PROSPECTUS
SUPPLEMENT
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Filed
Pursuant to Rule 424(b)(5)
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(To
Prospectus Dated September 6, 2016)
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Registration
No. 333-207600
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Anavex
Life Sciences Corp.
Up
to $9,711,390
Common
Stock
This
prospectus supplement relates to the issuance and sale of up to $9,711,390 in shares of our common stock that we may sell to Lincoln
Park Capital Fund, LLC, or Lincoln Park, from time to time, in one or more transactions in amounts, at prices, and on terms that
will be determined at the time these securities are offered. All of the shares of common stock being offered by Lincoln Park may
be issued pursuant to a purchase agreement between Lincoln Park and the Company, dated as of October 21, 2015 (the “Purchase
Agreement”). See “The Lincoln Park Transaction” for a description of the Purchase Agreement, and “Selling
Security Holder” for additional information regarding Lincoln Park as the purchaser of common stock (also referred to herein
as the Selling Security Holder).
We
will not receive any of the proceeds from the sale of shares of our common stock sold by Lincoln Park. Lincoln Park may sell the
shares of common stock described in this prospectus in a number of different ways and at varying prices. See “Plan of Distribution”
for more information about how Lincoln Park may sell the shares of common stock being registered pursuant to this prospectus.
The
Selling Security Holder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933,
as amended (the “Securities Act”).
Our
common stock is currently traded on the Nasdaq Capital Market under the symbol “AVXL”. On March 13, 2019, the last
reported sale price of our common stock was $3.03 per share.
We
will pay the expenses incurred in registering the shares, including legal and accounting fees. See “Plan of Distribution”.
Investing
in our securities involves a high degree of risk. See the section entitled “Risk Factors” on page S-6 of this prospectus
supplement and the section entitled “Risk Factors” beginning on page 9
of the accompanying prospectus,
and in the documents we filed with the Securities and Exchange Commission that are incorporated in this prospectus supplement
by reference for certain risks and uncertainties you should consider.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus supplement is March 15, 2019.
TABLE
OF CONTENTS
PROSPECTUS
SUPPLEMENT
PROSPECTUS
ABOUT
THIS PROSPECTUS SUPPLEMENT
We
are providing information to you about this offering of our common stock in two separate documents that are bound together: (1) this
prospectus supplement, which describes the specific terms of this offering, and (2) the accompanying base prospectus, which
provides general information, some of which may not apply to this offering. This prospectus supplement may also add to, update
or change information contained in the accompanying base prospectus. If information in this prospectus supplement is inconsistent
with the accompanying base prospectus, you should rely on this prospectus supplement. Generally, when we refer to this “prospectus,”
we are referring to both documents combined.
This
prospectus supplement, the accompanying base prospectus and any free-writing prospectus that we prepare or authorize contain and
incorporate by reference information that you should consider when making your investment decision. We have not, and Lincoln Park
has not, authorized anyone to provide you with additional or different information. If anyone provides you with different or inconsistent
information, you should not rely on it. You should not assume that the information contained in this prospectus supplement or
the accompanying base prospectus is accurate as of any date other than the date on the front of those documents or that any information
we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference. Our
business, financial condition, results of operations and prospects may have changed since those dates.
We
are not, and Lincoln Park is not, making an offer or sale of our common stock in any jurisdiction where such offer or sale is
not permitted.
The
information in this prospectus supplement is not complete. You should carefully read this prospectus supplement and the accompanying
base prospectus, including the information incorporated by reference herein and therein, before you invest, as these documents
contain information you should consider when making your investment decision.
None
of Anavex Life Sciences Corp., Lincoln Park or any of their representatives are making any representation to you regarding the
legality of an investment in our common stock by you under applicable laws. You should consult with your own advisors as to legal,
tax, business, financial and related aspects of an investment in our common stock.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement contains forward-looking statements. All statements other than statements of historical facts contained
in this prospectus supplement, including statements regarding our anticipated future clinical and regulatory milestone events,
future financial position, business strategy and plans and objectives of management for future operations, are forward-looking
statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,”
“intend,” “expect,” “should,” “forecast,” “could,” “suggest,”
“plan,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such forward-looking
statements include, without limitation, statements regarding:
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our ability to generate
any revenue or to continue as a going concern;
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our ability to successfully
conduct clinical and preclinical trials for our product candidates;
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our ability to raise
additional capital on favorable terms;
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our ability to execute
our development plan on time and on budget;
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our products ability
to demonstrate efficacy or an acceptable safety profile;
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our ability to obtain
the support of qualified scientific collaborators;
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our ability, whether
alone or with commercial partners, to successfully commercialize any of our product candidates that may be approved for sale;
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our ability to identify
and obtain additional product candidates;
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our ability to obtain
and maintain sufficient intellectual property protection for our product candidates;
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our ability to comply
with our intellectual property licensing agreements;
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our ability to defend
against claims of intellectual property infringement;
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the anticipated
start dates, durations and completion dates of our ongoing and future clinical studies;
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the anticipated
designs of our future clinical studies;
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our anticipated
future regulatory submissions and our ability to receive regulatory approvals to develop and market our product candidates;
and
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our anticipated
future cash position.
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We
have based these forward-looking statements largely on our current expectations and projections about future events, including
the responses we expect from the U.S. Food and Drug Administration, or FDA, and other regulatory authorities and financial trends
that we believe may affect our financial condition, results of operations, business strategy, preclinical and clinical trials
and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions including
without limitation the risks described in “Risk Factors” in “Part I, Item 1A” of or Annual Report on Form
10-K for the year ended September 30, 2018. These risks are not exhaustive. We operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors,
nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon forward-looking
statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking
statements will be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.
Except as required by applicable laws including the securities laws of the United States, we assume no obligation to update or
supplement forward-looking statements.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights information contained elsewhere in this prospectus supplement and the accompanying base prospectus. It does
not contain all of the information that you should consider before making an investment decision. You should read this entire
prospectus supplement, the accompanying base prospectus and the documents incorporated herein by reference for a more complete
understanding of this offering of common stock. Please read “Risk Factors” in our Annual Report on Form 10-K for the
year ended September 30, 2017 for information regarding risks you should consider before investing in our common stock.
Throughout
this prospectus supplement, when we use the terms “Anavex,” “we,” “us,” “our”
or the “Company,” we are referring either to Anavex Life Sciences Corp. in its individual capacity or to Anavex Life
Sciences Corp. and its operating subsidiaries collectively, as the context requires.
Our
Company
Overview
Anavex
Life Sciences Corp. 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 select patients that will receive the therapeutic benefit for the treatment
of neurodegenerative and neurodevelopmental diseases.
Our
lead compound, ANAVEX
®
2-73, is being developed to treat Alzheimer’s disease, Parkinson’s disease and
potentially other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological
monogenic disorder caused by mutations in the X-linked gene, methyl-CpG-binding protein 2 (“MECP2”).
Clinical
Studies Overview
In
November 2016, we completed a Phase 2a clinical trial, consisting of PART A and PART B, which lasted a total of 57 weeks, for
ANAVEX
®
2-73 in mild-to-moderate Alzheimer’s patients. This open-label randomized trial met both primary and
secondary endpoints and was designed to assess the safety and exploratory efficacy of ANAVEX
®
2-73 in 32 patients.
ANAVEX
®
2-73 targets sigma-1 and muscarinic receptors, which have been shown in preclinical studies to reduce stress
levels in the brain believed to restore cellular homeostasis and to reverse the pathological hallmarks observed in Alzheimer’s
disease. In October 2017, we presented positive pharmacokinetic (PK) and pharmacodynamic (PD) data from the Phase 2a study, which
established a concentration-effect relationship between ANAVEX
®
2-73 and study measurements. These measures obtained
from all patients who participated in the entire 57 weeks include exploratory cognitive and functional scores as well as biomarker
signals of brain activity. Additionally, the study appears to show that ANAVEX
®
2-73 activity is enhanced by its
active metabolite (ANAVEX19-144), which also targets the sigma-1 receptor and has a half-life approximately twice as long as the
parent molecule.
In
March 2016, we received approval from the Ethics Committee in Australia to extend the Phase 2a clinical trial by an additional
108 weeks, which had been requested by patients and their caregivers. Subsequently, in May 2018, we received approval from the
Ethics Committee in Australia to further extend the Phase 2a extension trial for an additional two years. The two consecutive
trial extensions have allowed participants who completed the 52-week PART B of the study to continue taking ANAVEX
®
2-73,
providing an opportunity to gather extended safety data for a cumulative time period of five years.
In
October 2018, we presented new long-term clinical data for ANAVEX
®
2-73 in a presentation at the 2018 Clinical Trials
on Alzheimer’s Disease (CTAD) Meeting. At 148 weeks into the five-year extended Phase 2a clinical study,
data
confirmed a significant association between ANAVEX
®
2-73 concentration and both exploratory functional and cognitive
endpoints as measured by the Alzheimer’s Disease Cooperative Study-Activities of Daily Living (ADCS-ADL) evaluation
and the Mini Mental State Examination (MMSE), respectively. The cohort of patients treated with higher ANAVEX
®
2-73
concentration maintained ADCS-ADL performance compared to the lower concentration cohort (p<0.0001). As well, the patient cohort
with the higher ANAVEX
®
2-73 concentration performed better at MMSE compared to the lower concentration cohort (p<0.0008).
A significant impact on the drug response levels of both the SIGMAR1 (p<0.0080) and COMT (p<0.0014) genomic biomarkers,
identified and specified at week 57, was also confirmed over the 148-week period. Further, ANAVEX
®
2-73 demonstrated
continued favorable safety and tolerability through 148 weeks.
A
larger Phase 2b/3 double-blind, placebo-controlled study of ANAVEX
®
2-73 in Alzheimer’s disease commenced
in October 2018, which is independent of the ongoing Phase 2a extension study. The Phase 2b/3 study will enroll approximately
450 patients for 48 weeks, randomized 1:1:1 to two different ANAVEX
®
2-73 doses or placebo. The trial is currently
taking place in Australia; however, North American sites may also be added. The ANAVEX
®
2-73 Phase 2b/3 study design
incorporates genomic precision medicine biomarkers identified in the ANAVEX
®
2-73 Phase 2a study. Primary and secondary
endpoints will assess safety and both cognitive and functional efficacy, measured through Alzheimer’s Disease Assessment
Scale – Cognition (ADAS-Cog), ADCS-ADL and Clinical Dementia Rating – Sum of Boxes for cognition and function (CDR-SB).
In
February 2016, we presented positive preclinical data for ANAVEX
®
2-73 in Rett syndrome, a rare neurodevelopmental
disease. The study was funded by the International Rett Syndrome Foundation (“Rettsyndrome.org”). In January 2017,
we were awarded a financial grant from Rettsyndrome.org of a minimum of $0.6 million to cover some of the costs of a multicenter
Phase 2 clinical trial of ANAVEX
®
2-73 for the treatment of Rett syndrome. This award is being received in quarterly
instalments which commenced during fiscal 2018. Further, in October 2018, the Company received confirmation from the FDA that
its investigational new drug (IND) application is now open for a Phase 2 clinical trial of ANAVEX
®
2-73 for the
treatment of Rett syndrome. The Phase 2 study is a randomized double-blind, placebo-controlled safety, tolerability, pharmacokinetic
and efficacy study of oral liquid ANAVEX
®
2-73 formulation to treat Rett syndrome. Pharmacokinetic and dose findings
will be investigated in a total of 15 patients over a 7-week treatment period including ANAVEX
®
2-73-specific genomic
precision medicine biomarkers. All patients who participate in the study will be eligible to receive ANAVEX
®
2-73
under a voluntary open label extension protocol. This study will be followed by a planned placebo-controlled safety and efficacy
evaluation of ANAVEX
®
2-73 over a 3-month treatment period. Primary and secondary endpoints include safety as well
as Rett syndrome conditions such as cognitive impairment, motor impairment, behavioral symptoms and seizure activity. The ANAVEX
®
2-73
Phase 2 Rett syndrome study design incorporates genomic precision medicine biomarkers identified in the ANAVEX
®
2-73
Phase 2a Alzheimer’s disease study.
In
September 2016, we presented positive preclinical data for ANAVEX
®
2-73 in Parkinson’s disease, which demonstrated
significant improvements on all measures: behavioral, histopathological, and neuroinflammatory endpoints. The study was funded
by the Michael J. Fox Foundation. Additional data was announced in October 2017 from the model for experimental parkinsonism.
The data presented indicates that ANAVEX
®
2-73 induces robust neurorestoration in experimental parkinsonism. The
encouraging results we have gathered in this model, coupled with the favorable profile of this compound in the Alzheimer’s
disease trial, support the notion that ANAVEX
®
2-73 is a promising clinical candidate drug for Parkinson’s
disease.
The
Company initiated in October 2018 in Spain, Europe a double-blind, randomized, placebo-controlled Phase 2 trial with ANAVEX
®
2-73
in Parkinson’s Disease Dementia (PDD), which will study the effect of the compound on both the cognitive and motor impairment
of Parkinson’s disease. The Phase 2 study will enroll approximately 120 patients for 14 weeks, randomized 1:1:1 to two different
ANAVEX
®
2-73 doses or placebo. The ANAVEX
®
2-73 Phase 2 PDD study design incorporates genomic precision
medicine biomarkers identified in the ANAVEX
®
2-73 Phase 2a study.
Recent
Developments
On
March 11, 2019, we announced that we have reached the 50% patient enrollment threshold of the multicenter, Phase 2 clinical study
evaluating ANAVEX®2-73 in Parkinson’s Disease Dementia (PDD), ahead of schedule.
Corporate
Information
Our
principal executive office is located at 51 West 52nd Street, 7th Floor, New York, NY 10019-6163, and our telephone number is
844.689.3939. Our website address is
www.anavex.com
. No information found on our website is part of this prospectus. Also,
this prospectus may include the names of various government agencies or the trade names of other companies. Unless specifically
stated otherwise, the use or display by us of such other parties’ names and trade names in this prospectus is not intended
to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties.
