Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 28, 2020 | Mar. 31, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity File Number | 001-37606 | ||
Entity Registrant Name | ANAVEX LIFE SCIENCES CORP. | ||
Entity Central Index Key | 0001314052 | ||
Entity Tax Identification Number | 98-0608404 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 51 W 52nd Street | ||
Entity Address, Address Line Two | 7th Floor | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Country | US | ||
Entity Address, Postal Zip Code | 10019 | ||
City Area Code | 844 | ||
Local Phone Number | 689-3939 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | AVXL | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 177,399,544 | ||
Entity Common Stock, Shares Outstanding | 66,962,957 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Current | ||
Cash and cash equivalents | $ 29,249,018 | $ 22,185,630 |
Incentive and tax receivables | 4,849,340 | 2,642,745 |
Prepaid expenses and deposits | 443,839 | 500,998 |
Total Assets | 34,542,197 | 25,329,373 |
Current Liabilities | ||
Accounts payable | 3,989,054 | 3,523,332 |
Accrued liabilities | 3,316,574 | 1,516,342 |
Total Liabilities | 7,305,628 | 5,039,674 |
Capital stock Authorized: 10,000,000 preferred stock, par value $0.001 per share | 0 | 0 |
Capital stock Authorized: 100,000,000 common shares, par value $0.001 per share Issued and outstanding: 62,045,198 common shares (2019 - 52,650,521) | 62,047 | 52,652 |
Additional paid-in capital | 186,851,752 | 153,633,807 |
Accumulated deficit | (159,677,230) | (133,396,760) |
Total Stockholders' Equity | 27,236,569 | 20,289,699 |
Total Liabilities and Stockholders' Equity | $ 34,542,197 | $ 25,329,373 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, authorized | 100,000,000 | 100,000,000 |
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, issued | 62,045,198 | 52,650,521 |
Common shares, outstanding | 62,045,198 | 52,650,521 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating expenses | ||
General and administrative | $ 5,856,609 | $ 6,846,599 |
Research and development | 25,231,623 | 22,260,349 |
Total operating expenses | (31,088,232) | (29,106,948) |
Other income (expenses) | ||
Grant income | 149,888 | 298,943 |
Research and development incentive income | 4,375,025 | 2,465,691 |
Interest income, net | 179,973 | 207,280 |
Gain on settlement of accounts payable | 0 | 115,758 |
Financing related charges | 0 | (151,133) |
Foreign exchange gain (loss), net | 125,540 | (42,389) |
Total other income, net | 4,830,426 | 2,894,150 |
Net loss before provision for income taxes | (26,257,806) | (26,212,798) |
Income tax expense, current | (22,664) | (82,181) |
Net loss and comprehensive loss | $ (26,280,470) | $ (26,294,979) |
Net Loss per share | ||
Basic and diluted | $ (0.45) | $ (0.54) |
Weighted average number of shares outstanding | ||
Basic and diluted | 58,194,894 | 48,906,470 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows used in Operating Activities | ||
Net loss | $ (26,280,470) | $ (26,294,979) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Stock-based compensation | 4,876,906 | 6,430,873 |
Deferred costs | 0 | 151,133 |
Gain on settlement of accounts payable | 0 | (115,758) |
Changes in non-cash working capital balances related to operations: | ||
Incentive and tax receivables | (2,206,595) | (772,388) |
Prepaid expenses and deposits | 57,159 | 803,196 |
Accounts payable | 465,722 | 683,797 |
Accrued liabilities | 1,800,232 | 587,009 |
Net cash used in operating activities | (21,287,046) | (18,527,117) |
Cash Flows provided by Financing Activities | ||
Issuance of common shares | 28,754,198 | 17,832,109 |
Share issue costs | (403,764) | 0 |
Deferred financing charges | 0 | (50,000) |
Net cash provided by financing activities | 28,350,434 | 17,782,109 |
Increase (decrease) in cash and cash equivalents during the period | 7,063,388 | (745,008) |
Cash and cash equivalents, beginning of year | 22,185,630 | 22,930,638 |
Cash and cash equivalents, end of year | $ 29,249,018 | $ 22,185,630 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Sep. 30, 2018 | $ 45,935 | $ 129,377,542 | $ (107,101,781) | $ 22,321,696 |
Balance Beginning (in shares) at Sep. 30, 2018 | 45,933,472 | |||
Purchase shares | $ 4,849 | 13,192,755 | 13,197,604 | |
Shares issued under 2015 Purchase Agreement - Purchase shares (in shares) | 4,848,995 | |||
Commitment shares | $ 24 | (24) | ||
Shares issued under 2015 Purchase Agreement - Commitment shares (in shares) | 23,701 | |||
Purchase shares | $ 1,500 | 4,633,005 | 4,634,505 | |
Shares issued under 2019 Purchase Agreement - Purchase shares (in shares) | 1,500,000 | |||
Commitment shares | $ 339 | (339) | ||
Shares issued under 2019 Purchase Agreement - Commitment shares (in shares) | 339,415 | |||
Shares issued pursuant to cashless exercise of warrants | $ 5 | (5) | ||
Shares issued pursuant to cashless exercise of warrants (in shares) | 4,938 | |||
Share based compensation | 6,430,873 | 6,430,873 | ||
Net loss | (26,294,979) | (26,294,979) | ||
Ending balance, value at Sep. 30, 2019 | $ 52,652 | 153,633,807 | (133,396,760) | 20,289,699 |
Balance Ending (in shares) at Sep. 30, 2019 | 52,650,521 | |||
Purchase shares | $ 7,565 | 21,246,733 | 21,254,298 | |
Shares issued under 2019 Purchase Agreement - Purchase shares (in shares) | 7,564,584 | |||
Commitment shares | $ 69 | (69) | ||
Shares issued under 2019 Purchase Agreement - Commitment shares (in shares) | 68,943 | |||
Shares issued pursuant to cashless exercise of options | $ 1 | (1) | ||
Shares issued pursuant to cashless exercise of options (in shares) | 721 | |||
Shares issued under Sales Agreement, net of shares issue costs | $ 1,760 | 7,094,376 | 7,096,136 | |
Shares issued under Sales Agreement, net of shares issue costs (in shares) | 1,760,429 | |||
Share based compensation | 4,876,906 | 4,876,906 | ||
Net loss | (26,280,470) | (26,280,470) | ||
Ending balance, value at Sep. 30, 2020 | $ 62,047 | $ 186,851,752 | $ (159,677,230) | $ 27,236,569 |
Balance Ending (in shares) at Sep. 30, 2020 | 62,045,198 |
Business Description and Basis
Business Description and Basis of Presentation | 12 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation | Note 1 Business Description and Basis of Presentation Business Anavex Life Sciences Corp. (“Anavex” or the “Company”) is a clinical stage biopharmaceutical company engaged in the development of differentiated therapeutics by applying precision medicine to central nervous system (“CNS”) diseases with high unmet need. Anavex analyzes genomic data from clinical studies to identify biomarkers, which are used to select patients that will receive the therapeutic benefit for the treatment of neurodegenerative and neurodevelopmental diseases. The Company’s lead compound ANAVEX ® Basis of Presentation These consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and the instructions to Form 10-K and have been prepared under the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Liquidity All of the Company’s potential drug compounds are in the clinical development stage and the Company cannot be certain that its research and development efforts will be successful or, if successful, that its potential drug compounds will ever be approved for sales to