rowSpan=7>Sabby <BR>Volatility <BR>Warrant
      <BR>Master Fund, <BR>Ltd. <BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>-
<BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>-
<BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>-
<BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>-
<BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>-
<BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>-
<BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="12%" rowSpan=7>-
  <BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>Sphera Global <BR>Healthcare <BR>Master Fund
    <BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=4>- <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>HFR HE <BR>Sphera Global <BR>Healthcare
      <BR>Master Trust <BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- </TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="12%" rowSpan=6>- <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Maxim <BR>Partners LLC </TD>
    <TD align=center width="12%" rowSpan=2>- <BR></TD>
    <TD align=center width="12%" rowSpan=2>-<BR></TD>
    <TD align=center width="12%" rowSpan=2>- <BR></TD>
    <TD align=center width="12%" rowSpan=2>- <BR></TD>
    <TD align=center width="12%" rowSpan=2>- <BR></TD>
    <TD align=center width="12%" rowSpan=2>- <BR></TD>
    <TD align=center width="12%" rowSpan=2>- <BR></TD></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<P align=justify><SUP>*</SUP>None of the Selling Security Holders or placement
agent had any business relationship or entered into any securities related
transactions with the Company prior to the Investment.<BR><SUP>(1) </SUP>Date of
the transaction.<BR><SUP>(2)</SUP>Number of shares of the class of securities
subject to the transaction that were outstanding prior to the transaction.
<SUP>(3) </SUP>Number of shares of the class of securities subject to the
transaction that were outstanding prior to the transaction and held by persons
other than the Selling Security Holders, affiliates of the Company, or
affiliates of the Selling Security Holders. <BR><SUP>(4) </SUP>Number of shares
of the class of securities subject to the transaction that were issued or
issuable in connection with the transaction. <BR><SUP>(5) </SUP>Percentage of
total issued and outstanding securities that were issued or issuable in the
transaction (assuming full issuance), with the percentage calculated by taking
the number of shares issued and outstanding prior to the applicable transaction
and held by persons other than the Selling Security Holders, affiliates of the
Company, or affiliates of the Selling Security Holders, and dividing that number
by the number of shares issued or issuable in connection with the applicable
transaction.<SUP> <BR></SUP><SUP>(6) </SUP>Market price per share of the class
of securities subject to the transaction immediately prior to the Investment
transaction (reverse split adjusted, if necessary).<BR><SUP>(7)</SUP> Current
market price per share of the class of securities subject to the transaction
(reverse split adjusted, if necessary). </P>
<P align=justify><B><I>Pre-Investment Transaction Securities held by Selling
Security Holders </I></B></P>
<P align=justify>The following table sets forth the pre-Investment transaction
securities held by the Selling Security Holders:</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=center>Selling Security <BR>Holder <BR></TD>
    <TD noWrap align=center width="16%"># of Shares <BR>Outstanding <BR>Prior
      to the </TD>
    <TD noWrap align=center width="16%"># of Shares <BR>Registered for
      <BR>Resale by </TD>
    <TD noWrap align=center width="16%"># of Shares <BR>Registered for
      <BR>Resale by </TD>
    <TD noWrap align=center width="16%"># of Shares Sold <BR>by Selling
      <BR>Security Holders </TD>
    <TD noWrap align=center width="16%"># of Shares Initially<BR>Registered for
      <BR>Resale on </TD></TR></TABLE></DIV>
<p align="center">34</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left rowSpan=10><BR><BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=10>Investment <BR>Transaction
      <BR>Held by Non- <BR>Selling Security <BR>Holders <BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=10>Selling Security
      <BR>Holders in Prior <BR>Registration <BR>Statements
      <BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=10>Selling Security
      <BR>Holders Still <BR>Held by Selling <BR>Security Holders
      <BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=10>in Registered <BR>Resales
      <BR><BR><BR><BR><BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=10>Behalf of <BR>Selling
      Security <BR>Holders in <BR>
      Investment<BR>Transaction**
    <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD noWrap align=left rowSpan=5>Auriga Global <BR>Investors SU, <BR>SA
      <BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>33,034,265*
    <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>- <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>- <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>- <BR><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=5>1,101,142
  <BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>Auriga <BR>Investors- <BR>Montserrat <BR>Global
      Fund <BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>33,034,265* <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>550,571 <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>Hudson Bay <BR>Master Fund <BR>LTD <BR></TD>
    <TD align=center width="16%" rowSpan=4>33,034,265* <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>1,651,713 <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>DAFNA <BR>LifeScience LP <BR></TD>
    <TD align=center width="16%" rowSpan=3>33,034,265* <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>852,416 <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=6>DAFNA <BR>LifeScience <BR>Market Neutral <BR>L.P.
      <BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>33,034,265* <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>- <BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=6>152,618 <BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=3>DAFNA <BR>LifeScience <BR>Select L.P. </TD>
    <TD align=center width="16%" rowSpan=3>33,034,265* <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>- <BR><BR></TD>
    <TD align=center width="16%" rowSpan=3>646,679 <BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left>Joann Mostovoy </TD>
    <TD align=center width="16%">33,034,265* </TD>
    <TD align=center width="16%">- </TD>
    <TD align=center width="16%">- </TD>
    <TD align=center width="16%">- </TD>
    <TD align=center width="16%">550,571 </TD></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=7>Sabby <BR>Healthcare <BR>Volatility <BR>Master
      Fund, <BR>Ltd. <BR><BR></TD>
    <TD align=center width="16%" rowSpan=7>33,034,265*
    <BR><BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7>- <BR><BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7>- <BR><BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7>- <BR><BR><BR><BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=7>2,202,284
    <BR><BR><BR><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>Sabby Volatility <BR>Warrant Master <BR>Fund,
      Ltd. <BR></TD>
    <TD align=center width="16%" rowSpan=4>33,034,265* <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>1,101,142 <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=4>Sphera Global <BR>Healthcare <BR>Master Fund
    <BR></TD>
    <TD align=center width="16%" rowSpan=4>33,034,265* <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>- <BR><BR><BR></TD>
    <TD align=center width="16%" rowSpan=4>2,084,682 <BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left>HFR HE Sphera </TD>
    <TD align=center width="16%">33,034,265* </TD>
    <TD align=center width="16%">- </TD>
    <TD align=center width="16%">- </TD>
    <TD align=center width="16%">- </TD>
    <TD align=center width="16%">117,602 </TD></TR></TABLE></DIV>
<p align="center">35</p>
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noShade SIZE=5>
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<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left rowSpan=4>Global <BR>Healthcare <BR>Master Trust
    <BR></TD>
    <TD noWrap align=center width="16%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="16%" rowSpan=4><BR><BR><BR></TD>
    <TD noWrap align=center width="16%"  rowSpan=4>&nbsp;</TD>
    <TD noWrap align=center width="16%" rowSpan=4><BR><BR><BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Maxim Partners <BR>LLC*** </TD>
    <TD align=center width="16%" rowSpan=2>33,034,265* <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD>
    <TD align=center width="16%"  rowSpan=2>- <BR></TD>
    <TD align=center width="16%" rowSpan=2>- <BR></TD></TR>
  <TR vAlign=top></TR></TABLE></DIV>
<P align=justify>* Prior to the Investment, the Company had 38,260,098 shares of
common stock issued and outstanding, with 5,225,832 shares directly held by
affiliates, and 0 shares held by the Selling Security Holders. </P>
<P align=justify>** Such shares of common stock underlie the Debentures issued
pursuant to the Investment transaction. Note that each of the Selling Security
Holders remains subject to conversion caps imposed by the Securities that limit
the amount of shares of common stock that they can convert/exercise into at
4.99% of the outstanding shares of common stock (except for Sphera Global
Healthcare Master Fund and HFR HE Sphera Global Healthcare Master Trust which
have a 9.99% limitation).</P>
<P align=justify>*** The Company has not submitted for registration any shares
underlying the Securities held by Maxim Partners LLC that were issued in the
Investment transaction. </P>
<P align=center>36</P>
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<!--$$/page=--><A name=page_41></A>
<P align=center><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF <BR>OPERATIONS</B> </P>
<P align=justify>The following discussion should be read in conjunction with our
audited consolidated financial statements and notes thereto for the fiscal year
ended September 30, 2014 included elsewhere in this prospectus. The following
Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations contains &#147;forward-looking statements.&#148; Forward-looking statements are
generally written in the future tense and/or are preceded by words such as
&#147;may,&#148; &#147;should,&#148; &#147;forecast,&#148; &#147;could,&#148; &#147;expect,&#148; &#147;suggest,&#148; &#147;believe,&#148;
&#147;anticipate,&#148; &#147;intend,&#148; &#147;plan,&#148; or other similar words. The forward-looking
statements contained in this prospectus involve a number of risks and
uncertainties, many of which are outside of our control. Factors that could
cause actual results to differ materially from projected results include, but
are not limited to, those discussed in &#147;Risk Factors&#148; elsewhere in this
prospectus. Readers are expressly advised to review and consider those Risk
Factors, which include risks associated with (1) our ability to successfully
conduct clinical and pre-clinical trials for our product candidates, (2) our
ability to obtain required regulatory approvals to develop and market our
product candidates, (3) our ability to raise additional capital on favorable
terms, (4) our ability to execute our development plan on time and on budget,
(5) our ability to obtain commercial partners, (6) our ability, whether alone or
with commercial partners, to successfully commercialize any of our product
candidates that may be approved for sale, and (7) our ability to identify and
obtain additional product candidates. Although we believe that the assumptions
underlying the forward-looking statements contained in this prospectus are
reasonable, any of the assumptions could be inaccurate, and therefore there can
be no assurance that such statements will be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by us or any other person that the results or conditions
described in such statements or our objectives and plans will be achieved.
Furthermore, past performance in operations and share price is not necessarily
indicative of future performance. Except as required by applicable laws
including the securities laws of the United States, we disclaim any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. </P>
<P align=justify><B><I>Our Business </I></B></P>
<P align=justify>We are a clinical stage biopharmaceutical company engaged in
the development of drug candidates to treat Alzheimer&#146;s disease, other central
nervous system (CNS) diseases, and various types of cancer. Our lead compounds
ANAVEX 2-73 and ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
(Aricept&#174;) are being developed to treat Alzheimer&#146;s disease and potentially
other central nervous system (CNS) diseases.</P>
<P align=justify>In December 2014 a Phase 2a clinical trial was initiated for
ANAVEX 2-73, which is being evaluated for the treatment of Alzheimer&#146;s disease.
The randomized trial is designed to assess the safety and exploratory efficacy
of ANAVEX 2-73 alone as well as in combination with donepezil (ANAVEX PLUS) in
patients with mild to moderate Alzheimer&#146;s disease. ANAVEX 2-73 targets sigma-1
and muscarinic receptors, which have been shown in preclinical studies to reduce
stress levels in the brain and to reverse the pathological hallmarks observed in
Alzheimer&#146;s disease. ANAVEX 2-73 showed no serious adverse events in a
previously performed Phase 1 study. In pre-clinical studies ANAVEX 2-73
demonstrated anti-amnesic and neuroprotective properties in various animal
models including the transgenic mouse model Tg2576. </P>
<P align=justify>We intend to identify and initiate discussions with potential
partners in the next 12 months. Further, we may acquire or develop new
intellectual property and assign, license, or otherwise transfer our
intellectual property to further our goals.</P>
<P align=justify><B><I>Recent Corporate Developments </I></B></P>
<P align=justify>Since the commencement of our fourth quarter ended September
30, 2014, we have experienced the following significant corporate
developments:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left>
      <LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>On October 22, 2014, we entered into a Securities
      Purchase Agreement (the &#147;Purchase Agreement&#148;) with Lincoln Park Capital
      Fund, LLC, a long time investor of our company, for an equity investment
      of $500,000 at a price of $0.25 per unit. Pursuant to the terms of the
      Purchase Agreement, we agreed to sell, and Lincoln Park agreed to
      purchase, 2,000,000 shares of common stock. In addition, we agreed to
      issue to Lincoln Park an aggregate of 4,000,000 stock purchase warrants,
      of which 2,000,000 are exercisable at $0.30 per share and 2,000,000 are
      exercisable at $0.42 per share, each for a period of five years, subject
      to adjustment for stock splits, combinations, and reclassification events.
      </P></TD></TR>
      <TR vAlign=top>
    <TD></TD>
    <TD align=left width="5%"><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>On November 3, 2014, we announced our Company has
      received regulatory approval from the Ethics Committee in Australia to
      initiate a Phase 2a clinical trial of our proprietary compound, ANAVEX
      2-73, as well as ANAVEX PLUS, the combination of ANAVEX 2-73 and donepezil
      (Aricept&#174;). The approved Phase 2a clinical trial is the first study of
      ANAVEX 2-73 in Alzheimer&#146;s patients. </P></TD></TR>
  <TR vAlign=top>
    <TD></TD>
    <TD align=left width="5%"><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Effective as of December 12, 2014, our Company&#146;s common
      stock began being quoted on the OTC Market Group&#146;s OTCQX tier under the
      Company&#146;s existing stock ticker &#147;AVXL&#148;. The OTCQX is the highest tier of
the OTC Market Group&#146;s trading marketplace. </P></TD></TR></TABLE>
<p align="center">37</p>
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<P align=justify><B>RESULTS OF OPERATIONS - FISCAL YEAR ENDED SEPTEMBER 30, 2014</B></P>
<P align=justify><B><I>Revenue </I></B></P>
<P align=justify>We have not earned any revenues since our inception on January
23, 2004. We are still in the development stage and do not anticipate earning
any revenues until we can establish an alliance with other companies to develop,
co-develop, license, acquire or market our products. </P>
<P align=justify><B><I>Operating Expenses</I></B> </P>
<P align=justify>Our operating expenses for the year ended September 30, 2014
were $2,968,975, which represents an increase of $831,608 compared to $2,137,367
for the year ended September 30, 2013. The increase was mainly attributable to
(i) an increase in investor relations expenses and other professional fees and
bonus payment as a result of our capital raising efforts related to a
$10,000,000 convertible Debenture financing, which resulted in one-time
compensation charges in the aggregate amount of $1,010,000, including a non-cash
charge of $610,000 for the vesting of common stock under our President&#146;s
employment agreement and (ii) an increase in research and development activities
in the current year, including clinical trial work, as a result of funding
secured.</P>
<P align=justify><B><I>Other income (expenses) </I></B></P>
<P align=justify>The aggregate amount in the other income (expense) for the year
ended September 30, 2014, amounted to $(8,399,378) as compared to $(1,562,679)
for the comparable year ended September 30, 2013. The largest single increase in
this loss was as a result of certain non-cash, non-operational accounting
charges related to certain amendments to the Debentures. </P>
<P align=justify>Generally accepted accounting principles in the United States
(US GAAP) accounting rules deemed the amendments to the terms of the Debentures
to require extinguishment accounting to be applied to them. This resulted in a
net non-cash, non-operational accounting charge being recorded in our
consolidated statement of operations of $8,099,137, net of the recovery of a
finance charge of $459,912, being the total accrued liquidating damages owed to
the holders of the convertible debentures at the date of the amendment, though
these amounts were satisfied through the modification of the conversion
price.</P>
<P align=justify>Further, we do not have a sufficient number of authorized and
unissued shares of common stock available to satisfy the additional shares that
could be issued under the terms of the Debentures. As a result, US GAAP
accounting rules require that we account for such shares underlying the
Debentures as derivative liabilities. It is the requirement of these accounting
rules, that we re-measure derivative financial instruments to their respective
fair values at each reporting period, with the changes in fair value being
reported as a non-operating item on the consolidated statement of operations.
Consequently, we were required to record non-cash, non-operational gains related
to the change in the calculated value of derivative liabilities of $2,955,000
for the year ended September 30, 2014.</P>
<P align=center>38</P>
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<P align=justify>These accounting charges did not result in an actual cash
impact on our Company. Removing the effect of all financing related accelerated
charges and adjustments to our consolidated statement of operations, results in
a net loss of $(2,760,714), or $(0.09) per share, as shown below:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="10%">As Reported </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="10%">Net impact </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=center width="10%">Adjusted </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left bgColor=#e6efff>Operating expenses </TD>
    <TD vAlign=bottom noWrap align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="2%"
bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>General and administrative </TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="10%">&nbsp;2,236,580 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="10%">&nbsp;2,236,580 </TD>
  <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left bgColor=#e6efff>Research and
      development </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="10%" bgColor=#e6efff>732,395 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="10%" bgColor=#e6efff>732,395 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Total operating expenses </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(2,968,975</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">- </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(2,968,975</TD>
    <TD vAlign=bottom align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Other income (expenses) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Interest and finance expenses, net </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(7,089</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(7,089</TD>
    <TD vAlign=bottom align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Gain on settlement of
      accounts payable </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>199,655 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>199,655 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Financing related charges and adjustments </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(8,624,986</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">8,607,639 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">(17,347</TD>
    <TD vAlign=bottom align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Foreign exchange loss </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>33,042 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%" bgColor=#e6efff>33,042 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Total other income (expenses), net </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">(8,399,378</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">8,607,639 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">208,261 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Net loss and comprehensive
      loss for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>&nbsp;(11,368,353</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>&nbsp;8,607,639 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>&nbsp;(2,760,714</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Loss per share - diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">&nbsp;(0.30</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="10%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">&nbsp;(0.09</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Net loss and comprehensive
      loss - GAAP basis </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="10%"
    bgColor=#e6efff>&nbsp;(11,368,353</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Add back: </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Non-cash financing related
      charged and adjustments </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%" bgColor=#e6efff>8,607,639 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Net loss and comprehensive loss - Non-GAAP
      basis </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="10%">&nbsp; </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="10%">&nbsp;(2,760,714</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">) </TD></TR></TABLE>
<P align=justify><B><I>Liquidity and Capital Resources</I></B> </P>
<P align=justify><B><I>Working Capital </I></B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap width="5%" >&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD width="1%" align=left vAlign=bottom noWrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right vAlign=bottom noWrap style="BORDER-BOTTOM: #000000 1px solid"><B>2014</B> </TD>
    <TD width="2%" align=left vAlign=bottom noWrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left vAlign=bottom noWrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right vAlign=bottom noWrap style="BORDER-BOTTOM: #000000 1px solid"><B>2013</B> </TD>
  <TD width="2%" align=left vAlign=bottom noWrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap width="5%">&nbsp;</TD>
    <TD vAlign=bottom align=left bgColor=#e6efff>Current Assets </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%"
      bgColor=#e6efff>&nbsp;7,351,255 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%"
      bgColor=#e6efff>&nbsp;393,449 </TD>
  <TD vAlign=bottom align=left width="2%"
bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=bottom align=left>Current Liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">1,441,149 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">1,952,660 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=bottom align=left bgColor=#e6efff>Working Capital (Deficiency)
    </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>&nbsp;5,910,106
    </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%"
    bgColor=#e6efff>&nbsp;(1,559,211</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>)
</TD></TR></TABLE>
<P align=justify>As of September 30, 2014, we had $7,262,138 in cash, an
increase of $6,917,064 from September 30, 2013. The principal reason for this
increase is due to cash received in respect of the issuance of the Debentures in
the aggregate principal amount of $10,000,000 that were issued in the current
year. We intend to use the funds from these Debentures to implement our plan of
operation of researching and developing our compounds, the related patents and
any further intellectual property we may acquire. We intend to use the majority
of our capital resources to complete the next clinical trial for ANAVEX 2-73 and
ANAVEX PLUS, and to perform work necessary to prepare for further clinical
development.</P>
<P align=justify><B>Cash Flows</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>2014</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%"><B>2013</B> </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Cash flows used in
      operating activities </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%"
      bgColor=#e6efff>&nbsp;(2,659,379</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%"
      bgColor=#e6efff>&nbsp;(777,573</TD>
  <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=left>Cash flows used in investing
      activities </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%">(3,015</TD>
    <TD vAlign=bottom noWrap align=left width="2%">) </TD>
    <TD vAlign=bottom noWrap align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom noWrap align=right width="12%">- </TD>
    <TD vAlign=bottom noWrap align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left bgColor=#e6efff>Cash flows provided by
      financing activities </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>9,579,458 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1,111,285 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Increase in cash </TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;6,917,064 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;333,712 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=justify><I>Cash flow used in operating activities </I></P>
<P align=justify>Our cash used in operating activities for the year ended
September 30, 2014 was $2,659,379 compared to $777,573 used in operating
activities for the comparative year ended September 30, 2013. The increase in
cash used in operating activities was primarily as a result of the increased net
loss for the current period as a result of an increase in corporate activities
and research and development following the Debenture financing in March,
2014.</P>
<P align=center>39</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_44></A>
<P align=justify><I>Cash used in investing activities</I> </P>
<P align=justify>Cash used in investing activities was $3,015 in the current
year ended September 30, 2014. This is as a result of small equipment purchases
in the current year. </P>
<P align=justify><I>Cash flow provided by financing activities </I></P>
<P align=justify>Our cash provided by financing activities for the year ended
September 30, 2014 was $9,579,458, mostly attributable to cash received from the
issuance of the Debentures in the aggregate principal amount of $10,000,000,
less related fees and expenses of $788,712 incurred in connection with the
closing of these Debentures. We also received cash from the issuance of common
shares under the Purchase Agreement with Lincoln Park Capital Fund, LLC
(described under <I>Other Financing</I> below). </P>
<P align=justify>In the comparative year ended September 30, 2013, we had cash
inflows of $1,111,285 from activities related to the issuance of short term debt
and a private placement equity financings.</P>
<P align=justify><B><I>Results of Operations</I></B> <i><b>- Three Months Ended December 31, 2014</b></i></P>
<P align=justify><I>Revenue</I></P>
<P align=justify>We have not earned any revenues since our inception on January
  23, 2004. We do not anticipate earning any revenues until we can establish an
  alliance with other companies to develop, co-develop, license, acquire or market
  our products. </P>
<P align=justify><I>Operating Expenses</I></P>
<P align=justify><B>Three months ended December 31, 2014 compared to three
  months ended December 31, 2013 </B></P>
<P align=justify>Our operating expenses for the three months ended December 31,
  2014 were $770,678, which represents an increase of $461,070 compared to
  $309,608 for the three month period ended December 31, 2013. The increase was
  mainly attributable to an increase in research and development expenses of
  $313,445 related to our Phase 2a clinical trial for ANAVEX 2-73, which commenced
  in December, 2014. We expect our research and development expenses will continue
  to increase over the remaining quarters in the current fiscal year as a result
  of this clinical trial and other auxiliary research and development activities.
  We continue to target potential research partners to further advance our
  pipeline compounds. </P>
<P align=justify><I>Other income </I></P>
<P align=justify>The aggregate amount in the other income for the three month
  period ended December 31, 2014, amounted to $(16,040) as compared to $668,245
  for the comparable three month period ended December 31, 2013. The decrease in
  other expenses was mainly as a result of a decrease in financing related income
  of $683,000 for the three months ended December 31, 2013, related to a change in
  the calculated fair value over the period of stock purchase warrants being
  accounted for as derivative liabilities in accordance with US GAAP.</P>
<P align=justify><B><I>Liquidity and Capital Resources</I></B></P>
<P align=center>40</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_10></A>
<P align=justify><I>Working Capital </I></P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD
      width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2014</B> </TD>
      <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>September 30, 2014</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Current Assets </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;7,048,500 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;7,351,255 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Current Liabilities </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">1,418,152 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">1,441,149 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Working Capital </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;5,630,348 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>&nbsp;5,910,106 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>As of December 31, 2014, we had $6,980,924 in cash, a decrease
  of $281,214 from September 30, 2014. The principal reason for this decrease is
  due to cash used in operations and for the advancement of clinical trial work,
  offset by funds received during the quarter in respect of a private placement.
  We intend to use the majority of our capital resources to complete the next
  clinical trial for ANAVEX 2-73 and ANAVEX PLUS, and to perform work necessary to
  prepare for further clinical development. </P>
<P align=justify><B><I>Cash Flows</I></B></P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD colspan="4" align=center nowrap><B>Three months ended December 31,</B> </TD>
      <TD align=right width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD width="17%" align=center nowrap><B>2014</B> </TD>
      <TD width="2%" align=center nowrap >&nbsp;</TD>
      <TD width="1%" align=center nowrap >&nbsp;</TD>
      <TD width="17%" align=center nowrap><B>2013</B> </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Cash flows used in operating
        activities </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;(693,070</TD>
      <TD align=left width="2%"  bgColor=#e6efff>) </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;(434,990</TD>
      <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Cash flows from investing activities </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">(2,327</TD>
      <TD align=left width="2%" >) </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Cash flows from financing
        activities </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>411,856 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>188,170 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Decrease in cash </TD>
      <TD align=left width="1%" >$</TD>
      <TD align=right width="17%">&nbsp;(281,214</TD>
      <TD align=left width="2%" >) </TD>
      <TD align=left width="1%" >$</TD>
      <TD align=right width="17%">&nbsp;(249,147</TD>
      <TD align=left width="2%" >) </TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify><I>Cash flow used in operating activities </I></P>
<P align=justify>Our cash used in operating activities for the period ended
  December 31, 2014 was $693,070 compared to $434,990 used in operating activities
  for the comparative period ended December 31, 2013. The increase in cash used in
  operating activities was primarily as a result of the increased research and
  development activities as a result of the commencement of clinical trial work. </P>
<P align=justify><I>Cash used in investing activities</I></P>
<P align=justify>Cash used in investing activities was $Nil in the current
  period ended December 31, 2014 compared to $2,327 in the comparative period.
  This is as a result of a small equipment purchase in the comparative period.</P>
<P align=justify><I>Cash flow provided by financing activities </I></P>
<P align=justify>Our cash used in financing activities for the period ended
  December 31, 2014 was $411,856, mostly attributable to cash received from the
  issuance of common shares under the Subscription Agreement with Lincoln Park
  Capital Fund, LLC (described above under <I>Recent Corporate
    Developments</I>).</P>
<P align=justify>In the comparative period ended December 31, 2013, we had cash
  inflows of $188,170 from activities related to the issuance of common shares
  under the Purchase Agreement (described below under <I>Other Financing</I>). </P>
<P align=justify><B>Other Financing</B> </P>
<P align=justify>On July 5, 2013, we entered into a Purchase Agreement (the &ldquo;Purchase Agreement&rdquo;) with Lincoln Park Capital Fund, LLC (&ldquo;<u>Lincoln Park</u>&rdquo;), pursuant to which Lincoln Park committed to purchase up to $10,000,000 of our common stock. Concurrently with the execution of the Purchase Agreement, we issued 341,858 shares of our common stock to Lincoln Park as a fee for its commitment to purchase shares of our common stock under the Purchase Agreement. The purchase shares that may be sold pursuant to the Purchase Agreement may be sold by us to Lincoln Park at our discretion from time to time over a 25-month period commencing after the SEC declared effective the related registration statement.</P>
<P align=justify>The Company has the right, in its sole discretion over a
25-month period, to sell to Lincoln Park up to the additional aggregate
commitment of $9.9 Million of shares of common stock. There are no upper limits
on the per share price that Lincoln Park may pay to purchase such common stock.