THE
OFFERING
Common stock offered by us
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Up to $9,711,390 of shares
of our common stock we may sell to Lincoln Park from time to time until September 6, 2019
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Common stock to be outstanding after this offering:
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Up to 50,702,709, shares assuming the sale of
3,205,079 shares of our common stock in this offering at an offering price of $3.03 per share, which was the closing price
of our common stock on The Nasdaq Capital Market on March 13, 2019. The actual number of shares issued will vary depending
on the sales prices under this offering.
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Use of Proceeds
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We intend to use the net proceeds from this
offering, after deducting the sales agent’s commissions and our offering expenses, for general corporate purposes, which
may include, among other things, working capital, capital expenditures and funding additional clinical and preclinical development
of our pipeline candidates. See “Use of Proceeds” on page S-7.
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Risk Factors
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You should read the “Risk Factors”
section on page S-6 of this prospectus supplement and the other risks identified in the documents incorporated by reference
herein before making a decision to purchase common stock in this offering.
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Nasdaq Capital Market symbol
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“AVXL.”
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The
number of shares of common stock shown above to be outstanding after this offering is based on 47,480,192 shares of common stock
outstanding as of March 14, 2019 and excludes the following:
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7,373,766 shares of common stock issuable upon
the exercise of outstanding stock options, vested and unvested, with a weighted-average exercise price of $3.67 per share;
and
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370,000 shares of common stock issuable upon
the exercise of outstanding warrants with a weighted-average exercise price of $4.03 per share.
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RISK
FACTORS
An
investment in our common stock involves a significant degree of risk. Before you invest in our common stock you should carefully
consider those risk factors included in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q,
any subsequently filed Quarterly Reports on Form 10-Q and any subsequently filed Current Reports on Form 8-K, which are incorporated
herein by reference, and those risk factors that may be included in any applicable prospectus supplement, together with all of
the other information included in this prospectus supplement, the accompanying base prospectus and the documents we incorporate
by reference, in evaluating an investment in our common stock. If any of the risks discussed in the foregoing documents were to
occur, our business, financial condition, results of operations and cash flows could be materially adversely affected. Please
read “Cautionary Statement Regarding Forward-Looking Statements.”
Risks
Relating to the Purchase Agreement with the Selling Security Holder
The
sale or issuance of our common stock to the Selling Security Holder may cause dilution and the sale of the shares of common stock
acquired by the Selling Security Holder, or the perception that such sales may occur, could cause the price of our common stock
to fall.
On
October 21, 2015, we entered into the Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has committed to purchase
up to $50,000,000 of shares of our common stock. Concurrently with the execution of the Purchase Agreement, we issued 179,598
shares of our common stock to Lincoln Park for no cash consideration as a fee for Lincoln Park’s commitment to purchase
additional shares of our common stock under the Purchase Agreement. Additional purchase shares that may be sold pursuant to the
Purchase Agreement may be sold by us to Lincoln Park at our discretion from time to time for a 36-month period, which commenced
on September 6, 2016.
The
purchase price for the shares that we may sell to Lincoln Park under the Purchase Agreement will fluctuate based on the price
of our common stock. Depending on market liquidity at the time, sales of such shares may cause the trading price of our common
stock to fall.
We
generally have the right to control the timing and amount of any sales of our shares to Lincoln Park. Sales of shares of our common
stock, if any, to Lincoln Park will depend upon market conditions and other factors to be determined by us. Therefore, Lincoln
Park may ultimately purchase all, some or none of the shares of our common stock that may be sold pursuant to the Purchase Agreement
and, after it has acquired shares, Lincoln Park may sell all, some or none of those shares. Sales to Lincoln Park by us could
result in substantial dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial
number of shares of our common stock to Lincoln Park, or the anticipation of such sales, could make it more difficult for us to
sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales,
which could have a materially adverse effect on our business and operations.
You
may experience future dilution as a result of future equity offerings.
To
raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into
or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares
or other securities in any other offering at a price per share that is less than the price per share paid by investors in this
offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.
The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common
stock, in future transactions may be higher or lower than the price per share paid by investors in this offering.
We
may not be able to access sufficient funds under the Purchase Agreement with Lincoln Park when needed.
Our
ability to sell shares to Lincoln Park and obtain funds under the Purchase Agreement is limited by the terms and conditions in
the Purchase Agreement, including restrictions on when we may sell shares to Lincoln Park, restrictions on the amounts we may
sell to Lincoln Park at any one time, and a limitation on our ability to sell shares to Lincoln Park to the extent that it would
cause Lincoln Park to beneficially own more than 9.99% of our outstanding shares of common stock. Therefore, we might not have
access to the full amount available to us under the Purchase Agreement. In addition, any amounts we sell under the Purchase Agreement
may not satisfy all of our funding needs, even if we are able and choose to sell all $9,711,390 of our common stock register on
this prospectus supplement.
Our
management might apply the net proceeds from this offering in ways with which you do not agree and in ways that may impair the
value of your investment.
We
currently intend to use the net proceeds from this offering primarily for working capital and general corporate purposes. Our
management has broad discretion as to the use of such proceeds and you will be relying on the judgment of our management regarding
the application of these proceeds. Our management might apply these proceeds in ways with which you do not agree, or in ways that
ultimately do not yield a favorable return. If our management applies such proceeds in a manner that does not yield a significant
return, if any, on our investment of such net proceeds, it could compromise our ability to pursue our growth strategy and adversely
affect the market price of our common stock
USE OF PROCEEDS
We
may receive up to $9,711,390 in aggregate gross proceeds under the Purchase Agreement from any sales we make to Lincoln Park pursuant
to the Purchase Agreement after the date of this prospectus supplement. We may sell fewer than all of the shares offered by this
prospectus supplement, in which case our aggregate proceeds will be less. Because we are not obligated to sell any shares of our
common stock under the Purchase Agreement, other than the Commitment Shares, the actual total offering amount and proceeds to
us, if any, are not determinable at this time. There can be no assurance that we will receive any proceeds under or fully utilize
the Purchase Agreement. See “Plan of Distribution” elsewhere in this prospectus supplement for more information.
We
intend to use the net proceeds of this offering for general corporate purposes, which may include, among other things, working
capital, capital expenditures and funding additional clinical and preclinical development of our pipeline candidates.
DILUTION
The
sale of our common stock to Lincoln Park pursuant to the Purchase Agreement will have a dilutive impact on our stockholders. In
addition, the lower our stock price is at the time we exercise our right to sell shares to Lincoln Park, the more shares of our
common stock we will have to issue to Lincoln Park pursuant to the Purchase Agreement and our existing stockholders would experience
greater dilution. We calculate net tangible book value per share by dividing the net tangible book value, which is tangible assets
less total liabilities, by the number of outstanding shares of common stock. Dilution represents the difference between the portion
of the amount per share paid by purchasers of shares in this offering and the as adjusted net tangible book value per share of
our common stock immediately after giving effect to this offering. Our net tangible book value as of December 31, 2018 was approximately
$17.2 million, or $0.37 per share.
After
giving effect to the sale of common stock pursuant to this prospectus supplement and accompanying prospectus in the aggregate
amount of $9,711,390 at an assumed offering price of $3.03 per share, the last reported sale price of our common stock on the
Nasdaq Capital Market on March 13, 2019, and after deducting estimated aggregate offering expenses payable by us, our net tangible
book value as of December 31, 2018 would have been $27.2 million, or $0.54 per share of common stock. This represents an immediate
increase in the net tangible book value of $0.17 per share to our existing stockholders and an immediate dilution in net tangible
book value of $2.49 per share to new investors. The following table illustrates this per share dilution:
Assumed public offering price
per share
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$
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3.03
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Net tangible book value per share as of December
31, 2018
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$
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0.37
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Increase per share
attributable to new investors
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$
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0.17
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As adjusted net
tangible book value per share as of December 31, 2018 after giving effect to this offering
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$
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0.54
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Dilution per share
to new investors purchasing shares in this offering
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$
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2.49
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The
table above assumes for illustrative purposes that an aggregate of 3,222,517 shares of our common stock are sold pursuant to this
prospectus supplement and the accompanying prospectus at a price of $3.03 per share, the last reported sale price of our common
stock on the Nasdaq Capital Market on March 13, 2019, for aggregate gross proceeds of $9.9 million. The shares sold in this offering,
if any, will be sold from time to time at various prices. An increase of $1.00 per share in the price at which the shares are
sold from the assumed offering price of $3.03 per share shown in the table above, assuming all of our common stock in the aggregate
amount of $9.9 million is sold at that price, would result in an adjusted net tangible book value per share after the offering
of $0.55 per share and would increase the dilution in net tangible book value per share to new investors in this offering to $3.48
per share, after deducting estimated aggregate offering expenses payable by us. A decrease of $1.00 per share in the price at
which the shares are sold from the assumed offering price of $3.03 per share shown in the table above, assuming all of our common
stock in the aggregate amount of $9.9 million is sold at that price, would result in an adjusted net tangible book value per share
after the offering of $0.52 per share and would decrease the dilution in net tangible book value per share to new investors in
this offering to $1.51 per share, after deducting commissions and estimated aggregate offering expenses payable by us.
The
above table and discussion are based on 46,887,056 shares of common stock outstanding as of December 31, 2018 and exclude the
following, all as of December 31, 2018:
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7,198,766 shares of common stock issuable upon
the exercise of outstanding stock options, vested and unvested, with a weighted-average exercise price of $3.71 per share;
and
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678,379 shares of common stock issuable upon
the exercise of outstanding warrants with a weighted-average exercise price of $2.87 per share.
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To
the extent that options or warrants outstanding as of December 31, 2018 have been or are exercised, or other shares are issued,
investors purchasing shares in this offering could experience further dilution. In addition, we may choose to raise additional
capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future
operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the
issuance of these securities could result in further dilution to our stockholders.
LINCOLN
PARK TRANSACTION
On
October 21, 2015, we entered into the Purchase Agreement and a registration rights agreement (the “RRA”) with Lincoln
Park. Pursuant to the terms of the Purchase Agreement, Lincoln Park has agreed to purchase from us up to $50,000,000 of shares
of our common stock (subject to certain limitations). Pursuant to the terms of the RRA, we filed with the accompanying prospectus
with the SEC which covered the secondary offering of 6,754,609 shares of common stock, which was declared effective September
9, 2016 and which is still effective as of the date of this prospectus supplement and a new registration Statement in 2017 for
5,000,000 shares, which was declared effective June 12, 2017 (the “2017 Registration Statement”), to register for
sale under the Securities Act the shares that have been and may be issued to Lincoln Park under the Purchase Agreement. As of
the date of this prospectus, the Company has sold 11,485,212 shares of common stock to Lincoln Park for gross proceeds of $40,288,610.
Therefore, we are hereby registering an additional $9,711,390 in shares of commons stock issuable pursuant to the Purchase Agreement.
From
September 9, 2016, we may, from time to time over a 36-month period and at our sole discretion, but no more frequently than every
other business day, direct Lincoln Park to purchase 50,000 shares of our common stock on any such business day, which amounts
may be increased under certain circumstances, provided that in no event shall Lincoln Park purchase more than $2,000,000 worth
of our common stock on any single business day, plus an additional “accelerated amount” under certain circumstances,
at a purchase price per share based on the market price of our common stock immediately preceding the time of sale as computed
under the Purchase Agreement without any fixed discount. The number of shares of our common stock that we direct Lincoln Park
to purchase depends on the closing price of our common stock.
Purchase
of Shares Under the Purchase Agreement
On
any day that the closing sale price of our common stock is not below $7.00 the purchase amount may be increased, at our sole discretion,
to up to 75,000 shares of our common stock per purchase; on any day that the closing sale price of our common stock is not below
$9.00 the purchase amount may be increased, at our sole discretion, to up to 100,000 shares of our common stock per purchase;
and on any day that the closing sale price of our common stock is not below $11.00 the purchase amount may be increased, at our
sole discretion, to up to 125,000 shares of our common stock per purchase and on any day that the closing sale price of our common
stock is not below $13.00 the purchase amount may be increased, at our sole discretion, to up to 150,000 shares (the “Regular
Purchase Share Limit”) of our common stock per purchase. Such purchases are hereinafter referred to as “Regular Purchases”.
In no event shall Lincoln Park purchase more than $2,000,000 worth of our common stock pursuant to a Regular Purchase on any single
business day. The purchase price per share for each such Regular Purchase will be equal to the lower of:
|
●
|
the
lowest sale price for our common stock on the purchase date of such shares; or
|
|
●
|
the
arithmetic average of the three lowest closing sale prices for our common stock during the 10 consecutive business days ending
on the business day immediately preceding the purchase date of such shares.
|
In
addition to Regular Purchases described above, we may also direct Lincoln Park, on any business day on which we have properly
submitted a Regular Purchase notice and the closing sale price of the common stock is not below $3.00, to purchase an additional
amount of our common stock, which we refer to as an “Accelerated Purchase”, not to exceed the lesser of:
|
●
|
30%
of the aggregate shares of our common stock traded during normal trading hours on the purchase date; and
|
|
●
|
200%
of the number of purchase shares purchased pursuant to the corresponding Regular Purchase.
|
The
purchase price per share for each such Accelerated Purchase will be equal to the lower of:
|
●
|
96%
of the volume weighted average price during (i) the entire trading day on the purchase date, if the volume of shares of our common
stock traded on the purchase date has not exceeded a volume maximum calculated in accordance with the Purchase Agreement, or (ii)
the portion of the trading day of the purchase date (calculated starting at the beginning of normal trading hours) until such
time at which the volume of shares of our common stock traded has exceeded such volume maximum; or
|
|
●
|
the
closing sale price of our common stock on the purchase date.
|
In
the case of both Regular Purchases and Accelerated Purchases, the purchase price per share will be equitably adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during
the business days used to compute the purchase price.
