AVXL 10-K & 10-Q changes, risk factors and insider trading

We are an earlya clinical stage pharmaceutical research research and development 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 future performance and prospects can be made. There is no assurance that our our future operations will result in profits. If we cannot generate sufficient revenues, we may suspend or cease operations.

We are an earlya clinical stage company and have not generated generated any revenues to date and have no operating history.date. 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 sale to pharmaceutical companies or generate commercial revenues. We have noa very limited 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 newpre-revenue enterprise,company, 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.

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.

To date, we have funded our operations primarily through private placement of our equity securities, through issuances of shares under the Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) pursuant to which the Company may direct Lincoln Park to purchase shares of common stock registered under an effective registration statement, or, historically, through draws under our “at-the-market offering” in connection with the Amended and Restated Sales Agreement with Cantor Fitzgerald & Co. and SVB Leerink LLC (the “Sales Agents”), pursuant to which we could offer and sell shares of common stock registered under an effective registration statement from time to time through the Sales Agents. The Company terminated the Sales Agreement in July 2024. We will need to raise additional fundingfunding, 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, revenues, if ever, we expect to satisfy our future cash needs through equity or convertible 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.

It willmay take several years before we can develop potentially marketable products, if at all. Our research and development plans will require substantial additional capital, arising from costs to:

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 determinemay suchinvolve one-time events such as the receipt or payment of major milestones and other other payments.

Additional funds maywill be required to support our operationsoperations, including commercialization of our product candidates, and if we are unable to obtain them on favorable terms, we may be required to cease or reduce certain further research and development and commercialization programs of our drug product platform, sell some or all our intellectual property, merge with another entity or scale back operations.

Companion diagnostics are subject to regulation by the FDAFDA, EMA and comparable foreign regulatory authorities as medical devices and will likely require separate regulatory approval prior to to commercialization. If we or third parties are unable to successfully develop companion diagnostics for our drug candidates, or experience delays in doing so:

Even if our drug candidates and any associated companion diagnostics are approved for marketing, the need for companion diagnostics may slow or limit adoption of our drug candidates. Our drug candidates may be perceived negatively compared to alternative treatments that do not require the use of companion diagnostics, either due to the additional cost of the companion diagnostic or the need to complete additional [testing?] prior to administering our drug candidates.

The regulatory approval processes of the FDAFDA, EMA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, which could lead to our inability to generate product revenue.

The time required to obtain approval by the FDAFDA, EMA and comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our product candidates in those countries. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other data. Satisfying these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays. Our failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory approval in other countries. Even if we eventually complete clinical testing and receive approval of any regulatory filing for our product candidates, the FDAFDA, EMA and comparable foreign regulatory authorities may approve our product candidates for a more more limited indication or a narrower patient population than we originally requested. If we fail to comply with regulatory requirements in in international markets or to obtain and maintain required approvals, our target market will be reduced and our ability to realize the full full market potential of our product candidates will be harmed.

All but one of our clinical trials to date have been conducted outside the United States, and the FDAFDA, EMA and other foreign regulatory authorities may not accept data data from such trials.

The acceptance of study data from clinical trials conducted outside the United States by the FDA may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the United States, the the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the United States States population and United States medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to good clinical practice regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. Many foreign regulatory bodies have similar approval requirements. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA, FDAEMA or any other foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction. If the FDAFDA, EMA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.

Under FDA policies, a compound is eligible for priority review, or review within a six-month time frame from the time a complete NDA is accepted for filing, if the compound provides a significant improvement compared to marketed drugs in the treatment, diagnosis or prevention of a disease. The FDA determines whether a drug qualifies for Priority Review after an NDA for such drug is submitted to the FDA. Therefore, until NDAs are submitted for our compounds, we cannot be assured that they will be granted Priority Review. Additionally, even if Priority Review is granted for one of our compounds, the FDA does not always meet its six-month Prescription Drug User Fee Act (PDUFA) goal date for Priority Review and the review process is often extended by FDA requests for additional information or clarification.

WeWhile we have established relationships with leading scientists and research institutions, we will need to continue to establish relationshipsthese with leading scientists and research institutions.relationships. 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 maintain our existing scientific relationships and establish new 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.

We are not aware that we have experienced any material misappropriation, loss or other unauthorized disclosure of confidential or personally identifiable information as a result of a cyber-security breach or other act,act; however, a cyber-security breach or other act and/or disruption to our information technology systems could have a material adverse effect on our business, prospects, financial condition or results of operations.

