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Commitments and Contingencies

12 Months Ended

Sep. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 6 Commitments and Contingencies

Lease

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.

The operating lease costs were as follows (in thousands):

Schedule of operating lease costs
		Years ended September 30,
		2025				2024				2023
Operating lease costs		$	134			$	125			$	118

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.

The Company made matching contributions under the 401(k) plan as follows (in thousands):


		Years ended September 30,
		2025				2024				2023
Contributions to 401(k) plan		$	255			$	279			$	232

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 and it named the Company and an officer of the Company as Defendants. The complaint was amended on July 12, 2024 (the “Initial Action”). The complaint alleged violations of the Securities and Exchange Act of 1934 associated with disclosures and statements made with respect to certain clinical trials for ANAVEX^®2-73 related to Rett syndrome. This lawsuit was dismissed by the United States District Court for the Southern District of New York on June 18, 2025. The plaintiff filed a notice of appeal on July 17, 2025. Briefing on the appeal concluded October 30, 2025. No decision has been entered. No amount has been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is not probable that any loss will occur.

On May 8, 2024, a similar complaint was filed in the same court by Kenneth Downing, a purported shareholder of the Company, against the same defendants. The Company believed that this lawsuit was also without merit and filed a motion to dismiss the complaint. Plaintiff Downing voluntarily dismissed this complaint subsequent to the filing of the motion to dismiss.

On or about May 13, 2024, a derivative lawsuit was filed against the Company (as nominal defendant), an officer of the Company, and members of the Company’s Board of Directors in the U.S. District Court for the District of Nevada by another purported shareholder. The complaint asserts various common law claims (including breach of fiduciary duty) and violation of Section 14(a)of the Securities Exchange Act regarding the same or similar allegations at issue in the purported class action lawsuit related to disclosures and statements made about certain clinical trials related to Rett syndrome. On January 22, 2025, pursuant to a stipulation of the parties, the Court entered an order staying this purported derivative lawsuit until the motion to dismiss filed by defendants in the Initial Action is decided by the U.S. District Court for the Southern District of New York. The stay has been extended through the appeal. No amount has been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is not probable that any loss will occur.

On February 14, 2025, another derivative lawsuit asserting state law breach of fiduciary duty and unjust enrichment claims based upon similar allegations was filed against the Company (as nominal defendant), an officer of the Company, and members of the Company’s Board of Directors in the Supreme Court for the State of New York, County of New York, by another purported shareholder. On August 18, 2025, pursuant to a stipulation of the parties, the Court entered an order staying this purported derivative lawsuit until the appeal in the Initial Action is resolved. No amount has been recorded in these consolidated financial statements for any loss contingencies associated with this lawsuit as the Company believes that it is not probable that any loss will occur.

We know of no other material pending legal or governmental proceedings, other than ordinary routine litigation incidental to our business, to which our Company or our subsidiaries are a party or of which any of their property is subject. There are no other proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder holding more than 5% of our shares, or any associate of such persons, is an adverse party or has a material interest adverse to our or our subsidiaries’ interest.

Share Purchase Warrants

At September 30, 2025 and 2024, the Company had 10,000 share purchase warrants outstanding exercisable at $12.00 per share until April 21, 2026.

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.

On April 17, 2025, the Board approved an amendment to the 2022 Plan (the “Amendment”). The Amendment was approved by the stockholders on June 10, 2025. The Amendment increased the number of shares of common stock reserved for issuance under the 2022 Plan by 4,000,000 shares for a total of 14,000,000. In addition, the Amendment established a minimum vesting period of one year for all awards granted under the 2022 Plan and limited the discretion to accelerate the vesting of awards upon a separation from service, with limited exceptions permitted. Finally, the Amendment prohibited liberal share recycling provisions.

At September 30, 2025, 6,504,829 options had been issued under the 2022 Plan and 8,436,882 options were available for issue under the 2022 Plan.

The following summarizes information about stock option activity during the years ended September 30, 2025:

Schedule of stock option activity
		Number of Options				Weighted Average Exercise Price ($)				Weighted Average Grant Date Fair Value ($)				Aggregate intrinsic value ($)
Outstanding, September 30, 2024			15,037,754				6.80				5.12				15,825,791
Granted			1,488,500				8.58				6.22				—
Expired			(100,100	)			16.23				—				—
Exercised			(1,383,988	)			3.21				1.31				9,324,901
Forfeited			(80,583	)			4.56				0.55				—
Outstanding, September 30, 2025			14,961,583				7.25				5.46				39,715,608
Exercisable, September 30, 2025			10,418,213				6.22				4.83				34,762,588

The following summarizes information about stock options at September 30, 2025 by a range of exercise prices:


Range of exercises prices								Number of outstanding				Weighted average remaining contractual life				Weighted average exercise				Number of vested				Weighted average exercise
From				To				options				(in years)				price				options				price
$	2.30			$	5.00				4,315,700				3.15			$	3.02				4,220,283			$	2.99
$	5.01			$	7.00				3,299,536				5.23			$	5.62				2,325,162			$	5.72
$	7.01			$	9.00				4,372,347				6.66			$	8.09				2,222,101			$	7.82
$	9.01			$	13.00				1,609,000				6.31			$	10.29				1,120,667			$	10.37
$	13.01			$	25.00				1,365,000				5.91			$	18.33				530,000			$	18.67
									14,961,583				5.22			$	7.25				10,418,213			$	6.22

The weighted average per share fair value of options vested at September 30, 2025 was $4.83 (2024: $4.34; 2023: $3.94). At September 30, 2025, the weighted average contractual life of options outstanding was 5.22 years (2024: 5.48 years; 2023: 6.0 years) and for options exercisable was 4.11 years (2024: 4.03 years; 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 September 30, 2025.

The Company recognized share-based compensation expense of $11.5 million during the year ended September 30, 2025 (2024: $9.4 million; 2023: $16.4 million) in connection with the issuance and vesting of stock options in exchange for services. These amounts have been included in general and administrative expenses and research and development expenses on the Company’s consolidated statements of operations as follows (in thousands):


		Years ended September 30,
		2025				2024				2023
General and administrative		$	4,536			$	3,625			$	5,558
Research and development			7,013				5,813				10,812
Total share-based compensation		$	11,549			$	9,438			$	16,370

An amount of approximately $6.3 million in share-based compensation is expected to be recorded over the remaining term of such options and warrants through fiscal 2029.

The fair value of each option and warrant award is estimated on the date of grant using the Black Scholes option pricing model based on the following weighted average assumptions:


		2025				2024				2023
Risk-free interest rate			3.98	%			4.28	%			3.70	%
Expected life of options (years)			5.57				5.78				5.64
Annualized volatility			86.49	%			84.81	%			85.13	%
Dividend rate			0.00	%			0.00	%			0.00	%

The fair value of stock compensation charges recognized during the years ended September 30, 2025, 2024 and 2023 was determined with reference to the quoted market price of the Company’s shares on the grant date.