The
Purchase Agreement limits our sales of shares of common stock to Lincoln Park to the maximum number of shares of our common stock
that we may issue without breaching our obligations under applicable Nasdaq rules or obtaining stockholder approval under such
rules.
Other
than as set forth above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control
the timing and amount of any sales of our common stock to Lincoln Park.
Events
of Default
Events
of default under the Purchase Agreement include the following:
|
●
|
the
effectiveness of the registration statement of which this prospectus forms a part lapses for any reason (including, without limitation,
the issuance of a stop order), or any required prospectus supplement and accompanying prospectus are unavailable for the sale
by Lincoln Park of our common stock offered hereby, and such lapse or unavailability continues for a period of 10 consecutive
business days or for more than an aggregate of 30 business days in any 365-day period;
|
|
●
|
suspension
by our principal market of our common stock from trading for a period of three consecutive business days;
|
|
●
|
the
delisting of our common stock from the OTCQB operated by the OTC Markets Group, Inc., provided, however, that the common stock
is not immediately thereafter trading on the New York Stock Exchange, The NASDAQ Capital Market, The NASDAQ Global Market, The
NASDAQ Global Select Market, the NYSE MKT, the NYSE Arca, the OTC Bulletin Board or the OTCQX operated by the OTC Markets Group,
Inc. (or nationally recognized successor to any of the foregoing). If at any time after September 9, 2016 the Exchange Cap (as
defined in the Purchase Agreement) is reached unless and until stockholder approval is obtained pursuant to Section 2(e) of the
Purchase Agreement. The Exchange Cap shall be deemed to be reached at such time if, upon submission of a Regular Purchase Notice
or Accelerated Purchase Notice under this Agreement, the issuance of such shares of common stock would exceed that number of shares
of common stock which the Company may issue under this Agreement without breaching the Company’s obligations under the rules
or regulations of the Principal Market (as defined in the Purchase Agreement);
|
|
●
|
the
transfer agent’s failure for three business days to issue to Lincoln Park shares of our common stock which Lincoln Park
is entitled to receive under the Purchase Agreement;
|
|
●
|
any
breach of the representations or warranties or covenants contained in the Purchase Agreement or any related agreement which has
or which could have a material adverse effect on us subject to a cure period of five business days;
|
|
●
|
any
voluntary or involuntary participation or threatened participation in insolvency or bankruptcy proceedings by or against us; and
|
|
●
|
if
at any time we are not eligible to transfer our common stock electronically or a material adverse change in our business, financial
condition, operations or prospects has occurred.
|
Lincoln
Park does not have the right to terminate the Purchase Agreement upon any of the events of default set forth above. During an
event of default, all of which are outside of Lincoln Park’s control, shares of our common stock cannot be sold by us or
purchased by Lincoln Park under the Purchase Agreement.
Our
Termination Rights
We
have the unconditional right, at any time, for any reason and without any payment or liability to us, to give notice to Lincoln
Park to terminate the Purchase Agreement. In the event of bankruptcy proceedings by or against us, the Purchase Agreement will
automatically terminate without action of any party.
No
Short-Selling or Hedging by Lincoln Park
Lincoln
Park has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling or hedging of our
common stock during any time prior to the termination of the Purchase Agreement.
Amount
of Potential Proceeds to be Received under the Purchase Agreement
Pursuant
to the terms of the Purchase Agreement, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $50,000,000
of our common stock, exclusive of the 179,598 shares issued to Lincoln Park as a commitment fee. As of the date of this prospectus
supplement, there was $9,711,390 of our common stock yet unpurchased. The number of shares ultimately offered for resale by Lincoln
Park under this prospectus is dependent upon the number of shares we direct Lincoln Park to purchase under the Purchase Agreement.
Assumed Average Purchase
Price Per Share
|
|
|
Number of Registered Shares
to be Issued if Full
Purchase
(1)(2)
|
|
|
Percentage of Outstanding
Shares After Giving Effect to
the Issuance to Lincoln Park
(3)
|
|
|
Proceeds from the
Sale of Shares Under the Purchase
Agreement Registered in this Offering
|
|
$
|
1.00
|
|
|
|
21,420,399
|
|
|
|
37.3
|
%
|
|
$
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2.00
|
|
|
|
16,452,806
|
|
|
|
31.4
|
%
|
|
$
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.03
|
(4)
|
|
|
14,690,291
|
|
|
|
29.0
|
%
|
|
$
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5.00
|
|
|
|
13,472,249
|
|
|
|
27.2
|
%
|
|
$
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10.00
|
|
|
|
12,478,731
|
|
|
|
25.7
|
%
|
|
$
|
50,000,000
|
|
(1) The
Purchase Agreement provides that we may sell up to $50,000,000 of our common stock to Lincoln Park. We are registering $9,711,390
of shares hereunder and have registered 11,754,609 shares (inclusive of the 179,598 initial commitment shares issued to Lincoln
Park and the 89,799 additional commitment shares that have been or may be issued to Lincoln Park as a commitment fee) under the
accompanying prospectus and the 2017 Registration Statement, combined, which may or may not cover all the shares we ultimately
sell to Lincoln Park under the Purchase Agreement, depending on the purchase price per share. As a result, we have included in
this column only those shares that we have initially reserved.
(2)
The
number of registered shares to be issued includes the 6,485,212 purchase shares registered in the accompanying prospectus, the
5,000,000 purchase shares registered in the 2017 Registration Statement and the number of shares assumed to be issued under the
$9,711,390 amount being registered hereby based on the assumed average purchase price per share. Such amount excludes an
aggregate of 269,397 initial commitment shares that have been issued or may be issued to Lincoln Park because no proceeds will
be attributable to such commitment shares
.
(3) The
denominator is based on 47,480,192 shares outstanding as of March 14 2019, which is inclusive of the 179,598 shares issued to
Lincoln Park as initial commitment shares in connection with this offering, the 11,485,212 shares of common stock which have already
been sold to Lincoln Park as of the date of this prospectus, and the 72,361 additional commitment shares which have already been
issued to Lincoln Park as of the date of this prospectus and the number of shares set forth in the adjacent column which we would
have sold to Lincoln Park at the applicable assumed average purchase price per share. The numerator does not include the 17,438
additional commitment shares that may be issued to Lincoln Park pro rata. (4) The closing price of our common stock on March
13, 2019.
(4) The closing price of our common stock on March 13, 2019.
PLAN
OF DISTRIBUTION
This
prospectus supplement and the accompanying prospectus relate to the issuance and sale of up to $9,711,390 of shares of our common
stock that we may issue to Lincoln Park from time to time under a Purchase Agreement that we entered into with Lincoln Park on
October 21, 2015. This prospectus supplement and the accompanying prospectus also cover the resale of these shares by Lincoln
Park to the public.
Pursuant
to the Purchase Agreement, over the 36-month term of the Purchase Agreement, up to an aggregate amount of $50,000,0000 (subject
to certain limitations) of shares of our common stock, we have the right, but not the obligation, from time to time, in our sole
discretion and subject to certain conditions, to direct Lincoln Park to purchase up to the Regular Purchase Share Limit in a Regular
Purchase. In any case, Lincoln Park’s maximum obligation under any single Regular Purchase will not exceed $2,000,000. In
addition, upon notice to Lincoln Park, we may, from time to time and at our sole discretion, direct Lincoln Park to purchase additional
shares of our common stock in “accelerated purchases,” and/or “additional accelerated purchases” as set
forth in the Purchase Agreement. The purchase price per share is based on the market price of our common stock at the time of
sale as computed under the Purchase Agreement.
We
will control the timing and amount of any sales of our Common Stock to Lincoln Park. There is no upper limit on the price per
share that Lincoln Park must pay for our Common Stock under the Purchase Agreement.
As
consideration for entering into the Purchase Agreement, the Company issued to Lincoln Park 179,598 shares of Common Stock. The
Company will not receive any cash proceeds from the issuance of these shares.
We
may at any time, in our sole discretion terminate the Purchase Agreement without fee, penalty or cost, upon one trading day written
notice. In the event of bankruptcy proceedings by or against us, the Purchase Agreement will automatically terminate without action
of any party.
We
may suspend the sale of shares to Lincoln Park pursuant to this prospectus supplement for certain periods of time for certain
reasons, including if this prospectus supplement is required to be supplemented or amended to include additional material information.
Lincoln
Park is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act. Lincoln Park has informed us
that it will use an unaffiliated broker-dealer to effectuate all sales, if any, of the common stock that it may purchase from
us pursuant to the Purchase Agreement. Such sales will be made on the NASDAQ Capital Market at prices and at terms then prevailing
or at prices related to the then current market price. Each such unaffiliated broker-dealer will be an underwriter within the
meaning of Section 2(a)(11) of the Securities Act. Lincoln Park has informed us that each such broker-dealer will receive commissions
from Lincoln Park that will not exceed customary brokerage commissions.
We
know of no existing arrangements between Lincoln Park and any other stockholder, broker, dealer, underwriter, or agent relating
to the sale or distribution of the shares offered by this Prospectus. At the time a particular offer of shares is made, a prospectus
supplement, if required, will be distributed that will set forth the names of any agents, underwriters, or dealers and any compensation
from the selling stockholder, and any other required information.
We
will pay all of the expenses incident to the registration, offering, and sale of the shares to Lincoln Park.
We
have agreed to indemnify Lincoln Park and certain other persons against certain liabilities in connection with the offering of
shares of common stock offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable,
to contribute amounts required to be paid in respect of such liabilities.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling
persons, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the
Securities Act and is therefore, unenforceable.
Lincoln
Park represented to us that at no time prior to the date of the Purchase Agreement has Lincoln Park or its agents, representatives
or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined
in Rule 200 of Regulation SHO of the Exchange Act) of our Common Stock or any hedging transaction. Lincoln Park agreed that during
the term of the Purchase Agreement, it, its agents, representatives or affiliates will not enter into or effect, directly or indirectly,
any of the foregoing transactions.
Nevada
Agency and Transfer Company is transfer agent and registrar for the Common Stock.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus has been passed upon for us by Snell & Wilmer, L.L.P., Reno, Nevada.
EXPERTS
The
financial statements as of September 30, 2018 and 2017 and for each of the three years in the period ended September 30, 2018
and management’s assessment of the effectiveness of internal control over financial reporting as of September 30, 2018 incorporated
by reference in this Prospectus have been so incorporated in reliance on the reports of BDO USA, LLP, an independent registered
public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that
contains reports, proxy statements and other information regarding issuers that file electronically with the SEC, including Anavex.
The address of the SEC website is www.sec.gov.
We
make available free of charge on our internet website at www.anavex.com our annual reports on Form 10-K, our quarterly reports
on Form 10-Q, our current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the SEC. Information contained on our website is not incorporated by
reference into this prospectus supplement and you should not consider such information as part of this prospectus supplement.
DOCUMENTS
INCORPORATED BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus certain information that we file with the SEC, which
means that we can disclose important information to you by referring you to other documents separately filed by us with the SEC
that contain such information. The information we incorporate by reference is considered to be part of this prospectus and information
we later file with the SEC will automatically update and supersede the information in this prospectus. The following documents
filed by us with the SEC pursuant to Section 13(a) of the Exchange Act and any of our future filings under Sections 13(a),
13(c), 14 or 15 (d) of the Exchange Act, except for information furnished under Item 2.02 or 7.01 of Current Report on Form 8-K,
or exhibits related thereto, made before the termination of the offering are incorporated by reference herein:
|
(1)
|
our Annual Report
on Form 10-K for the fiscal year ended September 30, 2018, filed with the SEC on December 12, 2018, and the amendment thereto
on Form 10-K/A filed on January 25, 2019;
|
|
(2)
|
our Proxy Statement
on Schedule 14A filed on February 11, 2019 (excluding those portions that are not incorporated by reference into our Annual
Report on Form 10-K);
|
|
(3)
|
our Quarterly Report
on Form 10-Q for the period ended December 31, 2018 filed on February 7, 2019; and
|
|
(4)
|
the description
of our common stock contained in the Registration Statement on Form 8-A (File No. 001-37606) filed with the SEC on October
23, 2005.
|
Any
statement contained herein or in any document incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for the purposes of this prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or replaces such statement.
Any such statement so modified or superseded shall not be deemed to constitute a part of this prospectus, except as so modified
or superseded.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports
or documents that have been incorporated by reference in the prospectus contained in the registration statement but not delivered
with the prospectus, other than an exhibit to these filings unless we have specifically incorporated that exhibit by reference
into the filing, upon written or oral request and at no cost to the requester. Requests should be made by writing or telephoning
us at the following address:
Anavex
Life Sciences Corp.
51
West 52
nd
Street, 7
th
Floor
New
York, NY 10019-6163
(844)
689-3939
PROSPECTUS
Anavex
Life Sciences Corp.
$100,000,000
of Shares of Common Stock and Warrants
6,754,609
Shares of Common Stock Offered
by Selling Security Holder
Anavex
Life Sciences Corp., a Nevada corporation (“
us
”, “
we
”, “
our
”, “
Anavex
”
or the “
Company
”) may offer and sell from time to time, in one or more series or issuances and on terms that
Anavex will determine at the time of the offering, shares of our common stock, par value $0.001 per share (“
Common Stock
”)
and warrants (“
Warrants
”) described in this prospectus, up to an aggregate amount of $100,000,000.
This
prospectus also covers the resale by Lincoln Park Capital Fund, LLC (“
Lincoln Park
” or the “
Selling
Security Holder
”), of up to 6,754,609 shares of our Common Stock in one or more transactions in amounts, at prices,
and on terms that will be determined at the time these securities are offered, inclusive of 269,397 shares of Common Stock issued
or issuable to the Selling Security Holder as commitment shares, as described in further detail herein. The shares being offered
for resale by the Selling Security Holder represents approximately 18.9% of the outstanding Common Stock of the Company.
