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<SEC-DOCUMENT>0001062993-09-004536.txt : 20091224
<SEC-HEADER>0001062993-09-004536.hdr.sgml : 20091224
<ACCEPTANCE-DATETIME>20091224164616
ACCESSION NUMBER:		0001062993-09-004536
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20090930
FILED AS OF DATE:		20091224
DATE AS OF CHANGE:		20091224

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ANAVEX LIFE SCIENCES CORP.
		CENTRAL INDEX KEY:			0001314052
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-51652
		FILM NUMBER:		091260478

	BUSINESS ADDRESS:	
		STREET 1:		27 MARATHONOS AVE.
		STREET 2:		15351
		CITY:			ATHENS
		STATE:			J3
		ZIP:			00000
		BUSINESS PHONE:		30-210-603-4026

	MAIL ADDRESS:	
		STREET 1:		27 MARATHONOS AVE.
		STREET 2:		15351
		CITY:			ATHENS
		STATE:			J3
		ZIP:			00000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Thrifty Printing Inc.
		DATE OF NAME CHANGE:	20050111
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>form10k.htm
<DESCRIPTION>ANNUAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2009
<TEXT>
<!DOCTYPE HTML PUBLIC "form10k.pdf">


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   <TITLE>Filed by sedaredgar.com - Anavex Life Sciences Corp. - Form 10-K</TITLE>
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<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A>
<P align=center><B><FONT size=5>UNITED STATES </FONT><BR></B><B><FONT
size=5>SECURITIES AND EXCHANGE COMMISSION</FONT><BR></B>Washington, D.C. 20549
</P>
<P align=center><B><FONT size=5>FORM 10-K</FONT></B></P>
<P align=center>(Mark One)</P>
<P align=center>[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 </P>
<P align=center>For the fiscal year ended: <B><U>September 30, 2009</U></B></P>
<P align=center>or </P>
<P align=center>[&nbsp; &nbsp;] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </P>
<P align=center>For the transition period from __________________ to
__________________</P>
<P align=center>Commission file number: <B><U>000-51652</U></B><B> </B></P>
<P align=center><B><U><FONT size=5>ANAVEX LIFE SCIENCES CORP.</FONT></U></B><B>
<BR></B>(Exact name of registrant as specified in its charter) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center><B><U>Nevada </U></B></TD>
    <TD align=center width="50%"><B><U>20-8365999 </U></B></TD></TR>
  <TR vAlign=top>
    <TD align=center>State or other jurisdiction of </TD>
    <TD align=center width="50%">(I.R.S. Employer </TD></TR>
  <TR vAlign=top>
    <TD align=center>incorporation or organization </TD>
    <TD align=center width="50%">Identification No.) </TD></TR></TABLE>
<P align=center><B><U>27 Marathonos Ave., 15351 Athens,
Greece<BR></U></B>(Address of principal executive offices)( Zip Code)</P>
<P align=center>Registrant&#146;s telephone number, including area code <B><U>30 210
603 4026</U></B></P>
<P align=center>Securities registered pursuant to Section 12(b) of the Act </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center>Title of each class </TD>
    <TD align=center width="50%">Name of each exchange on which registered
  </TD></TR>
  <TR vAlign=top>
    <TD align=center><B><U>Nil </U></B></TD>
    <TD align=center width="50%"><B><U>Nil </U></B></TD></TR></TABLE>
<P align=center>Securities registered pursuant to Section 12(g) of the Act
<BR><B><U>Common Stock</U></B><B> <BR></B>(Title of Class) </P>
<P align=center>Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. <BR>Yes
[&nbsp;&nbsp; ]&nbsp;&nbsp; &nbsp;No [X]</P>
<P align=center>Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. <BR>Yes
[&nbsp;&nbsp; ]&nbsp;&nbsp;&nbsp; No [X]</P>
<P align=center>Note &#150; Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of <BR>the Exchange Act
from their obligations under those Sections.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_2></A>
<P align=center>ii </P>
<P align=center>Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or <BR>15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
<BR>that the registrant was required to file such reports), and (2) has been
subject to such filing requirements <BR>for the past 90 days. Yes
[X]&nbsp;&nbsp; &nbsp;No [&nbsp;&nbsp; ]</P>
<P align=center>Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate <BR>Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of <BR>Regulation S-T (&#167;232.405 of this chapter) during the preceding 12 months
(or for such shorter period that <BR>the registrant was required to submit and
post such files). Yes [&nbsp; &nbsp;]&nbsp;&nbsp;&nbsp; No [&nbsp;&nbsp; ]</P>
<P align=center>Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (&#167; 229.405 <BR>of this chapter) is not
contained herein, and will not be contained, to the best of registrant&#146;s
knowledge, in <BR>definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any <BR>amendment to this Form 10-K.
[&nbsp;&nbsp; ]</P>
<P align=center>Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated <BR>filer, or a
smaller reporting company. See the definitions of &#147;large accelerated filer,&#148;
&#147;accelerated filer&#148; and <BR>&#147;smaller reporting company&#148; in Rule 12b-2 of the
Exchange Act </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=center>Large accelerated filer [&nbsp;&nbsp; ]</TD>
    <TD align=center width="40%" >&nbsp; </TD>
    <TD align=center width="29%">Accelerated
      filer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      [&nbsp;&nbsp; ]</TD></TR>
  <TR vAlign=top>
    <TD align=center>Non-accelerated filer&nbsp;&nbsp; [&nbsp;&nbsp; ]</TD>
    <TD align=center width="40%" >(Do not check if a smaller
      reporting company) </TD>
    <TD align=center width="29%">Smaller reporting company&nbsp;
  [X]</TD></TR></TABLE></DIV>
<P align=center>Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). <BR>Yes [&nbsp;&nbsp; ]&nbsp;&nbsp;&nbsp;
No [X]</P>
<P align=center>State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed<BR> by reference to the price at
which the common equity was last sold, or the average bid and asked price of
such <BR>common equity, as of the last business day of the registrant&#146;s most
recently completed second fiscal quarter. <BR>$25,555,190<B> (computed by
reference to the closing price of $2.00 per share on March 31, 2009)</B> </P>
<P align=center>Indicate the number of shares outstanding of each of the
registrant&#146;s classes of common stock, as of the latest <BR>practicable date:
21,013,427 shares of common stock are issued and outstanding as of December 22,
2009. </P>
<P align=center>DOCUMENTS INCORPORATED BY REFERENCE</P>
<P align=center>List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, <BR>Part II, etc.) into
which the document is incorporated: (1) Any annual report to security holders;
(2) Any proxy or <BR>information statement; and (3) Any prospectus filed
pursuant to Rule 424(b) or (c) under the Securities Act of 1933. <BR>The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders <BR>for fiscal year ended December 24, 1980). <B>Not
applicable.</B> </P>
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noShade SIZE=5>
<A name=page_3></A>
<P align=center>iii </P>
<P align=center>ANAVEX LIFE SCIENCES CORP. </P>
<P align=center>2009 ANNUAL REPORT ON FORM 10-K </P>
<P align=center>TABLE OF CONTENTS </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_5">PART I </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_5">5 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_5">ITEM 1. BUSINESS </A></TD>
    <TD align=right width="5%" ><A
      href="#page_5">5 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_17">ITEM 1A. RISK FACTORS </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_17">17 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_28">ITEM 1B. UNRESOLVED STAFF COMMENTS </A></TD>
    <TD align=right width="5%" ><A
      href="#page_28">28 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_28">ITEM 2. PROPERTIES </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_28">28 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_29">ITEM 3. LEGAL PROCEEDINGS </A></TD>
    <TD align=right width="5%" ><A
      href="#page_29">29 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_29">PART II </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_29">29 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_29">ITEM 5. MARKET FOR REGISTRANT&#146;S COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES </A></TD>
    <TD align=right width="5%"  ><A
      href="#page_29">29 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_31">ITEM 6. SELECTED FINANCIAL DATA </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_31">31</A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_31">ITEM 7. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATION </A></TD>
    <TD align=right width="5%"  ><A
      href="#page_31">31 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_34">ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
      MARKET RISK </A></TD>
    <TD align=right width="5%"  bgColor=#eeeeee ><A
      href="#page_34">34 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_35">ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA </A></TD>
    <TD align=right width="5%" ><A
      href="#page_35">35 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_36">ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL MATTERS </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_36">36 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_36">ITEM 9A(T). CONTROLS AND PROCEDURES </A></TD>
    <TD align=right width="5%" ><A
      href="#page_36">36 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_39">ITEM 9B. OTHER INFORMATION </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_39">39 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_39">PART III </A></TD>
    <TD align=right width="5%" ><A
      href="#page_39">39 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_39">ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
      </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_39">39 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_45">ITEM 11. EXECUTIVE COMPENSATION </A></TD>
    <TD align=right width="5%" ><A
      href="#page_45">45 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_51">ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
      AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_51">51 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_53">ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
      AND DIRECTOR INDEPENDENCE </A></TD>
    <TD align=right width="5%" ><A
      href="#page_53">53 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_53">ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_53">53 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_53">PART IV </A></TD>
    <TD align=right width="5%" ><A
      href="#page_53">53 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><A
      href="#page_54">ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES</A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_54">54 </A></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><A
      href="#page_57">SIGNATURES </A></TD>
    <TD align=right width="5%" ><A
      href="#page_57">57 </A></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<A name=page_4></A>
<P align=center>iv</P>
<P align=justify><B><I>Forward-Looking Statements</I></B></P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 &#147;believe,&#148; &#147;may,&#148; &#147;estimate,&#148; &#147;continue,&#148; &#147;anticipate,&#148;
&#147;intend,&#148; &#147;expect&#148; 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 &#147;Risk Factors&#148;
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.</P>
<P align=justify>As used in this annual report, the terms &#147;we&#148;, &#147;us&#148;, &#147;our&#148;, and
&#147;Anavex&#148; mean Anavex Life Sciences Corp., unless the context clearly requires
otherwise.</P>
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<P align=center>5</P>
<P align=center><B>PART I</B></P>
<P align=justify><B>ITEM 1. BUSINESS</B></P>
<P align=justify><B><I>Our Current Business</I></B></P>
<P align=justify>We are a biopharmaceutical company engaged in the discovery and
development of novel drug targets to treat serious diseases for which there are
urgent unmet medical needs. The ANAVEX portfolio involves new sigma receptor
compounds (ligands) in the preclinical stage that target neurodegenerative
diseases and cancer. Our lead drug candidate ANAVEX 2-73, targeting Alzheimer&#146;s
disease (AD), is expected to enter first Human Clinical Trials (HCT) in early
2010. Scale-up manufacturing of ANAVEX 2-73 has been completed and Forenap
Pharma EURL has been contracted to carry out our phase 1 clinical trials. We
have completed most preclinical testing on ANAVEX 2-73 and are currently
preparing the Investigational New Drug (IND) file. In parallel, we plan to
launch HCT for another three of our compounds (melanoma, prostate cancer and
epilepsy) in 2010 provided sufficient capital is available. Additionally, we
intend to further develop compounds in earlier preclinical phases, which target
diseases like diabetes, depression, neuropathic pain and various types of cancer
and continue to develop and expand our Sigmaceptor<SUP>tm </SUP>platform. </P>
<P align=justify><B><I>Our Pipeline</I></B></P>
<P align=justify>Our proprietary SIGMACEPTOR&#153; Discovery Platform has resulted in
and continues to generate small molecule drug candidates with unique modes of
action, by making use of sigma receptors, which represent potential targets for
therapeutic developments in combating many human diseases (such as AD,
depression, epilepsy and cancer). When activated by the appropriate ligands,
these receptors influence the functioning of multiple biochemical signals that
are involved in the pathogenesis (origin or development) of a disease.</P>
<P align=justify>With our SIGMACEPTOR&#153;-N program, we are focused on developing
disease modifying treatments for CNS diseases using sigma-1 receptor ligands.
Among our lead CNS drug candidates, we have made significant progress with
ANAVEX 2-73, our lead drug candidate to treat Alzheimer&#146;s disease (AD), and
ANAVEX 19-144, another lead drug candidate to treat epilepsy. Preclinical data
reveals that these compounds exhibit significant anti-amnesic, neuroprotective
and anticonvulsant properties in a variety of in vitro systems and specialized
animal models. These activities involve sigma-1 and NMDA receptor components and
also ion channels, indicating a unique mode of action. In AD, ANAVEX 2-73 is
pharmacologically suggested as an effective neuroprotective, anti-convulsive and
anti depressive (anti-amnesic) putative therapeutic agent, due to its potent
affinity to sigma-1 receptors and moderate affinities to M1-4 types muscarinic
receptors. In epilepsy, ANAVEX 19-144 controls seizures and the epileptogenesis
process. Moreover, its neuroprotective properties 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.</P>
<P align=justify>We also have reported promising developments with ANAVEX 1-41,
  which is a sigma-1 agonist and a lead compound to treat AD and depression. Preclinical
  tests revealed significant neuroprotective benefits (i.e. protects nerve cells
  from degeneration or death) through the prevention of oxidative stress, which
  damages and destroys cells and is believed to be a primary cause of AD. In addition,
  ANAVEX 1-41 prevented the expression of caspase-3, an enzyme that plays a key
  role in apoptosis (programmed cell death) and in the loss of cells in the hippocampus,
  the part of the brain that regulates learning, emotion and memory. These activities
  involve both muscarinic andsigma-1 receptor systems through a novel mechanism
  of action. Via this novel mechanism of action, it is anticipated that ANAVEX
  1-41 may offer disease-modifying options that reverse memory and learning deficits
  and protect nerve cells from death through its anti-amnesic, neuroprotective
  and anxiolytic actions. ANAVEX 1-41 may slow the progression of AD and considerably
  improve the quality of life of those impacted by the disease as well as their
  caregivers.</P>
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noShade SIZE=5>
<A name=page_6></A>
<P align=center>6</P>

<P align=justify>Our SIGMACEPTOR&#153;-C program leverages the unique properties of
sigma-1 and/or sigma-2 receptor ligands, which allows us to create a potent
class of promising drug candidates designed to combat various types of solid
cancer. Sigma receptors are highly expressed in different tumor cell types and
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 are believed to 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. The compounds in
our oncology program are in pre-clinical testing, and there is no guarantee that
the activity demonstrated in pre-clinical models will be shown in human
testing.</P>
<P align=justify>ANAVEX 7-1037, our lead drug candidate for the treatment of
prostate cancer, is a low molecular weight, synthetic compound exhibiting high
(nanomolar) affinity for sigma-1 and moderate (micromolar) affinity for sigma-2
and sodium channels. 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 emphasize the promise of sigma receptor ligands,
highlighting the fact that these ligands stop tumor growth and induce selective
cell death in various tumor cell lines, including leukemia, melanoma and cancers
of the colon, breast, prostate, lung, brain, ovary and kidney. </P>
<P align=justify>Numerous additional compounds are currently in the early discovery
  and lead optimization stages of our SIGMACEPTOR&#153;-N and SIGMACEPTOR&#153;-C
  programs.</P>
<P align=justify><B><I>Corporate History</I></B></P>
<P align=justify>We were incorporated in the State of Nevada on January 24,
2004, originally under the name of Thrifty Printing, Inc. From inception to
January 25, 2007, we were in the business of providing on-line photofinishing
services through our website.</P>
<P align=justify>On January 25, 2007, we completed a merger with our
wholly-owned subsidiary, Anavex Life Sciences Corp. As a result, we changed our
name from &#147;Thrifty Printing, Inc.&#148; to &#147;Anavex Life Sciences Corp.&#148; to better
reflect the direction and business of our company.</P>
<P align=justify>&nbsp;</P>
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<P align=center>7</P>
<P align=justify>With the completion of the patent and patent application acquisition
  on January 31, 2007, with Dr. Alexandre Vamvakides, we acquired all rights to
  three patents and one patent application as well as all inventions described
  in those patents as well as eight compounds that are in various stages of development
  and which are derivatives of the patents and patent application. With this acquisition,
  we changed our business model to the research and development. We conduct the
  research and development on our patents and patent application, and possibly
  new intellectual property that we will acquire or develop, of novel drug targets
  for the treatment of cancer and diseases of the central nervous system. </P>
<P align=justify><B><I>Diseases of the Central Nervous System</I></B></P>
<P align=justify>We believe that our compounds may be useful in medication for
the treatment of diseases of the central nervous system and cancer. We expect
that the market for treatments for diseases of the central nervous system will
grow over the next decade. We believe that this expansion will be driven by the
introduction of new technologies and products which will be developed as a
result of a clearer understanding of the underlying biochemical mechanisms that
cause neurological disorders. We believe that this enhanced understanding has
led, and will continue to lead to the development of rationally designed drugs
specifically targeted to the neuropharmacological mechanisms responsible for
central nervous system disorders.</P>
<P align=justify>The market for treatments for diseases of the central nervous
system is expected to be the fastest growing disease area over the next two
decades for two main reasons:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>Improved patient and physician awareness of central nervous system
  disorders;
  <LI>A better understanding of the neuropharmacological mechanisms underlying
  those disorders. </LI></UL>
<P align=justify>Central nervous system disorders are a broader group of
diseases than either cancer or Cardiovascular Disease. They include many of the
classic diseases of old age (Parkinson&#146;s and Alzheimer&#146;s are two examples.).