Furthermore, the Company controls the timing and amount of any future sales, if
any, of shares of common stock to Lincoln Park except that, pursuant to the
terms of the Purchase Agreement, we would be unable to sell shares to Lincoln
Park if and when the closing sale price of our common stock is below $0.50 per
share, subject to adjustment as set forth in the Purchase Agreement. Lincoln
Park has no right to require any sales and is obligated to purchase common stock
as directed by the Company.</P>
<P align=justify>Other than our rights related to the Lincoln Park financing,
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 we are not able to obtain the additional financing on a timely basis,
if and when it is needed, we will be forced to delay or scale down some or all
of our research and development activities or perhaps even cease the operation
of our business.</P>
<P align=justify>We expect that we will be able to fund our operations for the
next 12 months through existing cash on hand and through equity and debt
financings in the future. If we raise additional financing by issuing equity
securities, our existing stockholders&#146; ownership will be diluted. Obtaining
commercial loans, assuming those loans would be available, will increase our
liabilities and future cash commitments.</P>
<P align=justify><B><I>Off-Balance Sheet Arrangements </I></B></P>
<P align=justify>We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to our
stockholders.</P>
<P align=center>41</P>
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<P align=justify><B>APPLICATION OF CRITICAL ACCOUNTING POLICIES </B></P>
<P align=justify>Our financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles in the United States.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses. These estimates and assumptions are affected by management&#146;s
application of accounting policies. We believe that understanding the basis and
nature of the estimates and assumptions involved with the following aspects of
our financial statements is critical to an understanding of our financials.</P>
<P align=justify>We base our assumptions and estimates on historical experience
and other sources that we believe to be reasonable at the time. Actual results
may vary from our estimates due to changes in circumstances, weather, politics,
global economics, mechanical problems, general business conditions and other
factors. Our significant estimates are related to the valuation of warrants and
options.</P>
<P align=justify>There are accounting policies that we believe are significant
to the presentation of our financial statements. The most significant of these
accounting policies relates to the accounting for our research and development
expenses, stock-based compensation expense and derivative liabilities. </P>
<P align=justify><B><I>Research and Development Expenses </I></B></P>
<P align=justify>Research and developments costs are expensed as incurred. These
expenses are comprised of the costs of our proprietary research and development
efforts, including salaries, facilities costs, overhead costs and other related
expenses as well as costs incurred in connection with third-party collaboration
efforts. Milestone payments made by us to third parties are expensed when the
specific milestone has been achieved. </P>
<P align=justify>In addition, we incur expenses in respect of the acquisition of
intellectual property relating to patents and trademarks. The probability of
success and length of time in developing commercial applications of the drugs
subject to the acquired patents and trademarks is difficult to determine and
numerous risks and uncertainties exist with respect to the timely completion of
the development projects. There is no assurance the acquired patents and
trademarks will ever be successfully commercialized. Due to these risks and
uncertainties, we expense the acquisition of patents and trademarks. </P>
<P align=justify><B><I>Stock-based Compensation </I></B></P>
<P align=justify>We account for all stock-based payments and awards under the
fair value based method.</P>
<P align=justify>Stock-based payments to non-employees are measured at the fair
value of the consideration received, or the fair value of the equity instruments
issued, or liabilities incurred, whichever is more reliably measurable. The fair
value of stock-based payments to non-employees is periodically re-measured until
the counterparty performance is complete, and any change therein is recognized
over the vesting period of the award and in the same manner as if we had paid
cash instead of paying with or using equity based instruments. The cost of the
stock-based payments to non-employees that is fully vested and non-forfeitable
as at the grant date is measured and recognized at that date, unless there is a
contractual term for services in which case such compensation would be amortized
over the contractual term. </P>
<P align=justify>We account for the granting of share purchase options to
employees using the fair value method whereby all awards to employees will be
recorded at fair value on the date of the grant. The fair value of all share
purchase options are expensed over their vesting period with a corresponding
increase to additional capital surplus. Upon exercise of share purchase options,
the consideration paid by the option holder, together with the amount previously
recognized in additional capital surplus, is recorded as an increase to share
capital.</P>
<P align=justify>We use the Black-Scholes option valuation model to calculate
the fair value of share purchase options at the date of the grant. Option
pricing models require the input of highly subjective assumptions, including the
expected price volatility. Changes in assumptions can materially affect the fair
value estimate and therefore the Black-Scholes model does not necessarily
provide a reliable single measure of the fair value of our share purchase
options. </P>
<P align=center>42</P>
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<P align="justify">
<B><I>Derivative Liabilities </I></B> </P>
<P align="justify">
From time to time, we may issue convertible promissory notes which include embedded conversion options which, dependent on their specific contractual terms, may be required to be accounted for as separate derivative liabilities. These liabilities
are required to be measured at fair value. These instruments are then adjusted to reflect fair value at each period end. Any increase or decrease in the fair value is recorded in results of operations as change in fair value of derivative
liabilities. In determining the appropriate fair value, we use the binomial pricing model because these instruments are not quoted on an active market. </P>
<P align="justify">
Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in assumptions can materially affect the fair value estimate and therefore the binomial model does not necessarily provide a
reliable single measure of the fair value of these instruments.</P>
<P align="justify">
<B><I>Recent Accounting Pronouncements</I></B> </P>
<P align="justify">
In June 2014, the FASB issued Accounting Standards Updated No. 2014-10, "Development Stage Entities&#148; (&#147;ASU 2014-10&#148;) which removes the definition of a development stage entity from the Master Glossary of the Accounting Standards
Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the update eliminates the requirements for development stage entities to (1) present
inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the
entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. During the year ended September 30, 2014, we elected to early adopt ASU
2014-10. The adoption of this ASU allowed our company to remove the inception to date information and all references to development stage.</P>
<P align="justify">
<B><I>Recent Accounting Pronouncements Not Yet Adopted</I></B> </P>
<P align="justify">
In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period ("ASU 2014-12"). ASU 2014-12 requires that a
performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the
award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for
which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. We are currently evaluating the impact this
guidance on our financial condition, results of operations and cash flows.</P>
<P align="justify">
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity&#146;s Ability to Continue as a Going Concern (&#147;ASU 2014-15&#148;). ASU 2014-15 will explicitly require management to assess an entity&#146;s ability
to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016. We are currently evaluating the
impact this guidance on our financial condition, results of operations and cash flows.</P>
<P align="justify">
In May, 2014, the FASB and the International Accounting Standards Board (IASB) issued a converged standard on revenue recognition from contracts with customers, ASU 2014-09 (Topic 606 and IFRS 15). This standard will supersede nearly all existing
revenue recognition guidance. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is currently evaluating the impact this guidance will have on its financial condition,
results of operations and cash flows. </P>
<P align="justify">
Other than noted above, we do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.</P>
<P align="center">43</P>
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<P align=center><B>BUSINESS</B> </P>
<P align=justify><B><I>Our Current Business</I></B> </P>
<P align=justify>We are a clinical stage biopharmaceutical company engaged in
the development of drug candidates to treat Alzheimer&#146;s disease, other central
nervous system (CNS) diseases, and various types of cancer. Our lead compounds
ANAVEX 2-73 and ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
(Aricept), are being developed to treat Alzheimer&#146;s disease and potentially
other central nervous system (CNS) diseases.</P>
<P align=justify>In December 2014 a Phase 2a clinical trial was initiated for
ANAVEX 2-73, which is being evaluated for the treatment of Alzheimer&#146;s disease.
The randomized trial is designed to assess the safety and exploratory efficacy
of ANAVEX 2-73 alone as well as in combination with donepezil (ANAVEX PLUS) in
patients with mild to moderate Alzheimer&#146;s disease. ANAVEX 2-73 targets sigma-1
and muscarinic receptors, which have been shown in preclinical studies to reduce
stress levels in the brain and to reverse the pathological hallmarks observed in
Alzheimer&#146;s disease. ANAVEX 2-73 showed no serious adverse events in a
previously performed Phase 1 study. In pre-clinical studies, ANAVEX 2-73
demonstrated anti-amnesic and neuroprotective properties in various animal
models including the transgenic mouse model Tg2576.</P>
<P align=justify>We intend to identify and initiate discussions with potential
partners in the next 12 months. Further, we may acquire or develop new
intellectual property and assign, license, or otherwise transfer our
intellectual property to further our goals.</P>
<P align=justify><B><I>Our Pipeline</I></B></P>
<P align=justify>Our pipeline includes one clinical drug candidate and several
compounds in different stages of pre-clinical study.</P>
<P align=justify>Our proprietary SIGMACEPTOR&#153; Discovery Platform produced small
molecule drug candidates with unique modes of action, based on our understanding
of sigma receptors. Sigma receptors may be targets for therapeutics to combat
many human diseases, including Alzheimer&#146;s disease. When bound by the
appropriate ligands, sigma receptors influence the functioning of multiple
biochemical signals that are involved in the pathogenesis (origin or
development) of disease.</P>
<P align=justify>Compounds that have been subjects of our research include the
following:</P>
<P align=justify><B>ANAVEX 2-73</B></P>
<P align=justify>ANAVEX 2-73 may offer a disease-modifying approach in
Alzheimer&#146;s disease (AD) by using ligands that activate sigma-1 receptors.</P>
<P align=justify>In AD animal models, ANAVEX 2-73 has shown pharmacological,
histological and behavioral evidence as a potential neuroprotective,
anti-amnesic, anti-convulsive and anti-depressive therapeutic agent, due to its
potent affinity to sigma-1 receptors and moderate affinities to M1-4 type
muscarinic receptors. In addition, ANAVEX 2-73 has shown a potential dual
mechanism which may impact both amyloid and tau pathology. In a transgenic AD
animal model Tg2576 ANAVEX 2-73 induced a statistically significant
neuroprotective effect against the development of oxidative stress in the mouse
brain, as well as significantly increased the expression of functional and
synaptic plasticity markers that is apparently amyloid-beta independent. It also
statistically alleviated the learning and memory deficits developed over time in
the animals, regardless of sex, both in terms of spatial working memory and
long-term spatial reference memory.</P>
<P align=justify>Based on the results of pre-clinical testing, we initiated and
completed a Phase 1 single ascending dose (SAD) clinical trial of ANAVEX 2-73 in
2011. In this Phase 1 SAD trial, the maximum tolerated single dose was defined
per protocol as 55-60 mg. This dose is above the equivalent dose shown to have
positive effects in mouse models of AD. There were no significant changes in
laboratory or electrocardiogram (ECG) parameters. ANAVEX 2-73 was well tolerated
below the 55-60 mg dose with only mild adverse events in some subjects. Observed
adverse events at doses above the maximum tolerated single dose included
headache and dizziness, which were moderate in severity and reversible. These
side effects are often seen with drugs that target central nervous system (CNS)
conditions, including AD.</P>
<P align=center>44</P>
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<P align=justify>The ANAVEX 2-73 Phase 1 SAD trial was conducted as a
randomized, placebo-controlled study. Healthy male volunteers between the ages
of 18 and 55 received single, ascending oral doses over the course of the trial.
Study endpoints included safety and tolerability together with pharmacokinetic
parameters. Pharmacokinetics includes the absorption and distribution of a drug,
the rate at which a drug enters the blood and the duration of its effect, as
well as chemical changes of the substance in the body. This study was conducted
in Germany in collaboration with ABX-CRO, a clinical research organization that
has conducted several Alzheimer&#146;s disease studies, and the Technical University
of Dresden.</P>
<P align=justify><B>ANAVEX PLUS</B></P>
<P align=justify>ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
(Aricept&#174;) is a potential novel combination drug for Alzheimer&#146;s disease.
Aricept&#174; (donepezil) is now generic. ANAVEX 2-73 showed in combination with
donepezil an unexpected and clear synergic effect of memory improvement by up to
80% in animal models. A patent application was filed in the US for the
combination of donepezil and ANAVEX 2-73 and if granted would give patent
protection at least until 2033.</P>
<P align=justify>In a humanized calibrated cortical network computer model the
unexpected pre-clinical synergy between ANAVEX 2-73 and donepezil was confirmed
and ANAVEX PLUS showed an anticipated ADAS-Cog response of 7 points at 12 weeks
and 5.5 points at 26 weeks, which represents more than 2x the ADAS-Cog of
donepezil alone.</P>
<P align=justify><B>ANAVEX 3-71 </B></P>
<P align=justify>ANAVEX 3-71, previously named AF710B is a preclinical drug
candidate with a novel mechanism of action via sigma-1 receptor activation and
M1 muscarinic allosteric modulation, which has shown to enhance neuroprotection
and cognition in Alzheimer's disease. ANAVEX 3-71 is a CNS-penetrable
mono-therapy that bridges treatment of both cognitive impairments with disease
modifications. It is highly effective in very small doses against the major
Alzheimer's hallmarks in transgenic (3xTg-AD) mice, including cognitive
deficits, amyloid and tau pathologies, and also has beneficial effects on
inflammation and mitochondrial dysfunctions. ANAVEX 3-71 indicates extensive
therapeutic advantages in Alzheimer's and other protein-aggregation-related
diseases given its ability to enhance neuroprotection and cognition via sigma-1
receptor activation and M1 muscarinic allosteric modulation.</P>
<P align=justify><B>ANAVEX 1-41 </B></P>
<P align=justify>ANAVEX 1-41 is a sigma-1 agonist. Pre-clinical tests revealed
significant neuroprotective benefits (i.e., protects nerve cells from
degeneration or death) through the modulation of endoplasmic reticulum,
mitochondrial and oxidative stress, which damages and destroys cells and is
believed by some scientists to be a primary cause of AD. In addition, in animal
models, ANAVEX 1-41 prevented the expression of caspase-3, an enzyme that plays
a key role in apoptosis (programmed cell death) and loss of cells in the
hippocampus, the part of the brain that regulates learning, emotion and memory.
These activities involve both muscarinic and sigma-1 receptor systems through a
novel mechanism of action. </P>
<P align=justify><B>ANAVEX 1037 </B></P>
<P align=justify>ANAVEX 1037 is designed for the treatment of prostate cancer.
It is a low molecular weight, synthetic compound exhibiting high affinity for
sigma-1 receptors at nanomolar levels and moderate affinity for sigma-2
receptors and sodium channels at micromolar levels. In advanced pre-clinical
studies, this compound revealed antitumor potential with no toxic side effects.
It has also been shown to selectively kill human cancer cells without affecting
normal/healthy cells and also to significantly suppress tumor growth in
immune-deficient mice models. Scientific publications describe sigma receptor
ligands positively, highlighting the possibility that these ligands may stop
tumor growth and induce selective cell death in various tumor cell lines. Sigma
receptors are highly expressed in different tumor cell types. Binding by
appropriate sigma-1 and/or sigma-2 ligands can induce selective apoptosis. In
addition, through tumor cell membrane reorganization and interactions with ion
channels, our drug candidates may play an important role in inhibiting the
processes of metastasis (spreading of cancer cells from the original site to
other parts of the body), angiogenesis (the formation of new blood vessels) and
tumor cell proliferation.</P>
<P align=center>45</P>
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<P align=justify>Our compounds are in the pre-clinical and clinical testing
stages of development, and there is no guarantee that the activity demonstrated
in pre-clinical models will be shown in human testing.</P>
<P align=justify><B><I>Our Target Indications</I></B></P>
<P align=justify>We have developed compounds with potential application to two
broad categories and several specific indications. The two categories are
diseases of the central nervous system, and cancer. Specific indications
include: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Alzheimer&#146;s disease &#150; In 2014, an estimated 5.2 million
      Americans are suffering from Alzheimer&#146;s disease. The Alzheimer&#146;s
      Association&#174; reports that by 2025, 7.1 million Americans will be afflicted
      by the disease, a 40 percent increase from currently affected patients.
      Medications on the market today treat only the symptoms of AD and do not
      have the ability to stop its onset or its progression. There is an urgent
      and unmet need for both a disease modifying cure for Alzheimer&#146;s disease
      as well as for better symptomatic treatments. </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Depression - Depression is a major cause of morbidity
      worldwide according to the World Health Organization (WHO). Pharmaceutical
      treatment for depression is dominated by blockbuster brands, with the
      leading nine brands accounting for approximately 75% of total sales.
      However, the dominance of the leading brands is waning, largely due to the
      effects of patent expiration and generic competition. Our market research
      leads us to believe that the worldwide market for pharmaceutical treatment
      of depression exceeds $11 billion annually. </P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>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, epilepsy affects 2.2 million Americans. Today,
      epilepsy is often controlled, but not cured, with medication that is
      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 generations anti-epileptic
      drugs. Decision Resources, one of the world&#146;s leading research and
      advisory firms for pharmaceutical and healthcare issues, finds that the
      epilepsy market will increase from $2.9 billion in 2011 to nearly$3.7
      billion in 2016. </P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="90%">
      <P align=justify></P></TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD valign="top"><LI> </LI></TD>
    <TD width="90%">
      <P align=justify>Neuropathic Pain &#150; We define neuralgia, or neuropathic
      pain, as pain that is not related to activation of pain receptor cells in
      any part of the body. Neuralgia is more difficult to treat than some other
      types of pain because it does not respond well to normal pain medications.
      Special medications have become more specific to neuralgia and typically
      fall under the category of membrane stabilizing drugs or antidepressants.
      Our market research leads us to believe the worldwide market for
      pharmaceutical treatment of neuropathic pain exceeds $5 billion annually.
      </P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="90%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Malignant Melanoma - Predominantly a skin cancer,
      malignant melanoma can also occur in melanocytes found in the bowel and
      the eye. Malignant melanoma accounts for 75% of all deaths associated with
      skin cancer. The treatment includes surgical removal of the tumor,
      adjuvant treatment, chemo and immunotherapy, or radiation therapy.
      According to IMS Health the worldwide Malignant Melanoma market is
      expected to grow from about $900 million in 2012 to $4.4 billion by 2022.
      </P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="90%">
      <P align=justify></P></TD></TR>
  <TR vAlign=top>
    <TD width="5%"></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Prostate Cancer &#150; Specific to men, prostate cancer is a
      form of cancer that develops in the prostate, a gland in the male
      reproductive system. The 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 from $8.1
      billion in 2012 to nearly $18.6 billion in 2017 according to BCC Research.
      </P></TD></TR></TABLE>
<p align="center">46</p>
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<TABLE
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cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="5%"><LI> </LI></TD>
    <TD align=left width="90%">
      <P align=justify>Pancreatic Cancer - Pancreatic cancer is a malignant
      neoplasm of the pancreas. In the United States approximately 45,000 new
      cases of pancreatic cancer will be diagnosed this year and approximately
      38,000 patients will die as a result of their cancer. Our market research
      leads us to believe that the market for the pharmaceutical treatment of
      pancreatic cancer will exceed $1.2 billion by 2015.
</P></TD></TR></TABLE>
<P align=justify><B><I>Competition</I></B></P>
<P align=justify>The pharmaceutical industry is intensely competitive.</P>
<P align=justify>At this time, we view our competition as biomedical development
companies that are trying to discover and develop compounds to be used in the
treatment of Alzheimer&#146;s disease, and those companies already doing so. Those
companies include Prana Biotechnology Ltd. (NASDAQ:PRAN), Perrigo Company PLC
(NYSE:PRGO), Pfizer Inc. (NYSE:PFE), Actavis Plc. (NYSE:ACT), Novartis AG
(NYSE:NVS), GlaxoSmithKline PLC (NYSE:GSK), Merck &amp; Co. Inc. (NYSE:MRK), Eli
Lilly &amp; Co. (NYSE: LLY), Johnson &amp; Johnson (NYSE:JNJ) and Roche Holding
AG (VTX:ROG).</P>
<P align=justify>Each of our competitors have greater capital resources, larger
overall research and development staffs and facilities, and a longer history in
drug discovery and development, obtaining regulatory approval, and
pharmaceutical product manufacturing and marketing than we do. With these
additional resources, our competitors will be able to respond to the rapid and
significant technological changes in the biotechnology and pharmaceutical
industries faster than we can. Our future success will depend in large part on
our ability to acquire funding for our research and development. To continue to
acquire funding for our research and development, we will likely have to show
progress toward our goals and we will eventually be expected to develop a
compound that may result in a transaction with another pharmaceutical
company</P>
<P align=justify><B><I>Patents, Trademarks and Intellectual Property
</I></B></P>
<P align=justify>Anavex holds one issued U.S. patent and five U.S. patent
applications with various international counterpart applications. The most
recent U.S. patent application was filed October 20, 2014. Anavex is awaiting
formal patent documents from a co-inventor as to two applications, and seeking
one assignment from the same co-inventor to an application assigned to Anavex by
another co-inventor. 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.</P>
<P align=justify>In addition to filings made with intellectual property
organizations, 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&#146;s agreements. While no agreement offers
absolute protection, such agreements provide some form of recourse in the event
of disclosure, or anticipated disclosure.</P>
<P align=justify>Our 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. We may file
additional patent applications in the United States, or in other jurisdictions
for further inventions. We may not be successful in obtaining critical claims or
in protecting our potential drug compounds or processes. Even if we do obtain
patents, they may not adequately protect the technology we own or have licensed.
In addition, others may challenge, seek to invalidate, infringe or circumvent
any patents we own or license, and rights we receive under those patents may not
provide competitive advantages to us. Further, the manufacture, use or sale of
our potential drug compounds may infringe the patent rights of others</P>
<P align=justify>Our success will also depend in part on our ability to
commercialize our compounds without infringing the proprietary rights of others.
We have not conducted extensive freedom of use patent searches and no assurance
can be given that patents do not exist or could not be filed which would have an
adverse effect on our ability to market our technology or maintain our
competitive position with respect to our technology. If our compounds or other
subject matter are claimed under other existing United States or other patents
or are otherwise protected by third party proprietary rights, we may be subject
to infringement actions. In such event, we may challenge the validity of such
patents or other proprietary rights or we may be required to obtain licenses
from such companies in order to develop, manufacture or market our technology.
There can be no assurances that we would be able to obtain such licenses or that
such licenses, if available, could be obtained on commercially reasonable terms.
Furthermore, the failure to either develop a commercially viable alternative or
obtain such licenses could result in delays in marketing all of our potential
drug compounds based on our drug technology or the inability to proceed with the
development, manufacture or sale of potential drug compounds requiring such
licenses, which could have a material adverse effect on our business, financial
condition and results of operations. If we defend ourselves against charges of
patent infringement or to protect our proprietary rights against third parties,
substantial costs will be incurred regardless of whether we are successful. Such
proceedings are typically protracted with no certainty of success. An adverse
outcome could subject us to significant liabilities to third parties and force
us to curtail or cease our research and development of our technology.</P>
<P align=center>47</P>
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<P align=justify><B><I>Government Approval </I></B></P>
<P align=justify>Regulation by governmental authorities in the United States and
foreign countries is a significant factor in the development, manufacture, and
expected marketing of our potential drug compounds and in potential future
research and development activities. The nature and extent to which such
regulation will apply to us will vary depending on the nature of any potential
drug compounds developed. We anticipate that all of our potential drug compounds
will require regulatory approval by governmental agencies prior to
commercialization.</P>
<P align=justify>In particular, human therapeutic products are subject to
rigorous non-clinical and clinical testing and other approval procedures of the
FDA and similar regulatory authorities in other countries. Various federal
statutes and regulations also govern or influence testing, manufacturing,
safety, labeling, storage, and record-keeping related to such products and their
marketing. The process of obtaining these approvals and the subsequent
compliance with the appropriate federal statutes and regulations requires
substantial time and financial resources. Any failure by us or our collaborators
to obtain, or any delay in obtaining, regulatory approval could adversely affect
the marketing of any potential drug compounds developed by us, our ability to
receive product revenues, and our liquidity and capital resources.</P>
<P align=justify>The steps ordinarily required before a new drug may be marketed
in the United States, which are similar to steps required in most other
countries, include:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  ></TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">non-clinical laboratory tests, non-clinical
      studies in animals, formulation studies and the submission to the FDA of
      an investigational new drug application; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">adequate and well-controlled clinical trials to
      establish the safety and efficacy of the drug; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">the submission of a new drug application or
      biologic license application to the FDA; and </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><LI> </LI></TD>
    <TD align=left width="90%">FDA review and approval of the new drug
      application or biologics license application. </TD></TR></TABLE>
<P align=justify>Non-clinical tests include laboratory evaluation of potential
drug compound chemistry, formulation and toxicity, as well as animal studies.
The results of non-clinical testing are submitted to the FDA as part of an
investigational new drug application. A 30-day waiting period after the filing
of each investigational new drug application is required prior to commencement
of clinical testing in humans. At any time during the 30-day period or at any
time thereafter, the FDA may halt proposed or ongoing clinical trials until the
FDA authorizes trials under specified terms. The investigational new drug
application process may be extremely costly and substantially delay the
development of our potential drug compounds. Moreover, positive results of
non-clinical tests will not necessarily indicate positive results in subsequent
clinical trials. The FDA may require additional animal testing after an initial
investigational new drug application is approved and prior to Phase III
trials.</P>
<P align=justify>Clinical trials to support new drug applications are typically
conducted in three sequential phases, although the phases may overlap. During
Phase I, clinical trials are conducted with a small number of subjects to assess
metabolism, pharmacokinetics, and pharmacological actions and safety, including
side effects associated with increasing doses. Phase II usually involves studies
in a limited patient population to assess the efficacy of the drug in specific,
targeted indications; assess dosage tolerance and optimal dosage; and identify
possible adverse effects and safety risks.</P>
<P align=center>48</P>
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<P align=justify>If a compound is found to be potentially effective and to have
an acceptable safety profile in Phase I and II evaluations, Phase III trials are
undertaken to further demonstrate clinical efficacy and to further test for
safety within an expanded patient population at geographically dispersed
clinical trial sites.</P>
<P align=justify>After successful completion of the required clinical trials, a
new drug application is generally submitted. The FDA may request additional
information before accepting the new drug application for filing, in which case
the new drug application must be resubmitted with the additional information.
Once the submission has been accepted for filing, the FDA reviews the new drug
application and responds to the applicant. The FDA&#146;s requests for additional
information or clarification often significantly extends the review process. The
FDA may refer the new drug application to an appropriate advisory committee for
review, evaluation, and recommendation as to whether the new drug application
should be approved, although the FDA is not bound by the recommendation of an
advisory committee.</P>
<P align=justify>Sales outside the United States of potential drug compounds we
develop will also be subject to foreign regulatory requirements governing human
clinical trials and marketing for drugs. The requirements vary widely from
country to country, but typically the registration and approval process takes
several years and requires significant resources. In most cases, if the FDA has
not approved a potential drug compound for sale in the United States, the
potential drug compound may be exported for sale outside of the United States,
only if it has been approved in any one of the following: the European Union,
Canada, Australia, New Zealand, Japan, Israel, Switzerland and South Africa.
There are specific FDA regulations that govern this process.</P>
<P align=justify><B><I>Research and Development Expenses</I></B></P>
<P align=justify>Historically, a significant portion of our operating expenses
has related to research and development. See &#147;Financial Statements and
Supplementary Data&#148; of our Annual Report for costs and expenses related to
research and development, and other financial information for fiscal years 2014
and 2013.</P>
<P align=justify><B><I>Scientific Advisors</I></B></P>
<P align=justify>We are advised by scientists and physicians with experience
relevant to our Company and our product candidates. In the past twelve months,
our advisors included Dr. Michael Gold, John Harrison, Ph.D., Dr, Ottavio
Arancio, Dr. Norman Relkin, Ph.D., Ph.D., Tangui Nicolas Maurice, Ph.D., Abraham
Fisher, Ph.D., Dr. Paul Aisen, and Dr. Jeffrey Cummings.</P>
<P align=justify><B><I>Officers</I></B></P>
<P align=justify>One of our directors is engaged as an officer-employee of the
Company serving in the capacity of president, secretary, treasurer, chief
executive officer and chief financial officer.</P>
<P align=justify><B><I>Employees</I></B></P>
<P align=justify>We currently have four (4) full-time employees, and we retain
several independent contractors on an as-needed basis. We believe that we have
good relations with our employees.</P>
<P align=justify><B><I>Legal Proceedings</I></B> </P>
<P align=justify>We are not currently a party to or engaged in any material
legal proceedings. However, we may be subject to various claims and legal
actions arising in the ordinary course of business from time to time.</P>
<P align=center>49</P>
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<P align=center><B>MANAGEMENT</B> </P>
<P align=justify><B><I>Directors and Executive Officers </I></B></P>
<P align=justify>Our directors are to be elected at our annual meeting and each
director elected is to hold office until his or her successor is elected and
qualified. Our board of directors may remove our officers at any time. </P>
<P align=justify>Our directors and executive officers, their age, positions
held, and duration of such, are as follows: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD noWrap align=left>Name </TD>
    <TD noWrap align=left width="41%">Position </TD>
    <TD noWrap align=left width="10%">Age </TD>
    <TD noWrap align=left width="25%">Date first appointed </TD></TR>
  <TR vAlign=top>
    <TD align=left rowSpan=2>Christopher Missling, PhD <BR></TD>
    <TD align=left width="41%" rowSpan=2>Director, President, Chief Executive
      Officer, <BR>Chief Financial Officer, Secretary, Treasurer </TD>
    <TD align=left width="10%" rowSpan=2>49 <BR></TD>
    <TD align=left width="25%" rowSpan=2>July 5, 2013 <BR></TD></TR>
  <TR vAlign=top></TR>
  <TR vAlign=top>
    <TD align=left>Athanasios Skarpelos </TD>
    <TD align=left width="41%">Director </TD>
    <TD align=left width="10%">47 </TD>
    <TD align=left width="25%">January 9, 2013 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Bernd Metzner, PhD </TD>
    <TD align=left width="41%">Director </TD>
    <TD align=left width="10%">44 </TD>
    <TD align=left width="25%">May 7, 2014 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Elliot Favus, MD </TD>
    <TD align=left width="41%">Director </TD>
    <TD align=left width="10%">39 </TD>
    <TD align=left width="25%">May 7, 2014 </TD></TR></TABLE></DIV>
<P align=justify><B><I>Business Experience </I></B></P>
<P align=justify>The following is a brief account of the education and business
experience of directors and executive officers during at least the past five
years, indicating their principal occupation during the period, and the name and
principal business of the organization by which they were employed.</P>
<P align=justify><U>Christopher Missling, PhD</U>. Christopher Missling has over
twenty (20) years of healthcare industry experience in big pharmaceutical,
biotech industry and investment banking. Most recently, from March, 2007 until
his appointment by our company, Mr. Missling served as the head of healthcare
investment banking at Brimberg &amp; Co. in New York, New York. Also, Mr.