Disruptions at the FDA and other agencies may also also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several timestimes, including the longest government shutdown that began on October 1, 2025 and ended November 13, 2025, and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, submissions, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

WeThe conductedCompany conducts a Section 382 study during the year endedannually September 30, 2021 and determined that, during the year ended September 30, 2015, there was a change in ownership which resulted in $25.8 million of federal NOLs being subject to an annual limitation. During the year ended September 30, 2021, wehas reduced ourits federal NOLs by $12.1 million and ourits researchResearch and developmentDevelopment tax credit carryforwards by $0.8 million, which are the amount of tax assets that will expire unutilized pursuant to the Section 382 study. This resulted in a reduction of $2.5 million of NOLs and $0.8 million of research and development credits and a corresponding reduction in the valuation allowance of $3.3 million, which was recorded in the 2021 fiscal year.382. Subsequent ownership changes in future years could trigger additional limitations of ourthe Company’s NOLs. During the year ended September 30, 2025, the 2024 and 2023, weCompany determined that there were no changes in ownership pursuant to Section 382.

In the United States, there have been, and continue to be proposed and enacted legislation at the federal and state levels designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for drugs. For example, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. In addition, the IRA,Inflation Reduction Act of 2022 (“IRA”), among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry. If any of our products are subject to such negotiation, we may lose a significant amount of the revenues expected during the full life cycle of these products. Further,In addition, the Bidencurrent administration is releasedpursuing other measures to reduce the cost of drugs in the United States. For example, on July 4, 2025, the 2025 Reconciliation Act, which reduces funding to federal healthcare programs and imposes additional requirements to be eligible for healthcare, was signed into law. Additionally, in April 2025, an additional executive order onwas October 14, 2022,signed directing the Secretary of HHS to submittake appropriate steps to, among other things, modify certain provisions of the Medicare Drug Price Negotiation Program, develop and implement a reportpayment withinmodel 90to daysreduce onthe price howof high-cost prescription drugs and biological products covered by Medicare, accelerate approval of generic and biosimilar products, and facilitate the Centerability forof Medicarestates to import pharmaceuticals from other countries, and Medicaidin InnovationMay can2025, bean furtherexecutive leveragedorder was signed, among other things, directing the Secretary of HHS to propose rules that impose “most-favored-nation” pricing and take other measures to testreduce newthe modelscost forof loweringprescription drugdrugs. costsIt foris Medicarecurrently unclear whether and Medicaidto beneficiaries.what Weextent expect that additional U.S. federal healthcare reformthese measures will be adoptedimplemented and what impact any such implementation would have on our business. Further, there can be no assurance that the current administration or future administrations will not pursue different or additional measures, such as those intended to more closely align U.S. drug prices with international drug prices (often referred to as “reference” or “international price index” drug pricing). Future price controls or other changes in pricing regulation or negative publicity related to the future, anypricing of pharmaceutical drugs could restrict the amount that we are able to charge for our drug products, which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand forrender our product candidatescandidates, orif approved, commercially unviable and materially adversely affect our ability to raise additional pricingcapital pressures.on acceptable terms.

Securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company. Many investors who have purchased shares in those companies at an inflated rate face the risk of losing a significant portion of their original investment as the price per share has declined steadily as interest in those stocks havehas abated. There can be no assurance that we will not in the future be a target of a short squeeze, and you may lose a significant portion or all of your investment if you purchase our shares at a rate that is significantly disconnected from our underlying value.

Our success depends in large part on our ability to obtain and maintain protection of our intellectual property, particularly patents, in the United States and other countries with respect to our product candidates and technology. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates and/or by in-licensing intellectual property. U.S. patents related to ANAVEX®2-73 are directed to ANAVEX®2-73 in its various optical or crystal forms, its therapeutic indications, and dosage forms comprising certain doses of ANAVEX®2-73 combined with another therapeutic agent. We may not be able to obtain broader scope patent protection for ANAVEX®2-73 as a single drug or in other jurisdictions.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal, technological and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. Further, we may not be aware of all third-party intellectual property rights potentially relating to and/or interfering with our product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all.all until issuance. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and/or commercial value of our patent rights are highly uncertain. Our pending and future patent applications applications may not result in patents being issued that protect our product candidates, in whole or in part, or which could effectively prevent others from commercializing competitive product candidates. Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our patents by developing similar or alternative product candidates in a non-infringing manner.