Central nervous system disorders also include psychiatric disorders such as
depression and schizophrenia. Diseases of the peripheral nervous system such as
multiple sclerosis (MS) are also central nervous system disorders. Central
nervous system disorders vary greatly in their severity, both from one patient
to another and from one disease to another.</P>
<P align=justify><B>Alzheimer&#146;s disease</B></P>
<P align=justify>According to the World Health Organization, dementia currently
affects an estimated 37 million people worldwide and approximately 50% of these
cases are caused by Alzheimer&#146;s disease (AD). The worldwide prevalence of AD was
over 26 million in 2006, as reported by Johns Hopkins University. By 2050, it is
anticipated to quadruple and 1 in 85 people worldwide is anticipated to be
living with the disease. AD is considered to be a healthcare system &#145;time-bomb&#146;.
Medications on the market today only treat the symptoms of AD -- they do not
have the ability to stop its onset or its progression. Meanwhile, the majority
of AD treatments currently in development are focused on reducing or dissolving
amyloid-beta plaques. In 2008, there were several well-publicized failures of
therapies that were highly effective at clearing amyloid-beta plaques but which
had no impact on the disease.<B> </B></P>
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<P align=center>8</P>
<P align=justify><B>Depression</B></P>
<P align=justify>Depression is a major cause of morbidity worldwide according to
the World Health Organization (&#147;WHO&#148;). According to statistics published by the
WHO, lifetime prevalence varies widely, from 3% in Japan to 17% in the US. In
most countries the number of people who would suffer from depression during
their lives falls within an 8&#150;12% range. In North America the probability of
having a major depressive episode within a year-long period is 3&#150;5% for males
and 8&#150;10% for females. Population studies have consistently shown major
depression to be about twice as common in women as in men, although it is
unclear why this happens. The relative increase in occurrence is related to
pubertal development rather than chronological age which reaches adult ratios
between the ages of 15 and 18, and appears associated with psychosocial more
than hormonal factors. </P>
<P align=justify>The depression market is dominated by a large number of
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. The
need for innovation is evident as demonstrated by the low sales growth rates,
creating at the same time opportunities that will dramatically change the
depression market.</P>
<P align=justify><B>Epilepsy</B></P>
<P align=justify>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. It has been estimated that about 50 million people worldwide suffer
from epilepsy, according to the International Bureau for Epilepsy, with almost
90% of these people located in developing countries. Epilepsy is more likely to
occur in young children or people over the age of 65 years; however it can occur
at any time. Epilepsy is usually controlled, but not cured, with medication,
although surgery may be considered in difficult cases. Nevertheless, over 30% of
people with epilepsy do not have seizure control even with the best available
medications. </P>
<P align=justify>The epilepsy market features two classes of drugs, older traditional
  Anti Epileptic Drugs and second generation Anti Epileptic Drugs, with the former
  marketed before 1980, and the latter class marketed in the early 1990s is developed
  through intelligent synthetic design techniques and are currently the driving
  force of the market. However, second generation anti-convulsants offer limited
  benefits in terms of efficacy over traditional anticonvulsants but confer benefits
  in terms of side effects and dosing. Because epilepsy afflicts sufferers in
  several different ways, there is considerable need for an array of drugs that
  can be used in combination with both traditional Anti Epileptic Drugs and other
  second generations Anti Epileptic Drugs that can confer efficacious treatment
  to the widest range of epilepsy sufferers. Furthermore, with additional benefits
  in supplementary indications such as migraine prophylaxis, bipolar disorder
  and neuropathic pain, second-generation Anti Epileptic Drugs have greatly expanded
  the potential of the market for epilepsy treatments and are the driving force
  behind sales. </P>
<P align=justify>According to the International Bureau for Epilepsy, the world
  market for epilepsy therapies was estimated at US $ 10.4 billion in 2004 while
  this number is projected to increase to US $ 13.2 billion by 2010 and to US
  $ 15.3billion by 2015. </P>
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<P align=center>9</P>
<P align=justify><B><I>Cancer Disease</I></B></P>
<P align=justify>Cancer is the second leading cause of mortality, with seven
million deaths per year globally. In the US, one in two men and one in three
women are anticipated to develop cancer during their lifetime. From diagnosis,
five year survival is 64% in the US and lower in other countries. Currently
available treatments are not effective for all patients, and have limited impact
on survival for patients with metastatic disease. New treatments with novel
mechanisms of action that can overcome resistance mechanisms, inhibit tumor cell
proliferation, and trigger tumor cell death could offer greater therapeutic
benefit and improved survival. </P>
<P align=justify>The IMS Global Learning Consortium, Inc. estimates that the
market for cancer drugs will reach $ 80 billion annually by 2012, which is
almost double compared to 2007 value of $ 41 billion (IMS Global Oncology
Forecast, 2008). </P>
<P align=justify><B>Melanoma Cancer</B></P>
<P align=justify>Melanoma is a malignant tumor of melanocytes which are found
predominantly in skin but also in the bowel and the eye. It is one of the less
common types of skin cancer but causes the majority of skin cancer related
deaths. Malignant melanoma is a serious type of skin cancer. It is due to
uncontrolled growth of pigment cells, called melanocytes. Despite many years of
intensive laboratory and clinical research, the sole effective cure is surgical
resection of the primary tumor before it achieves a Breslow thickness greater
than 1 mm. Around 0.16 million new cases of melanoma are diagnosed nationally
each year, and it is more frequent in males. According to a World Health
Organization (WHO) report about 48,000 melanoma related deaths occur worldwide
per year. 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. </P>
<P align=justify><B>Prostate Cancer</B></P>
<P align=justify>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.</P>
<P align=justify>Rates of detection of prostate cancers vary widely across the
world, with South and East Asia detecting less frequently than in Europe, and
especially the United States.</P>
<P align=justify>Prostate cancer is a slow-growing form of the disease, with
over 65% of men over the age of 70 estimated to carry microscopic evidence of
the disease in their bodies. The growth in the number of cases of prostate
cancer is expected to continue to be high in relation to other cancer types,
with the market for treatments projected to reach $6.95 billion by 2015 as
determined by the IMS Global Learning Consortium, Inc. </P>
<P align=justify><B>Pancreas Cancer</B></P>
<P align=justify>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. The prognosis is
  in general poor as less than 5% of those diagnosed live for more than five years
  after diagnosis. Complete remission is still extremely rare. About 95% of exocrine
  pancreatic cancers are adenocarcinomas. The remaining 5% include adenosquamous
  carcinomas, squamous cell carcinomas, and giant cell carcinomas. Exocrine pancreatic
  cancers are far more common than endocrine pancreatic cancers (islet cell carcinomas),
  which make up about 1% of total cases. </P>
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<P align=center>10</P>
<P align=justify><B><I>Diabetes</I></B></P>
<P align=justify>Diabetes mellitus -often referred to simply as diabetes- is a
condition in which the body does not produce enough, or properly respond to,
insulin, a hormone produced in the pancreas. Insulin enables cells to absorb
glucose in order to turn it into energy. In diabetes, the body either doesn't
respond properly to its own insulin, doesn't make enough insulin, or both. This
causes glucose to accumulate in the blood, often leading to various
complications and degenerations. The American Diabetes Association reported in
2009 that there are 23.6 million children and adults in the United States, 7.8%
of the population, who have diabetes. While an estimated 17.9 million in the US
alone have been diagnosed with diabetes, nearly one in four (5.7 million)
diabetics are unaware that they have the disease. </P>
<P align=justify><B><I>Neuropathic Pain</I></B></P>
<P align=justify>Neuralgia or neuropathic pain can be defined as a pain that is
not related to activation of pain receptor cells in any part of the body.
Neuralgia is a pain produced by a change in neurological structure or function.
Unlike nociceptive pain, neuralgia exists with no continuous nociceptive input.
Neuralgia falls into two categories: central neuralgia and peripheral neuralgia.
This unusual pain is thought to be linked to four possible mechanisms: ion gate
malfunctions; the nerve becomes mechanically sensitive and creates an ectopic
signal; cross signals between large and small fibers; and malfunction due to
damage in the central processor.</P>
<P align=justify>Neuralgia is often difficult to diagnose, and most treatments
show little or no effectiveness. Diagnosis typically involves locating the
damaged nerve by identifying missing sensory or motor function. Neuralgia is
more difficult to be treated than 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. </P>
<P align=justify><B><I>The Market in General</I></B></P>
<P align=justify>Pharmaceutical companies provide remedies and treatments for
central nervous system diseases and cancer. We believe that as these
technologies are developed and to the extent they are approved, the central
nervous system diseases and cancer drug market will expand, as new therapeutics
become available for currently unmet needs. We hope to develop compounds to
market to pharmaceutical companies for use in any of these treatment
methods.</P>
<P align=justify>Three approaches are primarily used to treat central nervous
system diseases and cancer:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>Neurosurgery or invasive techniques.
  <LI>Pharmacological techniques, including drugs.
  <LI>Physiologically based techniques, such as transcytosis. </LI></UL>
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<P align=center>11</P>
<P align=justify>Invasive procedures utilize catheter-based delivery of the drug
directly into the brain. This technique has proven useful in the treatment of
brain tumors, but is not successful in distributing drugs throughout the entire
brain. Amgen, Inc. recently had clinical trials for the treatment of Parkinson&#146;s
disease using intrathecal delivery through the use of various catheter/pump
techniques. In the trials conducted by Amgen, Inc., improvements were found in
cells at various distances from the end of the catheter, but improvements were
not seen uniformly throughout the brain.</P>
<P align=justify>The physiological route is a popular approach to cross the
blood-brain barrier via lipid mediated free diffusion or by facilitated
transport. This is the most common strategy used for the development of new
neuropharmaceuticals, but has experienced limited success as it requires that
the drug have sufficient lipophilic or fat-soluble properties so that it can
pass through lipid membranes. Unfortunately, the current method of delivery by
this route is nonspecific to the brain and side effects are common since most
organs are exposed to the drug. Furthermore, many of the potential lipophilic
therapeutic molecules are substrates for the blood-brain barrier&#146;s multi-drug
resistant proteins, which actively transport the therapeutic agent back into the
blood. Consequently, large doses need to be used so that sufficient amounts of
the drug reach the brain. These high doses can result in significant side
effects as the drug is delivered to essentially all tissues of the body, which
is extremely inefficient as seen with most anticancer drugs and many of the new
central nervous system medications.</P>
<P align=justify>We believe that as these technologies are developed and to the
extent they are approved, the central nervous system diseases and cancer drug
market will expand, as new therapeutics become available for currently unmet
needs. We hope to develop compounds that can be used in any of these treatment
methods.</P>
<P align=justify><B><I>Competition</I></B></P>
<P align=justify>The biopharmaceutical industry is intensely competitive in general.
  Furthermore, our business strategy is to target large unmet medical needs, and
  those markets are even more highly competitive. </P>
<P align=justify>Our competition is other biomedical development companies that
  are also trying to discover compounds to be used in the treatment of central
  nervous system diseases and cancer. Our research and development is highly speculative
  and we may never discover or develop any compounds that we are capable of selling
  to pharmaceutical companies for inclusion in their treatments of central nervous
  system diseases and cancer.</P>
<P align=justify>Many 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 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 will eventually be expected to develop a compound
that will be purchased by a pharmaceutical company.</P>
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<P align=center>12<BR></P>
<P align=justify>Rapid technological development, as well as new scientific
developments, may result in our compounds becoming obsolete before we can
recover any of the expenses incurred to develop them. </P>
<P align=justify><B><I>Patents, Trademarks and Intellectual Property</I></B></P>
<P align=justify>We currently own the following patents: </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=bottom bgcolor="#EEEEEE">
      <TD colspan="3"
      align=center style="BORDER-BOTTOM: #000000 1px solid">&nbsp;&nbsp;<B>PATENTS</B>
      </TD>
    </TR>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD align=center style="BORDER-BOTTOM: #000000 1px solid"><B>Title of Application/</B>
        <BR> <B>Patent No./Jurisdiction</B> </TD>
      <TD
      width="25%" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>Filing/Issue/</B>
        <BR> <B>Expiration</B> </TD>
      <TD width="50%" align=center style="BORDER-BOTTOM: #000000 1px solid"
    ><BR> <B>Claims</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Patent No. <BR>
        1002616/Greece </TD>
      <TD align=left width="25%">February 21, 1996/ <BR>
        February 20, 1997/ <BR>
        February 20, 2017 </TD>
      <TD width="50%" align=left ><div align="justify">Invention related to the
          synthesis and the method of synthesis of molecules of a novel formula.
          This method is to be applied for the obtention of anticonvulsant, antidepressant
          and nootropic pharmaceuticals. </div></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Patent No. <BR>
        1004208/Greece </TD>
      <TD align=left width="25%">October 15, 2001/ <BR>
        April 4, 2003/ <BR>
        April 4, 2023 </TD>
      <TD width="50%" align=left ><div align="justify">Aminotetrahydrofuran derivatives,
          muscarinic/sigma/sodium channel ligands, with synergic sigma/muscarinic
          (neuroactivating) and sigma/sodium channel (neuroprotective) components,
          as prototypical activating &#150; neuroprotectors and neuroregenerative
          drugs </div></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Patent No. <BR>
        1004868/Greece </TD>
      <TD align=left width="25%">April 22, 2003/ <BR>
        April 26, 2005/ <BR>
        April 26, 2025 </TD>
      <TD width="50%" align=left ><div align="justify">Aminotetrahydrofuran derivatives,
          muscarinic/sigma/sodium channel ligands, ortho-and allo-sterically operating,
          as prototypical neuromodulating and neuroregenerative drugs </div></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Patent No. <BR>
        1005865/ Greece </TD>
      <TD align=left width="25%">January 17, 2007 <BR>
        April 7, 2008 <BR>
        January 18, 2027 </TD>
      <TD width="50%" align=left ><div align="justify">New sigma receptor ligands
          with anti-apoptotic and/or pro- apoptotic properties over cellular biochemical
          mechanisms, with neuroprotective, anti-cancer, anti- metastatic and
          anti-(chronic) inflammatory action </div></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Patent No. <BR>
        20090100115/ <BR>
        Greece </TD>
      <TD align=left width="25%">February 26, 2009 <BR></TD>
      <TD width="50%" align=left ><div align="justify">Sigma receptors ligands
          with anti-apoptotic and/or pro-apoptotic properties, over cellular mechanisms,
          exhibiting prototypical cytoprotective and also anticancer activity.
        </div></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>PCT/ National Phase <BR>
        - GR 2008000002 <BR>
        Filed: <BR>
        Europe &#150; 08702158.0 <BR>
        USA &#150; 12/522.761 <BR>
        India &#150; 2392/KOLNP/2009 <BR>
        China &#150; 2004800011111 <BR>
        Russia - 2009125211 </TD>
      <TD align=left width="25%"><BR> <BR> <BR>
        May 28, 2009 <BR>
        July 10, 2009 <BR>
        June 29, 2009 <BR>
        June 29, 2009 <BR>
        July 16, 2009 </TD>
      <TD align=left width="50%" ></TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>We regard patents and other proprietary technology rights a key
element in our goal of building a successful biomedical company. Accordingly, we
plan to protect all of our key technology, inventions and improvements to our
inventions by filing patent applications in a timely fashion. We are currently
seeking patent protection in the United States, China, Russia, India and Europe
and intend to seek protection for additional countries on a selective basis for
our compounds or other inventions and improvements. However, we note that filing
and prosecuting patent applications are expensive processes and we have very
limited financial resources.</P>
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<P align=center>13</P>
<P align=justify>We also rely on trade secrets and unpatentable know-how that we
seek to protect, in part, by confidentiality agreements. It is now our policy to
require our employees, consultants, contractors, manufacturers, outside
scientific collaborators and sponsored researchers, board of directors and other
advisors to execute confidentiality agreements upon the commencement of
employment, advisory, or consulting relationships with us. These agreements will
provide that all confidential information developed or made known to the
individual during the course of the individual&#146;s relationship with us is to be
kept confidential and not disclosed to third parties except in specific limited
circumstances. </P>
<P align=justify>We also require signed confidentiality or material transfer
agreements from any company that is to receive our confidential information. In
the case of employees, consultants and contractors, the agreements will
generally provide that all inventions conceived by the individual while
rendering services to us shall be assigned to us as our exclusive property.