Missling served as the Chief Financial Officer of Curis, Inc. (NASDAQ:CRIS) and
ImmunoGen, Inc. (NASDAQ:IMGN). Mr. Missling earned his MS and PhD from the
University of Munich and an MBA from Northwestern University Kellogg School of
Management and WHU Otto Beisheim School of Management.</P>
<P align=justify><U>Athanasios Skarpelos</U>. Athanasios (Tom) Skarpelos is a
self-employed investor with 17 years of experience working with private and
public companies. For the past 10 years, he has been focused on biotechnology
companies involved in drug discovery and drug development projects. Mr.
Skarpelos was engaged as a consultant to our company for one year effective
August 2, 2010. His experience has led to relationships with researchers at
academic institutes in Europe and North America. Mr. Skarpelos is a founder of
Anavex.</P>
<P align=justify><U>Bernd Metzner, PhD.</U> Bernd Metzner is currently Chief
Financial Officer of the Doehler Group, a global producer and provider of
technology-based natural ingredients for the food and beverage industry with
sales activities in more than 130 countries. Previously, he was Chief
Administration Officer and member of the Board of Management of Bayer Schering
Pharma AG, the pharmaceutical division of $100+ billion market cap company Bayer
AG. In this position, Dr. Metzner had worldwide financial responsibility for the
Bayer Pharma Group. During his almost 10-years with Bayer AG, Dr. Metzner also
held several senior international management positions in the corporate finance
organization of Bayer AG, including Chief Financial Officer of Bayer S.p.A.
Italy and heading the coordination of the successful spin-off of Lanxess, a
specialty chemicals group. Dr. Metzner started his career at the law firm Flick
Gocke Schaumburg and has a degree in business administration from the University
of Siegen. After obtaining his doctorate, he became a chartered accountant.</P>
<P align=justify><U>Elliot Favus, MD.</U> Elliot Favus is Chief Executive
Officer of Favus Institutional Research, a healthcare research firm serving
institutional investors. He has been a healthcare equity research analyst on
Wall Street since 2006, starting at Lazard Capital Markets and subsequently at
Och-Ziff Capital Management Group. Prior to working on Wall Street, Dr. Favus
was an Instructor in medicine at Mount Sinai School of Medicine in New York. He
attended the University of Michigan (BA, 1996), the University of Chicago
Pritzker School of Medicine (MD, 2001) and the NYU-Bellevue Hospital Internal
Medicine Residency Program (2004). He is board-certified in Internal Medicine
(2004) and has 10 years of basic science laboratory experience working on human
genetics projects at Harvard Medical School, the University of Chicago and the
University of Pittsburgh.</P>
<P align=center>50</P>
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<P align=justify><B><I>Family Relationships </I></B></P>
<P align=justify>There are no family relationships between any director or
executive officer.</P>
<P align=justify><B><I>Involvement in Certain Legal Proceedings </I></B></P>
<P align=justify>There are no material proceedings to which any director or
executive officer or any associate of any such director or officer is a party
adverse to our company or has a material interest adverse to our company. </P>
<P align=justify>No director or executive officer has been involved in any of
the following events during the past ten years: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD>
      <P align=justify>being the subject of, or a party to, any federal or state
      judicial or administrative order, judgment, decree, or finding, not
      subsequently reversed, suspended or vacated, relating to an alleged
      violation of: (i) any federal or state securities or commodities law or
      regulation; or (ii) any law or regulation respecting financial
      institutions or insurance companies including, but not limited to, a
      temporary or permanent injunction, order of disgorgement or restitution,
      civil money penalty or temporary or permanent cease- and- desist order, or
      removal or prohibition order; or (iii) any law or regulation prohibiting
      mail or wire fraud or fraud in connection with any business entity;
    or</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">6. </TD>
    <TD>
      <P align=justify>being the subject of, or a party to, any sanction or
      order, not subsequently reversed, suspended or vacated, of any
      self-regulatory organization (as defined in Section 3(a)(26) of the
      Securities Exchange Act of 1934), any registered entity (as defined in
      Section 1(a)(29) of the Commodity Exchange Act), or any equivalent
      exchange, association, entity or organization that has disciplinary
      authority over its members or persons associated with a
  member.</P></TD></TR></TABLE>
<P align=justify><B><I>Compliance with Section 16(a) of the Securities Exchange
Act of 1934</I></B> </P>
<P align=justify>Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the Securities and Exchange
Commission regulations to furnish us with copies of all Section 16(a) reports
that they file. </P>
<P align=justify>Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended September 30, 2014, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied.
<P align=center>51

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<P align=justify><B><I>Code of Ethics</I></B> </P>
<P align=justify>We have adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. We have posted our policy
on our website at <U>www.anavex.com</U>. </P>
<P align=justify><B><I>Audit Committee and Audit Committee Financial
Experts</I></B> </P>
<P align=justify>We do not have a standing audit committee at the present time.
We believe that our board of directors is capable of analyzing and evaluating
our financial statements and understanding internal controls and procedures for
financial reporting. The board of directors of our company does not believe that
it is necessary to have an audit committee at this time because management
believes the functions of an audit committee can be adequately performed by the
board of directors.<B> </B></P>
<P align=justify>Except for Dr. Metzner, we do not deem any of our directors as
an &#147;audit committee financial expert&#148; as defined in Item 407(d)(5)(ii) of
Regulation S-K. </P>
<P align=justify><B><I>Nominating and Compensation Committees </I></B></P>
<P align=justify>We do not have standing nominating or compensation committees,
or committees performing similar functions. Our board of directors believes that
it is not necessary to have a standing compensation committee at this time
because the functions of such committee are adequately performed by our board of
directors. Our board of directors has not adopted a charter for the compensation
committee. </P>
<P align=justify>Our board of directors also is of the view that it is
appropriate for us not to have a standing nominating committee because our board
of directors has performed and is expected to perform adequately the functions
of a nominating committee. Our board of directors has not adopted a charter for
the nominating committee. There has not been any defined policy or procedure
requirements for stockholders to submit recommendations or nomination for
directors. Our board of directors does not believe that a defined policy with
regard to the consideration of candidates recommended by stockholders is
necessary at this time because we believe that, at this stage of our
development, a specific nominating policy would be premature and of little
assistance until our business operations are at a more advanced level. There are
no specific, minimum qualifications that our board of directors believes must be
met by a candidate recommended by our board of directors. There is neither a
defined, nor a typical process of identifying and evaluating nominees for
director. </P>
<P align=justify><B><I>Summary Compensation</I></B> </P>
<P align=justify>The particulars of compensation paid to the following persons
for the last two completed fiscal years:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD>
      <P align=justify>our principal executive officers;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD>
      <P align=justify>each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the fiscal
      year ended September 30, 2014 who had total compensation exceeding
      $100,000; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD>
      <P align=justify>up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the most recently
      completed financial year, who we will collectively refer to as the named
      executive officers, for our fiscal years ended September 30, 2014 and
      2013, are set out in the following summary compensation
  table:</P></TD></TR></TABLE>
<br>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="12%" align=left noWrap>&nbsp;</TD>
    <TD width="12%" align=left noWrap>&nbsp;</TD>
    <TD width="12%" align=center noWrap><B>Other</B> </TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="12%" align=left noWrap>&nbsp;</TD>
    <TD width="12%" align=left noWrap>&nbsp;</TD>
    <TD width="12%" align=center noWrap><B>Annual</B> </TD>
    <TD align=center vAlign=bottom nowrap>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=center>&nbsp;</TD>
    <TD width="12%" align=center noWrap>&nbsp;</TD>
    <TD width="12%" align=center noWrap>&nbsp;</TD>
    <TD width="12%" align=center noWrap>&nbsp;</TD>
    <TD width="12%" align=center noWrap><B>Stock</B> </TD>
    <TD width="12%" align=center noWrap><B>Option</B> </TD>
    <TD width="12%" align=center noWrap><B>Compen-</B> </TD>
    <TD width="12%" align=center noWrap>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=left><B>Name and Principal</B> </TD>
    <TD noWrap align=left>&nbsp;</TD>
    <TD noWrap align=center><B>Salary</B> </TD>
    <TD noWrap align=center><B>Bonus</B> </TD>
    <TD noWrap align=center><B>Awards</B> </TD>
    <TD noWrap align=center><B>Awards</B> </TD>
    <TD noWrap align=center><B>sation</B> </TD>
    <TD noWrap align=center><B>Total</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap><B>Position</B> </TD>
    <TD align=center nowrap><B>Year</B> </TD>
    <TD align=center nowrap><B>($)</B> </TD>
    <TD align=center nowrap><B>($)</B> </TD>
    <TD align=center nowrap><B>($)</B> </TD>
    <TD align=center nowrap><B>($)</B> </TD>
    <TD align=center nowrap><B>($)</B> </TD>
    <TD align=center nowrap><B>($)</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Christopher Missling, </TD>
    <TD align=center bgColor=#e6efff>2014 </TD>
    <TD align=center bgColor=#e6efff>240,000 </TD>
    <TD align=center bgColor=#e6efff>400,000<SUP>(2)</SUP> </TD>
    <TD align=center bgColor=#e6efff>Nil </TD>
    <TD align=center bgColor=#e6efff>16,888 </TD>
    <TD align=center bgColor=#e6efff>Nil </TD>
    <TD align=center bgColor=#e6efff>656,888 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff rowSpan=5>PhD<SUP>(1)</SUP> <BR>
      President,
      Chief <BR>
      Executive Officer, Chief <BR>
      Financial Officer and <BR>
      Director </TD>
    <TD align=center bgColor=#e6efff rowSpan=5>2013 <BR>
        <BR>
        <BR>
        <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=5>60,000 <BR>
        <BR>
        <BR>
        <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=5>Nil <BR>
        <BR>
        <BR>
        <BR></TD>
    <TD align=center bgColor=#e6efff
      rowSpan=5>1,600,000<SUP>(3)</SUP> <BR>
        <BR>
        <BR>
        <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=5>1,002,500 <BR>
        <BR>
        <BR>
        <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=5>Nil <BR>
        <BR>
        <BR>
        <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=5>2,662,500 <BR>
        <BR>
        <BR>
        <BR></TD>
  </TR>
  <TR vAlign=top></TR>
  <TR></TR>
  <TR></TR>
  <TR></TR>
  <TR vAlign=top>
    <TD align=center nowrap>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=left bgColor=#e6efff>Robert Chisholm<SUP>(4)</SUP> </TD>
    <TD noWrap align=center bgColor=#e6efff>2014 </TD>
    <TD noWrap align=center bgColor=#e6efff>Nil </TD>
    <TD noWrap align=center bgColor=#e6efff>Nil </TD>
    <TD noWrap align=center bgColor=#e6efff>Nil </TD>
    <TD noWrap align=center bgColor=#e6efff>Nil </TD>
    <TD noWrap align=center bgColor=#e6efff>Nil </TD>
    <TD noWrap align=center bgColor=#e6efff>Nil </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff rowSpan=2>President, Chief Financial <BR>
      Officer and Director </TD>
    <TD align=center bgColor=#e6efff rowSpan=2>2013 <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=2>24,677 <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=2>Nil <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=2>Nil <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=2>Nil <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=2>Nil <BR></TD>
    <TD align=center bgColor=#e6efff rowSpan=2>24,677 <BR></TD>
  </TR>
  <TR vAlign=top></TR>
</TABLE>
<p align="center">52</p>
<hr style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noshade size=5>
<!--$$/page=-->
<a name=page_56></a><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Christopher Missling was appointed as director,
      President, Chief Executive Officer, Chief Financial Officer, Secretary and
      Treasurer on July 5, 2013.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>The bonus was a result of the successful financing in
      March, 2014.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>Mr. Missling was granted 4,000,000 shares of restricted
      common stock that vest upon the occurrence of certain financial and
      clinical milestones. The value of stock awards issued to Christopher
      Missling is presented at the quoted market price of these shares on the
      date of issuance in accordance with FASB ASC Topic 718 for the awards that
      were expected to vest at the date of issuance.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(4) </TD>
    <TD>
      <P align=justify>Robert Chisholm was appointed President and Chief
      Financial Officer on June 26, 2012. Prior to that date, Mr. Chisholm
      served as a director to the company. Mr. Chisholm resigned as President
      and Chief Financial Officer and director on January 9, 2013. These fees
      are included in consulting fees in our consolidated financial
      statements.</P></TD></TR></TABLE>
<P align=justify><B><I>Employment and Consulting Agreements</I></B> </P>
<P align=justify><B>Christopher Missling</B></P>
<P align=justify>In connection with Mr. Missling&#146;s appointment as Chief
Executive Officer, the Company and Mr. Missling entered into an employment
agreement commencing on July 5, 2013 and ending on July 5, 2016, whereby: (a)
the Company shall pay to Mr. Missling an initial monthly base salary of $20,000
with Mr. Missling being eligible for bonuses and salary increases; (b) Mr.
Missling received a sign-on stock option grant; (c) Mr. Missling shall receive a
restricted stock grant subject to certain vesting milestones; (d) Mr. Missling
shall be able to participate in the Company&#146;s employee benefit plans; and (e)
the Company agreed to indemnify Mr. Missling in connection with his provision of
services to the Company.</P>
<P align=justify><B>Robert Chisholm </B></P>
<P align=justify>Effective June 26, 2012, Robert Chisholm was appointed
President and Chief Financial Officer of the company. Mr. Chisholm was
remunerated at a rate of CDN$7,500 per month through a company with which he is
associated. Effective January 9, 2013, Mr. Chisholm resigned from his positions
as both an officer and a director and his agreement was terminated in connection
therewith.</P>
<P align=justify><B><I>Outstanding Equity Awards at Fiscal Year-End</I></B> </P>
<P align=justify>The following table sets forth for each named executive officer
and director certain information concerning the outstanding equity awards as of
September 30, 2014. </P>
<P align=center>53</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_57></A><BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

 <TR vAlign=top>
    <TD vAlign=bottom noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD colspan="5" align=center vAlign=bottom noWrap bgColor=#eeeeee>    Option Awards         </TD>
    <TD colspan="4" align=center vAlign=bottom noWrap bgColor=#eeeeee>    Stock Awards     </TD>
    </TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>&nbsp;    </TD>
    <TD vAlign=bottom noWrap align=center width="22%" bgColor=#eeeeee>Number
      of </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>Equity    </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>&nbsp;    </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>&nbsp;    </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>&nbsp;    </TD>
    <TD vAlign=bottom noWrap align=center width="22%" bgColor=#eeeeee>&nbsp;    </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>Equity    </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>Equity    </TD></TR>
  <TR vAlign=top>
    <TD vAlign=bottom noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>Number
      of </TD>
    <TD vAlign=bottom noWrap align=center width="22%"
      bgColor=#eeeeee>Securities </TD>
    <TD vAlign=bottom noWrap align=center width="11%"
      bgColor=#eeeeee>Incentive </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>&nbsp;    </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>&nbsp;    </TD>
    <TD vAlign=bottom noWrap align=center width="11%" bgColor=#eeeeee>Number    </TD>
    <TD vAlign=bottom noWrap align=center width="22%" bgColor=#eeeeee>Market    </TD>
    <TD vAlign=bottom noWrap align=center width="11%"
      bgColor=#eeeeee>Incentive </TD>
    <TD vAlign=bottom noWrap align=center width="11%"
      bgColor=#eeeeee>Incentive </TD></TR>
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Securities </TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Underlying </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Plan </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Option </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>of </TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Value of </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Plan </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Plan </TD></TR>
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Underlying</TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Unexercisable </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Awards: </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Exercise </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Option </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Shares of </TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Shares or </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Awards: </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Awards: </TD></TR>
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Exercisable </TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Options </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Number of </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Price </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Expiration </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Units of </TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Units of </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Number </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Market or</TD></TR>
  <TR vAlign=top>
    <TD align=center vAlign=bottom nowrap bgColor=#eeeeee>Name </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Options </TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>(#) </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Securities </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>($) </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Date </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Stock </TD>
    <TD width="22%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Stock that </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>of </TD>
    <TD width="11%" align=center vAlign=bottom nowrap bgColor=#eeeeee>Payout  </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>(#) </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Underlying </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>that have </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>have not</TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee> Unearned </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Value of </TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeeef>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Unexercised </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>not </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>Vested </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Shares,      </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Unearned </TD>
  </TR>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Unearned </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeeef>Vested </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>($) </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Units or </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Shares, </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Options </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>(#) </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Other </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Units or </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>(#) </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="22%" bgColor=#eeeeee>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Rights </TD>
    <TD noWrap align=center width="11%" bgColor=#eeeeee>Other </TD></TR>
  <TR vAlign=top>
    <TD align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>that </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>Rights that </TD></TR>
  <TR vAlign=top>
    <TD align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>have </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>have not </TD></TR>
  <TR vAlign=top>
    <TD align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>not </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>Vested </TD></TR>
  <TR vAlign=top>
    <TD align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>Vested </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>($) </TD></TR>
  <TR vAlign=top>
    <TD align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="22%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>(#) </TD>
    <TD width="11%" align=center nowrap bgColor=#eeeeee>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Christopher </TD>
    <TD align=center width="11%"  bgColor=#e6efff>2,000,000 </TD>
    <TD align=center width="22%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>0.40 </TD>
    <TD align=center width="11%" bgColor=#e6efff>July 5, </TD>
    <TD align=center width="11%" bgColor=#e6efff>3,000,000 </TD>
    <TD align=center width="22%" bgColor=#e6efff>540,000 </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#e6efff>2023 </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Missling </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="22%" bgColor=#e6efff>500,000 </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>0.33 </TD>
    <TD align=center width="11%" bgColor=#e6efff>May 8, </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#e6efff>2024 </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Athanasios </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="22%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>N/A </TD>
    <TD align=center width="11%" bgColor=#e6efff>N/A </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="22%" bgColor=#e6efff>N/A </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>N/A </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Skarpelos </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Bernd </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="22%" bgColor=#e6efff>150,000 </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>0.30 </TD>
    <TD align=center width="11%" bgColor=#e6efff>N/A </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="22%" bgColor=#e6efff>N/A </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>N/A </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Metzner </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Elliot </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="22%" bgColor=#e6efff>150,000 </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>0.30 </TD>
    <TD align=center width="11%" bgColor=#e6efff>N/A </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="22%" bgColor=#e6efff>N/A </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>N/A </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Favus </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="22%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="11%" bgColor=#e6efff>&nbsp; </TD>
  <TD align=left width="11%" bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</DIV>
<P align=justify>We have not adopted any other equity compensation plan other
than our 2007 Stock Option Plan.</P>
<P align=justify><B><I>Compensation of Directors</I></B> </P>
<P align=justify>The table below shows the compensation of our directors who
were not our named executive officers for the fiscal year ended September 30,
2014:</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><B>Fees</B> </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><b>Non-Equity</b></TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><b>Nonqualified</b></TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><B>Earned</B> </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><b>Stock</b> </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><b>Option</b> </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><b>Incentive Plan</b> </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><b>Deferred</b> </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff><b>All Other</b> </TD>
    <TD noWrap align=center width="11%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#ffffff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>or Paid in</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>Awards</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>Awards
      </B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><b>Compensation</b></TD>
    <TD align=center width="11%" bgColor=#ffffff><b>Compensation</b></TD>
    <TD align=center width="11%" bgColor=#ffffff><b>Compensation</b></TD>
    <TD align=center width="11%" bgColor=#ffffff><B>Total</B> </TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#ffffff><B>Name</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>Cash</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>($)</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>($)</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>($)</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>Earnings ($)</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>($)</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>($)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#ffffff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#ffffff><B>($)</B> </TD>
    <TD align=center width="11%" bgColor=#ffffff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#ffffff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#ffffff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#ffffff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#ffffff>&nbsp; </TD>
    <TD align=center width="11%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Athanasios Skarpelos </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Bernd Metzner </TD>
    <TD align=center width="11%" bgColor=#e6efff>5,000 </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>4,626 </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>9,626 </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Elliot Favus </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>4,626 </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="11%" bgColor=#e6efff>Nil </TD>
  <TD align=center width="11%" bgColor=#e6efff>4,626</TD></TR></TABLE>
</DIV>
<P align=justify>We reimburse our directors for expenses incurred in connection
with attending board meetings.</P>
<P align=justify>During the fiscal year ended September 30, 2014, there were no
standard arrangements pursuant to which any of our directors were compensated
for services provided in their capacity as directors. </P>
<P align=justify>We currently have no formal plan for compensating our directors
for their services in their capacity as directors, although we may elect to
issue stock options to such persons in the future. Directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of our board of directors. Our board of
directors may award special remuneration to any director undertaking any special
services on our behalf other than services ordinarily required of a
director.</P>
<P align=justify><B><I>Retirement or Similar Benefit Plans </I></B></P>
<P align=justify>There are no arrangements or plans in which we provide
retirement or similar benefits for our directors or executive officers.</P>
<P align="justify">
<B><I>Resignation, Retirement, Other Termination, or Change in Control Arrangements </I></B> </P>
<P align="justify">
Our employment agreement with Christopher Missling, PhD contains provisions regarding our obligations to Mr. Missling upon his termination and upon a change of control. In the event of a change of control, as such term is defined in the employment
agreement, all of the restricted stock granted to Mr. Missling shall vest. Depending on the nature of the termination of Mr. Missling&#146;s services, certain of his salary, bonus and granted securities shall vest in the amounts at such time as set
forth in the agreement. A copy of the employment agreement is set forth in its entirety as an exhibit to the Company&#146;s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2013. </P>
<P align="center">54</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<!--$$/page=--><A name=page_59></A>
<P align=center><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND <BR>RELATED STOCKHOLDER MATTERS </B></P>
<P align=justify>The following table sets forth, as of January 26, 2015, certain
information with respect to the beneficial ownership of our common stock by each
stockholder known by us to be the beneficial owner of more than 5% of our common
stock and by each of our current directors and our named executive officers and
by our current directors and executive officers as a group. We have determined
the number and percentage of shares beneficially owned by such person in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934. This
information does not necessarily indicate beneficial ownership for any other
purpose. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=center width="27%" bgColor=#ffffff><B>Name and address
      of</B> </TD>
    <TD noWrap align=center width="27%" bgColor=#ffffff><B>Amount and nature
      of</B> </TD>
    <TD noWrap align=center width="27%" bgColor=#ffffff><B>Percent of</B>
  </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=center bgColor=#ffffff><B>Title of class</B> </TD>
    <TD noWrap align=center width="27%" bgColor=#ffffff><B>beneficial
      owner</B> </TD>
    <TD noWrap align=center width="27%" bgColor=#ffffff><B>beneficial
      ownership</B> </TD>
    <TD noWrap align=center width="27%" bgColor=#ffffff><B>class
      </B><B><SUP>(1)</SUP></B> </TD></TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>Common Stock </TD>
    <TD align=left width="27%" bgColor=#e6efff>Athanasios Skarpelos </TD>
    <TD align=right width="27%" bgColor=#e6efff>5,225,832 Direct </TD>
    <TD align=center width="27%" bgColor=#e6efff>9.2% </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>(Director) </TD>
    <TD align=right width="27%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>2, Place du Port </TD>
    <TD align=right width="27%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>Geneva, Switzerland CH 1204 </TD>
    <TD align=right width="27%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=center>Common Stock </TD>
    <TD align=left width="27%">Christopher Missling </TD>
    <TD align=right width="27%">3,000,000<SUP>(2)</SUP> </TD>
    <TD align=center width="27%">5.3% </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="27%">(Officer/Director) </TD>
    <TD align=right width="27%">&nbsp; </TD>
  <TD align=left width="27%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="27%">51 W 52nd Street, </TD>
    <TD align=right width="27%">&nbsp; </TD>
  <TD align=left width="27%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="27%">7th floor </TD>
    <TD align=right width="27%">&nbsp; </TD>
  <TD align=left width="27%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="27%">New York, NY 10019 </TD>
    <TD align=right width="27%">&nbsp; </TD>
  <TD align=left width="27%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>Common Stock </TD>
    <TD align=left width="27%" bgColor=#e6efff>Bernd Metzner (Director) </TD>
    <TD align=right width="27%" bgColor=#e6efff>Nil </TD>
    <TD align=center width="27%" bgColor=#e6efff>Nil </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>51 W 52<SUP>nd </SUP>Street,
</TD>
    <TD align=right width="27%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>7<SUP>th </SUP>Floor </TD>
    <TD align=right width="27%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>New York, NY 10019 </TD>
    <TD align=right width="27%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=center>Common Stock </TD>
    <TD align=left width="27%">Elliot Favus(Director) </TD>
    <TD align=right width="27%">Nil </TD>
  <TD align=center width="27%">Nil </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="27%">51 W 52<SUP>nd </SUP>Street,</TD>
    <TD align=right width="27%">&nbsp; </TD>
  <TD align=left width="27%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="27%">7<SUP>th </SUP>Floor </TD>
    <TD align=right width="27%">&nbsp; </TD>
  <TD align=left width="27%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="27%">New York, NY 10019 </TD>
    <TD align=right width="27%">&nbsp; </TD>
  <TD align=left width="27%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff>Common Stock </TD>
    <TD align=left width="27%" bgColor=#e6efff><B>Directors &amp; Executive
      Officers as a</B> </TD>
    <TD align=right width="27%" bgColor=#e6efff>8,225,832 </TD>
    <TD align=center width="27%" bgColor=#e6efff>14.3% </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff><B>group (4 persons)</B> </TD>
    <TD align=right width="27%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="27%" bgColor=#e6efff>&nbsp; </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Percentage of ownership is based on 56,441,000 shares of
      our common stock issued and outstanding as of February 13, 2015. Except as
      otherwise indicated, we believe that the beneficial owners of the common
      stock listed above, based on information furnished by such owners, have
      sole investment and voting power with respect to such shares, subject to
      community property laws where applicable. Beneficial ownership is
      determined in accordance with the rules of the Securities and Exchange
      Commission and generally includes voting or investment power with respect
      to securities. Shares of common stock subject to options or warrants
      currently exercisable or exercisable within 60 days, are deemed
      outstanding for purposes of computing the percentage ownership of the
      person holding such option or warrants, but are not deemed outstanding for
      purposes of computing the percentage ownership of any other
  person.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>Includes 2,000,000 stock options that have vested and
      1,000,000 shares of restricted common stock that have vested pursuant to
      the achievement of certain objectives. Does not include 3,000,000 shares
      of restricted common stock that vest pursuant to the achievement of
      certain objectives.</P></TD></TR></TABLE>
<P align=justify><B><I>Changes in Control </I></B></P>
<P align=justify>We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.</P>
<P align=justify><B><I>Transactions with related persons </I></B></P>
<P align=justify>There have been no other transactions, since October 1, 2013,
or currently proposed transactions, in which we were or are to be a participant
and the amount involved exceeds the lesser of $120,000 or one percent of the
average of our total assets at year end for the last two completed fiscal years,
and in which any of the following persons had or will have a direct or indirect
material interest. </P>
<P align=center>55</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD vAlign=top align=right width="5%" >i. </TD>
    <TD width="5%"  >&nbsp;</TD>
    <TD>
      <P align=justify>any director or executive officer of our
  company;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"  >&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top align=right width="5%" >ii. </TD>
    <TD width="5%"  >&nbsp;</TD>
    <TD>
      <P align=justify>any beneficial owner of shares carrying more than 5% of
      the voting rights attached to our outstanding shares of common stock;
      and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"  >&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top align=right width="5%" >iii. </TD>
    <TD width="5%"  >&nbsp;</TD>
    <TD>
      <P align=justify>any member of the immediate family (including spouse,
      parents, children, siblings and in-laws) of any of the foregoing
      persons.</P></TD></TR></TABLE>
<P align=justify><B><I>Compensation of Named Executive Officers and Directors
</I></B></P>
<P align=justify>For information regarding compensation of named executive
officers and directors, please see &#147;Item 11. Executive Compensation.&#148; </P>
<P align=justify><B><I>Director Independence </I></B></P>
<P align=justify>We deem that Christopher Missling, PhD is not independent as
that term is defined by NASDAQ 5605(a)(2) because Mr. Missling serves as our
President, Chief Executive Officer, Secretary, Treasurer and Chief Financial
Officer. We have also determined that Athanasios Skarpelos is not independent as
that term is defined by NASDAQ 5605(a)(2). </P>
<P align=justify>We deem that Bernd Metzner and Elliot Favus are independent as
that term is defined by NASDAQ 5605(a)(2).</P>
<P align=center>56</P>
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<P align=center><B>DESCRIPTION OF SECURITIES</B> </P>
<P align=justify>We are authorized to issue 150,000,000 shares of common stock
with a par value of $0.001. As at January 13, 2015 we had 56,441,000  common
shares outstanding. Upon liquidation, dissolution or winding up of the
corporation, the holders of common stock are entitled to share ratably in all
net assets available for distribution to stockholders after payment to
creditors. The common stock is not convertible or redeemable and has no
preemptive, subscription or conversion rights. There are no conversion,
redemption, sinking fund or similar provisions regarding the common stock. Each
outstanding share of common stock is entitled to one vote on all matters
submitted to a vote of stockholders. There are no cumulative voting rights.</P>
<P align=justify>Each stockholder is entitled to receive the dividends as may be
declared by our board of directors out of funds legally available for dividends
and, in the event of liquidation, to share pro rata in any distribution of our
assets after payment of liabilities. Our board of directors is not obligated to
declare a dividend. Any future dividends will be subject to the discretion of
our board of directors and will depend upon, among other things, future
earnings, the operating and financial condition of our Company, its capital
requirements, general business conditions and other pertinent factors. It is not
anticipated that dividends will be paid in the foreseeable future. </P>
<P align=justify><B>Nevada Anti-Takeover Law and Charter and Bylaws
Provisions</B></P>
<P align=justify>Nevada Revised Statutes sections 78.378 to 78.3793 provide
state regulation over the acquisition of a controlling interest in certain
Nevada corporations unless the articles of incorporation or bylaws of the
corporation provide that the provisions of these sections do not apply. The
statute creates a number of restrictions on the ability of a person or entity to
acquire control of a Nevada company by setting down certain rules of conduct and
voting restrictions in any acquisition attempt, among other things. The statute
is limited to corporations that are organized in the state of Nevada and that
have 200 or more shareholders, at least 100 of whom are shareholders of record
and residents of the State of Nevada; and do business in the State of Nevada
directly or through an affiliated corporation. Because of these conditions, the
statute does not apply to our Company.</P>
<P align=justify>There are no provisions in our articles of incorporation or our
bylaws that would delay, defer or prevent a change in control of our Company.
