10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2012

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to________________

Commission file number: 000-51652

ANAVEX LIFE SCIENCES CORP.
(Exact name of registrant as specified in its charter)

Nevada	20-8365999
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1620 – 609 Granville Street, Vancouver BC Canada	V7Y 1C3
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 1-800-689-3939

Securities registered under Section 12(b) of the Act:

None	N/A
Title of each class	Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes[   ]     No[X]

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes[   ]     No [X]

Indicate by checkmark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes[X]     No[   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes[X]     No[   ]

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Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]		Accelerated filer                   [   ]
Non-accelerated filer   [   ]	(Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes[   ]     No[X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $25,213,463 based on a price of $1.25 per share, being the closing price of the registrant’s common stock on March 30, 2012.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 30,240,687 issued and outstanding as of December 28, 2012.

DOCUMENTS INCORPORATED BY REFERENCE

None

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TABLE OF CONTENTS

PART I
Item 1.	Business
Item 1A.	Risk Factors
Item 1B.	Unresolved Staff Comments
Item 2.	Properties.
Item 3.	Legal Proceedings.
Item 4.	Mine safety disclosures.
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6.	Selected Financial Data
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk.
Item 8.	Financial Statements and Supplementary Data.
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
Item 9A	Controls and Procedures
Item 9B	Other Information
PART III
Item 10.	Directors, Executive Officers and Corporate Governance
Item 11.	Executive Compensation.
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.	Certain Relationships and Related Transactions, and Director Independence

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Item 14.	Principal Accountant Fees and Services
PART IV
Item 15.	Exhibits and Financial Statement Schedules
Signatures

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Forward Looking Statements.

This Annual Report on Form 10-K includes forward-looking statements. All statements other than statements of historical facts contained in this Annual Report on Form 10-K, 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” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such forward-looking statements include, without limitation, statements regarding the anticipated start dates, durations and completion dates of our ongoing and future clinical studies, statements regarding the anticipated designs of our future clinical studies, statements regarding our anticipated future regulatory submissions and statements regarding our anticipated future cash position. 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 this Annual Report on Form 10-K. These risks are not exhaustive. Other sections of this Annual Report on Form 10-K include additional factors which could adversely impact our business and financial performance. Moreover, 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 and Canada, we assume no obligation to update or supplement forward-looking statements.

As used in this annual report, the terms “we”, “us”, “our”, and “Anavex” mean Anavex Life Sciences Corp., unless the context clearly requires otherwise.

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PART I

ITEM 1. BUSINESS

Our Current Business

We are a pharmaceutical company engaged in the development of drug candidates. Our lead compound ANAVEX 2-73, developed to treat Alzheimer’s disease through disease modification, is in human clinical trials.

In pre-clinical studies conducted in France, and in Greece, ANAVEX 2-73 demonstrated anti-amnesic and neuroprotective properties.

Based on these preclinical studies, we sponsored a Phase 1 single ascending dose study of ANAVEX 2-73 initiated and completed in 2011. This study was conducted in Germany in collaboration with ABX-CRO Advanced Pharmaceutical Services (ABX-CRO). The study indicated that ANAVEX 2-73 was well tolerated by study subjects in doses up to 55mg.

Despite success in trials to date, and due principally to insufficient capital to support operations and development of our pipeline, we have been unable to attract and retain executive management, particularly a chief executive officer, who has experience leading a development stage pharmaceutical company. For this reason, we intend to defer most of our research activity until expert management evaluates our progress and proposes an appropriate course of action, and until there is sufficient capital on hand to effect management’s plan of action.

In considering several different means of accomplishing our goal of commercializing drug candidates, we have determined that pursuing a strategic relationship with a partner, partners, or an acquirer with capable management and sufficient capital to sponsor trials is our best course of action at this time.

We intend to identify and initiate discussions with potential partners and acquirers 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 drug candidate in human clinical trials, and several compounds in different stages of preclinical study.

Our proprietary SIGMACEPTOR™ Discovery Platform produced small molecule drug candidates with unique modes of action, based on our leading 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:

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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 behavioural 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.

Based on the results of preclinical 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 central nervous system (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.

ANAVEX 19-144

ANAVEX 19-144 is the sole active metabolite of ANAVEX 2-73. Like ANAVEX 2-73, preclinical data reveals that ANAVEX 19-144 exhibits significant anti-amnesic, neuroprotective and anticonvulsant properties in a variety of in vitro systems and specialized animal models.

In animal models, ANAVEX 19-144 controls seizures and the epileptogenesis process. Moreover, its neuroprotective properties may prevent the process that causes long-term damage to tissue and cells as well as biochemical and physiological alterations to the brain from epileptic seizures.

ANAVEX 1-41

ANAVEX 1-41 is a sigma-1 agonist. Preclinical 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

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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 7-1037

ANAVEX 7-1037 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 preclinical 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 2012, 5 million Americans suffer from Alzheimer’s disease. The Alzheimer’s Association® reports that by 2025, 6.7 million Americans will be afflicted by the disease. 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 a disease modifying cure for Alzheimer’s disease.
• 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. We believe the worldwide market for pharmaceutical treatment of depression exceeds $11 billion annually.
• 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

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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 generations anti epileptic drugs. We believe the American market for pharmaceutical treatment of epilepsy exceeds $12 billion annually.
• 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. We believe the worldwide market for pharmaceutical treatment of neuropathic pain exceeds $5 billion annually.
• 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. We believe the worldwide market for the pharmaceutical treatment of malignant melanoma exceeds $200 million annually.
• 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. We believe the worldwide market for the pharmaceutical treatment of prostate cancer exceeds $4 billion annually.
• Pancreatic Cancer - Pancreatic cancer is a malignant neoplasm of the pancreas. In the United States approximately 42,000 new cases of pancreatic cancer were diagnosed and approximately 35,000 patients died in 2009 as a result of their cancer. We believe the worldwide market for the pharmaceutical treatment of pancreatic cancer is approximately $700 million annually.

Competition

The pharmaceutical industry is intensely competitive.

At this time, we view our competition as biomedical development companies that are trying to discover and develop compounds to be used in the treatment of Alzheimer’s disease, and those companies already doing so. Those companies include Prana Biotechnology Limited (NASDAQ:PRAN), Elan Corporation, PLC (NYSE:ELN), Pfizer Inc. (NYSE:PFE), Forest Pharmaceuticals, Inc. (NYSE:FRX), Novartis AG (NYSE:NVS), GlaxoSmithKline Inc. (NYSE:GSK), Merck & Co., Inc. (NYSD:MRK), Ranbaxy Laboratories Limited (BSE:500359) and F. Hoffman-La Roche Ltd. (SIX:ROG).

Each of our competitors have greater capital resources, larger overall research and development staffs and facilities, and a longer history in drug discovery and development, obtaining regulatory approval, and pharmaceutical product manufacturing and marketing than we do. With these additional resources, our competitors will be able to respond to the rapid and significant technological changes in the biotechnology and pharmaceutical industries faster than we can. Our future success will depend in large

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part on our ability to acquire funding for our research and development. To continue to acquire funding for our research and development, we will likely have to show progress toward our goals and we will eventually be expected to develop a compound that may result in a transaction with another pharmaceutical company.

Our research and development is highly speculative and we may never discover or develop any compounds that we are capable of selling.

Rapid technological development, as well as new scientific developments, and economic circumstances may result in our compounds becoming obsolete before we can recover any of the expenses incurred to develop them.

Patents, Trademarks and Intellectual Property

We own several patents, and have filed for intellectual property protection in several jurisdictions. Further information concerning our patents, trademarks, and intellectual property may be found as a matter of record in patent offices and with intellectual property registration organizations including: the Greek National Office of Industrial Property, the United States Patent and Trademark Office, and the World Intellectual Property Organization.

Patents we currently own include:

Patent Number	Jurisdiction	Filing and Expiration Dates	Invention Title
1002616	Greece	February 21, 1996 February 22, 2016	Synthesis and method of synthesis of a molecular (AE 37) of anticonvulsant, antidepressant and neuroleptic tropic action.
1004208	Greece	October 15, 2001 October 14, 2021	AMINOTETRAHYDROFURAN DERIVATIVES, MUSCARINIC/SIGMA/SODIUM CHANNEL LIGANDS, WITH SYNERGIC SIGMA/MUSCARINIC (NEUROACTIVATING) AND SIGMA/SODIUM CHANNEL (NEUROPROTECTIVE) COMPONENTS, AS PROTOTYPICAL ACTIVATING - NEUROPROTECTORS AND NEUROREGENERATIVE DRUGS
1004868	Greece	April 22, 2003 April 21, 2023	AMINOTETRAHYDROFURAN DERIVATIVES, MUSCARINIC/SIGMA/SODIUM CHANNEL LIGANDS, ORTHO-AND ALLO-STERICALLY OPERATING, AS PROTOTYPICAL NEUROMEODULATING AND NEUROREGENERATIVE DRUGS.
1005865	Greece	January 17, 2007 January 16, 2027	NEW SIGMA LIGANDS with anti-apoptotic and/or pro-apoptotic action on the cells biochemical mechanisms and neuroprotective, anti-cancer, anti- metastatic, and anti-chronic inflammatory properties.
1006794	Greece	February 26, 2009 February 27, 2029	THE NEW SIGMA(σ)-RECEPTOR LIGANDS WITH ANTI- APOPTOTIC AND/OR PRO-APOPTOTIC PROPERTIES OVER CELLULAR BIOCHEMICAL MECHANISMS, WITH

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			NEUROPROTECTIVE, ANTI-CANCER, ANTI- METASTATIC AND ANTI-(CHRONIC) INFLAMMATORY ACTION.
1007686	Greece	July 8, 2011 July 9, 2031	SYNTHESIS OF (+)- AND (-)-1-(5,5- DIPHENYLTETRAHYDROFURAN-3-YL)-N,N- DIMETHYLMETHYLAMINE, (+)-AND (-)-1-(2,2- DIPHENYLTETRAHYDROFURAN-3-YL)-N,N- DIMETHYLMETHYLAMINE AND (+)- AND (-)-1-(2,2- DIPHENYLTETRAHYDROFURAN-3-YL)-N- METHYLMETHYLAMINE
1007322	Greece	March 9, 2010 March 10, 2030	SYNTHESIS OF 1-METHYL-4-[4,4-DIPHENYL-4-(1- ADAMANTYL)-BUTYL] PIPERAZINE AND ANALOGUES THEREOF WITH ANTI-CANCER PROPERTIES

We regard patents and other proprietary technology rights as corporate assets. Accordingly, we attempt to optimize the value of intellectual property in developing our business strategy including the selective development, protection, and exploitation of our intellectual property rights.

In addition to filings made with intellectual property organizations, we protect our intellectual property and confidential information by means of carefully considered processes of communication and the sharing of information, and by the use of confidentiality and non-disclosure agreements and provisions for the same in contractor’s agreements. While no agreement offers absolute protection, each agreement provides us with some form of recourse in the event of disclosure, or anticipated disclosure. Each of our officers, directors, and third-party contractors is bound by an agreement.

Our patent position, like that of many biomedical companies, is uncertain and involves complex legal and technical questions for which important legal principles are unresolved. Our intellectual property is filed with the Greek National Office of Industrial Property. We may file additional patent applications in the United States, or in other jurisdictions for further inventions. We may not be successful in obtaining critical claims or in protecting our potential drug compounds or processes. Even if we do obtain patents, they may not adequately protect the technology we own or have licensed. In addition, others may challenge, seek to invalidate, infringe or circumvent any patents we own or license, and rights we receive under those patents may not provide competitive advantages to us. Further, the manufacture, use or sale of our potential drug compounds may infringe the patent rights of others.

Our success will also depend in part on our ability to commercialize our compounds without infringing the proprietary rights of others. We have not conducted extensive freedom of use patent searches and no assurance can be given that patents do not exist or could not be filed which would have an adverse affect on our ability to market our technology or maintain our competitive position with respect to our technology. If our compounds or other subject matter are claimed under other existing United States or other patents or are otherwise protected by third party proprietary rights, we may be subject to infringement actions. In such event, we may challenge the validity of such patents or other proprietary rights or we may be required to obtain licenses from such companies in order to develop, manufacture or market our technology. There can be no assurances that we would be able to obtain such licenses or

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that such licenses, if available, could be obtained on commercially reasonable terms. Furthermore, the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing all of our potential drug compounds based on our drug technology or the inability to proceed with the development, manufacture or sale of potential drug compounds requiring such licenses, which could have a material adverse affect on our business, financial condition and results of operations. If we defend ourselves against charges of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred regardless of whether we are successful. Such proceedings are typically protracted with no certainty of success. An adverse outcome could subject us to significant liabilities to third parties and force us to curtail or cease our research and development of our technology.

Government Approval

Regulation by governmental authorities in the United States and foreign countries is a significant factor in the development, manufacture, and expected marketing of our potential drug compounds and in potential future research and development activities. The nature and extent to which such regulation will apply to us will vary depending on the nature of any potential drug compounds developed. We anticipate that all of our potential drug compounds will require regulatory approval by governmental agencies prior to commercialization.

In particular, human therapeutic products are subject to rigorous non-clinical and clinical testing and other approval procedures of the FDA and similar regulatory authorities in other countries. Various federal statutes and regulations also govern or influence testing, manufacturing, safety, labeling, storage, and record-keeping related to such products and their marketing. The process of obtaining these approvals and the subsequent compliance with the appropriate federal statutes and regulations requires substantial time and financial resources. Any failure by us or our collaborators to obtain, or any delay in obtaining, regulatory approval could adversely affect the marketing of any potential drug compounds developed by us, our ability to receive product revenues, and our liquidity and capital resources.

The steps ordinarily required before a new drug may be marketed in the United States, which are similar to steps required in most other countries, include:

• non-clinical laboratory tests, non-clinical studies in animals, formulation studies and the submission to the FDA of an investigational new drug application;
• adequate and well-controlled clinical trials to establish the safety and efficacy of the drug;
• the submission of a new drug application or biologic license application to the FDA; and
• FDA review and approval of the new drug application or biologics license application.

Non-clinical tests include laboratory evaluation of potential drug compound chemistry, formulation and toxicity, as well as animal studies. The results of non-clinical testing are submitted to the FDA as part of an investigational new drug application. A 30-day waiting period after the filing of each investigational new drug application is required prior to commencement of clinical testing in humans. At any time

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during the 30-day period or at any time thereafter, the FDA may halt proposed or ongoing clinical trials until the FDA authorizes trials under specified terms. The investigational new drug application process may be extremely costly and substantially delay the development of our potential drug compounds. Moreover, positive results of non-clinical tests will not necessarily indicate positive results in subsequent clinical trials. The FDA may require additional animal testing after an initial investigational new drug application is approved and prior to Phase III trials.

Clinical trials to support new drug applications are typically conducted in three sequential phases, although the phases may overlap. During Phase I, clinical trials are conducted with a small number of subjects to assess metabolism, pharmacokinetics, and pharmacological actions and safety, including side effects associated with increasing doses. Phase II usually involves studies in a limited patient population to assess the efficacy of the drug in specific, targeted indications; assess dosage tolerance and optimal dosage; and identify possible adverse effects and safety risks.

If a compound is found to be potentially effective and to have an acceptable safety profile in Phase I and II evaluations, Phase III trials are undertaken to further demonstrate clinical efficacy and to further test for safety within an expanded patient population at geographically dispersed clinical trial sites.

After successful completion of the required clinical trials, a new drug application is generally submitted. The FDA may request additional information before accepting the new drug application for filing, in which case the new drug application must be resubmitted with the additional information. Once the submission has been accepted for filing, the FDA reviews the new drug application and responds to the applicant. The FDA’s requests for additional information or clarification often significantly extends the review process. The FDA may refer the new drug application to an appropriate advisory committee for review, evaluation, and recommendation as to whether the new drug application should be approved, although the FDA is not bound by the recommendation of an advisory committee.

Sales outside the United States of potential drug compounds we develop will also be subject to foreign regulatory requirements governing human clinical trials and marketing for drugs. The requirements vary widely from country to country, but typically the registration and approval process takes several years and requires significant resources. In most cases, if the FDA has not approved a potential drug compound for sale in the United States, the potential drug compound may be exported for sale outside of the United States, only if it has been approved in any one of the following: the European Union, Canada, Australia, New Zealand, Japan, Israel, Switzerland and South Africa. There are specific FDA regulations that govern this process.

We may also become subject to various federal, state, local, and foreign laws, regulations and recommendations relating to safe working conditions, laboratory and manufacturing practices, and the use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research. We cannot accurately predict the extent of government regulation that might result from future legislation or administrative action.

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Research and Development Expenses

A significant portion of our operating expenses is related to research and development. See Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for costs and expenses related to research and development, and other financial information for fiscal years 2012 and 2011.

Scientific Advisors

We are advised by scientists and physicians with experience relevant to our company and our product candidates. In the past twelve months, our advisors included Alexandre Vamvakides, Ph.D., Tangui Nicolas Maurice, Ph.D., Christopher Missling, Ph.D., Dr. Diego Garzon, Ph.D., Dr. Paul Aisen, Dr. Rachelle Doody, and Dr. Jeffrey Cummings.

Officers

One of our directors is engaged as a consultant who acts for our company in the capacity of president, secretary, chief operating officer and chief financial officer.

ITEM 1 A. RISK FACTORS

In addition to other information in this annual report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition. As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements. Additional risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, operating results, liquidity and financial condition. If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, the trading price of our securities could decline, and you may lose all or part of your investment.

Risks Related to our Company

We have had a history of losses and no revenue, which raise substantial doubt about our ability to continue as a going concern.

Since inception on January 23, 2004, we have incurred aggregate net losses of $36,954,122 from operations. We can offer no assurance that we will ever operate profitably or that we will generate positive cash flow in the future. To date, we have not generated any revenues from our operations. Our history of losses and no revenues raise substantial doubt about our ability to continue as a going concern. As a result, our management expects the business to continue to experience negative cash flow for the foreseeable future and cannot predict when, if ever, our business might become profitable. We will need to raise additional funds or partner with a well capitalized organization. Neither funds, nor

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partnership may be available on commercially acceptable terms. If we are unable to raise funds or partner, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. This may seriously harm our business, financial condition and results of operations.

We are an early development stage pharmaceutical research and development company and may never be able to successfully develop marketable products or generate any revenue. We have a very limited relevant operating history upon which an evaluation of our performance and prospects can be made. There is no assurance that our future operations will result in profits. If we cannot generate sufficient revenues, we may suspend or cease operations.

We are an early development stage company and have not generated any revenues to date and have no operating history. All of our potential drug compounds are in the concept stage or early clinical development stage. Moreover, we cannot be certain that our research and development efforts will be successful or, if successful, that our potential drug compounds will ever be approved for sales to pharmaceutical companies or will ever generate commercial revenues. We have no relevant operating history upon which an evaluation of our performance and prospects can be made. We are subject to all of the business risks associated with a new enterprise, including, but not limited to, risks of unforeseen capital requirements, failure of potential drug compounds either in non-clinical testing or in clinical trials, failure to establish business relationships and competitive disadvantages as against larger and more established companies. If we fail to become profitable, we may suspend or cease operations.

We will need additional funding and may be unable to raise additional capital when needed, which would force us to delay, reduce or eliminate our research and development activities.

We will need to raise additional funding, but the current economic condition will most likely have a negative impact on our ability to raise additional needed capital on terms that are favorable to our company or at all. We do not anticipate that we will generate significant revenues for several years, if at all. Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through equity or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of, or eliminate one or more of our research and development activities.

We may not be able to attract and retain qualified and experienced directors and executive officers necessary to continue operations. If suitable directors and officers cannot be attracted and retained we may cease operations, and we may cease or delay our market disclosures, in which case our securities will have little or no value.

We require skilled and experienced directors and executive officers to continue our operations and to achieve our business plans. Skills and qualifications include both specific pharmaceutical industry, and general corporate knowledge and experience. Due in part to our history of raising capital, and the value of our assets relative to our liabilities we have been unsuccessful in attracting and retaining directors and executive officers. We have deferred decisions concerning research activity spending until adequately skilled and qualified directors and officers are appointed. If directors and officers are not

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appointed, the company may cease spending, discontinue operations entirely, and indefinitely delay filings made to regulators including the United States Securities and Exchange Commission. Should any one, or any combination of these factors be realized you would likely suffer a complete loss of your investment in our securities.

We may be unable to continue as a going concern in which case our securities will have little or no value.

Our independent auditors have noted in their report concerning our annual financial statements for the fiscal year ended September 30, 2012 that we have incurred substantial losses since inception, which raises substantial doubt about our ability to continue as a going concern. In the event we are not able to continue operations you will likely suffer a complete loss of your investment in our securities.

Risks Related to our Business

Even if we are able to develop potential drug compounds, we may not be able to receive regulatory approval, or if approved, we may not be able to generate significant revenues or successfully commercialize our products, which will adversely affect our financial results and financial condition and we will have to delay or terminate some or all of our research and development plans and we may be forced to cease operations.

All of our potential drug compounds will require extensive additional research and development, including non-clinical testing and clinical trials, as well as regulatory approvals, before we can market them. We cannot predict if or when any potential drug compounds will be approved for marketing. There are many reasons that we may fail in our efforts to develop our potential drug compounds. These include:

• the possibility that non-clinical testing or clinical trials may show that our potential drug compounds are ineffective or cause harmful side effects;
• our potential drug compounds may prove to be too expensive to manufacture or administer to patients;
• our potential drug compounds may fail to receive necessary regulatory approvals from the United States Food and Drug Administration or foreign regulatory authorities in a timely manner, or at all;
• even if our potential drug compounds are approved, we may not be able to produce them in commercial quantities or at reasonable costs;
• even if our potential drug compounds are approved, they may not achieve commercial acceptance;
• regulatory or governmental authorities may apply restrictions to any of our potential drug compounds, which could adversely affect their commercial success; and
• the proprietary rights of other parties may prevent us or our potential collaborative partners from marketing our potential drug compounds.

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If we fail to develop potential drug compounds, our financial results and financial condition will be adversely affected, we will have to delay or terminate some or all of our research and development plans and may be forced to cease operations.

Our research and development plans will require substantial additional management expertise and future funding which could impact our operational and financial condition. Without sufficient expertise and additional funds, we will likely cease operations.

It will take several years before we are able to develop potentially marketable products, if at all.

Research and development requires substantial additional capital, arising from costs to:

• conduct research, non-clinical testing and human studies;
• establish pilot scale and commercial scale manufacturing processes and facilities; and
• establish and develop quality control, regulatory, marketing, sales, finance and administrative capabilities to support these programs.

Our future operating and capital needs will depend on many factors, including:

• the pace of scientific progress in our research and development programs and the magnitude of these programs;
• the scope and results of preclinical testing and human studies;
• the time and costs involved in obtaining regulatory approvals;
• the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims;
• competing technological and market developments;
• our ability to establish additional collaborations;
• changes in our existing collaborations;
• the cost of manufacturing scale-up; and
• the effectiveness of our commercialization activities.

We base our outlook regarding the need for funds on many uncertain variables. Such uncertainties include the success of our research initiatives, regulatory approvals, the timing of events outside our direct control such as negotiations with potential strategic partners and other factors. Any of these uncertain events can significantly change our cash requirements as they determine such one-time events as the receipt or payment of major milestones and other payments.

Additional funds will be required to support our operations and if we are unable to obtain them on favorable terms, we may be required to cease, delay, or reduce further research and development of our drug product programs, assign, license, or transfer some or all of our intellectual property, merge with another entity or cease operations.

If we fail to demonstrate efficacy in our non-clinical studies and clinical trials our future business prospects, financial condition and operating results will be materially adversely affected.

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The success of our research and development efforts will be greatly dependent upon our ability to demonstrate potential drug compound efficacy in non-clinical studies, as well as in clinical trials. Non-clinical studies involve testing potential drug compounds in appropriate non-human disease models to demonstrate efficacy and safety. Regulatory agencies evaluate these data carefully before they will approve clinical testing in humans. If certain non-clinical data reveals potential safety issues or the results are inconsistent with an expectation of the potential drug compound’s efficacy in humans, the regulatory agencies may require additional more rigorous testing, before allowing human clinical trials. This additional testing will increase program expenses and extend timelines. We may decide to suspend further testing on our potential drug compounds at any time if, in our judgment, the results do not support further development.

Moreover, success in non-clinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and non-clinical testing. The clinical trial process may fail to demonstrate that our potential drug compounds are safe for humans and effective for indicated uses. This failure may cause us to abandon a drug candidate and may delay development of other potential drug compounds. Any delay in, or termination of, our non-clinical testing or clinical trials will delay the filing of an investigational new drug application and new drug application with the Food and Drug Administration or the equivalent applications with pharmaceutical regulatory authorities outside the United States and, ultimately, our ability to commercialize our potential drug compounds and generate product revenues. In addition, we expect that our early clinical trials will involve small patient populations. Because of the small sample size, the results of these early clinical trials may not be indicative of future results.

Following successful non-clinical testing, potential drug compounds will need to be tested in a clinical development program to provide data on safety and efficacy prior to becoming eligible for product approval and licensure by regulatory agencies. From the first human trial through to regulatory approval can take many years and 10-12 years is not unusual for certain compounds.

If any of our future clinical development potential drug compounds become the subject of problems, our ability to sustain our development programs will become critically compromised. For example, efficacy or safety concerns may arise, whether or not justified, that could lead to the suspension or termination of our clinical programs. Examples of problems that could arise include, among others:

• efficacy or safety concerns with the potential drug compounds, even if not justified;
• manufacturing difficulties or concerns;
• regulatory proceedings subjecting the potential drug compounds to potential recall;
• publicity affecting doctor prescription or patient use of the potential drug compounds;
• pressure from competitive products; or
• introduction of more effective treatments.

Each clinical phase is designed to test attributes of the drug and problems that might result in the termination of the entire clinical plan can be revealed at any time throughout the overall clinical

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program. The failure to demonstrate efficacy in our clinical trials would have a material adverse effect on our future business prospects, financial condition and operating results.

If we do not obtain the support of qualified scientific collaborators, our revenue, growth and profitability will likely be limited, which would have a material adverse effect on our business.

We will need to establish relationships with leading scientists and research institutions. We believe that such relationships are pivotal to establishing products using our technologies as a standard of care for various indications. If we are not able to establish scientific relationships to assist in our research and development, we may not be able to successfully develop our potential drug compounds. If this happens, our business will be adversely affected.

We may not be able to develop market or generate sales of our products to the extent anticipated. Our business may fail and investors could lose all of their investment in our company.

Assuming that we are successful in developing our potential drug compounds and receiving regulatory clearances to market our products, our ability to successfully penetrate the market and generate sales of those products may be limited by a number of factors, including the following:

• If our competitors receive regulatory approvals for and begin marketing similar products in the United States, the European Union, Japan and other territories before we do, greater awareness of their products as compared to ours will cause our competitive position to suffer;
• Information from our competitors or the academic community indicating that current products or new products are more effective or offer compelling other benefits than our future products could impede our market penetration or decrease our future market share; and,
• The pricing and reimbursement environment for our future products, as well as pricing and reimbursement decisions by our competitors and by payers, may have an effect on our revenues.

If this happens, our business will be adversely affected.

None of our potential drug compounds may reach the commercial market for a number of reasons and our business may fail.

Research and development of pharmaceutical products is high risk. Most products and development candidates fail to reach the market. Our success depends on the commercialization of drug compounds. It is possible that our products may never reach the market for a number of reasons. They may be found ineffective or may cause harmful side-effects during non-clinical testing or clinical trials or fail to receive necessary regulatory approvals. We may find that certain products cannot be manufactured at a commercial scale and, therefore, they may not be economical to produce. Our potential products could also fail to achieve market acceptance or be precluded from commercialization by proprietary rights of third parties. Our patents, trademarks and other intellectual property may be challenged and this may delay or prohibit us from effectively commercializing our products. Furthermore, we do not expect our potential drug compounds to be commercially available for a number of years, if at all. If none of our

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potential drug compounds reach the commercial market, our business will likely fail and investors will lose all of their investment in our company. If this happens, our business will be adversely affected.

If our competitors succeed in developing products and technologies that cost less or are more effective or with a better profile than our own, or if scientific developments change our understanding of the potential scope and utility of our potential products, then our technologies and future products may be rendered undesirable or obsolete.

We face significant competition from industry participants that are pursuing technologies in similar disease states to those that we are pursuing and are developing pharmaceutical products that are competitive with our products. All of our industry competitors have greater capital resources, larger and more capable overall research and development staffs and facilities, and a longer history in drug discovery and development, obtaining regulatory approval and pharmaceutical product manufacturing and marketing than we do. With these additional resources, our competitors may be able to respond to the rapid and significant technological changes in the biotechnology and pharmaceutical industries faster than we can. Our success depends in large part on our ability to maintain a competitive position with respect to these companies and technologies. Rapid technological development, as well as new scientific developments, may result in our products becoming obsolete before we can recover any of the expenses incurred to develop them. For example, changes in our understanding of the appropriate population of patients who should be treated with a targeted therapy like ours may limit the drug’s market potential if it is subsequently demonstrated that only certain subsets of patients should be treated with the targeted therapy.

Our reliance on third parties, such as contracted laboratories, manufacturing organizations and clinical research organizations, may result in delays in completing, or a failure to complete, non-clinical testing or clinical trials if their contracted work is not completed or if we do not receive it.