There can be no assurance, however, that all persons who we desire to sign such
agreements will sign, or if they do, that these agreements will not be breached,
that we would have adequate remedies for any breach, or that our trade secrets
or unpatentable know-how will not otherwise become known or be independently
developed by competitors.</P>
<P align=justify>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. Much of our intellectual property is still only
filed with the Greek National Office of Industrial Property and we plan to file
additional patent applications in Canada and the U.S. 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.</P>
<P align=justify>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 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 are required to 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.</P>
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<P align=center>14</P>
<P align=justify><B><I>Government Approval</I></B></P>
<P align=justify>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 our ongoing 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. </P>
<P align=justify>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.</P>
<P align=justify>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:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>non-clinical laboratory tests, non-clinical studies in animals,
  formulation studies and the submission to the FDA of an investigational new
  drug application;
  <LI>adequate and well-controlled clinical trials to establish the safety and
  efficacy of the drug;
  <LI>the submission of a new drug application or biologic license application
  to the FDA; and
  <LI>FDA review and approval of the new drug application or biologics license
  application. </LI></UL>
<P align=justify>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 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.
</P>
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<P align=center>15</P>
<P align=justify>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.</P>
<P align=justify>If a compound is found to be potentially effective and to have
an acceptable safety profile in Phase 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.</P>
<P align=justify>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&#146;s requests for additional
information or clarification often significantly extend 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.</P>
<P align=justify>If the FDA evaluations of the application and the manufacturing
facilities are favorable, the FDA may issue an approval letter or an
&#147;approvable&#148; letter. An approvable letter will usually contain a number of
conditions that must be met in order to secure final approval of the new drug
application and authorization of commercial marketing of the drug for certain
indications. The FDA may also refuse to approve the new drug application or
issue a &#147;not approvable&#148; letter outlining the deficiencies in the submission and
often requiring additional testing or information.</P>
<P align=justify><I>The Food and Drug Administration&#146;s Modernization Act</I>
codified the FDA&#146;s policy of granting &#147;fast track&#148; review of certain therapies
targeting &#147;orphan&#148; indications and other therapies intended to treat severe or
life threatening diseases and having potential to address unmet medical needs.
Orphan indications are defined by the FDA as having a prevalence of less than
200,000 patients in the United States. We anticipate that certain
neurodegenerative diseases which could potentially be treated using our
technology could qualify for fast track review under these revised
guidelines.</P>
<P align=justify>Previously, the FDA approved cancer therapies primarily based
on patient survival rates or data on improved quality of life. The FDA
considered evidence of partial tumor shrinkage, while often part of the data
relied on for approval was insufficient by itself to warrant approval of a
cancer therapy, except in limited situations. Under the FDA&#146;s revised policy,
which became effective in 1998, the FDA has broadened authority to consider
evidence of partial tumor shrinkage or other clinical outcomes for approval.
This revised policy is intended to facilitate the study of solid tumor therapies
and shorten the total time for marketing approvals. We intend to take advantage
of this policy; however, it is too early to tell what effect, if any, these
provisions may have on the approval of our potential drug compounds.</P>
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<P align=justify>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.</P>
<P align=justify>We are also 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 work. We
cannot accurately predict the extent of government regulation that might result
from future legislation or administrative action.</P>
<P align=justify><B><I>Research and Development Expenses</I></B></P>
<P align=justify>A significant portion of our operating expenses is related to
research and development, and we intend to maintain a strong commitment to
research and development activities. See Item 8 &#147;Financial Statements and
Supplementary Data&#148; of this Annual Report on Form 10-K for costs and expenses
related to research and development, and other financial information for fiscal
years 2009 and 2008. </P>
<P align=justify><B><I>Scientific Advisory Board</I></B></P>
<P align=justify>We maintain a Scientific Advisory Board comprised of scientists
with experience relevant to our company and our product candidates. Members of
our Scientific Advisory Board have agreed to consult and advise us in their
respective areas of expertise. We have placed special emphasis on identifying
members of our Scientific Advisory Board with expertise in the treatment of the
clinical indications targeted by our programs. Our Scientific Advisory Board
consists of the following members:<B><I> </I></B></P>
<P align=justify><I>Alexandre Vamvakides, Ph.D.</I> Dr. Vamvakides has spent 30
years in research, focusing on the therapeutic/pharmacological areas of
anti-neurodegenerative, antiepileptic and anti-depressive molecules. The author
of more than 80 scientific papers, he has worked at the Institut national de la
sant&#233; et de la recherche m&#233;dicale (INSERM), the University of Athens, Ciba-Geigy
(now Novartis), Sanofi (now sanofi-aventis) and many other research laboratories
throughout Europe, for the discovery and development of new concepts in the
therapeutic areas of CNS, oncology and anti-inflammatory diseases. </P>
<P align=justify><I>Mark Smith, Ph.D., FRCPath</I> Dr. Smith is a leading researcher
  and professor in the Department of Pathology at Case Western Reserve University
  School of Medicine, Dr. Smith is one of the world&#146;s most cited researchers
  in the fields of Alzheimer&#146;s disease, free radical biology and neuroscience
  and behavior. He is Executive Director of the American Aging Association and
  Editor-in-Chief of the Journal of Alzheimer&#146;s Disease. Dr. Smith has authored
  over 600 peer reviewed scientific manuscripts and book chapters. He has received
  a number of notable scientific awards in recognition of his scientific research,
  which is currently focused on investigating the pathological mechanisms underlying
  selective neuronal death in neurodegenerative diseases, notably Alzheimer&#146;s
  disease. </P>
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<P align=justify><I>Tangui Nicolas Maurice, Ph.D</I>. Dr. Maurice has spent 15
years in the field of neurosciences, including behavioral and molecular
neuropharmacology, sigma receptors, neuropeptides, neurosteroids, neurotrophic
factors, normal/pathological aging models for Alzheimer&#146;s and related disorders,
and behavioural phenotyping of rodent models. Previously, Dr. Maurice held
research positions with INSERM U710 at Montpellier, CNRS, INSERM U336, the
department of neuropsychopharmacology and hospital pharmacy at Meijo University
(Nagoya, Japan), and Jouveinal Research Institute (Fresnes, France). A past
recipient of the CNRS bronze medal, Dr. Maurice holds a Ph.D. in cellular and
molecular biology with a specialty in neuropharmacology from Universit&#233;
Montpellier. </P>
<P align=justify><I>Jean-Jacques Bourguignon, Ph.D.</I> Dr. Bourguignon has 30
  years experience in medicinal chemistry, including expertise in drug design
  and optimization as well as organic and physical chemistry and is currently
  a Research Director, Centre National de la Recherche Scientifique (CNRS) at
  the Faculty of Pharmacy, Strasbourg-Illkrich, France. His background also includes
  work as a senior scientist at the Center of Neurochemistry (Strasbourg, France)
  and post-doctoral fellow with the department of chemistry at the State University
  of New York at Buffalo. Dr. Bourguignon holds a Ph.D. in polymer physical chemistry
  from the Universit&#233; Louis-Pasteur in Strasbourg.</P>
<P align=justify><B><I>Officers</I></B></P>
<P align=justify>We currently engage the services of three consultants who act
for our company in the capacity of chief executive officer, president and chief
financial officer, and a chief scientific officer respectively. Additionally we
have engaged the services of two consultants to assist in product research,
strategic planning and business development and we have 15 consultants assisting
us in our research and development activities.</P>
<P align=justify><B>ITEM 1A. RISK FACTORS</B></P>
<P align=justify>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.</P>
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<P align=justify><B><I>Risks Related to our Company</I></B></P>
<P align=justify><I>We have had a history of losses and no revenue, which raise
substantial doubt about our ability to continue as a going concern.</I></P>
<P align=justify>Since inception on January 23, 2004, we have incurred aggregate
net losses of $12,562,233 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. We will not be able to generate significant
revenues in the future and our management expects acquisitions and exploration
expenditures and operating expenses to increase substantially over the next 12
months. 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, and such funds may not be available on commercially acceptable
terms, if at all. If we are unable to raise funds on acceptable terms, 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. </P>
<P align=justify><I>We are an early development stage biotechnology 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.</I></P>
<P align=justify>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 and have not undergone
significant testing in non-clinical studies or in clinical trials. 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 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.</P>
<P align=justify><I>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.</I></P>
<P align=justify>We will need to raise additional funding, but the current economic
  crisis and its impact on the stock markets 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.</P>
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<P align=center>19</P>
<P align=justify><I>We may be unable to continue as a going concern in which
case our securities will have little or no value.</I></P>
<P align=justify>Our independent auditors have noted in their report concerning
our annual financial statements for the fiscal year ended September 30, 2009
that we have incurred substantial losses since inception, which raises
substantial doubt abut 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.</P>
<P align=justify><B><I>Risks Related to our Business</I></B></P>
<P align=justify><I>Even if we are able to develop our 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.</I></P>
<P align=justify>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 of the potential drug compounds we intend to develop will
be approved for marketing. There are many reasons that we may fail in our
efforts to develop our potential drug compounds. These include:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>the possibility that non-clinical testing or clinical trials may show that
  our potential drug compounds are ineffective and/or cause harmful side
  effects;
  <LI>our potential drug compounds may prove to be too expensive to manufacture
  or administer to patients;
  <LI>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;
  <LI>even if our potential drug compounds are approved, we may not be able to
  produce them in commercial quantities or at reasonable costs;
  <LI>even if our potential drug compounds are approved, they may not achieve
  commercial acceptance;
  <LI>regulatory or governmental authorities may apply restrictions to any of
  our potential drug compounds, which could adversely affect their commercial
  success; and
  <LI>the proprietary rights of other parties may prevent us or our potential
  collaborative partners from marketing our potential drug compounds. </LI></UL>
<P align=justify>If we fail to develop our 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.</P>
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<P align=center>20</P>
<P align=justify><I>Our research and development plans will require substantial
additional future funding which could impact our operational and financial
condition. Without the required additional funds, we will likely cease
operations.</I></P>
<P align=justify>It will take several years before we are able to develop
marketable potential drug compounds, if at all. Our research and development
plans will require substantial additional capital, arising from costs to: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>conduct research, non-clinical testing and human studies;
  <LI>establish pilot scale and commercial scale manufacturing processes and
  facilities; and
  <LI>establish and develop quality control, regulatory, marketing, sales,
  finance and administrative capabilities to support these programs. </LI></UL>
<P align=justify>Our future operating and capital needs will depend on many
factors, including:</P>
<UL style="TEXT-ALIGN: justify">
  <LI>the pace of scientific progress in our research and development programs
  and the magnitude of these programs;
  <LI>the scope and results of preclinical testing and human studies;
  <LI>the time and costs involved in obtaining regulatory approvals;
  <LI>the time and costs involved in preparing, filing, prosecuting, maintaining
  and enforcing patent claims;
  <LI>competing technological and market developments;
  <LI>our ability to establish additional collaborations;
  <LI>changes in our existing collaborations;
  <LI>the cost of manufacturing scale-up; and
  <LI>the effectiveness of our commercialization activities. </LI></UL>
<P align=justify>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.</P>
<P align=justify>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
or reduce further research and development of our drug product programs, sell
some or all of our intellectual property, merge with another entity or cease
operations. </P>
<P align=justify><I>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.</I></P>
<P align=justify>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&#146;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 if, in the judgment of our management and advisors, the non-clinical
  test results do not support further development.</P>
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<P align=center>21</P>
<P align=justify>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 would 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 and, ultimately, our ability
to commercialize our potential drug compounds and generate product revenues. In
addition, we expect that our 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. </P>
<P align=justify>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 product
approval can take many years and 10-12 years is not unusual. </P>
<P align=justify>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: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>efficacy or safety concerns with the potential drug compounds, even if not
  justified;
  <LI>unexpected side-effects;
  <LI>regulatory proceedings subjecting the potential drug compounds to
  potential recall;
  <LI>publicity affecting doctor prescription or patient use of the potential
  drug compounds;
  <LI>pressure from competitive products; or
  <LI>introduction of more effective treatments. </LI></UL>
<P align=justify>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 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. </P>
<P align=justify><I>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.</I></P>
<P align=justify>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. Additionally, although in discussion, there is no assurance that
  our current research partners will continue to work with us or that we will
  be able to attract additional research partners. If we are not able to 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.</P>
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<P align=center>22</P>
<P align=justify>&nbsp;</P>
<P align=justify><I>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.</I></P>
<P align=justify>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: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>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; </P>
  <LI>
  <P>Information from our competitors or the academic community indicating that
  current products or new products are more effective than our future products
  could be, if and when they are generated, impede our market penetration or
  decrease our future market share; and, </P>
  <LI>
  <P>The price for our future products, as well as pricing decisions by our
  competitors, may have an effect on our revenues. </P></LI></UL>
<P align=justify>If this happens, our business will be adversely affected.</P>
<P align=justify><I>None of our potential drug compounds may reach the
commercial market for a number of reasons and our business may fail.</I></P>
<P align=justify>Successful research and development of pharmaceutical products
is high risk. Most products and development candidates fail to reach the market.
Our success depends on the discovery of new drug compounds that we can
commercialize. It is possible that our potential drug compounds 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 potential drug
compounds cannot be manufactured at a commercial scale and, therefore, they may
not be economical to produce. Our potential drug compounds could also fail to
achieve market acceptance or be precluded from commercialization by proprietary
rights of third parties. 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 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.</P>
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<P align=center>23</P>
<P align=justify><I>If our competitors succeed in developing products and
technologies that are more effective than our own, or if scientific developments
change our understanding of the potential scope and utility of our potential
drug compounds, then our technologies and future potential drug compounds may be
rendered undesirable or obsolete.</I></P>
<P align=justify>We face significant competition from industry participants that
are pursuing technologies similar to those that we are pursuing and are
developing pharmaceutical products that are competitive with our potential drug
compounds. Nearly all of our industry 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 may 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 part on
our ability to maintain a competitive position with respect to these
technologies. Rapid technological development, as well as new scientific
developments, may result in our potential drug compounds 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 we are developing may limit the
drug&#146;s market potential if it is subsequently demonstrated that only certain
subsets of patients should be treated with the targeted therapy.</P>
<P align=justify><I>Our reliance on third parties, such as university
laboratories, contract manufacturing organizations and contract or clinical
research organizations, may result in delays in completing, or a failure to
complete, non-clinical testing or clinical trials if they fail to perform under
our agreements with them.</I></P>
<P align=justify>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 we may engage in the future 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 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. </P>
<P align=justify><I>If we fail to compete successfully with respect to
acquisitions, joint venture and other collaboration opportunities, we may be
limited in our ability to research and develop our potential drug compounds.
</I></P>
<P align=justify>Our competitors compete with us to attract established biotechnology
  and pharmaceutical companies or organizations for acquisitions, joint ventures,
  licensing arrangements 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 may 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.