We
will not receive any of the proceeds from the sale of shares of our Common Stock sold by the Selling Security Holder. The Selling
Security Holder may sell the shares of Common Stock described in this prospectus in a number of different ways and at varying
prices. See “Plan of Distribution” for more information about how the Selling Security Holder may sell the shares
of Common Stock being registered pursuant to this prospectus. The Selling Security Holder is an “underwriter” within
the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “
Securities Act
”).
This
prospectus provides you with a general description of the securities offered. We will file prospectus supplements and may provide
other offering material at later dates that will contain specific terms of each offering of securities by us. These supplements
may also add, update or change information contained in this prospectus. You should carefully read this prospectus and the applicable
prospectus supplement before you invest in any of our securities. This prospectus may not be used to consummate sales of
securities unless accompanied by a prospectus supplement.
We
may offer and sell the securities described in this prospectus and any prospectus supplement directly to our stockholders or to
other purchasers or through agents on our behalf or through underwriters or dealers as designated from time to time. If any agents
or underwriters are involved in the sale of any of these securities, the applicable prospectus supplement will provide the names
of the agents or underwriters and any applicable fees, commission or discounts.
Our
Common Stock is currently quoted on the Nasdaq Capital Market under the symbol “AVXL”. On August 30, 2016, the last
reported sale price of our Common Stock was $3.04 per share.
Investing
in our securities involves a high degree of risk. See the section entitled “Risk Factors” on page 9 of this prospectus
and in the documents we filed with the Securities and Exchange Commission that are incorporated in this prospectus by reference
for certain risks and uncertainties you should consider.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
This
prospectus is dated September 6, 2016.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus of Anavex Life Sciences Corp., a Nevada corporation (collectively with all of its subsidiaries, the “Company”,
“Anavex”, or “we”, “us”, or “our”) is a part of a registration statement that
we filed with the Securities and Exchange Commission (“
SEC
”) utilizing a “shelf” registration process.
Under this shelf registration process, we may, from time to time, sell the securities described in this prospectus in one or more
offerings up to a total dollar amount of $100,000,000 as described in this prospectus. In addition, Lincoln Park may, from time
to time, offer and sell up to an aggregate of 6,754,609 shares of our Common Stock in one or more transactions.
The
registration statement containing this prospectus, including the exhibits to the registration statement, provides additional information
about us and the securities offered under this prospectus. The registration statement, including the exhibits and the documents
incorporated herein by reference, can be read on the SEC website or at the SEC offices mentioned under the heading “Prospectus
Summary - Where You Can Find More Information.”
We
may provide a prospectus supplement containing specific information about the amounts, prices and terms of the securities for
a particular offering. The prospectus supplement may add, update or change information in this prospectus. If the information
in the prospectus is inconsistent with a prospectus supplement, you should rely on the information in that prospectus supplement.
You should read both this prospectus and, if applicable, any prospectus supplement. See “Prospectus Summary — Where
You Can Find More Information” for more information.
We
have not authorized any dealer, salesman or other person to give any information or to make any representation other than those
contained or incorporated by reference in this prospectus or any prospectus supplement. You must not rely upon any information
or representation not contained or incorporated by reference in this prospectus or any prospectus supplement. This prospectus
and any prospectus supplement do not constitute an offer to sell or the solicitation of an offer to buy any securities other than
the registered securities to which they relate, nor do this prospectus and any prospectus supplement constitute an offer to sell
or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer
or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus or any prospectus
supplement is accurate on any date subsequent to the date set forth on the front of such document or that any information we have
incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though
this prospectus and any prospectus supplement is delivered or securities are sold on a later date.
PROSPECTUS
SUMMARY
The
items in the following summary are described in more detail later in this prospectus. This summary does not contain all of the
information you should consider. Before investing in our securities, you should read the entire prospectus carefully, including
the “Risk Factors” beginning on page 9 and the financial statements incorporated by reference.
Overview
Our
Current Business
We
are a clinical stage biopharmaceutical company engaged in the development of differentiated therapeutics for the treatment of
neurodegenerative and neurodevelopmental diseases including drug candidates to treat Alzheimer’s disease, other central
nervous system (“CNS”) diseases, pain and various types of cancer. The Company’s lead compound ANAVEX 2-73 is
being developed to treat Alzheimer’s disease and potentially other central nervous system diseases, including rare diseases,
such as Rett syndrome.
In
December 2014 a Phase 2a clinical trial was initiated for ANAVEX 2-73, which is being evaluated for the treatment of Alzheimer’s
disease. This randomized trial is designed to assess the safety and exploratory efficacy of ANAVEX 2-73 alone as well as in combination
with donepezil (ANAVEX PLUS) in patients with mild to moderate Alzheimer’s disease. ANAVEX 2-73 targets sigma-1 and muscarinic
receptors, which have been shown in preclinical studies to reduce stress levels in the brain and to reverse the pathological hallmarks
observed in Alzheimer’s disease. ANAVEX 2-73 showed no serious adverse events in a previously performed Phase 1 study. In
pre-clinical studies, ANAVEX 2-73 demonstrated anti-amnesic and neuroprotective properties in various animal models including
the transgenic mouse model Tg2576. In March, 2016, we received approval from the Ethics Committee in Australia to extend the ongoing
Phase 2a clinical trial, which had been requested by patients and their caregivers. The trial extension allows participants who
complete 52 weeks in PART B to roll-over into a new trial and continue taking ANAVEX 2-73 for an additional 104 weeks, providing
an opportunity to gather extended safety data. The trial is independent of the Company’s planned larger Phase 2/3 double-blinded,
placebo-controlled study of ANAVEX 2-73 in Alzheimer’s disease.
We
intend to identify and initiate discussions with potential partners in the next 12 months. Further, we may acquire or develop
new intellectual property and assign, license, or otherwise transfer our intellectual property to further our goals.
Our
Pipeline
Our
pipeline includes one clinical drug candidate and several compounds in different stages of pre-clinical study.
Our
proprietary SIGMACEPTOR™ Discovery Platform produced small molecule drug candidates with unique modes of action, based on
our understanding of sigma receptors. Sigma receptors may be targets for therapeutics to combat many human diseases, including
Alzheimer’s disease. When bound by the appropriate ligands, sigma receptors influence the functioning of multiple biochemical
signals that are involved in the pathogenesis (origin or development) of disease.
Compounds
that have been subjects of our research include the following:
ANAVEX
2-73
ANAVEX
2-73 may offer a disease-modifying approach in Alzheimer’s disease (AD) by using ligands that activate sigma-1 receptors.
In
AD animal models, ANAVEX 2-73 has shown pharmacological, histological and behavioral evidence as a potential neuroprotective,
anti-amnesic, anti-convulsive and anti-depressive therapeutic agent, due to its potent affinity to sigma-1 receptors and moderate
affinities to M1-4 type muscarinic receptors. In addition, ANAVEX 2-73 has shown a potential dual mechanism which may impact both
amyloid and tau pathology. In a transgenic AD animal model Tg2576 ANAVEX 2-73 induced a statistically significant neuroprotective
effect against the development of oxidative stress in the mouse brain, as well as significantly increased the expression of functional
and synaptic plasticity markers that is apparently amyloid-beta independent. It also statistically alleviated the learning and
memory deficits developed over time in the animals, regardless of sex, both in terms of spatial working memory and long-term spatial
reference memory.
Based
on the results of pre-clinical testing, we initiated and completed a Phase 1 single ascending dose (SAD) clinical trial of ANAVEX
2-73 in 2011. In this Phase 1 SAD trial, the maximum tolerated single dose was defined per protocol as 55–60 mg. This dose
is above the equivalent dose shown to have positive effects in mouse models of AD. There were no significant changes in laboratory
or electrocardiogram (ECG) parameters. ANAVEX 2-73 was well tolerated below the 55–60 mg dose with only mild adverse events
in some subjects. Observed adverse events at doses above the maximum tolerated single dose included headache and dizziness, which
were moderate in severity and reversible. These side effects are often seen with drugs that target CNS conditions, including AD.
The
ANAVEX 2-73 Phase 1 SAD trial was conducted as a randomized, placebo-controlled study. Healthy male volunteers between the ages
of 18 and 55 received single, ascending oral doses over the course of the trial. Study endpoints included safety and tolerability
together with pharmacokinetic parameters. Pharmacokinetics includes the absorption and distribution of a drug, the rate at which
a drug enters the blood and the duration of its effect, as well as chemical changes of the substance in the body. This study was
conducted in Germany in collaboration with ABX-CRO, a clinical research organization that has conducted several Alzheimer’s
disease studies, and the Technical University of Dresden.
In
December 2014 a Phase 2a clinical trial was initiated for ANAVEX 2-73, which is being evaluated for the treatment of Alzheimer’s
disease. The randomized trial is designed to assess the safety and exploratory efficacy of ANAVEX 2-73 alone as well as in combination
with donepezil (ANAVEX PLUS) in patients with mild to moderate Alzheimer’s disease. ANAVEX 2-73 targets sigma-1 and muscarinic
receptors, which have been shown in preclinical studies to reduce stress levels in the brain and to reverse the pathological hallmarks
observed in Alzheimer’s disease. ANAVEX 2-73 showed no serious adverse events in a previously performed Phase 1 study. In
pre-clinical studies ANAVEX 2-73 demonstrated anti-amnesic and neuroprotective properties in various animal models including the
transgenic mouse model Tg2576.
The
Phase 2a study met both primary and secondary objectives of the study. The 31-week preliminary exploratory safety and efficacy
data from the ongoing Phase 2a study of ANAVEX 2-73 in Alzheimer’s patients demonstrated favorable safety, maximum tolerated
dose, positive dose response, sustained efficacy response through 31 weeks for both cognitive and functional measures, as well
as positive unexpected therapeutic response events. ANAVEX 2-73 continues to demonstrate a favorable adverse event (AE) profile
through 31 weeks in a patient population of elderly Alzheimer’s patients with varying degrees of physical fragility. The
most common side effects across all AE categories tended to be of mild severity grade 1, and were resolved with dose reductions
that were anticipated within the adaptive design of the study protocol. ANAVEX 2-73 data presented is prerequisite information
in order to progress into Phase 2/3 placebo controlled studies.
Recent
preclinical data validates ANAVEX 2-73 as a prospective platform drug for other neurodegenerative diseases beyond Alzheimer’s
as well as neurodevelopmental diseases, more specifically, epilepsy and Rett syndrome. For epilepsy, data demonstrates both significant
and dose related improvement in the reduction of seizures, as well as significant synergy with each of three generations of epilepsy
drugs currently on the market. In Rett syndrome, a rare neurodevelopmental disease indication, administration of ANAVEX 2-73 resulted
in both significant and dose related improvements in an array of behavioural paradigms in the MECP2 HET Rett syndrome disease
model.
ANAVEX
PLUS
ANAVEX
PLUS, a combination of ANAVEX 2-73 with donepezil (Aricept
®
) is a potential novel combination drug for Alzheimer’s
disease. Aricept
®
(donepezil) is now generic. ANAVEX 2-73 showed in combination with donepezil an unexpected and
clear synergic effect of memory improvement by up to 80% in animal models. A patent application was filed in the US for the combination
of donepezil and ANAVEX 2-73 and if granted would give patent protection at least until 2033.
In
a humanized calibrated cortical network computer model the unexpected pre-clinical synergy between ANAVEX 2-73 and donepezil was
confirmed and ANAVEX PLUS showed an anticipated ADAS-Cog response of 7 points at 12 weeks and 5.5 points at 26 weeks, which represents
more than 2x the ADAS-Cog of donepezil alone.
ANAVEX
3-71
ANAVEX
3-71, previously named AF710B is a preclinical drug candidate with a novel mechanism of action via sigma-1 receptor
activation and M1 muscarinic allosteric modulation, which has shown to enhance neuroprotection and cognition in
Alzheimer’s disease. ANAVEX 3-71 is a CNS-penetrable mono-therapy that bridges treatment of both cognitive impairments
with disease modifications. It is highly effective in very small doses against the major Alzheimer’s hallmarks in
transgenic (3xTg-AD) mice, including cognitive deficits, amyloid and tau pathologies, and also has beneficial effects on
inflammation and mitochondrial dysfunctions.
ANAVEX 3-71 indicates extensive therapeutic advantages in Alzheimer’s and other protein-aggregation-related diseases given
its ability to enhance neuroprotection and cognition via sigma-1 receptor activation and M1 muscarinic allosteric modulation.
A
recent preclinical study examined the response of ANAVEX 3-71 in aged transgenic animal models, and showed a significant reduction
in rate of cognitive deficit, amyloid beta pathology and inflammation with the administration of ANAVEX 3-71. In April 2016 the
U.S. Food and Drug Administration (“FDA”) granted Orphan Drug Designation (“ODD”) to ANAVEX 3-71 for the
treatment of Frontotemporal dementia (“FTD”).
ANAVEX
1-41
ANAVEX
1-41 is a sigma-1 agonist. Pre-clinical tests revealed significant neuroprotective benefits (i.e., protects nerve cells from degeneration
or death) through the modulation of endoplasmic reticulum, mitochondrial and oxidative stress, which damages and destroys cells
and is believed by some scientists to be a primary cause of AD. In addition, in animal models, ANAVEX 1-41 prevented the expression
of caspase-3, an enzyme that plays a key role in apoptosis (programmed cell death) and loss of cells in the hippocampus, the part
of the brain that regulates learning, emotion and memory. These activities involve both muscarinic and sigma-1 receptor systems
through a novel mechanism of action.
ANAVEX
1037
ANAVEX
1037 is designed for the treatment of prostate cancer. It is a low molecular weight, synthetic compound exhibiting high affinity
for sigma-1 receptors at nanomolar levels and moderate affinity for sigma-2 receptors and sodium channels at micromolar levels.