In the course of product development, we may engage university laboratories, other biotechnology companies or contract or clinical manufacturing organizations to manufacture drug material for us to be used in non-clinical and clinical testing and contract research organizations to conduct and manage non-clinical and clinical studies. If we engage these organizations to help us with our non-clinical and clinical programs, many important aspects of this process have been and will be out of our direct control. If any of these organizations fail to perform their obligations under our agreements with them or fail to perform non-clinical testing and/or clinical trials in a satisfactory manner, we may face delays in completing our clinical trials, as well as commercialization of any of our potential drug compounds. Furthermore, any loss or delay in obtaining or fulfilling contracts with such entities may also delay the completion of our clinical trials, regulatory filings and the potential market approval of our potential drug compounds.

If we fail to compete successfully with respect to partnering, licensing, mergers, acquisitions, joint venture and other collaboration opportunities, we may be limited in our ability to research and develop our potential drug compounds.

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Our competitors compete with us to attract established biotechnology and pharmaceutical companies or organizations for partnering, licensing, mergers, acquisitions, joint ventures or other collaborations. Collaborations include contracting with academic research institutions for the performance of specific scientific testing. If our competitors successfully enter into partnering arrangements or license agreements with academic research institutions, we will then be precluded from pursuing those specific opportunities. Since each of these opportunities is unique, we may not be able to find a substitute. Other companies have already begun many drug development programs which target diseases that we are also targeting, and have already entered into partnering and licensing arrangements with academic research institutions, reducing the pool of available opportunities.

Universities and public and private research institutions also compete with us. While these organizations primarily have educational or basic research objectives, they may develop proprietary technology and acquire patents that we may need for the development of our potential drug compounds. We may attempt to license this proprietary technology, if available. These licenses may not be available to us on acceptable terms, if at all. If we are unable to compete successfully with respect to acquisitions, joint venture and other collaboration opportunities, we may be limited in our ability to develop new products.

The use of any of our products in clinical trials may expose us to liability claims, which may cost us a significant amounts of money to defend against or pay out, causing our business to suffer.

The nature of our business exposes us to potential liability risks inherent in the testing, manufacturing and marketing of our products. We currently have one drug compound in clinical trials, however, when any of our products enter into clinical trials or become marketed products they could potentially harm people or allegedly harm people and we may be subject to costly and damaging product liability claims. Some participants in clinical trials are already ill when they enter a trial or may intentionally or unintentionally fail to meet the exclusion criteria. The waivers we obtain may not be enforceable and may not protect us from liability or the costs of product liability litigation. Although we intend to obtain product liability insurance that we believe is adequate, we are subject to the risk that our insurance will not be sufficient to cover claims. The insurance costs along with the defence or payment of liabilities above the amount of coverage could cost us significant amounts of money and management distraction from other elements of the business, causing our business to suffer.

The patent positions of pharmaceutical products are complex and uncertain and we may not be able to protect our patented or other intellectual property. If we cannot protect this property, we may be prevented from using it or our competitors may use it and our business could suffer significant harm. Also, the time and money we spend on acquiring and enforcing patents and other intellectual property will reduce the time and money we have available for our research and development, possibly resulting in a slow down or cessation of our research and development.

We own patents related to our potential drug compounds. However, these patents do not ensure the protection of our intellectual property for a number of reasons, including the following:

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1.	Competitors may interfere with our patent process in a variety of ways. Competitors may claim that they invented the claimed invention prior to us. Competitors may also claim that we are infringing their patents and restrict our freedom to operate as claimed under our patents and patent applications. Competitors may also contest our patents and patent application, if issued, by showing the patent examiner that the invention was not original, was not novel or was obvious. In litigation, a competitor could claim that our patents and patent application are not valid for a number of reasons. If a court agrees, we would lose that patent or patent application. As a company, we have no meaningful experience with competitors interfering with our patents or patent applications.
2.	Because of the time, money and effort involved in obtaining and enforcing patents, our management may spend less time and resources on developing potential drug compounds than they otherwise would, which could increase our operating expenses and delay product programs.
3.	Receipt of a patent may not provide much practical protection. If we receive a patent with a narrow scope, then it will be easier for competitors to design products that do not infringe our patent(s).
4.	Our patents are not issued in all possible geographies where our products may be marketed. Currently, we have submitted for patent protection and have been issued patents for certain claims in Greece. We have submitted for patent protection in some of the world’s largest markets. We may not necessarily be successful in securing patents for further claims and products in Greece, nor may we necessarily be successful in securing the existing claims and product patents in countries and jurisdictions where we have applied but have not yet had those patents issued. If we are not issued patents in these other key markets, our ability to advance our compounds will be severely hampered and we will be much less attractive to potential partners.
5.	In addition, competitors also seek patent protection for their inventions. Due to the number of patents in our field, we cannot be certain that we do not infringe on existing patents or that we will not infringe on patents granted in the future. If a patent holder believes our potential drug compound infringes on their patent, the patent holder may sue us even if we have received patent protection for our technology. If someone else claims we infringe on their patent, we would face a number of issues which could cause a slow down or cessation of our research and development, including the following:
	a.	Defending a lawsuit takes significant time and can be very expensive.
	b.	If the court decides that our potential drug compound infringes on the competitor’s patent, we may have to pay substantial damages for past infringement.
	c.	The court may prohibit us from selling or licensing the potential drug compound unless the patent holder licenses the patent to us. The patent holder is not required to grant us a license. If a license is available, we may have to pay substantial royalties or grant cross licenses to our patents.
	d.	Redesigning our potential drug compounds so that they do not infringe on other patents may not be possible or could require substantial funds and time.

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It is also unclear whether our trade secrets are adequately protected. While we use reasonable efforts to protect our trade secrets, our employees or consultants may unintentionally or willfully disclose our information to competitors. Enforcing a claim that someone else illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Our competitors may independently develop equivalent knowledge, methods and know-how.

We may also support and collaborate in research conducted by government organizations, hospitals, universities or other educational institutions. These research partners may be unwilling to grant us any exclusive rights to technology or products derived from these collaborations prior to entering into the relationship.

If we do not obtain required licenses or rights, we could encounter delays in our product development efforts while we attempt to design around other patents or even be prohibited from developing, manufacturing or selling potential drug compounds requiring these licenses. There is also a risk that disputes may arise as to the rights to technology or potential drug compounds developed in collaboration with other parties.

We incur substantial costs as a result of laws and regulations and proposed changes in laws and regulations and we cannot predict the impact of any future changes in law.

We face burdens relating to corporate governance and financial reporting standards. Legislations or regulations such as Section 404 of the Sarbanes-Oxley Act of 2002 impose strict corporate governance and financial reporting standards and have led to substantial costs of compliance including consulting, auditing and legal fees. Any new rules could make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. A failure to comply with these new laws and regulations may impact market perception of our financial condition and could materially harm our business. Additionally, it is unclear what additional laws or regulations may develop, and we cannot predict the ultimate impact of any future changes in law.

Our substantial debt and other financial obligations could impair our financial condition and our ability to fulfill our debt obligations. Any refinancing of this substantial debt could be at significantly higher interest rates.

As of September 30, 2012, we had total liabilities of $2,888,324 and accumulated deficit of $37,504,926. Our substantial indebtedness and other current financial obligations and any that we may become a party to in the future:

• impair our ability to obtain financing for working capital, capital expenditures, or general corporate purposes;

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• have a material adverse effect on us if we fail to comply with financial and affirmative and restrictive covenants in debt agreements and an event of default occurs as a result of a failure that is not cured or waived;
• require us to dedicate a substantial portion of our cash flow to interest payments on our indebtedness and other financial obligations, thereby reducing the availability of our cash flow to fund working capital and capital expenditures;
• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and
• place us at a competitive disadvantage compared to our competitors that have proportionally less debt.

If we are unable to meet our debt service obligations and other financial obligations, we could be forced to restructure or refinance our indebtedness and other financial transactions, seek additional equity capital or sell our assets. We might then be unable to obtain such financing or capital or sell our assets on satisfactory terms, if at all. Any refinancing of our indebtedness could be at significantly higher interest rates, and/or incur significant transaction fees.

Risks Related to our Common Stock

A further decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations and would severely dilute existing or future investors if we were to raise funds at lower prices.

A further prolonged decline in the price of our common stock could result in a reduction in our ability to raise capital. Because our operations have been principally financed through the sale of equity securities, a further decline in the price of our common stock could be detrimental to our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If the stock price declines, there can be no assurance that we can raise additional capital or generate funds from operations sufficient to meet our obligations. We believe the following factors could cause the market price of our common stock to continue to fluctuate widely and could cause our common stock to trade at a price below the price at which you purchase your shares of common stock:

• actual or anticipated variations in our quarterly operating results;
• announcements of new services, products, acquisitions or strategic relationships by us or our competitors;
• changes in accounting treatments or principles;
• changes in earnings estimates by securities analysts and in analyst recommendations; and
• general political, economic, regulatory and market conditions.

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The market price for our common stock may also be affected by our ability to meet or exceed expectations of analysts or investors. Any failure to meet these expectations, even if minor, could materially adversely affect the market price of our common stock.

If we issue additional shares of common stock in the future, it will result in the dilution of our existing stockholders.

Our articles of incorporation authorize the issuance of 150,000,000 shares of common stock. Our board of directors has the authority to issue additional shares of common stock up to the authorized capital stated in the articles of incorporation. Our board of directors may choose to issue some or all of such shares of common stock to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares of common stock will result in a reduction of the book value or market price of the outstanding shares of our common stock. If we do issue any such additional shares of common stock, such issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders. Further, any such issuance may result in a change of control of our corporation.

Trading of our common stock may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

There is currently a limited market for our common stock and the volume of our common stock traded on any day may vary significantly from one period to another. Our common stock is quoted on OTCQB. Trading in stock quoted on OTCQB is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. The availability of buyers and sellers represented by this volatility could lead to a market price for our common stock that is unrelated to operating performance. Moreover, OTCQB is not a stock exchange, and trading of securities quoted on OTCQB is often more sporadic than the trading of securities listed on a stock exchange like NASDAQ. There is no assurance that a sufficient market will develop in the stock, in which case it could be difficult for our stockholders to resell their stock.

Our stock is classed as a “penny stock”. Trading of our stock may be restricted by the Securities and Exchange Commission’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 (excluding the value of the primary residence of such individuals) or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and

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Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority or FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for shares of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2. PROPERTIES

We do not own or lease any property.

Our temporary principal executive offices are contributed by our president.

Effective August 1, 2012, we terminated our lease agreement with EuroGenet Labs SA to focus on research in the United States, and to conserve operating costs.

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ITEM 3. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings to which we are a party or of which any of our properties is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities. We know of no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or has a material interest adverse to our company.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market information

Our common stock is quoted on OTCQB under the symbol “AVXL”. Until July 22, 2012, our common stock was quoted on the OTC Bulletin Board, but effective July 23, 2012, our common stock was not eligible for quotation on the OTC Bulletin Board due to quoting inactivity under Rule 15c2-11 promulgated by the Securities and Exchange Commission.

The following table shows the quarterly range of high and low bid information for our common stock over the fiscal quarters for the last two fiscal years as quoted on OTCQB and the OTC Bulletin Board. We obtained the following high and low bid information from OTCQB and the OTC Bulletin Board. These over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions. Investors should not rely on historical prices of our common stock as an indication of its future price performance. On December 27, 2012, the closing price of our common stock as reported by OTCQB was $0.80 per share.

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Quarter Ended	High	Low
September 30, 2012	$1.45	$0.70
June 30, 2012	$1.36	$0.50
March 31, 2012	$2.09	$1.02
December 31, 2011	$2.50	$1.11
September 30, 2011	$2.50	$0.00
June 30, 2011	$3.65	$1.01
March 31, 2011	$4.45	$0.00
December 31, 2010	$4.25	$3.05

Transfer Agent

Shares of our common stock are issued in registered form. The Nevada Agency and Trust Company, 50 West Liberty Street, Reno, Nevada (Telephone: (775) 322-0626; Facsimile: (775) 322-5623) is the registrar and transfer agent for shares of our common stock.

Holders of Common Stock

As of December 20, 2012, there were 81 holders of record of our common stock. As of such date, 30,240,687 shares of our common stock were issued and outstanding.

Dividends

We have not paid any cash dividends on our common stock and have no intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.

Securities Authorized for Issuance under Equity Compensation Plans or Individual Compensation Arrangements

The following table summarizes certain information regarding our equity compensation plan or individual compensation arrangements as at September 30, 2012:

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Equity Compensation Plan Information
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	1,775,000	2.94	2,225,000
Equity compensation plans not approved by security holders	Nil	Nil	Nil
Total	1,775,000	2.94	2,225,000

Stock Option Plan

On April 17, 2007, our directors adopted the 2007 Stock Option Plan. On May 25, 2007, our stockholders ratified and approved the 2007 Stock Option Plan at the annual meeting of stockholders. As of September 30, 2012, 1,775,000 options have been granted to employees, directors, officers and consultants of our company.

The purpose of the 2007 Stock Option Plan is to retain the services of valued key employees and consultants of our company and such other persons as will be select in accordance with the 2007 Stock Option Plan, and to encourage such persons to acquire a greater proprietary interest in our company, thereby strengthening their incentive to achieve the objectives of the shareholders of our company, and to serve as an aid and inducement in the hiring of new employees and to provide an equity incentive to consultants.

On February 2, 2011 we amended and restated our 2007 stock option plan to increase the number of shares authorized to be issued under the plan to 4,000,000

Recent Sales of Unregistered Securities

Since the beginning of our fiscal year ended September 30, 2012, we have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K.

Purchases of Equity Securities by Our Company and Affiliated Purchasers

None.

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ITEM 6 SELECTED FINANCIAL DATA

Not applicable.

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended September 30, 2012, included elsewhere in this annual report. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains “forward-looking statements”. Forward-looking statements are generally written in the future tense and/or are preceded by words such as “may,” “should,” “forecast,” “could,” “expect,” “suggest,” “believe,” “anticipate,” “intend,” “plan,” or other similar words. The forward-looking statements contained in this annual report involve a number of risks and uncertainties, many of which are outside of our control. Factors that could cause actual results to differ materially from projected results include, but are not limited to, those discussed in “Risk Factors” elsewhere in this annual report. Readers are expressly advised to review and consider those Risk Factors, which include risks associated with (1) our ability to successfully conduct clinical and preclinical trials for our product candidates, (2) our ability to obtain required regulatory approvals to develop and market our product candidates, (3) our ability to raise additional capital on favorable terms, (4) our ability to execute our development plan on time and on budget, (5) our ability to obtain commercial partners, (6) our ability, whether alone or with commercial partners, to successfully commercialize any of our product candidates that may be approved for sale, and (7) our ability to identify and obtain additional product candidates. Although we believe that the assumptions underlying the forward-looking statements contained in this annual report are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements will be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Furthermore, past performance in operations and share price is not necessarily indicative of future performance. Except as required by applicable laws including the securities laws of the United States and Canada, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Our Business

We are a pharmaceutical company engaged in the development of drug candidates. Our lead compound ANAVEX 2-73, developed to treat Alzheimer’s disease through disease modification, is in human clinical trials.

In pre-clinical studies conducted in France, and in Greece, ANAVEX 2-73 demonstrated anti-amnesic and neuroprotective properties. Based on these preclinical studies, we sponsored a Phase 1 single ascending dose study of ANAVEX 2-73 initiated and completed in 2011. This study was conducted in Germany in collaboration with ABX-CRO Advanced Pharmaceutical Services. The study indicated that ANAVEX 2-73 was well tolerated by study subjects in doses up to 55mg.

Despite success in trials to date, and due principally to insufficient capital to support operations and development of our pipeline, we have been unable to attract and retain executive management, particularly a chief executive officer, who is experienced in leading a development stage pharmaceutical company. For this reason, we intend to defer most of our research activity until expert management evaluates our progress and proposes an appropriate course of action, and until there is sufficient capital on hand to effect management’s plan of action.

In considering several different means of accomplishing our goal of commercializing drug candidates, we have determined that pursuing a strategic relationship with a partner, partners, or an acquirer with capable management and sufficient capital to sponsor trials is our best course of action at this time.

We intend to identify and initiate discussions with potential partners and acquirers. Further, we may acquire or develop new intellectual property and assign, license, or otherwise transfer our intellectual property to further our goals.

Results of Operations

Revenue

We have not earned any revenues since our inception on January 23, 2004. We are still in the development stage and do not anticipate earning any revenues until we can establish an alliance with other companies to develop, co-develop, license, acquire or market our products.

Expenses

Our expenses for the fiscal year ended September 30, 2012 and 2011 were as follows:

		Year ended September 30,			Change
		2012		2011	$		%
Accounting and audit fees	$	139,761	$	158,225	(18,464	)	(11.7	)
Amortization		1,858		1,657	201		12.1
Bank charges and interest		5,963		8,701	(2,738	)	(31.5	)
Consulting		1,155,366		2,757,835	(1,602,469	)	(58.1	)

26

Insurance		10,844	48,152	(37,308	)	(77.5	)
Investor relations		108,138	133,805	(25,667	)	(19.2	)
Legal fees		142,923	140,613	2,310		1.6
Office and miscellaneous		9,147	30,068	(20,921	)	(69.6	)
Registration and filing fees		26,794	58,878	(32,084	)	(54.5	)
Rent		-	63,110	(63,110	)	(100.0	)
Research and development		2,653,860	2,597,279	56,581		2.2
Travel		66,837	182,259	(115,422	)	(63.3	)
Total expenses	$	4,321,491$	6,180,582	(1,859,091	)	(30.1	)

Year ended September 30, 2012 and 2011

Expenses for the fiscal year ended September 30, 2012 decreased by $1,859,091 over the same period in 2011. The principal contributors to the decrease were:

1.	Consulting fees have decreased by $1,602,469 primarily as a result of decreased management infrastructure as well as a decrease in stock based compensation expense from stock options granted and vesting during the period, as compared to fiscal 2011.
2.	Travel expenses have decreased by $115,422 as a result of less international corporate travel due to cost saving initiatives in response to our inability to obtain sufficient financing.
3.	Rent expense has decreased by $63,110 as a result of our New Jersey office lease expiring in 2011.

Other income

Other income and (loss) for the year ended September 30, 2012, amounted to $(3,980,214) as compared to a loss of $(1,126,565) for the year ended September 30, 2011. The increase in loss of $(2,853,649) is primarily attributable to

a)	a loss of $3,829,333 resulting from the extinguishment of four promissory notes totaling $1,297,889 recognized in the year ended September 30, 2012 compared with a loss of $198,738 recognized in the same period in 2011 relating to the extinguishment of promissory notes totaling $398,922;
b)	interest expense of $138,341 recognized in the year ended September 30, 2012 as compared to lower interest expense of $90,246 recognized in the year ended September 30, 2011, as a result of the increased debt levels during the current period from the issuance of promissory notes in the fourth quarter of 2011 and the first quarter of 2012;
c)	accretion of debt discount of $98,081 recognized in the year ended September 30, 2012 compared with accretion of $69,419 recognized in the year ended September 30, 2011 in respect of a debt issuance in the third quarter of fiscal 2011.

This increase in loss was also partially offset by:

27

a)	debt conversion expense of $504,160 recognized in the year ended September 30, 2011 compared with no similar expense for the same period in 2012, as a result of the Company’s adjustment to conversion rates on convertible debt during fiscal 2011;
b)	loss on settlement of accounts payable of $334,053 recognized in the year ended September 30, 2011 with no corresponding loss in the year ended September 30, 2012.

Liquidity and Capital Resources

Working Capital

		September 30, 2012		September 30, 2011
Current Assets		12,577		200,605
Current Liabilities		2,888,324		1,345,443
Working Capital Deficiency	$	(2,875,747	)	(1,144,838	)

As of September 30, 2012, we had $11,362 in cash, a decrease of $123,340 from September 30, 2011. The principal components of this decrease in cash relate to a loss from operations in excess of cash generated through financing activities from debt and equity issuances. As of September 30, 2012, we had a working capital deficiency of $2,875,747, a decrease in deficit of $1,730,909 from September 30, 2011. The principal component of this decrease in working capital deficit was as a result of increased accounts payable and accrued liabilities arising from our inability to obtain sufficient financing to meet these debt obligations.

We have sufficient capital to continue basic operations until January 2013. We anticipate that we will require $4,000,000 for the 12-month period ending September 30, 2013 to continue our operations. If we are not able to secure additional financing, we will not be able to implement and fund this work.

Going Concern

At September 30, 2012, we had an accumulated deficit of $37,504,926 since our inception and incurred a net loss of $8,301,705 for the fiscal year ended September 30, 2012. We expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern in their report on our annual financial statements for the fiscal year ended September 30, 2012.

28

Future Financing

We will require additional financing to fund operations, further strengthen our patents, secure patents for other compounds and any further intellectual property that we may acquire, and to continue clinical development. We currently do not have committed sources of additional financing and may not be able to obtain additional financing, particularly, if the volatile conditions in the stock and financial markets, and especially the market for early development stage pharmaceutical and biotechnology research and development company stocks persist.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to delay or scale down some or all of our research and development activities or perhaps even cease the operation of our business.

Since inception we have funded our operations primarily through equity and debt financings and we expect that we will continue to fund our operations through the equity and debt financing. Our existing stockholders’ ownership will be diluted if we raise additional financing by issuing equity securities. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There is no assurance that we will be able to maintain operations at a level sufficient for investors to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

Application of Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.

We base our assumptions and estimates on historical experience and other sources that we believe to be reasonable at the time. Actual results may vary from our estimates due to changes in circumstances, weather, politics, global economics, mechanical problems, general business conditions and other factors. Our significant estimates are related to the valuation of warrants and options.

29

There are accounting policies that we believe are significant to the presentation of our financial statements. The most significant of these accounting policies relates to the accounting for our research and development expenses and stock-based compensation expense.

Research and Development Expenses

Research and developments costs are expensed as incurred. These expenses are comprised of the costs of our proprietary research and development efforts, including salaries, facilities costs, overhead costs and other related expenses as well as costs incurred in connection with third-party collaboration efforts. Milestone payments made by us to third parties are expensed when the specific milestone has been achieved.

In addition, we incur expenses in respect of the acquisition of intellectual property relating to patents and trademarks. The probability of success and length of time in developing commercial applications of the drugs subject to the acquired patents and trademarks is difficult to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects. There is no assurance the acquired patents and trademarks will ever be successfully commercialized. Due to these risks and uncertainties, we expense the acquisition of patents and trademarks.

Stock-based Compensation

We account for all stock-based payments and awards under the fair value based method.

Stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until the counterparty performance is complete, and any change therein is recognized over the vesting period of the award and in the same manner as if we had paid cash instead of paying with or using equity based instruments. The cost of the stock-based payments to non-employees that is fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term.

We account for the granting of share purchase options to employees using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant. The fair value of all share purchase options are expensed over their vesting period with a corresponding increase to additional capital surplus. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in additional capital surplus, is recorded as an increase to share capital.

We use the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of the grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in assumptions can materially affect the fair value estimate and therefore the Black-Scholes model does not necessarily provide a reliable single measure of the fair value of our share purchase options.

30

Derivative Liabilities

Our convertible promissory notes included embedded conversion options which, prior to their amendments, were required to be accounted for as separate derivative liabilities. These liabilities were required to be measured at fair value. These instruments were adjusted to reflect fair value at each period end. Any increase or decrease in the fair value was recorded in results of operations as change in fair value of derivative liabilities. In determining the appropriate fair value, we used the binomial pricing model.

The debt discount arising from bifurcating the derivative liability from the host debt instrument was accreted to income during the period.

Recent Accounting Pronouncements

On June 16, 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, or ASU 2011-05. ASU 2011-05 requires entities to report items of other comprehensive income on either part of a single contiguous statement of comprehensive income or in a separate statement of comprehensive income immediately following the statement of income. On December 23, 2011, the FASB issued an update to this pronouncement, ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, or ASU 2011-12. ASU 2011-12 defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The Company has not recorded any components of comprehensive income (loss) for the years ended September 30, 2012 and 2011 and, as at September 30, 2012, the Company does not have a balance recorded in respect of accumulated comprehensive income (loss).

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

31

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Stated in US Dollars)

32

 

	Tel: 604 688 5421	BDO Canada LLP
	Fax: 604 688 5132	600 Cathedral Place
	www.bdo.ca	925 West Georgia Street
		Vancouver BC V6C 3L2 Canada

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Directors and Stockholders,
Anavex Life Sciences Corp.
(a Development Stage Company)

We have audited the accompanying consolidated balance sheets of Anavex Life Sciences Corp. (the “Company”) as of September 30, 2012 and 2011, and the related consolidated statements of operations, cash flows and changes in capital deficit for the years then ended and for the period from January 23, 2004 (date of inception) to September 30, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Anavex Life Sciences Corp. at September 30, 2012 and 2011, and the results of its operations and its cash flows for the years then ended and for the period from January 23, 2004 (date of inception) to September 30, 2012, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company had an accumulated deficit of $37,504,926 at September 30, 2012 and incurred a net loss of $8,301,705 for the year then ended. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ BDO Canada LLP

Chartered Accountants

Vancouver, Canada

December 28, 2012

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
September 30, 2012 and 2011
(Stated in US Dollars)

ASSETS
		2012			2011
Current
Cash	$	11,362		$	134,702
VAT recoverable		-			809
Deferred financing charge - Note 5		1,215			55,464
Prepaid expenses		-			9,630
		12,577			200,605
Equipment - Note 3		576			2,434
	$	13,153		$	203,039
LIABILITIES
Current
Accounts payable and accrued liabilities - Note 7	$	2,589,324		$	410,024
Derivative liability - Note 4		-			67,500
Promissory notes payable - Note 5		299,000			867,919
		2,888,324			1,345,443
CAPITAL DEFICIT
Capital stock - Note 6
Authorized: 150,000,000 common shares, par value $0.001 per share Issued and outstanding: 30,240,687 common shares (2011 - 26,571,574)		30,241			26,572
Additional paid-in capital		34,599,514			28,034,245
Deficit accumulated during the development stage		(37,504,926	)		(29,203,221	)
		(2,875,171	)		(1,142,404	)
	$	13,153		$	203,039
Basis of Presentation and Liquidity - Note 1

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended September 30, 2012 and 2011
and for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

								January 23, 2004
		Years ended September 30,						(Date of Inception) to
		2012			2011			September 30, 2012
Expenses
Accounting and audit fees	$	139,761		$	158,225		$	662,114
Amortization and depreciation		1,858			1,657			5,055
Bank charges and interest		5,963			8,701			42,307
Consulting fees - Note 7 and 8		1,155,366			2,757,835			11,744,091
Insurance		10,844			48,152			58,996
Investor relations		108,138			133,805			831,707
Legal fees		142,923			140,613			670,025
Management fees		-			-			14,625
Office and miscellaneous		9,147			30,068			147,684
Registration and filing fees		26,794			58,878			154,398
Rent and administration		-			63,110			224,670
Research and development - Note 8		2,653,860			2,597,279			12,558,949
Travel		66,837			182,259			741,155
Website design and maintenance		-			-			28,417
Loss before other income (expenses)		(4,321,491	)		(6,180,582	)		(27,884,193	)
Other income (expenses)
Interest and financing fees		(138,341	)		(90,246	)		(626,021	)
Accretion of debt discount - Note 5		(98,081	)		(69,419	)		(2,174,661	)
Change in fair value of derivative liability - Note 4		67,500			100,000			(463,274	)
Debt conversion expense		-			(504,160	)		(504,160	)
Loss on settlement of accounts payable		-			(334,053	)		(778,053	)
Loss on extinguishment of debt		(3,829,333	)		(198,738	)		(4,515,540	)
Foreign exchange gain (loss)		18,041			(29,949	)		(8,220	)
Net loss for the period	$	(8,301,705	)	$	(7,307,147	)	$	(36,954,122	)
Basic and diluted loss per share	$	(0.29	)	$	(0.29	)
Weighted average number of shares outstanding		28,168,784			25,169,065

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended September 30, 2012 and 2011
and for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

								January 23, 2004
		Years ended September 30,						(Date of Inception) to
		2012			2011			September 30, 2012
Cash Flows used in Operating Activities
Net loss for the period	$	(8,301,705	)	$	(7,307,147	)	$	(36,954,122	)
Adjustments to reconcile net loss to net cash used in operations:
Amortization and depreciation		1,858			1,657			5,055
Accretion of debt discount		98,081			69,419			2,174,661
Stock-based compensation		302,208			1,273,162			4,842,547
Amortization of deferred financing charge		62,399			44,536			162,712
Change in fair value of derivative liability		(67,500	)		(100,000	)		463,274
Consulting expense recorded in exchange for shares to be issued		-			-			236,337
Common shares issued for consulting expenses		15,895			-			406,405
Promissory note issued for severance		-			-			71,500
Common shares issued for severance		75,000			-			415,600
Common shares issued for research and development expenses		-			-			800,000
Management fees contributed		-			-			14,625
Debt conversion expense		-			504,160			504,160
Loss on settlement of accounts payable		-			334,053			778,053
Loss on extinguishment of debt		3,829,333			198,738			4,515,540
Rent contributed		-			-			3,750
Changes in non-cash working capital balances related to operations:								-
VAT recoverable		809			37,011			-
Prepaid expenses		9,630			13,639			-
Accounts payable and accrued liabilities		2,281,052			1,129,293			5,772,548
Net cash used in operating activities		(1,692,940	)		(3,801,479	)		(15,787,355	)
Cash Flows provided by Financing Activities
Issuance of common shares, net of share issue costs		996,250			3,021,512			10,246,833
Share subscriptions received		-			(100,000	)		-
Proceeds from promissory notes		581,500			750,000			5,399,000
Deferred financing fee		(8,150	)		-			(108,150	)
Repayment of promissory note		-			-			(100,000	)
Due to related parties		-			-			33,665
Shareholder advances		-			-			333,000
Net cash provided by financing activities		1,569,600			3,671,512			15,804,348
Cash Flows used in Investing Activities
Acquisition of equipment		-			-			(5,631	)
Net cash used in investing activities		-			-			(5,631	)
Increase (decrease) in cash during the period		(123,340	)		(129,967	)		11,362
Cash, beginning of period		134,702			264,669			-
Cash, end of period	$	11,362		$	134,702		$	11,362
Supplemental Cash Flow Information - Note 10