</P>
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<P align=center>24</P>
<P align=justify>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 will
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. </P>
<P align=justify><I>The use of any of our potential drug compounds 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.</I></P>
<P align=justify>The nature of our business exposes us to potential liability
risks inherent in the testing, manufacturing and marketing of our potential drug
compounds. We currently do not have any potential drug compounds in clinical
trials, however, when any of our potential drug compounds 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 of the patients who participate in clinical trials are
already critically ill when they enter a trial. 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 defense or
payment of liabilities above the amount of coverage could cost us significant
amounts of money, causing our business to suffer.</P>
<P align=justify><I>The patent positions of biopharmaceutical 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.</I></P>
<P align=justify>We own patents related to certain of our potential drug
compounds. However, these patents do not ensure the protection of our
intellectual property for a number of reasons, including the following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD> <P align=justify>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
        on their patents and therefore cannot practice our technology 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 patents or patent application. As a company, we have no meaningful
        experience with competitors interfering with our patents or patent applications.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_25></A>
<P align=center>25</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD colSpan=2> <P align=justify>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.</P></TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD colSpan=2> <P align=justify>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 on our
        patent.</P></TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD colSpan=2> <P align=justify>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:</P></TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD> <P align=justify>Defending a lawsuit takes significant time and can be
        very expensive.</P></TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD> <P align=justify>If the court decides that our potential drug compound
        infringes on the competitor&#146;s patent, we may have to pay substantial
        damages for past infringement.</P></TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD> <P align=justify>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.</P></TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD> <P align=justify>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.</P></TD>
  </TR>
</TABLE>
<P align=justify>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.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_26></A>
<P align=center>26</P>
<P align=justify>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.</P>
<P align=justify>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.</P>
<P align=justify><I>We will incur increased costs as a result of recently
enacted and proposed changes in laws and regulations and we cannot predict the
impact of any future changes in law. </I></P>
<P align=justify>We face burdens relating to the recent trend toward stricter
corporate governance and financial reporting standards. Legislations or
regulations such as Section 404 of the <I>Sarbanes-Oxley Act of 2002</I> follow
the trend of imposing stricter corporate governance and financial reporting
standards have led to an increase in our costs of compliance including increases
in 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&#146; and officers&#146; 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.</P>
<P align=justify><B><I>Risks Related to our Common Stock</I></B></P>
<P align=justify><I>A 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. </I></P>
<P align=justify>A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because our operations have been financed through
the sale of equity securities, a decline in the price of our common stock could
be especially detrimental to our liquidity and 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: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>actual or anticipated variations in our quarterly operating results;
</LI></UL>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_27></A>
<P align=center>27</P>
<UL style="TEXT-ALIGN: justify">
  <LI>announcements of new services, products, acquisitions or strategic
  relationships by us or our competitors;
  <LI>changes in accounting treatments or principles;
  <LI>changes in earnings estimates by securities analysts and in analyst
  recommendations; and
  <LI>general political, economic, regulatory and market conditions. </LI></UL>
<P align=justify>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. </P>
<P align=justify><I>If we issue additional shares of common stock in the future,
it will result in the dilution of our existing stockholders. </I></P>
<P align=justify>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. </P>
<P align=justify><I>Trading on the OTC Bulletin Board 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.</I></P>
<P align=justify>There is currently a limited market for our common stock. Our
common stock is quoted on the OTC Bulletin Board service of the Financial
Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board
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. This volatility could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board
is not a stock exchange, and trading of securities on the OTC Bulletin Board 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.</P>
<P align=justify><I>Our stock is a penny stock. Trading of our stock may be restricted
  by the Securities and Exchange Commission&#146;s penny stock regulations which
  may limit a stockholder&#146;s ability to buy and sell our stock. </I></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_28></A>
<P align=center>28</P>
<P align=justify>Our stock is a penny stock. The Securities and Exchange Commission
  has adopted Rule 15g-9 which generally defines &#147;penny stock&#148; 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 &#147;accredited investors&#148;. The term
  &#147;accredited investor&#148; refers generally to institutions with assets
  in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000
  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 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&#146;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&#146;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&#146;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.</P>
<P align=justify><I>The Financial Industry Regulatory Authority sales practice
requirements may also limit a stockholder&#146;s ability to buy and sell our
stock.</I></P>
<P align=justify>In addition to the &#147;penny stock&#148; 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&#146;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.</P>
<P align=justify><B>ITEM 1B. UNRESOLVED STAFF COMMENTS</B></P>
<P align=justify>Not Applicable.<BR></P>
<P align=justify><B>ITEM 2. PROPERTIES</B></P>
<P align=justify>We currently contract with Eurogenet Labs SA, a private Greek
company with a research laboratory located at 27 Marathonos Ave., 15351 Athens,
Greece for all our operations including administration and research and
development. This facility comprises approximately 8,500 square feet. This
facility is leased on a month to month basis for $70,000 per month and which
amount is included research and development expenses in our financial
statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_29></A>
<P align=center>29</P>
<P align=justify><B>ITEM 3. LEGAL PROCEEDINGS</B></P>
<P align=justify>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. </P>
<P align=justify><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS</B></P>
<P align=justify>None</P>
<P align=center><B>PART II</B></P>
<P align=justify><B>ITEM 5. MARKET FOR REGISTRANT&#146;S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES</B></P>
<P align=justify><B><I>Market information</I></B></P>
<P align=justify>Our common stock is quoted on the OTC Bulletin Board under the
symbol &#147;AVXL.OB&#148;.</P>
<P align=justify>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 the OTC Bulletin Board. We obtained the following high
and low bid information from 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 22, 2009, the closing price of our common stock
as reported by the OTC Bulletin Board was $1.99 per share. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="50%" border=1>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      ><B>Quarter Ended</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%"><B>High</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%"><B>Low</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >September 30, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$3.05 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$2.00 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left >June
      30, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$2.84 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$1.50 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >March 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$2.78 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$1.15 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$2.80 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$1.35 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >September 30, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$5.11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$1.35 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left >June
      30, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$5.45 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$4.59 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >March 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$5.48 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$4.50 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >December 31, 2007 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$5.26 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="29%">$3.55 </TD></TR></TABLE></DIV>
<P align=justify><B><I>Transfer Agent </I></B></P>
<P align=justify>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.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_30></A>
<P align=center>30</P>
<P align=justify><B><I>Holders of Common Stock</I></B></P>
<P align=justify>As of December 22, 2009, there were 57 holders of record of our
common stock. As of such date, 21,013,427 shares of our common stock was issued
and outstanding.</P>
<P align=justify><B><I>Dividends</I></B></P>
<P align=justify>We have not paid any cash dividends on our common stock and
have no present 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.</P>
<P align=justify><B><I>Securities Authorized for Issuance under Equity
Compensation Plans or Individual Compensation Arrangements </I></B></P>
<P align=justify>The following table summarizes certain information regarding
our equity compensation plan or individual compensation arrangements as at
September 30, 2009:</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      colSpan=4>&nbsp;<B>Equity Compensation Plan Information</B>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=center><BR><BR><BR><BR><BR><BR><B>Plan Category</B> </TD>
    <TD align=center width="25%"><BR><B>Number of securities</B> <BR><B>to be
      issued upon</B> <BR><B>exercise of outstanding</B> <BR><B>options,
      warrants and</B> <BR><B>rights</B> <BR><B>(a)</B> </TD>
    <TD align=center width="25%"><BR><BR><B>Weighted-average</B>
      <BR><B>exercise price of</B> <BR><B>outstanding options,</B>
      <BR><B>warrants and rights</B> <BR><B>(b)</B> </TD>
    <TD align=center width="25%"><B>Number of securities</B> <BR><B>remaining
      available</B> <BR><B>for future issuance</B> <BR><B>under equity</B>
      <BR><B>compensation plans</B> <BR><B>(excluding securities</B>
      <BR><B>reflected in column (a)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Equity compensation plans approved by security holders </TD>
    <TD align=right width="25%">2,795,000 </TD>
    <TD align=right width="25%">3.49 </TD>
    <TD align=right width="25%">205,000 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Equity compensation plans not approved by security holders
    </TD>
    <TD align=right width="25%">400,000 </TD>
    <TD align=right width="25%">2.50 </TD>
    <TD align=right width="25%">0 </TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Total</B> </TD>
    <TD align=right width="25%"><B>3,195,000</B> </TD>
    <TD align=right width="25%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>3.37</B> </TD>
    <TD align=right width="25%"><B>205,000</B> </TD></TR></TABLE></DIV>
<P align=justify><I>Stock Option Plan</I></P>
<P align=justify>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, 2009,
  3,195,000 options have been granted to employees, directors and officers of
  our company. </P>
<P align=justify>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.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_31></A>
<P align=center>31</P>
<P align=justify>The exercise price of shares subject to any option must be at
least 100% of the fair market value of the shares on the date of grant. The
maximum term of any stock option is 5 years from the date the option is granted.
</P>
<P align=justify><B><I>Recent Sales of Unregistered Securities</I></B></P>
<P align=justify>Since the beginning of the fourth quarter of our fiscal year
ended September 30, 2009, 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. </P>
<P align=justify><B><I>Purchases of Equity Securities by Our Company and
Affiliated Purchasers</I></B></P>
<P align=justify>None.</P>
<P align=justify><B>ITEM 6 SELECTED FINANCIAL DATA</B></P>
<P align=justify>Not applicable.</P>
<P align=justify><B>ITEM 7 MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION </B></P>
<P align=justify>The following discussion should be read in conjunction with our
audited consolidated financial statements and notes thereto for the fiscal year
ended September 30, 2009, included elsewhere in this Report. The following
Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations contains &#147;forward-looking statements&#148;. Forward-looking statements are
generally written in the future tense and/or are preceded by words such as
&#147;may,&#148; &#147;should,&#148; &#147;forecast,&#148; &#147;could,&#148; &#147;expect,&#148; &#147;suggest,&#148; &#147;believe,&#148;
&#147;anticipate,&#148; &#147;intend,&#148; &#147;plan,&#148; or other similar words. The forward-looking
statements contained in this 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 &#147;Risk Factors&#148; elsewhere in this 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 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. </P>
<P align=justify><B><I>Our Business</I></B></P>
<P align=justify>We are a biopharmaceutical company engaged in the discovery and
development of novel drug targets to treat serious diseases for which there are
urgent unmet medical needs. The ANAVEX portfolio involves new sigma receptor
compounds (ligands) in the preclinical stage that target neurodegenerative
diseases and cancer. Our lead drug candidate ANAVEX 2-73, targeting Alzheimer&#146;s
disease (AD), is expected to enter first Human Clinical Trials (HCT) in early
2010.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_32></A>
<P align=center>32</P>
<P align=justify>We have completed most preclinical testing on ANAVEX 2-73 and
are currently preparing the Investigational New Drug (IND) file. Additionally,
we would like to launch HCT for another three of our compounds (melanoma,
prostate cancer and epilepsy) in 2010 provided we have sufficient capital to do
so. We also intend to further advance compounds in earlier preclinical phases,
which target diseases like diabetes, depression, neuropathic pain and various
types of cancer and continue to develop and expand our Sigmaceptor<SUP>tm</SUP>
platform. </P>
<P align=justify><B><I>Results of Operations</I></B></P>
<P align=justify><I>Revenue</I></P>
<P align=justify>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 targeted companies to
market or distribute the results of our research projects.</P>
<P align=justify><I>Expenses</I></P>
<P align=justify>Our expenses for the fiscal year ended September 30, 2009 and
2008 were as follows:</P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="70%" border=0>
    <TR vAlign=top>
      <TD align=left >&nbsp; </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD colspan="4" align=center><B>Year Ended September 30,</B> </TD>
      <TD align=right width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >&nbsp; </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="17%"><B>2009</B> </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="17%"><B>2008</B> </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Accounting and audit fees </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;89,702 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;73,785 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Amortization and depreciation </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">410 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">220 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Bank charges and interest </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>5,670 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>11,474 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Consulting fees </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">2,110,866 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">3,196,213 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Investor relations </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>139,983 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>263,560 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Legal fees </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">94,791 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">30,545 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Management fees </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Office and miscellaneous </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">140,210 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">141,993 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Registration and filing fees </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>16,721 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>7,517 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Rent and administration </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">75,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff >Research and development </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>2,139,794 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="17%" bgColor=#e6efff>1,479,482 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Website design and maintenance </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">1,455 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="17%">1,424 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left bgColor=#e6efff ><B>Total expenses</B> </TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;4,739,602 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="17%" bgColor=#e6efff>&nbsp;5,281,213 </TD>
      <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify><U>Year ended September 30, 2009 and 2008</U> </P>
<P align=justify>Expenses for the fiscal year ended September 30, 2009 decreased
  by $541,611 over the same period in 2008. Accounting and audit fees have increased
  to $89,702 for the fiscal year ended September 30, 2009 from $73,785 for the
  fiscal year ended September 30, 2008 primarily as a result of our company having
  to address complex accounting matters resulting from our various agreements
  thus requiring increased scrutiny by our external auditors. Consulting fees
  have decreased by $1,085,347 from $3,196,213 for the fiscal year ended September
  30, 2008 to $2,110,866 for the fiscal year ended September 30, 2009 as a result
  of lower stock-based compensation charges. Rent and administration fees decreased
  to $Nil for the fiscal year ended September 30, 2009 from $75,000 in the fiscal
  year ended September 30, 2009 as a result of the lease for our rented premises
  in Switzerland expiring during the year ended September 30, 2008 and which was
  not renewed.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_33></A>
<P align=center>33 </P>
<P align=justify><B><I>Liquidity and Capital Resources </I></B></P>
<P align=justify><I>Working Capital</I></P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0>
    <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%"><B>September 30, 2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%"><B>September 30, 2008</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Cash </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="20%" bgColor=#e6efff>350,994&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="20%" bgColor=#e6efff>6,357 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Current Assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="20%">406,952 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="20%">6,357 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Current Liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%"
    bgColor=#e6efff>4,098,466 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%"
    bgColor=#e6efff>2,299,389 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >Working Capital (Deficit)</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%">(3,691,514</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >)</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%">(2,293,032</TD>
    <TD align=left width="2%" >) </TD></TR></TABLE></DIV>
<P align=justify>As of September 30, 2009, we had $350,994 in cash, an increase
of $344,637 from September 30, 2008. The principal component of this increase in
cash was contributed from a number of private placements and convertible notes
issued by our company. As of September 30, 2009, we had a working capital
deficit of $3,691,514, an increase of $1,398,482 from September 30, 2008. The
principal component of this increase in working capital deficit was an increase
in promissory notes payable by our company.</P>
<P align=justify>On October 2, 2009 we issued an aggregate of 266,666 units of
  our securities at a purchase price of $2.25 per unit. Each unit consists of
  one share of common stock in the capital of our company and 1.125 common share
  purchase warrants. One full warrant entitles the holder to purchase one additional
  share of common stock at a price of $2.25 per warrant share for a period of
  two years. </P>
<P align=justify>We anticipate that we will require up to $10 million for the
  12 months ending September 30, 2010 in order to implement our plan of operation
  of researching and developing our patents, the related compounds and further
  intellectual property we may acquire or develop. The majority of our capital
  resource requirement is needed to enter ANAVEX 2-73, ANAVEX 1-41 and ANAVEX
  7-1037 into clinical trials. If we are not able to secure additional financing,
  we will not be able to implement and fund these trials. </P>
<P align=justify><I>Going Concern </I></P>
<P align=justify>At September 30, 2009, we had an accumulated deficit of
$12,562,233 since our inception and incurred a net loss of $5,499,419 for the
fiscal year ended September 30, 2009. 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, 2009. </P>
<P align=justify><I>Future Financing </I></P>
<P align=justify>We will require additional financing to fund our planned operations,
  including researching and developing our patents, the related compounds and
  any further intellectual property that we may acquire and entering some of our
  current compounds into clinical trials. 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 more particularly the market for early development stage biotechnology research
  and development company stocks persist.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_34></A>
<P align=center>34</P>
<P align=justify>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.</P>
<P align=justify>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 other equity and debt financings. If we raise additional
financing by issuing equity securities, our existing stockholders&#146; ownership
will be diluted. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.</P>
<P align=justify>There is no assurance that we will be able to maintain
operations at a level sufficient for an investor to obtain a return on his, her,
or its investment in our common stock. Further, we may continue to be
unprofitable.</P>
<P align=justify><B><I>Off-Balance Sheet Arrangements</I></B></P>
<P align=justify>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.</P>
<P align=justify><B>ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK</B></P>
<P align=justify>Not Applicable<BR></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_35></A>
<P align=center>35</P>
<P align=justify><B>ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA</B><BR>
</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-1></A>

<P align=center><B>ANAVEX LIFE SCIENCES CORP. </B></P>
<P align=center>(A Development Stage Company) </P>
<P align=center>CONSOLIDATED FINANCIAL STATEMENTS </P>
<P align=center>September 30, 2009 and 2008 </P>
<P align=center>(<U>Stated in US Dollars</U>) </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-2></A>
<P align=center><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </B></P>
<P align=justify>To the Directors and Stockholders,<BR>
  Anavex Life Sciences Corp. <BR>
  (a Development Stage Company) <BR>
</P>
<P align=justify>We have audited the accompanying balance sheet of Anavex Life
  Sciences Corp. (the &#147;Company&#148;) (A Development Stage Company) as of
  September 30, 2009 and 2008 and the related 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, 2009. 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.</P>
<P align=justify>We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform an 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&#146;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. </P>
<P align=justify>In our opinion, these financial statements referred to above
  present fairly, in all material respects, the financial position of Anavex Life
  Sciences Corp. (A Development Stage Company) as of September 30, 2009 and 2008
  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,
  2008 in conformity with accounting principles generally accepted in the United
  States of America. </P>
<P align=justify>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 $12,562,233
  at September 30, 2009 (2008: $7,062,814) and incurred a net loss of $5,499,419
  (2008: $5,351,269) for the year then ended. These conditions raise substantial
  doubt about the Company&#146;s ability to continue as a going concern. Management&#146;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. </P>
<P align=justify>/s/ BDO Dunwoody LLP <BR>
  Chartered Accountants </P>
<P align=justify>Vancouver, Canada <BR>
  December 21, 2009 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-3></A>
<P align=center><B>ANAVEX LIFE SCIENCES CORP. </B><BR>
  (A Development Stage Company) <BR>
  CONSOLIDATED BALANCE SHEETS <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2008</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%" >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=center  bgColor=#e6efff
      colSpan=6><B><U>ASSETS</U></B> </TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Current </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Cash </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;350,994 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;6,357 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Deferred financing charge </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">55,777 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Prepaid expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>181 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>406,952 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>6,357 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Equipment &#150; Note 3 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,691 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>862 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;408,643 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;7,219 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center bgColor=#e6efff
      colSpan=6><B><U>LIABILITIES</U></B>&nbsp;&nbsp; </TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Current </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Accounts payable and accrued
      liabilities &#150; Note 4 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1,591,940 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;749,389 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Current portion of promissory notes payable
      &#150; Note 5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,506,526 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,550,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">4,098,466 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">2,299,389 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Promissory notes payable &#150; Note 5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">168,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">4,266,466 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,299,389 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center colSpan=6><B><U>CAPITAL DEFICIT</U></B>&nbsp;&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD align=center  bgColor=#e6efff colSpan=6>&nbsp;</TD>
    <TD align=center width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Capital stock &#150; Note 6 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Authorized: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;150,000,000
      common shares, par value $0.001 per share </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Issued and outstanding:
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;20,746,761
      common shares (2008: 19,957,420) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">20,747 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">19,957 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Shares to be issued &#150; Notes 4 and 8 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>300,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>125,849 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Additional paid-in capital </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">8,383,663 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">4,624,838 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Deficit accumulated during the development
      stage </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(12,562,233</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(7,062,814</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(3,857,823</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,292,170</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;408,643 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;7,219 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Nature of Operations and Ability to Continue as a Going Concern
  &#150; Note 1 <BR>
  Commitments &#150; Note 8 </P>
<P align=center>SEE ACCOMPANYING NOTES </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-4></A>
<P align=center><B>ANAVEX LIFE SCIENCES CORP. </B><BR>
  (A Development Stage Company) <BR>
  CONSOLIDATED STATEMENTS OF OPERATIONS<BR>
  for the years ended September 30, 2009 and 2008 and <BR>
  for the period from January 23, 2004 (Date of Inception) to September 30, 2009
  <BR>
  (<U>Stated in US Dollars</U>) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">January 23, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">2004 (Date of </TD>
    <TD align=center width="2%" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>Years Ended </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Inception) to </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>September 30, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">September 30, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2008</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Accounting and audit fees
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;89,702 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;73,785 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;213,118 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Amortization and depreciation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">410 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">220 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">630 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Bank charges and interest
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5,670 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>11,474 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>20,776 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Consulting fees &#150; Notes 4 and 8(b)
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">2,110,866 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">3,196,213 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">5,748,002 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Investor relations &#150;
      Note 8(b) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>139,983 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>263,560 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>403,543 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Legal fees </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">94,791 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">30,545 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">213,120 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Management fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>14,625 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Office and miscellaneous </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">140,210 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">141,993 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">324,538 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Registration and filing
      fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>16,721 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,517 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>41,051 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Rent and administration </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">75,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">148,750 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Research and development
      &#150; Note 4 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,139,794 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,479,482 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,578,974 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Website design and maintenance </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">1,455
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">1,424
    </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">26,725 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Loss before other expenses </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(4,739,602</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(5,281,213</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(11,733,852</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Other expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Loss on extinguishment of promissory note
      &#150; Note 5 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(487,469</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(487,469</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Accretion of debt discount