pharmaceutical companies or generate commercial revenues. To date, we have not generated any revenues from our operations. The Company expects the business to continue to experience negative cash flows for the foreseeable future and cannot predict when, if ever, our business might become profitable. The Company believes that its existing cash and cash equivalents, along with existing financial commitments from third parties, will be sufficient to meet its cash commitments for in excess of two years after the date that these consolidated financial statements are issued. The process of drug development can be costly, and the timing and outcomes of clinical trials is uncertain. The assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change. The actual amount of the Company’s expenditures will vary depending upon a number of factors including but not limited to the design, timing and duration of future clinical trials, the progress of the Company’s research and development programs and the level of financial resources available. The Company has the ability to adjust its operating plan spending levels based on the timing of future clinical trials. Other than our rights related to the 2019 Purchase Agreement and the Sales Agreement (each as defined below in Note 4), there can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all of its research and development activities. In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China. In March 2020, the World Health Organization (“WHO”) declared COVID-19 to be a global pandemic as a result of the rapid spread of the virus beyond its point of origin. The global outbreak of COVID-19 continues to rapidly evolve as of the date these consolidated financial statements are issued. As such, it is uncertain as to the full magnitude that the outbreak will have on the Company’s financial condition and future results of operations. Management is actively monitoring the global situation on its business, including on its clinical trials and operations and financial condition. The effects of COVID-19 did not have a material impact on the Company’s result of operations or financial condition for the year ended September 30, 2020. However, given the daily evolution of the COVID-19 situation, and the global responses to curb its spread, the Company is not able to estimate the effects COVID-19 may have on its future results of operations or financial condition. On March 27, 2020, the President of the United States signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The enactment of the CARES Act did not have any material impact on the Company’s consolidated financial statements or deferred tax assets or liabilities. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 Summary of Significant Accounting Policies a) Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to accounting for research and development costs, incentive income receivable, valuation and recoverability of deferred tax assets, asset impairment, stock-based compensation and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the book values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. b) Principles of Consolidation These consolidated financial statements include the accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiaries, Anavex Australia Pty Limited. (“Anavex Australia”), a company incorporated under the laws of Australia, Anavex Germany GmbH, a company incorporated under the laws of Germany, and Anavex Canada Ltd., a company incorporated under the laws of the Province of Ontario, Canada. All inter-company transactions and balances have been eliminated. c) Cash and equivalents The Company considers only those investments which are highly liquid, readily convertible to cash and that mature within three months from the date of purchase to be cash equivalents. d) Research and Development Expenses Research and development costs are expensed as incurred. These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits and stock based compensation expense, contract services including external research and development expenses incurred under arrangements with third parties such as contract research organizations (“CROs”), facilities costs, overhead costs and other related expenses. Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved. Manufacturing costs are expensed as incurred in accordance with Accounting Standard Codification (“ASC”) 730, Research and Development, as these materials have no alternative future use outside of their intended use. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered, or the related services are performed, subject to an assessment of recoverability. The Company makes estimates of costs incurred in relation to external CROs, and clinical site costs. The Company analyzes the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period. The Company reviews and accrues CRO expenses and clinical trial study expenses based on work performed and relies upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to record expenses in our financial statements based on the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract. In addition, the Company incurs expenses in respect of intellectual property costs relating to patents and trademarks. The probability of success and length of time to develop commercial applications of the compounds subject to the underlying patent and trademark costs is difficult to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects. There is no assurance the compounds subject to the underlying patents and trademarks will ever be successfully commercialized. Due to these risks and uncertainties, the patent and trademark costs do not meet the definition of an asset and thus are expensed as incurred within general and administrative expenses. e) Research and Development Incentive Income The Company is eligible to obtain certain research and development tax credits, including the New York City Biotechnology Tax Credit (“NYC Biotech credit”), and the Australian research and development tax incentive credit (the “Australia R&D credit”) through a program administered through the Australian Tax Office (the “ATO”), which provides for a cash refund based on a percentage of certain research and development activities undertaken in Australia by the Company’s wholly owned subsidiary, Anavex Australia Pty Ltd. (“Anavex Australia”). The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million Australian during the reimbursable period. The tax incentives are available on the basis of specific criteria with which the Company must comply. Although the tax incentive may be administered through the local tax authority, the Company has accounted for the incentives outside of the scope of ASC Topic 740, Income Taxes (“ASC 740”), since the incentives are not linked to the Company’s taxable income and can be realized regardless of whether the Company has generated taxable income in the respective jurisdictions. With respect to the Australia R&D credit, Anavex Australia may be eligible to receive the cash refund for certain research and development expenses incurred by Anavex Australia outside of Australia, to the extent such expenses are pre-approved by the Australian authority pursuant to an advanced overseas finding application. The Company