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Commitments and Contingencies
 3 Months Ended
Dec. 31, 2024
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):

 

          
   Three months ended December 31,
   2024  2023
Operating lease costs  $33   $30 

 

Anavex Life Sciences Corp.

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):

 

          
   Three months ended December 31,
   2024  2023
Contributions to 401(k) plan  $48   $73 

 

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. The complaint seeks unspecified damages, as well as costs, including counsel and expert witness fees, on behalf of a class of investors. The Company believes the lawsuit is without merit and the Company denies any liability or wrongdoing and has filed a motion to dismiss the complaint, which is awaiting a decision by the Court. No amount has been recorded in these condensed consolidated interim 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. No amount has been recorded in these condensed consolidated interim 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 December 31, 2024 and September 30, 2024, the Company had 10,000 share purchase warrants outstanding exercisable at $12.00 per share until April 21, 2026.

 

Share–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 2015 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 2019 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 2022 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. As at December 31, 2024, 5,238,668 options had been issued under the 2022 Plan and 5,462,202 options were available for issue under the 2022 Plan.

The following summarizes information about stock option activity during the year ended September 30, 2024 and the three months ended December 31, 2024:

 

                     
   Number of Options  Weighted Average Exercise Price
($)		  Weighted Average Grant Date Fair Value
($)		  Aggregate intrinsic value
($)
Outstanding, September 30, 2023    14,111,780    7.12    5.27    22,290,069 
Granted    1,860,500    5.47    3.95    — 
Exercised    (273,360)   2.53    1.11    601,407 
Forfeited    (661,166)   11.67    5.00    — 
Outstanding, September 30, 2024    15,037,754    6.80    5.12    15,825,791 
Exercised    (189,932)   3.72    2.92    1,535,045 
Outstanding, December 31, 2024    14,847,822    6.84    5.15    69,107,428 
Exercisable, December 31, 2024    10,249,032    5.67    4.42    56,918,436 

 

The following summarizes information about stock options at December 31, 2024 by a range of exercise prices:

 

               
   Number of  Weighted average  Weighted  Number of  Weighted
Range of exercises prices  outstanding  remaining contractual  average  vested  average
From  To  options  life (in years)  exercise price  options  exercise price
$0.92   $3.00    2,909,600    3.48   $2.38    2,909,600   $2.38 
$3.01   $5.00    2,232,500    3.78   $3.42    2,017,083   $3.30 
$5.01   $9.00    6,591,722    5.80   $6.58    3,726,932   $6.17 
$9.01   $13.00    1,649,000    7.08   $10.26    977,917   $10.44 
$13.01   $25.00    1,465,000    6.20   $18.18    617,500   $18.37 
           14,847,822    5.22   $6.84    10,249,032   $5.67 

 

The weighted average per share fair value of options vested at December 31, 2024 was $4.42 (September 30, 2024: $4.34). At December 31, 2024, the weighted average contractual life of options outstanding was 5.22 years (September 30, 2024: 5.48 years) and for options exercisable was 3.98 years (September 30, 2024: 4.03 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, 2024.

 

The Company recognized share-based compensation expense of $2.1 million during the three months ended December 31, 2024 (three months ended December 31, 2023: $2.3 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 condensed consolidated interim statements of operations as follows (in thousands):

          
   Three months ended December 31,
   2024  2023
General and administrative  $803   $926 
Research and development   1,252    1,360 
Total share-based compensation  $2,055   $2,286 

 

An amount of approximately $6.8 million in share-based compensation is expected to be recorded over the remaining term of such options and warrants through fiscal 2029.

 

There were no stock options issued during the three months ended December 31, 2024.

 

The fair value of each stock option award is estimated on the date of grant using the Black Scholes option pricing model. The fair value of share-based compensation charges recognized during the three months ended December 31, 2023 was determined with reference to the quoted market price of the Company’s shares on the grant date and based on the following weighted average assumptions:

 

     
   2023
Risk-free interest rate   4.47%
Expected life of options (years)   5.29 
Annualized volatility   80.61%
Dividend rate   0.00%