</P>
<P align=justify><B>OTC Markets - OTCQX Quotation</B> </P>
<P align=justify>Our common stock is quoted on the OTC Markets - OTCQX under the
trading symbol &#147;AVXL.&#148; </P>
<P align=center><B>PLAN OF DISTRIBUTION</B> </P>
<P align=justify>Each Selling Security Holder of the securities and any of their
pledgees, assignees and successors-in-interest may, from time to time, sell any
or all of their securities covered hereby on the OCTQB or any other stock
exchange, market or trading facility on which the securities are traded or in
private transactions. These sales may be at fixed or negotiated prices. A
Selling Security Holder may use any one or more of the following methods when
selling securities:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">ordinary brokerage transactions and
      transactions in which the broker-dealer solicits purchasers; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">block trades in which the broker-dealer will
      attempt to sell the securities as agent but may position and resell a
  portion of the block as principal to facilitate
    the transaction; </TD>
  </TR>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">purchases by a broker-dealer as principal and
      resale by the broker-dealer for its account; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">an exchange distribution in accordance with the
      rules of the applicable exchange; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">privately negotiated transactions; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">settlement of short sales; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">in transactions through broker-dealers that
  agree with the Selling Stockholders to sell a specified number of  </TD></TR></TABLE>
<p align="center">57</p>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">such securities at a stipulated price per
      security; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" ></TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">through the writing or settlement of options or
      other hedging transactions, whether through an options exchange or
      otherwise; </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">a combination of any such methods of sale; or
    </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left ><LI> </LI></TD>
    <TD align=left width="90%">any other method permitted pursuant to
      applicable law. </TD></TR></TABLE>
<P align=justify>The Selling Security Holders may also sell securities under
Rule 144 under the Securities Act, if available, rather than under this
prospectus.</P>
<P align=justify>Broker-dealers engaged by the Selling Security Holders may
arrange for other brokers-dealers to participate in sales. Broker-dealers may
receive commissions or discounts from the Selling Security Holders (or, if any
broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this
prospectus, in the case of an agency transaction not in excess of a customary
brokerage commission in compliance with FINRA Rule 2440; and in the case of a
principal transaction a markup or markdown in compliance with FINRA IM-2440.
</P>
<P align=justify>In connection with the sale of the securities or interests
therein, the Selling Security Holders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the securities in the course of hedging the positions they
assume. The Selling Security Holders may also sell securities short and deliver
these securities to close out their short positions, or loan or pledge the
securities to broker-dealers that in turn may sell these securities. The Selling
Security Holders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative
securities which require the delivery to such broker-dealer or other financial
institution of securities offered by this prospectus, which securities such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).</P>
<P align=justify>The Selling Security Holders and any broker-dealers or agents
that are involved in selling the securities may be deemed to be &#147;underwriters&#148;
within the meaning of the Securities Act in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Each Selling
Security Holder has informed the Company that it does not have any written or
oral agreement or understanding, directly or indirectly, with any person to
distribute the securities. </P>
<P align=justify>The Company is required to pay certain fees and expenses
incurred by the Company incident to the registration of the securities. The
Company has agreed to indemnify the Selling Security Holders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act. </P>
<P align=justify>Because Selling Security Holders may be deemed to be
&#147;underwriters&#148; within the meaning of the Securities Act, they will be subject to
the prospectus delivery requirements of the Securities Act including Rule 172
thereunder. In addition, any securities covered by this prospectus which qualify
for sale pursuant to Rule 144 under the Securities Act may be sold under Rule
144 rather than under this prospectus. The Selling Security Holders have advised
us that there is no underwriter or coordinating broker acting in connection with
the proposed sale of the resale securities by the Selling Security Holders.</P>
<P align=justify>We agreed to keep this prospectus effective until the earlier
of (i) the date on which the securities may be resold by the Selling Security
Holders without registration and without regard to any volume or manner-of-sale
limitations by reason of Rule 144, without the requirement for the Company to be
in compliance with the current public information under Rule 144 under the
Securities Act or any other rule of similar effect or (ii) all of the securities
have been sold pursuant to this prospectus or Rule 144 under the Securities Act
or any other rule of similar effect. The resale securities will be sold only
through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale securities
covered hereby may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with. </P>
<P align=center>58</P>
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<P align=justify>Under applicable rules and regulations under the Exchange Act,
any person engaged in the distribution of the resale securities may not
simultaneously engage in market making activities with respect to the common
stock for the applicable restricted period, as defined in Regulation M, prior to
the commencement of the distribution. In addition, the Selling Security Holders
will be subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of the common stock by the Selling Security Holders or any
other person. We will make copies of this prospectus available to the Selling
Security Holders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).</P>
<P align=justify>Our common stock is quoted on the OTCQX under the symbol
&#147;AVXL.&#148; </P>
<P align=center><B>LEGAL MATTERS</B> </P>
<P align=justify>The validity of the securities being offered by this prospectus
has been passed upon for us by Snell &amp; Wilmer L.L.P.
</P>
<P align=center><B>EXPERTS</B> </P>
<P align=justify>The financial statements as of September 30, 2014 and 2013 and
for each of the two years in the period ended September 30, 2014 included in
this Prospectus and in the Registration Statement have been so included in
reliance on the report of BDO USA, LLP, an independent registered public
accounting firm, appearing elsewhere herein and in the Registration Statement,
given on the authority of said firm as experts in auditing and accounting.</P>
<P align=center><B>WHERE YOU CAN FIND ADDITIONAL INFORMATION</B> </P>
<P align=justify>We filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933 for the shares of common
stock in this offering. This prospectus does not contain all of the information
in the registration statement and the exhibits and schedule that were filed with
the registration statement. For further information with respect to us and our
common stock, we refer you to the registration statement and the exhibits and
schedule that were filed with the registration statement. Statements contained
in this prospectus about the contents of any contract or any other document that
is filed as an exhibit to the registration statement are not necessarily
complete, and we refer you to the full text of the contract or other document
filed as an exhibit to the registration statement. A copy of the registration
statement and the exhibits and schedules that were filed with the registration
statement may be inspected without charge at the Public Reference Room
maintained by the Securities and Exchange Commission at 100 F Street, N.E.
Washington, DC 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC. The address of the
website is <U>www.sec.gov</U>. </P>
<P align=justify>We file periodic reports under the Securities Exchange Act of
1934, including annual, quarterly and special reports, and other information
with the Securities and Exchange Commission. These periodic reports and other
information are available for inspection and copying at the regional offices,
public reference facilities and website of the Securities and Exchange
Commission referred to above. </P>
<P align=justify>We make available free of charge on or through our internet
website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, and amendments to those reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as
reasonably practicable after we electronically file such material with, or
furnish it to, the Securities and Exchange Commission.
<P align=center>59

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<P align=center><B>DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITY</B> </P>
<P align=justify>Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. </P>
<P align=center>60</P>
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<P align=center><B>ANAVEX LIFE SCIENCES CORP.</B> </P>
<P align=center><B>FINANCIAL STATEMENTS</B> </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD noWrap align=left>&nbsp; <A href="#page_Page"></A></TD>
    <TD noWrap align=center width="15%">Page </TD></TR>
  <TR vAlign=top>
    <TD noWrap align=left><B>Consolidated Financial Statements For the Years
      Ended September 30, 2013 and 2014</B></TD>
    <TD noWrap align=left width="15%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_con-1"><U>Report of
      Independent Registered Public Accounting Firms</U> </A></TD>
    <TD align=center width="15%" bgColor=#eeeeee><A
      href="#page_con-1"><U>F-1</U> </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_F-2"><U>Balance Sheets</U> </A></TD>
    <TD align=center width="15%"><A href="#page_F-2"><U>F-2</U> </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_F-3"><U>Statements of
      Operations</U> </A></TD>
    <TD align=center width="15%" bgColor=#eeeeee><A
      href="#page_F-3"><U>F-3</U> </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_F-4"><U>Statements of Cash Flow</U> </A></TD>
    <TD align=center width="15%"><A href="#page_F-4"><U>F-4</U> </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A href="#page_F-5"><U>Statement of Changes
      in Capital Deficit</U> </A></TD>
    <TD align=center width="15%" bgColor=#eeeeee><A
      href="#page_F-5"><U>F-5</U> </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_F-6"><U>Notes to Financial Statements</U>
      </A></TD>
    <TD align=center width="15%"><A href="#page_F-6"><U>F-6</U>
  </A></TD>
  </TR>
  <TR vAlign=top bgcolor="#eeeeee">
    <TD align=left>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><b>Unaudited Interim Condensed Consolidated Financial Statements For the Three Months Ended December 31, 2014 and 2013</b></TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=top bgcolor="#eeeeee">
    <TD align=left><A href="#page_xF-2"><U>Balance Sheets</U> </A></TD>
    <TD align=center><A href="#page_xF-2"><U>F-34</U> </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_xF-3"><U>Statements of
      Operations</U> </A></TD>
    <TD align=center><A
      href="#page_xF-3"><U>F-35</U></A></TD>
  </TR>
  <TR vAlign=top bgcolor="#eeeeee">
    <TD align=left><A href="#page_xF-4"><U>Statements of Cash Flow</U> </A></TD>
    <TD align=center><A href="#page_xF-4"><U>F-36</U></A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A href="#page_xF-5"><U>Statement of Changes
      in Capital Deficit</U> </A></TD>
    <TD align=center><A
      href="#page_xF-5"><U>F-37</U> </A></TD>
  </TR>
  <TR vAlign=top bgcolor="#eeeeee">
    <TD align=left><A href="#page_xF-6"><U>Notes to Financial Statements</U> </A></TD>
    <TD align=center><A href="#page_xF-6"><U>F-38</U></A></TD>
  </TR>
</TABLE>
<br>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<P align=justify>
  <!--$$/page=-->
  <A name=page_con-1></A>&nbsp;<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left ><IMG
      src="consentx1x1.jpg"
      border=0></TD>
    <TD align=left width="33%">Tel: 212-885-8000 <BR>
      Fax: 212-697-1299 <BR>
      <B>www.bdo.com</B> </TD>
    <TD align=left width="33%">100 Park Avenue <BR>
      New York, NY 10017 <BR></TD>
  </TR>
</TABLE>
<P align=justify><B>Report of Independent Registered Public Accounting Firm </B></P>
<P align=justify><BR>
  Board of Directors and Stockholders <BR>
  Anavex Life
  Sciences Corp. <BR>
  New York, NY</P>
<P align=justify>We have audited the accompanying consolidated balance sheets of
  Anavex Life Sciences Corp. as of September 30, 2014 and 2013 and the related
  consolidated statements of operations, cash flows, and changes in stockholders&#146;
  equity (capital deficit) for each of the two years in the period ended September
  30, 2014. These financial statements are the responsibility of the Company&#146;s
  management. Our responsibility is to express an opinion on these financial
  statements based on our audits. </P>
<P align=justify>We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. The Company
  is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audits included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the Company&#146;s internal control
  over financial reporting. Accordingly, we express no such opinion. An audit also
  includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements, assessing the accounting principles
  used and significant estimates made by management, as well as evaluating the
  overall financial statement presentation. We believe that our audits provide a
  reasonable basis for our opinion. </P>
<P align=justify>In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  Anavex Life Sciences Corp. at September 30, 2014 and 2013, and the results of
  its operations and its cash flows for each of the two years in the period ended
  September 30, 2014<B>,</B> in conformity with accounting principles generally
  accepted in the United States of America. </P>
<P align=justify>/s/ BDO USA, LLP </P>
<P align=justify>New York, NY </P>
<P align=justify>December 29, 2014 </P>
<P align=justify>&nbsp;</P>
<P align=justify>&nbsp;</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>BDO USA, LLP, a Delaware limited liability partnership, is
      the U.S. member of BDO International Limited, a UK company limited by
      guarantee, and forms part of the international BDO network of independent
      member firms. </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>BDO is the brand name for the BDO network and for each of
      the BDO Member Firms. </TD>
  </TR>
</TABLE>
<BR>
<P align=center>F-1</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-2></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  CONSOLIDATED BALANCE SHEETS<BR>
  September 30, 2014 and
  2013<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=center></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%" >&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%" >&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan="6" align=center
      bgColor=#e6efff>&nbsp;<STRONG><U>ASSETS</U></STRONG> </TD>
    <TD vAlign=bottom align=center width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=center width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="12%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Current </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Cash </TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">7,262,138 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="12%">345,074 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Prepaid expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>89,117 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>48,375 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">7,351,255 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">393,449 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>2,247 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">7,353,502 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">393,449 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD colspan="6" align=center><B><U>LIABILITIES</U></B> </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Current </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Accounts payable and accrued
      liabilities </TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1,249,084 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1,741,797 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Promissory notes payable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">192,065 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">210,863 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1,441,149 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1,952,660 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Non&#150;interest bearing liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">5,719,727 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">904,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>7,160,876 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>2,856,660 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%"></TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%"></TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD colspan="6" align=center bgColor=#e6efff><B><U>STOCKHOLDERS' </U></B><B><U>EQUITY </U></B><B><U>(CAPITAL</U></B><B><U> DEFICIT)</U></B> </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Capital stock </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;&nbsp; Authorized: <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      150,000,000 common shares, par value $0.001 per share <BR>
      &nbsp;&nbsp;
      Issued and outstanding: <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 47,200,237
      common shares (September 30, 2013 &#150; 37,237,588) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">47,201 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">37,238 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Additional paid&#150;in capital </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>52,078,750 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>38,644,523 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Common stock to be issued </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">640,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">60,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Accumulated deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(52,573,325</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(41,204,972</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">192,626 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">(2,463,211</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>7,353,502 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>393,449 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-2</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-3></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  CONSOLIDATED STATEMENTS OF OPERATIONS<BR>
  for the
  years ended September 30, 2014 and 2013<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Operating expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>General and administrative &#150; Notes 8 and 9 </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">2,236,580 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">1,873,520 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Research and development </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>732,395 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>263,847 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total operating expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,968,975</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,137,367</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Other income (expenses) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Interest and finance expenses, net </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(7,089</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(51,341</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Gain (loss) on settlement of accounts
      payable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>199,655 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(976,880</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Financing related charges and adjustments </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(8,624,986</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(480,328</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Foreign exchange loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>33,042 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(54,130</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Total other expenses, net </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(8,399,378</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,562,679</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net loss and comprehensive loss for the
      period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>(11,368,353</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>(3,700,046</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Loss per share </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Basic </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">(0.29</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">(0.12</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Diluted </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.30</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>(0.12</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Weighted average number of shares
      outstanding </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Basic </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">39,727,731 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">31,908,441 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Diluted </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>39,727,731 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>31,908,441 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-3</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-4></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  CONSOLIDATED STATEMENTS OF CASH
  FLOWS<BR>
  for the
  years ended September 30, 2014 and 2013<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash Flows used in Operating Activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net loss for the period </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">(11,368,353</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">(3,700,046</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Adjustments to reconcile net loss to net
      cash used in operations: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Amortization and depreciation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">768 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">576 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Accretion of debt discount </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,917,615 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Stock&#150;based compensation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">637,925 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,002,500 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Amortization of deferred
      financing charge </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,123,612 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,215 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Change in fair value of derivative financial
      instruments </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(2,956,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(15,000</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;(Gain) Loss on settlement of
      accounts payable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(199,655</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>976,880 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Loss on extinguishment of debt </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">8,539,759 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">495,328 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Unrealized foreign exchange </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(18,798</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(4,937</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left colSpan=3>Changes in non&#150;cash working capital balances
      related to operations: </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Prepaid expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(33,234</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accounts payable and accrued liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(303,018</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">465,911 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash used in operating activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(2,659,379</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(777,573</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash Flows used in Investing Activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Acquisition of equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(3,015</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash used in investing activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(3,015</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash Flows provided by Financing Activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Issuance of common shares, net of share issue costs </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">368,170 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">801,285 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Share subscriptions received </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>60,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Proceeds from the issuance of promissory notes </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">250,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Financing fees paid </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(788,712</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Proceeds from the issuance of convertible debentures </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">10,000,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash provided by financing activities </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>9,579,458 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,111,285 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Increase in cash during the period </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>6,917,064 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>333,712 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash, beginning of period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">345,074 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">11,362 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash, end of period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>7,262,138 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>345,074 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Supplemental Cash Flow Information &#150; Note
      11 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-4</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-5></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY (CAPITAL DEFICIT)<BR>
  for the years ended September 30, 2014 and 2013</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD colspan="10" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"> Common Stock </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">Additional </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">Common </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">Paid&#150;in </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">Shares to be </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">Accumulated </TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom">&nbsp;</TD>
    <TD width="2%" align=center valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Shares </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">ParValue </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Capital </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Issued </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Deficit </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="8%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Total </TD>
    <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Balance, October 1, 2012 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>30,240,687 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>30,241 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>34,599,514 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%"
    bgColor=#e6efff>&nbsp;(37,504,926</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%"
      bgColor=#e6efff>(2,875,171</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Equity units issued for settlement of loans payable on July
      5, 2013 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">4,208,910 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">4,209 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">2,563,011 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">2,567,220 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Capital stock issued for cash on July 5,
      2013 &#150; at $0.40 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,196,133 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,196 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>563,257 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>565,453 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Less: Share issue costs </TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(112,174</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(112,174</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Initial purchase shares issued under
      Purchase Agreement on July 5, 2013 &#150; at $0.40 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>591,858 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>592 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>99,750 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>100,342 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Less: Share issue costs </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(71,335</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(71,335</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Common stock to be issued for cash&#150;at $0.50 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>60,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>60,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Stock&#150;based compensation </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,002,500 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,002,500 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Net loss for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(3,700,046</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(3,700,046</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Balance, September 30, 2013 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">37,237,588 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">37,238 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">38,644,523 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">60,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(41,204,972</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(2,463,211</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Equity units issued under Purchase
      Agreement </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>400,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>400 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>187,770 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>188,170 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Commitment shares issued under terms of Purchase Agreement </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">2,510 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">3 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">(3</TD>
    <TD vAlign=bottom align=left width="2%" >) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Capital stock issued for cash&#150;at$0.50 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>120,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>120 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>59,880 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(60,000</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)</TD>
    <TD vAlign=bottom align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Capital stock issued for cash&#150;at$0.30 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">500,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">500 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">149,500 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">30,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">180,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Share issue costs, net of recovery </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(2,452</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>(2,452</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Issuance of detachable warrants </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">5,989,900 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">5,989,900 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Agent's warrants issued in connection with
      convertible debentures </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>334,900 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>334,900 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Beneficial conversion feature on convertible debentures
      issued </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">4,010,100 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">4,010,100 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Reclassification of derivative financial
      instruments upon modification of warrant terms </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>221,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>221,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Capital stock issued pursuant to debt conversions&#150;at$0.30 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">6,378,426 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">6,378 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,907,149 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,913,527 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Capital stock issued pursuant to debt
      conversions&#150;at$0.25 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,561,713 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,562 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>548,558 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&#150; </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>551,120 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Stock based compensation </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">27,925 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">610,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">&#150; </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">637,925 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Net loss for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(11,368,353</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(11,368,353</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Balance, September 30, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">47,200,237 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">47,201 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">52,078,750 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">640,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">(52,573,325</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" >192,626 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-5</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-6></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US Dollars) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 1 </TD>
    <TD align=left width="90%" ><P align=justify><U>Business Description and Basis of Presentation</U> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Business </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Anavex Life Sciences Corp. (the &#147;Company&#148;) is a clinical
      stage biopharmaceutical company engaged in the development of drug
      candidates to treat Alzheimer&#146;s disease, other central nervous system
      (CNS) diseases, and various types of cancer. The Company&#146;s lead compounds
      ANAVEX 2-73 and ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
      (Aricept), are being developed to treat Alzheimer&#146;s disease and
      potentially other central nervous system (CNS) diseases. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In December 2014 a Phase 2a clinical trial was initiated
      for ANAVEX 2-73, which is being evaluated for the treatment of Alzheimer&#146;s
      disease. The randomized trial is designed to assess the safety and
      exploratory efficacy of ANAVEX 2-73 alone as well as in combination with
      donepezil (ANAVEX PLUS) in patients with mild to moderate Alzheimer&#146;s
      disease. ANAVEX 2-73 targets sigma-1 and muscarinic receptors, which have
      been shown in preclinical studies to reduce stress levels in the brain and
      to reverse the pathological hallmarks observed in Alzheimer&#146;s disease.
      ANAVEX 2-73 showed no serious adverse events in a previously performed
      Phase 1 study. In pre-clinical studies, ANAVEX 2-73 demonstrated
      anti-amnesic and neuroprotective properties in various animal models
      including the transgenic mouse model Tg2576. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company intends to identify and initiate discussions
      with potential partners in the next 12 months. Further, the Company may
      acquire or develop new intellectual property and assign, license, or
      otherwise transfer our intellectual property to further its goals. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Basis of Presentation </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>These financial statements have been prepared in
      accordance with generally accepted accounting principles in the United
      States of America and the instructions to Form 10-K. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Certain amounts for the prior periods have been
      reclassified to conform to the current period&#146;s presentation. These
      reclassifications did not impact reported results or earnings per share. </P></TD>
  </TR>
</TABLE>
<P align=center>F-6</P>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-7></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 2</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%"><U>Summary of Significant Accounting
      Policies</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>Use of Estimates</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The preparation of financial statements in accordance
      with United States generally accepted accounting principles requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities at the date of the financial statements
      and the reported amounts of revenue and expenses in the reporting period.
      The Company regularly evaluates estimates and assumptions related to
      deferred income tax asset valuations, asset impairment, conversion
      features embedded in convertible notes payable, derivative valuations,
      stock based compensation and loss contingencies. The Company bases its
      estimates and assumptions on current facts, historical experience and
      various other factors that it believes to be reasonable under the
      circumstances, the results of which form the basis for making judgments
      about the carrying values of assets and liabilities and the accrual of
      costs and expenses that are not readily apparent from other sources. The
      actual results experienced by the Company may differ materially and
      adversely from the Company&#146;s estimates. To the extent there are material
      differences between the estimates and the actual results, future results
      of operations will be affected.</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Principles of Consolidation</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>These consolidated financial statements include the
      accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiaries,
      Anavex Life Sciences (France) SA, a company incorporated under the laws of
      France and Anavex Australia Pty Limited, a company incorporated under the
      laws of Australia. All inter-company transactions and balances have been
      eliminated.</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD><P align=justify>Equipment</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>Equipment is recorded at cost and is depreciated at 33%
      per annum on the straight-line basis.</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD><P align=justify>Impairment of Long-Lived Assets</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company reviews the recoverability of its long-lived
      assets whenever events or changes in circumstances indicate that the
      carrying amount of such assets may not be recoverable. The estimated
      future cash flows are based upon, among other things, assumptions about
      future operating performance, and may differ from actual cash flows.
      Long-lived assets evaluated for impairment are grouped with other assets
      to the lowest level for which identifiable cash flows are largely
      independent of the cash flows of other groups of assets and liabilities.
      If the sum of the projected undiscounted cash flows (excluding interest)
      is less than the carrying value of the assets, the assets will be written
      down to the estimated fair value in the period in which the determination
      is made.</P></TD>
  </TR>
</TABLE>
<P align=center>F-7<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-8></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 3</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Summary of Significant
      Accounting Policies </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">e) </TD>
    <TD><P align=justify>Financial Instruments</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The carrying value of the Company&#146;s financial
      instruments, consisting of cash and accounts payable and accrued
      liabilities approximate their fair value due to the short- term maturity
      of such instruments. Based on borrowing rates currently available to the
      Company for similar terms and based on the short term duration of the debt
      instruments, the carrying value of the promissory notes payable
      approximate their fair value. Unless otherwise noted, it is management&#146;s
      opinion that the Company is not exposed to significant interest, currency
      or credit risks arising from these financial instruments.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">f) </TD>
    <TD><P align=justify>Foreign Currency Translation</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The functional currency of the Company is the US dollar.
      Monetary items denominated in a foreign currency are translated into US
      dollars at exchange rates prevailing at the balance sheet date and
      non-monetary items are translated at exchange rates prevailing when the
      assets were acquired or obligations incurred. Foreign currency denominated
      expense items are translated at exchange rates prevailing at the
      transaction date. Unrealized gains or losses arising from the translations
      are credited or charged to income in the period in which they
      occur.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">g) </TD>
    <TD><P align=justify>Research and Development Expenses</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>Research and developments costs are expensed as incurred.