accrues for the amount of cash refund it expects to receive in relation to research and development expenses outside of Australia only to the extent it has received advanced approval from the Department of Industry, Innovation and Science in Australia, pursuant to an approved advanced overseas finding application. The Company recognizes the amount of cash refund it expects to receive related to the NYC Biotech credit and Australian research and development tax incentive program when there is reasonable assurance that the cash refund will be received, when the relevant expenditures have been incurred, and when the amount can be reliably measured. This amount is included in Incentive and tax receivables in the accompanying consolidated balance sheets. In addition, Anavex Australia and Anavex Canada incur Goods and Services Tax (GST) on certain services provided by local vendors. As a domestic entity in those jurisdictions, Anavex Australia and Anavex Canada are entitled to a refund of the GST paid. Similarly, Anavex Germany incurs Value Added Tax (VAT) on certain services provided by local vendors, to which it is entitled to a refund of such VAT paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST and VAT incurred is included in Incentive and tax receivables in the accompanying consolidated balance sheets. f) Basic and Diluted Loss per Share Basic income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the sum of (1) the weighted-average number of common shares outstanding during the period, (2) the dilutive effect of the assumed exercise of options and warrants using the treasury stock method and (3) the dilutive effect of other potentially dilutive securities. For purposes of the diluted net loss per share calculation, options and warrants are potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. As of September 30, 2020, diluted loss per share excludes 10,576,266 8,812,933 g) Financial Instruments The book value of the Company’s financial instruments, consisting of cash and equivalents, incentive and tax receivables, and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. h) Foreign Currency Translation The functional currency of the Company is the US dollar. Monetary items denominated in a foreign currency are translated into US dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired, or obligations incurred. Foreign currency denominated expense items are translated at exchange rates prevailing on the transaction date. Unrealized gains or losses arising from the translations are credited or charged to income in the period in which they occur. The Company has determined that the functional currency of Anavex Australia Pty Limited, Anavex Germany GmbH, and Anavex Canada Ltd. is the US dollar. i) Segment and Geographic Reporting Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment, which is the business of developing novel therapies for the management of CNS diseases. j) Grant Income Grant income is recognized at the fair value of the grant when it is received, and all substantive conditions have been satisfied. Grants received from government and other agencies in advance of the specific research and development costs to which they relate are deferred and recognized in the consolidated statement of operations in the period they are earned and when the related research and development costs are incurred. k) Income Taxes The Company follows the provisions of ASC 740, which requires the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company follows the provisions of ASC 740 regarding accounting for uncertainty in income taxes. The Company initially recognizes tax positions in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts. Application requires numerous estimates based on available information. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, and its recognized tax positions and tax benefits may not accurately anticipate actual outcomes. As additional information is obtained, there may be a need to periodically adjust the recognized tax positions and tax benefits. These periodic adjustments may have a material impact on the consolidated statements of operations. The Company recognizes interest and penalties related to current income tax expense on the interest income, net line, in the accompanying consolidated statement of operations. Accrued interest and penalties, if any, are included in accrued liabilities on the consolidated balance sheets. l) Stock-based Compensation The Company accounts for all stock-based payments and awards under the fair value method. The Company accounts for the granting of share purchase options and warrants to employees using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant. The fair value of all share purchase options and warrants are expensed over their contractual vesting period, or over the expected performance period for only the portion of awards expected to vest, in the case of milestone-based vesting, with a corresponding increase to additional paid-in capital. Share purchase options and warrants issued to non-employees are measured at the fair value of the equity instruments issued. Compensation expense for share purchase options and warrants issued to non-employees is recorded over the service performance period. Prior to the Company’s adoption of ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting on October 1, 2019, options and warrants subject to vesting were periodically re-measured until the counterparty performance was complete, and any change therein was recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity based instruments. After the adoption of ASU No. 2018-07, the Company measures equity-classified share-based payment awards issued to nonemployees on the grant date, rather than remeasuring the awards through the performance completion date as previously required (see Note 2 n)). Compensation costs for stock-based payments with graded vesting are recognized on a straight-line basis. The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options and warrants at the date of the grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimates. m) Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 - assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities. At September 30, 2020 and 2019, the Company did not have any Level 3 assets or liabilities. n) Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, Topic 842, Leases was issued to replace the leases requirements in Topic 840, Leases. The main difference between previous U.S. GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. The Company elected the package of practical expedients permitted under the transition guidance that allowed, among other things, the historical lease classifications to be carried forward without reassessment. Further, the Company elected to not recognize lease assets and lease liabilities for leases with a term of 12 months or less. The adoption of this standard on October 1, 2019 did not have any impact on the Company's consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments to nonemployees for goods and services by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance was effective for the Company beginning on October 1, 2019 and was required to be applied retrospectively with the cumulative effect recognized at the date of initial application. The adoption of this standard on October 1, 2019 did not have any material impact on the Company's consolidated results of operations, financial condition, cash flows, and financial statement disclosures. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes (ASC 740)", which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying and amending existing guidance to improve consistent application. ASU 2019-12 is effective for the Company on October 1, 2021. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements but does not expect such guidance to have a material impact. |