In advanced pre-clinical studies, this compound revealed antitumor potential with no toxic side effects. It has also been shown
to selectively kill human cancer cells without affecting normal/healthy cells and also to significantly suppress tumor growth
in immune-deficient mice models. Scientific publications describe sigma receptor ligands positively, highlighting the possibility
that these ligands may stop tumor growth and induce selective cell death in various tumor cell lines. Sigma receptors are highly
expressed in different tumor cell types. Binding by appropriate sigma-1 and/or sigma-2 ligands can induce selective apoptosis.
In addition, through tumor cell membrane reorganization and interactions with ion channels, our drug candidates may play an important
role in inhibiting the processes of metastasis (spreading of cancer cells from the original site to other parts of the body),
angiogenesis (the formation of new blood vessels) and tumor cell proliferation.
Our
compounds are in the pre-clinical and clinical testing stages of development, and there is no guarantee that the activity demonstrated
in pre-clinical models will be shown in human testing.
Our
Target Indications
We
have developed compounds with potential application to two broad categories and several specific indications. The two categories
are diseases of the central nervous system, and cancer. Specific indications include:
•
Alzheimer’s disease — In 2015, an estimated 5.3 million Americans were suffering from Alzheimer’s disease. The
Alzheimer’s Association
®
reports that by 2025, 7.1 million Americans will be afflicted by the disease, a
40 percent increase from currently affected patients. Medications on the market today treat only the symptoms of AD and do not
have the ability to stop its onset or its progression. There is an urgent and unmet need for both a disease modifying cure for
Alzheimer’s disease as well as for better symptomatic treatments.
•
Depression — Depression is a major cause of morbidity worldwide according to the World Health Organization (WHO). Pharmaceutical
treatment for depression is dominated by blockbuster brands, with the leading nine brands accounting for approximately 75% of
total sales. However, the dominance of the leading brands is waning, largely due to the effects of patent expiration and generic
competition.
•
Epilepsy — Epilepsy is a common chronic neurological disorder characterized by recurrent unprovoked seizures. These seizures
are transient signs and/or symptoms of abnormal, excessive or synchronous neuronal activity in the brain. According to the Centers
for Disease Control and Prevention, epilepsy affects 2.2 million Americans. Today, epilepsy is often controlled, but not cured,
with medication that is categorized as older traditional anti-epileptic drugs and second generation anti epileptic drugs. Because
epilepsy afflicts sufferers in different ways, there is a need for drugs used in combination with both traditional anti-epileptic
drugs and second generation anti-epileptic drugs. GBI Research estimates that the epilepsy market will increase to $4.5 billion
by 2019.
•
Neuropathic Pain — We define neuralgia, or neuropathic pain, as pain that is not related to activation of pain receptor
cells in any part of the body. Neuralgia is more difficult to treat than some other types of pain because it does not respond
well to normal pain medications. Special medications have become more specific to neuralgia and typically fall under the category
of membrane stabilizing drugs or antidepressants.
•
Malignant Melanoma — Predominantly a skin cancer, malignant melanoma can also occur in melanocytes found in the bowel and
the eye. Malignant melanoma accounts for 75% of all deaths associated with skin cancer. The treatment includes surgical removal
of the tumor, adjuvant treatment, chemo and immunotherapy, or radiation therapy. According to IMS Health the worldwide Malignant
Melanoma market is expected to grow to $4.4 billion by 2022.
•
Prostate Cancer — Specific to men, prostate cancer is a form of cancer that develops in the prostate, a gland in the male
reproductive system. The cancer cells may metastasize from the prostate to other parts of the body, particularly the bones and
lymph nodes. Drug therapeutics for Prostate Cancer are expected to increase to nearly $18.6 billion in 2017 according to BCC Research.
•
Pancreatic Cancer — Pancreatic cancer is a malignant neoplasm of the pancreas. In the United States approximately 45,000
new cases of pancreatic cancer will be diagnosed this year and approximately 38,000 patients will die as a result of their cancer.
Sales predictions by GlobalData forecast that the market for the pharmaceutical treatment of pancreatic cancer in the five largest
European countries and the United States, will increase to $1.63 billion by 2017.
Corporate
Information
Our
principal executive office is located at 51 West 52
nd
Street, 7
th
Floor, New York, NY 10019-6163, and our
telephone number is 844.689.3939. Our website address is
www.anavex.com
. No information found on our website is part of
this prospectus. Also, this prospectus may include the names of various government agencies or the trade names of other companies.
Unless specifically stated otherwise, the use or display by us of such other parties’ names and trade names in this prospectus
is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties.
The
Offerings
Primary
Offering
We
may offer and sell, from time to time, in one or more offerings, the securities that we describe in this prospectus having a total
initial offering price not exceeding $100,000,000 at prices and on terms to be determined by market conditions at the time of
any offering.
Secondary
Offering
On
October 21, 2015, the Company entered into a purchase agreement (the “
Purchase Agreement
”) with the Selling
Security Holder (such transaction, the “
Financing
”), pursuant to which the Selling Security Holder agreed to
purchase from us up to $50,000,000 of our Common Stock (subject to certain limitations) from time to time over a 36-month period.
In connection with the Financing, the Company also entered into a registration rights agreement with the Selling Security Holder
(the “
RRA
”) whereby the Company agreed to file a registration statement, of which this prospectus is a part,
with the U.S. Securities and Exchange Commission (“
SEC
”) covering the shares of the Company’s Common
Stock that may be issued to the Selling Security Holder under the Purchase Agreement. 6,754,609 shares of Common Stock are being
registered under the registration statement of which this prospectus is a part, in connection with the Company’s obligations
under the Purchase Agreement and the RRA.
After
the registration statement, of which this prospectus is a part, is declared effective, the Company may, from time to time and
at its sole discretion, direct the Selling Security Holder to purchase up to 50,000 shares of our Common Stock on any such business
day, provided that in no event shall the Selling Security Holder purchase more than $2,000,000 worth of our Common Stock on any
single business day, plus an additional “accelerated amount” under certain circumstances. Except as described in this
prospectus, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing
and amount of any sales of our Common Stock to the Selling Security Holder. The purchase price of the up to 50,000 shares that
may be sold to the Selling Security Holder under the Purchase Agreement on any business day will be based on the market price
of our Common Stock immediately preceding the time of sale as computed under the Purchase Agreement without any fixed discount.
The purchase price per share will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, forward or
reverse stock split, or other similar transaction occurring during the business days used to compute such price. We may at any
time in our sole discretion terminate the Purchase Agreement without fee, penalty or cost upon one business day’s notice.
The
Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification and termination
provisions by, among and for the benefit of the parties. The Selling Security Holder has covenanted not to cause or engage in
any manner whatsoever, any direct or indirect short selling or hedging of the Company’s Common Stock.
In
consideration for entering into the Purchase Agreement, the Company issued to the Selling Security Holder, 179,598 shares of Common
Stock as a commitment fee and shall issue up to 89,799 shares pro rata, which commitment fee shares are also being registered
hereunder, when and if, the Selling Security Holder purchases at the Company’s discretion the $50,000,000 aggregate commitment.
The Purchase Agreement may be terminated by the Company at any time at its discretion without any cost to the Company.
This
prospectus provides you with a general description of the securities we and the Selling Security Holder may offer. Each time we
offer a type or series of securities under this prospectus, we will provide a prospectus supplement that will describe the specific
amounts, prices and other important terms of the securities.
General
The
prospectus supplement also may add, update or change information contained in this prospectus or in documents we have incorporated
by reference into this prospectus. However, no prospectus supplement will fundamentally change the terms that are set forth in
this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness.
Where
You Can Find More Information
We
are subject to the information requirements of the Securities Exchange Act of 1934 (the “
Exchange Act
”). Accordingly,
we file annual, quarterly and current reports, proxy statements as may be required and other information with the SEC and filed
a registration statement on Form S-3 under the Securities Act relating to the securities offered by this prospectus. This prospectus,
which forms part of the registration statement, does not contain all of the information included in the registration statement.
For further information, you should refer to the registration statement and its exhibits.
You
may read and copy the registration statement and any document we file with the SEC at the SEC’s Public Reference Room at
100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of
the Public Reference Room. You can also review our filings by accessing the website maintained by the SEC at
http://www.sec.gov
.
The site contains reports, proxy and information statements and other information regarding issuers that file electronically with
the SEC. In addition to the foregoing, we maintain a website at
http://www.anavex.com
. Our website content is made available
for informational purposes only. It should neither be relied upon for investment purposes nor is it incorporated by reference
into this prospectus. We make available at
http://www.anavex.com/investors/share-data/
copies of our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any amendments to such document as soon as practicable
after we electronically file such material with or furnish such documents to the SEC.
SELECTED
FINANCIAL DATA
The
following selected financial data should be read in conjunction with our financial statements and the related notes contained
in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended September 30, 2015 and our interim consolidated
financial statements and the related notes contained in Item 1 of Part I of our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2016, which are incorporated by reference into this prospectus, except that share and per share information for
the years ended September 30, 2015 and 2014 and for the nine months ended June 30, 2016 and 2015 have been revised to reflect
the reverse stock split of our issued and outstanding shares of Common Stock effective on October 7, 2015, at a ratio of 1 to
4. The selected data in this section is not intended to replace such financial statements, except that share and per share information
has been revised for the periods presented to reflect the reverse stock split at a ratio of 1 to 4.
We
have derived the statements of operations data for each of the years ended September 30, 2015 and 2014 and the balance sheet data
as of September 30, 2015 and 2014 from the audited consolidated financial statements contained in Item 8 of Part II of our Annual
Report on Form 10-K for the year ended September 30, 2015. The consolidated statement of operations data set forth below for the
nine months ended June 30, 2016 and 2015 and the consolidated balance sheet data as of June 30, 2016 has been derived from our
consolidated financial statements included in Item 1 of Part I of our Quarterly Report on Form 10-Q for the quarter ended June
30, 2016, which is incorporated by reference into this prospectus.
The
historical financial information set forth below may not be indicative of our future performance and should be read together with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated
financial statements and notes to those statements included in Item 7 of Part II and Item 8 of Part II, respectively, of our Annual
Report on Form 10-K for the year ended September 30, 2015, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and our historical financial statements and notes to those statements included in Item 2 of Part
I and Item 1 of Part I, respectively, of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, and updates thereto
reflected in subsequent filings with the SEC, and all other annual, quarterly and other reports that we file with the SEC after
the date of this prospectus and that also are incorporated herein by reference.
|
|
Nine
months ended June 30,
|
|
|
2016
(unaudited)
|
|
2015
(unaudited)
|
Research
and development expenses
|
|
$
|
2,915,432
|
|
|
$
|
1,525,233
|
|
General
and administrative expenses
|
|
|
6,090,835
|
|
|
|
1,616,744
|
|
Net
loss
|
|
|
(8,225,666
|
)
|
|
|
(6,751,821
|
)
|
Net
loss per share, basic and diluted
|
|
|
(0.24
|
)
|
|
|
(0.44
|
)
|
Weighted
average number of common shares, basic and diluted
|
|
|
34,961,838
|
|
|
|
15,438,000
|
|
|
|
Year
ended September 30,
|
|
|
2015
|
|
2014
|
Research
and development expenses
|
|
$
|
2,271,736
|
|
|
$
|
732,395
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses
|
|
|
4,836,978
|
|
|
|
2,236,580
|
|
Net
loss
|
|
|
(12,108,130
|
)
|
|
|
(9,968,353
|
)
|
Net
loss per share
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.65
|
)
|
|
|
(1.02
|
)
|
Diluted
|
|
|
(0.65
|
)
|
|
|
(1.02
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares, basic and diluted
|
|
|
18,584,820
|
|
|
|
9,804,539
|
|
Selected
Balance Sheet Data
|
|
At June 30, 2016
|
|
|
At September 30,
|
|
|
|
(unaudited)
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
9,727,040
|
|
|
$
|
15,290,976
|
|
|
$
|
7,262,138
|
|
Working Capital
|
|
|
7,670,925
|
|
|
|
12,808,083
|
|
|
|
5,910,106
|
|
Total Assets
|
|
|
9,843,973
|
|
|
|
15,469,913
|
|
|
|
7,353,502
|
|
Long-term debt
|
|
|
345
|
|
|
|
332
|
|
|
|
263,727
|
|
Total Stockholders’
Equity
|
|
|
7,671,086
|
|
|
|
12,809,003
|
|
|
|
192,626
|
|
RISK
FACTORS
An
investment in our securities which may be offered hereby is subject to numerous risks, including the risks described under the
caption “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2015, which is incorporated
by reference herein. You should carefully consider these risks, along with the information provided elsewhere in this prospectus
and the documents we incorporate by reference in this prospectus before investing in our securities. You could lose all or part
of your investment in the securities. You should consider these matters in conjunction with the other information included or
incorporated by reference in this prospectus. The risks and uncertainties described in this prospectus, any applicable prospectus
supplement and the documents incorporated by reference herein are not the only ones facing us. Additional risks and uncertainties
that we do not presently know about or that we currently believe are not material may also adversely affect our business. Our
business, results of operations or financial condition could be seriously harmed, and the trading price of our Common Stock may
decline due to any of these or other risks.
This
prospectus contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements appear in a number of places in this prospectus and include statements regarding the intent,
belief or current expectations of our management, directors or officers primarily with respect to our future operating performance.
Prospective purchasers of our securities are cautioned that these forward-looking statements are not guarantees of future performance
and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements due to
various factors. The accompanying information contained in this prospectus, including the information set forth below, identifies
important factors that could cause these differences. See “Forward-Looking Statements” below.
Risks
Relating to the Purchase Agreement with the Selling Security Holder
The
sale or issuance of our Common Stock to the Selling Security Holder may cause dilution and the sale of the shares of Common Stock
acquired by the Selling Security Holder, or the perception that such sales may occur, could cause the price of our Common Stock
to fall.