      &#150; Note 5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(170,164</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(170,164</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Interest </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(52,191</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(60,284</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(112,475</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Foreign exchange loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(49,993</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(9,772</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(58,273</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net loss for the period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;(5,499,419</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;(5,351,269</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;(12,562,233</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Basic and diluted loss per share </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;(0.27</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;(0.27</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Weighted average number of shares outstanding
    </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>20,203,795 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>19,707,708 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-5></A>
<P align=center><B>ANAVEX LIFE SCIENCES CORP. </B><BR>
  (A Development Stage Company) <BR>
  CONSOLIDATED STATEMENTS OF CASH FLOWS <BR>
  for the years ended September 30, 2009 and 2008 and <BR>
  for the period from January 23, 2004 (Date of Inception) to September 30, 2009
  <BR>
  (<U>Stated in US Dollars</U>) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">January 23, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">2004 (Date of </TD>
    <TD align=center width="2%" ></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>Years ended </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Inception) to </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>September 30, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">September 30, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2008</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash Flows used in Operating Activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Net loss for the period
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(5,499,419</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(5,351,269</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(12,562,233</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Adjustments to reconcile net loss to net
      cash used in </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;operations: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Amortization and depreciation
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">410 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">220 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">630 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accretion
      of debt discount </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>170,164 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>170,164 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Stock-based compensation
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">812,336 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,684,786 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">2,497,122 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Consulting
      expense recorded in exchange for shares to be </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;issued &#150; Note
      4 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">236,337 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">236,337 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Common
      shares issued for consulting expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>70,760 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>319,750 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>390,510 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Promissory note issued
      for severance &#150; Notes 5 and 6 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">71,500 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">71,500 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Common
      shares issued for severance </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>340,600 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>340,600 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Common shares issued
      for research and development </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;expenses
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>800,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Management fees contributed
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">14,625 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Loss
      on extinguishment of debt </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>487,469 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>487,469 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Rent contributed </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">3,750 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Changes in non-cash working
      capital balances related to </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;operations: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Prepaid
      expenses </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(181</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(181</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accounts payable and
      accrued liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">927,469 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">460,360 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">1,850,359 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash used in operating activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(2,794,655</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(2,474,053</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(5,699,348</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash Flows provided by Financing Activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Issuance of common shares
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,638,031 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,131,467 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,833,498 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Share Subscriptions received </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">300,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">300,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Proceeds from promissory
      notes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,202,500 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,450,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,652,500 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Repayment of promissory note </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(100,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(100,000</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Due to related parties
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>33,665 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Shareholder advances </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">333,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash provided by financing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">3,140,531 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">2,481,467, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">6,052,663 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash Flows used in Investing Activities </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Acquisition of equipment
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,239</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,082</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,321</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Net cash used in investing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,239</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,082</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,321</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Increase in cash during the period </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>344,637 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>6,332 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>350,994 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash, beginning of period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>6,357 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>25 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Cash, end of period </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;350,994 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;6,357 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;350,994 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Supplemental Cash Flow Information &#150; Note 9 </P>
<P align=center>SEE ACCOMPANYING NOTES </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-6></A>
<P align=center><B>ANAVEX</B><B> LIFE </B><B>SCIENCES</B><B> </B><B>CORP.</B><B>
  </B><BR>
  (A Development Stage Company) <BR>
  CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT <BR>
  for the period January 23, 2004 (Date of Inception) to September 30, 2009 <BR>
  (Stated in US Dollars) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Deficit </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="7" align=center style="BORDER-BOTTOM: #000000 1px solid"> Common
      Stock </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Accumulated </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Additional </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Common </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">During the </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Paid-in </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Shares to be </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Development </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Shares </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Par Value
    </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Capital </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Issued </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Stage
    </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Total
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Capital stock issued for cash on January 23,
      2004 - at $0.0033 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>12,000,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;12,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;28,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;40,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Net loss from January 23, 2004 to September 30,
      2004 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="8%">(14,395</TD>
    <TD align=left width="1%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="8%">(14,395</TD>
    <TD align=left width="1%" >) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance, September 30, 2004 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">12,000,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">12,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">28,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">(14,395</TD>
    <TD align=left width="1%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">25,605 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Capital stock issued for cash
      on December 31, 2004 - at $0.0033 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>7,200,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>7,200 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>16,800 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>24,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Management fees contributed </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">13,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">13,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Rent contributed </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>3,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>3,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Net loss for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="8%">(91,625</TD>
    <TD align=left width="1%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="8%">(91,625</TD>
    <TD align=left width="1%" >) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance, September 30, 2005 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">19,200,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">19,200 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">60,800 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">(106,020</TD>
    <TD align=left width="1%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">(26,020</TD>
    <TD align=left width="1%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Management fees contributed </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,625 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,625 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Rent contributed </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">750 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">750 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Debt forgiven by directors </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>33,666 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>33,666 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Net loss for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="8%">(25,532</TD>
    <TD align=left width="1%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="8%">(25,532</TD>
    <TD align=left width="1%" >) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance, September 30, 2006 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">19,200,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">19,200 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">96,841 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">(131,552</TD>
    <TD align=left width="1%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">(15,511</TD>
    <TD align=left width="1%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Capital stock issued for research
      and development services on </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;September 24, 2007
      - at $3.60 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">222,222 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">222 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">799,778 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">800,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Capital stock issued for settlement
      of loan payable on September </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>25, 2007 - at $3.60 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">92,500 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">93 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">332,907 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">333,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Net loss for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>(1,579,993</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>(1,579,993</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance, September 30, 2007 &#150; carried
      forward </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>19,514,722 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;19,515 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;1,229,526 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;(1,711,545</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;(462,504</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-7></A>
<P align=center><B>ANAVEX</B><B> LIFE </B><B>SCIENCES</B><B> </B><B>CORP.</B><B>
  </B><BR>
  (A Development Stage Company) <BR>
  CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIT <BR>
  for the period January 23, 2004 (Date of Inception) to September 30, 2009 <BR>
  (Stated in US Dollars) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">Deficit </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD colspan="7" align=center style="BORDER-BOTTOM: #000000 1px solid"> Common
      Stock </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">Accumulated </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">Additional </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">Common </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">During the </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">Paid-in </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">Shares to be </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">Development </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Shares </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Par Value
    </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Capital </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Issued </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Stage
    </TD>
    <TD align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Total
    </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance, September 30, 2007 &#150; brought
      forward </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>19,514,722 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;19,515 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;1,229,526 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;(1,711,545</TD>
    <TD align=left width="1%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;(462,504</TD>
    <TD align=left width="1%" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Capital stock issued for cash on December 10,
      2007 - at $3.50 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">150,000 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">150 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">524,850 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">525,000 </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Capital stock issued for consulting
      services on December 18, 2007 &#150; </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>50,000 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>50 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>192,950 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>193,000 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;at $3.86 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Capital stock issued in settlement
      of debt on December 18, 2007 - at </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>10,000 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>10 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>44,990 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>45,000 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$4.50 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Stock-based compensation for shares
      issued at a discount &#150; Note 6 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>65,000 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>65,000 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Capital stock issued for severance on May 15,
      2008 - at $5.24 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">65,000 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">65 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">340,535 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">340,600 </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Common shares to be issued for
      consulting services &#150; Note 4 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>-</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>252,599 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>252,599 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Capital stock issued for consulting services on
      August 19, 2008 - at </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;$5.07
    </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>25,000 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>25 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>126,725 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(126,750</TD>
    <TD align=left width="1%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Capital stock issued for cash on August 19, 2008
      - at $4.25 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">142,698 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">142 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">606,325 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">606,467 </TD>
    <TD align=left width="1%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Stock based compensation &#150;
      Note 8 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,493,937 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,493,937 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Net loss for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">- </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">(5,351,269</TD>
    <TD align=left width="1%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">(5,351,269</TD>
    <TD align=left width="1%">) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance, September 30, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">19,957,420 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;19,957 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;4,624,838 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">125,849 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;(7,062,814</TD>
    <TD align=left width="1%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;(2,292,170</TD>
    <TD align=left width="1%">) </TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-8></A>
<P align=center><B>ANAVEX</B><B> LIFE </B><B>SCIENCES</B><B> </B><B>CORP.</B><B>
  </B><BR>
  (A Development Stage Company) <BR>
  STATEMENT OF CHANGES IN CAPITAL DEFICIT <BR>
  for the period January 23, 2004 (Date of Inception) to June 30, 2009 <BR>
  (Stated in US Dollars) <BR>
  (Unaudited ) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Deficit </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD colspan="7" align=center style="BORDER-BOTTOM: #000000 1px solid"> Common
      Stock </TD>
    <TD align=center width="1%"
    >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Accumulated </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Additional </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Common </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">During the </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Paid-in </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Shares to </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">Development </TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Shares </TD>
    <TD align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Par Value
    </TD>
    <TD align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="8%">Capital </TD>
    <TD align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Be Issued
    </TD>
    <TD align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Stage
    </TD>
    <TD align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%">Total
    </TD>
    <TD align=left width="1%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Balance, September 30, 2008 &#150; brought
      forward </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>19,957,420 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;19,957 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;4,624,838 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;125,849 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;(7,062,814</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;(2,292,170</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Stock-based compensation &#150; Note 8 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">812,336 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">812,336 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Capital stock issued for consulting services
      on November 20, 2008 - </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>25,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>25 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>65,725 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(65,750</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;$2.63 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Capital stock issued for consulting services
      on February 20, 2009 - </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>25,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>25 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>62,475 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(62,500</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;$2.50 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Capital stock issued for cash on March 6,
      2009 - at $2.25 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>89,148 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>89 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>200,494 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>200,583 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Capital stock issued for consulting services on March 20,
      2009 - at </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;$2.00 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>2,500 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>3 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>4,997 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>5,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Capital stock issued for cash on March 20, 2009 - at $2.25
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">10,800 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">11 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">24,289 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">24,300 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Capital stock issued for cash on June 11,
      2009 - at $2.25 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>36,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>36 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>80,964 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>81,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Capital stock issued for services on June 11, 2009 - at $2.25
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">29,227 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">29 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">65,731 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">65,760 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Capital stock issued for cash on June 19,
      2009 - at $2.25 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>495,556 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>496 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,114,504 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1,115,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Capital stock issued for finders&#146; fees on the issuance
      of a promissory </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;note on June 26,
      2009 &#150; at $2.51 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>22,222 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>22 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>55,755 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>55,777 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Shares to be issued for consulting services -Note 5 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">236,337 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">236,337 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Capital stock issued for cash on August 19,
      2009 &#150; at $2.25 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>128,888 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>129 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>289,869 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>289,998 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Less: Finders fees </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">(72,850</TD>
    <TD align=left width="1%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">(72,850</TD>
    <TD align=left width="1%" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Beneficial conversion features on convertible
      debt issuances - Note 5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>333,056 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>333,056 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Extinguishment of debt - Note 5 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">487,469 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">- </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">487,469 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Cancellation of common shares &#150; Note
      5 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(75,000</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(75</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>234,011 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(233,936</TD>
    <TD align=left width="1%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>- </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Share subscriptions received &#150; Note 8 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">300,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="8%">300,000 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Net loss for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>(5,499,419</TD>
    <TD align=left width="1%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>(5,499,419</TD>
    <TD align=left width="1%"
     bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff >Balance, September 30, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%"
    bgColor=#e6efff>20,746,761 </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%"
    bgColor=#e6efff>&nbsp;20,747 </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%"
    bgColor=#e6efff>&nbsp;8,383,663 </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%"
    bgColor=#e6efff>&nbsp;300,000 </TD>
    <TD align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%"
    bgColor=#e6efff>&nbsp;(12,562,233</TD>
    <TD align=left width="1%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%"
    bgColor=#e6efff>&nbsp;(3,857,823</TD>
    <TD align=left width="1%"
     bgColor=#e6efff>) </TD>
  </TR>
</TABLE>
<P align=center>SEE ACCOMPANYING NOTES </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-9></A>
<P align=center><B>ANAVEX LIFE SCIENCES CORP. </B><BR>
  (A Development Stage Company) <BR>
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 1 </TD>
    <TD align=left width="90%" ><U>Nature of Operations and Ability to Continue
      as a Going Concern</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>The Company is in the development
        stage and has not yet realized any revenues from its planned operations.
        The Company is seeking to develop and market proprietary drug targets
        for the treatment of cancer and diseases of the central nervous system.
      </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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, 2009, the Company had not yet achieved profitable operations, had
        an accumulated deficit of $12,562,233 (2008 - $7,062,814) since its inception
        and incurred a net loss of $5,499,419 (2008 - $ 5,351,269) for the year
        then ended and expects to incur further losses in the development of its
        business, all of which casts substantial doubt about the Company&#146;s
        ability to continue as a going concern. The Company&#146;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 concern but considers obtaining additional funds
        by equity financing and/or from issuing promissory notes. Management expects
        the Company&#146;s cash requirement over the twelve-month period ended
        September 30, 2010 to be approximately $10,000,000. While the Company
        is expending its best efforts to achieve the above plans, there is no
        assurance that any such activity will generate funds for operations. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>The Company was incorporated
        in the State of Nevada, United States of America on January 23, 2004 as
        Thrifty Printing Inc. On January 25, 2007, the Company changed its business
        from developing online photofinishing services to its current business
        and changed its name to Anavex Life Sciences Corp. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" > <P align=justify><U>Significant Accounting Policies</U>
      </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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,
        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&#146;s
        estimates. To the extent there are material differences between the estimates
        and the actual results, future results of operations will be affected.
      </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>The financial statements have,
        in management&#146;s opinion, been properly prepared within the framework
        of the significant accounting policies summarized below: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD> <P align=justify><U>Principles of Consolidation</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-10></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 2 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Significant Accounting Policies </U>&#150;
      (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify><U>Development Stage Company</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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&#146;s development stage activities.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD> <P align=justify><U>Equipment</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>Equipment is recorded at cost and is depreciated at
        33% per annum on the straight-line basis.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD> <P align=justify><U>Impairment of Long-Lived Assets</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">e) </TD>
    <TD> <P align=justify><U>Financial Instruments</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>The carrying value of the Company&#146;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&#146;s opinion that the Company is not
        exposed to significant interest, currency or credit risks arising from
        these financial instruments.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">f) </TD>
    <TD> <P align=justify><U>Foreign Currency Translation</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>Monetary items denominated in a foreign currency are
        translated into US dollars, the reporting currency, 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. Gains or losses arising
        from the translations are included in operations.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">g) </TD>
    <TD> <P align=justify><U>Research and Development Expenses</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>Research and developments costs are expensed as incurred.
        These expenses are comprised of the costs of the Company&#146;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.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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 Company expenses
        the acquisition of patents and trademarks.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-11></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 3 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" >Significant Accounting Policies &#150; (cont&#146;d)
    </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">h) </TD>
    <TD> <P align=justify><U>Income Taxes</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>On October 1, 2007, the Company adopted the provisions
        of FASB ASC 740 "Income Taxes" that changed the framework for accounting
        for uncertainty in income taxes and provided a comprehensive model to
        recognize, measure, present, and disclose in our financial statements
        uncertain tax positions taken or expected to be taken on a tax return.