Other Income
Other Income | 12 Months Ended |
Sep. 30, 2020 | |
Other Income | |
Other Income | Note 3 Other Income Grant income During the year ended September 30, 2017, the Company was awarded grant funding in the amount of $ 597,886 The grant income was deferred when received and amortized to other income as the related research and development expenditures were incurred. During the year ended September 30, 2020, the Company recognized $ 149,888 298,943 Research and development incentive income Research and development incentive income during the years ended September 30, 2020 and 2019 represents the receipt by Anavex Australia, of the Australia R&D Credit, as well as receipt by the Company of the New York City Biotechnology Credit (“NYC Biotech credit”). During the year ended September 30, 2020, the Company recorded research and development incentive income of $ 4,375,025 6,392,266 2,215,691 3,281,300 During the year ended September 30, 2019, the Company recorded research and development incentive income of $ 250,000 |
Equity Offering Agreements
Equity Offering Agreements | 12 Months Ended |
Sep. 30, 2020 | |
Equity Offering Agreements | |
Equity Offering Agreements | Note 4 Equity Offering Agreements 2015 Purchase Agreement On October 21, 2015, the Company entered into a $50,000,000 purchase agreement (the “2015 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company could sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $50,000,000 in value of its shares of common stock from time to time over a 36-month period. During the year ended September 30, 2019, the Company issued to Lincoln Park an aggregate of 4,872,696 4,848,995 13,197,604 23,701 2019 Purchase Agreement On June 7, 2019, the Company entered into a $ 50,000,000 36 The Company may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 200,000 shares of common stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 250,000 shares, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. In the event the Company purchases the full amount allowed for a Regular Purchase on any given business day, the Company may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price of shares of common stock related to the future funding will be based on the then prevailing market prices of such shares at the time of sales as described in the 2019 Purchase Agreement. The Company’s sale of shares of Common Stock to Lincoln Park subsequent to the Amendment Date is limited to 12,016,457 19.99% In consideration for entering into the 2019 Purchase Agreement, the Company issued to Lincoln Park 324,383 162,191 During the year ended September 30, 2020, the Company issued to Lincoln Park an aggregate of 7,633,527 1,839,415 7,564,584 1,500,000 21,254,298 4,634,505 68,943 339,415 24,111,197 45,365,495 Sales Agreement The Company entered into a Controlled Equity Offering Sales Agreement on July 6, 2018, which was amended and restated on May 1, 2020 (the “Sales Agreement”) with Cantor Fitzgerald & Co. and SVB Leerink LLC (together the “Sales Agents”), pursuant to which the Company may offer and sell shares of common stock, for aggregate gross sale proceeds of up to $ 50,000,000 Upon delivery of a placement notice based on the Company’s instructions and subject to the terms and conditions of the Sales Agreement, the Sales Agents may sell the Shares by methods deemed to be an “at the market offering” offering, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to the prior written consent of the Company. The Company is not obligated to make any sales of Shares under the Sales Agreement. The Company or Sales Agents may suspend or terminate the offering of Shares upon notice to the other party, subject to certain conditions. The Sales Agents will act as agent on a commercially reasonable efforts basis consistent with their normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of Nasdaq. The Company has agreed to pay the Sales Agents commissions for their services of up to 3.0% 1,760,429 7,499,900 7,096,136 42,500,100 |
Commitments
Commitments | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 5 Commitments a) Lease During the year ended September 30, 2020 the Company incurred office lease expense of $ 233,423 (2019: $ 190,416 ). b) 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. c) Share Purchase Warrants The following table summarizes the warrant activity during the years ended September 30, 2020 and 2019: Schedule of exercisable share purchase warrants outstanding Weighted Average Exercise Number of Shares Exercise Price ($) Balance , September 30 , 2018 678,379 2.87 Exercised (8,750 ) 1.13 Expired (319,629 ) 1.46 Balance , September 30 , 2019 350,000 4.19 Granted 150,000 3.17 Balance, September 30, 2020 500,000 3.88 During the year ended September 30, 2019, the Company issued 4,938 8,750 At September 30, 2020 the Company had share purchase warrants outstanding as follows: Schedule of share purchase warrants outstanding Number Exercise Price Expiry Date 350,000 $ 4.19 June 30, 2021 150,000 $ 3.17 May 6, 2024 500,000 d) Stock–based Compensation Plan 2015 Stock Option Plan On September 18, 2015, the Company’s board of directors 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 6,050,553 146,371 146,371 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. Under the terms of the 2019 Plan, 6,000,000 The 2019 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 of directors 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 2019 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 2019 Plan. At September 30, 2020, 3,161,665 4,788,333 A summary of the status of Company’s outstanding stock purchase options is presented below: Schedule of outstanding stock purchase options Number of Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value ($) Aggregate intrinsic value ($) Outstanding, September 30, 2018 6,506,917 3.83 2,353,088 Granted 2,265,399 2.79 2.27 Forfeited (309,383 ) 3.25 Outstanding, September 30, 2019 8,462,933 3.58 4,115,032 Granted 1,695,000 2.96 2.27 Forfeited (68,332 ) 3.01 Exercised (13,335 ) 3.15 Outstanding, September 30, 2020 10,076,266 3.48 14,982,581 Exercisable, September 30, 2020 7,412,100 3.66 10,763,906 During the year ended September 30, 2020, the Company issued 721 13,335 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 on the applicable date. The Company recognized stock-based compensation expense of $ 4,876,906 6,430,873 Schedule of general and administrative expenses and research and development expenses 2020 2019 General and administrative $ 2,210,789 $ 3,203,165 Research and development 2,666,117 3,227,708 Total share based compensation $ 4,876,906 $ 6,430,873 An amount of approximately $ 4,040,812 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: Schedule of weighted average assumptions for fair value of each option award 2020 2019 Risk-free interest rate 1.57 % 2.50 % Expected life of option (years) 5.53 6.05 Annualized volatility 95.99 % 104.45 % Dividend rate 0.00 % 0.00 % The fair value of stock compensation charges recognized during the years ended September 30, 2020 and 2019 was determined with reference to the quoted market price of the Company’s shares on the grant date. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6 Income Taxes The Company’s U.S. and foreign loss before income taxes are set forth below: Schedule of Income before Income Tax, Domestic and Foreign 2020 2019 United States $ (18,096,148 ) $ (18,031,016 ) Foreign (8,161,658 ) (8,181,782 ) Total $ (26,257,806 ) $ (26,212,798 ) The components of net deferred income tax assets as of September 30, 2020 and 2019 are as follows: Schedule of deferred tax asset and liabilities 2020 2019 Net operating loss carryforwards $ 23,397,000 $ 18,704,000 Research and development tax credit carry forwards 2,069,000 1,162,000 Stock-based compensation 8,283,000 6,570,000 Unpaid charges 83,000 69,000 Intangible asset costs 132,000 30,000 Foreign exchange and other 27,000 15,000 Valuation allowance deferred tax assets (33,991,000 ) (26,550,000 ) Net deferred tax assets $ — $ — A reconciliation of income tax expense at the statutory federal income tax rate and income taxes as reflected in the consolidated financial statements for the years ended September 30, 2020 and 2019 is as follows: Schedule of Effective Income Tax Rate Reconciliation 2020 2019 Income tax benefit at statutory federal rate $ (5,519,000 ) $ (5,505,000 ) Foreign income taxed at other rates (723,000 ) (825,000 ) Other permanent differences 35,000 140,000 Research and development credit benefit 1,267,000 914,000 State and local taxes (2,911,000 ) (1,487,000 ) Adjustment and true up to prior year tax provision 373,000 194,000 Effect of change in statutory rates 36,000 — State minimum and excise taxes 22,664 82,181 Change in valuation allowances 7,442,000 6,569,000 Income tax expense $ 22,664 $ 82,181 As of September 30, 2020, the Company had U.S. federal net operating loss carryforwards of approximately $ 76.8 60.8 2027 103.1 64.0 4.3 6.0 3.5 The Company evaluates its valuation allowance requirements based on available evidence. When circumstances change, and this causes a change in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income. Because management of the Company does not currently believe that it is more likely than not that the Company will receive the benefit of these assets, a valuation allowance has been established at September 30, 2020 and 2019. Uncertain Tax Positions The Company files income tax returns in the U.S. federal jurisdiction and various state and local and foreign jurisdictions. The Company’s tax returns are subject to tax examinations by U.S. federal and state tax authorities, or examinations by foreign tax authorities until the respective statutes of limitation expire. The Company is subject to tax examinations by tax authorities for all taxation years commencing on or after 2013. Under the provisions of the Internal Revenue Code, the net operating loss (“NOL”) carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of an over 50% cumulative change in the ownership interest of significant stockholders over a three-year period, as defined under Sections 382 and 383 of the Internal Revenue Code, as well as similar state tax provisions. This could limit the amount of NOLs that the Company could be entitled to utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, would be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may affect the limitation in future years . The Company completed a Section 382 analysis through the fiscal year ended September 30, 2020 and currently does not believe Section 382 will apply to limit the utilization of available NOLs. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | a) Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to accounting for research and development costs, incentive income receivable, valuation and recoverability of deferred tax assets, asset impairment, stock-based compensation and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the book values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Principles of Consolidation | b) Principles of Consolidation These consolidated financial statements include the accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiaries, Anavex Australia Pty Limited. (“Anavex Australia”), a company incorporated under the laws of Australia, Anavex Germany GmbH, a company incorporated under the laws of Germany, and Anavex Canada Ltd., a company incorporated under the laws of the Province of Ontario, Canada. All inter-company transactions and balances have been eliminated. |
Cash and equivalents | c) Cash and equivalents The Company considers only those investments which are highly liquid, readily convertible to cash and that mature within three months from the date of purchase to be cash equivalents. |
Research and Development Expenses | d) Research and Development Expenses Research and development costs are expensed as incurred. These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits and stock based compensation expense, contract services including external research and development expenses incurred under arrangements with third parties such as contract research organizations (“CROs”), facilities costs, overhead costs and other related expenses. Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved. Manufacturing costs are expensed as incurred in accordance with Accounting Standard Codification (“ASC”) 730, Research and Development, as these materials have no alternative future use outside of their intended use. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered, or the related services are performed, subject to an assessment of recoverability. The Company makes estimates of costs incurred in relation to external CROs, and clinical site costs. The Company analyzes the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period. The Company reviews and accrues CRO expenses and clinical trial study expenses based on work performed and relies upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to record expenses in our financial statements based on the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract. In addition, the Company incurs expenses in respect of intellectual property costs relating to patents and trademarks. The probability of success and length of time to develop commercial applications of the compounds subject to the underlying patent and trademark costs is difficult to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects. There is no assurance the compounds subject to the underlying patents and trademarks will ever be successfully commercialized. Due to these risks and uncertainties, the patent and trademark costs do not meet the definition of an asset and thus are expensed as incurred within general and administrative expenses. |