On
October 21, 2015, we entered into the Purchase Agreement with the Selling Security Holder, pursuant to which the Selling Security
Holder has committed to purchase up to $50,000,000 of shares of our Common Stock. Concurrently with the execution of the Purchase
Agreement on October 21, 2015, we issued 179,598 shares of our Common Stock to the Selling Security Holder as a fee for its commitment
to purchase additional shares of our Common Stock under the Purchase Agreement. We have not issued additional shares of Common
Stock to the Selling Security Holder since the execution of the Purchase Agreement. Additional purchase shares that may be sold
pursuant to the Purchase Agreement may be sold by us to Lincoln Park at our discretion from time to time for a 36-month period,
commencing after the SEC declares the registration statement that this prospectus forms a part effective.
The
purchase price for the shares that we may sell to the Selling Security Holder under the Purchase Agreement will fluctuate based
on the price of our Common Stock. Depending on market liquidity at the time, sales of such shares may cause the trading price
of our Common Stock to fall.
We
generally have the right to control the timing and amount of any sales of our shares to the Selling Security Holder. Sales of
our Common Stock, if any, to the Selling Security Holder will depend upon market conditions and other factors to be determined
by us. Therefore, the Selling Security Holder may ultimately purchase all, some or none of the shares of our Common Stock that
may be sold pursuant to the Purchase Agreement and, after it has acquired shares, the Selling Security Holder may sell all, some
or none of those shares. Sales to the Selling Security Holder by us could result in substantial dilution to the interests of other
holders of our Common Stock. Additionally, the sale of a substantial number of shares of our Common Stock to the Selling Security
Holder, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in
the future at a time and at a price that we might otherwise wish to effect sales.
We
may not be able to access sufficient funds under the Purchase Agreement with Lincoln Park when needed.
Our
ability to sell shares to Lincoln Park and obtain funds under the Purchase Agreement is limited by the terms and conditions
in the Purchase Agreement, including restrictions on when we may sell shares to Lincoln Park, restrictions on the amounts we
may sell to Lincoln Park at any one time, and a limitation on our ability to sell shares to Lincoln Park to the extent that
it would cause Lincoln Park to beneficially own more than 9.99% of our outstanding Common Stock. Therefore, we might not have
access to the full amount available to us under the Purchase Agreement. In addition, any amounts we sell under the Purchase
Agreement
may not satisfy all of our funding needs, even if we are able and choose to sell all $50,000,000 of our Common Stock under
the Purchase Agreement.
We
elected to enter into the Purchase Agreement with Lincoln Park as we expect that amount of capital over the next three years will
be required for us to fully implement our business, operating and development plans. The extent we rely on Lincoln Park as a source
of funding will depend on a number of factors including, the prevailing market price of our Common Stock and the extent to which
we are able to secure working capital from other sources. If obtaining sufficient funding from Lincoln Park were to prove unavailable
or prohibitively dilutive, we will need to secure another source of funding in order to satisfy our working capital needs. Even
if we sell all $50,000,000 of shares of our Common Stock under the Purchase Agreement, we may still need additional capital to
fully implement our business, operating and development plans. Should the financing we require to sustain our working capital
needs be unavailable or prohibitively expensive when we require it, the consequences could be a material adverse effect on our
business, operating results, financial condition and prospects.
DOCUMENTS
INCORPORATED BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus certain information that we file with the SEC, which
means that we can disclose important information to you by referring you to other documents separately filed by us with the SEC
that contain such information. The information we incorporate by reference is considered to be part of this prospectus and information
we later file with the SEC will automatically update and supersede the information in this prospectus. The following documents
filed by us with the SEC pursuant to Section 13(a) of the Exchange Act and any of our future filings under Sections 13(a), 13(c),
14 or 15 (d) of the Exchange Act, except for information furnished under Item 2.02 or 7.01 of Current Report on Form 8-K, or exhibits
related thereto, made before the termination of the offering are incorporated by reference herein:
(1)
our Annual Report on Form 10-K for the fiscal year ended September 30, 2015, filed with the SEC on December 29, 2015;
(2)
our Quarterly Reports on Form 10-Q for the fiscal periods ended: (i) December 31, 2015, as filed with the SEC on February 8, 2016;
(ii) March 31, 2016, as filed with the SEC on May 11, 2016; and (iii) June 30, 2016, as filed with the SEC on August 11, 2016;
(3)
our Current Reports on Form 8-K, as filed with the SEC on September 28, 2015, October 6, 2015, October 7, 2015, October 26, 2015,
May 6, 2016, May 11, 2016, June 23, 2016, July 7, 2016 and July 22, 2016;
(4)
all other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act and all proxy or information statements filed pursuant
to Section 14 of the Exchange Act since the end of the fiscal year covered by the Annual Report referenced in (1) above; and
(5)
The description of our Common Stock contained in the Registration Statement on Form 8-A filed with the SEC on December 6, 2005.
In
addition, all documents subsequently filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act before the
date our offering is terminated or complete are deemed to be incorporated by reference into, and to be a part of, this prospectus.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports
or documents that have been incorporated by reference in the prospectus contained in the registration statement but not delivered
with the prospectus, other than an exhibit to these filings unless we have specifically incorporated that exhibit by reference
into the filing, upon written or oral request and at no cost to the requester. Requests should be made by writing or telephoning
us at the following address:
Anavex
Life Sciences Corp.
51 West 52
nd
Street, 7
th
Floor
New York, NY 10019-6163
(844) 689-3939
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act regarding our business,
financial condition, results of operations and prospects. Words such as “expects”, “anticipates”, “intends”,
“plans”, “believes”, “seeks”, “estimates” and similar expressions or variations
of such words are intended to identify forward-looking statements. However, these are not the exclusive means of identifying forward-looking
statements. Although forward-looking statements contained in this prospectus reflect our good faith judgment, such statements
can only be based on facts and factors currently known to us. Consequently, forward-looking statements are inherently subject
to risks and uncertainties, and actual outcomes may differ materially from the results and outcomes discussed in the forward-looking
statements. Further information about the risks and uncertainties that may impact us are described or incorporated by reference
in “Risk Factors” beginning on page 9. You should read that section carefully. You should not place undue reliance
on forward-looking statements, which speak only as of the date of this prospectus. We undertake no obligation to update publicly
any forward-looking statements in order to reflect any event or circumstance occurring after the date of this prospectus or currently
unknown facts or conditions or the occurrence of unanticipated events.
USE
OF PROCEEDS
Unless
otherwise specified in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities
described in this prospectus in connection with the primary offering for general corporate and operations purposes and to fund
our anticipated growth. The applicable prospectus supplement will provide more details on the use of proceeds of any specific
offering. We retain broad discretion in determining how we allocate the net proceeds received in connection with the primary offering.
However, we expect that such cash will be used to further our business plan of advancing human clinical trials of AVAVEX 2-73
and for general corporate and administrative purposes.
We
will not receive any proceeds from the sale of shares of our Common Stock by the Selling Security Holder named in such prospectus
supplement.
PLAN
OF DISTRIBUTION
Primary
Offering
We
may sell the securities described in this prospectus on a continuous or delayed basis directly to purchasers, through underwriters,
broker-dealers or agents that may receive compensation in the form of discounts, concessions or commissions from us or the purchasers
of the securities, in “at the market offerings” within the meaning of Rule 415(a)(4) of the Securities Act, to or
through a market maker or into an existing trading market, on an exchange, or otherwise or through a combination of any such methods
of sale. Discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those
customary in the types of transactions involved.
The
securities may be sold from time to time in one or more transactions at fixed prices, which may be changed from time to time,
at prevailing market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. These
sales may be effected in transactions, which may involve crosses or block transactions:
•
on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
•
in the over-the-counter market;
•
in transactions otherwise than on these exchanges or services or in the over-the-counter market; or
•
through the writing of options, whether the options are listed on an options exchange or otherwise.
Each
time that we use this prospectus to sell our securities, we shall also provide a prospectus supplement. For each series of securities,
the applicable prospectus supplement will set forth the terms of the offering including:
•
the public offering price;
•
the name or names of any underwriters, dealers or agents;
•
the purchase price of the securities;
•
the proceeds from the sale of the securities to us;
•
any underwriting discounts, agency fees, or other compensation payable to underwriters or agents;
•
any discounts or concessions allowed or reallowed or repaid to dealers; and
•
the securities exchanges on which the securities will be listed, if any.
If
we use underwriters in the sale of securities, the securities will be acquired by the underwriters for their own account. The
underwriters may then resell the securities in one or more transactions at a fixed public offering price or at varying prices
determined at the time of sale or thereafter. The securities may be either offered to the public through underwriting syndicates
represented by managing underwriters, or directly by underwriters. The obligations of the underwriters to purchase the securities
will be subject to certain conditions. The underwriters will be obligated to purchase all the securities offered if they purchase
any securities. The public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed
from time to time.
If
we use dealers in the sale of securities, we will sell securities to such dealers as principals. The dealers may then resell the
securities to the public at varying prices to be determined by such dealers at the time of resale. We may solicit offers to purchase
the securities directly, and we may sell the securities directly to institutional or other investors, who may be deemed underwriters
within the meaning of the Securities Act with respect to any resales of those securities. The terms of these sales will be described
in the applicable prospectus supplement. If we use agents in the sale of securities, unless otherwise indicated in the prospectus
supplement, they will use their reasonable best efforts to solicit purchases for the period of their appointment. Unless otherwise
indicated in a prospectus supplement, if we sell directly, no underwriters, dealers or agents would be involved. We will not make
an offer of securities in any jurisdiction that does not permit such an offer.
We
may grant underwriters who participate in the distribution of securities an option to purchase additional securities to
cover overallotments, if any, in connection with the distribution. Any underwriter may engage in overallotment, stabilizing
transactions, short covering transactions and penalty bids in accordance with SEC orders, rules and regulations and
applicable law. To the extent permitted by applicable law and SEC orders, rules and regulations, an overallotment involves
sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified maximum. To the extent permitted by applicable
law and SEC orders, rules and regulations, short covering transactions involve purchases of the securities in the open market
after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the securities originally sold by the dealer is purchased in a covering transaction to cover
short positions. Those activities may cause the price of the Common Stock to be higher than it would otherwise be. If
commenced, the underwriters may discontinue any of the activities at any time.
Any
underwriters who are qualified market makers on the NASDAQ Stock Market may engage in passive market making transactions in our
Common Stock on the NASDAQ Stock Market in accordance with Rule 103 of Regulation M, during the business day prior to the pricing
of the offering, before the commencement of offers or sales of the Common Stock. Passive market makers must comply with applicable
volume and price limitations and must be identified as passive market makers. In general a passive market maker must display its
bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive
market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are
exceeded. The anti-manipulation rules under the Exchange Act may apply to sales of shares in the market. Furthermore, Regulation
M may restrict the ability of any person engaged in the distribution of the shares to engage in market-making activities for the
particular securities being distributed for a period of up to five business days before the distribution. The restrictions may
affect the marketability of the shares and the ability of any person or entity to engage in market-making activities for the shares.
Underwriters,
dealers and agents that participate in any distribution of securities may be deemed to be underwriters as defined in the Securities
Act. Any discounts, commissions or profit they receive when they resell the securities may be treated as underwriting discounts
and commissions under the Securities Act. Only underwriters named in the prospectus supplement are underwriters of the securities
offered in the prospectus supplement. We may have agreements with underwriters, dealers and agents to indemnify them against certain
civil liabilities, including certain liabilities under the Securities Act, or to contribute with respect to payments that they
may be required to make.
We
may authorize underwriters, dealers or agents to solicit offers from certain institutions whereby the institution contractually
agrees to purchase the securities from us on a future date at a specific price. This type of contract may be made only with institutions
that we specifically approve. Such institutions could include banks, insurance companies, pension funds, investment companies
and educational and charitable institutions. The underwriters, dealers or agents will not be responsible for the validity or performance
of these contracts.
Each
series of securities will be a new issue of securities. Our Common Stock is quoted on the Nasdaq Capital Market. Unless otherwise
specified in the applicable prospectus supplement, our securities (other than our Common Stock) will not be listed on any exchange.
It has not presently been established whether the underwriters, if any, of the securities will make a market in the securities.
If the underwriters make a market in the securities, such market making may be discontinued at any time without notice.
Agents,
dealers and underwriters may be entitled to indemnification by us against certain civil liabilities, including liabilities under
the Securities Act, or to contribution with respect to payments which the agents, dealers or underwriters may be required to make
in respect thereof. Agents, dealers or underwriters may be customers of, engage in transactions with, or perform services for
us and our subsidiaries in the ordinary course of business.
Secondary
Offering
The
Common Stock offered by this prospectus is being offered by the Selling Security Holder. The Common Stock may be sold or distributed
from time to time by the selling stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who
may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at
negotiated prices, or at fixed prices, which may be changed. The sale of the Common Stock offered by this prospectus could be
affected in one or more of the following methods:
•
ordinary brokers’ transactions;
•
transactions involving cross or block trades;
•
through brokers, dealers, or underwriters who may act solely as agents;
•
“at the market” into an existing market for the Common Stock;
•
in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected
through agents;
•
in privately negotiated transactions; or
•
any combination of the foregoing.
In
order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed
brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for
sale in the state or an exemption from the state’s registration or qualification requirement is available and complied with.
The
Selling Security Holder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.
The
Selling Security Holder has informed us that it intends to use an unaffiliated broker-dealer to effectuate all sales, if any,
of the Common Stock that it may purchase from us pursuant to the Purchase Agreement. Such sales will be made at prices and at
terms then prevailing or at prices related to the then current market price. Each such unaffiliated broker-dealer will be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act. The Selling Security Holder has informed us that each such broker-dealer
will receive commissions from the Selling Security Holder that will not exceed customary brokerage commissions. In compliance
with the guidelines of the Financial Industry Regulatory Authority, Inc., or FINRA, the maximum consideration or discount to be
received by any FINRA member or independent broker dealer may not exceed 8% of the aggregate amount of the securities offered
pursuant to this prospectus.
Brokers,
dealers, underwriters or agents participating in the distribution of the shares as agents may receive compensation in the form
of commissions, discounts, or concessions from the selling stockholder and/or purchasers of the Common Stock for whom the broker-dealers
may act as agent. The compensation paid to a particular broker-dealer may be less than or in excess of customary commissions.