In addition, thewhile issuanceU.S. ofpatents have a patentpresumption of is not conclusive as to its inventorship, scope, validity and/or enforceability, andvalidity, our patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical product candidates, or limit the duration of the patent protection of our product candidates. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.

We hold ownership or exclusive rights to twenty-twothirty (30) U.S. patents, twenty-threeseventeen (17) pending U.S. patent applications, and variousnumerous PCT orand ex-U.S. patents and patent applications relating to our drug candidates, methods associated therewith, and to our research programs. Neither patents nor patent applications necessarily ensure the protection of our intellectual property for a number of reasons, including the following:

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.

The following discussion should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this report. Past operating results are not necessarily indicative of results that may occur in future periods. This discussion contains forward-looking statements, which involve a number of risks and uncertainties. See “Forward Looking Statements” included elsewhere in this report. For discussion and analysis pertaining to 2024 overview and highlights as compared to 2023, please refer to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on December 23, 2024.

We are in the developmentpre-revenue stage and have not earned any revenues since our inception in 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.

Our operating expenses for fiscal 20242025 decreased to $52.9$51.4 million, from $55.8$52.9 million in fiscal 2023.2024. The decrease is attributable to a modest decrease in research and development expenses of $1.9 million (4.3%) to $41.8 million in fiscal 2024 as well as a small decrease in general and administrative expenses of $1.0 million (8.3%) to $11.0 million in fiscal 2024,expenses, as more fully described below.

The following table summarizes our research and development expenses for the years ended September 30, 2025, 2024, and 2023 (in thousands):

General and administrative expenses were $11.0$13.8 million for the fiscal 20242025 financial year, as compared to $12.0$11.0 million in fiscal 2023.2024. The primary reason for the decreaseincrease in general and administrative expenses was aan reductionincrease in share-basedlegal compensation chargesfees of $1.9$1.7 million, asrelated to legal/regulatory matters, a resultnew ofshelf theregistration vesting of previous option awardsstatement, and various theclass extendedaction timeline of milestone based vesting awards.lawsuits.

Net other income for the year ended September 30, 20242025 was $9.9$5.0 million as compared to $8.3$9.9 million for fiscal 2023.2024. The primary reason for the increasedecrease in other income was due to a one-time financing chargedecrease of $0.9 $2.6 million recognized in the comparable year associated with entering into the 2023 Purchase Agreement (as described below), as well as an increase in interest income as a result of withdrawals in fiscalprincipal 2024balance earned on cash and cash equivalents, dueapplied to anexcess increasefunds invested in a money market as well as a market wide decrease in interest rates year over year.rates.

During fiscal 2024,2025, we recorded $2.3$0.6 million in research and development incentive income, consisting of the Australian research and development incentive credit administered through the ATO, in connection with fiscal 2024 2025 eligible expenditures. In comparison, research and development incentive income for fiscal 20232024 was $2.7$2.3 million in connection with fiscal 20232024 eligible expenditures. This income is driven by the clinical trial expenditures incurred in Australia, and the decrease year over year is a result of the completion of theeligible EXCELLENCER&D trialclinical trials in Rett Syndrome and the Phase 2b/3 clinical trial in Alzheimer’s disease, as well as related open label extension trials, which were completed during fiscal 2024.Australia. We expect to continue to receive support from the Australian government for future clinical trials which we plan to conduct, in part, within Australia.

Following is a summary of sources of cash flows for the years ended September 30, 2025, 2024 and 2023 (in thousands):

There was an increase in cash used in operating activities of $3.0$8.2 million during fiscal 2024.2025. The principal reason for this is andue to a large decrease in accounts payable during the year, as compared to a large increase in net cash expenses, after taking into account non-cash share-based compensation, over the comparable periodfinancial year, principally due to timing of approximatelypayments $3.3for million.a large manufacturing campaign of ANAVEX®2-73.

On February 3, 2023, the Companywe entered into a $150,000,000 purchase agreement (the “2023 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which thewe Company hashave the right to sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $150.0 million in value of itsour shares of Common Stock from time to time over a three-year period until February 3, 2026.