Research and Development Incentive Income | e) Research and Development Incentive Income The Company is eligible to obtain certain research and development tax credits, including the New York City Biotechnology Tax Credit (“NYC Biotech credit”), and the Australian research and development tax incentive credit (the “Australia R&D credit”) through a program administered through the Australian Tax Office (the “ATO”), which provides for a cash refund based on a percentage of certain research and development activities undertaken in Australia by the Company’s wholly owned subsidiary, Anavex Australia Pty Ltd. (“Anavex Australia”). The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million Australian during the reimbursable period. The tax incentives are available on the basis of specific criteria with which the Company must comply. Although the tax incentive may be administered through the local tax authority, the Company has accounted for the incentives outside of the scope of ASC Topic 740, Income Taxes (“ASC 740”), since the incentives are not linked to the Company’s taxable income and can be realized regardless of whether the Company has generated taxable income in the respective jurisdictions. With respect to the Australia R&D credit, Anavex Australia may be eligible to receive the cash refund for certain research and development expenses incurred by Anavex Australia outside of Australia, to the extent such expenses are pre-approved by the Australian authority pursuant to an advanced overseas finding application. The Company accrues for the amount of cash refund it expects to receive in relation to research and development expenses outside of Australia only to the extent it has received advanced approval from the Department of Industry, Innovation and Science in Australia, pursuant to an approved advanced overseas finding application. The Company recognizes the amount of cash refund it expects to receive related to the NYC Biotech credit and Australian research and development tax incentive program when there is reasonable assurance that the cash refund will be received, when the relevant expenditures have been incurred, and when the amount can be reliably measured. This amount is included in Incentive and tax receivables in the accompanying consolidated balance sheets. In addition, Anavex Australia and Anavex Canada incur Goods and Services Tax (GST) on certain services provided by local vendors. As a domestic entity in those jurisdictions, Anavex Australia and Anavex Canada are entitled to a refund of the GST paid. Similarly, Anavex Germany incurs Value Added Tax (VAT) on certain services provided by local vendors, to which it is entitled to a refund of such VAT paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST and VAT incurred is included in Incentive and tax receivables in the accompanying consolidated balance sheets. |
Basic and Diluted Loss per Share | f) Basic and Diluted Loss per Share Basic income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income/(loss) per common share is computed by dividing net income/(loss) available to common stockholders by the sum of (1) the weighted-average number of common shares outstanding during the period, (2) the dilutive effect of the assumed exercise of options and warrants using the treasury stock method and (3) the dilutive effect of other potentially dilutive securities. For purposes of the diluted net loss per share calculation, options and warrants are potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. As of September 30, 2020, diluted loss per share excludes 10,576,266 8,812,933 |
Financial Instruments | g) Financial Instruments The book value of the Company’s financial instruments, consisting of cash and equivalents, incentive and tax receivables, and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. |
Foreign Currency Translation | h) Foreign Currency Translation The functional currency of the Company is the US dollar. Monetary items denominated in a foreign currency are translated into US dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired, or obligations incurred. Foreign currency denominated expense items are translated at exchange rates prevailing on the transaction date. Unrealized gains or losses arising from the translations are credited or charged to income in the period in which they occur. The Company has determined that the functional currency of Anavex Australia Pty Limited, Anavex Germany GmbH, and Anavex Canada Ltd. is the US dollar. |
Segment and Geographic Reporting | i) Segment and Geographic Reporting Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment, which is the business of developing novel therapies for the management of CNS diseases. |
Grant Income | j) Grant Income Grant income is recognized at the fair value of the grant when it is received, and all substantive conditions have been satisfied. Grants received from government and other agencies in advance of the specific research and development costs to which they relate are deferred and recognized in the consolidated statement of operations in the period they are earned and when the related research and development costs are incurred. |
Income Taxes | k) Income Taxes The Company follows the provisions of ASC 740, which requires the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company follows the provisions of ASC 740 regarding accounting for uncertainty in income taxes. The Company initially recognizes tax positions in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts. Application requires numerous estimates based on available information. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, and its recognized tax positions and tax benefits may not accurately anticipate actual outcomes. As additional information is obtained, there may be a need to periodically adjust the recognized tax positions and tax benefits. These periodic adjustments may have a material impact on the consolidated statements of operations. The Company recognizes interest and penalties related to current income tax expense on the interest income, net line, in the accompanying consolidated statement of operations. Accrued interest and penalties, if any, are included in accrued liabilities on the consolidated balance sheets. |
Stock-based Compensation | l) Stock-based Compensation The Company accounts for all stock-based payments and awards under the fair value method. The Company accounts for the granting of share purchase options and warrants to employees using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant. The fair value of all share purchase options and warrants are expensed over their contractual vesting period, or over the expected performance period for only the portion of awards expected to vest, in the case of milestone-based vesting, with a corresponding increase to additional paid-in capital. Share purchase options and warrants issued to non-employees are measured at the fair value of the equity instruments issued. Compensation expense for share purchase options and warrants issued to non-employees is recorded over the service performance period. Prior to the Company’s adoption of ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting on October 1, 2019, options and warrants subject to vesting were periodically re-measured until the counterparty performance was complete, and any change therein was recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity based instruments. After the adoption of ASU No. 2018-07, the Company measures equity-classified share-based payment awards issued to nonemployees on the grant date, rather than remeasuring the awards through the performance completion date as previously required (see Note 2 n)). Compensation costs for stock-based payments with graded vesting are recognized on a straight-line basis. The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options and warrants at the date of the grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimates. |