Neither we nor the Selling Security Holder can presently estimate the amount of compensation that any agent will receive. We know
of no existing arrangements between the Selling Security Holder or any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of the shares offered by this prospectus. At the time a particular offer of shares is made,
a prospectus supplement, if required, will be distributed that will set forth the names of any agents, underwriters or dealers
and any compensation from the selling stockholder, and any other required information.
We
will pay the expenses incident to the registration, offering, and sale of the shares to the Selling Security Holder. We have agreed
to indemnify and certain other persons against certain liabilities in connection with the offering of shares of Common Stock offered
hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required
to be paid in respect of such liabilities. Lincoln Park has agreed to indemnify us against liabilities under the Securities Act
that may arise from certain written information furnished to us by specifically for use in this prospectus or, if such indemnity
is unavailable, to contribute amounts required to be paid in respect of such liabilities.
Lincoln
Park has represented to us that at no time prior to the Purchase Agreement has or its agents, representatives or affiliates engaged
in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation
SHO of the Exchange Act) of our Common Stock or any hedging transaction, which establishes a net short position with respect to
our Common Stock. Lincoln Park has agreed that during the term of the Purchase Agreement, it, its agents, representatives or affiliates
will not enter into or effect, directly or indirectly, any of the foregoing transactions.
We
have advised the Selling Security Holder that it is required to comply with Regulation M promulgated under the Exchange Act. With
certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other
person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase
any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any
bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All
of the foregoing may affect the marketability of the securities offered by this prospectus.
Our
Common Stock is quoted on the Nasdaq Capital Market under the symbol “AVXL.”
When
we refer to “Selling Security Holder” in this prospectus, we mean the entity listed in the table below.
SELLING
SECURITY HOLDER
An
aggregate of up to 6,754,609 shares of Common Stock and up to 269,397 shares of Common Stock may be offered for sale and sold
from time to time pursuant to this prospectus by the Selling Security Holder. Except as may be set forth in any accompanying prospectus
supplement, we will pay all of the expenses in connection with the registration and the sale of the shares, other than selling
commissions and the fees and expenses of counsel and other advisors to the Selling Security Holder. We will not receive any proceeds
from the sale of shares by the Selling Security Holder.
On
October 21, 2015, the Company entered into the Purchase Agreement with the Selling Security Holder. In connection with the Financing,
the Company also entered into the RRA whereby the Company agreed to file a registration statement with the SEC covering the shares
of the Company’s Common Stock that may be issued to the Selling Security Holder under the Purchase Agreement. The shares
being registered hereunder are being registered pursuant to the terms of the RRA.
After
the SEC has declared effective this registration statement related to the Financing, the Company has the right, in its sole discretion
over a 36-month period, to sell to the Selling Security Holder up to an aggregate commitment of $50,000,000 of shares of Common
Stock. The Company controls the timing and amount of any future sales, if any, of shares of Common Stock to the Selling Security
Holder.
The
Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification and termination
provisions by, among and for the benefit of the parties. The Selling Security Holder has covenanted not to cause or engage in
any manner whatsoever, any direct or indirect short selling or hedging of the Company’s Common Stock.
In
consideration for entering into the Purchase Agreement, the Company issued to the Selling Security Holder, 179,598 shares of Common
Stock as a commitment fee and shall issue up to 89,799 shares pro rata, when and if the Selling Security Holder purchases at the
Company’s discretion the $50,000,000 aggregate commitment. For example, if we elect, at our sole discretion, to require
the Selling Security Holder to purchase $100,000 of our stock then we would issue 180 shares of the pro rata commitment fee which
is the product of $100,000 (the amount we have elected to sell) divided by $50,000,000 (the amount we can sell the Selling Security
Holder under the Purchase Agreement multiplied by 89,799 (the total number of pro rata commitment shares). The pro rata commitment
shares will only be issued pursuant to this formula as and when we elect at our discretion to sell stock to the Selling Security
Holder. The Selling Security Holder may not assign or transfer its rights and obligations under the Purchase Agreement. The Purchase
Agreement may be terminated by the Company at any time at its discretion without any cost to the Company.
Pursuant
to the Registration Rights Agreement, dated as of October 21, 2015, among the Selling Security Holder and the Company, the Selling
Security Holder has the right to request that the Company include their shares on the registration statement of which this prospectus
forms a part under the Securities Act. Under the Registration Rights Agreement, the Selling Security Holder has registration rights
with respect to the shares of Common Stock set forth in the table below.
As
of August 30, 2016, the Selling Security Holder beneficially owned, in the aggregate, 179,598 shares of Common Stock, or 0.50%
of our outstanding Common Stock. We cannot provide an estimate as to the number of shares of Common Stock that will be held by
the Selling Security Holder upon consummation of any offering or offerings covered by this prospectus because the Selling Security
Holder may offer some, all or none of their shares of Common Stock in any such offering or offerings. The Selling Security Holder
does not and has not within the past three years had, any position, office or material relationship with us or any of our predecessors
or affiliates.
Selling
Shareholder
|
|
Shares
Beneficially Owned Before this Offering
|
|
Percentage
of Outstanding Shares Beneficially Owned Before this Offering
|
|
No.
of Shares to be Registered in this Offering
|
|
Percentage
of Outstanding Shares Beneficially Owned After this Offering
|
Lincoln
Park Capital Fund, LLC
(1)
|
|
179,598
|
(2)
|
|
0.50
|
%
|
|
6,754,609
|
(4)
|
|
*
|
*
Less than 1%
(1)
Josh Scheinfeld and Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC, are deemed to be beneficial owners of all
of the shares of Common Stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and Scheinfeld have shared voting and investment
power over the shares being offered under the prospectus filed with the SEC in connection with
the transactions contemplated under the Purchase Agreement. Lincoln Park Capital, LLC is not a licensed broker dealer or an affiliate
of a licensed broker dealer.
(2)
Represents 179,598 shares of our Common Stock issued to the Selling Security Holder on or about October 21, 2015 as a fee for
its commitment to purchase additional shares of our Common Stock under the Purchase Agreement, all of which shares are covered
by the registration statement that includes this prospectus.
(3)
Based on 35,710,862 outstanding shares of our Common Stock as of August 30, 2016, with the above mentioned commitment shares deemed
issued as of that date.
(4)
Although the Purchase Agreement provides that we may sell up to $50,000,000 of shares of our Common Stock to Lincoln Park, we
have initially reserved approximately 6,754,609 shares for sale to Lincoln Park under the Purchase Agreement and RRA. The amount
of shares of Common Stock we may sell to Lincoln Park is subject to cap on issuable shares as described in the Purchase Agreement.
The
Lincoln Park Transaction
General
On
October 21, 2015, we entered into the Purchase Agreement and the Registration Rights Agreement with Lincoln Park. Pursuant to
the terms of the Purchase Agreement, Lincoln Park has agreed to purchase from us up to $50,000,000 of shares of our Common Stock
(subject to certain limitations). Pursuant to the terms of the Registration Rights Agreement, we have filed with the SEC the registration
statement that includes this prospectus to register for resale under the Securities Act the shares that have been or may be issued
to Lincoln Park under the Purchase Agreement.
After
the SEC has declared the registration statement effective, we may, from time to time over a 36-month period and at our sole discretion,
but no more frequently than every other business day, direct Lincoln Park to purchase 50,000 shares of our Common Stock on any
such business day, which amounts may be increased under certain circumstances, provided that in no event shall Lincoln Park purchase
more than $2,000,000 worth of our Common Stock on any single business day, plus an additional “accelerated amount”
under certain circumstances, at a purchase price per share based on the market price of our Common Stock immediately preceding
the time of sale as computed under the Purchase Agreement without any fixed discount. The amount of shares of our Common Stock
that we direct Lincoln Park to purchase depends on the closing price of our Common Stock.
The
Company has previously entered into transactions with Lincoln Park. On July 5, 2013, the Company entered into a purchase agreement
with Lincoln Park (the “
2013 Purchase Agreement
”) to purchase $10,000,000 shares, pursuant to which 2013 Purchase
Agreement the Company could sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $10,000,000 in value
of its shares of Common Stock from time to time over a 25 month period. In connection therewith, the Company also entered into
a registration rights agreement with Lincoln Park whereby the Company agreed to file a registration statement with the Commission
covering the shares of the Company’s Common Stock that may be issued to Lincoln Park under the 2013 Purchase Agreement.
Under
the 2013 Purchase Agreement, the Company determined, at its own discretion, the timing and amount of its sales of Common Stock,
subject to certain conditions and limitations. The purchase price of the shares that were sold to Lincoln Park under the 2013
Purchase Agreement was based on the market price of the Company’s shares of Common Stock immediately preceding the time
of sale without any fixed discount, provided that in no event could such shares be sold to Lincoln Park when the closing sale
price was less than $0.50 per share ($2.00 on a post reverse split basis).
Pursuant
to the 2013 Purchase Agreement, Lincoln Park initially purchased 62,500 shares of the Company’s Common Stock for $100,000.
In consideration for entering into the 2013 Purchase Agreement, the Company issued to Lincoln Park 85,465 shares of Common Stock
as a commitment fee and issued up to 33,353 shares pro rata, when Lincoln Park purchased the remaining $10,000,000 aggregate commitment.
The sale of shares under the 2013 Purchase Agreement did not seem to have any discernable effect on the market price of the Company’s
stock. During the 2-week period subsequent to the effective date of the registration statement on Form S-1 relating to the 2013
Lincoln Park transaction, there was a decrease in the market price of the Company’s Common Stock. During this period, the
Company issued 75,489 shares of Common Stock to Lincoln Park, which represented 0.81% of the Company’s issued and outstanding
shares as of the effective date.
Purchase
of Shares Under the Purchase Agreement
Under
the Purchase Agreement, on any business day selected by us, we may direct Lincoln Park to purchase 50,000 shares of our
Common Stock on any such business day. On any day that the closing sale price of our Common Stock is not below $7.00 the
purchase amount may be increased, at our sole discretion, to up to 75,000 shares of our Common Stock per purchase; on any day
that the closing sale price of our Common Stock is not below $9.00 the purchase amount may be increased, at our sole
discretion, to up to 100,000 shares of our Common Stock per purchase; and on any day that the closing sale price of our
Common Stock is not below $11.00 the purchase amount may be increased, at our sole discretion, to up to 125,000 shares of our
Common Stock per purchase and on any day that the closing sale price of our Common Stock is not below $13.00 the purchase
amount may be increased, at our sole discretion, to up to 150,000 shares of our Common Stock per purchase. Such purchases are
hereinafter referred to as “Regular Purchases”. In no event shall Lincoln Park purchase more than $2,000,000
worth of our Common Stock pursuant to a Regular Purchase on any single business day. The purchase price per share for each
such Regular Purchase will be equal to the lower of:
•
the lowest sale price for our Common Stock on the purchase date of such shares; or
•
the arithmetic average of the three lowest closing sale prices for our Common Stock during the 10 consecutive business days ending
on the business day immediately preceding the purchase date of such shares.
In
addition to Regular Purchases described above, we may also direct Lincoln Park, on any business day on which we have properly
submitted a Regular Purchase notice, to purchase an additional amount of our Common Stock, which we refer to as an Accelerated
Purchase, not to exceed the lesser of:
•
30% of the aggregate shares of our Common Stock traded during normal trading hours on the purchase date; and
•
200% of the number of purchase shares purchased pursuant to the corresponding Regular Purchase.
The
purchase price per share for each such Accelerated Purchase will be equal to the lower of:
•
96% of the volume weighted average price during (i) the entire trading day on the purchase date, if the volume of shares of our
Common Stock traded on the purchase date has not exceeded a volume maximum calculated in accordance with the Purchase Agreement,
or (ii) the portion of the trading day of the purchase date (calculated starting at the beginning of normal trading hours) until
such time at which the volume of shares of our Common Stock traded has exceeded such volume maximum; or
•
the closing sale price of our Common Stock on the purchase date.
In
the case of both Regular Purchases and Accelerated Purchases, the purchase price per share will be equitably adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during
the business days used to compute the purchase price.
The
Purchase Agreement limits our sales of shares of Common Stock to Lincoln Park to the maximum number of shares of our Common Stock
that we may issue without breaching our obligations under applicable rules of the NASDAQ Stock Market (approximately 6,754,609
shares, or 19.99% of our total outstanding Common Stock upon entering into the Purchase Agreement) or obtaining stockholder approval
under such rules.
Other
than as set forth above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control
the timing and amount of any sales of our Common Stock to Lincoln Park.
Events
of Default
Events
of default under the Purchase Agreement include the following:
•
the effectiveness of the registration statement of which this prospectus forms a part lapses for any reason (including, without
limitation, the issuance of a stop order), or any required prospectus supplement and accompanying prospectus are unavailable for
the resale by Lincoln Park of our Common Stock offered hereby, and such lapse or unavailability continues for a period of 10 consecutive
business days or for more than an aggregate of 30 business days in any 365-day period;
•
suspension by our principal market of our Common Stock from trading for a period of three consecutive business days;
•
the delisting of the Common Stock from the OTCQB operated by the OTC Markets Group, Inc., provided, however, that the Common
Stock is not immediately thereafter trading on the New York Stock Exchange, The NASDAQ Capital Market, The NASDAQ Global
Market, The NASDAQ Global Select Market, the NYSE MKT, the NYSE Arca, the OTC Bulletin Board or the OTCQX operated by the OTC
Markets Group, Inc. (or nationally recognized successor to any of the foregoing). If at any time after the Commencement Date,
the Exchange Cap (as defined in the Purchase Agreement) is reached unless and until stockholder approval is obtained pursuant
to Section 2(e) of the Purchase Agreement. The Exchange Cap shall be deemed to be reached at such time if, upon submission of
a Regular Purchase Notice or Accelerated Purchase Notice under this Agreement, the issuance of such shares of Common Stock
would exceed that number of shares of Common Stock which the Company may issue under this Agreement without breaching the
Company’s obligations under the rules or regulations of the Principal Market (as defined in the Purchase
Agreement);
•
the transfer agent’s failure for three business days to issue to Lincoln Park shares of our Common Stock which Lincoln Park
is entitled to receive under the Purchase Agreement;
•
any breach of the representations or warranties or covenants contained in the Purchase Agreement or any related agreement which
has or which could have a material adverse effect on us subject to a cure period of five business days; and
•
any voluntary or involuntary participation or threatened participation in insolvency or bankruptcy proceedings by or against us;
and
•
if at any time we are not eligible to transfer our Common Stock electronically or a material adverse change in our business, financial
condition, operations or prospects has occurred.