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

									Deficit
	Common Stock								Accumulated
	Shares		Par Value		Additional		Common		During the
					Paid-in		Shares to be		Development
					Capital		Issued		Stage			Total
Capital stock issued for cash on January 23, 2004 - at $0.0033	12,000,000	$	12,000	$	28,000	$	-	$	-		$	40,000
Net loss from January 23, 2004 to September 30, 2004	-		-		-		-		(14,395	)		(14,395	)
Balance, September 30, 2004	12,000,000		12,000		28,000		-		(14,395	)		25,605
Capital stock issued for cash on December 31, 2004 - at $0.0033	7,200,000		7,200		16,800		-		-			24,000
Management fees contributed	-		-		13,000		-		-			13,000
Rent contributed	-		-		3,000		-		-			3,000
Net loss for the year	-		-		-		-		(91,625	)		(91,625	)
Balance, September 30, 2005	19,200,000		19,200		60,800		-		(106,020	)		(26,020	)
Management fees contributed	-		-		1,625		-		-			1,625
Rent contributed	-		-		750		-		-			750
Debt forgiven by directors	-		-		33,666		-		-			33,666
Net loss for the year	-		-		-		-		(25,532	)		(25,532	)
Balance, September 30, 2006	19,200,000		19,200		96,841		-		(131,552	)		(15,511	)
Capital stock issued for research and development services on September 24, 2007 - at $3.60	222,222		222		799,778		-		-			800,000
Capital stock issued for settlement of loan payable on September 25, 2007 - at $3.60	92,500		93		332,907		-		-			333,000
Net loss for the year	-		-		-		-		(1,579,993	)		(1,579,993	)
Balance, September 30, 2007	19,514,722	$	19,515	$	1,229,526	$	-	$	(1,711,545	)	$	(462,504	)

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

										Deficit
	Common Stock									Accumulated
	Shares		Par Value		Additional		Common			During the
					Paid-in		Shares to be			Development
					Capital		Issued			Stage			Total
Balance, September 30, 2007 - brought forward	19,514,722	$	19,515	$	1,229,526	$	-		$	(1,711,545	)	$	(462,504	)
Capital stock issued for cash on December 10, 2007 - at $3.50	150,000		150		524,850		-			-			525,000
Capital stock issued for consulting services on December 18, 2007 - at $3.86	50,000		50		192,950		-			-			193,000
Capital stock issued in settlement of debt on December 18, 2007 - at $4.50	10,000		10		44,990		-			-			45,000
Stock-based compensation for shares issued at a discount	-		-		65,000		-			-			65,000
Capital stock issued for severance on May 15, 2008 - at $5.24	65,000		65		340,535		-			-			340,600
Common shares to be issued for consulting services	-		-		-		252,599			-			252,599
Common stock issued for consulting services on August 19, 2008 - at $5.07	25,000		25		126,725		(126,750	)		-			-
Capital stock issued for cash on August 19, 2008 - at $4.25	142,698		142		606,325		-			-			606,467
Stock-based compensation	-		-		1,493,937		-			-			1,493,937
Net loss for the year	-		-		-		-			(5,351,269	)		(5,351,269	)
Balance, September 30, 2008	19,957,420	$	19,957	$	4,624,838	$	125,849		$	(7,062,814	)	$	(2,292,170	)

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

													Deficit
	Common Stock												Accumulated
	Shares			Par Value			Additional			Common			During the
							Paid-in			Shares to be			Development
							Capital			Issued			Stage			Total
Balance, September 30, 2008 - brought forward	19,957,420		$	19,957		$	4,624,838		$	125,849		$	(7,062,814	)	$	(2,292,170	)
Stock-based compensation	-			-			812,336			-			-			812,336
Capital stock issued for consulting services on November 20, 2008 - $2.63	25,000			25			65,725			(65,750	)		-			-
Capital stock issued for consulting services on February 20, 2009 - $2.50	25,000			25			62,475			(62,500	)		-			-
Capital stock issued for cash on March 6, 2009 - at $2.25	89,148			89			200,494			-			-			200,583
Capital stock issued for consulting services on March 20, 2009 - at $2.00	2,500			3			4,997			-			-			5,000
Capital stock issued for cash on March 20, 2009 - at $2.25	10,800			11			24,289			-			-			24,300
Capital stock issued for cash on June 11, 2009 - at $2.25	36,000			36			80,964			-			-			81,000
Capital stock issued for services on June 11, 2009 - at $2.25	29,227			29			65,731			-			-			65,760
Capital stock issued for cash on June 19, 2009 - at $2.25	495,556			496			1,114,504			-			-			1,115,000
Capital stock issued for finders' fees on June 26, 2009 - at $2.51	22,222			22			55,755			-			-			55,777
Shares to be issued for consulting services - Note 8	-			-			-			236,337			-			236,337
Capital stock issued for cash on August 19, 2009 - at $2.25	128,888			129			289,869			-			-			289,998
Less: Finders fees							(72,850	)		-			-			(72,850	)
Beneficial conversion features on convertible debt issuances	-			-			333,056			-			-			333,056
Extinguishment of debt	-			-			487,469			-			-			487,469
Cancellation of common shares	(75,000	)		(75	)		234,011			(233,936	)		-			-
Share subscriptions received	-			-			-			300,000			-			300,000
Net loss for the year	-			-			-			-			(5,499,419	)		(5,499,419	)
Balance, September 30, 2009	20,746,761		$	20,747		$	8,383,663		$	300,000		$	(12,562,233	)	$	(3,857,823	)

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

											Deficit
	Common Stock										Accumulated
	Shares		Par Value		Additional			Common			During the
					Paid-in			Shares to be			Development
					Capital			Issued			Stage			Total
Balance, September 30, 2009 - brought forward	20,746,761	$	20,747	$	8,383,663		$	300,000		$	(12,562,233	)	$	(3,857,823	)
Cumulative effect of accounting changes	-		-		(333,056	)		-			(550,804	)		(883,860	)
Capital stock issued for cash on October 2, 2009 - at $2.25	266,666		267		599,733			(300,000	)		-			300,000
Capital stock issued in settlement of promissory note on February 2, 2010 - at $2.02	49,505		49		99,951			-			-			100,000
Capital stock issued for cash on April 9, 2010 - at $2.60	92,499		93		240,405			-			-			240,498
Capital stock issued in settlement of debt on April 30, 2010 - at $2.85	9,825		9		27,991			-			-			28,000
Finders' fees paid in cash	-		-		(24,050	)		-			-			(24,050	)
Capital stock issued for cash on June 29, 2010 - at $2.50	941,000		941		2,351,559			-			-			2,352,500
Finders' fees paid in cash	-		-		(206,500	)		-			-			(206,500	)
Capital stock issued in settlement of debt on July 5, 2010 - at $2.50	400,000		400		999,600			-			-			1,000,000
Capital stock issued for cash on September 3, 2010 - at $2.75	163,000		163		448,087			-			-			448,250
Capital stock issued for finders' fees on September 3, 2010 - at $2.75	9,000		9		(9	)		-			-			-
Finders' fees paid in cash	-		-		(15,125	)		-			-			(15,125	)
Shares issud on conversion of promissory note on September 30, 2010 - at	328,058		328		737,802			-			-			738,130
Shares issud on conversion of promissory note on September 30, 2010 - at	510,638		511		1,199,489			-			-			1,200,000
Reclassification of dervative liability on modification of note terms	-		-		3,144,520			-			-			3,144,520
Settlement of accounts payable	-		-		444,000			-			-			444,000
Stock-based compensation	-		-		770,055			-			-			770,055
Equity component of convertible promissory note	-		-		44,220			-			-			44,220
Net loss for the year	-		-		-			-			(8,783,037	)		(8,783,037	)
Balance, September 30, 2010	23,516,952	$	23,517	$	18,912,335		$	-		$	(21,896,074	)	$	(2,960,222	)

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

										Deficit
	Common Stock									Accumulated
	Shares		Par Value		Additional			Common		During the
					Paid-in			Shares to be		Development
					Capital			Issued		Stage			Total
Balance, September 30, 2010 - brought forward	23,516,952	$	23,517	$	18,912,335		$	-	$	(21,896,074	)	$	(2,960,222	)
Capital stock issued for cash on November 18, 2010 - at $2.75	393,846		393		1,082,682			-		-			1,083,075
Less: Share Issue costs	-		-		(65,363	)		-		-			(65,363	)
Capital stock issued for finders' fees on November 18, 2010 - at $2.75	3,636		4		(4	)		-		-			-
Shares issued on the conversion of promissory note on November 18, 2010 - at $2.25	853,075		853		1,918,565			-		-			1,919,418
Debt conversion expense	-		-		504,160			-		-			504,160
Shares issued on the conversion of a promissory note on November 18, 2010 - at $4.12	145,063		145		597,515			-		-			597,660
Capital stock issued in settlement of debt on November 18, 2010 - at $4.12	181,818		182		748,908			-		-			749,090
Capital stock issued for cash on November 25, 2010 - at $3.35	29,851		30		99,970			-		-			100,000
Capital stock issued for finders' fees on on November 25, 2010 - at $3.35	2,985		3		(3	)		-		-			-
Capital stock issued for cash on February 1, 2011 - at $3.75	61,014		61		228,739			-		-			228,800
Capital stock issued for cash on May 3, 2011 - at $3.00	33,334		34		99,966			-		-			100,000
Capital stock issued on exercise of warrants for cash on June 19, 2011 - at $2.25	700,000		700		1,574,300			-		-			1,575,000
Equity units issued in settlement of an account payable on September 28, 2011	650,000		650		1,059,313								1,059,963
Stock-based compensation	-		-		1,273,162			-		-			1,273,162
Net loss for the period	-		-		-			-		(7,307,147	)		(7,307,147	)
Balance, September 30, 2011	26,571,574	$	26,572	$	28,034,245		$	-	$	(29,203,221	)	$	(1,142,404	)

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period from January 23, 2004 (Date of Inception) to September 30, 2012
(Stated in US Dollars)

										Deficit
	Common Stock									Accumulated
	Shares		Par Value		Additional			Common		During the
					Paid-in			Shares to be		Development
					Capital			Issued		Stage			Total
Balance, September 30, 2011 - brought forward	26,571,574	$	26,572	$	28,034,245		$	-	$	(29,203,221	)	$	(1,142,404	)
Capital stock issued for cash on December 6, 2011 - at $1.25	615,600		616		768,884			-		-			769,500
Less: Share Issue costs	-		-		(77,000	)		-		-			(77,000	)
Capital stock issued for cash on February 9, 2012 - at $1.25	270,000		270		337,230			-		-			337,500
Less: Share Issue costs	-		-		(33,750	)		-		-			(33,750	)
Equity units issued for services on February 9, 2012 - at $1.99	8,000		8		15,888			-		-			15,896
Equity units issued for settlement of loans payable on May 31, 2012 - Note 5	2,700,513		2,700		5,176,884			-		-			5,179,584
Capital stock issued for services on July 12, 2012 - at $1.00	75,000		75		74,925			-		-			75,000
Stock-based compensation - Note 8	-		-		302,208			-		-			302,208
Net loss for the period	-		-		-			-		(8,301,705	)		(8,301,705	)
Balance, September 30, 2012	30,240,687	$	30,241	$	34,599,514		$	-	$	(37,504,926	)	$	(2,875,171	)

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Stated in US Dollars)

Note 1 Business Description, Basis of Presentation and Liquidity

Business

Anavex Life Sciences is a pharmaceutical company engaged in the development of drug candidates. Our lead compound ANAVEX 2-73, developed to treat Alzheimer’s disease through disease modification, is in human clinical trials.

In pre-clinical studies conducted in France, and in Greece ANAVEX 2-73 demonstrated anti-amnesic and neuroprotective properties.

Based on these preclinical studies, Anavex sponsored a Phase 1 single ascending dose study of ANAVEX 2-73 initiated and completed in 2011. This study was conducted in Germany in collaboration with ABX-CRO Advanced Pharmaceutical Services. The study indicated that ANAVEX 2-73 was well tolerated by study subjects in doses up to 55mg.

Due principally to Anavex’ inability to obtain sufficient funding to support operations and development of our pipeline, it has been unable to attract and retain executive management that is experienced in leading a development stage pharmaceutical company. For this reason, the company is deferring research into drug candidates until expert management evaluates the company’s progress and determines an appropriate course of action, and there is capital to effect management’s plan of action.

In considering several different means of accomplishing Anavex’ goal of commercializing a treatment for Alzheimer’s disease, its officers and directors have determined that pursuing a strategic relationship with a partner, partners, or an acquirer with capable management and sufficient capital to sponsor trials is the company’s best course of action at this time. Further, Anavex may acquire or develop new intellectual property and assign, license, or otherwise transfer its intellectual property to further its plan.

Basis of Presentation and Liquidity

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and the instructions to Form 10-K.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 2

Note 1	Business Description, Basis of Presentation and Liquidity – (cont’d)
	These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its obligations and commitments in the normal course of operations. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2012, the Company had an accumulated deficit of $37,504,926 (2011 - $29,203,221), had a working capital deficit of $2,875,747 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this but considers obtaining additional funds by equity financing and/or from issuing promissory notes. Management expects the Company’s cash requirement over the next twelve months to be approximately $4,000,000. While the Company is expending best efforts to achieve the above plans, there is no assurance that any such activity will generate funds for operations.
Note 2	Summary of Significant Accounting Policies

a)

Use of Estimates

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuations, asset impairment, conversion features embedded in convertible notes payable, derivative valuations, stock based compensation and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 3

Note 2 Summary of Significant Accounting Policies – (cont’d)

b)	Principles of Consolidation
	These consolidated financial statements include the accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiary, Anavex Life Sciences (France) SA, a company incorporated under the laws of France. All inter-company transactions and balances have been eliminated.
c)	Development Stage Company
	The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since inception has been considered as part of the Company’s development stage activities.
d)	Equipment
	Equipment is recorded at cost and is depreciated at 33% per annum on the straight-line basis.
e)	Impairment of Long-Lived Assets
	The Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The estimated future cash flows are based upon, among other things, assumptions about future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made.
f)	Financial Instruments
	The carrying value of the Company’s financial instruments, consisting of cash and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Based on borrowing rates currently available to the Company for similar terms and based on the short term duration of the debt instruments, the carrying value of the promissory notes payable approximate their fair value. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 4

Note 2 Summary of Significant Accounting Policies – (cont’d)

g)	Foreign Currency Translation
	The functional currency of the Company is the US dollar. Monetary items denominated in a foreign currency are translated into US dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired or obligations incurred. Foreign currency denominated expense items are translated at exchange rates prevailing at the transaction date. Unrealized gains or losses arising from the translations are credited or charged to income in the period in which they occur.
h)	Research and Development Expenses
	Research and developments costs are expensed as incurred. These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including salaries, facilities costs, overhead costs and other related expenses as well as costs incurred in connection with third-party collaboration efforts. Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved.
	In addition, the Company incurs expenses in respect of the acquisition of intellectual property relating to patents and trademarks. The probability of success and length of time to developing commercial applications of the drugs subject to the acquired patents and trademarks is difficult to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects. There is no assurance the acquired patents and trademarks will ever be successfully commercialized. Due to these risks and uncertainties, the acquisition of patents and trademarks does not meet the definition of an asset and thus are expensed as incurred.
i)	Income Taxes
	The Company has adopted the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 5

Note 2 Summary of Significant Accounting Policies – (cont’d)

i)	Income Taxes – (cont’d)
	The Company has adopted the provisions of FASB ASC 740 "Income Taxes" regarding accounting for uncertainty in income taxes. The Company initially recognizes tax positions in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts. Application requires numerous estimates based on available information. The Company considers many factors when evaluating and estimating our tax positions and tax benefits, and our recognized tax positions and tax benefits may not accurately anticipate actual outcomes. As additional information is obtained, there may be a need to periodically adjust the recognized tax positions and tax benefits. These periodic adjustments may have a material impact on the consolidated statements of operations.
j)	Basic and Diluted Loss per Share
	The basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the year ended September 30, 2012, loss per share excludes 6,025,141 (2011 – 5,030,479) potentially dilutive common shares (related to convertible notes payable and outstanding options and warrants) as their effect was anti-dilutive.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 6

Note 2 Summary of Significant Accounting Policies – (cont’d)

k)	Stock-based Compensation
	The Company accounts for all stock-based payments and awards under the fair value based method.
	Stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until the counterparty performance is complete, and any change therein is recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity based instruments. Compensation costs for stock-based payments with graded vesting are recognized on a straight-line basis. The cost of the stock-based payments to non- employees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term.
	The Company accounts for the granting of share purchase options to employees using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant. The fair value of all share purchase options are expensed over their vesting period with a corresponding increase to additional paid-in capital.
	The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of the grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimates.
l)	Fair Value Measurements
	The fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 -	quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 -	observable inputs other than Level I, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3 -	assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 7

Note 2 Summary of Significant Accounting Policies – (cont’d)

l)	Fair Value Measurements – (cont’d)
	The book value of cash and accounts payable and accrued liabilities approximate their fair values due to the short term maturity of those instruments. Based on borrowing rates currently available to the Company under similar terms, the book value of promissory notes payable approximates their fair values. The Company’s promissory notes payable are based on Level 2 inputs in the ASC 820 fair value hierarchy.
	The Company’s Level 3 liability consisted of the bifurcated embedded conversion features in the Company’s convertible promissory notes. This Level 3 liability had no active market and was required to be measured at its fair value at each reporting period based on information that is unobservable.
	A summary of the Company’s Level 3 liabilities for the years ended June 30, 2012 and 2011 is as follows:

		2012			2011
Balance, beginning of the period	$	67,500		$	-
Fair value of embedded conversion feature of convertible promissory notes		-			167,500
Change in fair value of derivative liability		(67,500	)		(100,000	)
Balance, end of the period	$	-		$	67,500

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). There were no assets or liabilities measured at fair value on a nonrecurring basis during the periods ended September 30, 2012 and 2011.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 8

Note 2 Summary of Significant Accounting Policies – (cont’d)

m)

Recent Accounting Pronouncements

On June 16, 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, or ASU 2011-05. ASU 2011-05 requires entities to report items of other comprehensive income on either part of a single contiguous statement of comprehensive income or in a separate statement of comprehensive income immediately following the statement of income. On December 23, 2011, the FASB issued an update to this pronouncement, ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, or ASU 2011-12. ASU 2011-12 defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The Company has not recorded any components of comprehensive income (loss) for the years ended September 30, 2012 and 2011 and, as at September 30, 2012, the Company does not have a balance recorded in respect of accumulated comprehensive income (loss).

Note 3 Equipment

				September 30, 2012
				Accumulated
		Cost		Depreciation		Net
Computer equipment	$	5,631	$	5,055	$	576

				September 30, 2011
				Accumulated
		Cost		Depreciation		Net
Computer equipment	$	5,631	$	3,197	$	2,434

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 9

Note 4	Derivative Liability
	Derivative liability, consisting of the embedded conversion features in the Company’s convertible promissory notes, is accounted for as a separate liability measured at its respective fair value, as follows:

		2012			2011
Balance, beginning of the period	$	67,500		$	-
Fair value of embedded conversion feature of convertible promissory notes		-			167,500
Change in fair value of derivative liability		(67,500	)		(100,000	)
Balance, end of the period	$	-		$	67,500

The fair values of the convertible promissory notes embedded call options have been determined using the binomial pricing model using the following weighted average assumptions:

	2012	2011
Risk-free interest rate	0.05%	0.13%
Expected life of derivative liability	0.05 years	0.56 years
Annualized volatility	57.99%	93.45%
Dividend rate	0.00%	0.00%

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 10

Note 5 Promissory Notes Payable

		2012			2011
Convertible interest bearing promissory notes payable	$	-		$	750,000
Interest bearing promissory notes payable		299,000			216,000
Less: fair value of derivative liabilities on date of issuance		-			(167,500	)
Add: accumulated accretion		-			69,419
		299,000			867,919
Less: current portion		(299,000	)		(867,919	)
	$	-		$	-

Convertible interest bearing promissory notes

The Company issued unsecured convertible interest bearing promissory notes totaling $750,000 during the year ended September 30, 2011 consisting of a promissory note in the amount of $250,000 maturing on April 20, 2012 and a promissory note in the amount of $500,000 maturing on May 4, 2012, each bearing interest at 8% per annum. These notes were convertible at any time at the option of the holder into units of the Company at $3.00 per unit with each unit consisting of one common share and one common share purchase warrant entitling the holder thereof to purchase an additional common share for $4.00 for a period of 2 years from the date of issuance.

In connection with the issuance of these notes, the Company paid a finder’s fee totaling $100,000 which was deferred and amortized to income using the effective interest method over the terms of the notes. As at September 30, 2012, there remained no unamortized balance in respect of this deferred financing charge (2011: $55,464).

Pursuant to the guidance of ASC 815-40, the Company determined that the embedded conversion feature of the notes failed to meet the “fixed for fixed” criteria contained within the guidance. Accordingly, the Company bifurcated the embedded conversion features as a separate derivative liability having a fair value of $167,500 at inception. The corresponding debt discount was accreted over the term of the note. During the year ended September 30, 2012, the Company recorded accretion expense of $98,081 (2011: $69,419) in respect of this debt discount.

On April 20, 2012, the $500,000 convertible promissory note with accrued interest thereon of $40,000 along with an interest bearing $250,000 promissory note with accrued interest thereon of $9,389 that had been issued on November 1, 2011 were exchanged for a new non-convertible 12% interest bearing promissory note having a principal amount of $799,389 maturing on June 19, 2012. Subsequent to this exchange of promissory notes, on May 31, 2012, the Company extinguished this note along with accrued interest of $10,925 thereon by issuing 1,620,628 equity units having a fair value of $3,108,365. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $2,298,051.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 11

Note 5	Promissory Notes Payable – (cont’d)
	On May 31, 2012, the Company extinguished the $250,000 convertible promissory note along with accrued interest of $22,333 thereon by issuing 544,667 equity units having a fair value of $1,044,671. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $772,338.
	Interest bearing promissory notes
	During the year ended September 30, 2010, the Company issued a promissory note having a principal balance of $200,000 with terms that included interest at 8% per annum and maturing on May 4, 2011. On May 4, 2011, this note, including accrued interest of $16,000 thereon, was exchanged for a new 8% interest bearing promissory note having a principal balance of $216,000 maturing May 4, 2012. On May 31, 2012, the Company extinguished this note along with accrued interest of $18,576 thereon by issuing 469,152 equity units having a fair value of $899,833. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $665,257.
	On April 2, 2012, the Company issued a promissory note having a principal balance of $32,500 with terms that included interest at 10% per annum maturing on April 2, 2013. The Company paid a finders fee totalling $3,250 which was deferred and amortized to income from the date of issuance to the date of extinguishment. On May 31, 2012, the Company extinguished this note along with accrued interest of $533 thereon by issuing 66,066 equity units having a fair value of $126,715. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $93,682.
	On June 6, 2012, the Company issued a promissory note having a principal balance of $49,000 with terms that include interest at 8% per annum and maturing on December 3, 2012. In connection with the issuance of this note, the Company paid a finder’s fee totaling $4,900 which was deferred and amortized to income using the effective interest method over the terms of the note. As at September 30, 2012, there remained an unamortized balance of $1,215 in respect of this deferred financing charge.
	On June 26, 2012, the Company issued a promissory note having a principal balance of $250,000 with terms that include interest at 8% per annum and maturing on March 31, 2013.
	Extinguishment of promissory notes payable
	As noted above, on May 31, 2012, the Company issued equity units in settlement of certain of its promissory notes outstanding. Each unit consisted of one common share and common share purchase warrant entitling the holder to purchase an additional common share at $0.75 until November 30, 2013.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 12

Note 5	Promissory Notes Payable – (cont’d)
	The promissory note settlements are summarized as follows:

Promissory note settled			Units issued
		Accrued			Loss on
Maturity date	Principal	Interest	Number	Fair Value	Settlement

Convertible interest bearing promissory note

April 20, 2012 $  250,000 $  22,333 544,667 $  1,044,671 $  (772,338 )

Interest bearing promissory notes

May 4, 2012		216,000		18,571	469,152		899,833		(665,262	)
June 19, 2012		799,389		10,925	1,620,628		3,108,365		(2,298,051	)
April 2, 2013		32,500		533	66,066		126,715		(93,682	)
		1,047,889		30,029	2,155,846		4,134,913		(3,056,995	)
	$	1,297,889	$	52,362	2,700,513	$	5,179,584	$	(3,829,333	)

The fair value of each unit issued was determined to be $1.918 determined by aggregating (i) the fair value of $1.25 for the Company’s common shares based on their quoted market price on the date of settlement and (ii) the fair value of $0.668 for each warrant included in the Company’s units. The fair value of the Company’s warrants was determined using the binomial model with the following assumptions:

Stock price	$1.25
Exercise price	$0.75
Expected volatility	78.89%
Risk-free discount rate	0.23%

Note 6	Capital Stock
	On May 24, 2006, the board of directors approved a six (6) for one (1) forward split of the authorized issued and outstanding common stock. The Company’s authorized capital increased from 25,000,000 shares of common stock to 150,000,000 shares of common stock.
	On September 24, 2007, the Company issued 222,222 common shares common shares at $3.60 per share for a total of $800,000 for research and development expenses. The common shares were recorded based upon the quoted market price of the Company’s common stock on the agreement date.
	On September 25, 2007, the Company settled a loan payable in the amount of $333,000 by issuing 92,500 common shares at $3.60 per share, being the quoted market price of the Company’s common stock on the settlement date.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 13

Note 6	Capital Stock – (cont’d)
	On December 10, 2007, the Company issued 150,000 units at $3.50 per unit for proceeds of $525,000. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $5.00 per share until December 10, 2009.
	On December 18, 2007, the Company issued 10,000 shares at $4.50 per share for a total of $45,000 pursuant to an agreement to settle a debt and issued 50,000 shares at $3.86 per share for a total of $193,000 pursuant to a consulting agreement. The Company recorded compensation expense of $65,000 in respect of these issuances based on the excess of the fair value of these shares over the balances at which they were recorded by the Company.
	On May 15, 2008, the Company issued 65,000 common shares at $5.24 per share for a total of $340,600 to its former CEO in accordance with the terms of a severance agreement upon the termination of his services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the agreement date.
	On August 19, 2008, the Company issued 25,000 common shares at $5.07 per share for a total of $ 126,750 to a director of the Company pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the agreement date.
	On August 19, 2008, the Company issued 142,698 units at $4.25 per unit for proceeds of $606,467 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $5.00 per share until August 19, 2009.
	On November 20, 2008, the Company issued 25,000 common shares at $2.63 per share for a total of $65,750 to a director of the Company pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issuance date.
	On February 20, 2009, the Company issued 25,000 common shares at $2.50 per share for a total of $62,500 to a director of the Company pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issuance date.
	On March 6, 2009, the Company issued 89,148 units at $2.25 per unit for proceeds of $200,583 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until March 6, 2010.
	On March 20, 2009, the Company issued 10,800 units at $2.25 per unit for proceeds of $24,300 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until March 20, 2010.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 14

Note 6	Capital Stock – (cont’d)
	On March 20, 2009, the Company issued 2,500 common shares at $2.00 per share for a total of $5,000 to a public relations consultant pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issuance date.
	On May 14, 2009, the Company entered into a revised consulting agreement with a director whereby the consultant returned 75,000 common shares to the Company for cancellation. The return of shares was recorded in the same amount at which they were originally issued.
	On June 11, 2009 the Company issued 36,000 units at $2.25 per unit for proceeds of $81,000 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until June 11, 2010. The Company paid finders’ fees in the amount of $8,100 in relation to this private placement.
	On June 11, 2009 the Company issued 29,227 common shares at $2.25 per share for service rendered by consultants. The common shares were recorded based upon the fair value of the Company’s common stock on the issuance date of the shares.
	On June 19, 2009, the Company issued 495,556 units at $2.25 per unit for total proceeds of $1,115,000 pursuant to private placement agreements. Each unit consisted on one common share and one and one-half of a common share purchase warrant entitling the holder to purchase additional common shares at $2.25 per share until June 19, 2011.
	On June 26, 2009, the Company issued 22,222 common shares at $2.51 per share for finder’s fees related to the issuance of a $500,000 note payable. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issue date.
	On August 19, 2009, the Company issued 128,888 units at $2.25 per Unit for total proceeds of $289,998. Of these placements, 40,000 Units consisted of one common share and one share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until July 9, 2010 and 88,888 Units consisted on one common share and one and one- eighth share purchase warrant entitling the holder to purchase an additional common shares at $2.25 per share until August 4, 2011. The Company paid finders’ fees totalling $19,000 in respect of these private placements.
	On October 2, 2009 the Company issued 266,666 units at $2.25 per unit for proceeds of $600,000 pursuant to private placement agreement. Each unit consisted of one common share and one and one-eighth common share purchase warrant entitling the holder to purchase an additional common share at $2.25 per share until October 2, 2011. The Company had received $300,000 of this amount in the year ended September 30, 2010.
	On February 2, 2010 the Company issued 49,505 common shares of the Company, at their fair value of $2.02 per share pursuant to an agreement with a former officer to settle an outstanding amount owed.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 15