On any business day and subject to having an effective registration statement and subject to certain customary conditions, the Companywe may direct Lincoln Park to purchase up to 200,000 shares of Common Stock (such purchases, “Regular Purchases”). The amount of a Regular Purchase may increase under certain circumstances based on the market price of the Common Stock; provided, however, that Lincoln Park’s committed obligation under any Regular Purchase shall not exceed $4.0 million. The purchase price of shares of Common Stock will be based on the then prevailing market prices of such shares at the time of sales as described in the 2023 Purchase Agreement. There are no limits on the price per share that Lincoln Park may pay to purchase Common Stock under the 2023 Purchase Agreement. In addition, if thewe Company hashave directed Lincoln Park to purchase the full amount of Common Stock available as a Regular Purchase on a given day, itwe may direct Lincoln Park to purchase additional amounts as “accelerated purchases” and “additional accelerated purchases,” each as set forth in the 2023 Purchase Agreement.

During the year ended September 30, 2025, the Company did not issue any shares of common stock under the 2023 Purchase Agreement. During the year ended September 30, 2024, the Company issued issued to Lincoln Park an aggregate of 2,455,646 shares of Common Stock under the 2023 Purchase Agreement, including 2,450,000 shares of Common Stock for an aggregate purchase price of $11.3 million and 5,646 commitment shares. During the year ended September 30, 2023, the Company issued to Lincoln Park an aggregate of 3,288,943 shares of Common Stock under the 2023 Purchase Agreement, including 3,275,000 shares of Common Stock for an aggregate purchase price of $27.9 million and 13,943 commitment shares as well as the 75,000 initial commitment shares.

On September 30, 2024,2025, there was an unused amount of $110.8 million remained available under the 2023 Purchase Agreement. The Company will need to file a prospectus supplement in order to access funds under the 2023 Purchase Agreement.

We have granted share purchase option awards that vest upon achievement of certain performance criteria, or milestone-based awards. We estimate an implicit service period for achieving performance criteria for each award and recognizesrecognize the resulting fair value as expense over the implicit service period when we conclude that achieving the performance criteria is probable. We periodically review and update as appropriate our estimates of implicit service periods and conclusions on achieving the performance criteria. Performance awards vest upon achievement of the performance criteria.

The termination of our former CEO’s employment for Cause, the related review by the Special Committee,Committee and other matters reviewed in connection therewith,therewith have resulted in, and could continue to result in litigation, inquiries, investigations or other proceedings ,proceedings, and could adversely affect our reputation, business, business, financial condition and results of operations, prospects, and the market price of our common stock.

The conduct of our former CEO and other matters reviewed in connection therewith have resulted in, and could continue to result inin, litigation, inquiries, investigations or enforcement actions actions by the FDA, the SEC, Nasdaq or other governmental or regulatory authorities, significant costs, diversion of management’s attention, reputational harm and a loss of confidence among investors, clinical investigators, patients, business partners, shareholders and other stakeholders. Any of these consequences could materially and adversely affect our reputation, business, financial condition, results of operations, prospects and the market price of our common stock. For example, in June 2026, our former CEO filed a Demand for Arbitration with the AAA against us asserting wrongful termination and in July 2026 our former CEO filed a Summons with Notice with the New York Supreme Court against four of our independent directors for alleging “breach of fiduciary duty as independent board members”. For additional information, see Part II, Item 1 “Legal Proceedings” of this Quarterly Report on Form 10-Q.

As further described in Part II, Item 4 “Controls and Procedures” of this Quarterly Report on Form 10-Q10-Q, and Item 9A of the 2025 Form 10-K/A, management has concluded that there was a material weakness in our internal control over financial reporting that existed at September 30, 2025, December 31, 2025 and2025, March 31, 2026 and June 30, 2026. Accordingly, Accordingly, our internal control over financial reporting as of such dates was not effective. In addition, our disclosure controls and procedures procedures were not effective as of such datesdates, due to the material weakness in internal control over financial reporting.

We face risks related to previously being delinquent in filing this Quarterly Report on Form 10-Q and our Quarterly Report on Form 10-Q for the quarterly period ended JuneMarch 30,31, 2026.