Fair Value Measurements | m) Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 - assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities. At September 30, 2020 and 2019, the Company did not have any Level 3 assets or liabilities. |
Recent Accounting Pronouncements | n) Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, Topic 842, Leases was issued to replace the leases requirements in Topic 840, Leases. The main difference between previous U.S. GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. The Company elected the package of practical expedients permitted under the transition guidance that allowed, among other things, the historical lease classifications to be carried forward without reassessment. Further, the Company elected to not recognize lease assets and lease liabilities for leases with a term of 12 months or less. The adoption of this standard on October 1, 2019 did not have any impact on the Company's consolidated results of operations, financial condition, cash flows, and financial statement disclosures. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments to nonemployees for goods and services by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance was effective for the Company beginning on October 1, 2019 and was required to be applied retrospectively with the cumulative effect recognized at the date of initial application. The adoption of this standard on October 1, 2019 did not have any material impact on the Company's consolidated results of operations, financial condition, cash flows, and financial statement disclosures. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes (ASC 740)", which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying and amending existing guidance to improve consistent application. ASU 2019-12 is effective for the Company on October 1, 2021. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements but does not expect such guidance to have a material impact. |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of exercisable share purchase warrants outstanding | Schedule of exercisable share purchase warrants outstanding Weighted Average Exercise Number of Shares Exercise Price ($) Balance , September 30 , 2018 678,379 2.87 Exercised (8,750 ) 1.13 Expired (319,629 ) 1.46 Balance , September 30 , 2019 350,000 4.19 Granted 150,000 3.17 Balance, September 30, 2020 500,000 3.88 |
Schedule of share purchase warrants outstanding | Schedule of share purchase warrants outstanding Number Exercise Price Expiry Date 350,000 $ 4.19 June 30, 2021 150,000 $ 3.17 May 6, 2024 500,000 |
Schedule of outstanding stock purchase options | Schedule of outstanding stock purchase options Number of Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value ($) Aggregate intrinsic value ($) Outstanding, September 30, 2018 6,506,917 3.83 2,353,088 Granted 2,265,399 2.79 2.27 Forfeited (309,383 ) 3.25 Outstanding, September 30, 2019 8,462,933 3.58 4,115,032 Granted 1,695,000 2.96 2.27 Forfeited (68,332 ) 3.01 Exercised (13,335 ) 3.15 Outstanding, September 30, 2020 10,076,266 3.48 14,982,581 Exercisable, September 30, 2020 7,412,100 3.66 10,763,906 |
Schedule of general and administrative expenses and research and development expenses | Schedule of general and administrative expenses and research and development expenses 2020 2019 General and administrative $ 2,210,789 $ 3,203,165 Research and development 2,666,117 3,227,708 Total share based compensation $ 4,876,906 $ 6,430,873 |
Schedule of weighted average assumptions for fair value of each option award | Schedule of weighted average assumptions for fair value of each option award 2020 2019 Risk-free interest rate 1.57 % 2.50 % Expected life of option (years) 5.53 6.05 Annualized volatility 95.99 % 104.45 % Dividend rate 0.00 % 0.00 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Schedule of Income before Income Tax, Domestic and Foreign 2020 2019 United States $ (18,096,148 ) $ (18,031,016 ) Foreign (8,161,658 ) (8,181,782 ) Total $ (26,257,806 ) $ (26,212,798 ) |
Schedule of deferred tax asset and liabilities | Schedule of deferred tax asset and liabilities 2020 2019 Net operating loss carryforwards $ 23,397,000 $ 18,704,000 Research and development tax credit carry forwards 2,069,000 1,162,000 Stock-based compensation 8,283,000 6,570,000 Unpaid charges 83,000 69,000 Intangible asset costs 132,000 30,000 Foreign exchange and other 27,000 15,000 Valuation allowance deferred tax assets (33,991,000 ) (26,550,000 ) Net deferred tax assets $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | Schedule of Effective Income Tax Rate Reconciliation 2020 2019 Income tax benefit at statutory federal rate $ (5,519,000 ) $ (5,505,000 ) Foreign income taxed at other rates (723,000 ) (825,000 ) Other permanent differences 35,000 140,000 Research and development credit benefit 1,267,000 914,000 State and local taxes (2,911,000 ) (1,487,000 ) Adjustment and true up to prior year tax provision 373,000 194,000 Effect of change in statutory rates 36,000 — State minimum and excise taxes 22,664 82,181 Change in valuation allowances 7,442,000 6,569,000 Income tax expense $ 22,664 $ 82,181 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||
Cash Refund Available description | The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million Australian during the reimbursable period. | |
Loss per share for potentially dilutive common shares | 10,576,266 | 8,812,933 |
Other Income (Details Narrative
Other Income (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Grant income | $ 149,888 | $ 298,943 | |
Research and development incentive income | 4,375,025 | 2,215,691 | |
Australia, Dollars | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Research and development incentive income | $ 6,392,266 | 3,281,300 | |
Clinical Study Grant [Member] | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Awarded grant funding amount | $ 597,886 | ||
NYC Biotech Credit [Member] | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Research and development incentive income | $ 250,000 |
Equity Offering Agreements (Det
Equity Offering Agreements (Details Narrative) - USD ($) | May 01, 2020 | Jun. 07, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Entity Listings [Line Items] | ||||
Proceeds from sale of common stock | $ 28,754,198 | $ 17,832,109 | ||
2015 Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | ||||
Entity Listings [Line Items] | ||||
Number of share issued | 4,872,696 | |||
Number of shares issued for aggregate purchase price | 4,848,995 | |||
Number of shares issued for aggregate purchase price, value | $ 13,197,604 | |||
Number of shares issued for commitment | 23,701 | |||
2019 Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | ||||