Note 6	Capital Stock – (cont’d)
	On April 9, 2010, the Company issued 92,499 units at $2.60 per unit for proceeds of $240,498 pursuant to private placement agreement. Each unit consisted of one common share and one- half common share purchase warrant entitling the holder to purchase an additional common share at $3.50 per share until April 9, 2011.
	On April 30, 2010, the Company issued 9,825 common shares of the Company, at $2.85 per share as consideration for terminating a consulting agreement and for services rendered under the agreement. The common shares were recorded based upon the quoted market price of the Company’s common stock on the date of the termination of the agreement.
	On June 29, 2010, the Company issued 941,000 units at $2.50 per unit for total proceeds of $2,352,500 pursuant to private placement agreements. Each unit consisted on one common share and one-half of a common share purchase warrant entitling the holder to purchase additional common shares at $3.50 per share until December 29, 2011.
	On July 5, 2010, the Company issued 400,000 units in settlement of $1,000,000 owing to a creditor. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at 3.50 per share until January 5, 2012. The fair value of the units issued was determined to be $1,444,000 on the date they were issued and thus the Company recorded a loss on settlement of accounts payable of $444,000 with a corresponding credit to additional paid-in capital of the same amount on date of issuance. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $3.50, stock price - $3.15, expected volatility – 68.45%, expected life – 1.5 years, dividend yield – 0.00%.
	On September 3, 2010, the Company issued 163,000 units at $2.75 per unit for proceeds of $448,250 pursuant to private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $3.75 per share until March 3, 2012.
	On September 3, 2010, the Company issued 9,000 units at $2.75 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $3.75 per share until March 3, 2012.
	On September 30, 2010, the Company issued 510,638 common shares at $2.35 per share pursuant to the terms of a convertible note payable.
	On September 30, 2010, the Company issued 82,310 units at $2.25 per unit pursuant to the terms of convertible notes payable. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $3.50 per share until September 30, 2011.
	On September 30, 2010, the Company issued 245,748 units at $2.25 per unit pursuant to the terms of convertible notes payable. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $3.00 per share until September 30, 2012.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 16

Note 6	Capital Stock – (cont’d)
	On November 18, 2010, the Company issued 393,846 units at $2.75 per unit for proceeds of $1,083,075 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until May 18, 2012. The Company paid a finder’s fee totalling $65,363 in respect of this private placement.
	On November 18, 2010, the Company issued 3,636 units at $2.75 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until May 18, 2012.
	On November 18, 2010, the Company issued 853,075 units in the conversion of two notes payable originally convertible at $2.50. The Company recorded debt conversion expense of $504,160, related to the fair value of the additional units issued as a result of converting at the lower conversion price. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $3.00 per share until November 18, 2012. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $3.00, stock price - $4.12, expected volatility – 78.33%, expected life – 2.0 years, dividend yield – 0.00%, risk-free rate – 0.52%.
	On November 18, 2010, the Company issued 145,063 shares of common stock at their fair value of $4.12 per share based on their quoted market price pursuant to settling non- convertible interest bearing notes payable outstanding in the amount of $398,922, including accrued interest of $26,032. The Company recorded a loss on settlement of debt of $198,738 based on the difference between the carrying value of the debt settled and the fair value of the shares issued.
	On November 18, 2010, the Company issued 181,818 shares of common stock at their fair value of $4.12 per share based on the quoted value of units issued in a private placement on the same date to one creditor in settlement of $500,000 of debt owing. The Company recorded a loss on settlement of accounts payable of $249,090 based on the difference of the carrying value of the account payable and the fair value of the shares issued.
	On November 25, 2010, the Company issued 29,851 units at $3.35 per unit for proceeds of $100,000 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until November 25, 2012.
	On November 25, 2010, the Company issued 2,985 units at $3.35 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until November 25, 2012.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 17

Note 6	Capital Stock – (cont’d)
	On February 1, 2011, the Company issued 61,014 units at $3.75 per unit for proceeds of $228,800 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $5.25 per share until August 1, 2012.
	On May 3, 2011, the Company issued 33,334 units at $3.00 per unit for proceeds of $100,000 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until April 20, 2013.
	On June 19, 2011, the Company issued 700,000 common shares at $2.25 per share for proceeds of $1,575,000 pursuant to the exercise of warrants.
	On September 26, 2011, the Company issued 650,000 units in settlement of $975,000 of debt owing. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until September 26, 2012. The Company recorded a loss on settlement of account payable in the amount of $84,963 based on the fair value of shares being $975,000 at their issuance and the fair value of the warrants determined to be $84,963. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $2.00, stock price - $1.50, expected volatility – 69%, expected life – 1.0 years, dividend yield – 0.00%, risk-free interest rate – 0.10%.
	On December 6, 2011, the Company issued 615,600 units at $1.25 per unit for proceeds of $769,500 pursuant to private placement agreements. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until December 6, 2012. The Company paid finder’s fees of $77,000 in connection with this private placement.
	On February 9, 2012 the Company issued 8,000 units for service rendered by a director and officer of the Company. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until February 9, 2013. The fair value of the units issued was determined to be $15,896 on the date they were issued and the Company recorded consulting fees of $15,896 on the statement of operations for the year ended September 30, 2012. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $2.00, stock price - $1.74, expected volatility – 84.88%, expected life – 1.0 years, risk free interest rate – 0.15%, dividend yield – 0.00%.
	On February 9, 2012, the Company issued 270,000 units at $1.25 per unit for proceeds of $337,500 pursuant to private placement agreements. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until February 9, 2013. The Company paid a finder’s fee of $33,750 in connection with this private placement.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 18

Note 6	Capital Stock – (cont’d)
	On May 31, 2012, the Company issued 2,700,513 equity units determined to have a fair value of $5,179,584 in settlement of promissory notes totaling $1,297,889 and of $52,367 accrued interest thereon. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $0.75 per share until November 30, 2013. (Note 5).
	On July 12, 2012, the Company issued 75,000 common shares having a fair value of $75,000 based on their quoted market price to the former president of the Company for past services and in final settlement of a consulting agreement dated February 1, 2007.
Note 7	Related Party Transactions
	The following amounts have been donated to the Company by the directors:

		Years ended				January 23, 2004
		September 30,				(Date of Inception)
		2012		2011		to September 30, 2012
Management fees	$	-	$	-	$	14,625
Rent		-		-		3,750
Debt forgiven by directors		-		-		33,666
	$	-	$	-	$	52,041

During the year ended September 30, 2012, the Company was charged consulting fees totaling $479,434 (2011: $674,917) by directors, officers and a significant shareholder of the Company. As at September 30, 2012, included in accounts payable and accrued liabilities is $127,452 (2011: $20,833) owing to directors and officers of the Company and a former director and officer of the Company.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 19

Note 8 Commitments

a)	Share Purchase Warrants
	A summary of the Company’s share purchase warrants outstanding is presented below:

				Weighted
				Average
				Exercise
	Number of Shares			Price
Balance, September 30, 2010	2,047,151		$	2.87
Expired	(148,749	)	$	2.64
Exercised	(700,000	)	$	2.25
Issued	1,457,077		$	3.07
Balance, September 30, 2011	2,655,479		$	3.16
Expired	(1,552,651	)	$	3.16
Issued	3,147,313		$	0.93
Balance, September 30, 2012	4,250,141		$	1.16

At September 30, 2012, the Company has 4,250,141 currently exercisable share purchase warrants outstanding as follows:

Number	Exercise Price		Expiry Date
853,075	$	3.00	November 18, 2012
16,419	$	4.50	November 25, 2012
307,800	$	2.00	December 6, 2012
200,000	$	1.50	January 5, 2013
135,000	$	2.00	February 9, 2013
4,000	$	2.00	February 9, 2013
33,334	$	4.00	April 20, 2013
2,700,513	$	0.75	November 30, 2013
4,250,141

During the year ended September 30, 2012, the exercise price and expiry of 200,000 warrants exercisable at $3.50 and expiring January 5, 2012 were modified and extended such that these warrants are now exercisable at $1.50 until January 5, 2013. The fair value of this modification was determined to be $80,200 and was determined using the Black-Scholes option pricing model using the following weighted average assumptions: risk-free interest rate: 0.11%, expected life: 1.0 year, annualized volatility: 79.46%, dividend rate: 0%.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 20

Note 8 Commitments – (cont’d)

b)	Stock–based Compensation Plan
	In April, 2007, the Company adopted a stock option plan which provides for the granting of stock options to selected directors, officers, employees or consultants in an aggregate amount of up to 3,000,000 common shares of the Company and, in any case, the number of shares to be issued to any one individual pursuant to the exercise of options shall not exceed 10% of the issued and outstanding share capital. The granting of stock options, exercise prices and terms are determined by the Company's Board of Directors. If no vesting schedule is specified by the Board of Directors on the grant of options, then the options shall vest over a 4-year period with 25% the granted vesting each year commencing 1 year from the grant date. For stockholders who have greater than 10% of the outstanding common shares of the Company and who have granted options, the exercise price of their options shall not be less than 110% of the fair of the stock on grant date. Otherwise, options granted shall have an exercise price equal to their fair value on grant date.
	On February 2, 2011, the Company amended and restated the 2007 stock option plan to increase the number of options authorized to 4,000,000.
	A summary of the status of Company’s outstanding stock purchase options for the year ended September 30, 2012 is presented below:

				Weighted
				Average		Weighted
				Exercise		Average Grant
	Number of Shares			Price		Date fair value
Outstanding at September 30, 2010	2,775,000		$	3.29
Forfeited	(1,000,000	)	$	3.93
Cancelled	(50,000	)	$	2.75
Granted	650,000		$	4.06	$	2.95
Outstanding at September 30, 2011	2,375,000		$	3.18
Forfeited	(1,100,000	)	$	2.82
Granted	500,000		$	1.50	$	0.72
Outstanding at September 30, 2012	1,775,000		$	2.94
Exercisable at September 30, 2012	905,000		$	2.81
Exercisable at September 30, 2011	930,000		$	2.90

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 21

Note 8 Commitments – (cont’d)

b)	Stock–based Compensation Plan – (cont’d)
	At September 30, 2012, the following stock options were outstanding:

Number of Shares							Aggregate	Remaining
			Number	Exercise			Intrinsic	Contractual
Total			Vested	Price		Expiry Date	Value	Life (yrs)
50,000	(1	)	50,000	$	3.75	November 1, 2012	-	0.09
100,000	(2	)	-	$	3.86	December 1, 2012	-	0.17
150,000	(3	)	150,000	$	3.10	June 30, 2014	-	1.75
400,000	(4	)	400,000	$	2.50	September 15, 2013	-	0.96
500,000	(5	)	-	$	2.50	October 19, 2013	-	1.04
5,000	(6	)	5,000	$	2.50	March 2, 2014	-	1.42
50,000	(7	)	50,000	$	3.50	June 30, 2014	-	1.75
150,000	(8	)	150,000	$	3.72	February 24, 2016	-	3.40
100,000	(9	)	100,000	$	3.67	March 30, 2016	-	3.50
270,000	(10	)	-	$	3.00	February 8, 2017	-	4.36
1,775,000			905,000				-

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price of the Company’s stock for the options that were in-the-money at September 30, 2012.

(1)	As at September 30, 2012 and 2011, these options had fully vested. The Company did not recognize any stock-based compensation for these options during the year ended September 30, 2012 (2011: $nil). Subsequent to September 30, 2012, these options expired unexercised.
(2)	As at September 30, 2012 and 2011, these options have not vested. The options vest upon the Company listing its shares on the American Stock Exchange or any other nationally recognized stock exchange by December 1, 2012 or in the event of a change of control a listing on a nationally recognized stock exchange is not required. No stock- based compensation has been recorded in the financial statements as the performance condition has not yet been met. Subsequent to September 30, 2012, these options expired unexercised.
(3)	As at September 30, 2012 and 2011, these options had fully vested. During the year ended September 30, 2012, the expiry of these options was extended from June 3, 2013 to June 30, 2014. The fair value of this modification was determined to be $18,600 and was determined using the Black-Scholes option pricing model using the following weighted average assumptions: risk-free interest rate: 0.31%, expected life: 2.0 years, annualized volatility: 84.74%, dividend rate: 0%.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 22

Note 8 Commitments – (cont’d)

b)	Stock–based Compensation Plan – (cont’d)
	(4)	As at September 30, 2012 and 2011, these options had fully vested. The Company did not recognize any stock-based compensation for these options during the year ended September 30, 2012 (2011: $500,000).
	(5)	As at September 30, 2012 and 2011, none of these options have vested. The options vest as to 100,000 per compound entered into a phase II trial. The fair value of these options was calculated to be $740,000, which the Company has not yet recognized in the financial statements as the performance conditions have not yet been met.
	(6)	As at September 30, 2012 and 2011, these options had fully vested. The Company did not recognize any stock-based compensation for these options in the year ended September 30, 2012 (2011: $nil).
	(7)	As at September 30, 2012 and 2011 these options had fully vested. The Company did not recognize any stock-based compensation for the year ended September 30, 2012 (2011: $125,000). During the year ended September 30, 2012, the expiry of these options was shortened from June 29, 2015 to June 30, 2014. The Company did not recognize any stock based compensation expense in connection with this modification because the fair value of the modified options was less than the fair value of the options under the old terms.
	(8)	As at September 30, 2012, these options had fully vested (2011: none of these options have vested). The options vested on February 24, 2012. The fair value of these options was calculated to be $406,500, of which the Company recognized stock-based compensation in the amount of $163,415 for the year ended September 30, 2012 (2011: $243,084).
	(9)	These options were granted during the year ended September 30, 2011. At September 30, 2011, 75,000 of these options had vested. The remaining 25,000 options vested during the year ended September 30, 2012. The fair value of these options at issuance was calculated to be $267,000, of which the Company has recognized $6,500 as stock based compensation during the year ended September 30, 2012 (2011: $120,250).
	(10)	As at September 30, 2012 and 2011, these options have not vested. The options vest upon one or more compounds: entering Phase II trial – 90,000 options; entering Phase III trial – 90,000 options; and receiving FDA approval – 90,000 options. No stock-based compensation has been recorded in the financial statements as none of the performance conditions have yet been met.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 23

Note 8 Commitments – (cont’d)

b)	Stock–based Compensation Plan – (cont’d)
	During the year ended September 30, 2012, a total of 1,100,000 options were forfeited for which the Company had recognized stock-based compensation of $158,493 in respect of these options. The Company recognized stock-based compensation of $33,493 in respect of these options during the year ended September 30, 2012 (2011: $Nil).
	During the year ended September 30, 2011, a total of 1,000,000 options were forfeited for which the Company had recognized stock based compensation of $708,917 in respect of these options. Of this total, $284,828 of stock based compensation expense had been recognized during the year ended September 30, 2011.
	The fair value of stock options granted has been determined using the Black-Scholes option pricing model using the following weighted average assumptions applied to stock options granted during the periods:

	2012	2011
Risk-free interest rate	0.83% - 2.19%	0.96% - 2.21%
Expected life of options	4.25 - 5.0 years	4.5 - 5.0 years
Annualized volatility	57.87% - 95.25%	56.27% - 62.52%
Dividend rate	0%	0%

At September 30, 2012, the following summarizes the unvested stock options:

						Weighted
				Weighted		Average
	Number of			Average		Grant-Date
	Shares			Exercise Price		Fair Value
Unvested options at September 30, 2010	1,161,667		$	2.98	$	1.80
Granted	650,000		$	4.06	$	2.61
Forfeited/Cancelled	(225,000	)	$	3.47	$	2.51
Vested	(141,667	)	$	3.57	$	2.59
Unvested options at September 30, 2011	1,445,000		$	3.33	$	2.17
Granted	500,000		$	1.50	$	0.72
Forfeited	(900,000	)	$	2.74	$	1.60
Vested	(175,000	)	$	3.71	$	2.70
Unvested options at September 30, 2012	870,000		$	2.81	$	1.82

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 24

Note 8 Commitments – (cont’d)

b)	Stock–based Compensation Plan – (cont’d)
	As at September 30, 2012, there was no unrecognized compensation cost associated with unvested share-based compensation awards that will become vested exclusive of achieving any performance milestones that is expected to be recognized in current fiscal year. There has been no stock-based compensation recognized in the financial statements for the year ended September 30, 2012 (2011: $nil) for options that will vest upon the achievement of performance milestones because the Company has determined that satisfaction of the performance milestones was not probable. Compensation relating to stock options exercisable upon achieving performance milestones will be recognized in the period the milestones are achieved.
	Stock-based compensation amounts, including those relating to shares issued for services during the years ended September 30, 2012 and 2011 are classified in the Company’s Statement of Operations as follows:

		Years ended September 30,
		2012		2011
Consulting fees	$	312,903	$	1,273,162
Research and development		80,200		-
	$	393,103	$	1,273,162

Note 9	Income Taxes
	The tax effects of the temporary differences that give rise to the Company’s estimated deferred tax assets and liabilities are as follows:

		2012			2011
		34%			34%
Net operating loss carryforwards	$	6,775,000		$	5,508,000
Research and development tax credits		741,000			476,000
Foreign exchange		28,000			15,000
Accrued bonuses		34,000			-
Intangible asset costs		34,000			38,000
Valuation allowance for deferred tax assets		(7,612,000	)		(6,037,000	)
Net deferred tax assets	$	-		$	-

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 25

Note 9	Income Taxes – (cont’d)
	The provision for income taxes differ from the amount established using the statutory income tax rate as follows:

		2012			2011
Income benefit at statutory rate	$	(2,823,000	)	$	(2,484,000	)
Stock-based compensation		103,000			433,000
Foreign income taxed at foreign statutory rate		(2,000	)		1,000
Debt extinguishment		1,302,000			181,000
Research and development tax credit		(175,000	)		(95,000	)
Fair value of derivative liability		(23,000	)		(34,000	)
Debt accretion		33,000			24,000
Debt conversion		-			170,000
Other permanent differences		10,000			-
Change in valuation allowance		1,575,000			1,804,000
Deferred income tax recovery	$	-		$	-

As of September 30, 2012, the Company had net operating loss carry-forwards of approximately $19,945,000 (2011: $16,300,000) available to offset future taxable income. The carry-forwards will begin to expire in 2027 unless utilized in earlier years. The Company has not yet filed any tax returns in France as they are not yet due.

The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and this causes a change in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income. Because management of the Company does not currently believe that it is more likely than not that the Company will receive the benefit of these assets, a valuation allowance equal to the deferred tax asset has been established at both September 30, 2012 and 2011.

Uncertain Tax Positions

The Company files income tax returns in the U.S. federal jurisdiction, various state and foreign jurisdictions. The Company’s tax returns are subject to tax examinations by U.S. federal and state tax authorities, or examinations by foreign tax authorities until respective statute of limitation. The Company is subject to tax examinations by tax authorities for all taxation years commencing on or after 2004.

Provisions have not been made for U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries. Such earnings have been and will continue to be reinvested but could become subject to additional tax if they were remitted as dividends, or were loaned to the Company affiliate. It is not practicable to determine the amount of additional tax, if any, that might be payable on the undistributed foreign earnings.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 26

Note 10	Supplemental Cash Flow Information
	Investing and financing activities that do not have a direct impact on current cash flows are excluded from the statement of cash flows.
	During the year ended September 30, 2012:

a)	The Company issued 544,667 units of the Company at their fair value of $1.918 per unit to settle a convertible interest bearing note payable outstanding in the amount of $272,333, including accrued interest of $22,333 included in accounts payable and accrued liabilities and 2,155,846 units of the Company at their fair value of $1.918 per unit to settle non- convertible interest bearing notes payable outstanding in the amount of $1,077,923 including accrued interest of $30,034 included in accounts payable and accrued liabilities. Each unit consisted of one common share and one common share purchase warrant exercisable into one additional common share for $0.75 per share until November 30, 2013. The Company recorded a loss on debt settlement of $3,829,333 as a result of this transaction.
b)	The Company issued 75,000 common shares at their fair value of $1.00 per share for a total of $75,000 to the former President of the Company pursuant to a severance agreement.
c)	The Company issued 8,000 units for services performed by director. Each unit consisted of one common share and one-half common share purchase warrant. The fair value of this issuance was determined to be $15,896.

During the year ended September 30, 2011:

a)	The Company issued 3,636 units at $2.75 per unit for finder’s fees related to the private placement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until May 18, 2012.
b)	The Company issued 853,075 units at the calculated fair value of $6.24 per unit in the conversion of two notes payable. The Company recorded debt conversion expense of $504,160 related to the fair value of the additional units issued based on the difference between the fair value of the units issued and the carrying value of the debt. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $3.00 per share until November 18, 2012.
c)	The Company issued 145,063 shares of common stock at their fair value of $4.12 per share to settle non-convertible interest bearing notes payable outstanding in the amount of $398,923, including accrued interest of $26,032 (included in accounts payable and accrued liabilities). The Company recorded a loss on debt settlement of $198,738 as a result of this transaction.

Anavex Life Sciences Corp.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2012 and 2011
(Stated in US Dollars) – Page 27

Note 10 Supplemental Cash Flow Information – (cont’d)

d)	The Company issued 181,818 shares of common stock at their fair value of $4.12 per share based on their quoted market price to one creditor in settlement of $500,000 of accounts payable. The Company recorded a loss on settlement of accounts payable of $249,090 as a result of the difference between the carrying value of the account payable and the fair value of the shares issued.
e)	The Company issued 2,985 units at $3.35 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until November 25, 2012.
f)	On September 26, 2011, the Company issued 650,000 units having a fair value of $1,059,963 to settle an account payable totaling $975,000 and thus recorded a loss of $84,963 on the settlement of account payable.
g)	The Company issued an 8% interest bearing promissory note having a principal balance of $216,000 in exchange for a promissory note that had a principal balance of $200,000 with accrued interest of $16,000 thereon.

Note 11	Subsequent Events
	Subsequent to September 30, 2012;

a)	the Company issued a promissory note having a principal balance of $150,000 with terms that include interest at 8% per annum and maturing on March 31, 2013.
b)	the Company issued a promissory note having a principal balance of $50,000 with terms that include interest at 8% per annum and maturing on March 31, 2013.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL MATTERS

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer, evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this annual report.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure.

Based on its evaluation, our management, with the participation of our principal executive officer and principal financial officer, concluded that as of the end of the period covered by this annual report, our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to internal control deficiencies related to internal control over financial reporting.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our management evaluated, under the supervision and with the participation of our principal executive officer and principal financial officer, the effectiveness of our internal control over financial reporting as of September 30, 2012.

Based on its evaluation under the framework in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission, our management, with the participation of our principal executive officer and principal financial officer, concluded that our internal

33

control over financial reporting was not effective as of September 30, 2012. The ineffectiveness of our internal control over financial reporting was due to the existence of significant deficiencies constituting material weaknesses, as described in greater detail below. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Material Weaknesses Identified

Based on our management’s evaluation required by Rule 13a-15 of the Securities Exchange Act of 1934, certain significant deficiencies in internal control are evident to our management and our management believes these deficiencies represent material weaknesses, including:

1.

Insufficient segregation of duties in our finance and accounting functions due to limited personnel. During the fiscal year ended September 30, 2012, we had limited staff that performed nearly all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements. This creates certain incompatible duties and a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the Securities and Exchange Commission. These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected; and

2.

There has been a lack of sufficient supervision and review by our management as a product of limited personnel.

Plan for Remediation of Material Weaknesses

We intend to take appropriate and reasonable steps to make improvements to remediate these deficiencies as a product of a larger strategic plan that incorporates partnership with a larger enterprise, or the sale of the company. We intend to consider the results of our remediation efforts and related testing as part of our year-end 2013 assessment of the effectiveness of our internal control over financial reporting in light of our strategic plan.

Due to our size and nature, segregation of all conflicting duties has not always been possible and may not be economically feasible. However, we are in the process of implementing processes and procedures intended to mitigate any material weaknesses identified,

We believe that the foregoing steps will remediate the deficiencies identified above, and we intend to continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate.

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Limitations on Effectiveness of Controls

Our principal executive officer and principal financial officer do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additional controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

During the fourth quarter ended September 30, 2012, we undertook changes that have materially improved our internal control over financial reporting. We appointed Robert Chisholm as our principal executive officer and principal financial officer. Mr. Chisholm has significant experience working with internal controls and accounting, and is an accredited accountant. His experience and accreditation exceeds the experience and qualifications of his predecessor. Mr. Chisholm has implemented procedures by which we have greater clarity into our daily financial affairs including improved budgeting, review by the directors of all invoices received by the company, transparent cash management reporting and planning, and on-demand reporting of all banking transactions.

ITEM 9B OTHER INFORMATION

On October 17, 2012, we issued Akira International Limited a promissory note having a principal balance of $150,000 with terms that include interest at 8% per annum and maturing on March 31, 2013. On November 14, 2012, we issued Akira International Limited another promissory note having a principal balance of $50,000 with terms that include interest at 8% per annum and maturing on March 31, 2013.

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PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

Our directors are to be elected at our annual meeting and each director elected is to hold office until his or her successor is elected and qualified. Our board of directors may remove our officers at any time.

Our directors and executive officers, their age, positions held, and duration of such, are as follows:

Name	Position	Age	Date first appointed
Sean Lowry	Director	40	February 24, 2011
Robert Chisholm	Director, President, Secretary, Treasurer, Chief Financial Officer	50	May 13, 2011

Business Experience

The following is a brief account of the education and business experience of directors and executive officers during at least the past five years, indicating their principal occupation during the period, and the name and principal business of the organization by which they were employed.

Sean Lowry

Mr. Lowry is executive director of Airframe Capital, an advisory firm. Mr. Lowry was president of Wm. Lowry Consulting from 2001 until its merger with Airframe Capital in 2012. Between 2006 and 2012, Mr. Lowry was also a partner and portfolio manager in Gulfstream Ventures, a venture capital firm. Mr. Lowry serves as an officer and director of private companies and is a member of the Institute of Corporate Directors.

We believe Mr. Lowry is qualified to serve on our board of directors because of his knowledge of our company’s history and current operations, which he gained from serving as our director since February 24, 2011, in addition to his business experiences described above.

Robert Chisholm

Mr. Chisholm has been our President, Secretary, Treasurer and Chief Financial Officer since June 26, 2012 and a director of our company since May 13, 2011.

Mr. Chisholm has been an officer and partner of Emprise Capital Corp, a private company focused on advising portfolio companies on managing finances, including development and implementation of

36

comprehensive budgeting processes, public market listings and oversight of contract negotiations since 2009.

Mr. Chisholm has been the Chief Financial Officer and a director of OMT Inc. since July 2011. He has been the Chief Financial Officer of T.M.T. Resources Inc. since November 2011 and a director since October 2012 and the Chief Financial Officer of Ripper Oil and Gas Inc. since May 2012.

Mr. Chisholm’s background includes previous appointments as Chief Financial Officer and a director of Brookwater Ventures Inc., Ocean Park Ventures Corp., Savary Capital Corp., Windamere Ventures Ltd. (formerly Advanced Vision Systems Corp.) and PNI Digital Media Inc. (formerly PhotoChannel Networks Inc.). Mr. Chisholm has also served as a member of the Board of Directors for Rare Earth Industries Limited (formerly Seymour Ventures Corp.) and as Chief Financial Officer of Chantrell Ventures Corp. (formerly Tiger Pacific Mining Corp.). Mr. Chisholm holds a professional accounting designation from the Certified Management Accountants of Canada and received his BBA with a major in accounting from Saint Francis Xavier University in Nova Scotia.

We believe Mr. Chisholm is qualified to serve on our board of directors because of his knowledge of our company’s history and current operations, which he gained from serving as our director since May 13, 2011, in addition to his business experiences described above.

Family Relationships

There are no family relationships between any director or executive officer.

Involvement in Certain Legal Proceedings

There are no material proceedings to which any director or executive officer or any associate of any such director or officer is a party adverse to our company or has a material interest adverse to our company.

No director or executive officer has been involved in any of the following events during the past ten years:

1.	any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2.	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
3.	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
4.	being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

37

5.

being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and- desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

6.

being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of our common stock to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended September 30, 2012, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted our policy on our website at www.anavex.com.

Audit Committee and Audit Committee Financial Experts

We have an audit committee, comprised of two directors, Robert Chisholm, and Sean Lowry. During the fiscal year ended September 30, 2012, our audit committee held 12 meetings. The audit committee represents our board of directors in discharging its responsibility relating to the accounting, reporting and financial practices of our company, and has general responsibility for oversight of internal controls, accounting and audit activities and legal compliance of our company. However, the audit committee’s function is one of oversight only and does not relieve our management of its responsibilities for preparing financial statements which accurately and fairly present our financial results and conditions or

38

the responsibilities of the independent registered public accounting firm relating to the audit or review of financial statements.

Sean Lowry, and Robert Chisholm are each considered an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K. Sean Lowry is Chairman of the audit committee.

Nominating and Compensation Committees

We do not have standing nominating or compensation committees, or committees performing similar functions. Our board of directors believes that it is not necessary to have a standing compensation committee at this time because the functions of such committee are adequately performed by our board of directors. Our board of directors has not adopted a charter for the compensation committee.