Due to the circumstances described in our Form 12b-25 filed with the SEC on August 10, 2026 (the “Q3 Form 12b-25”), this Quarterly Report on Form 10-Q was delinquent and, due to the circumstances described in our Form 12b-25 filed with the SEC on May 11, 2026 (the “Q2 Form 12b-25”), this Quarterly Report on Form 10-Q was delinquent, and due to the circumstances described in our Form 12b-25 filed with the SEC on August 10, 2026 (the “Q3 Form 12b-25”), our Quarterly Report on Form 10-Q for the quarterly period ended JuneMarch 30,31, 2026, was delinquent. Additionally, as previously disclosed, on May 20, 2026, we received a deficiency notification letter from the Nasdaq Staff indicating that, as a result of our inability to timely file thisthe Quarterly Report on Form 10-Q,10-Q for the quarterly period ended March 31, 2026, we are not in compliance with Nasdaq Listing Rule Rule 5250(c)(1).

The un-timely filing of this Quarterly Report on Form 10-Q and our Quarterly Report on Form 10-Q for the quarterly period ended JuneMarch 30,31, 2026 will make us ineligible to utilize our effective Form S-3 registration statement or to file a new Form S-3 registration statement after we file our next Annual Report on Form 10-K. We will be unable to regain eligibility to use Form S-3 until we have timely filed all reports specified under General Instruction I.A.3. of Form S-3 for the preceding 12 calendar months, which will adversely affect our ability to raise future capital.

As a result of the un-timely filing of this Quarterly Report on Form 10-Q and our Quarterly Report on Form 10-Q for the quarterly period ended JuneMarch 30,31, 2026 with the SEC, we will be ineligible to utilize our effective Form S-3 registration statement, including in connection with our ATM program under the 2025 Sales Agreement, or to file a new Form S-3 registration statement after we file our next Annual Report on Form 10-K. We will be unable to regain eligibility to use Form S-3 until we have timely filed all reports specified under Form S-3 for the preceding 12 calendar months. Should we wish to offer and sell our securities to the public prior to the time we become eligible to use Form S-3, both the transaction costs and the amount of time required to complete such transactions could increase, making it more difficult to execute any such transactions successfully and potentially having a material adverse effect on our business and financial condition.

In March 2026, we submitted an Investigational New Drug (“IND”) application to the FDA for ANAVEX 2-73 for the treatment of early AD (the “AD IND”). The submission included cross-referenced information from an existing IND for Rett syndrome that we submitted to the FDA in October 2017 (the “Rett IND”). We are currently proceeding with nonclinical and two foundational clinical pharmacology studies under the AD IND to support and strengthen our regulatory strategy for ANAVEX 2-73 – an absorption, distribution, metabolism, and excretion (“ADME”) study and a drug-drug interaction (“DDI”) study. The first participant visit in the ADME study occurred in August 2026. Dosing in the DDI study is underway and the last participant completing dosing is targeted for the end of September 2026. These studies are not sequential requirements. Rather, these studies support the overall FDA regulatory requirements for ANAVEX 2-73 while we continue to advance our early AD program in parallel. Such studies are not indication-specific and would apply across all of our ANAVEX2-73ANAVEX 2-73 programs.

We hold ownership or exclusive rights to thirty-three (33) issued U.S. patents, seventeen (17) pending U.S. patent applications, and numerous Patent Cooperation Treaty (“PCT”) and ex-U.S. patents and patent applications relating to our drug candidates, methods associated therewith, and to our research programs.

We expect the filing of this Quarterly Report on Form 10-Q, and our Quarterly Report on Form 10-Q for the quarterly period ended JuneMarch 30,31, 20262026, to cure the deficiency. However, the Nasdaq Staff will consider multiple factors when reviewing our Compliance Plan, including our past compliance history, the reasons for the late filing, other corporate events that may occur within our review period, our overall financial condition and our public disclosures. If the Compliance Plan is not accepted by the Nasdaq Staff, the Company will have an opportunity to request a hearing on the Nasdaq Staff’s determination before an independent Hearings Panel.

Our operating costs consist primarily of research and development activities including the cost of clinical trials and clinical supplies as well as clinical drug manufacturing and formulation. Research and development expenses also include personnel-related costs such as salaries and wages, and third-party contract research organization (“CRO”) expenses in support of these clinical trials. Personnel costs include salaries and wages, benefits, and non-cash share-based compensation compensation charges associated with options and other equity awards granted to employees and consultants who are directly engaged in support of our research and development activities.