        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. There was no significant
        impact on the Company&#146;s results of operations or financial position,
        and there was no required adjustment to the opening balance sheet accounts
        upon the adoption of ASC 740.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">i) </TD>
    <TD> <P align=justify><U>Basic and Diluted Loss per Share</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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, 2009, loss per share excludes 5,295,868 (September 30, 2008 &#150;
        1,712,698) potentially dilutive common shares (related to outstanding
        options, warrants and shares and warrants issuable on the conversion of
        convertible promissory notes) as their effect was anti-dilutive.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">j) </TD>
    <TD> <P align=justify><U>Stock-based Compensation</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>The Company accounts for all stock-based payments and
        awards under the fair value based method.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-12></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 4 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" >Significant Accounting Policies &#150; (cont&#146;d)
    </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">j) </TD>
    <TD> <P align=justify><U>Stock-based Compensation &#150; (cont&#146;d) </U>.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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 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</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">k) </TD>
    <TD> <P align=justify><U>Website Costs</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>Direct costs incurred during the application stage of
        development of the Company&#146;s website are capitalized and amortized
        over the estimated useful life. Fees incurred for web site hosting are
        expensed over the period of the benefit. Costs of operating a web site
        are expensed as incurred.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">l) </TD>
    <TD> <P align=justify><U>Comprehensive Income (Loss)</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>Comprehensive income (loss) represents the net change
        in stockholders&#8217; equity during a period from sources other than
        transactions with stockholders. The Company has not recorded any components
        of comprehensive income (loss) for the years ended September 30, 2009
        and 2008 and, as at September 30, 2009, the Company does not have a balance
        recorded in respect of accumulated comprehensive income (loss). </P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">m) </TD>
    <TD> <P align=justify><U>Recent Accounting Pronouncements</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>In March 2008, the FASB issued guidance included in
        ASC 815-10 <I>&#147;Derivatives and Hedging,&#148; </I>which seeks to
        enhance disclosure about how and why a company uses derivatives; how derivative
        instruments are accounted for and how derivatives affect a company&#146;s
        financial position, financial performance and cash flows. This guidance
        was effective for financial statements issued for fiscal years and interim
        periods beginning after November 15, 2008. Early application of the standard
        was encouraged, as well as comparative disclosures for earlier periods
        at initial adoption. The Company chose not to early adopt this guidance
        and is currently evaluating what effects the adoption of ASC 815-10 will
        have on its consolidated financial statements.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>In June 2008, the FASB ratified guidance which is now
        part of ASC 815-40, &#147;<I>Contracts in Entity&#146;s Own Equity</I>&#148;.
        The objective of this issue is to provide guidance for determining whether
        an equity- linked financial instrument (or embedded feature) is indexed
        to an entity&#146;s own stock. This issue applies to any freestanding
        financial instrument or embedded feature that has all the characteristics
        of a derivative instrument or an instrument which may be potentially settled
        in an entity&#146;s own stock regardless of whether the instrument possess
        derivative characteristics. This issue provides a two-step approach to
        assist in making these determinations and is effective for financial statements
        issued for fiscal years beginning after December 15, 2008. The Company
        is currently evaluating what effects the adoption of ASC 815-40 will have
        on its consolidated financial statements.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-13></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 5 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 2 </TD>
    <TD align=left width="90%" ><U>Significant Accounting Policies </U>&#150;
      (cont&#146;d) </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">m) </TD>
    <TD> <P align=justify><U>Recent Accounting Pronouncements &#150; (cont&#146;d)</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>In April 2009, the FASB issued additional disclosure
        requirements related to fair values, which are included in ASC 820, &#147;<I>Interim
        Disclosures about Fair Value of Financial Instruments.&#148; </I>The provisions
        require disclosures about fair value of financial instruments for interim
        reporting periods of publicly traded companies as well as in annual financial
        statements. The required disclosures were effective for interim reporting
        periods ending after June 15, 2009. The adoption of the provisions did
        not have a material impact on the Company&#146;s statements of financial
        position, results of operations and cash flows.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>In May 2009, the FASB issued ASC No. 855, &#147;<I>Subsequent
        Events,</I>&#148; which established general standards of accounting for
        and disclosure of events that occur after the balance sheet date but before
        the financial statements are issued. It sets forth the period after the
        balance sheet date during which management of a reporting entity should
        evaluate events or transactions that occur for potential recognition or
        disclosure in the financial statements, the circumstances under which
        an entity should recognize events or transactions occurring after the
        balance sheet date in its financial statements and the disclosures that
        an entity should make about events or transactions that occurred after
        the balance sheet date. ASC 855 was effective for financial statements
        issued for interim and annual periods ending after June 15, 2009 and did
        not have any impact on the Company&#146;s consolidated financial statements.
        The Company has evaluated subsequent events through December 21, 2009
        which represents the date on which the financial statements were issued.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>In June 2009, the Financial Accounting Standards Board,
        or FASB, established the FASB Accounting Standards Codification, or ASC,
        as the source of authoritative accounting principles recognized by the
        FASB to be applied by nongovernmental entities in preparation of financial
        statements in conformity with generally accepted accounting principles
        in the United States. All other accounting literature not included in
        the ASC is now non-authoritative. The ASC was effective for financial
        statements issued for interim and annual periods ending after September
        15, 2009 and its adoption did not have any impact on the Company&#146;s
        consolidated financial statements.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>In August 2009, the FASB issued ASU No. 2009-05, &#147;<I>Measuring
        Liabilities at Fair Value,</I>&#148; or ASU 2009-05, which amends ASC
        820 to provide clarification of a circumstances in which a quoted price
        in an active market for an identical liability is not available. A reporting
        entity is required to measure fair value using one or more of the following
        methods: 1) a valuation technique that uses a) the quoted price of the
        identical liability when traded as an asset or b) quoted prices for similar
        liabilities (or similar liabilities when traded as assets) and/or 2) a
        valuation technique that is consistent with the principles of ASC 820.
        ASU 2009-05 also clarifies that when estimating the fair value of a liability,
        a reporting entity is not required to adjust to include inputs relating
        to the existence of transfer restrictions on that liability. The adoption
        of this ASU did not have an impact on the Company&#146;s consolidated
        financial statements.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>In October 2009, the FASB issued ASU No. 2009-13, &#147;<I>Multiple-Deliverable
        Revenue Arrangements</I>,&#148; or ASU 2009-13, which amends existing
        revenue recognition accounting pronouncements that are currently within
        the scope of ASC 605. This guidance eliminates the requirement to establish
        the fair value of undelivered products and services and instead provides
        for separate revenue recognition based upon management&#146;s estimate
        of the selling price for an undelivered item when there is no other means
        to determine the fair value of that undelivered item. ASU 2009-13 is effective
        prospectively for revenue arrangements entered into or materially modified
        in fiscal years beginning on or after June 15, 2010. The Company is currently
        evaluating the impact, if any, that the adoption of this amendment will
        have on its consolidated financial statements.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-14></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 6 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 3 </TD>
    <TD align=left width="90%" ><U>Equipment</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%">September 30, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%">Accumulated </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="14%"><U>Cost</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%"><U>Depreciation</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%"><U>Net</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Computer equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="14%"
    bgColor=#e6efff>&nbsp;2,321 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="14%"
    bgColor=#e6efff>&nbsp;630&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="14%"
    bgColor=#e6efff>&nbsp;1,691 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%">September 30, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="14%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%">Accumulated </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="14%"><U>Cost</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%"><U>Depreciation</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="14%"><U>Net</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Computer equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="14%"
    bgColor=#e6efff>&nbsp;1,082 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="14%"
    bgColor=#e6efff>&nbsp;220</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="14%"
    bgColor=#e6efff>&nbsp;862 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 4 </TD>
    <TD align=left width="90%" ><U>Related Party Transactions</U> </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%"  >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="90%" >The following amounts have been donated to the
      Company by the directors: </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="13%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%">January 23, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="13%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%">2004 (Date of </TD>
    <TD align=center width="2%" ></TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>Years ended </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%">Inception) to </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD colspan="4" align=center>September 30, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%">September 30, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="13%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%"><U>2008</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="13%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="13%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="13%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="13%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Management fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="13%" bgColor=#e6efff>&nbsp;-</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="13%" bgColor=#e6efff>&nbsp;-</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="13%" bgColor=#e6efff>14,625 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left >Rent </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="13%">-</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="13%">-</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="13%">3,750 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Debt forgiven by directors </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="13%"
    bgColor=#e6efff>-</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="13%"
    bgColor=#e6efff>-</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="13%"
    bgColor=#e6efff>33,666 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="13%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="13%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="13%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="13%"
    bgColor=#e6efff>&nbsp;-</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="13%"
    bgColor=#e6efff>-</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="13%"
    bgColor=#e6efff>52,041 </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>During the year ended September 30,
  2009, the Company was charged consulting fees totaling $486,690 (2008: $352,382)
  by directors and officers of the Company. </P>
<P style="MARGIN-LEFT: 10%" align=justify>During the year ended September 30,
  2008, the Company acquired the ownership rights to four Greek patents for consideration
  of $72,000 pursuant to a patent transfer agreement with an officer of the Company.
  The charge in respect of the acquisition of these patents has been expensed
  to research and development. </P>
<P style="MARGIN-LEFT: 10%" align=justify>During the year ended September 30,
  2008, the Company terminated the services of its CEO and agreed to a severance
  package consisting of the issuance of 65,000 common shares at $5.24 per share
  totaling $340,600. The common shares were valued using the quoted market price
  of the Company&#146;s common stock on the agreement date. In addition, the Company
  issued a promissory note payable to the former CEO in the amount of $200,000
  of which $128,500 was applied to unpaid consulting fees and the remaining $71,500
  was charged as severance pay. As at September 30, 2009 and 2008, the Company
  had paid an amount of $100,000 on account of the promissory note with remaining
  $100,000 being in default &#150; Note 5.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-15></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 7 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 4 </TD>
    <TD align=left width="90%" ><U>Related Party Transactions &#150; (cont&#146;d)</U>
    </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR>
    <TD></TD>
    <TD width="90%" > <P align=justify>On May 20, 2008, the Company executed an
        agreement with a director of the Company to provide consulting services
        for consideration consisting of 200,000 common shares to be issued every
        quarter at the rate of 25,000 per quarter commencing August 20, 2008 and
        by granting 400,000 share purchase options which vest at the rate of 100,000
        per quarter commencing August 20, 2008. On May 14, 2009, the agreement
        was amended whereby the director was granted 400,000 share purchase options
        in exchange for rescinding the portion of the agreement that called for
        compensation of 200,000 common shares. Consequently, as a result of this
        amendment, the director returned 75,000 common shares to the Company for
        cancellation that had previously been issued. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>During the year ended September
        30, 2009, the Company calculated compensation expense associated with
        this agreement as follows: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD> <P align=justify>At September 30, 2008, the value of the shares to be
        issued under this agreement was $125,849. During the year ended September
        30, 2009, as a result of re-measuring the remaining shares to be issued,
        the Company recognized a compensation expense of $236,337 up to the date
        of the agreement being amended and the director returning the previously
        issued common shares to the Company for cancellation. As a result of the
        agreement being amended, there are no remaining common shares to be issued.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify>In accordance with the agreement being amended on May
        14, 2009, the director was granted 400,000 additional share purchase options
        having a grant date fair value of $272,000. As a result, the Company recorded
        an incremental share-based compensation charge of $70,250 in respect of
        these options after giving effect to the director receiving these options
        in exchange for surrendering the 75,000 common shares having a fair value
        of $201,750 as at the date of the amendment. Additionally, as at September
        30, 2009, the remaining unvested options granted to the director upon
        the amendment of the agreement were re-measured resulting in the Company
        recognizing $167,812 included in consulting fees</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD> <P align=justify>During the year ended September 30, 2009, the remaining
        unvested options pertaining to the original agreement were periodically
        re-measured up to their measurement date which resulted in the Company
        recognizing $40,020 included in consulting fees in the consolidated financial
        statements for the year ended September 30, 2009.</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=center></TD>
    <TD align=center width="90%" > <P align=justify>As at September 30, 2009,
        included in accounts payable and accrued liabilities is $57,464 (2008:
        $10,114) owing to directors and officers of the Company. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Promissory Notes Payable</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">September 30, </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%">September 30, </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2008</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Convertible non-interest bearing promissory
      notes payable </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1,919,418 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Convertible interest bearing promissory notes payable </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">668,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Interest bearing promissory note </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>150,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,450,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Non-interest bearing promissory note </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">100,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">100,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Less: beneficial conversion
      features </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(333,056</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp;Add: accretion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">170,164 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>2,674,526 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,550,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Less: current portion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(2,506,526</TD>
    <TD align=left width="2%" >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">(1,550,000</TD>
    <TD align=left width="2%" >) </TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;168,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-16></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 8 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 5 </TD>
    <TD align=left width="90%" ><U>Promissory Notes Payable &#150; (cont&#146;d)</U>
    </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>During the year ended September
        30, 2009, the Company issued non-interest bearing unsecured promissory
        notes totaling $1,919,418 in exchange for funds received from several
        parties. These notes are due on demand but not before January 13, 2010
        as to $150,000, February 2, 2010 as to $1,669,418 and March 16, 2010 as
        to $100,000. The promissory notes are convertible into units at $2.50
        per unit as to $1,819,418 of the notes and at $2.25 as to $100,000. Each
        unit is comprised of one common share and one common share purchase warrant
        exercisable at $3.00 per share for a period of two years from the conversion
        date. The promissory note of $1,669,418 was issued in exchange for a promissory
        note of the same amount that had matured as a result of the Company renegotiating
        this debt. The Company recorded the transaction as a debt extinguishment
        with a loss on extinguishment of $487,469 recorded as a result of recognizing
        the new promissory note at its fair value of $2,156,887. The premium of
        the fair value of the note over its principal balance in the amount of
        $487,469 has been recorded as additional paid-in capital. The Company
        recorded a beneficial conversion feature totaling $41,995 in respect of
        the promissory note issued in the amount of $150,000 based on the comparison
        of the proceeds of the note allocated to the common stock portion of the
        conversion feature and the fair value of the common stock at the commitment
        date of the note. This amount is being accreted using the effective interest
        rate method as a charge to income and included in accretion expense in
        the financial statements over the term of the note. During the year ended
        September 30, 2009, the Company recorded an accretion expense of $28,450
        (2008: $Nil) for the discount on this note. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>During the year ended September
        30, 2009, the Company issued interest bearing unsecured promissory notes
        totalling $668,000. These notes bear interest at 8% and mature on June
        3, 2014, as to $500,000 and June 19, 2011, as to $168,000. The holder
        of the note in the amount of $500,000 may demand repayment of the balance
        outstanding at any time commencing 180 days from the issuance of the note
        to its maturity date. The promissory notes are convertible into units
        at $2.25 per unit. Each unit is comprised of one common share and one
        common share purchase warrant exercisable at $3.00 per share for a period
        of two years from the conversion date, as to $500,000 and one common share
        and one-half of one common share purchase warrant exercisable at $3.50
        per share for a period of one year from the conversion date, as to $168,000.
        The Company has recorded a beneficial conversion feature in the amount
        of $232,581 on the promissory note totaling $500,000 and a beneficial
        conversion feature in the amount of $58,480 on the promissory notes totaling
        $168,000 for total beneficial conversion features on these note issuances
        of $291,061. These beneficial conversion features are calculated based
        on the comparison of the proceeds of the note allocated to the common
        stock portion of the conversion feature and the fair value of the common
        stock at the commitment date of the note. These amounts will be accreted
        using the effective interest rate method as a charge to income and included
        in accretion expense in the financial statements over the term of the
        note or the period to which the note holder may first demand repayment,
        whichever is applicable. During the year ended September 30, 2009, the
        Company recorded accretion expense of $141,714 (2008: $Nil) for the discount
        on these notes. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>During the year ended September
        30, 2009, the Company issued an unsecured promissory note in the amount
        of $150,000 bearing interest at 8% and maturing on December 31, 2009.