Our board of directors also is of the view that it is appropriate for us not to have a standing nominating committee because our board of directors has performed and is expected to perform adequately the functions of a nominating committee. Our board of directors has not adopted a charter for the nominating committee. There has not been any defined policy or procedure requirements for stockholders to submit recommendations or nomination for directors. Our board of directors does not believe that a defined policy with regard to the consideration of candidates recommended by stockholders is necessary at this time because we believe that, at this stage of our development, a specific nominating policy would be premature and of little assistance until our business operations are at a more advanced level. There are no specific, minimum qualifications that our board of directors believes must be met by a candidate recommended by our board of directors. There is neither a defined, nor a typical process of identifying and evaluating nominees for director.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation

The particulars of compensation paid to the following persons:

a)	our principal executive officers;
b)	each of our two most highly compensated executive officers who were serving as executive officers at the end of the fiscal year ended September 30, 2012 who had total compensation exceeding $100,000; and
c)	up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the most recently completed financial year, who we will collectively refer to as the named executive officers, for our fiscal years ended September 30, 2012 and 2011, are set out in the following summary compensation table:

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Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)(1)	Other Annual Compen- sation ($)(2)	Total ($)
Robert Chisholm(1) President, Chief Financial Officer and Director	2012 2011	96,217 Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	96,217 Nil
Harvey Lalach (2) Former President, Former Chief Operating, Former Director	2012 2011	130,000 150,000	Nil Nil	75,000 Nil	18,600 Nil	Nil Nil	223,600 150,000
George Tidmarsh (3) Former Executive Director	2012 2011	42,012 Nil	Nil Nil	15,896 Nil	33,493 Nil	Nil Nil	91,401 Nil

(1)	Robert Chisholm was appointed President and Chief Financial Officer on June 26, 2012. Prior to that date, Mr. Chisholm served as a director to the company.
(2)	Harvey Lalach was appointed President and Secretary on April 25, 2006. On August 27, 2011, Mr. Lalach was appointed Chief Operating Officer and on May 13, 2011 he was appointed interim Chief Financial Officer. Mr. Lalach resigned as an officer and director of our company on June 26, 2012.
(3)	George Tidmarsh was appointed as an executive director on October 12, 2011 and received consulting fees and stock option awards in his capacity as Executive Director. Mr. Tidmarsh resigned on March 17, 2012

Consulting Agreements

Robert Chisholm

Effective June 26, 2012, Robert Chisholm was appointed President and Chief Financial Officer of the company. Mr. Chisholm is remunerated at the rate of CDN$7,500 per month through a company with which he is associated.

Harvey Lalach

We had a consulting agreement dated February 1, 2007 with Harvey Lalach to provide management services to our company for consideration of $7,000 per month. The contract had a two year term, and was extended for an additional two year term expiring January 31, 2011. During the fiscal year ended September 30, 2008, we agreed to increase the compensation of Mr. Lalach to $12,500 per month. Effective February 1, 2011 we entered into a consulting agreement with Mr. Lalach whereby Mr. Lalach agreed to continue to provide management services to our company in return for compensation of $12,500 per month for an additional two years.

Effective June 26, 2012 Mr. Lalach resigned his positions as both an officer and a director. Mr. Lalach continued to consult for the company until September 30, 2012 and was paid $15,000. In addition, we issued an aggregate of 75,000 shares of our common stock at a deemed value of $1.00 per share to

40

Mr. Lalach for his past services and in final settlement of his Consulting Agreement dated February 1, 2007 and we extended the expiry date to June 30, 2014 of 200,000 stock options held by Mr. Lalach.

Dr. George Tidmarsh

Effective October 10, 2011 we entered into a consulting agreement with Dr. Tidmarsh to act as our executive director for the following consideration:

a)	a monthly consulting fee of $10,000;
b)	500,000 Share purchase options exercisable at $1.50 per option share until October 10, 2016 (subject to certain vesting provisions);
c)	reimbursement of all reasonable expenditures.

On February 9, 2012 we issued an aggregate of 8,000 units of our securities at a price of $1.25 per unit to George Tidmarsh, a former director of our company, for his services during the month of January, 2012. Each unit consisted of one share of our common stock and one-half of one share purchase warrant. Each whole warrant is exercisable at $2.00 for one share of common stock for a period of 12 months.

On March 18, 2012 Dr. Tidmarsh delivered notice to us of his resignation as both an officer and a director. On March 21, 2012, Dr. Tidmarsh withdrew his original notice, and issued an amended notice of resignation.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer and director certain information concerning the outstanding equity awards as of September 30, 2012.

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Name	Option Awards					Stock Awards
	Number of Securities Underlying Exercisable Options (#)	Number of Securities Underlying Unexercisable Options (#)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares of Units of Stock that have not Vested (#)	Market Value of Shares or Units of Stock that have not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested ($)
Robert Chisholm	Nil	Nil	Nil	N/A	N/A	Nil	N/A	Nil	N/A
Sean Lowry	150,000	Nil	Nil	3.72	Feb 24, 2016	Nil	N/A	Nil	N/A
Harvey Lalach	150,000 50,000	Nil Nil	Nil Nil	3.10 3.50	June 30, 2014 June 30, 2014	Nil	N/A	Nil	N/A
George Tidmarsh	Nil	Nil	Nil	N/A	N/A	Nil	N/A	Nil	N/A

We have not adopted any other equity compensation plan other than our 2007 Stock Option Plan.

Compensation of Directors

The table below shows the compensation of our directors who were not our named executive officers for the fiscal year ended September 30, 2012:

				Non-Equity	Nonqualified
	Fees Earned or	Stock	Option	Incentive Plan	Deferred	All Other
	Paid in Cash	Awards	Awards	Compensation	Compensation	Compensation	Total
Name	($)	($)	($)	($)	Earnings ($)	($)	($)
Sean Lowry (1)	95,000	Nil	Nil	Nil	Nil	Nil	95,000

(1) Sean Lowry is paid a fee for his service as chairman of the company’s audit committee.

We reimburse our directors for expenses incurred in connection with attending board meetings.

42

During the fiscal year ended September 30, 2012, there were no standard arrangements pursuant to which any of our directors were compensated for services provided in their capacity as directors.

We currently have no formal plan for compensating our directors for their services in their capacity as directors, although we may elect to issue stock options to such persons in the future. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director.

Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide retirement or similar benefits for our directors or executive officers.

Resignation, Retirement, Other Termination, or Change in Control Arrangements

We have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive officers, or a change in control of our company or a change in our directors’ or executive officers’ responsibilities following a change in control.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of December 28, 2012, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and our named executive officers and by our current directors and executive officers as a group. We have determined the number and percentage of shares beneficially owned by such person in accordance with Rule 13d-3 under the Securities Exchange Act of 1934. This information does not necessarily indicate beneficial ownership for any other purpose.

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Title of class	Name and address of beneficial owner	Amount and nature of beneficial ownership	Percent of class 1
Common Stock	Athanasios Skarpelos 2, Place du Port Geneva, Switzerland CH 1204	6,725,832     Direct	22.24%
Common Stock	Sean Lowry 300-1172 Bay Street Toronto, Ontario M5S 1L9 Canada	150,0002    Direct	0.49%
Common Stock	Robert Chisholm c/o 1600 – 609 Granville Street Vancouver, BC V7Y 1C3 Canada	0     Direct	0%
Common Stock	Harvey Lalach3 4837 Canyon Ridge Crescent Kelowna, British Columbia Canada	825,0004    Direct	2.71%
Common Stock	George Tidmarsh5 951 Gateway Blvd., Suite 3A South, San Francisco, CA, 94060, USA	12,0006    Direct	0.40%
	Directors & Executive Officers as a group (2 persons) 7	150,000     Direct	0.49%

1 Percentage of ownership is based on 30,240,687 shares of our common stock issued and outstanding as of December 28, 2012. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

44

2 Includes 150,000 stock options exercisable within 60 days.

3 Mr. Lalach resigned as director and officer on June 26, 2012.

4 Includes 625,000 shares of common stock and 200,000 stock options exercisable within 60 days.

5 Dr. Tidmarsh resigned as executive chairman on March 21, 2012.

6 Includes 8,000 shares of common stock and 4,000 shares of common stock issuable upon exercise of warrants.

7 Does not include Mr. Lalach, who resigned as director and officer on June 26, 2012 and Dr. Tidmarsh who resigned as executive chairman on March 21, 2012.

Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of our company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with related persons

There has been no transaction, since October 1, 2010, or currently proposed transaction, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any of the following persons had or will have a direct or indirect material interest.

i.	any director or executive officer of our company;
ii.	any beneficial owner of shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; and
iii.	any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons.

Cameron Durrant

On May 20, 2008, we entered into a consulting agreement with Cameron Durrant, a former director of our company, to provide certain management and consulting services to our company. Consideration for his services included:

45

(a)	the issuance of 200,000 shares of common stock to be paid installments of 25,000 shares every quarter;
(b)	the issuance of 400,000 stock options exercisable at $5.25 per share for a period of three years, subject to vesting provisions; and
(c)	a payment of a finder’s fee for any financing our company receives in the amount of 4% on the first $100,000,000 and 2% on the balance.

On May 14, 2009, we signed an amended consulting agreement with Cameron Durrant, whereby the consideration of 200,000 common shares to be paid in installments of 25,000 common shares every quarter was replaced with a grant of 400,000 options at an exercise price of $2.50 per share until May 12, 2014 and vest as follows:

(a)	200,000 options upon the execution of the amended consulting agreement;
(b)	50,000 options on August 14, 2009
(c)	50,000 options on November 14, 2009
(d)	50,000 on February 14, 2010
(e)	50,000 options on May 14, 2010

Dr. Durrant received 75,000 shares of common stock pursuant to the consulting agreement dated May 20, 2008 and subsequently returned these 75,000 shares to our company for cancellation as a result of the award modification.

On January 2, 2010 we signed a second amended consulting agreement with Dr. Durrant, whereby we retained his services as our Executive Chairman commencing as of January 2, 2010. In consideration of Dr. Durrant’s services, we agreed to pay him a monthly fee of $25,000, which equates to $300,000 over the course of one year. The term of this agreement was for a period of two years commencing on January 2, 2010 and expiring on January 1, 2012. Effective September 16, 2011, Dr. Durrant resigned from our board of directors and as an officer of our company.

Compensation of Named Executive Officers and Directors

For information regarding compensation of named executive officers and directors, please see “Item 11. Executive Compensation.”

Director Independence

Under NASDAQ Rule 5605(a)(2), a director is not considered to be independent if he or she is also an executive officer or employee of the company or accepted any compensation from the company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence.

We determined that Robert Chisholm is not independent as that term is defined by NASDAQ 5605(a)(2) because Mr. Chisholm serves as our President, Secretary, Treasurer and Chief Financial Officer. We determined that Sean Lowry is independent as that term is defined by NASDAQ Rule 5605(a)(2).

46

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Fees Paid to Our Independent Registered Public Accounting Firm

The following table sets forth the aggregate fees billed or expected to be billed to our company for professional services rendered by our independent registered public accounting firms, for the fiscal years ended September 30, 2012 and 2011:

BDO Canada LLP

	2012	2011
Audit Fees	$87,231	$87,570
Audit Related Fees	Nil	Nil
Tax Fees	$5,161	$7,349
All Other Fees	Nil	Nil
Total Fees	$92,392	$94,919

Audit Fees. Consist of fees billed for professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly reports, services performed in connection with filings with the Securities and Exchange Commission and other services that are normally provided by BDO Canada LLP for the fiscal years ended September 30, 2012 and 2011, in connection with statutory and regulatory filings or engagements.

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Registered Public Accounting Firm

Our audit committee pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees were reviewed and approved by our audit committee before the respective services were rendered.

Our audit committee has considered the nature and amount of fees billed by BDO Canada LLP and believes that the provision of services for activities unrelated to the audit was compatible with maintaining BDO Canada LLP’s independence.

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PART IV

ITEM 15. EXHIBITS, SCHEDULES FINANCIAL STATEMENT

Exhibit Number	Description
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation (incorporated by reference to an exhibit to our Registration Statement on Form SB-2 filed on January 13, 2005)
3.2	Bylaws (incorporated by reference to an exhibit to our Registration Statement on Form SB-2 filed on January 13, 2005)
3.3	Articles of Merger filed with the Secretary of State of Nevada on January 10, 2007 and which is effective January 25, 2007 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on January 25, 2007)
(4)	Instruments defining rights of security holders, including indentures
4.1	Specimen Stock Certificate (incorporated by reference to an exhibit to our Registration Statement on Form SB-2 filed on January 13, 2005)
4.2	Form of Convertible Loan Agreement (incorporated by reference to an exhibit to our Form 8-K filed on April 3, 2009)
4.3	8% Convertible Loan Agreement dated June 3, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
4.4	8% Convertible Loan Agreement dated June 19, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 26, 2009)
(10)	Material Contracts
10.1	Agreement between Anavex Life Sciences Corp. and Dr. Alexandre Vamvakides dated January 31, 2007 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2007)
10.2	Abstract of Disclosure of Greek Patent Number 1002616 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2007)
10.3	Abstract of Disclosure of Greek Patent Number 1004208 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2007)
10.4	Abstract of Disclosure of Greek Patent Number 1004868 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2007)
10.5	Written description of Greek Patent Application Number 20070100020 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2007)
10.6	Form of Stock Option Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 22, 2007)

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Exhibit Number	Description
10.7	Shares for Services and Subscription Agreement dated September 11, 2007 between our company and Eurogenet Labs S.A. (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 27, 2007)
10.8	2007 Stock Option Plan (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 28, 2007)
10.9	Consulting Agreement with Cameron Durrant dated May 20, 2008 (incorporated by reference to an exhibit to our Quarterly Report on Form 10-QSB filed on August 18, 2008
10.10	Form of Convertible Loan Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 3, 2009)
10.11	Consulting Agreement with Tariq Arshad dated March 2, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 3, 2009)
10.13	Consulting Agreement with Dr. Mark Smith dated January 13, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 3, 2009)
10.14	Form of Subscription Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 3, 2009)
10.15	Form of Warrant Certificate (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 3, 2009)
10.16	Amended Consulting Agreement with Cameron Durrant dated May 14, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
10.17	CEO Consulting Agreement with Dr. Herve de Kergrohen dated June 12, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
10.18	Form of Private Placement subscription agreement dated June 15, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
10.19	Shares for Services Agreement with Andreas Eleuthariadis dated June 10, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
10.20	Shares for Services Agreement with Vasileios Kourafalos dated June 10, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
10.21	Shares for Services Agreement with George Kalkanis dated June 10, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
10.22	Stock Option Agreement with Alexandre Vamvakides dated June 11, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 23, 2009)
10.23	Form of Private Placement Subscription Agreement Convertible Loan (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 26, 2009)
10.24	Form of Private Placement Subscription Agreement for Units (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 26, 2009)
10.25	Consultant Services Agreement with NAD Ltd. dated July 1, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 24, 2009)

49

Exhibit Number	Description
10.26	Form of Subscription Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 24, 2009)
10.27	Form of Warrant Certificate (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on August 12, 2009)
10.28	Stock Option Agreement with Alexander Vamvakides dated October 19, 2009 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 24, 2009)
10.29	Promissory note issued to Stonehedge Limited on January 1, 2010 (incorporated by reference to an exhibit to our Quarterly Report on Form 10-Q filed on March 31, 2010)
10.30	Second Amended Consulting Agreement with Dr. Cameron Durrant dated January 2, 2010 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 9, 2010)
10.31	Contract Lease Agreement with Euro Genet Labs SA dated February 1, 2010 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 9, 2010)
10.32	Form of Subscription Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 9, 2010)
10.33	Form of Warrant Certificate (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 9, 2010)
10.34	Form of Convertible Loan Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 9, 2010)
10.35	Form of Subscription Agreement for US subscribers (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on July 6, 2010)
10.36	Form of Subscription Agreement for non-US subscribers (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on July 6, 2010)
10.37	Form of Warrant Certificate for US warrant holders (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on July 6, 2010)
10.38	Form of Warrant Certificate for non-US warrant holders (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on July 6, 2010)
10.39	Shares for Services Agreement dated July 5, 2010 with Eurogenet Labs SA (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on July 9, 2010)
10.40	Form of Warrant Certificate for non-US warrant holders (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on July 9, 2010)
10.41	Agreement for Services with Genesis Biopharma Group LLC dated August 10, 2010 (incorporated by reference to an exhibit of our Current Report on Form 8-K filed on August 18, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.42	Agreement for Services with ABX-CRO Advanced Pharmaceutical Services dated August 10, 2010 (incorporated by reference to an exhibit of our Current Report on Form 8-K filed on August 18, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)

50

Exhibit Number	Description
10.43	Form of Subscription Agreement (US Purchasers) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 9, 2010)
10.44	Form of Subscription Agreement (Canadian and Offshore Purchasers) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 9, 2010)
10.45	Form of Warrant Certificate (US warrant holders)(incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 9, 2010)
10.46	Form of Warrant Certificate (Canadian and Offshore warrant holders) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 9, 2010)
10.47	Consulting Agreement dated August 2, 2010 with Tom Skarpelos (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 27, 2010)
10.48	Independent Contractor Agreement dated September 1, 2010 with David Tousley (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 27, 2010)
10.49	Sublease Contract with Genesis Research LLC dated September 15, 2010 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 27, 2010)
10.50	Form of Subscription Agreement (US Purchasers) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 22, 2010)
10.51	Form of Subscription Agreement (non-US Purchasers) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 22, 2010)
10.52	Form of Warrant Certificate (US Warrant Holders) (US Purchasers) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 22, 2010)
10.53	Form of Warrant Certificate (non-US Warrant Holders) (US Purchasers) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 22, 2010)
10.54	Shares for Service and Subscription Agreement dated November 1, 2010 with Eurogenet Labs SA (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 22, 2010)
10.55	Subscription Agreement with Stonehedge Limited dated November 17, 2010 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 22, 2010)
10.56	Form of Subscription Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 30, 2010)
10.57	Form of Warrant Certificate Form of Subscription Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 30, 2010)
10.58	Shares for Services Agreement Form of Subscription Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on November 30, 2010)
10.59	Form of Subscription Agreement (non-US Purchasers) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2011)
10.60	Form of Warrant Certificate (non-US Warrant Holders) (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2011)

51

Exhibit Number	Description
10.61	Termination Agreement dated February 2, 2011 with Genesis BioPharma Group, LLC (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2011)
10.62	Independent Contractor Agreement with Harvey Lalach dated February 1, 2011 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2011)
10.63	Independent Contractor Agreement with Dr. Angelos Stergiou dated February 1, 2011 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 7, 2011)
10.64	Amended and Restated 2007 Stock Option Plan (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 8, 2011)
10.65	Form of Advisory Board Consulting Agreement (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on February 28, 2011)
10.66	Consulting Agreement dated March 30, 2011 with Shackleton Consulting Corp. (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 13, 2011)
10.67	Form of subscription agreement for convertible debenture (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on April 26, 2011)
10.68	Form of subscription agreement for convertible debenture (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on May 9, 2011)
10.69	Form of warrant certificate (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on May 9, 2011)
10.70	Amended Stock Option Agreement dated September 16, 2011 with Cameron Durrant (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 21, 2011)
10.71	Consulting Agreement dated effective October 10, 2011, with George Tidmarsh (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on October 14, 2011)
10.72	Form of subscription agreement for services (US purchaser) (incorporated by reference to our current report on Form 8-K filed on February 10, 2012)
10.73	Form of subscription agreement for units (Offshore purchasers) (incorporated by reference to our current report on Form 8-K filed on February 10, 2012)
10.74	Unsecured Promissory Note dated April 20, 2012 issued to Georgia Georgopoulou (incorporated by reference to our quarterly report on Form 10-Q filed on May 15, 2012)
10.75	Form of subscription agreements for convertible debenture and promissory notes (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on June 7, 2012)
10.76*	Promissory Note dated October 17, 2012 issued to Akira International Limited
10.77*	Promissory Note dated November 12, 2012 issued to Akira International Limited

52

Exhibit Number	Description
(14)	Code of Ethics
14.1	Code of Conduct (incorporated by reference to an exhibit to our Current Report on Form 8- K filed on September 28, 2007)
(21)	Subsidiaries
21.1	Anavex Life Sciences (France) SA, incorporated under the laws of France
(31)	Section 302 Certifications
31.1*	Section 302 Certification of Robert Chisholm
(32)	Section 906 Certifications
32.1*	Section 906 Certification of Robert Chisholm
(99)	Additional Exhibits
99.1	Insider Trading Policy Adopted August 27, 2010 (incorporated by reference to an exhibit to our Current Report on Form 8-K filed on September 27, 2010)
(101)	XBRL
101.INS*	XBRL INSTANCE DOCUMENT
101.SCH*	XBRL TAXONOMY EXTENSION SCHEMA
101.CAL*	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*	XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE*	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ANAVEX LIFE SCIENCES CORP.

By:

/s/ Robert Chisholm                                                                 
Robert Chisholm
President, Secretary, Treasurer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Date: December 31, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/ Robert Chisholm                                                                 
Robert Chisholm
President, Secretary, Treasurer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Date: December 31, 2012

By:

/s/ Sean Lowry                                                                          
Sean Lowry
Director
Date: December 31, 2012

54

EX-10.76

Exhibit 10.76

EX-10.77

Exhibit 10.77

EX-31.1

Ex. 31.1

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Chisholm, certify that:

i.	I have reviewed this annual report on Form 10-K of Anavex Life Sciences Corp.;
ii.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
iii.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
iv.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

A.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
B.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
C.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
D.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

v. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

A.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
B.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: December 31, 2012

/s/ Robert Chisholm                                
Robert Chisholm
President, Secretary, Treasurer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Robert Chisholm, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the annual report on Form 10-K of Anavex Life Sciences Corp. for the period ended September 30, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the annual report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Anavex Life Sciences Corp.

Date: December 31, 2012

/s/ Robert Chisholm                                               
Robert Chisholm
President, Secretary, Treasurer, Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

XML

Schedule of Debt (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Promissory Notes Payable Schedule Of Debt 1	$ 0
Promissory Notes Payable Schedule Of Debt 2	750,000
Promissory Notes Payable Schedule Of Debt 3	299,000
Promissory Notes Payable Schedule Of Debt 4	216,000
Promissory Notes Payable Schedule Of Debt 5	0
Promissory Notes Payable Schedule Of Debt 6	(167,500)
Promissory Notes Payable Schedule Of Debt 7	0
Promissory Notes Payable Schedule Of Debt 8	69,419
Promissory Notes Payable Schedule Of Debt 9	299,000
Promissory Notes Payable Schedule Of Debt 10	867,919
Promissory Notes Payable Schedule Of Debt 11	(299,000)
Promissory Notes Payable Schedule Of Debt 12	(867,919)
Promissory Notes Payable Schedule Of Debt 13	0
Promissory Notes Payable Schedule Of Debt 14	$ 0

XML

Schedule of Nonvested Share Activity (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Commitments Schedule Of Nonvested Share Activity 1	$ 1,161,667
Commitments Schedule Of Nonvested Share Activity 2	2.98
Commitments Schedule Of Nonvested Share Activity 3	1.80
Commitments Schedule Of Nonvested Share Activity 4	650,000
Commitments Schedule Of Nonvested Share Activity 5	4.06
Commitments Schedule Of Nonvested Share Activity 6	2.61
Commitments Schedule Of Nonvested Share Activity 7	(225,000)
Commitments Schedule Of Nonvested Share Activity 8	3.47
Commitments Schedule Of Nonvested Share Activity 9	2.51
Commitments Schedule Of Nonvested Share Activity 10	(141,667)
Commitments Schedule Of Nonvested Share Activity 11	3.57
Commitments Schedule Of Nonvested Share Activity 12	2.59
Commitments Schedule Of Nonvested Share Activity 13	1,445,000
Commitments Schedule Of Nonvested Share Activity 14	3.33
Commitments Schedule Of Nonvested Share Activity 15	2.17
Commitments Schedule Of Nonvested Share Activity 16	500,000
Commitments Schedule Of Nonvested Share Activity 17	1.50
Commitments Schedule Of Nonvested Share Activity 18	0.72
Commitments Schedule Of Nonvested Share Activity 19	(900,000)
Commitments Schedule Of Nonvested Share Activity 20	2.74
Commitments Schedule Of Nonvested Share Activity 21	1.60
Commitments Schedule Of Nonvested Share Activity 22	(175,000)
Commitments Schedule Of Nonvested Share Activity 23	3.71
Commitments Schedule Of Nonvested Share Activity 24	2.70
Commitments Schedule Of Nonvested Share Activity 25	$ 870,000
Commitments Schedule Of Nonvested Share Activity 26	2.81
Commitments Schedule Of Nonvested Share Activity 27	1.82

XML

Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 1	$ 50,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 2	50,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 3	3.75
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 4	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 5	0.09
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 6	100,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 7	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 8	3.86
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 9	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 10	0.17
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 11	150,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 12	150,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 13	3.10
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 14	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 15	1.75
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 16	400,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 17	400,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 18	2.50
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 19	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 20	0.96
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 21	500,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 22	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 23	2.50
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 24	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 25	1.04
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 26	5,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 27	5,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 28	2.50
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 29	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 30	1.42
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 31	50,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 32	50,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 33	3.50
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 34	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 35	1.75
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 36	150,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 37	150,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 38	3.72
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 39	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 40	3.40
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 41	100,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 42	100,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 43	3.67
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 44	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 45	3.50
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 46	270,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 47	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 48	3.00
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 49	0
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 50	4.36
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 51	1,775,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 52	905,000
Commitments Schedule Of Disclosure Of Share-based Compensation Arrangements By Share-based Payment Award 53	$ 0

XML

Supplemental Cash Flow Information (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012 unit
Supplemental Cash Flow Information 1	544,667
Supplemental Cash Flow Information 2	1.918
Supplemental Cash Flow Information 3	$ 272,333
Supplemental Cash Flow Information 4	22,333
Supplemental Cash Flow Information 5	2,155,846
Supplemental Cash Flow Information 6	1.918
Supplemental Cash Flow Information 7	1,077,923
Supplemental Cash Flow Information 8	30,034
Supplemental Cash Flow Information 9	$ 0.75
Supplemental Cash Flow Information 10	3,829,333
Supplemental Cash Flow Information 11	75,000
Supplemental Cash Flow Information 12	$ 1.00
Supplemental Cash Flow Information 13	75,000
Supplemental Cash Flow Information 14	8,000
Supplemental Cash Flow Information 15	15,896
Supplemental Cash Flow Information 14	3,636
Supplemental Cash Flow Information 15	2.75
Supplemental Cash Flow Information 16	$ 4.50
Supplemental Cash Flow Information 17	853,075
Supplemental Cash Flow Information 18	6.24
Supplemental Cash Flow Information 19	504,160
Supplemental Cash Flow Information 20	$ 3.00
Supplemental Cash Flow Information 21	145,063
Supplemental Cash Flow Information 22	$ 4.12
Supplemental Cash Flow Information 23	398,923
Supplemental Cash Flow Information 24	26,032
Supplemental Cash Flow Information 25	198,738
Supplemental Cash Flow Information 26	181,818
Supplemental Cash Flow Information 27	$ 4.12
Supplemental Cash Flow Information 28	500,000
Supplemental Cash Flow Information 29	249,090
Supplemental Cash Flow Information 30	2,985
Supplemental Cash Flow Information 31	3.35
Supplemental Cash Flow Information 32	$ 4.50
Supplemental Cash Flow Information 33	650,000
Supplemental Cash Flow Information 34	1,059,963
Supplemental Cash Flow Information 35	975,000
Supplemental Cash Flow Information 36	84,963
Supplemental Cash Flow Information 37	8.00%
Supplemental Cash Flow Information 38	216,000
Supplemental Cash Flow Information 39	200,000
Supplemental Cash Flow Information 40	$ 16,000

XML

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2012

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

		2012			2011
		34%			34%
Net operating loss carryforwards	$	6,775,000		$	5,508,000
Research and development tax credits		741,000			476,000
Foreign exchange		28,000			15,000
Accrued bonuses		34,000			-
Intangible asset costs		34,000			38,000
Valuation allowance for deferred tax assets		(7,612,000	)		(6,037,000	)
Net deferred tax assets	$	-		$	-

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

		2012			2011
Income benefit at statutory rate	$	(2,823,000	)	$	(2,484,000	)
Stock-based compensation		103,000			433,000
Foreign income taxed at foreign statutory rate		(2,000	)		1,000
Debt extinguishment		1,302,000			181,000
Research and development tax credit		(175,000	)		(95,000	)
Fair value of derivative liability		(23,000	)		(34,000	)
Debt accretion		33,000			24,000
Debt conversion		-			170,000
Other permanent differences		10,000			-
Change in valuation allowance		1,575,000			1,804,000
Deferred income tax recovery	$	-		$	-

XML

Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 1	34.00%
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 2	34.00%
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 3	$ 6,775,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 4	5,508,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 5	741,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 6	476,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 7	28,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 8	15,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 9	34,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 10	0
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 11	34,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 12	38,000
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 13	(7,612,000)
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 14	(6,037,000)
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 15	0
Income Taxes Schedule Of Deferred Tax Assets And Liabilities 16	$ 0

