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Commitments and Contingencies | 6 Months Ended
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Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Note 6 Commitments and Contingencies Leases The Company leases office space under an operating lease with an initial term of 12 months or less. Under the terms of the office lease, the Company is required to pay its proportionate share of operating costs. During the three and six months ended March 31, 2024 and 2023, operating lease costs were as follows (in thousands):
Schedule of operating lease costs |  |  |  |  |  |  |  |
|  | Three months ended March 31, |  | Six months ended March 31,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease costs |  | $ | 31 |  |  | $ | 30 |  |  | $ | 61 |  |  | $ | 60 |
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 and six months ended March 31, 2024 and 2023, the Company made matching contributions under the 401(k) plan as follows (in thousands):
Schedule of contribution plan |  |  |  |  |  |  |  |
|  | Three months ended March 31, |  | Six months ended March 31,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Contributions to 401(k) plan |  | $ | 94 |  |  | $ | 56 |  |  | $ | 167 |  |  | $ | 100 |
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. On March 13, 2024, a shareholder class action complaint was filed in the United States District Court for the Southern District of New York. The complaint is captioned Blum v. Anavex Life Sciences, Corp. et al., case number 1:24-cv-01910, and names the Company and Christopher Missling as Defendants. The complaint alleges violations of the Securities and Exchange Act of 1934 resulting from disclosures and statements made about certain clinical trials for ANAVEX®2-73. The Company believes the complaint is without merit. The Company is vigorously pursuing its defenses and a potential dismissal of all claims asserted in the lawsuit. Share Purchase Warrants At March 31, 2024 and September 30, 2023, the Company had 160,000 warrants outstanding at a weighted average exercise price of $3.72 as follows:
| Schedule of share purchase warrants outstanding |  |  |  |  |  |  |
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, in addition to the shares available under the 2019 Plan and the 2015 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 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 March 31, 2024, 5,452,500 options had been issued under the 2022 Plan and 5,132,202 options were available for issue under the 2022 Plan. The following summarizes information about stock option activity during the year ended September 30, 2023 and six months ended March 31, 2024:
Schedule of outstanding stock purchase options |  |  |  |  |  |  |  |
|  |  |  | Weighted Average Exercise Price |  | Weighted Average Grant Date Fair Value |  | Aggregate intrinsic value
|  | Number of Options |  | ($) |  | ($) |  | ($)
| Outstanding, September 30, 2022 |  |  |  | 13,169,616 |  |  |  | 6.61 |  |  |  | 4.96 |  |  |  | 62,267,309 |
| Granted |  |  |  | 1,959,000 |  |  |  | 9.30 |  |  |  | 6.60 |  |  |  | — |
| Exercised |  |  |  | (759,753 | ) |  |  | 2.34 |  |  |  | 0.95 |  |  |  | 4,629,026 |
| Forfeited |  |  |  | (257,083 | ) |  |  | 12.00 |  |  |  | 6.74 |  |  |  | — |
| Outstanding, September 30, 2023 |  |  |  | 14,111,780 |  |  |  | 7.12 |  |  |  | 5.27 |  |  |  | 22,290,069 |
| Granted |  |  |  | 1,750,500 |  |  |  | 5.53 |  |  |  | 3.99 |  |  |  | — |
| Exercised |  |  |  | (46,000 | ) |  |  | 3.43 |  |  |  | 2.60 |  |  |  | 125,170 |
| Forfeited |  |  |  | (221,166 | ) |  |  | 13.84 |  |  |  | 9.06 |  |  |  | — |
| Outstanding, March 31, 2024 |  |  |  | 15,595,114 |  |  |  | 6.85 |  |  |  |  |  |  |  | 12,480,916 |
| Exercisable, March 31, 2024 |  |  |  | 9,955,616 |  |  |  | 5.38 |  |  |  |  |  |  |  | 12,440,416 |
The following summarizes information about stock options at March 31, 2024 by a range of exercise prices:
Schedule of summarized information about stock options |  |  |  |  |  |  |  |  |  |  |  |
Range of exercises prices |  | Number of outstanding |  | Weighted average remaining contractual life (in |  | Weighted average |  | Number of vested |  | Weighted average
From |  | To |  | options |  | years) |  | exercise price |  | options |  | exercise price
$ | 0.92 |  |  | $ | 3.00 |  |  |  | 3,243,060 |  |  |  | 4.22 |  |  |  | 2.38 |  |  |  | 3,243,060 |  |  | $ | 2.38 |
$ | 3.01 |  |  | $ | 5.00 |  |  |  | 2,167,500 |  |  |  | 4.24 |  |  |  | 3.39 |  |  |  | 2,017,500 |  |  | $ | 3.28 |
$ | 5.01 |  |  | $ | 9.00 |  |  |  | 6,790,554 |  |  |  | 6.62 |  |  |  | 6.58 |  |  |  | 3,436,472 |  |  | $ | 6.19 |
$ | 9.01 |  |  | $ | 13.00 |  |  |  | 1,894,000 |  |  |  | 7.85 |  |  |  | 10.53 |  |  |  | 705,667 |  |  | $ | 11.06 |
$ | 13.01 |  |  | $ | 25.00 |  |  |  | 1,500,000 |  |  |  | 6.97 |  |  |  | 18.12 |  |  |  | 552,917 |  |  | $ | 18.28 |
|  |  |  |  |  |  |  |  | 15,595,114 |  |  |  | 5.97 |  |  |  | 6.85 |  |  |  | 9,955,616 |  |  |  | 5.38 |
The weighted average grant date fair value of options vested at March 31, 2024 was $4.07 (September 30, 2023: $3.94). At March 31, 2024, the weighted average contractual life of options outstanding was 6.0 years (September 30, 2023: 6.0 years) and for options exercisable was 4.5 years (September 30, 2023: 4.75 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 March 31, 2024. During the three and six months ended March 31, 2024, the Company recognized stock-based compensation expense of $2.7 million and $4.9 million, respectively (2023: $4.0 million and $9.3 million, respectively) 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 condensed consolidated interim statement of operations as follows (in thousands):
Schedule of general and administrative expenses and research and development expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three months ended March 31, |  | Six months ended March 31,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
General and administrative |  | $ | 979 |  |  | $ | 1,257 |  |  | $ | 1,905 |  |  | $ | 3,000 |
Research and development |  |  | 1,673 |  |  |  | 2,713 |  |  |  | 3,033 |  |  |  | 6,317 |
Total stock-based compensation |  | $ | 2,652 |  |  | $ | 3,970 |  |  | $ | 4,938 |  |  | $ | 9,317 |
An amount of approximately $14.5 million in stock-based compensation is expected to be recorded over the remaining term of such options through fiscal 2026. The fair value of each option award granted during the three and six months ended March 31, 2024 and 2023 is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions:
Schedule of weighted average assumptions |  |  |  |  |  |  |  |
|  | 2024 |  | 2023
Risk-free interest rate |  |  | 4.28 | % |  |  | 3.69 | %
Expected life of options (years) |  |  | 5.74 |  |  |  | 5.61 |
Annualized volatility |  |  | 84.84 | % |  |  | 85.28 | %
Dividend rate |  |  | 0.00 | % |  |  | 0.00 | %
The fair value of stock compensation charges recognized during the three and six months ended March 31, 2024 and 2023 was determined with reference to the quoted market price of the Company’s shares on the grant date.

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