      These expenses are comprised of the costs of the Company&#146;s proprietary
      research and development efforts, including salaries, facilities costs,
      overhead costs and other related expenses as well as costs incurred in
      connection with third-party collaboration efforts. Milestone payments made
      by the Company to third parties are expensed when the specific milestone
      has been achieved.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>In addition, the Company incurs expenses in respect of
      the acquisition of intellectual property relating to patents and
      trademarks. The probability of success and length of time to develop
      commercial applications of the drugs subject to the acquired patents and
      trademarks is difficult to determine and numerous risks and uncertainties
      exist with respect to the timely completion of the development projects.
      There is no assurance the acquired patents and trademarks will ever be
      successfully commercialized. Due to these risks and uncertainties, the
      acquisition of patents and trademarks does not meet the definition of an
      asset and thus are expensed as incurred.</P></TD>
  </TR>
</TABLE>
<P align=center>F-8<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-9></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 4<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Summary of Significant
      Accounting Policies </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">h) </TD>
    <TD><P align=justify>Income Taxes</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company has adopted the provisions of FASB ASC 740
      "Income Taxes" (&#147;ASC 740&#148;) which requires the asset and liability method
      of accounting for income taxes. Under the asset and liability method,
      deferred tax assets and liabilities are recognized for the future tax
      consequences attributable to temporary differences between the financial
      statements carrying amounts of existing assets and liabilities and their
      respective tax bases. Deferred tax assets and liabilities are measured
      using enacted tax rates expected to apply to taxable income in the years
      in which those temporary differences are expected to be recovered or
      settled.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company follows the provisions of ASC 740 regarding
      accounting for uncertainty in income taxes. The Company initially
      recognizes tax positions in the financial statements when it is more
      likely than not the position will be sustained upon examination by the tax
      authorities. Such tax positions are initially and subsequently measured as
      the largest amount of tax benefit that is greater than 50% likely of being
      realized upon ultimate settlement with the tax authority assuming full
      knowledge of the position and all relevant facts. Application requires
      numerous estimates based on available information. The Company considers
      many factors when evaluating and estimating our tax positions and tax
      benefits, and our recognized tax positions and tax benefits may not
      accurately anticipate actual outcomes. As additional information is
      obtained, there may be a need to periodically adjust the recognized tax
      positions and tax benefits. These periodic adjustments may have a material
      impact on the consolidated statements of operations.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">i) </TD>
    <TD><P align=justify>Basic and Diluted Loss per Share</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The basic loss per common share is computed by dividing
      net loss available to common stockholders by the weighted average number
      of common shares outstanding. Diluted loss per common share is computed
      similar to basic loss per common share except that the denominator is
      increased to include the number of additional common shares that would
      have been outstanding if the potential common shares had been issued and
      if the additional common shares were dilutive. Additionally, the numerator
      is also adjusted for changes in fair value of the derivative financial
      instruments where it is presumed they will be share settled.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>For the year ended September 30, 2014, loss per share
      excludes 107,869,808 (2013 &#150; 12,224,479) potentially dilutive common
      shares related to outstanding options, warrants, and convertible
      debentures as their effect was anti-dilutive.</P></TD>
  </TR>
</TABLE>
<P align=center>F-9<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-10></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 5<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Summary of Significant
      Accounting Policies </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">j) </TD>
    <TD><P align=justify>Stock-based Compensation</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company accounts for all stock-based payments and
      awards under the fair value method.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>Stock-based payments to non-employees are measured at the
      fair value of the consideration received, or the fair value of the equity
      instruments issued, or liabilities incurred, whichever is more reliably
      measurable. The fair value of stock-based payments to non-employees is
      periodically re-measured until the counterparty performance is complete,
      and any change therein is recognized over the vesting period of the award
      and in the same manner as if the Company had paid cash instead of paying
      with or using equity based instruments. Compensation costs for stock-based
      payments with graded vesting are recognized on a straight-line basis. The
      cost of the stock-based payments to non-employees that are fully vested
      and non-forfeitable at the grant date is measured and recognized at that
      date, unless there is a contractual term for services in which case such
      compensation would be amortized over the contractual term.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company accounts for the granting of share purchase
      options to employees using the fair value method whereby all awards to
      employees will be recorded at fair value on the date of the grant. The
      fair value of all share purchase options are expensed over their vesting
      period with a corresponding increase to additional paid-in
      capital.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company uses the Black-Scholes option valuation model
      to calculate the fair value of share purchase options at the date of the
      grant. Option pricing models require the input of highly subjective
      assumptions, including the expected price volatility. Changes in these
      assumptions can materially affect the fair value estimates.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">k) </TD>
    <TD><P align=justify>Fair Value Measurements</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The fair value hierarchy under GAAP is based on three
      levels of inputs, of which the first two are considered observable and the
      last unobservable, that may be used to measure fair value which are the
      following:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=left  >Level 1 - </TD>
    <TD align=left width="75%"><P align=justify>quoted prices (unadjusted) in active markets for
      identical assets or liabilities; </P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD  >&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" ></TD>
    <TD align=left  >Level 2 - </TD>
    <TD align=left width="75%"><P align=justify>observable inputs other than Level I, quoted prices for
      similar assets or liabilities in active markets, quoted prices for
      identical or similar assets and liabilities in markets that are not
      active, and model-derived prices whose inputs are observable or whose
      significant value drivers are observable; and </P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD  >&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" ></TD>
    <TD align=left  >Level 3 - </TD>
    <TD align=left width="75%"><P align=justify>assets and liabilities whose significant value drivers
      are unobservable by little or no market activity and that are significant
      to the fair value of the assets or liabilities. </P></TD>
  </TR>
</TABLE>
<P align=center>F-10</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-11></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 6</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Summary of Significant
      Accounting Policies </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">l) </TD>
    <TD><P align=justify>Fair Value Measurements &#150; (cont&#146;d)</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The book value of cash and accounts payable and accrued
      liabilities approximate their fair values due to the short term maturity
      of those instruments. Based on borrowing rates currently available to the
      Company under similar terms, the book value of promissory notes payable
      approximates their fair values. The Company&#146;s promissory notes payable are
      based on Level 2 inputs in the ASC 820 fair value hierarchy.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>At September 30, 2014, the Company&#146;s Level 3 liabilities
      consisted of embedded conversion features that were required to be
      accounted for as liabilities pursuant to ASC 815 because the Company did
      not have sufficient authorized and unissued shares available to settle
      fully certain conversion features of such instruments.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>At September 30, 2013, the Company&#146;s Level 3 liabilities
      consisted of share purchase warrants that were required to be accounted
      for as liabilities pursuant to ASC 815 Derivatives and Hedging (&#147;ASC
      815&#148;)because the terms of the warrants contained provisions that were not
      in compliance with the fixed for fixed criteria of that
      guidance.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company calculated the fair value at the inception of
      those instruments, at September 30, 2014 and 2013, and at the date of
      reclassification of the warrants into equity using the binomial option
      pricing model to determine the fair value. The following assumptions were
      used for the respective instruments:</P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD align=left width="20%">&nbsp;</TD>
      <TD align=right width="20%">September 30, </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left ><B>Embedded </B><B>conversion </B><B>option</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%">At
        Inception </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%">2014 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Risk&#150;free interest rate </TD>
      <TD align=right width="20%" bgColor=#e6efff>3.13% </TD>
      <TD align=right width="20%" bgColor=#e6efff>3.21% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Expected life of options (years) </TD>
      <TD align=right width="20%">29.58 </TD>
      <TD align=right width="20%">29.48 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Annualized volatility </TD>
      <TD align=right width="20%" bgColor=#e6efff>100.71% </TD>
      <TD align=right width="20%" bgColor=#e6efff>100.07% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Stock price </TD>
      <TD align=right width="20%">$0.26 </TD>
      <TD align=right width="20%">$0.18 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Dividend rate </TD>
      <TD align=right width="20%" bgColor=#e6efff>0.00% </TD>
      <TD align=right width="20%" bgColor=#e6efff>0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD align=left width="18%">&nbsp;</TD>
      <TD align=right width="18%">September 30, </TD>
      <TD align=right width="18%">Reclassification </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left ><B>Warrants</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="18%">At
        Inception </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="18%">2013 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="18%">Date </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Risk&#150;free interest rate </TD>
      <TD align=right width="18%" bgColor=#e6efff>0.28% </TD>
      <TD align=right width="18%" bgColor=#e6efff>0.10% </TD>
      <TD align=right width="18%" bgColor=#e6efff>0.13% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Expected life of options (years) </TD>
      <TD align=right width="18%">1.49 </TD>
      <TD align=right width="18%">1.25 </TD>
      <TD align=right width="18%">1.03 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Annualized volatility </TD>
      <TD align=right width="18%" bgColor=#e6efff>81.57% </TD>
      <TD align=right width="18%" bgColor=#e6efff>77.51% </TD>
      <TD align=right width="18%" bgColor=#e6efff>107.62% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Stock price </TD>
      <TD align=right width="18%">$0.61 </TD>
      <TD align=right width="18%">$0.65 </TD>
      <TD align=right width="18%">$0.25 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Dividend rate </TD>
      <TD align=right width="18%" bgColor=#e6efff>0.00% </TD>
      <TD align=right width="18%" bgColor=#e6efff>0.00% </TD>
      <TD align=right width="18%" bgColor=#e6efff>0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P align=center>F-11<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-12></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 7</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Summary of Significant
      Accounting Policies </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">l) </TD>
    <TD><P align=justify>Fair Value Measurements &#150; (cont&#146;d)</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>Certain assets and liabilities are measured at fair value
      on a nonrecurring basis; that is, the instruments are not measured at fair
      value on an ongoing basis but are subject to fair value adjustments only
      in certain circumstances (for example, when there is evidence of
      impairment). There were no assets or liabilities measured at fair value on
      a nonrecurring basis during the periods ended September 30, 2014 and
      2013.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">m) </TD>
    <TD><P align=justify>Derivative Liabilities</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The Company evaluates its financial instruments and other
      contracts to determine if those contracts or embedded components of those
      contracts qualify as derivatives to be separately accounted for in
      accordance with ASC 815. The result of this accounting treatment is that
      the fair value of the embedded derivative is marked- to-market at each
      balance sheet date and recorded as a liability and the change in fair
      value is recorded in the consolidated statements of operations as other
      income or expense. Upon conversion or exercise of a derivative instrument,
      the instrument is marked to fair value at the conversion date and then
      that fair value is reclassified to equity.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>The classification of derivative instruments, including
      whether such instruments should be recorded as liabilities or as equity,
      is re-assessed at the end of each reporting period. Derivative instruments
      that become subject to reclassification are reclassified at the fair value
      of the instrument on the reclassification date. Derivative instrument
      liabilities will be classified in the balance sheet as current or
      non-current based on whether or not settlement of the derivative
      instrument is expected within 12 months of the balance sheet
      date.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>Certain of the Company&#146;s embedded conversion features on
      debt and outstanding warrants are treated as derivative liabilities for
      accounting purposes under ASC 815 due to insufficient authorized shares to
      fully settle conversion features of the instruments if exercised. In this
      case, the Company utilizes the latest inception date sequencing method to
      reclassify outstanding instruments as derivative instruments. These
      contracts are recognized at fair value with changes in fair value
      recognized in earnings until such time as the conditions giving rise to
      such derivative liability classification have been settled.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>These derivative instruments do not trade in an active
      securities market. The Company uses the binomial option pricing model to
      value derivative liabilities. This model uses Level 3 inputs in the fair
      value hierarchy established by ASC 820 Fair Value
      Measurement.</P></TD>
  </TR>
</TABLE>
<P align=center>F-12<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-13></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 8</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Summary of Significant
      Accounting Policies </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">n) </TD>
    <TD><P align=justify>Recent Accounting Pronouncements</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify><I>Recently Adopted Accounting
      Pronouncements</I></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>In June 2014, the FASB issued Accounting Standards
      Updated No. 2014-10, "Development Stage Entities&#148; (&#147;ASU 2014-10&#148;) which
      removes the definition of a development stage entity from the Master
      Glossary of the Accounting Standards Codification, thereby removing the
      financial reporting distinction between development stage entities and
      other reporting entities from U.S. GAAP. In addition, the update
      eliminates the requirements for development stage entities to (1) present
      inception-to-date information in the statements of income, cash flows, and
      shareholder equity, (2) label the financial statements as those of a
      development stage entity, (3) disclose a description of the development
      stage activities in which the entity is engaged, and (4) disclose in the
      first year in which the entity is no longer a development stage entity
      that in prior years it had been in the development stage.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>During the year ended September 30, 2014, the Company has
      elected to early adopt ASU 2014-10. The adoption of this ASU allowed the
      Company to remove the inception to date information and all references to
      development stage.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify><I>Recent Accounting Pronouncements Not Yet
      Adopted</I></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>In June 2014, the FASB issued ASU No. 2014-12, Accounting
      for Share-Based Payments When the Terms of an Award Provide That a
      Performance Target Could Be Achieved after the Requisite Service Period
      ("ASU 2014-12"). ASU 2014-12 requires that a performance target that
      affects vesting, and that could be achieved after the requisite service
      period, be treated as a performance condition. As such, the performance
      target should not be reflected in estimating the grant date fair value of
      the award. This update further clarifies that compensation cost should be
      recognized in the period in which it becomes probable that the performance
      target will be achieved and should represent the compensation cost
      attributable to the period(s) for which the requisite service has already
      been rendered. The amendments in this ASU are effective for annual periods
      and interim periods within those annual periods beginning after December
      15, 2015. The Company is currently evaluating the impact this guidance
      will have on its financial condition, results of operations and cash
      flows.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>In August 2014, the FASB issued ASU No. 2014-15,
      Disclosure of Uncertainties about an Entity&#146;s Ability to Continue as a
      Going Concern (&#147;ASU 2014-15&#148;). ASU 2014-15 will explicitly require
      management to assess an entity&#146;s ability to continue as a going concern,
      and to provide related footnote disclosure in certain circumstances. The
      new standard will be effective for all entities in the first annual period
      ending after December 15, 2016. The Company is currently evaluating the
      impact this guidance will have on its financial condition, results of
      operations and cash flows.</P></TD>
  </TR>
</TABLE>
<P align=center>F-13<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-14></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 9</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Summary of Significant
      Accountin g Policies </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="15%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">l) </TD>
    <TD><P align=justify>Recent Accounting Pronouncements &#150;
      (cont&#146;d)</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify><I>Recent Accounting Pronouncements
  Not Yet Adopted</I> &#150; (cont&#146;d)<I> </I></P>
<P style="MARGIN-LEFT: 15%" align=justify>In May, 2014, the FASB and the
  International Accounting Standards Board (IASB) issued a converged standard on
  revenue recognition from contracts with customers, ASU 2014-09 (Topic 606 and
  IFRS 15). This standard will supersede nearly all existing revenue recognition
  guidance. ASU 2014-09 is effective for fiscal years, and interim periods within
  those years, beginning after December 15, 2016. The Company is currently
  evaluating the impact this guidance will have on its financial condition,
  results of operations and cash flows. </P>
<P style="MARGIN-LEFT: 15%" align=justify>Other than noted above, the Company
  does not expect the adoption of recently issued accounting pronouncements to
  have a significant impact on our results of operations, financial position or
  cash flow. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 3 </TD>
    <TD align=left width="90%" ><U>Equipment</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">September 30, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Accumulated </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%"><U>Cost</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%"><U>Depreciation</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%"><U>Net</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Computer equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>3,015 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>768 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>2,247 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">September 30, 2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Accumulated </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Cost </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Depreciation </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Net </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Computer equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>5,631 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>5,631 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>F-14<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-15></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 10</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 4 </TD>
    <TD align=left width="90%" ><U>Promissory Notes Payable</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Promissory note dated December 31, 2012
      with a principal balance of $89,618 (CDN $100,000) bearing interest at 12%
      per annum, due on September 30, 2014 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>89,618 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>100,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Promissory note dated January 9, 2013 with
      a principal balance of $77,679 (CDN $86,677), bearing interest at 12% per
      annum, secured by all the present and future assets of the Company; due on
      demand </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>77,679 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>84,060 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Promissory note dated January 9, 2013 with
      a principal balance of $24,768 (CDN $27,639), bearing interest at 12% per
      annum, secured by all the present and future assets of the Company; due on
      demand </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>24,768 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>26,803 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">192,065 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">210,863 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Less: current portion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(192,065</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>(210,863</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>On December 31, 2012, the Company
  issued a promissory note having a principal balance of $89,618 (CDN$100,000)
  with terms that included interest at 12% per annum and matured on June 30, 2013,
  in exchange for an accounts payable owing with respect to unpaid consulting
  fees. This note was not repaid on June 30, 2013 and the maturity date was
  extended to September 30, 2014. Subsequent to September 30, 2014, the Company
  repaid this note. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On January 9, 2013, the Company issued
  two (2) promissory notes (the &#147;Secured Notes&#148;); </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>The Company issued a promissory note in the amount of
      $77,679 (CDN$86,677) to the former President, Secretary, Treasurer, CFO
      and director of the Company (the &#147;President&#148;) in exchange for unpaid
      consulting fees owing to the President. The note is bearing interest at
      12% per annum and was due June 30, 2013.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>The Company issued a promissory note in the amount of
      $24,768 (CDN$27,639) to a former director of the Company (the &#147;Director&#148;)
      in exchange for unpaid consulting fees owing to the Director. The note is
      bearing interest at 12% per annum and was due June 30,
      2013.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>The Secured Notes are secured by a
  right to delay the transfer of any or all of the Company&#146;s assets until the
  obligations of the Secured Notes are satisfied, including a restriction on the
  transfer of cash by the Company and a security interest over the intellectual
  property of the Company. The security interests of the Secured Notes is ranked
  senior to any and all security interests granted prior to the issuance of the
  notes and to all subsequent security interests granted, unless the holders agree
  in writing to other terms.</P>
<P align=center>F-15<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-16></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 11</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 4 </TD>
    <TD align=left width="90%" ><P align=justify><U>Promissory Notes Payable </U>&#150; (cont&#146;d) </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In addition, the Secured Notes contain a provision
      whereby if they are not repaid within 10 days of their maturity dates,
      they shall bear late fees in addition to interest accruing, at a rate of
      $100 per day per note. In an event of default by the Company, under the
      terms of the Secured Notes, the notes shall bear additional late fees of
      $500 per day per note. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Subsequent to the issuance of these Secured Notes, the
      former President resigned as President, Secretary, Treasurer, CFO and
      director of the Company and the former Director resigned as director of
      the Company. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company did not repay the notes on June 30, 2013. The
      Company has disputed the issuance and enforceability of the Secured Notes
      and should there be an attempt to enforce the Secured Notes or collection
      on them, the Company will consider a legal remedy. The Company has not
      accrued any late fees in connection with these Secured Notes as of
      September 30, 2014 or 2013, as the Company does not consider these amounts
      to be legally enforceable. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify><B>Extinguishment of promissory notes payable and
      accounts payable </B></P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the year ended September 30, 2013, the Company
      issued equity units in settlement of certain of its promissory notes and
      trade accounts payable. Each unit consisted of one common share and common
      share purchase warrant entitling the holder to purchase an additional
      common share at $0.75 until July 5, 2018. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>The promissory note and accounts payable settlements are
      summarized as follows: </P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=right>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>
    <TR vAlign=top>
      <TD colspan="7" align=center style="BORDER-BOTTOM: #000000 1px solid"
      >Amount Settled </TD>
      <TD style="BORDER-BOTTOM: #000000 0px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD colspan="4" align=center style="BORDER-BOTTOM: #000000 1px solid">Units issued </TD>
      <TD align=center width="2%"
    >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">&nbsp;</TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="23%" align=center >&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">Accrued </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="12%">Loss on </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      >Date of Note </TD>
      <TD align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">Principal </TD>
      <TD align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">Interest </TD>
      <TD align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">Number </TD>
      <TD align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">FairValue </TD>
      <TD align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="12%">Settlement </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff >Promissory notes payable </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right >June 6, 2012 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">49,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">3,200 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">130,501 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">98,205 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">46,005 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff >June 26, 2012 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>250,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>15,233 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>663,082 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>498,972 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>233,739 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right >October 17, 2012 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">150,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">5,425 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">388,562 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">292,394 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="12%">136,969 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff >November 14, 2012 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>50,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>1,501 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>128,753 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>96,887 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>45,386 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right >February 8, 2013 </TD>
      <TD align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">50,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">699 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">126,747 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">95,377 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">44,678 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff >&nbsp;</TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>549,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>26,058 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>1,437,645 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>1,081,835 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>506,777 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD align=right >&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff >Accounts payable </TD>
      <TD align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,108,506 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&#150; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2,771,265 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2,085,386 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>976,880 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR>
      <TD align=right >&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="12%">&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff >&nbsp;</TD>
      <TD align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,657,506 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>26,058 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>4,208,910 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>3,167,221 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,483,657 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=center>F-16<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-17></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 12</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 4 </TD>
    <TD align=left width="90%" ><U>Promissory Notes Payable </U>&#150;
      (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The fair value of each unit issued was determined to be
      $0.753 determined by aggregating (i) the fair value of $0.61 for the
      Company&#146;s common shares based on their quoted market price on the date of
      settlement and (ii) the fair value of $0.143 for each warrant included in
      the Company&#146;s units. The fair value of the Company&#146;s warrants was
      determined using the Black Scholes option pricing model with the following
      assumptions: </P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Stock price </TD>
      <TD align=right width="35%" bgColor=#e6efff >$0.61 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Exercise price </TD>
      <TD align=right width="35%" >$0.75 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected volatility </TD>
      <TD align=right width="35%" bgColor=#e6efff >81.57% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Risk&#150;free discountrate </TD>
      <TD align=right width="35%" >0.28% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected term </TD>
      <TD align=right width="35%" bgColor=#e6efff >1.49years </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expected dividend yield </TD>
      <TD align=right width="35%" >0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>The loss on settlement of debt was
  recorded on the statement of operations for the year ended September 30, 2013
  and was reduced by an amount of $11,449 relating to the interest that accrued on
  the promissory notes that was forgiven upon settlement of the notes payable in
  exchange for shares. </P>
<P style="MARGIN-LEFT: 10%" align=justify>As discussed in Note 5, the warrants
  issued were required to be accounted for as derivative liabilities pursuant to
  the guidance of ASC 815. Consequently, the Company allocated the proceeds from
  the issuance of the units first to the warrants, at their fair value of $600,000
  with the remainder of $2,567,220 being allotted to equity. The fair value of the
  warrants of $600,000 was determined based on the binomial option pricing model
  using the following assumptions: risk-free interest rate 0.28%, expected life
  1.49 years, expected volatility 81.57%, dividend yield 0.00% .</P>
<P align=center>F-17<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-18></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 13</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities</U> </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%"  >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" >Non-interest bearing liabilities
      consists of the following: </TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%">2014 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%">2013 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Senior Convertible Debentures </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>263,727 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&#150; </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Derivative Financial Instruments </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">5,456,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">904,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>5,719,727 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>904,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify><B>Senior Convertible Debentures </B></P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
      <TD align=left valign="bottom" >&nbsp;</TD>
      <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="17%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
      <TD width="2%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="17%" align=center valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2013 </TD>
      <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    </TR>
    <TR>
      <TD valign="bottom" >&nbsp;</TD>
      <TD width="1%" valign="bottom" >&nbsp;</TD>
      <TD width="17%" valign="bottom">&nbsp;</TD>
      <TD width="2%" valign="bottom" >&nbsp;</TD>
      <TD width="1%" valign="bottom" >&nbsp;</TD>
      <TD width="17%" valign="bottom">&nbsp;</TD>
      <TD width="2%" valign="bottom" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Senior Convertible
        Debentures, non&#150;interest bearing, unsecured, due March 18, 2044 </TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>7,446,044 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>&#150; </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >Less: Debt Discount </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%">(7,182,317</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%">&#150; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Total carrying value </TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>263,727 </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD vAlign=bottom align=right width="17%" bgColor=#e6efff>&#150; </TD>
      <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" >Less: current portion </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%">&#150; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%">&#150; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left valign="bottom" bgColor=#e6efff >Long term liability </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%" bgColor=#e6efff>263,727 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="17%" bgColor=#e6efff>&#150; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>On March 13, 2014, the Company entered
  into a Securities Purchase Agreement (the &#147;Purchase Agreement&#148;) with certain
  purchasers (the &#147;Purchasers&#148;) pursuant to which the Company issued senior
  convertible debentures in the aggregate principal amount of $10,000,000 (the
  &#147;Debentures&#148;).</P>
<P style="MARGIN-LEFT: 10%" align=justify>In connection with the issuance of the
  Debentures, the Company issued an aggregate of 67,666,666 share purchase
  warrants as follows:</P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="15%">&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="15%">Non&#150; </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="15%">&nbsp;</TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">Purchasers </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">purchasers </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">Total </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Series A Warrants </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff>33,333,333 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff>500,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff>33,833,333 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Series B Warrants </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">33,333,333 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">500,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">33,833,333 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>66,666,666 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>1,000,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>67,666,666 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>Each Series A warrant is exercisable
  into one common share of the Company at $0.30 per share until March 18, 2019. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Each Series B warrant is exercisable
  into one common share of the Company at $0.42 per share until March 18, 2019 </P>
<P style="MARGIN-LEFT: 10%" align=justify>The
  Debentures are unsecured, non-interest bearing and are due on March 18, 2044.
  The Debentures were convertible, in whole or in part, at the option of the
  holder into common shares of the Company at $0.30 per share (&#147;the Conversion
  Price&#148;). The Conversion Price of the debenture will be adjusted in the event of
  common stock dividend, split or consolidation. The Conversion Price was later
  amended to $0.25 per share, as set forth below. </P>
<P align=center>F-18<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-19></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 14</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><P align=justify><U>Non-interest Bearing Liabilities </U>&#150; (cont&#146;d) </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify><B>Senior Convertible Debentures </B>&#150; (cont&#146;d) </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Pursuant to the guidance of ASC 470-20 Debt with
      Conversion and Other Options, the Company allocated the proceeds from the
      issuance of the Debentures between the Debentures and the detachable
      Purchaser warrants using the relative fair value method. The fair value of
      the Purchaser warrants of $22,326,200 at issuance resulted in a debt
      discount at issuance of $5,989,900. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD width="90%" ><P align=justify>The Company recorded a beneficial conversion feature
      discount of $4,010,100 in respect of the Debentures issued, based on the
      intrinsic value of the conversion feature limited to a maximum of the
      total proceeds of the Debentures allocated to the Debentures. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The total debt discount at issuance of $10,000,000 was
      being amortized using the effective interest method over the term of the
      Debentures. During the year ended September 30, 2014, the Company recorded
      accretion expense of $1,914,433 (2013: $Nil) in respect of the accretion
      of this discount, which is included in other financing related charges and
      adjustments on the consolidated statement of operations. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In consideration for the Debentures issued, the Company
      issued an aggregate of 1,000,000 share purchase warrants to non-lenders as
      described above. The fair value of the Non-Purchaser Warrants of $334,900,
      along with finder&#146;s fees and other financing costs directly associated
      with the issuance of the Debentures in the amount of $788,712, was
      recorded as a deferred financing charge and is being amortized to income
      over the term of the Debentures using the effective interest method.