XML

Schedule of Related Party Transactions (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Related Party Transactions Schedule Of Related Party Transactions 1	$ 0
Related Party Transactions Schedule Of Related Party Transactions 2	0
Related Party Transactions Schedule Of Related Party Transactions 3	14,625
Related Party Transactions Schedule Of Related Party Transactions 4	0
Related Party Transactions Schedule Of Related Party Transactions 5	0
Related Party Transactions Schedule Of Related Party Transactions 6	3,750
Related Party Transactions Schedule Of Related Party Transactions 7	0
Related Party Transactions Schedule Of Related Party Transactions 8	0
Related Party Transactions Schedule Of Related Party Transactions 9	33,666
Related Party Transactions Schedule Of Related Party Transactions 10	0
Related Party Transactions Schedule Of Related Party Transactions 11	0
Related Party Transactions Schedule Of Related Party Transactions 12	$ 52,041

XML

Derivative Liabilities Activity (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Derivative Liabilities Derivative Liabilities Activity 1	$ 67,500
Derivative Liabilities Derivative Liabilities Activity 2	0
Derivative Liabilities Derivative Liabilities Activity 3	0
Derivative Liabilities Derivative Liabilities Activity 4	167,500
Derivative Liabilities Derivative Liabilities Activity 5	(67,500)
Derivative Liabilities Derivative Liabilities Activity 6	(100,000)
Derivative Liabilities Derivative Liabilities Activity 7	0
Derivative Liabilities Derivative Liabilities Activity 8	$ 67,500

XML

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	12 Months Ended
	Sep. 30, 2012 Y
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 1	0.83%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 2	2.19%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 3	0.96%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 4	2.20%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 5	4.25
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 6	5
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 7	4.5
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 8	5
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 9	57.87%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 10	95.25%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 11	56.27%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 12	62.52%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 13	0.00%
Commitments Schedule Of Share-based Payment Award, Stock Options, Valuation Assumptions 14	0.00%

XML

Equipment

12 Months Ended

Sep. 30, 2012

Equipment [Text Block]

Note 3 Equipment

				September 30, 2012
				Accumulated
		Cost		Depreciation		Net
Computer equipment	$	5,631	$	5,055	$	576

				September 30, 2011
				Accumulated
		Cost		Depreciation		Net
Computer equipment	$	5,631	$	3,197	$	2,434

XML

Schedule of Stockholders' Equity Note, Warrants or Rights, Activity (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 1	$ 2,047,151
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 2	2.87
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 3	(148,749)
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 4	2.64
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 5	(700,000)
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 6	2.25
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 7	1,457,077
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 8	3.07
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 9	2,655,479
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 10	3.16
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 11	(1,552,651)
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 12	3.16
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 13	3,147,313
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 14	0.93
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 15	$ 4,250,141
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights, Activity 16	1.16

XML

Capital Stock (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012 unit Y
Capital Stock 1	25,000,000
Capital Stock 2	150,000,000
Capital Stock 3	222,222
Capital Stock 4	$ 3.60
Capital Stock 5	$ 800,000
Capital Stock 6	333,000
Capital Stock 7	92,500
Capital Stock 8	$ 3.60
Capital Stock 9	150,000
Capital Stock 10	3.50
Capital Stock 11	525,000
Capital Stock 12	$ 5.00
Capital Stock 13	10,000
Capital Stock 14	$ 4.50
Capital Stock 15	45,000
Capital Stock 16	50,000
Capital Stock 17	$ 3.86
Capital Stock 18	193,000
Capital Stock 19	65,000
Capital Stock 20	65,000
Capital Stock 21	$ 5.24
Capital Stock 22	340,600
Capital Stock 23	25,000
Capital Stock 24	$ 5.07
Capital Stock 25	126,750
Capital Stock 26	142,698
Capital Stock 27	4.25
Capital Stock 28	606,467
Capital Stock 29	$ 5.00
Capital Stock 30	25,000
Capital Stock 31	$ 2.63
Capital Stock 32	65,750
Capital Stock 33	25,000
Capital Stock 34	$ 2.50
Capital Stock 35	62,500
Capital Stock 36	89,148
Capital Stock 37	2.25
Capital Stock 38	200,583
Capital Stock 39	$ 4.00
Capital Stock 40	10,800
Capital Stock 41	2.25
Capital Stock 42	24,300
Capital Stock 43	$ 4.00
Capital Stock 44	2,500
Capital Stock 45	$ 2.00
Capital Stock 46	5,000
Capital Stock 47	75,000
Capital Stock 48	36,000
Capital Stock 49	2.25
Capital Stock 50	81,000
Capital Stock 51	$ 4.00
Capital Stock 52	8,100
Capital Stock 53	29,227
Capital Stock 54	$ 2.25
Capital Stock 55	495,556
Capital Stock 56	2.25
Capital Stock 57	1,115,000
Capital Stock 58	$ 2.25
Capital Stock 59	22,222
Capital Stock 60	$ 2.51
Capital Stock 61	500,000
Capital Stock 62	128,888
Capital Stock 63	2.25
Capital Stock 64	289,998
Capital Stock 65	40,000
Capital Stock 66	$ 4.00
Capital Stock 67	88,888
Capital Stock 68	$ 2.25
Capital Stock 69	19,000
Capital Stock 70	266,666
Capital Stock 71	2.25
Capital Stock 72	600,000
Capital Stock 73	$ 2.25
Capital Stock 74	300,000
Capital Stock 75	49,505
Capital Stock 76	$ 2.02
Capital Stock 77	92,499
Capital Stock 78	2.60
Capital Stock 79	240,498
Capital Stock 80	$ 3.50
Capital Stock 81	9,825
Capital Stock 82	$ 2.85
Capital Stock 83	941,000
Capital Stock 84	2.50
Capital Stock 85	2,352,500
Capital Stock 86	$ 3.50
Capital Stock 87	400,000
Capital Stock 88	1,000,000
Capital Stock 89	3.50
Capital Stock 90	1,444,000
Capital Stock 91	444,000
Capital Stock 92	3.50
Capital Stock 93	3.15
Capital Stock 94	68.45%
Capital Stock 95	1.5
Capital Stock 96	0.00%
Capital Stock 97	163,000
Capital Stock 98	2.75
Capital Stock 99	448,250
Capital Stock 100	$ 3.75
Capital Stock 101	9,000
Capital Stock 102	2.75
Capital Stock 103	$ 3.75
Capital Stock 104	510,638
Capital Stock 105	$ 2.35
Capital Stock 106	82,310
Capital Stock 107	2.25
Capital Stock 108	$ 3.50
Capital Stock 109	245,748
Capital Stock 110	2.25
Capital Stock 111	$ 3.00
Capital Stock 112	393,846
Capital Stock 113	2.75
Capital Stock 114	1,083,075
Capital Stock 115	$ 4.50
Capital Stock 116	65,363
Capital Stock 117	3,636
Capital Stock 118	2.75
Capital Stock 119	$ 4.50
Capital Stock 120	853,075
Capital Stock 121	2.50
Capital Stock 122	504,160
Capital Stock 123	$ 3.00
Capital Stock 124	3.00
Capital Stock 125	4.12
Capital Stock 126	78.33%
Capital Stock 127	2
Capital Stock 128	0.00%
Capital Stock 129	0.52%
Capital Stock 130	145,063
Capital Stock 131	$ 4.12
Capital Stock 132	398,922
Capital Stock 133	26,032
Capital Stock 134	198,738
Capital Stock 135	181,818
Capital Stock 136	$ 4.12
Capital Stock 137	500,000
Capital Stock 138	249,090
Capital Stock 139	29,851
Capital Stock 140	3.35
Capital Stock 141	100,000
Capital Stock 142	$ 4.50
Capital Stock 143	2,985
Capital Stock 144	3.35
Capital Stock 145	$ 4.50
Capital Stock 146	61,014
Capital Stock 147	3.75
Capital Stock 148	228,800
Capital Stock 149	$ 5.25
Capital Stock 150	33,334
Capital Stock 151	3.00
Capital Stock 152	100,000
Capital Stock 153	$ 4.00
Capital Stock 154	700,000
Capital Stock 155	$ 2.25
Capital Stock 156	1,575,000
Capital Stock 157	650,000
Capital Stock 158	975,000
Capital Stock 159	$ 2.00
Capital Stock 160	84,963
Capital Stock 161	975,000
Capital Stock 162	84,963
Capital Stock 163	2.00
Capital Stock 164	1.50
Capital Stock 165	69.00%
Capital Stock 166	1
Capital Stock 167	0.00%
Capital Stock 168	0.10%
Capital Stock 169	615,600
Capital Stock 170	1.25
Capital Stock 171	769,500
Capital Stock 172	$ 2.00
Capital Stock 173	77,000
Capital Stock 174	8,000
Capital Stock 175	$ 2.00
Capital Stock 176	15,896
Capital Stock 177	15,896
Capital Stock 178	2.00
Capital Stock 179	1.74
Capital Stock 180	84.88%
Capital Stock 181	1
Capital Stock 182	0.15%
Capital Stock 183	0.00%
Capital Stock 184	270,000
Capital Stock 185	1.25
Capital Stock 186	337,500
Capital Stock 187	$ 2.00
Capital Stock 188	33,750
Capital Stock 189	2,700,513
Capital Stock 190	1,297,889
Capital Stock 191	$ 52,367
Capital Stock 192	$ 0.75
Capital Stock 193	75,000

XML

Promissory Notes Payable (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012 Y unit
Promissory Notes Payable 1	$ 750,000
Promissory Notes Payable 2	250,000
Promissory Notes Payable 3	500,000
Promissory Notes Payable 4	8.00%
Promissory Notes Payable 5	3.00
Promissory Notes Payable 6	4.00
Promissory Notes Payable 7	2
Promissory Notes Payable 8	100,000
Promissory Notes Payable 9	55,464
Promissory Notes Payable 10	167,500
Promissory Notes Payable 11	98,081
Promissory Notes Payable 12	69,419
Promissory Notes Payable 13	500,000
Promissory Notes Payable 14	40,000
Promissory Notes Payable 15	250,000
Promissory Notes Payable 16	9,389
Promissory Notes Payable 17	12.00%
Promissory Notes Payable 18	799,389
Promissory Notes Payable 19	10,925
Promissory Notes Payable 20	1,620,628
Promissory Notes Payable 21	3,108,365
Promissory Notes Payable 22	2,298,051
Promissory Notes Payable 23	250,000
Promissory Notes Payable 24	22,333
Promissory Notes Payable 25	544,667
Promissory Notes Payable 26	1,044,671
Promissory Notes Payable 27	772,338
Promissory Notes Payable 28	200,000
Promissory Notes Payable 29	8.00%
Promissory Notes Payable 30	16,000
Promissory Notes Payable 31	8.00%
Promissory Notes Payable 32	216,000
Promissory Notes Payable 33	18,576
Promissory Notes Payable 34	469,152
Promissory Notes Payable 35	899,833
Promissory Notes Payable 36	665,257
Promissory Notes Payable 37	32,500
Promissory Notes Payable 38	10.00%
Promissory Notes Payable 39	3,250
Promissory Notes Payable 40	533
Promissory Notes Payable 41	66,066
Promissory Notes Payable 42	126,715
Promissory Notes Payable 43	93,682
Promissory Notes Payable 44	49,000
Promissory Notes Payable 45	8.00%
Promissory Notes Payable 46	4,900
Promissory Notes Payable 47	1,215
Promissory Notes Payable 48	250,000
Promissory Notes Payable 49	8.00%
Promissory Notes Payable 50	0.75
Promissory Notes Payable 51	1.918
Promissory Notes Payable 52	1.25
Promissory Notes Payable 53	$ 0.668

XML

Schedule of Stockholders' Equity Note, Warrants or Rights (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 1	$ 853,075
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 2	3.00
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 3	16,419
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 4	4.50
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 5	307,800
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 6	2.00
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 7	200,000
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 8	1.50
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 9	135,000
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 10	2.00
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 11	4,000
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 12	2.00
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 13	33,334
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 14	4.00
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 15	2,700,513
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 16	0.75
Commitments Schedule Of Stockholders' Equity Note, Warrants Or Rights 17	$ 4,250,141

XML

Related Party Transactions (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Related Party Transactions 1	$ 479,434
Related Party Transactions 2	674,917
Related Party Transactions 3	127,452
Related Party Transactions 4	$ 20,833

XML

Commitments (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012 Y option warrant
Commitments 1	4,250,141
Commitments 2	200,000
Commitments 3	$ 3.50
Commitments 4	1.50
Commitments 5	80,200
Commitments 6	0.11%
Commitments 7	1
Commitments 8	79.46%
Commitments 9	0.00%
Commitments 10	3,000,000
Commitments 11	10.00%
Commitments 12	25.00%
Commitments 13	1
Commitments 14	10.00%
Commitments 15	110.00%
Commitments 16	4,000,000
Commitments 17	0
Commitments 18	18,600
Commitments 19	0.31%
Commitments 20	2
Commitments 21	84.73%
Commitments 22	0.00%
Commitments 23	500,000
Commitments 24	100,000
Commitments 25	740,000
Commitments 26	0
Commitments 27	125,000
Commitments 28	406,500
Commitments 29	163,415
Commitments 30	243,084
Commitments 31	75,000
Commitments 32	25,000
Commitments 33	267,000
Commitments 34	6,500
Commitments 35	120,250
Commitments 36	90,000
Commitments 37	90,000
Commitments 38	90,000
Commitments 39	1,100,000
Commitments 40	158,493
Commitments 41	33,493
Commitments 42	0
Commitments 43	1,000,000
Commitments 44	708,917
Commitments 45	284,828
Commitments 46	$ 0

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Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies [Text Block]

Note 2 Summary of Significant Accounting Policies

a)

Use of Estimates

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuations, asset impairment, conversion features embedded in convertible notes payable, derivative valuations, stock based compensation and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

b)	Principles of Consolidation
	These consolidated financial statements include the accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiary, Anavex Life Sciences (France) SA, a company incorporated under the laws of France. All inter-company transactions and balances have been eliminated.

c)	Development Stage Company
	The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since inception has been considered as part of the Company’s development stage activities.

d)	Equipment
	Equipment is recorded at cost and is depreciated at 33% per annum on the straight-line basis.

e)

Impairment of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The estimated future cash flows are based upon, among other things, assumptions about future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made.

f)

Financial Instruments

The carrying value of the Company’s financial instruments, consisting of cash and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Based on borrowing rates currently available to the Company for similar terms and based on the short term duration of the debt instruments, the carrying value of the promissory notes payable approximate their fair value. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

g)

Foreign Currency Translation

The functional currency of the Company is the US dollar. Monetary items denominated in a foreign currency are translated into US dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired or obligations incurred. Foreign currency denominated expense items are translated at exchange rates prevailing at the transaction date. Unrealized gains or losses arising from the translations are credited or charged to income in the period in which they occur.

h)	Research and Development Expenses
	Research and developments costs are expensed as incurred. These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including salaries, facilities costs, overhead costs and other related expenses as well as costs incurred in connection with third-party collaboration efforts. Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved.
	In addition, the Company incurs expenses in respect of the acquisition of intellectual property relating to patents and trademarks. The probability of success and length of time to developing commercial applications of the drugs subject to the acquired patents and trademarks is difficult to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects. There is no assurance the acquired patents and trademarks will ever be successfully commercialized. Due to these risks and uncertainties, the acquisition of patents and trademarks does not meet the definition of an asset and thus are expensed as incurred.

i)

Income Taxes

The Company has adopted the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The Company has adopted the provisions of FASB ASC 740 "Income Taxes" regarding accounting for uncertainty in income taxes. The Company initially recognizes tax positions in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts. Application requires numerous estimates based on available information. The Company considers many factors when evaluating and estimating our tax positions and tax benefits, and our recognized tax positions and tax benefits may not accurately anticipate actual outcomes. As additional information is obtained, there may be a need to periodically adjust the recognized tax positions and tax benefits. These periodic adjustments may have a material impact on the consolidated statements of operations.

j)

Basic and Diluted Loss per Share

The basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the year ended September 30, 2012, loss per share excludes 6,025,141 (2011 – 5,030,479) potentially dilutive common shares (related to convertible notes payable and outstanding options and warrants) as their effect was anti-dilutive.

k)	Stock-based Compensation
	The Company accounts for all stock-based payments and awards under the fair value based method.
	Stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until the counterparty performance is complete, and any change therein is recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity based instruments. Compensation costs for stock-based payments with graded vesting are recognized on a straight-line basis. The cost of the stock-based payments to non- employees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term.
	The Company accounts for the granting of share purchase options to employees using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant. The fair value of all share purchase options are expensed over their vesting period with a corresponding increase to additional paid-in capital.
	The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of the grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimates.

l)	Fair Value Measurements
	The fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 -	quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 -	observable inputs other than Level I, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3 -	assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.

The book value of cash and accounts payable and accrued liabilities approximate their fair values due to the short term maturity of those instruments. Based on borrowing rates currently available to the Company under similar terms, the book value of promissory notes payable approximates their fair values. The Company’s promissory notes payable are based on Level 2 inputs in the ASC 820 fair value hierarchy.

The Company’s Level 3 liability consisted of the bifurcated embedded conversion features in the Company’s convertible promissory notes. This Level 3 liability had no active market and was required to be measured at its fair value at each reporting period based on information that is unobservable.

A summary of the Company’s Level 3 liabilities for the years ended June 30, 2012 and 2011 is as follows:

		2012			2011
Balance, beginning of the period	$	67,500		$	-
Fair value of embedded conversion feature of convertible promissory notes		-			167,500
Change in fair value of derivative liability		(67,500	)		(100,000	)
Balance, end of the period	$	-		$	67,500

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). There were no assets or liabilities measured at fair value on a nonrecurring basis during the periods ended September 30, 2012 and 2011.

m)

Recent Accounting Pronouncements

On June 16, 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income , or ASU 2011-05. ASU 2011-05 requires entities to report items of other comprehensive income on either part of a single contiguous statement of comprehensive income or in a separate statement of comprehensive income immediately following the statement of income. On December 23, 2011, the FASB issued an update to this pronouncement, ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 , or ASU 2011-12. ASU 2011-12 defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The Company has not recorded any components of comprehensive income (loss) for the years ended September 30, 2012 and 2011 and, as at September 30, 2012, the Company does not have a balance recorded in respect of accumulated comprehensive income (loss).

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Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Income Taxes 1	$ 19,945,000
Income Taxes 2	$ 16,300,000

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Schedule of promissory note settlements (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Promissory Notes Payable Schedule Of Promissory Note Settlements 1	$ 250,000
Promissory Notes Payable Schedule Of Promissory Note Settlements 2	22,333
Promissory Notes Payable Schedule Of Promissory Note Settlements 3	544,667
Promissory Notes Payable Schedule Of Promissory Note Settlements 4	1,044,671
Promissory Notes Payable Schedule Of Promissory Note Settlements 5	(772,338)
Promissory Notes Payable Schedule Of Promissory Note Settlements 6	216,000
Promissory Notes Payable Schedule Of Promissory Note Settlements 7	18,571
Promissory Notes Payable Schedule Of Promissory Note Settlements 8	469,152
Promissory Notes Payable Schedule Of Promissory Note Settlements 9	899,833
Promissory Notes Payable Schedule Of Promissory Note Settlements 10	(665,262)
Promissory Notes Payable Schedule Of Promissory Note Settlements 11	799,389
Promissory Notes Payable Schedule Of Promissory Note Settlements 12	10,925
Promissory Notes Payable Schedule Of Promissory Note Settlements 13	1,620,628
Promissory Notes Payable Schedule Of Promissory Note Settlements 14	3,108,365
Promissory Notes Payable Schedule Of Promissory Note Settlements 15	(2,298,051)
Promissory Notes Payable Schedule Of Promissory Note Settlements 16	32,500
Promissory Notes Payable Schedule Of Promissory Note Settlements 17	533
Promissory Notes Payable Schedule Of Promissory Note Settlements 18	66,066
Promissory Notes Payable Schedule Of Promissory Note Settlements 19	126,715
Promissory Notes Payable Schedule Of Promissory Note Settlements 20	(93,682)
Promissory Notes Payable Schedule Of Promissory Note Settlements 21	1,047,889
Promissory Notes Payable Schedule Of Promissory Note Settlements 22	30,029
Promissory Notes Payable Schedule Of Promissory Note Settlements 23	2,155,846
Promissory Notes Payable Schedule Of Promissory Note Settlements 24	4,134,913
Promissory Notes Payable Schedule Of Promissory Note Settlements 25	(3,056,995)
Promissory Notes Payable Schedule Of Promissory Note Settlements 26	1,297,889
Promissory Notes Payable Schedule Of Promissory Note Settlements 27	52,362
Promissory Notes Payable Schedule Of Promissory Note Settlements 28	2,700,513
Promissory Notes Payable Schedule Of Promissory Note Settlements 29	5,179,584
Promissory Notes Payable Schedule Of Promissory Note Settlements 30	$ (3,829,333)

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INTERIM CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2012	Sep. 30, 2011
Current
Cash	$ 11,362	$ 134,702
VAT recoverable	0	809
Deferred financing charge	1,215	55,464
Prepaid expenses	0	9,630
Total Current Assets	12,577	200,605
Equipment	576	2,434
Total Assets	13,153	203,039
Current
Accounts payable and accrued liabilities	2,589,324	410,024
Derivative liability	0	67,500
Promissory notes payable	299,000	867,919
Total Liabilities	2,888,324	1,345,443
CAPITAL DEFICIT
Capital stock Authorized: 150,000,000 common shares, par value $0.001 per share Issued and outstanding: 30,240,687 common shares (2011 - 26,571,574)	30,241	26,572
Additional paid-in capital	34,599,514	28,034,245
Deficit accumulated during the development stage	(37,504,926)	(29,203,221)
Total Stockholders' Equity	(2,875,171)	(1,142,404)
Total Liabilities and Stockholders' Equity	$ 13,153	$ 203,039

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Schedule of Share-based Compensation, Stock Options, Activity (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 1	$ 2,775,000
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 2	3.29
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 3	(1,000,000)
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 4	3.93
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 5	(50,000)
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 6	2.75
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 7	650,000
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 8	4.06
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 9	2.95
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 10	2,375,000
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 11	3.18
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 12	(1,100,000)
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 13	2.82
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 14	500,000
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 15	1.50
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 16	0.72
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 17	1,775,000
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 18	2.94
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 19	905,000
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 20	2.81
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 21	$ 930,000
Commitments Schedule Of Share-based Compensation, Stock Options, Activity 22	2.90

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INTERIM CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT (USD $)	Common Stock [Member]	Common Stock Additional Paid-In Capital [Member]	Common Shares to be Issued [Member]	Common Stock Deficit Accumulated During the Development Stage [Member]	Total
Beginning Balance at Jan. 22, 2004
Capital stock issued for cash on January 23, 2004 - at $0.0033	$ 12,000	$ 28,000			$ 40,000
Capital stock issued for cash on January 23, 2004 - at $0.0033 (Shares)	12,000,000
Net Income (Loss)				(14,395)	(14,395)
Ending Balance at Sep. 30, 2004	12,000	28,000		(14,395)	25,605
Ending Balance (Shares) at Sep. 30, 2004	12,000,000
Capital stock issued for cash on December 31, 2004 - at $0.0033	7,200	16,800			24,000
Capital stock issued for cash on December 31, 2004 - at $0.0033 (Shares)	7,200,000
Management fees contributed (ManagementFeesContributed)		13,000			13,000
Rent contributed		3,000			3,000
Net Income (Loss)				(91,625)	(91,625)
Ending Balance at Sep. 30, 2005	19,200	60,800		(106,020)	(26,020)
Ending Balance (Shares) at Sep. 30, 2005	19,200,000
Management fees contributed (ManagementFeesContributed)		1,625			1,625
Rent contributed		750			750
Debt forgiven by directors		33,666			33,666
Net Income (Loss)				(25,532)	(25,532)
Ending Balance at Sep. 30, 2006	19,200	96,841		(131,552)	(15,511)
Beginning Balance (Shares) at Sep. 30, 2006	19,200,000
Capital stock issued for research and development services on September 24, 2007 - at $3.60	222	799,778			800,000
Capital stock issued for research and development services on September 24, 2007 - at $3.60 (Shares)	222,222
Capital stock issued for settlement of loan payable on September 25, 2007 - at $3.60	93	332,907			333,000
Capital stock issued for settlement of loan payable on September 25, 2007 - at $3.60 (Shares)	92,500
Net Income (Loss)				(1,579,993)	(1,579,993)
Ending Balance at Sep. 30, 2007	19,515	1,229,526		(1,711,545)	(462,504)
Ending Balance (Shares) at Sep. 30, 2007	19,514,722
Capital stock issued for cash on December 10, 2007- at $3.50	150	524,850			525,000
Capital stock issued for cash on December 10, 2007- at $3.50 (Shares)	150,000
Capital stock issued for consulting services on December 18,2007 - at $3.86	50	192,950			193,000
Capital stock issued for consulting services on December 18,2007 - at $3.86 (Shares)	50,000
Capital stock issued debt settlement of debt on December 18, 2007- at $4.50	10	44,990			45,000
Capital stock issued debt settlement of debt on December 18, 2007- at $4.50 (Shares)	10,000
Stock-based compensation for shares issued at a discount		65,000			65,000
Capital stock issued for severance on May 15, 2008 - at $5.24	65	340,535			340,600
Capital stock issued for severance on May 15, 2008 - at $5.24 (Shares)	65,000
Capital stock issued for consulting services on August 19, 2008 - at $5.07	25	126,725	(126,750)
Capital stock issued for consulting services on August 19, 2008 - at $5.07 (Shares)	25,000
Capital stock issued for cash on August 19,2008 - at $4.25	142	606,325			606,467
Capital stock issued for cash on August 19,2008 - at $4.25 (Shares)	142,698
Stock based compensation		1,493,937			1,493,937
Shares to be issued for consulting services			252,599		252,599
Net Income (Loss)				(5,351,269)	(5,351,269)
Ending Balance at Sep. 30, 2008	19,957	4,624,838	125,849	(7,062,814)	(2,292,170)
Ending Balance (Shares) at Sep. 30, 2008	19,957,420
Stock based compensation		812,336			812,336
Capital stock issued for consulting services on November 20, 2008 at $2.63	25	65,725	(65,750)
Capital stock issued for consulting services on November 20, 2008 at $2.63 (Shares)	25,000
Capital stock issued for consulting services on February 20, 2009 at $2.50	25	62,475	(62,500)
Capital stock issued for consulting services on February 20, 2009 at $2.50 (Shares)	25,000
Capital stock issued for cash on March 6, 2009 at $2.25	89	200,494			200,583
Capital stock issued for cash on March 6, 2009 at $2.25 (Shares)	89,148
Capital stock issued for consulting services on March 20, 2009 at $2.00	3	4,997			5,000
Capital stock issued for consulting services on March 20, 2009 at $2.00 (Shares)	2,500
Capital stock issued for cash on March 20, 2009 at $2.25	11	24,289			24,300
Capital stock issued for cash on March 20, 2009 at $2.25 (Shares)	10,800
Capital stock issued for cash on June 11, 2009 at $2.25	36	80,964			81,000
Capital stock issued for cash on June 11, 2009 at $2.25 (Shares)	36,000
Capital stock issued for services on June 11, 2009 at $2.25	29	65,731			65,760
Capital stock issued for services on June 11, 2009 at $2.25 (Shares)	29,227
Capital stock issued for cash on June 19, 2009 at $2.25	496	1,114,504			1,115,000
Capital stock issued for cash on June 19, 2009 at $2.25 (Shares)	495,556
Capital stock issued for finders fees on June 26, 2009 at $2.51	22	55,755			55,777
Capital stock issued for finders fees on June 26, 2009 at $2.51 (Shares)	22,222
Shares to be issued for consulting services			236,337		236,337
Capital stock issued for cash on August 19, 2009 at $2.25	129	289,869			289,998
Capital stock issued for cash on August 19, 2009 at $2.25 (Shares)	128,888
Less: Finders fees		(72,850)			(72,850)
Beneficial conversion features on convertible debt issuances		333,056			333,056
Extinguishment of debt		487,469			487,469
Cancellation of common shares	(75)	234,011	(233,936)
Cancellation of common shares (Shares)	(75,000)
Share subscriptions received			300,000		300,000
Net Income (Loss)				(5,499,419)	(5,499,419)
Ending Balance at Sep. 30, 2009	20,747	8,383,663	300,000	(12,562,233)	(3,857,823)
Ending Balance (Shares) at Sep. 30, 2009	20,746,761
Stock based compensation		770,055			770,055
Less: Finders fees		(24,050)			(24,050)
Cumulative effect of accounting changes		(333,056)		(550,804)	(883,860)
Capital stock issued for cash on October 2, 2009 at $2.25	267	599,733	(300,000)		300,000
Capital stock issued for cash on October 2, 2009 at $2.25 (Shares)	266,666
Capital stock issued in settlement of promissory note on February 2, 2010 at $2.02	49	99,951			100,000
Capital stock issued in settlement of promissory note on February 2, 2010 at $2.02 (Shares)	49,505
Capital stock issued for cash on April 9, 2010 - at $2.60	93	240,405			240,498
Capital stock issued for cash on April 9, 2010 - at $2.60 (Shares)	92,499
Capital stock issued in settlement of debt on April 30, 2010 - at $2.85	9	27,991			28,000
Capital stock issued in settlement of debt on April 30, 2010 - at $2.85 (Shares)	9,825
Capital stock issued for cash on June 29, 2010 - at $2.50	941	2,351,559			2,352,500
Capital stock issued for cash on June 29, 2010 - at $2.50 (Shares)	941,000
Finders fees paid in cash 2		(206,500)			(206,500)
Capital stock issued in settlement of debt on July 5, 2010 at $2.50	400	999,600			1,000,000
Capital stock issued in settlement of debt on July 5, 2010 at $2.50 (Shares)	400,000
Capital stock issued for cash on September 3, 2010 at $2.75	163	448,087			448,250
Capital stock issued for cash on September 3, 2010 at $2.75 (Shares)	163,000
Capital stock issued for finders fees on September 3, 2010 at $2.75	9	(9)
Capital stock issued for finders fees on September 3, 2010 at $2.75 (Shares)	9,000
Finders fees paid in cash 3		(15,125)			(15,125)
Shares issued on conversion of promissory note on September 30, 2010 at $2.25	328	737,802			738,130
Shares issued on conversion of promissory note on September 30, 2010 at $2.25 (Shares)	328,058
Shares issued on conversion of promissory note on September 30, 2010 at $2.35	511	1,199,489			1,200,000
Shares issued on conversion of promissory note on September 30, 2010 at $2.35 (Shares)	510,638
Reclassification of derivative liability on modification of note terms		3,144,520			3,144,520
Settlement of accounts payable		444,000			444,000
Equity component of convertible interest bearing promissory note		44,220			44,220
Net Income (Loss)				(8,783,037)	(8,783,037)
Ending Balance at Sep. 30, 2010	23,517	18,912,335		(21,896,074)	(2,960,222)
Ending Balance (Shares) at Sep. 30, 2010	23,516,952
Rent contributed					0
Stock based compensation		1,273,162			1,273,162
Capital stock issued for cash on November 18, 2010 at $2.75	393	1,082,682			1,083,075
Capital stock issued for cash on November 18, 2010 at $2.75 (Shares)	393,846
Less: Share issue costs		(65,363)			(65,363)
Capital stock issued for finders fees on November 18, 2010 at $2.75	4	(4)
Capital stock issued for finders fees on November 18, 2010 at $2.75 (Shares)	3,636
Shares issued on conversion of promissory note on November 18, 2010 at $2.25	853	1,918,565			1,919,418
Shares issued on conversion of promissory note on November 18, 2010 at $2.25 (Shares)	853,075
Debt conversion expense		504,160			504,160
Shares issued on the conversion of a promissory note on November 18, 2010 - at $4.12	145	597,515			597,660
Shares issued on the conversion of a promissory note on November 18, 2010 - at $4.12 (Shares)	145,063
Capital stock issued in settlement of debt on November 18, 2010 - at $4.12	182	748,908			749,090
Capital stock issued in settlement of debt on November 18, 2010 - at $4.12 (Shares)	181,818
Capital stock issued for cash on November 25, 2010 at $3.35	30	99,970			100,000
Capital stock issued for cash on November 25, 2010 at $3.35 (Shares)	29,851
Capital stock issued for finders fees on November 25, 2010 at $3.35	3	(3)
Capital stock issued for finders fees on November 25, 2010 at $3.35 (Shares)	2,985
Capital stock issued for cash on February 1, 2011 - at $3.75	61	228,739			228,800
Capital stock issued for cash on February 1, 2011 - at $3.75 (Shares)	61,014
Capital stock issued for cash on May 3, 2011 - at $3.00	34	99,966			100,000
Capital stock issued for cash on May 3, 2011 - at $3.00 (Shares)	33,334
Capital stock issued on exercise of warrants for cash on June 19, 2011 - at $2.25	700	1,574,300			1,575,000
Capital stock issued on exercise of warrants for cash on June 19, 2011 - at $2.25 (Shares)	700,000
Equity units issued in settlement of an account payable on September 28, 2011	650	1,059,313			1,059,963
Equity units issued in settlement of an account payable on September 28, 2011 (Shares)	650,000
Net Income (Loss)				(7,307,147)	(7,307,147)
Ending Balance at Sep. 30, 2011	26,572	28,034,245		(29,203,221)	(1,142,404)
Ending Balance (Shares) at Sep. 30, 2011	26,571,574
Rent contributed					0
Stock based compensation		302,208			302,208
Less: Share issue costs		(77,000)			(77,000)
Capital stock issued for cash on December 6, 2011 - at $1.25	616	768,884			769,500
Capital stock issued for cash on December 6, 2011 - at $1.25 (Shares)	615,600
Capital stock issued for cash on February 9, 2012 - at $1.25	270	337,230			337,500
Capital stock issued for cash on February 9, 2012 - at $1.25 Shares	270,000
Less: Share Issue costs 2		(33,750)			(33,750)
Capital stock issued for services on February 9, 2012 - at $1.99	8	15,888			15,896
Capital stock issued for services on February 9, 2012 - at $1.99 Shares	8,000
Capital stock issued for settlement of loans payable on May 31, 2012	2,700	5,176,884			5,179,584
Capital stock issued for settlement of loans payable on May 31, 2012 (Shares)	2,700,513
Capital stock to be issued for services on June 26, 2012 - at $1.00	75	74,925			75,000
Capital stock to be issued for services on June 26, 2012 - at $1.00 (Shares)	75,000
Net Income (Loss)				(8,301,705)	(8,301,705)
Ending Balance at Sep. 30, 2012	$ 30,241	$ 34,599,514		$ (37,504,926)	$ (2,875,171)
Ending Balance (Shares) at Sep. 30, 2012	30,240,687

