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Commitments and Contingencies

3 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 6 Commitments and Contingencies

Leases

During the three months ended December 31, 2022, the Company incurred office lease expense of $30,070 (2021: $4,845).

Employee 401(k) Benefit Plan

The Company has a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. The plan covers all United States based employees. United States based employees eligible to participate in the plan may contribute up to the current statutory limits under the Internal Revenue Service regulations. The 401(k) plan permits the Company to make additional matching contributions on behalf of contributing employees. During the three months ended December 31, 2022, the Company made $43,646 (2021: $22,682) in matching contributions under the 401(k) plan.

Litigation

The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company’s consolidated financial statements. The Company does not believe that any of such pending claims and legal proceedings will have a material adverse effect on its consolidated financial statements.

Anavex Life Sciences Corp.

Share Purchase Warrants

At December 31, 2022 and September 30, 2022, the Company had 160,000 warrants outstanding at a weighted average exercise price of $3.72 as follows:



Number			Exercise Price				Expiry Date
150,000			$	3.17			May 6, 2024
10,000			$	12.00			April 21, 2026
160,000

Stock–based Compensation Plan

2015 Stock Option Plan

On September 18, 2015, the Company’s Board approved a 2015 Omnibus Incentive Plan (the “2015 Plan”), which provided for the grant of stock options and restricted stock awards to directors, officers, employees and consultants of the Company.

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

2019 Stock Option Plan

On January 15, 2019, the Board approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which provides for the grant of stock options and restricted stock awards to directors, officers, employees, consultants and advisors of the Company.

The maximum number of our common shares reserved for issue under the plan was 6,000,000 shares, subject to adjustment in the event of a change of the Company’s capitalization.

During the year ended September 30, 2022, 406,453 options previously available under the 2019 Plan and the 2015 Plan became available under the 2022 Plan (as defined below).

2022 Stock Option Plan

On March 25, 2022, the Board approved the 2022 Omnibus Incentive Plan (the “2022 Plan”). The 2022 Plan was approved by stockholders on May 24, 2022. Under the terms of the 2022 Plan, 10,000,000 additional shares of Common Stock will be available for issuance under the plan. Any awards outstanding under a previous stock option plan will remain subject to and be paid under such plan, and any shares subject to outstanding awards under a previous plan that subsequently cease to be subject to such awards (other than by reason of settlement of the awards in shares) will automatically become available for issuance under the 2022 Plan.

The 2022 Plan provides that it may be administered by the Board, or the Board may delegate such responsibility to a committee. The exercise price will be determined by the Board at the time of grant and shall be at least equal to the fair market value on such date. If the grantee is a 10% stockholder on the grant date, then the exercise price shall not be less than 110% of fair market value of the Company’s shares of common stock on the grant date. Stock options may be granted under the 2022 Plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by the Board, subject to earlier termination in accordance with the terms of the 2022 Plan. At December 31, 2022 2,378,000 options had been issued under the 2022 Plan and 8,078,453 options were available for issue under the 2022 Plan.

A summary of the status of Company’s outstanding stock options is presented below:


							Weighted				Weighted
							Average				Average				Aggregate
			Number of				Exercise				Grant Date				intrinsic value
			Shares				Price ($)				Fair Value ($)				($)
Outstanding, September 30, 2021				11,330,903				5.74								140,132,451
Granted				2,358,000				10.13				7.07
Forfeited				(118,750	)			6.86				5.23
Exercised				(400,537	)			2.52				1.88				4,201,015
Outstanding, September 30, 2022				13,169,616				6.61								62,267,309
Granted				325,000				12.43				8.17
Forfeited				(40,000	)			7.51				2.52
Exercised				(89,320	)			2.89				2.44				591,993
Outstanding, December 31, 2022				13,365,296				6.78								50,676,617
Exercisable, December 31, 2022				8,795,293				4.51								45,930,627

The following summarizes information about stock options at December 31, 2022 by a range of exercise prices:

																								Weighted
												Weighted												average
												average												exercise
								Number of				remaining				Weighted								price
Range of exercise prices								outstanding				contractual				average				Number of				options
From				To				options				life (in years)				exercise price				vested options				vested
$	0.92				2.96				3,850,742				4.86				2.29				3,844,908				2.29
$	3.15				4.80				2,042,500				5.09				3.30				2,032,500				3.29
$	5.04				8.98				3,927,054				5.80				6.29				2,374,554				6.31
$	9.20				13.01				1,968,000				9.04				10.73				154,581				12.27
$	13.22				24.58				1,577,000				8.24				18.51				388,750				18.80
									13,365,296												8,795,293

The weighted average grant date fair value of options vested during the three months ended December 31, 2022 was $4.40 (2021: $2.85). At December 31, 2022, the weighted average contractual life of options outstanding was 6.18 years (September 30, 2022: 6.40 years) and for options exercisable was 4.83 years (September 30, 2022: 5.1 years).

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price of the Company’s stock for the options that were in-the-money at December 31, 2022.

During the three months ended December 31, 2022, the Company recognized stock-based compensation expense of $5,346,508 (2021: $3,908,771) in connection with the issuance and vesting of stock options and warrants in exchange for services. These amounts have been included in general and administrative expenses and research and development expenses on the Company’s statement of operations as follows:


		2022				2021
General and administrative		$	1,742,524			$	1,671,725
Research and development			3,603,984				2,237,046
Total stock-based compensation		$	5,346,508			$	3,908,771

An amount of approximately $16,340,941 in stock-based compensation is expected to be recorded over the remaining term of such options through fiscal 2025.

The fair value of each option award granted during the three months ended December 31, 2022 and 2021 is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions:


		2022				2021
Risk-free interest rate			4.07	%			1.37	%
Expected life of options (years)			4.98				6.50
Annualized volatility			84.01	%			96.79	%
Dividend rate			0.00	%			0.00	%

The fair value of stock compensation charges recognized during the three months ended December 31, 2022 and 2021 was determined with reference to the quoted market price of the Company’s shares on the grant date.