        Pursuant to a termination agreement the Company has issued one promissory
        note to a former officer of the Company, in the amount of $200,000. The
        note is without interest and had specified repayment terms. The Company
        repaid $100,000 in accordance with the repayment terms. As at September
        30, 2009 and 2008, the Company was in default of the payment terms for
        the entire $100,000 balance owing. </P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-17></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 9 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 6 </TD>
    <TD align=left width="90%" > <P align=justify><U>Capital Stock</U> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146;s authorized capital
        increased from 25,000,000 shares of common stock to 150,000,000 shares
        of common stock. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146;s common
        stock on the agreement date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146;s
        common stock on the settlement date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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. (Note 4) The common shares were
        recorded based upon the quoted market price of the Company&#146;s common
        stock on the agreement date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146;s common stock on the agreement date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146;s common stock on the issuance date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146;s common stock on the issuance date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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. </P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-18></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 10 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 6 </TD>
    <TD align=left width="90%" ><U>Capital Stock &#150; (cont&#146;d)</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146;s common stock on the issuance date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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 at their par value. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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&#146; fees in the amount of $8,100 in relation to
        this private placement. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>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 quoted market
        price of the Company&#146;s common stock on the issuance date. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>On June 19, 2009 the Company
        issued 495,556 units at $2.25 per unit for proceeds of $1,115,000 pursuant
        to private placement agreements. 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 June 19,
        2011. The Company paid finders&#146; fees in the amount of $55,750 in
        relation to this private placement. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>On June 26, 2009, the Company
        issued 22,222 common shares at $2.51 per share for a total value of $55,777
        for finders&#146; fees related to the issuance of the $500,000 promissory
        note (Note 3). The common shares were recorded based upon the quoted market
        price of the Company&#146;s common stock on the issuance date. Such amount
        has been deferred and is being amortized over the term of the debt. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>On August 19, 2009, the Company
        issued 128,888 units at $2.25 per Unit for total proceeds of $290,000.
        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 10, 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&#146; fees totalling $9,000
        in respect of these private placements. </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 7 </TD>
    <TD align=left width="90%" > <P align=justify><U>Income Taxes</U> </P></TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" > <P align=justify> </P></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>The tax effects of the temporary
        differences that give rise to the Company's estimated deferred tax assets
        and liabilities are as follows: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2008</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%"
    bgColor=#e6efff>(34.00%)</TD>
    <TD align=center width="2%"  bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="12%"
    bgColor=#e6efff>(34.00%)</TD>
    <TD align=left width="2%"  bgColor=#e6efff></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Net operating loss carryforwards </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2,637,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1,349,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Accrued expenses not currently deductible for tax </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">306,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">255,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Valuation allowance for deferred tax assets
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,943,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(1,604,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Net deferred tax assets </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="12%"
    bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-19></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 11 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 7 </TD>
    <TD align=left width="90%" ><U>Income Taxes &#150; (cont&#146;d)</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>The provision for income taxes
        differ from the amount established using the statutory income tax rate
        as follows: </P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="10%"  >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2008</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Income tax benefit at statutory rate </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(1,870,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(1,819,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Stock-based compensation </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">277,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">797,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Foreign income taxed at foreign statutory rate
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>4,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Debt extinguishment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">166,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Debt accretion </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>58,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Other permanent differences </TD>
    <TD align=left width="1%"
    >&nbsp;</TD>
    <TD align=right
      width="12%">26,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%"
    >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Increase in valuation allowance </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,339,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>1,022,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD align=left>Deferred income tax recovery </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>As of September 30, 2009, the Company
  had net operating loss carryforwards of approximately $7,764,000 available to
  offset future taxable income. The carryforwards will begin expiring in 2024
  unless utilized in earlier years. </P>
<P style="MARGIN-LEFT: 10%" align=justify>The Company evaluates its valuation
  allowance requirements based on projected future operations. When circumstances
  change and this causes a change in management&#146;s judgment about the recoverability
  of deferred tax assets, the impact of the change on the valuation allowance
  is reflected in current income. As management of the Company does not currently
  believe that it is more likely than not that the Company will receive the benefit
  of this asset, a valuation allowance equal to the deferred tax asset has been
  established at both September 30, 2009 and September 30, 2008. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Uncertain Tax Positions </P>
<P style="MARGIN-LEFT: 10%" align=justify>The Company files income tax returns
  in the U.S. federal jurisdiction, various state and foreign jurisdictions. The
  Company&#146;s tax returns are subject to tax examinations by U.S. federal and
  state tax authorities, or examinations by foreign tax authorities until respective
  statue of limitation. It is subject to tax examinations by tax authorities for
  all taxation years commencing on or after 2004. </P>
<P style="MARGIN-LEFT: 10%" align=justify>Provision has 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.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-20></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 12 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%" ><U>Commitments</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD> <P align=justify><U>Share Purchase Warrants</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>A summary of the Company&#146;s share purchase warrants
        outstanding is presented below:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Weighted </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Average </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Number of </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%">Exercise </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>Shares</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>Price</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Balance, September 30, 2007 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="12%" bgColor=#e6efff>$&nbsp;&nbsp;&nbsp; &nbsp;- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>Issued </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">292,628 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="12%">$5.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Balance, September 30, 2008 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>292,698 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="12%" bgColor=#e6efff>$5.00 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>Expired </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(142,698</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="12%">$5.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Issued </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>833,448 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="12%" bgColor=#e6efff>$2.62 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>Balance, September 30, 2009 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">983,448 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="12%">$2.93 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>At September 30, 2009, the Company had
  983,448 currently exercisable share purchase warrants outstanding as follows:
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=right><U>Number</U> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="25%" ><U>Exercise Price</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="25%" ><U>Expiry Date</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="25%" >&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="25%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right bgColor=#e6efff>150,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=right width="25%" bgColor=#e6efff >$5.00 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="25%" bgColor=#e6efff >December 21, 2009 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right>89,148 </TD>
    <TD align=left width="1%" ></TD>
    <TD align=right width="25%" >$4.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="25%" >March 6, 2010 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right bgColor=#e6efff>10,800 </TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=right width="25%" bgColor=#e6efff >$4.00 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="25%" bgColor=#e6efff >March 20, 2010 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right>36,000 </TD>
    <TD align=left width="1%" ></TD>
    <TD align=right width="25%" >$4.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="25%" >June 11, 2010 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right bgColor=#e6efff>40,000 </TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=right width="25%" bgColor=#e6efff >$4.00 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="25%" bgColor=#e6efff >July 10, 2010 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right>99,999 </TD>
    <TD align=left width="1%" ></TD>
    <TD align=right width="25%" >$2.25 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="25%" >August 4, 2010 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>557,501 </TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=right width="25%" bgColor=#e6efff >$2.25 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="25%" bgColor=#e6efff >June 19, 2011 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right>983,448 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="25%" >&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="25%" >&nbsp;</TD>
    <TD align=right width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>On December 21, 2009, the 150,000 warrants exercisable
        at$5.00 per warrant expired unexercised.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify><U>Stock&#150;based Compensation Plan</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>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 value of the stock on grant date. Otherwise, options granted shall
        have an exercise price equal to their fair value on grant date.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-21></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 13 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%" ><U>Commitments &#150; (cont&#146;d)</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify><U>Stock&#150;based Compensation Plan &#150; (cont&#146;d)</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>A summary of the status of company&#146;s outstanding
        stock purchase options for the year ended September 30, 2009 is presented
        below:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%">Weighted </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%">Average </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%">Number of </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%">Exercise </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><U>Shares</U> </TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="17%"><U>Price</U> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Outstanding at September 30, 2007 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="17%" bgColor=#e6efff>770,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="17%" bgColor=#e6efff>$3.00 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forfeited </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">(500,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="17%">$3.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff
      >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Granted </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>1,150,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%"
    bgColor=#e6efff>$4.78 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Outstanding at September 30, 2008 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="17%">1,420,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="17%">$4.44 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Granted </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="17%"
    bgColor=#e6efff>1,775,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="17%"
    bgColor=#e6efff>$2.51 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Outstanding at September 30, 2009 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">3,195,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=center
      width="17%">$3.37 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; </TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=center width="17%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="17%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Exercisable at September 30, 2009 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="17%"
    bgColor=#e6efff>1,330,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=center width="17%"
    bgColor=#e6efff>$4.38 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Exercisable at September 30, 2008 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="17%">450,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=center
      width="17%">$4.73 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>At September 30, 2009, the following
  stock options were outstanding: </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
      <TD width="15%"  >&nbsp;</TD>
      <TD colspan="3" align=center style="BORDER-BOTTOM: #000000 1px solid"
      >Number of Shares </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="8%" >Exercise </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="15%" >Expiry Date </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%" >Aggregate&nbsp;&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">Remaining </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=center >&nbsp; </TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="8%" >Price </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="15%" >&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">Intrinsic </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">contractual </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=center >Total Number </TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">Number </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="8%" >&nbsp; </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="15%" >&nbsp;</TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">Value </TD>
      <TD align=center width="2%" >&nbsp;</TD>
      <TD align=center width="1%" >&nbsp;</TD>
      <TD align=center width="11%">life (yrs) </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      >&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">Vested </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="8%"
    >&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="15%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="11%">&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    </TR>
    <TR>
      <TD width="15%" >&nbsp;</TD>
      <TD >&nbsp; </TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="11%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD align=center width="8%" >&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="15%" >&nbsp;</TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD width="11%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
      <TD width="1%" >&nbsp;</TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right bgColor=#e6efff >100,000 <SUP>(1)</SUP> </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff></TD>
      <TD align=center width="8%" bgColor=#e6efff >$&nbsp;3.86 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff >December 1, 2010 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>$</TD>
      <TD align=right width="11%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="11%" bgColor=#e6efff>1.19 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right >400,000 <SUP>(2)</SUP> </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">400,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" ></TD>
      <TD align=center width="8%" >$&nbsp;5.25 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="15%" >May 20, 2011 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">1.64 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right bgColor=#e6efff >50,000 <SUP>(3)</SUP> </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>50,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff></TD>
      <TD align=center width="8%" bgColor=#e6efff >$&nbsp;3.75 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff >November 1, 2012 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="11%" bgColor=#e6efff>3.09 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right >150,000 <SUP>(4)</SUP> </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">150,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" ></TD>
      <TD align=center width="8%" >$&nbsp;3.85 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="15%" >December 3, 2012 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">3.18 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right bgColor=#e6efff >450,000 <SUP>(5)</SUP> </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>450,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff></TD>
      <TD align=center width="8%" bgColor=#e6efff >$&nbsp;5.00 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff >June 3, 2013 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="11%" bgColor=#e6efff>3.68 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right >50,000 <SUP>(6)</SUP> </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">25,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" ></TD>
      <TD align=center width="8%" >$&nbsp;2.75 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="15%" >January 14, 2014 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">4.29 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right bgColor=#e6efff >5,000 <SUP>(7)</SUP> </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>5,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff></TD>
      <TD align=center width="8%" bgColor=#e6efff >$&nbsp;2.50 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff >March 2, 2014 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>750 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="11%" bgColor=#e6efff>4.42 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right >400,000 <SUP>(8)</SUP> </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">250,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" ></TD>
      <TD align=center width="8%" >$&nbsp;2.50 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="15%" >May 12, 2014</TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">60,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">4.62 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right bgColor=#e6efff >500,000 <SUP>(9)</SUP> </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff></TD>
      <TD align=center width="8%" bgColor=#e6efff >$&nbsp;2.50 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff >June 11, 2014</TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>75,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="11%" bgColor=#e6efff>4.70 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right >700,000 <SUP>(10)</SUP> </TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">- </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" ></TD>
      <TD align=center width="8%" >$&nbsp;2.50 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="15%" >June 12, 2014 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="11%">105,000 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">4.70 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD align=right bgColor=#e6efff >120,000 <SUP>(11)</SUP> </TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>- </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff></TD>
      <TD align=center width="8%" bgColor=#e6efff >$&nbsp;2.50 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="15%" bgColor=#e6efff >July 1,2014 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=right width="11%" bgColor=#e6efff>18,000 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="11%" bgColor=#e6efff>4.75 </TD>
      <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      >270,000 <SUP>(12)</SUP> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD align=left width="1%" ></TD>
      <TD align=center width="8%" >$&nbsp;3.00 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=right width="15%" >February 8, 2017 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">7.36 </TD>
      <TD align=left width="2%" >&nbsp;</TD>
    </TR>
    <TR>
      <TD width="15%" >&nbsp;</TD>
      <TD bgColor=#e6efff >&nbsp; </TD>
      <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="11%" bgColor=#e6efff>&nbsp; </TD>
      <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="8%" bgColor=#e6efff >&nbsp; </TD>
      <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="15%" bgColor=#e6efff >&nbsp;</TD>
      <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="11%" bgColor=#e6efff>&nbsp; </TD>
      <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
      <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
      <TD align=center width="11%" bgColor=#e6efff>&nbsp; </TD>
      <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD width="15%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      >3,195,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="11%">1,330,000 </TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="8%" >&nbsp; </TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=left width="15%" >&nbsp;</TD>
      <TD align=left width="2%" >&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="11%"
    >&nbsp;258,750</TD>
      <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
      <TD align=left width="1%" >&nbsp;</TD>
      <TD align=center width="11%">&nbsp; </TD>
      <TD align=left width="2%"
>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="15%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD> <P align=justify>As at September 30, 2009, 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 and 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.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-22></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 14 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%" ><U>Commitments &#150; (cont&#146;d)</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify><U>Stock&#150;based Compensation Plan &#150; (cont&#146;d)</U></P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="15%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD> <P align=justify>As at September 30, 2009, these options have fully vested.
        The fair value of the options on the grant date was calculated to be $1,031,800,
        of which the Company recognized $257,950 stock- based compensation for
        the options vested in the year ended September 30, 2008. At September
        30, 2008, the remaining 300,000 unvested options were re-measured with
        their fair value determined to be $172,350, of which the Company recognized
        $62,802 stock-based compensation in the year ended September 30, 2008.
        As a result of the Company periodically re-measuring the remaining non-vested
        options up to the dates on which they vested, the Company recognized $40,020
        included with consulting fees for the year ended September 30, 2009.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD> <P align=justify>As at September 30, 2009 these options were fully vested.
        The fair value of these options was calculated to be $122,150 which amount
        has been recognized as stock-based compensation and included with investor
        relations expense in the financial statements for the year ended September
        30, 2008.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD> <P align=justify>As at September 30, 2009, these options had fully vested.
        The fair value of the options on the grant date was calculated to be $269,910
        for which the Company has recognized stock-based compensation in the amount
        of $256,954 included with consulting fees in the financial statements
        for the year ended September 30, 2008. The Company has recognized stock-based
        compensation in the amount of $12,956 included with consulting fees in
        the financial statements for the year ended September 30, 2009.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">5. </TD>
    <TD> <P align=justify>As at September 30, 2009, these options had fully vested.
        The fair value of the options on the grant date was calculated to be $1,136,025
        for which the Company has recognized stock-based compensation in the amount
        of $794,081 included with consulting fees in the financial statements
        for the year ended September 30, 2008. The Company has recognized stock-based
        compensation in the amount of $341,354 included with consulting fees in
        the financial statements for the year ended September 30, 2009.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">6. </TD>
    <TD> <P align=justify>These options were granted during the year ended September
        30, 2009 and as at September 30, 2009, 25,000 of these options had vested.
        The remaining 25,000 options vest on January 13, 2010. The grant date
        fair value of these options was calculated to be $79,000 of which the
        Company has included $56,509 in consulting fees for the year ended September
        30, 2009.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">7. </TD>
    <TD> <P align=justify>These options were granted during the year ended September
        30, 2009 and as at September 30, 2009 all of these options had vested.
        The fair value of the options on the grant date was calculated to be $6,000
        of which the Company has recognized stock-based compensation in that amount
        for the year ended September 30, 2009, included with consulting fees in
        the financial statements.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">8. </TD>
    <TD> <P align=justify>These options were granted during the year ended September
        30, 2009 and as at September 30, 2009, 250,000 of these options have vested.
        The remaining 150,000 options vest as to 50,000 on each of November 14,
        2009, February 14, 2010 and May 14, 2010. The grant date fair value of
        these options was calculated to be $544,000 of which the Company has recognized
        stock- based compensation in the amount of $238,063 for the year ended
        September 30, 2009 included with consulting fees in the financial statements.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-23></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 15 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%" ><U>Commitments &#150; (cont&#146;d)</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify><U>Stock&#150;based Compensation Plan &#150; (cont&#146;d)</U></P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="15%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">9. </TD>
    <TD> <P align=justify>These options were granted during the year ended September
        30, 2009 and as at September 30, 2009, none of these options have vested.
        The options vest on commencement of Phase 3 trial of a specific compound.
        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. Subsequent to September 30, 2009, the
        vesting provisions of these options were changed such that there are 100,000
        options vesting for each compound entering Phase II trials.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">10. </TD>
    <TD> <P align=justify>These options were granted during the year ended September
        30, 2009 and as at September 30, 2009 none of these options have vested.
        The options vest 233,333 on each of June 10, 2010, one compound commencing
        Phase 2 trials and one compound commencing Phase 3 trial. The fair value
        of these options was calculated to be $1,099,000 of which the Company
        has recognized stock-based compensation in the amount of $117,434 for
        the year ended September 30, 2009 included with consulting fees in the
        financial statements.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">11. </TD>
    <TD> <P align=justify>These options were granted during the year ended September
        30, 2009 and as at September 30, 2009, these options have not vested.
        The options vest upon completion of a minimum financing of $3,000,000
        introduced and closed by the optionee. No stock-based compensation has
        been recorded in the financial statements as the performance conditions
        have not yet been met.</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">12. </TD>
    <TD> <P align=justify>As at June 30, 2009, these options have not vested.