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Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 1	$ 67,500
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 2	0
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 3	0
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 4	167,500
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 5	(67,500)
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 6	(100,000)
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 7	0
Summary Of Significant Accounting Policies Fair Value, Liabilities Measured On Recurring And Nonrecurring Basis 8	$ 67,500

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Promissory Notes Payable (Tables)

12 Months Ended

Sep. 30, 2012

Schedule of Debt [Table Text Block]

		2012			2011
Convertible interest bearing promissory notes payable	$	-		$	750,000
Interest bearing promissory notes payable		299,000			216,000
Less: fair value of derivative liabilities on date of issuance		-			(167,500	)
Add: accumulated accretion		-			69,419
		299,000			867,919
Less: current portion		(299,000	)		(867,919	)
	$	-		$	-

Schedule of promissory note settlements [Table Text Block]

Promissory note settled					Units issued
				Accrued					Loss on
Maturity date		Principal		Interest	Number		Fair Value		Settlement
Convertible interest bearing promissory note
April 20, 2012	$	250,000	$	22,333	544,667	$	1,044,671	$	(772,338	)
Interest bearing promissory notes
May 4, 2012		216,000		18,571	469,152		899,833		(665,262	)
June 19, 2012		799,389		10,925	1,620,628		3,108,365		(2,298,051	)
April 2, 2013		32,500		533	66,066		126,715		(93,682	)
		1,047,889		30,029	2,155,846		4,134,913		(3,056,995	)
	$	1,297,889	$	52,362	2,700,513	$	5,179,584	$	(3,829,333	)

Schedule of fair value of warrants assumption [Table Text Block]

Stock price	$1.25
Exercise price	$0.75
Expected volatility	78.89%
Risk-free discount rate	0.23%

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Schedule of Property, Plant and Equipment (Details) (USD $)	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Equipment Schedule Of Property, Plant And Equipment 1	$ 5,631
Equipment Schedule Of Property, Plant And Equipment 2	5,055
Equipment Schedule Of Property, Plant And Equipment 3	576
Equipment Schedule Of Property, Plant And Equipment 1		5,631
Equipment Schedule Of Property, Plant And Equipment 2		3,197
Equipment Schedule Of Property, Plant And Equipment 3		$ 2,434

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Commitments (Tables)

12 Months Ended

Sep. 30, 2012

Schedule of Stockholders' Equity Note, Warrants or Rights, Activity [Table Text Block]

				Weighted
				Average
				Exercise
	Number of Shares			Price
Balance, September 30, 2010	2,047,151		$	2.87
Expired	(148,749	)	$	2.64
Exercised	(700,000	)	$	2.25
Issued	1,457,077		$	3.07
Balance, September 30, 2011	2,655,479		$	3.16
Expired	(1,552,651	)	$	3.16
Issued	3,147,313		$	0.93
Balance, September 30, 2012	4,250,141		$	1.16

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

Number	Exercise Price		Expiry Date
853,075	$	3.00	November 18, 2012
16,419	$	4.50	November 25, 2012
307,800	$	2.00	December 6, 2012
200,000	$	1.50	January 5, 2013
135,000	$	2.00	February 9, 2013
4,000	$	2.00	February 9, 2013
33,334	$	4.00	April 20, 2013
2,700,513	$	0.75	November 30, 2013
4,250,141

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

				Weighted
				Average		Weighted
				Exercise		Average Grant
	Number of Shares			Price		Date fair value
Outstanding at September 30, 2010	2,775,000		$	3.29
Forfeited	(1,000,000	)	$	3.93
Cancelled	(50,000	)	$	2.75
Granted	650,000		$	4.06	$	2.95
Outstanding at September 30, 2011	2,375,000		$	3.18
Forfeited	(1,100,000	)	$	2.82
Granted	500,000		$	1.50	$	0.72
Outstanding at September 30, 2012	1,775,000		$	2.94
Exercisable at September 30, 2012	905,000		$	2.81
Exercisable at September 30, 2011	930,000		$	2.90

Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

Number of Shares							Aggregate	Remaining
			Number	Exercise			Intrinsic	Contractual
Total			Vested	Price		Expiry Date	Value	Life (yrs)
50,000	(1	)	50,000	$	3.75	November 1, 2012	-	0.09
100,000	(2	)	-	$	3.86	December 1, 2012	-	0.17
150,000	(3	)	150,000	$	3.10	June 30, 2014	-	1.75
400,000	(4	)	400,000	$	2.50	September 15, 2013	-	0.96
500,000	(5	)	-	$	2.50	October 19, 2013	-	1.04
5,000	(6	)	5,000	$	2.50	March 2, 2014	-	1.42
50,000	(7	)	50,000	$	3.50	June 30, 2014	-	1.75
150,000	(8	)	150,000	$	3.72	February 24, 2016	-	3.40
100,000	(9	)	100,000	$	3.67	March 30, 2016	-	3.50
270,000	(10	)	-	$	3.00	February 8, 2017	-	4.36
1,775,000			905,000				-

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	2012	2011
Risk-free interest rate	0.83% - 2.19%	0.96% - 2.21%
Expected life of options	4.25 - 5.0 years	4.5 - 5.0 years
Annualized volatility	57.87% - 95.25%	56.27% - 62.52%
Dividend rate	0%	0%

Schedule of Nonvested Share Activity [Table Text Block]

						Weighted
				Weighted		Average
	Number of			Average		Grant-Date
	Shares			Exercise Price		Fair Value
Unvested options at September 30, 2010	1,161,667		$	2.98	$	1.80
Granted	650,000		$	4.06	$	2.61
Forfeited/Cancelled	(225,000	)	$	3.47	$	2.51
Vested	(141,667	)	$	3.57	$	2.59
Unvested options at September 30, 2011	1,445,000		$	3.33	$	2.17
Granted	500,000		$	1.50	$	0.72
Forfeited	(900,000	)	$	2.74	$	1.60
Vested	(175,000	)	$	3.71	$	2.70
Unvested options at September 30, 2012	870,000		$	2.81	$	1.82

Shares Issued For Services [Table Text Block]

		Years ended September 30,
		2012		2011
Consulting fees	$	312,903	$	1,273,162
Research and development		80,200		-
	$	393,103	$	1,273,162

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Business Description, Basis of Presentation and Liquidity

12 Months Ended

Sep. 30, 2012

Business Description, Basis of Presentation and Liquidity [Text Block]

Note 1 Business Description, Basis of Presentation and Liquidity

Business

Anavex Life Sciences is a pharmaceutical company engaged in the development of drug candidates. Our lead compound ANAVEX 2-73, developed to treat Alzheimer’s disease through disease modification, is in human clinical trials.

In pre-clinical studies conducted in France, and in Greece ANAVEX 2-73 demonstrated anti-amnesic and neuroprotective properties.

Based on these preclinical studies, Anavex sponsored a Phase 1 single ascending dose study of ANAVEX 2-73 initiated and completed in 2011. This study was conducted in Germany in collaboration with ABX-CRO Advanced Pharmaceutical Services. The study indicated that ANAVEX 2-73 was well tolerated by study subjects in doses up to 55mg.

Due principally to Anavex’ inability to obtain sufficient funding to support operations and development of our pipeline, it has been unable to attract and retain executive management that is experienced in leading a development stage pharmaceutical company. For this reason, the company is deferring research into drug candidates until expert management evaluates the company’s progress and determines an appropriate course of action, and there is capital to effect management’s plan of action.

In considering several different means of accomplishing Anavex’ goal of commercializing a treatment for Alzheimer’s disease, its officers and directors have determined that pursuing a strategic relationship with a partner, partners, or an acquirer with capable management and sufficient capital to sponsor trials is the company’s best course of action at this time. Further, Anavex may acquire or develop new intellectual property and assign, license, or otherwise transfer its intellectual property to further its plan.

Basis of Presentation and Liquidity

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and the instructions to Form 10-K.

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its obligations and commitments in the normal course of operations. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2012, the Company had an accumulated deficit of $37,504,926 (2011 - $29,203,221), had a working capital deficit of $2,875,747 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this but considers obtaining additional funds by equity financing and/or from issuing promissory notes. Management expects the Company’s cash requirement over the next twelve months to be approximately $4,000,000. While the Company is expending best efforts to achieve the above plans, there is no assurance that any such activity will generate funds for operations.

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INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Par Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares, Issued	30,240,687	26,571,574
Common Stock, Shares, Outstanding	30,240,687	26,571,574

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Subsequent Events

12 Months Ended

Sep. 30, 2012

Subsequent Events [Text Block]

Note 11	Subsequent Events
	Subsequent to September 30, 2012;

a)	the Company issued a promissory note having a principal balance of $150,000 with terms that include interest at 8% per annum and maturing on March 31, 2013.
b)	the Company issued a promissory note having a principal balance of $50,000 with terms that include interest at 8% per annum and maturing on March 31, 2013.

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Document and Entity Information (USD $)	12 Months Ended
	Sep. 30, 2012	Dec. 28, 2012	Mar. 30, 2012
Document Type	10-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Trading Symbol	avxl
Entity Registrant Name	ANAVEX LIFE SCIENCES CORP.
Entity Central Index Key	0001314052
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		30,240,687
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Entity Public Float			$ 25,213,463
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2012

Use of Estimates [Policy Text Block]

a)

Use of Estimates

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuations, asset impairment, conversion features embedded in convertible notes payable, derivative valuations, stock based compensation and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Principles of Consolidation [Policy Text Block]

b)	Principles of Consolidation
	These consolidated financial statements include the accounts of Anavex Life Sciences Corp. and its wholly-owned subsidiary, Anavex Life Sciences (France) SA, a company incorporated under the laws of France. All inter-company transactions and balances have been eliminated.

Development Stage Company [Policy Text Block]

c)	Development Stage Company
	The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced. All losses accumulated since inception has been considered as part of the Company’s development stage activities.

Equipment [Policy Text Block]

d)	Equipment
	Equipment is recorded at cost and is depreciated at 33% per annum on the straight-line basis.

Impairment of Long-Lived Assets [Policy Text Block]

e)

Impairment of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The estimated future cash flows are based upon, among other things, assumptions about future operating performance, and may differ from actual cash flows. Long-lived assets evaluated for impairment are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest) is less than the carrying value of the assets, the assets will be written down to the estimated fair value in the period in which the determination is made.

Financial Instruments [Policy Text Block]

f)

Financial Instruments

The carrying value of the Company’s financial instruments, consisting of cash and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Based on borrowing rates currently available to the Company for similar terms and based on the short term duration of the debt instruments, the carrying value of the promissory notes payable approximate their fair value. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Foreign Currency Translation [Policy Text Block]

g)

Foreign Currency Translation

The functional currency of the Company is the US dollar. Monetary items denominated in a foreign currency are translated into US dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired or obligations incurred. Foreign currency denominated expense items are translated at exchange rates prevailing at the transaction date. Unrealized gains or losses arising from the translations are credited or charged to income in the period in which they occur.

Research and Development Expenses [Policy Text Block]

h)	Research and Development Expenses
	Research and developments costs are expensed as incurred. These expenses are comprised of the costs of the Company’s proprietary research and development efforts, including salaries, facilities costs, overhead costs and other related expenses as well as costs incurred in connection with third-party collaboration efforts. Milestone payments made by the Company to third parties are expensed when the specific milestone has been achieved.
	In addition, the Company incurs expenses in respect of the acquisition of intellectual property relating to patents and trademarks. The probability of success and length of time to developing commercial applications of the drugs subject to the acquired patents and trademarks is difficult to determine and numerous risks and uncertainties exist with respect to the timely completion of the development projects. There is no assurance the acquired patents and trademarks will ever be successfully commercialized. Due to these risks and uncertainties, the acquisition of patents and trademarks does not meet the definition of an asset and thus are expensed as incurred.

Income Taxes [Policy Text Block]

i)

Income Taxes

The Company has adopted the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Basic and Diluted Loss per Share [Policy Text Block]

j)

Basic and Diluted Loss per Share

The basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the year ended September 30, 2012, loss per share excludes 6,025,141 (2011 – 5,030,479) potentially dilutive common shares (related to convertible notes payable and outstanding options and warrants) as their effect was anti-dilutive.

Stock-based Compensation [Policy Text Block]

k)	Stock-based Compensation
	The Company accounts for all stock-based payments and awards under the fair value based method.
	Stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until the counterparty performance is complete, and any change therein is recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity based instruments. Compensation costs for stock-based payments with graded vesting are recognized on a straight-line basis. The cost of the stock-based payments to non- employees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual term for services in which case such compensation would be amortized over the contractual term.
	The Company accounts for the granting of share purchase options to employees using the fair value method whereby all awards to employees will be recorded at fair value on the date of the grant. The fair value of all share purchase options are expensed over their vesting period with a corresponding increase to additional paid-in capital.
	The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of the grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimates.

Fair Value Measurements [Policy Text Block]

l)	Fair Value Measurements
	The fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 -	quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 -	observable inputs other than Level I, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3 -	assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to the fair value of the assets or liabilities.

Recent Accounting Pronouncements [Policy Text Block]

m)

Recent Accounting Pronouncements

On June 16, 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income , or ASU 2011-05. ASU 2011-05 requires entities to report items of other comprehensive income on either part of a single contiguous statement of comprehensive income or in a separate statement of comprehensive income immediately following the statement of income. On December 23, 2011, the FASB issued an update to this pronouncement, ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 , or ASU 2011-12. ASU 2011-12 defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The Company has not recorded any components of comprehensive income (loss) for the years ended September 30, 2012 and 2011 and, as at September 30, 2012, the Company does not have a balance recorded in respect of accumulated comprehensive income (loss).

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INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended		104 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Expenses
Accounting and audit fees	$ 139,761	$ 158,225	$ 662,114
Amortization and depreciation	1,858	1,657	5,055
Bank charges and interest	5,963	8,701	42,307
Consulting fees	1,155,366	2,757,835	11,744,091
Insurance	10,844	48,152	58,996
Investor relations	108,138	133,805	831,707
Legal fees	142,923	140,613	670,025
Management fees	0	0	14,625
Office and miscellaneous	9,147	30,068	147,684
Registration and filing fees	26,794	58,878	154,398
Rent and administration	0	63,110	224,670
Research and development	2,653,860	2,597,279	12,558,949
Travel	66,837	182,259	741,155
Website design and maintenance	0	0	28,417
Loss before other income (expenses)	(4,321,491)	(6,180,582)	(27,884,193)
Other income (expenses)
Interest and financing fees	(138,341)	(90,246)	(626,021)
Accretion of debt discount	(98,081)	(69,419)	(2,174,661)
Change in fair value of derivative liability	67,500	100,000	(463,274)
Debt conversion expense	0	(504,160)	(504,160)
Loss on settlement of accounts payable	0	(334,053)	(778,053)
Loss on extinguishment of debt	(3,829,333)	(198,738)	(4,515,540)
Foreign exchange gain (loss)	18,041	(29,949)	(8,220)
Net loss for the period	$ (8,301,705)	$ (7,307,147)	$ (36,954,122)
Basic and diluted loss per share	$ (0.29)	$ (0.29)
Weighted average number of shares outstanding	28,168,784	25,169,065

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Capital Stock

12 Months Ended

Sep. 30, 2012

Capital Stock [Text Block]

Note 6	Capital Stock
	On May 24, 2006, the board of directors approved a six (6) for one (1) forward split of the authorized issued and outstanding common stock. The Company’s authorized capital increased from 25,000,000 shares of common stock to 150,000,000 shares of common stock.
	On September 24, 2007, the Company issued 222,222 common shares common shares at $3.60 per share for a total of $800,000 for research and development expenses. The common shares were recorded based upon the quoted market price of the Company’s common stock on the agreement date.
	On September 25, 2007, the Company settled a loan payable in the amount of $333,000 by issuing 92,500 common shares at $3.60 per share, being the quoted market price of the Company’s common stock on the settlement date.

On December 10, 2007, the Company issued 150,000 units at $3.50 per unit for proceeds of $525,000. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $5.00 per share until December 10, 2009.

On December 18, 2007, the Company issued 10,000 shares at $4.50 per share for a total of $45,000 pursuant to an agreement to settle a debt and issued 50,000 shares at $3.86 per share for a total of $193,000 pursuant to a consulting agreement. The Company recorded compensation expense of $65,000 in respect of these issuances based on the excess of the fair value of these shares over the balances at which they were recorded by the Company.

On May 15, 2008, the Company issued 65,000 common shares at $5.24 per share for a total of $340,600 to its former CEO in accordance with the terms of a severance agreement upon the termination of his services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the agreement date.

On August 19, 2008, the Company issued 25,000 common shares at $5.07 per share for a total of $126,750 to a director of the Company pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the agreement date.

On August 19, 2008, the Company issued 142,698 units at $4.25 per unit for proceeds of $606,467 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $5.00 per share until August 19, 2009.

On November 20, 2008, the Company issued 25,000 common shares at $2.63 per share for a total of $65,750 to a director of the Company pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issuance date.

On February 20, 2009, the Company issued 25,000 common shares at $2.50 per share for a total of $62,500 to a director of the Company pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issuance date.

On March 6, 2009, the Company issued 89,148 units at $2.25 per unit for proceeds of $200,583 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until March 6, 2010.

On March 20, 2009, the Company issued 10,800 units at $2.25 per unit for proceeds of $24,300 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until March 20, 2010.

On March 20, 2009, the Company issued 2,500 common shares at $2.00 per share for a total of $5,000 to a public relations consultant pursuant to an agreement to provide consulting services. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issuance date.

On May 14, 2009, the Company entered into a revised consulting agreement with a director whereby the consultant returned 75,000 common shares to the Company for cancellation. The return of shares was recorded in the same amount at which they were originally issued.

On June 11, 2009 the Company issued 36,000 units at $2.25 per unit for proceeds of $81,000 pursuant to private placement agreements. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until June 11, 2010. The Company paid finders’ fees in the amount of $8,100 in relation to this private placement.

On June 11, 2009 the Company issued 29,227 common shares at $2.25 per share for service rendered by consultants. The common shares were recorded based upon the fair value of the Company’s common stock on the issuance date of the shares.

On June 19, 2009, the Company issued 495,556 units at $2.25 per unit for total proceeds of $1,115,000 pursuant to private placement agreements. Each unit consisted on one common share and one and one-half of a common share purchase warrant entitling the holder to purchase additional common shares at $2.25 per share until June 19, 2011.

On June 26, 2009, the Company issued 22,222 common shares at $2.51 per share for finder’s fees related to the issuance of a $500,000 note payable. The common shares were recorded based upon the quoted market price of the Company’s common stock on the issue date.

On August 19, 2009, the Company issued 128,888 units at $2.25 per Unit for total proceeds of $289,998. Of these placements, 40,000 Units consisted of one common share and one share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until July 9, 2010 and 88,888 Units consisted on one common share and one and one- eighth share purchase warrant entitling the holder to purchase an additional common shares at $2.25 per share until August 4, 2011. The Company paid finders’ fees totalling $19,000 in respect of these private placements.

On October 2, 2009 the Company issued 266,666 units at $2.25 per unit for proceeds of $600,000 pursuant to private placement agreement. Each unit consisted of one common share and one and one-eighth common share purchase warrant entitling the holder to purchase an additional common share at $2.25 per share until October 2, 2011. The Company had received $300,000 of this amount in the year ended September 30, 2010.

On February 2, 2010 the Company issued 49,505 common shares of the Company, at their fair value of $2.02 per share pursuant to an agreement with a former officer to settle an outstanding amount owed.

On April 9, 2010, the Company issued 92,499 units at $2.60 per unit for proceeds of $240,498 pursuant to private placement agreement. Each unit consisted of one common share and one- half common share purchase warrant entitling the holder to purchase an additional common share at $3.50 per share until April 9, 2011.

On April 30, 2010, the Company issued 9,825 common shares of the Company, at $2.85 per share as consideration for terminating a consulting agreement and for services rendered under the agreement. The common shares were recorded based upon the quoted market price of the Company’s common stock on the date of the termination of the agreement.

On June 29, 2010, the Company issued 941,000 units at $2.50 per unit for total proceeds of $2,352,500 pursuant to private placement agreements. Each unit consisted on one common share and one-half of a common share purchase warrant entitling the holder to purchase additional common shares at $3.50 per share until December 29, 2011.

On July 5, 2010, the Company issued 400,000 units in settlement of $1,000,000 owing to a creditor. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at 3.50 per share until January 5, 2012. The fair value of the units issued was determined to be $1,444,000 on the date they were issued and thus the Company recorded a loss on settlement of accounts payable of $444,000 with a corresponding credit to additional paid-in capital of the same amount on date of issuance. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $3.50, stock price - $3.15, expected volatility – 68.45%, expected life – 1.5 years, dividend yield – 0.00%.

On September 3, 2010, the Company issued 163,000 units at $2.75 per unit for proceeds of $448,250 pursuant to private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $3.75 per share until March 3, 2012.

On September 3, 2010, the Company issued 9,000 units at $2.75 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $3.75 per share until March 3, 2012.

On September 30, 2010, the Company issued 510,638 common shares at $2.35 per share pursuant to the terms of a convertible note payable.

On September 30, 2010, the Company issued 82,310 units at $2.25 per unit pursuant to the terms of convertible notes payable. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $3.50 per share until September 30, 2011.

On September 30, 2010, the Company issued 245,748 units at $2.25 per unit pursuant to the terms of convertible notes payable. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $3.00 per share until September 30, 2012.

On November 18, 2010, the Company issued 393,846 units at $2.75 per unit for proceeds of $1,083,075 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until May 18, 2012. The Company paid a finder’s fee totalling $65,363 in respect of this private placement.

On November 18, 2010, the Company issued 3,636 units at $2.75 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until May 18, 2012.

On November 18, 2010, the Company issued 853,075 units in the conversion of two notes payable originally convertible at $2.50. The Company recorded debt conversion expense of $504,160, related to the fair value of the additional units issued as a result of converting at the lower conversion price. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $3.00 per share until November 18, 2012. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $3.00, stock price - $4.12, expected volatility – 78.33%, expected life – 2.0 years, dividend yield – 0.00%, risk-free rate – 0.52%.

On November 18, 2010, the Company issued 145,063 shares of common stock at their fair value of $4.12 per share based on their quoted market price pursuant to settling non- convertible interest bearing notes payable outstanding in the amount of $398,922, including accrued interest of $26,032. The Company recorded a loss on settlement of debt of $198,738 based on the difference between the carrying value of the debt settled and the fair value of the shares issued.

On November 18, 2010, the Company issued 181,818 shares of common stock at their fair value of $4.12 per share based on the quoted value of units issued in a private placement on the same date to one creditor in settlement of $500,000 of debt owing. The Company recorded a loss on settlement of accounts payable of $249,090 based on the difference of the carrying value of the account payable and the fair value of the shares issued.

On November 25, 2010, the Company issued 29,851 units at $3.35 per unit for proceeds of $100,000 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until November 25, 2012.

On November 25, 2010, the Company issued 2,985 units at $3.35 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until November 25, 2012.

On February 1, 2011, the Company issued 61,014 units at $3.75 per unit for proceeds of $228,800 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $5.25 per share until August 1, 2012.

On May 3, 2011, the Company issued 33,334 units at $3.00 per unit for proceeds of $100,000 pursuant to a private placement agreement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.00 per share until April 20, 2013.

On June 19, 2011, the Company issued 700,000 common shares at $2.25 per share for proceeds of $1,575,000 pursuant to the exercise of warrants.

On September 26, 2011, the Company issued 650,000 units in settlement of $975,000 of debt owing. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until September 26, 2012. The Company recorded a loss on settlement of account payable in the amount of $84,963 based on the fair value of shares being $975,000 at their issuance and the fair value of the warrants determined to be $84,963. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $2.00, stock price - $1.50, expected volatility – 69%, expected life – 1.0 years, dividend yield – 0.00%, risk-free interest rate – 0.10%.

On December 6, 2011, the Company issued 615,600 units at $1.25 per unit for proceeds of $769,500 pursuant to private placement agreements. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until December 6, 2012. The Company paid finder’s fees of $77,000 in connection with this private placement.