      During the year ended September 30, 2014, the Company had recorded
      financing expense of $13,044 (2013: $Nil) in respect of the amortization
      of these charges. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The fair value of the Purchaser and Non-Purchaser
      warrants at issuance was determined using the Black Scholes option pricing
      model with the following weighted average assumptions: </P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
      <TD align=left width="35%" bgColor=#e6efff >1.56% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expected life (years) </TD>
      <TD align=left width="35%" >5.00 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected volatility </TD>
      <TD align=left width="35%" bgColor=#e6efff >97.16% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Dividend yields </TD>
      <TD align=left width="35%" >0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>In connection with the Purchase
  Agreement, the Company also entered into a registration rights agreement with
  each Purchaser (the &#147;RRA&#148;) whereby the Company agreed to file a registration
  statement with the Securities and Exchange Commission (the &#147;SEC&#148;) covering the
  resale of the shares of the Company&#146;s common stock issuable upon conversion of
  the Debentures and upon exercise of the Purchaser warrants.</P>
<P style="MARGIN-LEFT: 10%" align=justify>On July 23, 2014, the registration
  statement was declared effective by the SEC. </P>
<P align=center>F-19<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-20></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 15</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><B>Senior Convertible Debentures </B>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><U>Amendment Agreements</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On August 25, 2014, the Company entered into amendment
      agreements with each Purchaser, pursuant to which all provisions regarding
      liquidating damages and the accrual of damages with respect to the
      obligations for, and rights enforceable against, the Company, were
      eliminated from the RRAs. As consideration for entering into the amendment
      agreements and for the Purchasers agreeing to forego an amount of $459,912
      in liquidating damages that had accrued and were accruing pursuant to the
      terms of the original RRAs, the Company agreed to adjust the fixed
      conversion price of the remaining outstanding debentures from $0.30 per
      share to $0.25 per share (the &#147;Debenture Amendment&#148;). </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company assessed the guidance under ASC 470-60 <I>Troubled Debt Restructurings</I> and determined that this guidance did
      not apply to the Debenture Amendment. The Debenture Amendment was
      considered a substantial change in the terms of the debentures pursuant to
      ASC 470-50 <I>Modifications and Extinguishments </I>and accordingly, the
      Company was required to apply debt extinguishment accounting.
      Consequently, the Company calculated a net non-cash loss on extinguishment
      of debt of $8,099,137 as the premium of the aggregate fair value of the
      amended debentures over their aggregate carrying values of $906
      immediately prior to the Debenture Amendment and the gain from the
      forgiveness of accrued liquidating damages of $459,912. This amount is
      included in other financing related charges and adjustments on the
      consolidated statement of operations for the year ended September 30,
      2014. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company calculated the fair value of the amended
      Debentures by discounting future cash flows using rates representative of
      current borrowing rates for debt instruments without a conversion feature
      and by using the binomial option pricing model to determine the fair value
      of the conversion features, using the following assumptions: </P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
      <TD align=left width="25%" bgColor=#e6efff >3.13% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expected life (years) </TD>
      <TD align=left width="25%" >29.58 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected volatility </TD>
      <TD align=left width="25%" bgColor=#e6efff >100.71% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Dividend yields </TD>
      <TD align=left width="25%" >0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>The net loss was recorded as part of
  financing related charges and adjustments in the consolidated statement of
  operations during the year ended September 30, 2014. In addition, in accordance
  with debt extinguishment accounting, remaining unamortized financing costs of
  $1,110,568 associated with the original Debentures were immediately amortized
  through earnings upon entering into the amendments. This amount is also included
  in other financing related charges and adjustments in the consolidated statement
  of operations for the year ended September 30, 2014. </P>
<P align=center>F-20<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-21></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 16</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><B>Senior Convertible Debentures </B>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the year ended September 30, 2014, the Company
      issued an aggregate of 8,940,139 shares of common stock pursuant to
      conversion notices received from the Purchasers as follows: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD><P align=justify>An aggregate of 6,378,426 shares of common stock were
      issued at a conversion price of $0.30 per share pursuant to the conversion
      of $1,913,527 in outstanding principal amounts due under the Debentures,
      prior to the Debenture Amendment.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD><P align=justify>An aggregate of 2,561,713 shares of common stock were
      issued at a conversion price of $0.25 per share pursuant to the conversion
      of $640,428 in outstanding principal amounts due under the Debentures,
      subsequent to the Debenture Amendments.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>As a result of the bifurcation of the
  embedded conversion option subsequent to the Debenture Amendments as discussed
  above, for accounting purposes, two instruments are considered outstanding and,
  upon exercise of the contractual conversion option, extinguishment accounting
  has been applied. Consequently, the embedded conversion feature is marked to
  fair value at the conversion date and the shares issued pursuant to conversion
  are recorded at their fair value on the date of issuance, determined with
  reference to the quoted market price of the Company&#146;s shares on the issuance
  date. The resulting difference is recorded as a gain or loss on the consolidated
  statement of operations. During the year ended September 30, 2014, the Company
  recorded $19,290 (2013: $Nil) in respect of net gains on these conversion of the
  Debentures. </P>
<P style="MARGIN-LEFT: 10%" align=justify><B>Embedded conversion options and
  warrants </B></P>
<P style="MARGIN-LEFT: 10%" align=justify>The following table presents the
  components of the Company&#146;s embedded conversion options and warrants being
  accounted for as derivative liabilities. These instruments have no observable
  market data and are derived using an option pricing model measured at fair value
  on a recurring basis, using Level 3 inputs to the fair value hierarchy:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>September 30, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2014 </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%">2013 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Warrants </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>904,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Embedded conversion features </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">5,456,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Derivative financial instruments </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>5,456,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>904,000 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>These derivative financial instruments
  arise as a result of applying ASC 815 <I>Derivatives and Hedging</I> (&#147;ASC
  815&#148;), which requires the Company to make a determination whether an
  equity-linked financial instrument, or embedded feature, is indexed to the
  entity&#146;s own stock. This guidance applies to any freestanding financial
  instrument or embedded features that have the characteristics of a derivative,
  and to any freestanding financial instruments that are potentially settled in an
  entity&#146;s own stock. </P>
<P align=center>F-21<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-22></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 17</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%"><U>Non-interest Bearing Liabilities </U>&#150;
      (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%"><B>Embedded conversion options and warrants </B>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>During the year ended September 30, 2014, the Company
      issued debentures with fixed price embedded conversion features and,
      subsequent to certain amendments as discussed above, the Company did not
      have a sufficient number of authorized and available shares of common
      stock to fully settle the conversion feature of such instruments if
      exercised. As such, the Company was required to account for these
      instruments as derivative financial instruments. On the commitment date of
      the related convertible debentures, the Company recorded a debt discount
      to the extent of the fair value of the embedded conversion features
      required to be accounted for as liabilities under ASC 815. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>During the year ended September 30, 2013, the Company
      issued an aggregate of 6,448,966 common stock purchase warrants that were
      required to be accounted for as liabilities pursuant to ASC 815 as a
      result of certain features embedded in those instruments. During the year
      ended September 30, 2014, the Company amended the terms of these common
      stock purchase warrants. As of the modification date, these warrants were
      no longer required to be accounted for as liabilities. Pursuant to the
      guidance of ASC 815, the Company reclassified the fair value of these
      instruments on the date of modification into equity, with the change in
      fair value up to the date of modification being recorded on the
      consolidated statements of operations as other income. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>As a result of the application of ASC 815, the Company
      has recorded these liabilities at their fair values as follows: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD colspan="4" align=center>September 30, </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%">2014 </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%">2013 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Balance, beginning of the period </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>904,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="17%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left>Fair value at issuance </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">8,277,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">919,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Change in fair value during the period </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(2,956,000</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(15,000</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left>Transfer to equity upon modification of warrant terms </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(221,000</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Transfer to equity upon exercise </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(548,000</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=left>Balance, end of the period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">5,456,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">904,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>The embedded conversion features and
  warrants accounted for as derivative financial instruments have no observable
  market and the Company estimated their fair values at September 30, 2014 and
  2013 using the binomial option pricing model based on the following weighted
  average management assumptions: </P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="20%"><U>2014</U> </TD>
      <TD align=left width="20%"><U>2013</U> </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
      <TD align=left width="20%" bgColor=#e6efff>3.21% </TD>
      <TD align=left width="20%" bgColor=#e6efff>0.10% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expected life (years) </TD>
      <TD align=left width="20%">29.48 </TD>
      <TD align=left width="20%">1.25 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected volatility </TD>
      <TD align=left width="20%" bgColor=#e6efff>100.07% </TD>
      <TD align=left width="20%" bgColor=#e6efff>77.51% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Stock price </TD>
      <TD align=left width="20%">$0.184 </TD>
      <TD align=left width="20%">$0.65 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Dividend yields </TD>
      <TD align=left width="20%" bgColor=#e6efff>0.00% </TD>
      <TD align=left width="20%" bgColor=#e6efff>0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P align=center>F-22<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-23></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 18</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 6 </TD>
    <TD align=left width="90%" ><U>Capital Stock</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>As at September 30, 2014, the Company&#146;s authorized share
      capital, consisting of 150,000,000 share of common stock, was insufficient
      to fully settle the conversion or exercise of all outstanding convertible
      debentures, stock purchase warrants and stock options at that date. As a
      result, and in accordance with ASC 815, the Company has recorded
      derivative liabilities in connection with certain embedded conversion
      options contained in convertible debentures outstanding at September 30,
      2014, as more fully described in Note 5. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Year ended September 30, 2014 </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On February 24, 2014, the Company issued 120,000 units at
      $0.50 per unit for gross proceeds of $60,000, which was received during
      the year ended September 30, 2013. Each unit consisted of one common share
      and one common share purchase warrant entitling the holder to purchase
      additional common shares at $1.00 per share for a period of five years
      from the date of issuance. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On February 24, 2014, the Company issued 500,000 units at
      $0.30 per unit for gross proceeds of $150,000. Each unit consisted of one
      common share and one common share purchase warrant entitling the holder to
      purchase additional common shares at $0.75 per share for a period of five
      years from the date of issuance. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Year ended September 30, 2013 </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On July 5, 2013, the Company issued 4,208,910 units in
      settlement of $549,000 in promissory notes, $26,058 of accrued interest on
      these notes, which was included in accounts payable and accrued
      liabilities, and $1,108,506 in other accounts payable and accrued
      liabilities. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase an additional common
      share at $0.75 per share until July 5, 2018. (Note 4). </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On July 5, 2013, the Company issued 2,196,133 units at
      $0.40 per unit for gross proceeds of $878,453 pursuant to private
      placement agreements. Each unit consisted of one common share and one
      common share purchase warrant entitling the holder to purchase an
      additional common share at $0.75 per share until July 5, 2018. As
      discussed in Note 5, the warrants issued were required to be accounted for
      as derivative liabilities pursuant to the guidance of ASC 815.
      Consequently, the Company allocated the proceeds from the issuance of the
      units first to the warrants, at their fair value of $313,000 with the
      remainder of $565,453 being allotted to equity. The fair value of the
      warrants of $313,000 was determined based on the binomial option pricing
      model using the following assumptions: risk-free interest rate 0.28%,
      expected life 1.49 years, expected volatility 81.57%, dividend yield
      0.00%. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In addition, the Company paid finder&#146;s fees of $95,680 in
      connection with the issuance of the units, consisting of cash of $89,680
      and $6,000 in warrants to purchase 43,923 shares of common stock at $0.75
      per share until July 5, 2018 in connection with this private placement.
      The fair value of the warrants of $6,000 was determined using the binomial
      option pricing model using the following assumptions: risk-free interest
      rate 0.28%, expected life 1.49 years, expected volatility 81.57%, dividend
      yield 0.00%. In addition, the Company incurred share issuance costs of
      $16,494. </P></TD>
  </TR>
</TABLE>
<P align=center>F-23<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-24></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 19</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 6 </TD>
    <TD align=left width="90%" ><U>Capital Stock </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" >Common stock to be issued </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On February 28, 2014, the Company received $30,000 in
      share subscriptions in respect of the issuance of 100,000 units at $0.30
      per unit. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase additional common shares
      at $0.75 per share for a period of five years from the date of issuance. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 7 </TD>
    <TD align=left width="90%" ><P align=justify><U>Lincoln Park Purchase Agreement</U> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On July 5, 2013, the Company entered into a $10,000,000
      purchase agreement (the &#147;Purchase Agreement&#148;) with Lincoln Park Capital
      Fund, LLC, (&#147;Lincoln Park&#148;) an Illinois limited liability company (the
      &#147;Financing&#148;) pursuant to which the Company may sell and issue to Lincoln
      Park, and Lincoln Park is obligated to purchase, up to $10,000,000 in
      value of its shares of common stock from time to time over a 25 month
      period. In connection with the Financing, the Company also entered into a
      registration rights agreement with Lincoln Park whereby the Company agreed
      to file a registration statement with the Securities and Exchange
      Commission (the &#147;SEC&#148;) covering the shares of the Company&#146;s common stock
      that may be issued to Lincoln Park under the Purchase Agreement. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company will determine, at its own discretion, the
      timing and amount of its sales of common stock, subject to certain
      conditions and limitations. The purchase price of the shares that may be
      sold to Lincoln Park under the Purchase Agreement will be based on the
      market price of the Company&#146;s shares of common stock immediately preceding
      the time of sale without any fixed discount, provided that in no event
      will such shares be sold to Lincoln Park when the closing sale price is
      less than $0.50 per share. There are no upper limits on the per share
      price that Lincoln Park may pay to purchase such common stock. The
      purchase price will be equitably adjusted for any reorganization,
      recapitalization, non-cash dividend, stock split or similar transaction
      occurring during the business days used to compute such price. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Pursuant to the Purchase Agreement, Lincoln Park
      initially purchased 250,000 shares of the Company&#146;s common stock for
      $100,000. In consideration for entering into the Purchase Agreement, the
      Company issued to Lincoln Park 341,858 shares of common stock as a
      commitment fee and shall issue up to 133,409 shares pro rata, when and if,
      Lincoln Park purchases, at the Company&#146;s discretion, the remaining
      $10,000,000 aggregate commitment. The Purchase Agreement may be terminated
      by the Company at any time at its discretion without any cost to the
      Company. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>On October 23, 2013, the registration statement was
      declared effective by the SEC. </P></TD>
  </TR>
</TABLE>
<P align=center>F-24<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-25></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 20</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 7 </TD>
    <TD align=left width="90%"><U>Lincoln Park Purchase Agreement </U>&#150;
      (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>The Company incurred a net $73,787 in direct expenses in
      connection with the Purchase Agreement and registration statement, of
      which $71,335 was incurred during the year ended September 30, 2013. These
      were recorded as share issuance costs as a charge against additional paid
      in capital during the year ended September 30, 2014 and during the nine
      months ended June 30, 2014. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>During the year ended September 30, 2014, the Company
      issued to Lincoln Park an aggregate of 402,510 shares of common stock
      under the Purchase Agreement, including 400,000 shares of common stock for
      an aggregate purchase price of $188,170 and 2,510 commitment shares. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%"><P align=justify><U>Related Party Transactions</U> </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%"><P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>During the year ended September 30, 2014, the Company was
      charged general and administrative expenses totaling $1,041,140 in respect
      of directors fees, management bonuses and share and stock option based
      compensation charges paid or accrued to directors and officers of the
      Company, inclusive of amounts noted below (2013: $81,072 in respect of
      consulting fees paid to directors, officers, and a company controlled by a
      director and officer of the Company). </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%"><P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>As at September 30, 2014, included in accounts payable
      and accrued liabilities was $28,232 (2013: $30,447) owing to directors and
      officers of the Company for director fees and reimbursable expenses, and a
      former director and officer of the Company for unpaid fees. </P></TD>
  </TR>
  <TR>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%"><P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%"><P align=justify>During the year ended September 30, 2013, pursuant to an
      employment agreement with the President, Chief Executive Officer, Chief
      Financial Officer, Secretary and Treasurer, and Director, of the Company,
      the Company: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">i) </TD>
    <TD><P align=justify>granted 2,000,000 fully vested share purchase options
      exercisable at $0.40 per share until July 5, 2023. The Company recognized
      stock based compensation expense of $1,002,500 during the year ended
      September 30, 2013 in connection with these options.</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD vAlign=top width="5%">ii) </TD>
    <TD><P align=justify>issued 4,000,000 shares of restricted common stock that
      vest as follows:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%"><P align=justify>25% upon the Company starting a Phase Ib/IIb human study </P></TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%"></TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%"><P align=justify>25% upon the Company in-licensing additional assets in
      clinical or pre- clinical stage (vested during the year ended September
      30, 2014) </P></TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%"></TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%"><P align=justify>25% upon the Company securing additional non-dilutive
      equity funding in 2013 of at least $5,000,000 with a share price higher
      than the previous funding </P></TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%"><P align=justify>25% upon the Company obtaining a listing on a major stock
      exchange </P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>Included in operating results for the
  year ended September 30, 2014 is an amount of $610,000 relating to the vesting
  of 1,000,000 shares of restricted common stock upon the achievement of certain
  performance conditions. The fair value of $0.61 per share was determined with
  reference to the quoted market price of the Company&#146;s shares on the commitment
  date. This amount has been included in common stock to be issued at September
  30, 2014.</P>
<P align=center>F-25<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-26></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 21</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%"><U>Commitments</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>Share Purchase Warrants</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>A summary of the Company&#146;s share purchase warrants
      outstanding is presented below:</P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="17%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="17%">Weighted </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="17%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="17%">Average </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="17%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="17%">Exercise </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%">Number of Shares </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="17%">Price </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="17%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD align=center width="17%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance, October 1, 2012 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>4,250,141 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=center width="17%" bgColor=#e6efff>1.16 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expired </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="17%">(1,549,628</TD>
      <TD align=left width="2%">) </TD>
      <TD align=left width="1%">$</TD>
      <TD align=center width="17%">2.56 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Issued </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>6,448,966 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%"
    bgColor=#e6efff>0.75 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Balance, September 30, 2013 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="17%">9,149,479 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=center width="17%">0.75 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expired </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>(2,700,513</TD>
      <TD align=left width="2%" bgColor=#e6efff>) </TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=center width="17%" bgColor=#e6efff>0.75 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Issued </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">68,466,666 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%">0.36 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance, September 30, 2014 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>74,915,632 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%"
    bgColor=#e6efff>0.40 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 15%" align=justify>At September 30, 2014, the Company has
  74,915,632 currently exercisable share purchase warrants outstanding as follows: </P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="50%" border=0>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Number </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="21%">Exercise Price </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="35%">Expiry Date </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>6,448,966 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="21%" bgColor=#e6efff>0.75 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="35%" bgColor=#e6efff>July 5, 2018 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>500,000 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="21%">0.75 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="35%">February 14, 2019 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>120,000 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="21%" bgColor=#e6efff>1.00 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="35%" bgColor=#e6efff>February 24, 2019 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>33,833,333 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="21%">0.30 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="35%">March 13, 2019 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>33,833,333 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="21%" bgColor=#e6efff>0.42 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="35%" bgColor=#e6efff>March 13, 2019 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>180,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="21%">0.31 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="35%">May 31, 2019 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      bgColor=#e6efff>74,915,632 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="21%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="35%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 15%" align=justify>All of the 6,448,966 warrants expiring
  on July 5, 2018 and the 500,000 warrants expiring February 14, 2019 contain a
  contingent call provision whereby the Company may have the option to call for
  cancellation of all or any portion of the warrants for consideration equal to
  $0.001 per share, provided the quoted market price of the Company&#146;s common stock
  exceeds $1.50 for a period of twenty consecutive trading days, subject to
  certain minimum volume restrictions and other restrictions as provided in the
  warrant agreements. </P>
<P align=center>F-26<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-27></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 22</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%" ><U>Commitments </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Stock&#150;based Compensation Plan</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>In April, 2007, the Company adopted a stock option plan
      which provides for the granting of stock options to selected directors,
      officers, employees or consultants in an aggregate amount of up to
      3,000,000 common shares of the Company and, in any case, the number of
      shares to be issued to any one individual pursuant to the exercise of
      options shall not exceed 10% of the issued and outstanding share capital.
      The granting of stock options, exercise prices and terms are determined by
      the Company's Board of Directors. If no vesting schedule is specified by
      the Board of Directors on the grant of options, then the options shall
      vest over a 4-year period with 25% of the granted options vesting each
      year commencing 1 year from the grant date. For stockholders who have
      greater than 10% of the outstanding common shares of the Company and who
      have granted options, the exercise price of their options shall not be
      less than 110% of the fair of the stock on grant date. Otherwise, options
      granted shall have an exercise price equal to their fair value on grant
      date.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>On February 2, 2011, the Company amended and restated the
      2007 stock option plan to increase the number of options authorized to
      4,000,000.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>A summary of the status of Company&#146;s outstanding stock
      purchase options for the years ended September 30, 2014 and 2013 is
      presented below:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Weighted </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Weighted </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Number of </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Average </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Average Grant </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">Shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">Exercise Price </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="15%">Date
      fair value </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Outstanding at October 1,
      2012 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>1,775,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>2.94 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Expired </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">(550,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="15%">3.86 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Forfeited </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>(150,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>3.72 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Granted </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">2,000,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">0.40 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="15%">0.50 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Outstanding at September 30,
      2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>3,075,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>1.26 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Expired </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">(705,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="15%">2.70 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Granted </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>800,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>0.32 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>0.25 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Outstanding at September 30, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="15%">3,170,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%">0.70 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Exercisable at September 30,
      2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>2,100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>0.56 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Exercisable at September 30, 2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="15%">2,305,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%">0.79 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>F-27<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-28></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 23</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%"><U>Commitments </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Stock&#150;based Compensation Plan &#150; (cont&#146;d)</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>At September 30, 2014, the following stock options were
      outstanding:</P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=right>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="85%" border=0>
    <TR vAlign=top>
      <TD colspan="6" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Number of Shares </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="17%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Aggregate </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Remaining </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="5%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Number </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Exercise </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="17%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Intrinsic </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="11%" align=center nowrap>Contractual </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Total </TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="5%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Vested </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Price </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">ExpiryDate </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Value </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD width="11%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Life
        (yrs) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>&nbsp; &nbsp; &nbsp;100,000 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="5%" bgColor=#e6efff><SUP>(1)</SUP></TD>
      <TD align=center width="2%" bgColor=#e6efff></TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>100,000 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>3.67 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>March 30, 2016 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>&#150; </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>1.50 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>&nbsp; &nbsp; &nbsp;270,000 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="5%"><SUP>(2)</SUP></TD>
      <TD align=center width="2%"></TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="11%">&#150; </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="11%">3.00 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="17%">February 8, 2017 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="11%">&#150; </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="11%">2.36 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>2,000,000 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="5%" bgColor=#e6efff><SUP>(3)</SUP></TD>
      <TD align=center width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>2,000,000 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>0.40 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>July 5 ,2023 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>&#150; </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>8.77 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>&nbsp; &nbsp; &nbsp;300,000 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="5%"><SUP>(4)</SUP></TD>
      <TD align=center width="2%"></TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="11%">&#150; </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="11%">0.30 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="17%">May 7, 2024 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="11%">&#150; </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="11%">9.61 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>&nbsp; &nbsp; &nbsp;500,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="5%"
    bgColor=#e6efff><SUP>(5)</SUP></TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    bgColor=#e6efff></TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>&#150; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>0.33 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>May 8, 2024 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%"
    bgColor=#e6efff>&#150; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>9.61 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right>3,170,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=center
      width="5%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=center
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="11%">2,100,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="11%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="17%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%">&#150;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="11%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 15%" align=justify>The aggregate intrinsic value is
  calculated as the difference between the exercise price of the underlying awards
  and the quoted market price of the Company&#146;s stock for the options that were
  in-the-money at September 30, 2014. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(1)</SUP> </TD>
    <TD><P align=justify>As of September 30, 2014 and September 30, 2013, these
      options had fully vested. These options were granted during the year ended
      September 30, 2011 and vested over a period of one year from the date of
      grant. The fair value of these options at issuance was calculated to be
      $267,000. The Company did not recognize any stock-based compensation
      during the year ended September 30, 2014 (2013: $Nil).</P></TD>
  </TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(2)</SUP> </TD>
    <TD><P align=justify>As of September 30, 2014 and 2013, none of these options
      had vested. The options vest upon one or more compounds: entering Phase II
      trial &#150; 90,000 options; entering Phase III trial &#150; 90,000 options; and
      receiving FDA approval &#150; 90,000 options. No stock-based compensation has
      been recorded in the financial statements as none of the performance
      conditions have yet been met.</P></TD>
  </TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(3)</SUP> </TD>
    <TD><P align=justify>As of September 30, 2014 and 2013 these options had fully
      vested. These options were granted during the year ended September 30,
      2013 and vested immediately upon granting. The Company recognized stock
      based compensation expense of $Nil during the year ended September 30,
      2014 (2013: $1,002,500) in connection with these options. These amounts
      have been included in general and administrative expenses on the Company&#146;s
      statement of operations.</P></TD>
  </TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(4)</SUP> </TD>
    <TD><P align=justify>As of September 30, 2014 none of these options had
      vested. These options were issued during the year ended September 30, 2014
      and vest annually over a three year period commencing on the first
      anniversary of the date of the grant. The Company recognized stock based
      compensation expense of $9,252 during the year ended September 30, 2014,
      (2013: $Nil) in connection with these options. These amounts have been
      included in general and administrative expenses on the Company&#146;s statement
      of operations.</P></TD>
  </TR>
</TABLE>
<P align=center>F-28<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-29></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 24</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%" ><U>Commitments </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Stock&#150;based Compensation Plan &#150;
      (cont&#146;d)</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="15%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(5)</SUP> </TD>
    <TD><P align=justify>As of September 30, 2014 none of these options had
      vested. These options were issued during the year ended September 30, 2014
      and vest annually over a four year period commencing on the first
      anniversary of the date of the grant. The Company recognized stock based
      compensation expense of $16,905 during the year ended September 30, 2014
      (2013: $Nil) in connection with these options.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>During the year ended September 30,
  2014, 705,000 options expired for which the Company had recognized stock-based
  compensation of $Nil (2013: $Nil) during the year ended September 30, 2014. </P>
<P style="MARGIN-LEFT: 15%" align=justify>The fair value of stock options
  granted has been determined using the Black-Scholes option pricing model using
  the following weighted average assumptions applied to stock options granted
  during the periods: </P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%">2014 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%">2013 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Risk&#150;free interestrate </TD>
      <TD align=right width="20%" bgColor=#e6efff>2.17% </TD>
      <TD align=right width="20%" bgColor=#e6efff>2.73% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Expected life of options (years) </TD>
      <TD align=right width="20%">6.50 </TD>
      <TD align=right width="20%">10.0years </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Annualized volatility </TD>
      <TD align=right width="20%" bgColor=#e6efff>91.21% </TD>
      <TD align=right width="20%" bgColor=#e6efff>71.39% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Dividend rate </TD>
      <TD align=right width="20%">0.00% </TD>
      <TD align=right width="20%">0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 15%" align=justify>There has been no stock-based
  compensation recognized in the financial statements for the year ended September
  30, 2014 (2013: $nil) for options that will vest upon the achievement of
  performance milestones because the Company has determined that satisfaction of
  the performance milestones was not probable. Compensation relating to stock
  options exercisable upon achieving performance milestones will be recognized in
  the period the milestones are achieved. </P>
<P align=center>F-29<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-30></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 25</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 10 </TD>
    <TD align=left width="90%" ><U>Income Taxes</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The tax effects of the temporary differences that give
      rise to the Company&#146;s estimated deferred tax assets and liabilities are as
      follows: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2014</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2013</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff><I>Tax</I><I>rate</I> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff><I>34%</I> </TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="12%" bgColor=#e6efff><I>34%</I> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Net operating loss carry forwards </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>8,270,000&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%"  bgColor=#e6efff>7,141,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Research and development tax credits </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">745,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >705,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Foreign exchange </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(23,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>(19,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Accrued bonuses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">170,000</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >34,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Intangible asset costs </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>70,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>51,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Stock&#150;based compensation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">441,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >633,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Valuation allowance for deferred tax assets </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(9,673,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
     bgColor=#e6efff>(8,545,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Net deferred tax assets </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
     bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>The provision for income taxes differ
  from the amount established using the statutory income tax rate as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2014</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2013</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Income benefit at statutory rate of 34% </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>(3,865,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,258,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Foreign income taxed at other rates </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">13,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Permanent differences </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Effect of stock based compensation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">202,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Debt extinguishment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,736,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>501,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Mark&#150;to&#150;market deriative liability adjustment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(994,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">7,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Non&#150;deductible finance and
      accretion expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>808,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Other permanent differences </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(16,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(5,000</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Research and development tax credit </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(26,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(17,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Adjustment and true up to prior years' tax provision </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">14,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(161,000</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Change in valuation allowance </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,128,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>933,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Income Tax Expense </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>As of September 30, 2014, the Company
  had net operating loss carry-forwards of approximately $24,000,000 (2013:
  $21,000,000) available to offset future taxable income. The carry-forwards will
  begin to expire in 2027 unless utilized in earlier years. The Company has not
  yet filed any tax returns in France or Australia. </P>
<P align=center>F-30<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-31></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 26</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 10 </TD>
    <TD align=left width="90%" ><U>Income Taxes </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company evaluates its valuation allowance
      requirements based on projected future operations. When circumstances
      change and this causes a change in management&#146;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 equal to the deferred tax asset has been established at both
      September 30, 2014 and 2013. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Uncertain Tax Positions </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company files income tax returns in the U.S. federal
      jurisdiction and various state and foreign jurisdictions. The Company&#146;s tax
      returns are subject to tax examinations by U.S. federal and state tax
      authorities, or examinations by foreign tax authorities until the respective
      statutes of limitation expire. The Company is subject to tax examinations by tax
      authorities for all taxation years commencing on or after 2006. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 11 </TD>
    <TD align=left width="90%" ><P align=justify><U>Supplemental Cash Flow Information</U> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Investing and financing activities that do not have a
      direct impact on current cash flows are excluded from the statement of
      cash flows. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>During the year ended September 30, 2014; </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>the Company reclassified an amount of $221,000 into
      equity upon modification of the terms of certain derivative
      instruments.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>the Company issued 6,378,426 shares of common stock of
      the Company pursuant to the conversion of $1,913,528 face value of
      convertible debentures at $0.30 per share;</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD><P align=justify>the Company issued 2,561,713 shares of common stock of
      the Company at a fair value of $551,120 pursuant to the conversion of
      convertible debentures at a conversion price of $0.25 per
      share.</P></TD>
  </TR>
</TABLE>
<P align=center>F-31<BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-32></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Consolidated
  Financial Statements <BR>
  September 30, 2014 and 2013 <BR>
  (Stated in US
  Dollars)&nbsp; &#150; Page 27</P>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 11 </TD>
    <TD align=left width="90%" ><U>Supplemental Cash Flow
      Information </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%"  >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" >During the year ended September
      30, 2013; </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>the Company issued three promissory notes in the
      principal amounts of $100,000, $87,865 (CDN$86,677) and $28,017
      (CDN$27,639) in exchange for accounts payable owing to three vendors in
      respect of unpaid consulting fees.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>The Company issued 4,208,910 units of the Company at
      their fair value of $1.02 per unit to settle (i) interest bearing notes
      payable outstanding in the amount of $549,000; (ii) accrued interest in
      connection with the notes payable of $26,058 included in accounts payable
      and accrued liabilities; and (iii) accounts payable of $1,108,506. Each
      unit consisted of one common share and one common share purchase warrant
      exercisable into one additional common share for $0.75 per share until
      July 5, 2018. In addition, in connection with the settlement of $11,449 of
      accrued interest with respect to the notes payable was forgiven. The
      Company recorded a loss on debt settlement of $1,472,208 as a result of
      this transaction.</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 12 </TD>
    <TD align=left width="90%" ><U>Subsequent Events</U> </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" >Subsequent to September 30, 2014; </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>On October 22, 2014, the Company entered into a
      Securities Purchase Agreement (the &#147;Purchase Agreement&#148;) with one investor
      for an equity investment of $500,000 at a price of $0.25 per unit.