Lincoln
Park does not have the right to terminate the Purchase Agreement upon any of the events of default set forth above. During an
event of default, all of which are outside of Lincoln Park’s control, shares of our Common Stock cannot be sold by us or
purchased by Lincoln Park under the Purchase Agreement.
Our
Termination Rights
We
have the unconditional right, at any time, for any reason and without any payment or liability to us, to give notice to Lincoln
Park to terminate the Purchase Agreement. In the event of bankruptcy proceedings by or against us, the Purchase Agreement will
automatically terminate without action of any party.
No
Short-Selling or Hedging by Lincoln Park
Lincoln
Park has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling or hedging of our
Common Stock during any time prior to the termination of the Purchase Agreement.
Effect
of Performance of the Purchase Agreement on Our Stockholders
All
the shares of our Common Stock registered in this offering which may be sold by us to Lincoln Park under the Purchase Agreement
are expected to be freely tradable. It is anticipated that shares registered in this offering will be sold over a period of up
to 36 months commencing on the date that the registration statement including this prospectus becomes effective. The sale by Lincoln
Park of a significant amount of shares registered in this offering at any given time could cause the market price of our Common
Stock to decline and to be highly volatile. Lincoln Park may ultimately purchase all, some or none of the shares of Common Stock
registered in this offering that Lincoln Park has not previously purchased. Lincoln Park may sell all, some or none of the shares
it has purchased or will purchase under the Purchase Agreement. Therefore, sales to Lincoln Park by us under the Purchase Agreement
may result in substantial dilution to the interests of other holders of our Common Stock. In addition, if we sell a substantial
number of shares to Lincoln Park under the Purchase Agreement, or if investors expect that we will do so, the actual sales of
shares or the mere existence of our arrangement with Lincoln Park may make it more difficult for us to sell equity or equity-related
securities in the future at a time and at a price that we might otherwise wish to effect such sales. However, we have the right
to control the timing and amount of any sales of our shares to Lincoln Park and the Purchase Agreement may be terminated by us
at any time at our discretion without any cost to us.
Pursuant
to the terms of the Purchase Agreement, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $50,000,000
of our Common Stock, exclusive of the 179,598 shares issued to Lincoln Park as a commitment fee. Depending on the price per share
at which we sell our Common Stock to Lincoln Park, we may be authorized to issue and sell to Lincoln Park under the Purchase Agreement
more shares of our Common Stock than are offered under this prospectus. If we choose to do so, we must first register for resale
under the Securities Act any such additional shares, which could cause additional substantial dilution to our stockholders. The
number of shares ultimately offered for resale by Lincoln Park under this prospectus is dependent upon the number of shares we
direct Lincoln Park to purchase under the Purchase Agreement.
The
following table sets forth the amount of gross proceeds we would receive from Lincoln Park from our sale of shares to Lincoln
Park under the Purchase Agreement registered in this offering at varying purchase prices:
Assumed
Average Purchase Price Per Share
|
|
Number
of Registered Shares to be Issued if Full Purchase
(1)(2)
|
|
Percentage
of Outstanding Shares After Giving Effect to the Issuance to Lincoln Park
(3)(5)
|
|
Proceeds
from the Sale of Shares to Lincoln Park Under the $50,000,000 Purchase Agreement
|
$1.00
|
|
|
6,485,212
|
|
15.34%
|
|
|
$6,485,212
|
|
|
|
|
|
|
|
|
|
$2.00
|
|
|
6,485,212
|
|
15.34%
|
|
|
$12,970,424
|
|
|
|
|
|
|
|
|
|
$3.04
(4)
|
|
|
6,485,212
|
|
15.34%
|
|
|
$19,715,044
|
|
|
|
|
|
|
|
|
|
$5.00
|
|
|
6,485,212
|
|
15.34%
|
|
|
$32,426,060
|
|
|
|
|
|
|
|
|
|
$10.00
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|
|
5,000,000
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12.25%
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|
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$50,000,000
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(1)
Although the Purchase Agreement provides that we may sell up to $50,000,000 of our Common Stock to Lincoln Park, we are initially
registering 6,754,609 shares (inclusive of the 179,598 initial commitment shares issued to Lincoln Park and the 89,799 additional
commitment shares that may be issued to Lincoln Park as a commitment fee), which may or may not cover all the shares we ultimately
sell to Lincoln Park under the Purchase Agreement, depending on the purchase price per share. As a result, we have included in
this column only those shares that we have initially reserved.
(2)
The number of registered shares to be issued excludes the 179,598 initial commitment shares that have been issued and 89,799 additional
commitment shares that may be issued to Lincoln Park because no proceeds will be attributable to such commitment shares.
(3)
The denominator is based on 35,710,862 shares outstanding as of August 30, 2016, adjusted to include the 179,598 shares issued
and to be issued to Lincoln Park as initial commitment shares in connection with this offering and the number of shares set forth
in the adjacent column which we would have sold to Lincoln Park at the applicable assumed average purchase price per share. The
numerator does not include the 179,598 shares issued to Lincoln Park as initial commitment shares in connection with this offering,
or the 89,799 additional commitment shares that may be issued to Lincoln Park pro rata, and is based on the number of shares registered
in this offering to be issued under the Purchase Agreement at the applicable assumed purchase price per share set forth in the
adjacent column. The number of shares in such column does not include shares that may be issued to Lincoln Park under the Purchase
Agreement which are not registered in this offering.
(4)
The closing price of our Common Stock on August 30, 2016.
(5)
If we seek to issue shares, including shares from other transactions but not included in this offering that may be aggregated
with this transaction under the applicable rules of the NASDAQ Stock Market, in excess of 6,754,609, or 19.99% of the total Common
Stock outstanding as of the date of the Purchase Agreement, we may be required to seek stockholder approval in order to be in
compliance with the rules of the NASDAQ Stock Market.
DESCRIPTION
OF OUR CAPITAL STOCK
Common
Stock
We
are authorized to issue 100,000,000 shares of Common Stock with a par value of $0.001. As at August 30, 2016 we had 35,710,862
common shares outstanding. Upon liquidation, dissolution or winding up of the corporation, the holders of Common Stock are entitled
to share ratably in all net assets available for distribution to stockholders after payment to creditors. The Common Stock is
not convertible or redeemable and has no preemptive, subscription or conversion rights. There are no conversion, redemption, sinking
fund or similar provisions regarding the Common Stock. Each outstanding share of Common Stock is entitled to one vote on all matters
submitted to a vote of stockholders. There are no cumulative voting rights.
Each
stockholder is entitled to receive the dividends as may be declared by our board of directors out of funds legally available for
dividends and, in the event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities.
Our board of directors is not obligated to declare a dividend. Any future dividends will be subject to the discretion of our board
of directors and will depend upon, among other things, future earnings, the operating and financial condition of our Company,
its capital requirements, general business conditions and other pertinent factors. It is not anticipated that dividends will be
paid in the foreseeable future.
On
October 7, 2015, the Company effected a reverse stock split at a ratio of 1 for 4, whereby every 4 shares of Common Stock became
1 share of Common Stock. The authorized shares of Common Stock of the Company were therefore proportionally reduced from 400,000,000
to 100,000,000.
Our
Common Stock is quoted on the Nasdaq Capital Market under the trading symbol “AVXL”. On August 30, 2016, the last
reported sale price of our Common Stock was $3.04 per share.
Nevada
Anti-Takeover Law and Charter and Bylaws Provisions
Nevada
Revised Statutes sections 78.378 to 78.3793 provide state regulation over the acquisition of a controlling interest in certain
Nevada corporations unless the articles of incorporation or bylaws of the corporation provide that the provisions of these sections
do not apply. The statute creates a number of restrictions on the ability of a person or entity to acquire control of a Nevada
company by setting down certain rules of conduct and voting restrictions in any acquisition attempt, among other things. The statute
is limited to corporations that are organized in the state of Nevada and that have 200 or more shareholders, at least 100 of whom
are shareholders of record and residents of the State of Nevada; and do business in the State of Nevada directly or through an
affiliated corporation. Because of these conditions, the statute does not apply to our Company.
There
are no provisions in our articles of incorporation or our bylaws that would delay, defer or prevent a change in control of our
Company.
DESCRIPTION
OF WARRANTS
We
may issue Warrants from time to time in one or more series for the purchase of our Common Stock. Warrants may be issued independently
or together with any shares of Common Stock or offered by any prospectus supplement and may be attached to or separate from Common
Stock. Each series of Warrants may be issued under a separate warrant agreement to be entered into between us and a warrant agent,
or any other bank or trust company specified in the related prospectus supplement relating to the particular issue of Warrants.
A warrant agent may act as our agent in connection with the Warrants and would not assume any obligation or relationship of agency
or trust for or with any holders of Warrants or beneficial owners of Warrants. The specific terms of any series of Warrants will
be described in the applicable prospectus supplement relating to that series of Warrants along with any general provisions applicable
to that series of warrants.
The
following is a general description of the Warrants we may issue. The applicable prospectus supplement will describe the specific
terms of any issuance of Warrants. The terms of any Warrants we offer may differ from the terms described in this prospectus.
As a result, we will describe in the prospectus supplement the specific terms of the particular series of Warrants offered by
that prospectus supplement. Accordingly, for a description of the terms of a particular series of Warrants, you should carefully
read this prospectus, the applicable prospectus supplement, and the applicable warrant agreement, which will be filed as an exhibit
to the registration statement of which this prospectus forms a part.
Terms
.
If Warrants are offered by us, the prospectus supplement will describe the terms of the Warrants, including the following
if applicable to the particular offering:
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the
title of the Warrants;
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the
total number of Warrants;
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•
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the
number of shares of Common Stock purchasable upon exercise of the Warrants to purchase Common Stock and the price at which
such shares of Common Stock may be purchased upon exercise;
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the
date on and after which the Warrants and the related Common Stock will be separately transferable;
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if
applicable, the date on which the right to exercise the Warrants will commence and the date on which this right will expire;
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if
applicable, the minimum or maximum amount of the Warrants which may be exercised at any one time;
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a
discussion of federal income tax, accounting and other special considerations, procedures and limitations relating to the
Warrants; and
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any
other terms of the Warrants including terms, procedures and limitations relating to the exchange and exercise of the Warrants.
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Warrants
may be exchanged for new warrants of different denominations, may be presented for registration of transfer, and may be exercised
at our principal executive office, the warrant agent or any other office indicated in the prospectus supplement.
Before
the exercise of their Warrants, holders of Warrants will not have any of the rights of holders of shares of Common Stock, including
the right to receive payments of dividends, if any, on the shares of Common Stock or to exercise any applicable right to vote.
Exercise
of Warrants.
Each Warrant will entitle the holder to purchase a number of shares of Common Stock at an exercise price as will
in each case be described in, or calculable from, the prospectus supplement relating to those Warrants. Warrants may be exercised
at the times set forth in the prospectus supplement relating to the Warrants. After the close of business on the expiration date
(or any later date to which the expiration date may be extended by us), unexercised Warrants will become void. Subject to any
restrictions and additional requirements that may be set forth in the prospectus supplement relating thereto, Warrants may be
exercised by delivery to the warrant agent, or at our principal executive office or any other office indicated in the prospectus
supplement, of the certificate evidencing the Warrants properly completed and duly executed, and of payment as provided in the
prospectus supplement of the amount required to purchase the shares of Common Stock purchasable upon such exercise. The exercise
price will be the price applicable on the date of payment in full, as set forth in the prospectus supplement relating to the Warrants.
Upon receipt of the payment, and the certificate representing the Warrants to be exercised properly completed and duly executed
at our principal executive office, the warrant agent or any other office indicated in the prospectus supplement, we will, as soon
as practicable, issue and deliver the shares of Common Stock purchasable upon such exercise. If fewer than all of the Warrants
represented by that certificate are exercised, a new certificate will be issued for the remaining amount of Warrants.
The
description in the applicable prospectus supplement and other offering material of any Warrants we offer will not necessarily
be complete and will be qualified in its entirety by reference to the applicable warrant agreement, which will be filed with the
SEC if we offer Warrants. For more information on how you can obtain copies of the applicable warrant agreement if we offer Warrants,
see “Where You Can Find More Information”. We urge you to read the applicable warrant agreement and the applicable
prospectus supplement in their entirety.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus has been passed upon for us by Snell & Wilmer, L.L.P., Reno, Nevada.
If legal matters in connection with offerings made pursuant to this prospectus are passed upon by counsel for the underwriters,
dealers or agents, if any, such counsel will be named in the prospectus supplement relating to such offering.
EXPERTS
The
financial statements as of September 30, 2015 and 2014 and for each of the two years in the period ended September 30, 2015 incorporated
by reference in this prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered
public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
Insofar
as indemnification for liabilities arising under the Securities Act, as amended, may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the Company’s constituent documents, or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer, or controlling person in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling person connected with the securities being registered,
we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
Anavex
Life Sciences Corp.
Up
to $9,711,390
Common
Stock
PROSPECTUS
SUPPLEMENT
March 15, 2019
Anavex Life Sciences (NASDAQ:AVXL)
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From Aug 2024 to Sep 2024
Anavex Life Sciences (NASDAQ:AVXL)
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From Sep 2023 to Sep 2024