On February 9, 2012 the Company issued 8,000 units for service rendered by a director and officer of the Company. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until February 9, 2013. The fair value of the units issued was determined to be $15,896 on the date they were issued and the Company recorded consulting fees of $15,896 on the statement of operations for the year ended September 30, 2012. The fair value of the shares included in the units was determined with reference to their quoted market price and the value of the warrants was determined using the Black-Scholes model with the following assumptions: exercise price - $2.00, stock price - $1.74, expected volatility – 84.88%, expected life – 1.0 years, risk free interest rate – 0.15%, dividend yield – 0.00%.

On February 9, 2012, the Company issued 270,000 units at $1.25 per unit for proceeds of $337,500 pursuant to private placement agreements. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $2.00 per share until February 9, 2013. The Company paid a finder’s fee of $33,750 in connection with this private placement.

On May 31, 2012, the Company issued 2,700,513 units in settlement of $1,297,889 in promissory notes and $52,367 of accrued interest on these notes, which was included in accounts payable and accrued liabilities Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $0.75 per share until November 30, 2013. (Note 5).

On June 26, 2012, the Company agreed to issue 75,000 common shares to the former president of the Company for past services and in final settlement of a consulting agreement dated February 1, 2007. These shares were issued on July 12, 2012.

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Promissory Notes Payable

12 Months Ended

Sep. 30, 2012

Promissory Notes Payable [Text Block]

Note 5 Promissory Notes Payable

		2012			2011
Convertible interest bearing promissory notes payable	$	-		$	750,000
Interest bearing promissory notes payable		299,000			216,000
Less: fair value of derivative liabilities on date of issuance		-			(167,500	)
Add: accumulated accretion		-			69,419
		299,000			867,919
Less: current portion		(299,000	)		(867,919	)
	$	-		$	-

Convertible interest bearing promissory notes

The Company issued unsecured convertible interest bearing promissory notes totaling $750,000 during the year ended September 30, 2011 consisting of a promissory note in the amount of $250,000 maturing on April 20, 2012 and a promissory note in the amount of $500,000 maturing on May 4, 2012, each bearing interest at 8% per annum. These notes were convertible at any time at the option of the holder into units of the Company at $3.00 per unit with each unit consisting of one common share and one common share purchase warrant entitling the holder thereof to purchase an additional common share for $4.00 for a period of 2 years from the date of issuance.

In connection with the issuance of these notes, the Company paid a finder’s fee totaling $100,000 which was deferred and amortized to income using the effective interest method over the terms of the notes. As at September 30, 2012, there remained no unamortized balance in respect of this deferred financing charge (2011: $55,464).

Pursuant to the guidance of ASC 815-40, the Company determined that the embedded conversion feature of the notes failed to meet the “fixed for fixed” criteria contained within the guidance. Accordingly, the Company bifurcated the embedded conversion features as a separate derivative liability having a fair value of $167,500 at inception. The corresponding debt discount was accreted over the term of the note. During the year ended September 30, 2012, the Company recorded accretion expense of $98,081 (2011: $69,419) in respect of this debt discount.

On April 20, 2012, the $500,000 convertible promissory note with accrued interest thereon of $40,000 along with an interest bearing $250,000 promissory note with accrued interest thereon of $9,389 that had been issued on November 1, 2011 were exchanged for a new non-convertible 12% interest bearing promissory note having a principal amount of $799,389 maturing on June 19, 2012. Subsequent to this exchange of promissory notes, on May 31, 2012, the Company extinguished this note along with accrued interest of $10,925 thereon by issuing 1,620,628 equity units having a fair value of $3,108,365. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $2,298,051.

On May 31, 2012, the Company extinguished the $250,000 convertible promissory note along with accrued interest of $22,333 thereon by issuing 544,667 equity units having a fair value of $1,044,671. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $772,338.

Interest bearing promissory notes

During the year ended September 30, 2010, the Company issued a promissory note having a principal balance of $200,000 with terms that included interest at 8% per annum and maturing on May 4, 2011. On May 4, 2011, this note, including accrued interest of $16,000 thereon, was exchanged for a new 8% interest bearing promissory note having a principal balance of $216,000 maturing May 4, 2012. On May 31, 2012, the Company extinguished this note along with accrued interest of $18,576 thereon by issuing 469,152 equity units having a fair value of $899,833. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $665,257.

On April 2, 2012, the Company issued a promissory note having a principal balance of $32,500 with terms that included interest at 10% per annum maturing on April 2, 2013. The Company paid a finders fee totalling $3,250 which was deferred and amortized to income from the date of issuance to the date of extinguishment. On May 31, 2012, the Company extinguished this note along with accrued interest of $533 thereon by issuing 66,066 equity units having a fair value of $126,715. As a result of this extinguishment, the Company recorded a loss on debt extinguishment in the amount of $93,682.

On June 6, 2012, the Company issued a promissory note having a principal balance of $49,000 with terms that include interest at 8% per annum and maturing on December 3, 2012. In connection with the issuance of this note, the Company paid a finder’s fee totaling $4,900 which was deferred and amortized to income using the effective interest method over the terms of the note. As at September 30, 2012, there remained an unamortized balance of $1,215 in respect of this deferred financing charge.

On June 26, 2012, the Company issued a promissory note having a principal balance of $250,000 with terms that include interest at 8% per annum and maturing on March 31, 2013.

Extinguishment of promissory notes payable

As noted above, on May 31, 2012, the Company issued equity units in settlement of certain of its promissory notes outstanding. Each unit consisted of one common share and common share purchase warrant entitling the holder to purchase an additional common share at $0.75 until November 30, 2013.

The promissory note settlements are summarized as follows:

Promissory note settled					Units issued
				Accrued					Loss on
Maturity date		Principal		Interest	Number		Fair Value		Settlement
Convertible interest bearing promissory note
April 20, 2012	$	250,000	$	22,333	544,667	$	1,044,671	$	(772,338	)
Interest bearing promissory notes
May 4, 2012		216,000		18,571	469,152		899,833		(665,262	)
June 19, 2012		799,389		10,925	1,620,628		3,108,365		(2,298,051	)
April 2, 2013		32,500		533	66,066		126,715		(93,682	)
		1,047,889		30,029	2,155,846		4,134,913		(3,056,995	)
	$	1,297,889	$	52,362	2,700,513	$	5,179,584	$	(3,829,333	)

The fair value of each unit issued was determined to be $1.918 determined by aggregating (i) the fair value of $1.25 for the Company’s common shares based on their quoted market price on the date of settlement and (ii) the fair value of $0.668 for each warrant included in the Company’s units. The fair value of the Company’s warrants was determined using the binomial model with the following assumptions:

Stock price	$1.25
Exercise price	$0.75
Expected volatility	78.89%
Risk-free discount rate	0.23%

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Related Party Transactions (Tables)

12 Months Ended

Sep. 30, 2012

Schedule of Related Party Transactions [Table Text Block]

		Years ended				January 23, 2004
		September 30,				(Date of Inception)
		2012		2011		to September 30, 2012
Management fees	$	-	$	-	$	14,625
Rent		-		-		3,750
Debt forgiven by directors		-		-		33,666
	$	-	$	-	$	52,041

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2012

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis [Table Text Block]

		2012			2011
Balance, beginning of the period	$	67,500		$	-
Fair value of embedded conversion feature of convertible promissory notes		-			167,500
Change in fair value of derivative liability		(67,500	)		(100,000	)
Balance, end of the period	$	-		$	67,500

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Income Taxes

12 Months Ended

Sep. 30, 2012

Income Taxes [Text Block]

Note 9	Income Taxes
	The tax effects of the temporary differences that give rise to the Company’s estimated deferred tax assets and liabilities are as follows:

		2012			2011
		34%			34%
Net operating loss carryforwards	$	6,775,000		$	5,508,000
Research and development tax credits		741,000			476,000
Foreign exchange		28,000			15,000
Accrued bonuses		34,000			-
Intangible asset costs		34,000			38,000
Valuation allowance for deferred tax assets		(7,612,000	)		(6,037,000	)
Net deferred tax assets	$	-		$	-

The provision for income taxes differ from the amount established using the statutory income tax rate as follows:

		2012			2011
Income benefit at statutory rate	$	(2,823,000	)	$	(2,484,000	)
Stock-based compensation		103,000			433,000
Foreign income taxed at foreign statutory rate		(2,000	)		1,000
Debt extinguishment		1,302,000			181,000
Research and development tax credit		(175,000	)		(95,000	)
Fair value of derivative liability		(23,000	)		(34,000	)
Debt accretion		33,000			24,000
Debt conversion		-			170,000
Other permanent differences		10,000			-
Change in valuation allowance		1,575,000			1,804,000
Deferred income tax recovery	$	-		$	-

As of September 30, 2012, the Company had net operating loss carry-forwards of approximately $19,945,000 (2011: $16,300,000) available to offset future taxable income. The carry-forwards will begin to expire in 2027 unless utilized in earlier years. The Company has not yet filed any tax returns in France as they are not yet due.

The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and this causes a change in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income. Because management of the Company does not currently believe that it is more likely than not that the Company will receive the benefit of these assets, a valuation allowance equal to the deferred tax asset has been established at both September 30, 2012 and 2011.

Uncertain Tax Positions

The Company files income tax returns in the U.S. federal jurisdiction, various state and foreign jurisdictions. The Company’s tax returns are subject to tax examinations by U.S. federal and state tax authorities, or examinations by foreign tax authorities until respective statute of limitation. The Company is subject to tax examinations by tax authorities for all taxation years commencing on or after 2004.

Provisions have not been made for U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries. Such earnings have been and will continue to be reinvested but could become subject to additional tax if they were remitted as dividends, or were loaned to the Company affiliate. It is not practicable to determine the amount of additional tax, if any, that might be payable on the undistributed foreign earnings.

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Related Party Transactions

12 Months Ended

Sep. 30, 2012

Related Party Transactions [Text Block]

Note 7	Related Party Transactions
	The following amounts have been donated to the Company by the directors:

		Years ended				January 23, 2004
		September 30,				(Date of Inception)
		2012		2011		to September 30, 2012
Management fees	$	-	$	-	$	14,625
Rent		-		-		3,750
Debt forgiven by directors		-		-		33,666
	$	-	$	-	$	52,041

During the year ended September 30, 2012, the Company was charged consulting fees totaling $479,434 (2011: $674,917) by directors, officers and a significant shareholder of the Company. As at September 30, 2012, included in accounts payable and accrued liabilities is $127,452 (2011: $20,833) owing to directors and officers of the Company and a former director and officer of the Company.

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Commitments

12 Months Ended

Sep. 30, 2012

Commitments [Text Block]

Note 8 Commitments

a)	Share Purchase Warrants
	A summary of the Company’s share purchase warrants outstanding is presented below:

				Weighted
				Average
				Exercise
	Number of Shares			Price
Balance, September 30, 2010	2,047,151		$	2.87
Expired	(148,749	)	$	2.64
Exercised	(700,000	)	$	2.25
Issued	1,457,077		$	3.07
Balance, September 30, 2011	2,655,479		$	3.16
Expired	(1,552,651	)	$	3.16
Issued	3,147,313		$	0.93
Balance, September 30, 2012	4,250,141		$	1.16

At September 30, 2012, the Company has 4,250,141 currently exercisable share purchase warrants outstanding as follows:

Number	Exercise Price		Expiry Date
853,075	$	3.00	November 18, 2012
16,419	$	4.50	November 25, 2012
307,800	$	2.00	December 6, 2012
200,000	$	1.50	January 5, 2013
135,000	$	2.00	February 9, 2013
4,000	$	2.00	February 9, 2013
33,334	$	4.00	April 20, 2013
2,700,513	$	0.75	November 30, 2013
4,250,141

During the year ended September 30, 2012, the exercise price and expiry of 200,000 warrants exercisable at $3.50 and expiring January 5, 2012 were modified and extended such that these warrants are now exercisable at $1.50 until January 5, 2013. The fair value of this modification was determined to be $80,200 and was determined using the Black-Scholes option pricing model using the following weighted average assumptions: risk-free interest rate: 0.11%, expected life: 1.0 year, annualized volatility: 79.46%, dividend rate: 0%.

b)	Stock–based Compensation Plan
	In April, 2007, the Company adopted a stock option plan which provides for the granting of stock options to selected directors, officers, employees or consultants in an aggregate amount of up to 3,000,000 common shares of the Company and, in any case, the number of shares to be issued to any one individual pursuant to the exercise of options shall not exceed 10% of the issued and outstanding share capital. The granting of stock options, exercise prices and terms are determined by the Company's Board of Directors. If no vesting schedule is specified by the Board of Directors on the grant of options, then the options shall vest over a 4-year period with 25% the granted vesting each year commencing 1 year from the grant date. For stockholders who have greater than 10% of the outstanding common shares of the Company and who have granted options, the exercise price of their options shall not be less than 110% of the fair of the stock on grant date. Otherwise, options granted shall have an exercise price equal to their fair value on grant date.
	On February 2, 2011, the Company amended and restated the 2007 stock option plan to increase the number of options authorized to 4,000,000.
	A summary of the status of Company’s outstanding stock purchase options for the year ended September 30, 2012 is presented below:

				Weighted
				Average		Weighted
				Exercise		Average Grant
	Number of Shares			Price		Date fair value
Outstanding at September 30, 2010	2,775,000		$	3.29
Forfeited	(1,000,000	)	$	3.93
Cancelled	(50,000	)	$	2.75
Granted	650,000		$	4.06	$	2.95
Outstanding at September 30, 2011	2,375,000		$	3.18
Forfeited	(1,100,000	)	$	2.82
Granted	500,000		$	1.50	$	0.72
Outstanding at September 30, 2012	1,775,000		$	2.94
Exercisable at September 30, 2012	905,000		$	2.81
Exercisable at September 30, 2011	930,000		$	2.90

At September 30, 2012, the following stock options were outstanding:

Number of Shares							Aggregate	Remaining
			Number	Exercise			Intrinsic	Contractual
Total			Vested	Price		Expiry Date	Value	Life (yrs)
50,000	(1	)	50,000	$	3.75	November 1, 2012	-	0.09
100,000	(2	)	-	$	3.86	December 1, 2012	-	0.17
150,000	(3	)	150,000	$	3.10	June 30, 2014	-	1.75
400,000	(4	)	400,000	$	2.50	September 15, 2013	-	0.96
500,000	(5	)	-	$	2.50	October 19, 2013	-	1.04
5,000	(6	)	5,000	$	2.50	March 2, 2014	-	1.42
50,000	(7	)	50,000	$	3.50	June 30, 2014	-	1.75
150,000	(8	)	150,000	$	3.72	February 24, 2016	-	3.40
100,000	(9	)	100,000	$	3.67	March 30, 2016	-	3.50
270,000	(10	)	-	$	3.00	February 8, 2017	-	4.36
1,775,000			905,000				-

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price of the Company’s stock for the options that were in-the-money at September 30, 2012.

(1)	As at September 30, 2012 and 2011, these options had fully vested. The Company did not recognize any stock-based compensation for these options during the year ended September 30, 2012 (2011: $nil). Subsequent to September 30, 2012, these options expired unexercised.
(2)	As at September 30, 2012 and 2011, these options have not vested. The options vest upon the Company listing its shares on the American Stock Exchange or any other nationally recognized stock exchange by December 1, 2012 or in the event of a change of control a listing on a nationally recognized stock exchange is not required. No stock- based compensation has been recorded in the financial statements as the performance condition has not yet been met. Subsequent to September 30, 2012, these options expired unexercised.
(3)	As at September 30, 2012 and 2011, these options had fully vested. During the year ended September 30, 2012, the expiry of these options was extended from June 3, 2013 to June 30, 2014. The fair value of this modification was determined to be $18,600 and was determined using the Black-Scholes option pricing model using the following weighted average assumptions: risk-free interest rate: 0.31%, expected life: 2.0 years, annualized volatility: 84.74%, dividend rate: 0%.

(4)	As at September 30, 2012 and 2011, these options had fully vested. The Company did not recognize any stock-based compensation for these options during the year ended September 30, 2012 (2011: $500,000).
(5)	As at September 30, 2012 and 2011, none of these options have vested. The options vest as to 100,000 per compound entered into a phase II trial. The fair value of these options was calculated to be $740,000, which the Company has not yet recognized in the financial statements as the performance conditions have not yet been met.
(6)	As at September 30, 2012 and 2011, these options had fully vested. The Company did not recognize any stock-based compensation for these options in the year ended September 30, 2012 (2011: $nil).
(7)	As at September 30, 2012 and 2011 these options had fully vested. The Company did not recognize any stock-based compensation for the year ended September 30, 2012 (2011: $125,000). During the year ended September 30, 2012, the expiry of these options was shortened from June 29, 2015 to June 30, 2014. The Company did not recognize any stock based compensation expense in connection with this modification because the fair value of the modified options was less than the fair value of the options under the old terms.
(8)	As at September 30, 2012, these options had fully vested (2011: none of these options have vested). The options vested on February 24, 2012. The fair value of these options was calculated to be $406,500, of which the Company recognized stock-based compensation in the amount of $163,415 for the year ended September 30, 2012 (2011: $243,084).
(9)	These options were granted during the year ended September 30, 2011. At September 30, 2011, 75,000 of these options had vested. The remaining 25,000 options vested during the year ended September 30, 2012. The fair value of these options at issuance was calculated to be $267,000, of which the Company has recognized $6,500 as stock based compensation during the year ended September 30, 2012 (2011: $120,250).
(10)	As at September 30, 2012 and 2011, these options have not vested. The options vest upon one or more compounds: entering Phase II trial – 90,000 options; entering Phase III trial – 90,000 options; and receiving FDA approval – 90,000 options. No stock-based compensation has been recorded in the financial statements as none of the performance conditions have yet been met.

During the year ended September 30, 2012, a total of 1,100,000 options were forfeited for which the Company had recognized stock-based compensation of $158,493 in respect of these options. The Company recognized stock-based compensation of $33,493 in respect of these options during the year ended September 30, 2012 (2011: $Nil).

During the year ended September 30, 2011, a total of 1,000,000 options were forfeited for which the Company had recognized stock based compensation of $708,917 in respect of these options. Of this total, $284,828 of stock based compensation expense had been recognized during the year ended September 30, 2011.

The fair value of stock options granted has been determined using the Black-Scholes option pricing model using the following weighted average assumptions applied to stock options granted during the periods:

	2012	2011
Risk-free interest rate	0.83% - 2.19%	0.96% - 2.21%
Expected life of options	4.25 - 5.0 years	4.5 - 5.0 years
Annualized volatility	57.87% - 95.25%	56.27% - 62.52%
Dividend rate	0%	0%

At September 30, 2012, the following summarizes the unvested stock options:

						Weighted
				Weighted		Average
	Number of			Average		Grant-Date
	Shares			Exercise Price		Fair Value
Unvested options at September 30, 2010	1,161,667		$	2.98	$	1.80
Granted	650,000		$	4.06	$	2.61
Forfeited/Cancelled	(225,000	)	$	3.47	$	2.51
Vested	(141,667	)	$	3.57	$	2.59
Unvested options at September 30, 2011	1,445,000		$	3.33	$	2.17
Granted	500,000		$	1.50	$	0.72
Forfeited	(900,000	)	$	2.74	$	1.60
Vested	(175,000	)	$	3.71	$	2.70
Unvested options at September 30, 2012	870,000		$	2.81	$	1.82

As at September 30, 2012, there was no unrecognized compensation cost associated with unvested share-based compensation awards that will become vested exclusive of achieving any performance milestones that is expected to be recognized in current fiscal year. There has been no stock-based compensation recognized in the financial statements for the year ended September 30, 2012 (2011: $nil) for options that will vest upon the achievement of performance milestones because the Company has determined that satisfaction of the performance milestones was not probable. Compensation relating to stock options exercisable upon achieving performance milestones will be recognized in the period the milestones are achieved.

Stock-based compensation amounts, including those relating to shares issued for services during the years ended September 30, 2012 and 2011 are classified in the Company’s Statement of Operations as follows:

		Years ended September 30,
		2012		2011
Consulting fees	$	312,903	$	1,273,162
Research and development		80,200		-
	$	393,103	$	1,273,162

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Supplemental Cash Flow Information

12 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Information [Text Block]

Note 10	Supplemental Cash Flow Information
	Investing and financing activities that do not have a direct impact on current cash flows are excluded from the statement of cash flows.
	During the year ended September 30, 2012:

a)	The Company issued 544,667 units of the Company at their fair value of $1.918 per unit to settle a convertible interest bearing note payable outstanding in the amount of $272,333, including accrued interest of $22,333 included in accounts payable and accrued liabilities and 2,155,846 units of the Company at their fair value of $1.918 per unit to settle non- convertible interest bearing notes payable outstanding in the amount of $1,077,923 including accrued interest of $30,034 included in accounts payable and accrued liabilities. Each unit consisted of one common share and one common share purchase warrant exercisable into one additional common share for $0.75 per share until November 30, 2013. The Company recorded a loss on debt settlement of $3,829,333 as a result of this transaction.
b)	The Company issued 75,000 common shares at their fair value of $1.00 per share for a total of $75,000 to the former President of the Company pursuant to a severance agreement.
c)	The Company issued 8,000 units for services performed by director. Each unit consisted of one common share and one-half common share purchase warrant. The fair value of this issuance was determined to be $15,896.

During the year ended September 30, 2011:

a)	The Company issued 3,636 units at $2.75 per unit for finder’s fees related to the private placement. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until May 18, 2012.
b)	The Company issued 853,075 units at the calculated fair value of $6.24 per unit in the conversion of two notes payable. The Company recorded debt conversion expense of $504,160 related to the fair value of the additional units issued based on the difference between the fair value of the units issued and the carrying value of the debt. Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at $3.00 per share until November 18, 2012.
c)	The Company issued 145,063 shares of common stock at their fair value of $4.12 per share to settle non-convertible interest bearing notes payable outstanding in the amount of $398,923, including accrued interest of $26,032 (included in accounts payable and accrued liabilities). The Company recorded a loss on debt settlement of $198,738 as a result of this transaction.

d)	The Company issued 181,818 shares of common stock at their fair value of $4.12 per share based on their quoted market price to one creditor in settlement of $500,000 of accounts payable. The Company recorded a loss on settlement of accounts payable of $249,090 as a result of the difference between the carrying value of the account payable and the fair value of the shares issued.
e)	The Company issued 2,985 units at $3.35 per unit for finder’s fees related to the private placement of the same date. Each unit consisted of one common share and one-half common share purchase warrant entitling the holder to purchase an additional common share at $4.50 per share until November 25, 2012.
f)	On September 26, 2011, the Company issued 650,000 units having a fair value of $1,059,963 to settle an account payable totaling $975,000 and thus recorded a loss of $84,963 on the settlement of account payable.
g)	The Company issued an 8% interest bearing promissory note having a principal balance of $216,000 in exchange for a promissory note that had a principal balance of $200,000 with accrued interest of $16,000 thereon.

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Subsequent Events (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Subsequent Events 1	$ 150,000
Subsequent Events 2	8.00%
Subsequent Events 3	$ 50,000
Subsequent Events 4	8.00%

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Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 1	$ (2,823,000)
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 2	(2,484,000)
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 3	103,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 4	433,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 5	(2,000)
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 6	1,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 7	1,302,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 8	181,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 9	(175,000)
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 10	(95,000)
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 11	(23,000)
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 12	(34,000)
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 13	33,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 14	24,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 15	0
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 16	170,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 17	10,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 18	0
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 19	1,575,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 20	1,804,000
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 21	0
Income Taxes Schedule Of Effective Income Tax Rate Reconciliation 22	$ 0

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Derivative Liabilities (Tables)

12 Months Ended

Sep. 30, 2012

Derivative Liabilities Activity [Table Text Block]

		2012			2011
Balance, beginning of the period	$	67,500		$	-
Fair value of embedded conversion feature of convertible promissory notes		-			167,500
Change in fair value of derivative liability		(67,500	)		(100,000	)
Balance, end of the period	$	-		$	67,500

Schedule of Derivative Instruments [Table Text Block]

	2012	2011
Risk-free interest rate	0.05%	0.13%
Expected life of derivative liability	0.05 years	0.56 years
Annualized volatility	57.99%	93.45%
Dividend rate	0.00%	0.00%

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Business Description, Basis of Presentation and Liquidity (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Business Description, Basis Of Presentation And Liquidity 1	$ 37,504,926
Business Description, Basis Of Presentation And Liquidity 2	29,203,221
Business Description, Basis Of Presentation And Liquidity 3	2,875,747
Business Description, Basis Of Presentation And Liquidity 4	$ 4,000,000

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Shares Issued For Services (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Commitments Shares Issued For Services 1	$ 312,903
Commitments Shares Issued For Services 2	1,273,162
Commitments Shares Issued For Services 3	80,200
Commitments Shares Issued For Services 4	0
Commitments Shares Issued For Services 5	393,103
Commitments Shares Issued For Services 6	$ 1,273,162

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Schedule of fair value of warrants assumption (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Promissory Notes Payable Schedule Of Fair Value Of Warrants Assumption 1	$ 1.25
Promissory Notes Payable Schedule Of Fair Value Of Warrants Assumption 2	$ 0.75
Promissory Notes Payable Schedule Of Fair Value Of Warrants Assumption 3	78.89%
Promissory Notes Payable Schedule Of Fair Value Of Warrants Assumption 4	0.23%

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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended		104 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Cash Flows used in Operating Activities
Net loss for the period	$ (8,301,705)	$ (7,307,147)	$ (36,954,122)
Adjustments to reconcile net loss to net cash used in operations:
Amortization and depreciation	1,858	1,657	5,055
Accretion of debt discount	98,081	69,419	2,174,661
Stock-based compensation	302,208	1,273,162	4,842,547
Amortization of deferred financing charge	62,399	44,536	162,712
Change in fair value of derivative liability	(67,500)	(100,000)	463,274
Consulting expense recorded in exchange for shares to be issued	0	0	236,337
Common shares issued for consulting expenses	15,895	0	406,405
Promissory note issued for severance	0	0	71,500
Common shares issued for severance	75,000	0	415,600
Common shares issued for research and development expenses	0	0	800,000
Management fees contributed	0	0	14,625
Debt conversion expense	0	504,160	504,160
Loss on settlement of accounts payable	0	334,053	778,053
Loss on extinguishment of debt	3,829,333	198,738	4,515,540
Rent contributed	0	0	3,750
Changes in non-cash working capital balances related to operations:
VAT recoverable	809	37,011	0
Prepaid expenses	9,630	13,639	0
Accounts payable and accrued liabilities	2,281,052	1,129,293	5,772,548
Net cash used in operating activities	(1,692,940)	(3,801,479)	(15,787,355)
Cash Flows provided by Financing Activities
Issuance of common shares, net of share issue costs	996,250	3,021,512	10,246,833
Share subscriptions received	0	(100,000)	0
Proceeds from promissory notes	581,500	750,000	5,399,000
Deferred financing fee	(8,150)	0	(108,150)
Repayment of promissory note	0	0	(100,000)
Due to related parties	0	0	33,665
Shareholder advances	0	0	333,000
Net cash provided by financing activities	1,569,600	3,671,512	15,804,348
Cash Flows used in Investing Activities
Acquisition of equipment	0	0	(5,631)
Net cash used in investing activities	0	0	(5,631)
Increase (decrease) in cash during the period	(123,340)	(129,967)	11,362
Cash, beginning of period	134,702	264,669	0
Cash, end of period	$ 11,362	$ 134,702	$ 11,362

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Derivative Liabilities

12 Months Ended

Sep. 30, 2012

Derivative Liabilities [Text Block]

Note 4	Derivative Liability
	Derivative liability, consisting of the embedded conversion features in the Company’s convertible promissory notes, is accounted for as a separate liability measured at its respective fair value, as follows:

		2012			2011
Balance, beginning of the period	$	67,500		$	-
Fair value of embedded conversion feature of convertible promissory notes		-			167,500
Change in fair value of derivative liability		(67,500	)		(100,000	)
Balance, end of the period	$	-		$	67,500

The fair values of the convertible promissory notes embedded call options have been determined using the binomial pricing model using the following weighted average assumptions:

	2012	2011
Risk-free interest rate	0.05%	0.13%
Expected life of derivative liability	0.05 years	0.56 years
Annualized volatility	57.99%	93.45%
Dividend rate	0.00%	0.00%

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Summary of Significant Accounting Policies (Narrative) (Details)	12 Months Ended
	Sep. 30, 2012
Summary Of Significant Accounting Policies 1	33.00%
Summary Of Significant Accounting Policies 2	50.00%
Summary Of Significant Accounting Policies 3	6,025,141
Summary Of Significant Accounting Policies 4	5,030,479

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Schedule of Derivative Instruments (Details)	12 Months Ended
	Sep. 30, 2012 Y
Derivative Liabilities Schedule Of Derivative Instruments 1	0.05%
Derivative Liabilities Schedule Of Derivative Instruments 2	0.13%
Derivative Liabilities Schedule Of Derivative Instruments 3	0.05
Derivative Liabilities Schedule Of Derivative Instruments 4	0.56
Derivative Liabilities Schedule Of Derivative Instruments 5	57.99%
Derivative Liabilities Schedule Of Derivative Instruments 6	93.45%
Derivative Liabilities Schedule Of Derivative Instruments 7	0.00%
Derivative Liabilities Schedule Of Derivative Instruments 8	0.00%

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Equipment (Tables)

12 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Schedule of Property, Plant and Equipment [Table Text Block]

				September 30, 2012
				Accumulated
		Cost		Depreciation		Net
Computer equipment	$	5,631	$	5,055	$	576

				September 30, 2011
				Accumulated
		Cost		Depreciation		Net
Computer equipment	$	5,631	$	3,197	$	2,434