      Pursuant to the terms of the Purchase Agreement, the Company agreed to
      sell, and Lincoln Park agreed to purchase, 2,000,000 shares of common
      stock. In addition, the Company agreed to issue an aggregate of 4,000,000
      stock purchase warrants, of which 2,000,000 are exercisable at $0.30 per
      share and 2,000,000 are exercisable at $0.42 per share, each for a period
      of five years, subject to adjustment for stock splits, combinations, and
      reclassification events.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>The Company issued an aggregate of 5,484,668 shares of
      common stock pursuant to the conversion of $1,371,167 face value of
      convertible debentures at $0.25 per share.</P></TD>
  </TR>
</TABLE>
<P align=center>F-32</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<P align=center><B>ANAVEX LIFE SCIENCES CORP. </B></P>
<P align=center>INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS </P>
<P align=center>December 31, 2014 </P>
<P align=center>(<U>Unaudited</U>) </P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center>F-33</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-2></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  INTERIM CONDENSED CONSOLIDATED BALANCE
  SHEETS<BR>
  December 31, 2014 and September 30, 2014<BR>
  (<u>Unaudited</u>)<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=center ></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="15%" align=center nowrap>December 31, </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="15%" align=center nowrap>September 30, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=center  bgColor=#e6efff
      >&nbsp;<STRONG><U>ASSETS</U></STRONG> </TD>
    <TD align=center width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="15%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="15%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left  >&nbsp;</TD>
    <TD vAlign=bottom align=center width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="15%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="15%" >&nbsp;</TD>
    <TD vAlign=bottom align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Current </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp;Cash </TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="15%">6,980,924 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >$</TD>
    <TD vAlign=bottom align=right width="15%">7,262,138 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp;Prepaid expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>67,576 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>89,117 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">7,048,500 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">7,351,255 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>1,998 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>2,247 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="15%">7,050,498 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="15%">7,353,502 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=center ><B><U>LIABILITIES</U></B> </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Current </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp;Accounts payable
      and accrued liabilities </TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>1,319,840 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>1,249,084 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp;Promissory notes payable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%">98,312 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%">192,065 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>1,418,152 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>1,441,149 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Non-interest bearing liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%">5,159,220 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%">5,719,727 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>6,577,372 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>7,160,876 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD ></TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%"></TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%"></TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=center bgColor=#e6efff ><B><U>STOCKHOLDERS' </U></B><B><U>EQUITY</U></B> </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Capitalstock </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;&nbsp;&nbsp;&nbsp;
      Authorized:&nbsp;<BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      150,000,000 common shares, par value $0.001 per
      share&nbsp;<BR>
      &nbsp;&nbsp;&nbsp;&nbsp; Issued and
      outstanding:&nbsp;<BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      54,804,905 common shares (September 30, 2014 - 47,200,237) </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">54,807 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">47,201 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Additional paid-in capital </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>53,138,362 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>52,078,750 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Common stock to be issued </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">640,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">640,000 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Accumulated deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>(53,360,043</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>(52,573,325</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%">473,126 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%">192,626 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>7,050,498 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>7,353,502 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-34</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-3></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
  OPERATIONS<BR>
  for the three months ended December 31, 2014 and
  2013<BR>
  (<U>Unaudited</U>)<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="15%">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="15%">2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Operating expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >General and administrative -
      Notes 8 and 9 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>452,053 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>304,428 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Research and development </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">318,625 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">5,180 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Total operating expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">(770,678</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">(309,608</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff >&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Other income (expenses) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Interest and finance income
      (expenses), net </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>(77,009</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>(3,287</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Financing related charges and adjustments </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">37,651 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">683,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Foreign exchange gain (loss) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>23,318 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>(11,468</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Total other income
      (expenses), net </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>(16,040</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>668,245 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net loss and comprehensive
      loss for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>(786,718</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>358,637 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Loss per share </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp;Basic </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
    width="15%">(0.02</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%">0.01 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp;Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>(0.02</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>(0.01</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Weighted average number of
      shares outstanding </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp;Basic </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">51,630,390 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">37,484,793 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp;Diluted </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>51,630,390 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>43,933,759 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-35</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-4></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH
  FLOWS<BR>
  for the three months ended December 31, 2014 and
  2013<BR>
  (<U>Unaudited</U>)<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%">2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash Flows used in Operating Activities </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net loss for the period </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="17%">(786,718</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="17%">358,637 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Adjustments to reconcile net loss to net
      cash used in operations: </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Amortization and depreciation </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">249 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">192 </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Accretion of debt discount </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>7,120 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Stock-based compensation </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">15,362 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Non-cash financing related
      charges </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>29,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Change in fair value of derivative financial
      instruments </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(2,000</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(683,000</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Gain on extinguishment of debt </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(42,771</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Unrealized foreign exchange </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(5,609</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(10,499</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Changes in non-cash working capital
      balances related to operations: </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Prepaid expenses </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(9,373</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(20,449</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Accounts payable and accrued
      liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>101,670 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(79,871</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash used in operating activities </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(693,070</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(434,990</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash Flows used in Investing Activities </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="17%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="17%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Acquisition of equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>(2,327</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash used in investing activities </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">- </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="17%">(2,327</TD>
    <TD align=left width="2%">) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash Flows provided by Financing Activities </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="17%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="17%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Issuance of common shares </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>500,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>188,170 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Repayment of promissory note </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">(88,144</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash provided by financing activities </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>411,856 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>188,170 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Increase in cash during the period </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(281,214</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>(249,147</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash, beginning of period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">7,262,138 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="17%">345,074 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash, end of period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>6,980,924 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>95,927 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Supplemental Cash Flow Information - Note 11</P>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-36</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-5></A>
<P align=center><B>ANAVEX </B><B>LIFE </B><B>SCIENCES </B><B>CORP.</B><BR>
  INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES
  IN STOCKHOLDERS' EQUITY<BR>
  for the three months ended December 31,
  2014<BR>
  (<u>Unaudited</u> )<BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 9pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="10" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> Common Stock </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>Additional </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>Common </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>Paid-in </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>Shares to be </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>Accumulated </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="8%" align=center nowrap>&nbsp;</TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD
      width="8%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Shares </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="8%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Par
      Value </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Capital </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Issued </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="8%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Deficit </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="8%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Total </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance, October 1, 2014 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>47,200,237 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>47,201 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>52,078,750 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>&nbsp;640,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%"
    bgColor=#e6efff>&nbsp;(52,573,325</TD>
    <TD vAlign=bottom align=left width="2%"  bgColor=#e6efff>)</TD>
    <TD vAlign=bottom align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>192,626 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Capital stock issued pursuant to debt conversions - at
      $0.25 </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">5,604,668 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">5,607 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,044,250 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">1,049,857 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Capital stock issued for cash - at $0.25</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,000,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%" bgColor=#e6efff>2,000 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Stock based compensation </TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">15,362 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">- </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="8%">15,362 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net loss for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(786,718</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%" bgColor=#e6efff>(786,718</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance, December 31, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%">54,804,905 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%">54,807 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%">53,138,362 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%">640,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%">(53,360,043</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="8%">473,126 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<P align=center>F-37</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-6></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014 <BR>
  (<U>Unaudited</U>) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 1 </TD>
    <TD align=left width="90%" ><U>Business Description and Basis
      of Presentation</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" >Business </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Anavex Life Sciences Corp. (the &#147;Company&#148;) is a clinical
      stage biopharmaceutical company engaged in the development of drug
      candidates to treat Alzheimer&#146;s disease, other central nervous system
      (CNS) diseases, and various types of cancer. The Company&#146;s lead compounds
      ANAVEX 2-73 and ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
      (Aricept), are being developed to treat Alzheimer&#146;s disease and
      potentially other central nervous system (CNS) diseases. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In December 2014 a Phase 2a clinical trial was initiated
      for ANAVEX 2-73, which is being evaluated for the treatment of Alzheimer&#146;s
      disease. The randomized trial is designed to assess the safety and
      exploratory efficacy of ANAVEX 2-73 alone as well as in combination with
      donepezil (ANAVEX PLUS) in patients with mild to moderate Alzheimer&#146;s
      disease. ANAVEX 2-73 targets sigma-1 and muscarinic receptors, which have
      been shown in preclinical studies to reduce stress levels in the brain and
      to reverse the pathological hallmarks observed in Alzheimer&#146;s disease.
      ANAVEX 2-73 showed no serious adverse events in a previously performed
      Phase 1 study. In pre-clinical studies, ANAVEX 2-73 demonstrated
      anti-amnesic and neuroprotective properties in various animal models
      including the transgenic mouse model Tg2576. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company intends to identify and initiate discussions
      with potential partners in the next 12 months. Further, the Company may
      acquire or develop new intellectual property and assign, license, or
      otherwise transfer our intellectual property to further its goals. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Basis of Presentation </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>These interim condensed consolidated financial statements
      have been prepared, without audit pursuant to the rules and regulations of
      the Securities and Exchange Commission. Accordingly, certain information
      and footnote disclosures normally included in the annual financial
      statements in accordance with generally accepted accounting principles
      have been condensed or omitted pursuant to such rules and regulations. In
      the opinion of management, the disclosures are adequate to make the
      information presented not misleading. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>These statements reflect all adjustments, consisting of
      normal recurring adjustments, which in the opinion of management are
      necessary for fair presentation of the information contained herein. These
      interim condensed financial statements should be read in conjunction with
      the audited financial statements included in its annual report on Form
      10-K for the year ended September 30, 2014. The Company follows the same
      accounting policies in the preparation of interim reports. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Operating results for the three months ended December 31,
      2014 are not necessarily indicative of the results that may be expected
      for the year ending September 30, 2015. </P></TD>
  </TR>
</TABLE>
<p align="center">F-38</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-7></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 2 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><U>Basic and Diluted Loss per
      Share</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The basic loss per common share is computed by dividing
      net loss available to common stockholders by the weighted average number
      of common shares outstanding. Diluted loss per common share is computed
      similar to basic loss per common share except that the denominator is
      increased to include the weighted average of all potentially dilutive
      shares of common stock that were outstanding during the period.
      Additionally, the numerator is also adjusted for changes in fair value of
      the derivative financial instruments where it is presumed they will be
      share settled. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>As of December 31, 2014, loss per share excludes
      107,265,140 (2013 &#150; 9,023,966) potentially dilutive common shares related
      to outstanding options, warrants, and convertible debentures as their
      effect was anti-dilutive. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><P align=justify><U>Recent Accounting Pronouncements</U> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify><I>Recent Accounting Pronouncements Not Yet Adopted</I> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In June 2014, the FASB issued ASU No. 2014-12, Accounting
      for Share-Based Payments When the Terms of an Award Provide That a
      Performance Target Could Be Achieved after the Requisite Service Period
      ("ASU 2014-12"). ASU 2014-12 requires that a performance target that
      affects vesting, and that could be achieved after the requisite service
      period, be treated as a performance condition. As such, the performance
      target should not be reflected in estimating the grant date fair value of
      the award. This update further clarifies that compensation cost should be
      recognized in the period in which it becomes probable that the performance
      target will be achieved and should represent the compensation cost
      attributable to the period(s) for which the requisite service has already
      been rendered. The amendments in this ASU are effective for annual periods

      and interim periods within those annual periods beginning after December
      15, 2015. The Company is currently evaluating the impact this guidance
      will have on its financial condition, results of operations and cash
      flows. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In August 2014, the FASB issued ASU No. 2014-15,
      Disclosure of Uncertainties about an Entity&#146;s Ability to Continue as a
      Going Concern (&#147;ASU 2014-15&#148;). ASU 2014-15 will explicitly require
      management to assess an entity&#146;s ability to continue as a going concern,
      and to provide related footnote disclosure in certain circumstances. The
      new standard will be effective for all entities in the first annual period
      ending after December 15, 2016. The Company is currently evaluating the
      impact this guidance will have on its financial condition, results of
      operations and cash flows. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In May, 2014, the FASB and the International Accounting
      Standards Board (IASB) issued a converged standard on revenue recognition
      from contracts with customers, ASU 2014-09 (Topic 606 and IFRS 15). This
      standard will supersede nearly all existing revenue recognition guidance.
      ASU 2014-09 is effective for fiscal years, and interim periods within
      those years, beginning after December 15, 2016. The Company is currently
      evaluating the impact this guidance will have on its financial condition,
      results of operations and cash flows. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Other than noted above, the Company does not expect the
      adoption of recently issued accounting pronouncements to have a
      significant impact on our results of operations, financial position or
      cash flow. </P></TD>
  </TR>
</TABLE>
<p align="center">F-39</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-8></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 3 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 3 </TD>
    <TD align=left width="90%"><U>Equipment</U> </TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD colspan="7" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> December31,2014 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="19%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap>Accumulated </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap>&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="19%" align=center nowrap><U>Cost</U> </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap><U>Depreciation</U> </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap><U>Net</U> </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="19%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="19%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="19%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Computer equipment </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="19%"
    bgColor=#e6efff>3,015 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="19%"
    bgColor=#e6efff>1,017 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="19%"
    bgColor=#e6efff>1,998 </TD>
      <TD align=left width="2%"
bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD colspan="7" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"> September30,2014 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="19%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap>Accumulated </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap>&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="19%" align=center nowrap>Cost </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap>Depreciation </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="19%" align=center nowrap>Net </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR>
      <TD>&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="19%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="19%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="19%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Computer equipment </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="19%"
    bgColor=#e6efff>3,015 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="19%"
    bgColor=#e6efff>768 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="19%"
    bgColor=#e6efff>2,247 </TD>
      <TD align=left width="2%"
bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<p align="center">F-40</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-9></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 4 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 4 </TD>
    <TD align=left width="90%" ><U>Promissory Notes Payable</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="15%" align=center nowrap>December 31, </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="15%" align=center nowrap >September 30, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Promissory note dated
      December 31, 2012 with a principal balance of CDN$100,000 bearing interest
      at 12% per annum, due on September 30, 2014 </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>- </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>89,618 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Promissory note dated January
      9, 2013 with a principal balance of CDN$86,677, bearing interest at 12%
      per annum, secured by all the present and future assets of the Company;
      due on demand </TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>74,543 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%" bgColor=#e6efff>77,679 </TD>
    <TD vAlign=bottom align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
    <TD vAlign=bottom width="1%" >&nbsp;</TD>
    <TD vAlign=bottom width="15%">&nbsp;</TD>
    <TD vAlign=bottom width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Promissory note dated January
      9, 2013 with a principal balance of CDN$27,639, bearing interest at 12%
      per annum, secured by all the present and future assets of the Company;
      due on demand </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>23,769 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>24,768 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">98,312 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" >&nbsp;</TD>
    <TD vAlign=bottom align=right width="15%">192,065 </TD>
    <TD vAlign=bottom align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Less: current portion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>(98,312</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="15%" bgColor=#e6efff>(192,065</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="15%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="15%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>On December 31, 2012, the Company
  issued a promissory note having a principal balance of CDN$100,000, with terms
  that included interest at 12% per annum and matured on June 30, 2013, in
  exchange for an accounts payable owing with respect to unpaid consulting fees.
  This note was not repaid on June 30, 2013 and the maturity date was extended to
  September 30, 2014. The Company repaid this note during the three months ended
  December 31, 2014. </P>
<P style="MARGIN-LEFT: 10%" align=justify>On January 9, 2013, the Company issued
  two (2) promissory notes (the &#147;Secured Notes&#148;); </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>The Company issued a promissory note in the amount of
      CDN$86,677 to the former President, Secretary, Treasurer, CFO and director
      of the Company (the &#147;President&#148;) in exchange for unpaid consulting fees
      owing to the President. The note is bearing interest at 12% per annum and
      was due June 30, 2013.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>The Company issued a promissory note in the amount of
      CDN$27,639 to a former director of the Company (the &#147;Director&#148;) in
      exchange for unpaid consulting fees owing to the Director. The note is
      bearing interest at 12% per annum and was due June 30,
      2013.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>The Secured Notes are secured by a
  right to delay the transfer of any or all of the Company&#146;s assets until the
  obligations of the Secured Notes are satisfied, including a restriction on the
  transfer of cash by the Company and a security interest over the intellectual
  property of the Company. The security interests of the Secured Notes is ranked
  senior to any and all security interests granted prior to the issuance of the
  notes and to all subsequent security interests granted, unless the holders agree
  in writing to other terms.</P>
<p align="center">F-41</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-10></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 5 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 4 </TD>
    <TD align=left width="90%" ><U>Promissory Notes Payable </U>&#150;
      (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In addition, the Secured Notes contain a provision
      whereby if they are not repaid within 10 days of their maturity dates,
      they shall bear late fees in addition to interest accruing, at a rate of
      $100 per day per note. In an event of default by the Company, under the
      terms of the Secured Notes, the notes shall bear additional late fees of
      $500 per day per note. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Subsequent to the issuance of these Secured Notes, the
      former President resigned as President, Secretary, Treasurer, CFO and
      director of the Company and the former Director resigned as director of
      the Company. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company did not repay the notes on June 30, 2013. The
      Company has disputed the issuance and enforceability of the Secured Notes
      and should there be an attempt to enforce the Secured Notes or collection
      on them, the Company will consider a legal remedy. The Company has not
      accrued any late fees in connection with these Secured Notes as of
      December 31, 2014 or September 30, 2014, as the Company does not consider
      these amounts to be legally enforceable. </P></TD>
  </TR>
</TABLE>
<p align="center">F-42</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-11></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 6 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities</U> </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%"  >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" >Non-interest bearing liabilities
      consists of the following: </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="15%" align=center nowrap>December 31, </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="15%" align=center nowrap>September 30, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Senior Convertible Debentures </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>221,220 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>263,727 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Derivative Financial Instruments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">4,938,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">5,456,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>5,159,220 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>5,719,727 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify><B>Senior Convertible Debentures </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="15%" align=center nowrap>December 31, </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="15%" align=center nowrap>September 30, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff >&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="15%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Senior Convertible Debentures, non-interest </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="15%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >bearing ,unsecured, due March
      18, 2044 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>6,044,877 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>7,446,044 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Less: Debt Discount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">(5,823,657</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">(7,182,317</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Total carrying value </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>221,220 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>263,727 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Less: current portion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Long term liability </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>221,220 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="15%"
    bgColor=#e6efff>263,727 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>On March 13, 2014, the Company entered
  into a Securities Purchase Agreement (the &#147;Purchase Agreement&#148;) with certain
  purchasers (the &#147;Purchasers&#148;) pursuant to which the Company issued senior
  convertible debentures in the aggregate principal amount of $10,000,000 (the
  &#147;Debentures&#148;).</P>
<P style="MARGIN-LEFT: 10%" align=justify>In connection with the issuance of the
  Debentures, the Company issued an aggregate of 67,666,666 share purchase
  warrants as follows:</P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD width="15%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap >&nbsp;</TD>
      <TD width="1%" align=center nowrap >&nbsp;</TD>
      <TD width="15%" align=center nowrap>Non- </TD>
      <TD width="2%" align=center nowrap >&nbsp;</TD>
      <TD width="1%" align=center nowrap >&nbsp;</TD>
      <TD width="15%" align=center nowrap>&nbsp;</TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD
      width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Purchasers </TD>
      <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">purchasers </TD>
      <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
      <TD
      width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Total </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Series A Warrants </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff>33,333,333 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff>500,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff>33,833,333 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Series B Warrants </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">33,333,333 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">500,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">33,833,333 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>66,666,666 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>1,000,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>67,666,666 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>Each Series A warrant is exercisable
  into one common share of the Company at $0.30 per share until March 18, 2019. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Each Series B warrant is exercisable
  into one common share of the Company at $0.42 per share until March 18, 2019 </P>
<P style="MARGIN-LEFT: 10%" align=justify>The Debentures are unsecured,
  non-interest bearing and are due on March 18, 2044. The Debentures were
  originally convertible, in whole or in part, at the option of the holder into
  common shares of the Company at $0.30 per share (&#147;the Conversion Price&#148;). The
  Conversion Price of the debenture will be adjusted in the event of common stock
  dividend, split or consolidation. The Conversion Price was later amended to
  $0.25 per share, as set forth below. </P>
<p align="center">F-43</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-12></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 7 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><B>Senior Convertible Debentures </B>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Pursuant to the guidance of ASC 470-20 Debt with
      Conversion and Other Options, the Company allocated the proceeds from the
      issuance of the Debentures between the Debentures and the detachable
      Purchaser warrants using the relative fair value method. The fair value of
      the Purchaser warrants of $22,326,200 at issuance resulted in a debt
      discount at issuance of $5,989,900. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company recorded a beneficial conversion feature
      discount of $4,010,100 in respect of the Debentures issued, based on the
      intrinsic value of the conversion feature limited to a maximum of the
      total proceeds of the Debentures allocated to the Debentures. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The total debt discount at issuance of $10,000,000 was
      being amortized using the effective interest method over the term of the
      Debentures. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>In consideration for the Debentures issued, the Company
      issued an aggregate of 1,000,000 share purchase warrants to non-lenders as
      described above. The fair value of the Non- Purchaser Warrants of
      $334,900, along with finder&#146;s fees and other financing costs directly
      associated with the issuance of the Debentures in the amount of $788,712,
      was recorded as a deferred financing charge and was being amortized to
      income over the term of the Debentures using the effective interest
      method. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The fair value of the Purchaser and Non-Purchaser
      warrants at issuance was determined using the Black Scholes option pricing
      model with the following weighted average assumptions: </P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
      <TD align=left width="30%" bgColor=#e6efff >1.56% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expected life (years) </TD>
      <TD align=left width="30%" >5.00 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected volatility </TD>
      <TD align=left width="30%" bgColor=#e6efff >97.16% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Dividend yields </TD>
      <TD align=left width="30%" >0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>In connection with the Purchase
  Agreement, the Company also entered into a registration rights agreement with
  each Purchaser (the &#147;RRA&#148;) whereby the Company agreed to file a registration
  statement with the Securities and Exchange Commission (the &#147;SEC&#148;) covering the
  resale of the shares of the Company&#146;s common stock issuable upon conversion of
  the Debentures and upon exercise of the Purchaser warrants.</P>
<P style="MARGIN-LEFT: 10%" align=justify>On July 23, 2014, the registration
  statement was declared effective by the SEC. </P>
<p align="center">F-44</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-13></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 8 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><B>Senior Convertible Debentures </B>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><U>Amendment Agreements</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On August 25, 2014, the Company entered into amendment
      agreements with each Purchaser, pursuant to which all provisions regarding
      liquidating damages and the accrual of damages with respect to the
      obligations for, and rights enforceable against, the Company, were
      eliminated from the RRAs. As consideration for entering into the amendment
      agreements and for the Purchasers agreeing to forego an amount of $459,912
      in liquidating damages that had accrued and were accruing pursuant to the
      terms of the original RRAs, the Company agreed to adjust the fixed
      conversion price of the remaining outstanding debentures from $0.30 per
      share to $0.25 per share (the &#147;Debenture Amendment&#148;). </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company assessed the guidance under ASC 470-60 <I>Troubled Debt Restructurings</I> and determined that this guidance did
      not apply to the Debenture Amendment. The Debenture Amendment was
      considered a substantial change in the terms of the debentures pursuant to
      ASC 470-50 <I>Modifications and Extinguishments </I>and accordingly, the
      Company was required to apply debt extinguishment accounting.