General and administrative expenses consist of personnel costs, expenses for outside professional services and expenses associated with operating as a public company. Personnel costs consist of salaries and wages, benefits and share-based compensation for general and administrative personnel. Outside professional services and public company expenses include expenses related to compliance and reporting, additional insurance expenses, audit and Sarbanes-Oxley Act of 2002 compliance, expenses associated with patent research, applications and filings, investor and shareholder relations activities and other administrative expenses and professional services. SubsequentWe tohave the end of the quarterly period ended March 31, 2026, we incurred increased legal and other professional expenses arising out of the review by the special committee (“Special Committee”) of our Board of Directors (“Board”), which resulted in the termination of our former CEO, and related matters, and we anticipate incurring higher legal and other professional expenses in future quarters in connection with these matters.

Comparison of the three months ended MarchJune 31,30, 2026 2026 and 2025

Total operating expenses for the three months ended MarchJune 31,30, 2026 were $6.5$(6.7) million, compared to $12.5$14.5 million for the comparable three months ended MarchJune 31,30, 2025. The primary reason for the decrease in operating expenses is due to the decreasereversal of $15.5 million in researchstock-based andcompensation developmentexpense expenses,primarily whichassociated iswith the moretermination fullyof describedour below.former CEO for Cause. Additionally, there were also reversals of $1.9 million in stock-based compensation expense associated with the determination that previously granted milestone-based stock options, will never vest given the Company’s change in strategy.

The following table summarizes our research and development expenses for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):

During the three months ended MarchJune 31,30, 2026 and 2025, external service provider costs by indication and product candidate were as follows (in thousands):

Net other income for the three months ended MarchJune 30, 31, 2026 was $1.1 million, as compared to $1.3$1.2 million for the three months ended MarchJune 31,30, 2025. The decrease is primarily related to a decrease in interestresearch and development incentive income of $0.2$0.1 million as a result of lowerthe interestcompletion ratesof duringclinical trial activities in Australia that had been eligible for the period.Australian research and development credit.

Net loss for the threenine months ended MarchJune 31,30, 2026,2026 was was $5.3$3.2 million, or $0.06$0.03 per share, as compared to $11.2$36.6 million, or $0.13$0.43 per share, for the threenine months ended MarchJune 31,30, 2025. The decrease decreasein net loss is primarily related to athe decreaserecovery inof researchstock-based andcompensation development expenses,expense, as more fully described above.

On MarchJune 31,30, 2026, we had net current assets of $121.7$112.4 million, an increase of approximately $26.8$17.5 million from our fiscal year ended September 30, 2025. The increase in net current assets is primarily related to cash received from the issuance of our common stock pursuant to the 2025 Sales Agreement (as defined below). during the first quarter of fiscal 2026.

We had cash and cash equivalents of $127.4$118.3 million as of MarchJune 31,30, 2026, compared to $131.7$102.6 million as of DecemberSeptember 31,30, 2025. We expect our cash balance at the end of the secondthird quarter of of 2026 to fund operations and planned development activities until mid to late fiscal 2028.

The following table summarizes cash flows during the sixnine months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Net cash used in operating activities for the sixnine months ended MarchJune 31,30, 2026 was $11.6$20.7 million, compared to $18.0$30.4 million during the comparable period ended MarchJune 31,30, 2025. The principal reason for this change is due to the decrease in net loss due to the decrease in operatingresearch and development expenditures, net of stock-based compensation reversals, as more fully described above.

Cash flows provided by financing activities for the sixnine month periodmonths ended MarchJune 31,30, 2026,2026 was $36.4 million, compared to $1.6cash utilized in financing activities of $0.6 million during the comparable nine six-month periodmonths ended March 31,June 30, 2025.

During the sixnine months ended MarchJune 31,30, 2026, cash provided by financing activities was related to cash received from the issuance of our common stock pursuant to the 2025 Sales Agreement.

There were no cash flows from investing activities for the six-monthnine-month periods ended MarchJune 31,30, 2026 and 2025.

During the sixnine months ended MarchJune 31,30, 2026, we issued an aggregate of 6,026,237 shares of Common Stock under the 2025 Sales Agreement for net proceeds of $37.2$36.4 million, after deducting commissions. We suspended sales under the 2025 Sales Agreement following the formation of the Special Committee described above under “—Financial Overview.” We will be unable to make sales under the 2025 Sales Agreement after we file our next Annual Report on Form 10-K due to our loss of Form S-3 eligibility for the untimely filing of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2026 and June 30, 2026 with the SEC. We will be unable to regain eligibility to use Form S-3 until we have timely filed all reports specified under Form S-3 for the preceding 12 calendar months.

At MarchJune 31,30, 2026, there was an unused amount of $103.2 million under the 2025 Sales Agreement.