Entity Listings [Line Items] | ||||
Number of share issued | 324,383 | 7,633,527 | 1,839,415 | |
Number of shares issued for aggregate purchase price | 7,564,584 | 1,500,000 | ||
Number of shares issued for aggregate purchase price, value | $ 21,254,298 | $ 4,634,505 | ||
Number of shares issued for commitment | 68,943 | 339,415 | ||
Total number of shares obligated to purchase | $ 50,000,000 | |||
Agreement term | 36 months | |||
Description of purchases price | The Company may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 200,000 shares of common stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 250,000 shares, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. In the event the Company purchases the full amount allowed for a Regular Purchase on any given business day, the Company may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price of shares of common stock related to the future funding will be based on the then prevailing market prices of such shares at the time of sales as described in the 2019 Purchase Agreement. | |||
Pro rata basic number of shares obligated to purchase | 162,191 | |||
Amount of shares remain available | $ 24,111,197 | $ 45,365,495 | ||
2019 Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | Common Stock [Member] | ||||
Entity Listings [Line Items] | ||||
Number of share issued | 12,016,457 | |||
Percentage of gross proceeds from sales | 19.99% | |||
Equity Offering Sales Agreement [Member] | Cantor Fitzgerald & Co [Member] | ||||
Entity Listings [Line Items] | ||||
Percentage of gross proceeds from sales | 3.00% | |||
Proceeds from sale of common stock | $ 50,000,000 | $ 7,096,136 | ||
Number of stock sold | 1,760,429 | |||
Gross proceeds from sale of common stock | $ 7,499,900 | |||
Number of shares available | 42,500,100 |
Commitments (Details)
Commitments (Details) - Purchase Warrants [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Purchase Warrants Balance, at beginning | 350,000 | 678,379 |
Weighted Average Exercise Price Balance, at beginning | $ 4.19 | $ 2.87 |
Share Purchase Warrants Exercised | (8,750) | |
Weighted Average Exercise Price, Exercised | $ 1.13 | |
Share Purchase Warrants Expired | (319,629) | |
Weighted Average Exercise Price, Expired | $ 1.46 | |
Share Purchase Warrants Granted | 150,000 | |
Weighted Average Exercise Price, Granted | $ 3.17 | |
Share Purchase Warrants Balance, at ending | 500,000 | 350,000 |
Weighted Average Exercise Price Balance, at ending | $ 3.88 | $ 4.19 |
Commitments (Details 1)
Commitments (Details 1) | Sep. 30, 2020$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number | 500,000 |
Purchase Warrants 1 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number | 350,000 |
Exercise Price | $ / shares | $ 4.19 |
Expiry Date | Jun. 30, 2021 |
Purchase Warrants 2 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number | 150,000 |
Exercise Price | $ / shares | $ 3.17 |
Expiry Date | May 6, 2024 |
Commitments (Details 2)
Commitments (Details 2) - 2015 Omnibus Incentive Plan [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding at beginning | 8,462,933 | 6,506,917 |
Weighted Average Exercise Price Outstanding at beginning | $ 3.58 | $ 3.83 |
Aggregate intrinsic value Outstanding at beginning | $ 4,115,032 | $ 2,353,088 |
Options Granted | 1,695,000 | 2,265,399 |
Weighted Average Exercise Price Granted | $ 2.96 | $ 2.79 |
Weighted Average Grant Date Fair Value Granted | $ 2.27 | $ 2.27 |
Options Forfeited | (68,332) | (309,383) |
Weighted Average Exercise Price Forfeited | $ 3.01 | $ 3.25 |
Options Exercised | (13,335) | |
Weighted Average Exercise Price Exercised | $ 3.15 | |
Options Outstanding at ending | 10,076,266 | 8,462,933 |
Weighted Average Exercise Price Outstanding at ending | $ 3.48 | $ 3.58 |
Aggregate intrinsic value Outstanding at ending | $ 14,982,581 | $ 4,115,032 |
Options Exercisable at ending | 7,412,100 | |
Weighted Average Exercise Price Exercisable at ending | $ 3.66 | |
Aggregate intrinsic value Exercisable at ending | $ 10,763,906 |
Commitments (Details 3)
Commitments (Details 3) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Loss Contingencies [Line Items] | ||
Total share based compensation | $ 4,876,906 | $ 6,430,873 |
General and Administrative Expense [Member] | ||
Loss Contingencies [Line Items] | ||
Total share based compensation | 2,210,789 | 3,203,165 |
Research and Development Expense [Member] | ||
Loss Contingencies [Line Items] | ||
Total share based compensation | $ 2,666,117 | $ 3,227,708 |
Commitments (Details 4)
Commitments (Details 4) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Risk-free interest rate | 1.57% | 2.50% |
Expected life of options (years) | 5 years 6 months 10 days | 6 years 18 days |
Annualized volatility | 95.99% | 104.45% |
Dividend rate | 0.00% | 0.00% |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Operating Leases, Rent Expense | $ 233,423 | $ 190,416 |
Shares issued pursuant to cashless exercise of warrants | 4,938 | |
Stock issued pursuant to cashless exercise of warrants | 8,750 | |
Shares issued pursuant to cashless exercises of option | 721 | |
Number of cashless exercise option | 13,335 | |
Share based compensation | $ 4,876,906 | $ 6,430,873 |
Remaining stock based compensation | $ 4,040,812 | |
2015 Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of common shares reserved for future issuance | 6,050,553 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 146,371 | 146,371 |
2019 Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3,161,665 | 4,788,333 |
Additional shares of common stock available for issuance | 6,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (18,096,148) | $ (18,031,016) |
Foreign | (8,161,658) | (8,181,782) |
Total | $ (26,257,806) | $ (26,212,798) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 23,397,000 | $ 18,704,000 |
Research and development tax credit carry forwards | 2,069,000 | 1,162,000 |
Stock-based compensation | 8,283,000 | 6,570,000 |
Unpaid charges | 83,000 | 69,000 |
Intangible asset costs | 132,000 | 30,000 |
Foreign exchange and other | 27,000 | 15,000 |
Valuation allowance deferred tax assets | (33,991,000) | (26,550,000) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at statutory federal rate | $ (5,519,000) | $ (5,505,000) |
Foreign income taxed at other rates | (723,000) | (825,000) |
Other permanent differences | 35,000 | 140,000 |
Research and development credit benefit | 1,267,000 | 914,000 |
State and local taxes | (2,911,000) | (1,487,000) |
Adjustment and true up to prior year tax provision | 373,000 | 194,000 |
Effect of change in statutory rates | 36,000 | 0 |
State minimum and excise taxes | 22,664 | 82,181 |
Change in valuation allowances | 7,442,000 | 6,569,000 |
Income tax expense | $ 22,664 | $ 82,181 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
U.S. federal net operating loss carryforwards | $ 76,800,000 | $ 60,800,000 |
Operating loss carry-forwards, expiration year | 2027 | |
State net operating loss carryforwards | $ 103,100,000 | 64,000,000 |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carry-forwards | 4,300,000 | $ 3,500,000 |
Foreign Tax Authority [Member] | Australia, Dollars | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carry-forwards | $ 6,000,000 |