      Consequently, the Company calculated a net non-cash loss on extinguishment
      of debt of $8,099,137 as the premium of the aggregate fair value of the
      amended debentures over their aggregate carrying values of $906
      immediately prior to the Debenture Amendment and the gain from the
      forgiveness of accrued liquidating damages of $459,912. This amount is
      included in other financing related charges and adjustments on the
      consolidated statement of operations during the year ended September 30,
      2014. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company calculated the fair value of the amended
      Debentures by discounting future cash flows using rates representative of
      current borrowing rates for debt instruments without a conversion feature
      and by using the binomial option pricing model to determine the fair value
      of the conversion features, using the following assumptions: </P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Risk-free interest rate </TD>
      <TD align=left width="30%" bgColor=#e6efff >3.13% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expected life (years) </TD>
      <TD align=left width="30%" >29.58 </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Expected volatility </TD>
      <TD align=left width="30%" bgColor=#e6efff >100.71% </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Dividend yields </TD>
      <TD align=left width="30%" >0.00% </TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 10%" align=justify>In addition, in accordance with debt
  extinguishment accounting, remaining unamortized financing costs of $1,110,568
  associated with the original Debentures were immediately amortized through
  earnings upon entering into the amendments. This amount is also included in
  other financing related charges and adjustments in the consolidated statement of
  operations during the year ended September 30, 2014. </P>
<p align="center">F-45</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-14></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 9 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><B>Senior Convertible
      Debentures </B>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the three months ended December 31, 2014, the
      Company issued an aggregate of 5,604,668 shares of common stock were based
      on a conversion price of $0.25 per share pursuant to the conversion of
      $1,401,167 in outstanding principal amounts due under the Debentures. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>As a result of the bifurcation of the embedded conversion
      option subsequent to the Debenture Amendments as discussed above, for
      accounting purposes, two instruments are considered outstanding and, upon
      exercise of the contractual conversion option, extinguishment accounting
      is applied. Consequently, the embedded conversion feature is adjusted to
      fair value at the conversion date and the shares issued pursuant to
      conversion are recorded at their fair value on the date of issuance,
      determined with reference to the quoted market price of the Company&#146;s
      shares on the issuance date. The resulting difference is recorded as a
      gain or loss on the consolidated statement of operations. During the three
      months ended December 31, 2014, the Company recorded $42,771 (2013: $Nil)
      in respect of net gains on these conversion of the Debentures. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify><B>Embedded conversion options and warrants</B> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>At December 31, 2014 and September 30, 2014, the Company
      had outstanding embedded conversion options associated with the Senior
      Convertible Debentures and outstanding warrants being accounted for as
      derivative liabilities. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>These derivative financial instruments arise as a result
      of applying ASC 815 <I>Derivatives</I> <I>and Hedging </I>(&#147;ASC 815&#148;),
      which requires the Company to make a determination whether an
      equity-linked financial instrument, or embedded feature, is indexed to the
      entity&#146;s own stock. This guidance applies to any freestanding financial
      instrument or embedded features that have the characteristics of a
      derivative, and to any freestanding financial instruments that are
      potentially settled in an entity&#146;s own stock. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the year ended September 30, 2014, the Company
      issued debentures with fixed price embedded conversion features and,
      subsequent to certain amendments as discussed above, the Company did not
      have a sufficient number of authorized and available shares of common
      stock to fully settle the conversion feature of such instruments if
      exercised. As such, the Company was required to account for these
      instruments as derivative financial instruments. On the commitment date of
      the related convertible debentures, the Company recorded a debt discount
      to the extent of the fair value of the embedded conversion features
      required to be accounted for as liabilities under ASC 815. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the three months ended December 31, 2014, the
      Company issued units consisting of shares of common stock and share
      purchase warrants and, since the Company does not have a sufficient number
      of authorized and available shares of common stock to fully settle the
      exercise of these warrants if exercised, due to the outstanding embedded
      conversion features discussed above. As a result, the Company was required
      to account for these instruments as derivative financial instruments. On
      the commitment date of the related warrants, the Company allocated the
      proceeds from the issuance of units first to the derivative liability at
      its fair value, with any remaining proceeds allocated to the common stock. </P></TD>
  </TR>
</TABLE>
<p align="center">F-46</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-15></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 10 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Non-interest Bearing
      Liabilities </U>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><B>Embedded conversion options
      and warrants </B>&#150; (cont&#146;d) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the year ended September 30, 2013, the Company
      issued an aggregate of 6,448,966 common stock purchase warrants that were
      required to be accounted for as liabilities pursuant to ASC 815 as a
      result of certain features embedded in those instruments. During the three
      months ended December 31, 2013, the Company amended the terms of these
      common stock purchase warrants. As of the modification date, these
      warrants were no longer required to be accounted for as liabilities.
      Pursuant to the guidance of ASC 815, the Company reclassified the fair
      value of these instruments on the date of modification into equity, with
      the change in fair value up to the date of modification being recorded on
      the consolidated statements of operations as other income. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>As a result of the application of ASC 815, the Company
      has recorded these liabilities at their fair values as follows: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD width="15%" align=center nowrap>December 31, </TD>
    <TD width="2%" align=center nowrap >&nbsp;</TD>
    <TD width="1%" align=center nowrap >&nbsp;</TD>
    <TD width="15%" align=center nowrap>September 30, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="15%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Balance, beginning of the
      period </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>5,456,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>904,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Fair value at issuance </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">527,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">8,277,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Change in fair value during
      the period </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>(2,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>(2,956,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Transfer to equity upon modification of
      warrant terms </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">(221,000</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Transfer to equity upon
      exercise </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>(1,043,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>(548,000</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Balance, end of the period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="15%">4,938,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="15%">5,456,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>The embedded conversion features and
  warrants accounted for as derivative financial instruments have no observable
  market and the Company estimated their fair values at December 31, 2014 and
  September 30, 2014 using the binomial option pricing model based on the
  following weighted average management assumptions: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD width="25%" align=right nowrap><div align="center"><U>December 31,</U> </div></TD>
    <TD width="25%" align=right nowrap><div align="center"><U>September 30, 2014</U> </div></TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD width="25%" align=right nowrap><div align="center"><U>2014</U> </div></TD>
    <TD width="25%" align=right nowrap>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Risk-free interest rate </TD>
    <TD align=right width="25%" bgColor=#e6efff>2.59% </TD>
    <TD align=right width="25%" bgColor=#e6efff>3.21% </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Expected life (years) </TD>
    <TD align=right width="25%">25.77 </TD>
    <TD align=right width="25%">29.48 </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Expected volatility </TD>
    <TD align=right width="25%" bgColor=#e6efff>101.94% </TD>
    <TD align=right width="25%" bgColor=#e6efff>100.07% </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Stock price </TD>
    <TD align=right width="25%">$0.185 </TD>
    <TD align=right width="25%">$0.184 </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Dividend yields </TD>
    <TD align=right width="25%" bgColor=#e6efff>0.00% </TD>
    <TD align=right width="25%" bgColor=#e6efff>0.00% </TD>
  </TR>
</TABLE>
<p align="center">F-47</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-16></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 11 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 6 </TD>
    <TD align=left width="90%" ><U>Capital Stock</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" >Authorized </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>As at December 31, 2014 and September 30, 2014, the
      Company&#146;s authorized share capital, consisting of 150,000,000 share of
      common stock, was insufficient to fully settle the conversion or exercise
      of all outstanding convertible debentures, stock purchase warrants and
      stock options at that date. As a result, and in accordance with ASC 815,
      the Company has recorded derivative liabilities in connection with certain
      embedded conversion options contained in convertible debentures
      outstanding at December 31, 2014 and September 30, 2014, as more fully
      described in Note 5. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Equity Transactions </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On October 22, 2014, the Company entered into a
      Securities Purchase Agreement (the &#147;Purchase Agreement&#148;) with one investor
      for an equity investment of $500,000 at a price of $0.25 per unit.
      Pursuant to the terms of the Purchase Agreement, the Company agreed to
      sell, and Lincoln Park agreed to purchase, 2,000,000 shares of common
      stock. In addition, the Company agreed to issue an aggregate of 4,000,000
      stock purchase warrants, of which 2,000,000 are exercisable at $0.30 per
      share and 2,000,000 are exercisable at $0.42 per share, each for a period
      of five years, subject to normal adjustment for stock splits,
      combinations, and reclassification events. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>As discussed in Note 5, the warrants issued were required
      to be accounted for as derivative liabilities pursuant to the guidance of
      ASC 815. Consequently, the Company allocated the proceeds from the
      issuance of the units first to the warrants, at their fair value of
      $527,000 with an amount of $2,000 being allocated to equity at par value.
      The $29,000 excess of the sum of fair value and par value over the
      proceeds received of $500,000 was recorded as a component of financing
      related charges and adjustments on the statement of operations during the
      three months ended December 31, 2014. The fair value of the warrants was
      determined based on the binomial option pricing model using the following
      weighted average assumptions: risk-free interest rate: 1.46%, expected
      life: 5 years, expected volatility: 100.21%, dividend yield: 0%. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company paid a finder&#146;s fee of $50,000 in connection
      with the purchase agreement. This amount was expensed as a component of
      financing related charges and adjustments during the three months ended
      December 31, 2014. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>Common stock to be issued </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On February 28, 2014, the Company received $30,000 in
      share subscriptions in respect of the issuance of 100,000 units at $0.30
      per unit. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase additional common shares
      at $0.75 per share for a period of five years from the date of issuance. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Included in common stock to be issued at December 31,
      2014 is an amount of $610,000 (September 30, 2014: $610,000) related to
      1,000,000 of common stock issuable to a director and officer of the
      Company pursuant to the terms of an employment agreement with that
      director and officer (Note 8). </P></TD>
  </TR>
</TABLE>
<p align="center">F-48</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-17></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 12 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 7 </TD>
    <TD align=left width="90%" ><U>Lincoln Park Purchase
      Agreement</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>On July 5, 2013, the Company entered into a $10,000,000
      purchase agreement (the &#147;Purchase Agreement&#148;) with Lincoln Park Capital
      Fund, LLC, (&#147;Lincoln Park&#148;) an Illinois limited liability company (the
      &#147;Financing&#148;) pursuant to which the Company may sell and issue to Lincoln
      Park, and Lincoln Park is obligated to purchase, up to $10,000,000 in
      value of its shares of common stock from time to time over a 25 month
      period. In connection with the Financing, the Company also entered into a
      registration rights agreement with Lincoln Park whereby the Company agreed
      to file a registration statement with the Securities and Exchange
      Commission (the &#147;SEC&#148;) covering the shares of the Company&#146;s common stock
      that may be issued to Lincoln Park under the Purchase Agreement. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company will determine, at its own discretion, the
      timing and amount of its sales of common stock, subject to certain
      conditions and limitations. The purchase price of the shares that may be
      sold to Lincoln Park under the Purchase Agreement will be based on the
      market price of the Company&#146;s shares of common stock immediately preceding
      the time of sale without any fixed discount, provided that in no event
      will such shares be sold to Lincoln Park when the closing sale price is
      less than $0.50 per share. There are no upper limits on the per share
      price that Lincoln Park may pay to purchase such common stock. The
      purchase price will be equitably adjusted for any reorganization,
      recapitalization, non- cash dividend, stock split or similar transaction
      occurring during the business days used to compute such price. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 7 </TD>
    <TD align=left width="90%" ><P align=justify><U>Lincoln Park Purchase Agreement </U>&#150; (cont&#146;d) </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Pursuant to the Purchase Agreement, Lincoln Park
      initially purchased 250,000 shares of the Company&#146;s common stock for
      $100,000. In consideration for entering into the Purchase Agreement, the
      Company issued to Lincoln Park 341,858 shares of common stock as a
      commitment fee and shall issue up to 133,409 shares pro rata, when and if,
      Lincoln Park purchases, at the Company&#146;s discretion, the remaining
      $10,000,000 aggregate commitment. The Purchase Agreement may be terminated
      by the Company at any time at its discretion without any cost to the
      Company. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>On October 23, 2013, the registration statement was
      declared effective by the SEC. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>The Company incurred a net $73,787 in direct expenses in
      connection with the Purchase Agreement and registration statement. These
      were recorded as share issuance costs as a charge against additional paid
      in capital in the period incurred. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the three months ended December 31, 2014, the
      Company did not issue any shares under the Purchase Agreement. </P></TD>
  </TR>
</TABLE>
<p align="center">F-49</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-18></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 13 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%" ><U>Related Party Transactions</U> </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the three months ended December 31, 2014, the
      Company was charged general and administrative expenses totaling $16,383
      in respect of directors fees and stock option based compensation charges
      paid or accrued to directors and officers of the Company, inclusive of
      amounts noted below (2013: $Nil). </P></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>As at December 31, 2014, included in accounts payable and
      accrued liabilities was $35,732 (September 30, 2014: $28,232) owing to
      directors and officers of the Company for director fees and reimbursable
      expenses, and a former director and officer of the Company for unpaid
      fees. </P></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>&nbsp;</P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the year ended September 30, 2013, pursuant to an
      employment agreement with the President, Chief Executive Officer, Chief
      Financial Officer, Secretary and Treasurer, and Director, of the Company,
      the Company: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">i) </TD>

    <TD><P align=justify>granted 2,000,000 fully vested share purchase options
      exercisable at $0.40 per share until July 5, 2023.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">ii) </TD>
    <TD><P align=justify>issued 4,000,000 shares of restricted common stock that
      vest as follows:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%" ><P align=justify>25% upon the Company starting a Phase Ib/IIb human study </P></TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" ></TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%" ><P align=justify>25% upon the Company in-licensing additional assets in
      clinical or pre-clinical stage (vested during the year ended September 30,
      2014 at a value of $610,000) </P></TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" ></TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%" ><P align=justify>25% upon the Company securing additional non-dilutive
      equity funding in 2013 of at least $5,000,000 with a share price higher
      than the previous funding </P></TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&#149; </TD>
    <TD align=left width="80%" ><P align=justify>25% upon the Company obtaining a listing on a major stock
      exchange </P></TD>
  </TR>
</TABLE>
<p align="center">F-50</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-19></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 14 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%"><U>Commitments</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>Share Purchase Warrants</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>A summary of the Company&#146;s share purchase warrants
      outstanding is presented below:</P></TD>
  </TR>
</TABLE>
<BR>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="60%" border=0>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="22%" align=left nowrap>&nbsp;</TD>
      <TD width="2%" align=left nowrap>&nbsp;</TD>
      <TD width="1%" align=left nowrap>&nbsp;</TD>
      <TD width="22%" align=center nowrap>Weighted </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="22%" align=left nowrap>&nbsp;</TD>
      <TD width="2%" align=left nowrap>&nbsp;</TD>
      <TD width="1%" align=left nowrap>&nbsp;</TD>
      <TD width="22%" align=center nowrap>Average </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD width="22%" align=left nowrap>&nbsp;</TD>
      <TD width="2%" align=left nowrap>&nbsp;</TD>
      <TD width="1%" align=left nowrap>&nbsp;</TD>
      <TD width="22%" align=center nowrap>Exercise </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
      <TD
      width="22%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><div align="center">Number of Shares </div></TD>
      <TD
    width="2%" align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="22%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Price </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Balance, October 1, 2013 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="22%" bgColor=#e6efff>9,149,479 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=center width="22%" bgColor=#e6efff>0.75 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Expired </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="22%">(2,700,513</TD>
      <TD align=left width="2%">) </TD>
      <TD align=left width="1%">$</TD>
      <TD align=center width="22%">0.75 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Issued </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="22%"
    bgColor=#e6efff>68,466,666 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="22%"
    bgColor=#e6efff>0.36 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Balance, September 30, 2014 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="22%">74,915,632 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=center width="22%">0.40 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff>Issued </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="22%"
    bgColor=#e6efff>4,300,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="22%"
    bgColor=#e6efff>0.35 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Balance, December 31,2 014 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="22%">79,215,632 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=center
      width="22%">0.39 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left

    width="2%">&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 15%" align=justify>At December 31, 2014, the Company has
  78,915,632 currently exercisable share purchase warrants outstanding as follows: </P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="50%" border=0>
    <TR vAlign=top>
      <TD align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;Number </TD>
      <TD width="3%" align=left nowrap style="BORDER-BOTTOM: #000000 1px solid"
     >&nbsp;</TD>
      <TD
    width="1%" align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="29%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Exercise Price </TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="29%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Expiry Date </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>&nbsp;6,448,966 </TD>
      <TD align=left width="3%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="29%" bgColor=#e6efff>0.75 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="29%" bgColor=#e6efff>July 5, 2018 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>&nbsp; &nbsp; &nbsp;500,000 </TD>
      <TD align=left width="3%"  >&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="29%">0.75 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="29%">February 14, 2019 </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>&nbsp; &nbsp; &nbsp;120,000 </TD>
      <TD align=left width="3%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="29%" bgColor=#e6efff>1.00 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="29%" bgColor=#e6efff>February 24, 2019 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>33,833,333 </TD>
      <TD align=left width="3%"  >&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="29%">0.30 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="29%">March 13, 2019 </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>33,833,333 </TD>
      <TD align=left width="3%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="29%" bgColor=#e6efff>0.42 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="29%" bgColor=#e6efff>March 13, 2019 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>&nbsp; &nbsp; &nbsp;180,000 </TD>
      <TD align=left width="3%"  >&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="29%">0.31 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="29%">May 31, 2019 </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>&nbsp;2,000,000 </TD>
      <TD align=left width="3%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="29%" bgColor=#e6efff>0.30 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="29%" bgColor=#e6efff>October 22, 2019 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>&nbsp;2,000,000 </TD>
      <TD align=left width="3%"  >&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="29%">0.42 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="29%">October 22, 2019 </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>&nbsp; &nbsp; &nbsp;250,000 </TD>
      <TD align=left width="3%"  bgColor=#e6efff
    >&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="29%" bgColor=#e6efff>0.19 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="29%" bgColor=#e6efff>January 31, 2015 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp; &nbsp;
        &nbsp; &nbsp; &nbsp;50,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="3%"
     >&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="29%">0.31 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="29%">May 31, 2019 </TD>
      <TD align=left width="1%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      bgColor=#e6efff>79,215,632 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="3%"
     bgColor=#e6efff >&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="29%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="29%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 15%" align=justify>During the three months ended December
  31, 2014, the Company issued 250,000 warrants exercisable at $0.19 per share
  until January 31, 2015 to a consultant of the Company pursuant to a consulting
  agreement dated October 24, 2014. The warrants were to vest in the event the
  Company entered into a license agreement or direct sales transaction as a direct
  result of the consultant. Subsequent to December 31, 2014, these warrants
  expired unvested and unexercised. No stock-based compensation has been or will
  be recorded in the financial statements as none of the performance conditions
  for vesting were met. </P>
<p align="center">F-51</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-20></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 15 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%" ><U>Commitments </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD><P align=justify>Share Purchase Warrants &#150; (cont&#146;d)</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>During the three months ended December 31, 2014, the
      Company issued 50,000 warrants exercisable at $0.31 per share until May
      31, 2019 to a consultant of the Company pursuant to a consulting
      agreement. The fair value of these warrants at issuance was calculated to
      be $6,000 based on the Black-Scholes option pricing model using the
      following assumptions: expected term 4.59 years, expected volatility
      102.33%, expected dividend yield 0.00%, risk free interest rate 1.58%.
      Stock based compensation will be recorded in the financial statements over
      the vesting term of three years from the date of grant.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>All of the 6,448,966 warrants expiring on July 5, 2018
      and the 500,000 warrants expiring February 14, 2019 contain a contingent
      call provision whereby the Company may have the option to call for
      cancellation of all or any portion of the warrants for consideration equal
      to $0.001 per share, provided the quoted market price of the Company&#146;s
      common stock exceeds $1.50 for a period of twenty consecutive trading
      days, subject to certain minimum volume restrictions and other
      restrictions as provided in the warrant agreements.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Stock&#150;based Compensation Plan</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>In April, 2007, the Company adopted a stock option plan
      which provides for the granting of stock options to selected directors,
      officers, employees or consultants in an aggregate amount of up to
      3,000,000 common shares of the Company and, in any case, the number of
      shares to be issued to any one individual pursuant to the exercise of
      options shall not exceed 10% of the issued and outstanding share capital.
      The granting of stock options, exercise prices and terms are determined by
      the Company's Board of Directors. If no vesting schedule is specified by
      the Board of Directors on the grant of options, then the options shall
      vest over a 4-year period with 25% of the granted options vesting each
      year commencing 1 year from the grant date. For stockholders who have
      greater than 10% of the outstanding common shares of the Company and who
      have granted options, the exercise price of their options shall not be
      less than 110% of the fair of the stock on grant date. Otherwise, options
      granted shall have an exercise price equal to their fair value on grant
      date.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>On February 2, 2011, the Company amended and restated the
      2007 stock option plan to increase the number of options authorized to
      4,000,000.</P></TD>
  </TR>
</TABLE>
<p align="center">F-52</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-21></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 16 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%"><U>Commitments </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Stock&#150;based Compensation Plan &#150; (cont&#146;d)</P></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD><P align=justify>A summary of the status of Company&#146;s outstanding stock
      purchase options for the three months ended December 31, 2014 and for the
      year ended September 30, 2014 is presented
      below:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="12%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="12%" align=center nowrap>Weighted </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="12%" align=center nowrap>Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="12%" align=center nowrap>Number of </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="12%" align=center nowrap>Average </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="12%" align=center nowrap>Average Grant </TD>
    <TD align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD
      width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Shares </TD>
    <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Exercise Price </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Date
      fairv alue </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Outstanding at October 1, 2013 </TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>3,075,000 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>1.26 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>Expired </TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">(705,000</TD>
    <TD vAlign=bottom align=left width="2%">) </TD>
    <TD vAlign=bottom align=left width="1%">$</TD>
    <TD vAlign=bottom align=right width="12%">2.70 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Granted </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>800,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>0.32 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>$</TD>
    <TD vAlign=bottom align=right width="12%" bgColor=#e6efff>0.25 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>Outstanding at September 30, 2014 and December 31, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">3,170,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">0.70 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%"></TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Exercisable at December 31, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>2,100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%" bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%" bgColor=#e6efff>0.56 </TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%" bgColor=#e6efff>&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>Exercisable at September 30, 2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">2,100,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=left
    width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom align=right
    width="12%">0.56 </TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>At December 31, 2014, the following
  stock options were outstanding: </P>
<DIV align=right>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="85%" border=0>
    <TR vAlign=top>
      <TD colspan="5" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp; Number of
        Shares </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>Aggregate </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>Remaining </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="4%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>Number </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>Exercise </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>&nbsp;</TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>Intrinsic </TD>
      <TD width="2%" align=center nowrap>&nbsp;</TD>
      <TD width="1%" align=center nowrap>&nbsp;</TD>
      <TD width="12%" align=center nowrap>Contractual </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Total </TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="4%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Vested </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Price </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Expiry Date </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
      width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Value </TD>
      <TD
    width="2%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD
    width="1%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
      <TD width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Life
        (yrs) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>&nbsp; &nbsp;100,000 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="4%" bgColor=#e6efff><SUP>(1) </SUP></TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>100,000 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>3.67 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>March 30, 2016 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>1.25 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>&nbsp; &nbsp;270,000 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="4%"><SUP>(2) </SUP></TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">-</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="12%">3.00 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">February 8, 2017 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">- </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">2.11 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right bgColor=#e6efff>2,000,000 </TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="4%" bgColor=#e6efff><SUP>(3) </SUP></TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>2,000,000 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>0.40 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>July 5, 2023 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>8.52 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=right>&nbsp; &nbsp;300,000 </TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=center width="4%"><SUP>(4) </SUP></TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">-</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">$</TD>
      <TD align=right width="12%">0.30 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">May 7, 2024 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">- </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=right width="12%">9.36 </TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>&nbsp; &nbsp;500,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="4%"
    bgColor=#e6efff><SUP>(5) </SUP></TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>-</TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>$</TD>
      <TD align=right width="12%" bgColor=#e6efff>0.33 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>May 8, 2024 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="12%" bgColor=#e6efff>9.36 </TD>
      <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right>3,170,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="4%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">2,100,000 </TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="12%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="12%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%">-</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
      <TD align=left width="1%">&nbsp;</TD>
      <TD align=left width="12%">&nbsp;</TD>
      <TD align=left width="2%">&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 15%" align=justify>The aggregate intrinsic value is
  calculated as the difference between the exercise price of the underlying awards
  and the quoted market price of the Company&#146;s stock for the options that were
  in-the-money at December 31, 2014. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(1)</SUP> </TD>
    <TD><P align=justify>As of December 31, 2014 and September 30, 2014, these
      options had fully vested. These options were granted during the year ended
      September 30, 2011 and vested over a period of one year from the date of
      grant. The fair value of these options at issuance was calculated to be
      $267,000. The Company did not recognize any stock- based compensation
      during the three months ended December 31, 2014 (2013: $Nil).</P></TD>
  </TR>
  <TR>

    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(2)</SUP> </TD>
    <TD><P align=justify>As of December 31, 2014 and September 30, 2014, none of
      these options had vested. The options vest upon one or more compounds:
      entering Phase II trial &#150; 90,000 options; entering Phase III trial &#150;
      90,000 options; and receiving FDA approval &#150; 90,000 options. No
      stock-based compensation has been recorded in the financial statements as
      none of the performance conditions have yet been
      met.</P></TD>
  </TR>
</TABLE>
<p align="center">F-53</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-22></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 17 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%" ><U>Commitments </U>&#150; (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD><P align=justify>Stock&#150;based Compensation Plan &#150;
      (cont&#146;d)</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD width="15%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(3)</SUP> </TD>
    <TD><P align=justify>As of December 31, 2014 and September 30, 2014 these
      options had fully vested. These options were granted during the year ended
      September 30, 2013 and vested immediately upon granting. The Company
      recognized stock based compensation expense of $Nil during the three
      months ended December 31, 2014 (2013: $Nil) in connection with these
      options.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(4)</SUP> </TD>
    <TD><P align=justify>As of December 31, 2014 and September 30, 2014, none of
      these options had vested. These options were issued during the year ended
      September 30, 2014 and vest annually over a three year period commencing
      on the first anniversary of the date of the grant. The Company recognized
      stock based compensation expense of $5,830 during the three months ended
      December 31, 2014, (2013: $Nil) in connection with these options. These
      amounts have been included in general and administrative expenses on the
      Company&#146;s statement of operations.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>(5)</SUP> </TD>
    <TD><P align=justify>As of December 31, 2014 and September 30, 2014, none of
      these options had vested. These options were issued during the year ended
      September 30, 2014 and vest annually over a four year period commencing on
      the first anniversary of the date of the grant. The Company recognized
      stock based compensation expense of $8,053 during the three months ended
      December 31, 2014 (2013: $Nil) in connection with these
      options.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>During the three months ended December
  31, 2013, 500,000 options expired for which the Company had recognized
  stock-based compensation of $Nil (2012: $Nil) during the three months ended
  December 31, 2013 </P>
<P style="MARGIN-LEFT: 15%" align=justify>There has been no stock-based
  compensation recognized in the financial statements for the three months ended
  December 31, 2014 (2013: $nil) for options that will vest upon the achievement
  of performance milestones because the Company has determined that satisfaction
  of the performance milestones was not probable. Compensation relating to stock
  options exercisable upon achieving performance milestones will be recognized in
  the period the milestones are achieved. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 10 </TD>
    <TD align=left width="90%" ><U>Subsequent Events</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Subsequent to December 31, 2014 the Company issued an
      aggregate of 1,636,096   shares of common stock pursuant to the conversion of
      $409,024   face value of convertible debentures at $0.25 per share. </P></TD>
  </TR>
</TABLE>
<p align="center">F-54</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_xF-23></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  Notes to the Interim Condensed
  Consolidated Financial Statements <BR>
  December 31, 2014<BR>
  Stated in US Dollars <BR>
  (<U>Unaudited</U>) &#150; Page 18 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 11 </TD>
    <TD align=left width="90%" ><U>Supplemental Cash Flow
      Information</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>Investing and financing activities that do not have a
      direct impact on current cash flows are excluded from the statement of
      cash flows. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the three months ended December 31, 2014, the
      Company issued 5,604,668 shares of common stock of the Company at a fair
      value of $1,049,855 pursuant to the conversion of convertible debentures
      at a conversion price of $0.25 per share. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" ><P align=justify>During the three months ended December 31, 2013, the
      Company reclassified an amount of $221,000 into equity upon modification
      of the terms of certain derivative instruments. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD align=left width="90%" ><P align=justify>These transactions have been excluded from the statement
      of cash flows. </P></TD>
  </TR>
</TABLE>
<p align="center">F-55</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    align=center><B>ANAVEX LIFE SCIENCES CORP.</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>15,486,358
      Shares of Common Stock</B> </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center>PROSPECTUS
</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=center>March 24, 2015
  </TD>
  </TR></TABLE>
<p align="justify">You should rely only on the information contained in this  prospectus. We have not authorized any person to provide you with different  information. If anyone provides you with different or inconsistent information,  you should not rely on it. This prospectus is not an offer to sell, nor are the  Selling Security Holders seeking an offer to buy, securities in any state where  the offer or solicitation is not permitted. The information contained in this  prospectus is complete and accurate as of the date on the front cover of this  prospectus, but information may have changed since that date.
</p>
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