        The options vest upon one or more compounds: entering Phase 2 Trial &#150;
        90,000 options; entering Phase 3 Trial &#150; 90,000 options; and receiving
        FDA approval &#150; 90,000 options. No stock-based compensation has been
        recorded in the financial statements as none of the performance conditions
        have yet been met.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>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 years:
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="20%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=center width="19%"><U>2009</U> </TD>
    <TD align=center width="19%"><U>2008</U> </TD>
  </TR>
  <TR>
    <TD width="20%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD align=right width="19%">&nbsp;</TD>
    <TD width="19%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD width="20%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Risk-free interest rate </TD>
    <TD align=right width="19%" bgColor=#e6efff>1.16% - 2.71% </TD>
    <TD align=right width="19%" bgColor=#e6efff>2.28% - 3.785% </TD>
  </TR>
  <TR vAlign=top>
    <TD width="20%" >&nbsp;</TD>
    <TD align=left >Expected life of options </TD>
    <TD align=right width="19%">1.75 - 5 years </TD>
    <TD align=right width="19%">2.25 - 5 years </TD>
  </TR>
  <TR vAlign=top>
    <TD width="20%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Annualized volatility </TD>
    <TD align=right width="19%" bgColor=#e6efff>73.61% </TD>
    <TD align=right width="19%" bgColor=#e6efff>77.82% </TD>
  </TR>
  <TR vAlign=top>
    <TD width="20%" >&nbsp;</TD>
    <TD align=left >Dividend rate </TD>
    <TD align=right width="19%">0.00% </TD>
    <TD align=right width="19%">0.00% </TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>The volatility was determined based
  on an index of volatility from comparable companies. The expected term of the
  options granted to employees is derived from the simplified method as prescribed
  by SEC Staff Accounting Bulletin No. 110 given that the Company has no historical
  experience with the exercise of options for which to base an estimate of the
  expected term of options granted. The Company anticipates it will discontinue
  the use of the simplified method of SAB 110 once sufficient historical option
  exercise behavior becomes apparent. The expected term of options granted to
  non-employees was determined to be the option term. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-24></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 16 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%" ><U>Commitments &#150; (cont&#146;d) </U></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify><U>Stock&#150;based Compensation Plan &#150; (cont&#146;d)</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>At September 30, 2009, the following summarizes the
        unvested stock options:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Weighted </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Weighted </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Average </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Average </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Number of </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Exercise </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%">Grant-date </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%"><U>Shares </U></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%"><U>Price </U></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="15%"><U>Fair value </U></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD >&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="15%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD align=center width="15%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Unvested options at September 30, 2007 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>770,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="15%" bgColor=#e6efff>$3.00 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="15%" bgColor=#e6efff>$2.21 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;Forfeited </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">(500,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="15%">$3.00 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="15%">$2.21 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;Granted </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>1,150,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="15%" bgColor=#e6efff>$4.78 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="15%" bgColor=#e6efff>$2.47 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;Vested </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%">(450,000</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" ></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="15%">$4.73 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="15%">$2.46 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >Unvested options at September 30, 2008 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>970,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="15%" bgColor=#e6efff>$4.31 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="15%" bgColor=#e6efff>$2.42 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >&nbsp; &nbsp; &nbsp; &nbsp;Granted </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="15%">1,775,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="15%">$2.51 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="15%">$3.08 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff >&nbsp; &nbsp; &nbsp; &nbsp;Vested </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>(880,000</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="15%"
    bgColor=#e6efff>$4.20 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff></TD>
    <TD align=center width="15%" bgColor=#e6efff>$3.48 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left >Unvested options at September 30, 2009 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="15%">1,865,000 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="15%">$2.65 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ></TD>
    <TD align=center width="15%">$2.93 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>As at September 30, 2009, there was
  a total of $375,581 of 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 as follows: $363,403
  in the year ended September 30, 2010 and $12,178 in the year ended September
  30, 2011. There has been no stock-based compensation recognized in the financial
  statements for the year ended September 30, 2009 for options that vest upon
  the achievement of performance milestones because the Company has determined
  that satisfaction of the performance milestones was not probable. Compensation
  relating to stock options exercisable upon achieving performance milestones
  will be recognized in the period the milestones are achieved. </P>
<P style="MARGIN-LEFT: 15%" align=justify>Stock-based compensation amounts, including
  those relating to shares issued for non-cash consideration during the year (Note
  6), are classified in the Company&#146;s Statement of Operations as follows:
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2009 </U></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="12%"><U>2008 </U></TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Consulting fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1,119,433 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;2,218,488 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>Deferred financing costs </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">55,777 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Investor relations </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>127,650 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;1,175,210 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="12%">&nbsp;2,346,138 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD> <P align=justify><U>Share Subscriptions</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>As at September 30, 2009, the Company had received $300,000
        in respect of a private placement for 133,333 units at $2.25 per unit.
        Each unit will consist of one common share and 1.125 common share purchase
        warrants entitling the holder thereof to purchase an additional common
        share for each whole warrant held at a price of $2.25 for a period of
        2 years from closing date. Subsequent to September 30, 2009, these units
        were issued.</P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-25></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 17 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 8 </TD>
    <TD align=left width="90%" ><U>Commitments &#150; (cont&#146;d)</U> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD colSpan=2> <P align=justify><U>Patent and Collaboration Agreement</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD colSpan=2> <P align=justify>On February 1, 2007, the Company signed a
        contract with an officer of the Company to acquire property for the development
        of a new drug compound including three patents and one patent application.
        Pursuant to the agreement, the Company agreed to the following:</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">i) </TD>
    <TD> <P align=justify>Invest a minimum of $200,000 every fiscal year into
        scientific research and;</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">ii) </TD>
    <TD> <P align=justify>Hire the director as a consultant to carry out the Company&#146;s
        Research and Development program at $6,000 per month and;</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">iii) </TD>
    <TD> <P align=justify>Pay to the director 6% of the net income earned from
        the exploitation of the patent and patent application; and</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">iv) </TD>
    <TD> <P align=justify>Disburse a one-time payment to the director an amount
        of $72,000 before December 31, 2007 as consideration for the transfer
        of the patents and the patent application. (paid)</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>Effective January 1, 2008, the monthly salary paid to
        the director was increased to 7,000 Euros. As at September 30, 2009, the
        Company has complied with the terms of the Patent and Collaboration Agreement
        and it remains in good standing</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">e) </TD>
    <TD> <P align=justify><U>CEO Consulting Agreement</U></P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD> <P align=justify>On June 16, 2009, we appointed Dr. Herve de Kergrohen
        as our Chief Executive Officer pursuant to a consulting agreement effective
        June 12, 2009. In return for acting as Chief Executive Officer, we agreed
        to pay Dr. de Kergrohen the following consideration:</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="15%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD> <P align=justify>pay a consulting fee at the rate 35,000 Swiss francs
        per month;</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD> <P align=justify>pay an incentive bonus of 100,000 Swiss francs on the
        annual anniversary of the term of the agreement;</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD> <P align=justify>grant 700,000 stock options exercisable at $2.25 per
        option until June 12, 2014; 233,334 options vest on June 12, 2010; 233,333
        options vest when one or more compounds enter Phase 2 trial; and 233,333
        vest when one or more compounds enter Phase 3 trial;</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD> <P align=justify>pay a 4% finders bonus on up to the first $100 million
        and a 2% finders bonus on any amounts that exceed $100 million of any
        funding (joint-venture, licensing, and/or drug development funding) or
        trade sale secured from non-investment banking enterprises as a direct
        result of introduction and closing by Dr. de Kergrohen; and</P></TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="15%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD> <P align=justify>reimburse any reasonable business expenses incurred
        in performing duties and promoting the business of our company, including,
        but not limited to, travel and lodging expenses, following presentation
        of documentation in accordance with our business expense reimbursement
        policies.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>The agreement is for a period of two
  years and either party may terminate the agreement by providing the other party
  with 60 days written notice. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_F-26></A>
<P align=justify>Anavex Life Sciences Corp. <BR>
  (A Development Stage Company) <BR>
  Notes to the Consolidated Financial Statements <BR>
  September 30, 2009 and 2008 <BR>
  (<U>Stated in US Dollars</U>) &#150; Page 18 <BR>
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left>Note 9 </TD>
    <TD align=left width="90%" ><U>Supplemental Cash flow Information</U> </TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>Investing and financing activities
        that do not have a direct impact on current cash flows are excluded from
        the statements of cash flows. </P></TD>
  </TR>
  <TR>
    <TD align=left >&nbsp;</TD>
    <TD align=left width="90%" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="90%" >During the year ended September 30, 2009: </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD> <P align=justify>The Company issued 25,000 shares at $2.63 per share
        and 25,000 common shares at $2.50 per share, for a total of $128,250 pursuant
        to the consulting agreement with a director to issue common shares in
        exchange for consulting services. Subsequent to their issuance, pursuant
        to an amendment of the agreement to compensate the director, these shares
        were returned to treasury for cancellation. &#150; Notes 4 and 6</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify>The Company issued 2,500 shares at $2.00 per share,
        29,227 shares at $2.25 per share for a total of $70,760 as consideration
        for consulting services</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD> <P align=justify>As a result of re-measuring remaining shares to be issued
        pursuant to a consulting agreement, the Company recorded compensation
        expense of $236,337 as consideration for consulting services; and</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">d) </TD>
    <TD> <P align=justify>The Company issued 22,222 common shares at $2.51 per
        share for a total of $55,777 pursuant to a deferred financing charge on
        an issuance of a convertible promissory note.</P></TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>During the year ended September 30,
  2008: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a) </TD>
    <TD> <P align=justify>The Company terminated the services of its CEO and the
        agreed upon severance package included the issuance of 65,000 common shares
        at $5.24 per share totaling $340,600 and the issuance of a promissory
        note payable in the amount of $200,000 of which $128,500 was applied to
        unpaid consulting fees and the remaining $71,500 was charged as severance
        pay in the current year.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">b) </TD>
    <TD> <P align=justify>The Company issued 10,000 shares at $4.50 per share
        for a total of $45,000 to settle an account payable.</P></TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%">c) </TD>
    <TD> <P align=justify>The Company issued 50,000 common shares at $3.86 per
        share for a total of $193,000 and 25,000 common shares at $5.00 per share
        for a total of $125,000 for payments of consulting services.</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" >There were no amounts paid in 2009 and 2008 in
      respect of interest or income taxes. </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Note 10 </TD>
    <TD align=left width="90%" ><U>Subsequent Events</U> </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="90%" >&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left></TD>
    <TD align=left width="90%" > <P align=justify>Subsequent to September 30,
        2009, the Company closed a private placement with two purchasers providing
        for the issuance of 266,666 units of the Company at a price of $2.25 per
        unit raising gross proceeds of $600,000. Each unit consists of one share
        of common stock and 1.125 non-transferable share purchase warrant. Each
        whole warrant entitles the holder to purchase one additional share of
        common stock of the Company at a price of $2.25 per share for a period
        of two years. </P></TD>
  </TR>
</TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_36></A>
<P align=center>36</P>
<P align=justify><B>ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL MATTERS </B></P>
<P align=justify>None</P>
<P align=justify><B>ITEM 9A(T). CONTROLS AND PROCEDURES</B></P>
<P align=justify><B><I>Disclosure Controls and Procedures</I></B></P>
<P align=justify>As required by Rule 13a-15 under the Securities Exchange Act of
1934, our management, with the participation of our principal executive officer
and our 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.</P>
<P align=justify>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&#146;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 our principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure. </P>
<P align=justify>Based on its evaluation, our management, with the participation
of our principal executive officer and our 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 material weaknesses described
below. </P>
<P align=justify><B><I>Management&#146;s Annual Report on Internal Control over
Financial Reporting </I></B></P>
<P align=justify>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 our principal financial officer, the effectiveness of our
internal control over financial reporting as of September 30, 2009. </P>
<P align=justify>Based on its evaluation under the framework in Internal
Control&#151;Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission, our management, with the participation
of our principal executive officer and our principal financial officer concluded
that our internal control over financial reporting was not effective as of
September 30, 2009. 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. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_37></A>
<P align=center>37</P>
<P align=justify>This annual report does not include an attestation report of
our independent registered public accounting firm regarding internal control
over financial reporting. Management&#146;s report was not subject to attestation by
our independent registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit our company to provide only
management&#146;s report in this annual report. </P>
<P align=justify><I>Material Weaknesses Identified</I></P>
<P align=justify>Based on our management&#146;s evaluation required by Rule 13a-15 of
the Securities Exchange Act of 1934, certain significant deficiencies in
internal control became evident to management that our management believes
represent material weaknesses, including:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>Insufficient segregation of duties in our finance and
      accounting functions due to limited personnel. During the fiscal year
      ended September 30, 2009, 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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>There is a lack of sufficient supervision and review by
      our management;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(iii) </TD>
    <TD>
      <P align=justify>Insufficient corporate governance policies. Although we
      have a code of ethics which provides broad guidelines for corporate
      governance, our corporate governance activities and processes are not
      always formally documented. Specifically, decisions made by the board to
      be carried out by management should be documented and communicated on a
      timely basis to reduce the likelihood of any misunderstandings regarding
      key decisions affecting our operations and management; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(iv) </TD>
    <TD>
      <P align=justify>Our company&#146;s accounting staff does not have sufficient
      technical accounting knowledge relating to accounting for income taxes and
      complex US GAAP matters. Management corrected any errors prior to the
      release of our company&#146;s September 30, 2009 financial
  statements.</P></TD></TR></TABLE>
<P align=justify><I>Plan for Remediation of Material Weaknesses</I></P>
<P align=justify>We intend to take appropriate and reasonable steps to make the
necessary improvements to remediate these deficiencies. We intend to consider
the results of our remediation efforts and related testing as part of our
year-end 2010 assessment of the effectiveness of our internal control over
financial reporting. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_38></A>
<P align=center>38<BR></P>
<P align=justify>We have implemented certain remediation measures and are in the
process of designing and implementing additional remediation measures for the
material weaknesses described in this annual report. Such remediation activities
include the following: In order to correct the foregoing deficiencies, we have
taken the following remediation measures:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1) </TD>
    <TD>
      <P align=justify>We have committed to the establishment of effective
      internal audit functions, however, due to the scarcity of qualified
      candidates with extensive experience in U.S. GAAP reporting and accounting
      in the region, we were not able to hire sufficient internal audit
      resources. However, we intend to increase our search for qualified
      candidates with assistance from recruiters and through
referrals.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2) </TD>
    <TD>
      <P align=justify>During the year ended September 30, 2009, we elected an
        independent director to serve on our audit committee.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3) </TD>
    <TD>
      <P align=justify>Due to our size and nature, segregation of all
      conflicting duties may not always be possible and may not be economically
      feasible. However, to the extent possible, we intend to implement
      procedures to ensure that the initiation of transactions, the custody of
      assets and the recording of transactions will be performed by separate
      individuals, and intend to ensure the timely filing of our 8-K and 10-K in
      the future.</P></TD></TR></TABLE>
<P align=justify>We believe that the foregoing steps will remediate the
deficiency identified above, and we intend to continue to monitor the
effectiveness of these steps and make any changes that our management deems
appropriate. </P>
<P align=justify><I>Limitations on Effectiveness of Controls</I></P>
<P align=justify>Our principal executive officer and our 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. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_39></A>
<P align=center>39</P>
<P align=justify><B><I>Changes in Internal Control over Financial
Reporting</I></B></P>
<P align=justify>There were no changes in our internal control over financial
reporting during the fourth quarter ended September 30, 2009 that have
materially affected, or are reasonably likely to materially affect our internal
control over financial reporting. </P>
<P align=justify><B>ITEM 9B OTHER INFORMATION</B></P>
<P align=justify>On June 16, 2009, Dr. Herve de Kergrohen was appointed as one
  of our directors in addition to being appointed as our Chief Executive Officer.
</P>
<P align=center><B>PART III</B></P>
<P align=justify><B>ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE</B></P>
<P align=justify><B><I>Directors and Executive Officers</I></B></P>
<P align=justify>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. </P>
<P align=justify>Our directors and executive officers, their age, positions
held, and duration of such, are as follows: </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD align=center style="BORDER-BOTTOM: #000000 1px solid"><BR>
        <B>Name</B>
    </TD>
      <TD width="40%" align=center style="BORDER-BOTTOM: #000000 1px solid"
    ><BR>
        <B>Position Held with Our Company</B> </TD>
      <TD width="5%" align=center style="BORDER-BOTTOM: #000000 1px solid"
    ><BR>
        <B>Age</B> </TD>
      <TD
      width="28%" align=center style="BORDER-BOTTOM: #000000 1px solid"><B>Date First Elected</B> <BR>
        <B>or Appointed</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Dr. Herve de
      Kergrohen </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="40%"
    >Chief Executive Officer and Director </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="5%"
    >53 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="28%">June
      16, 2009 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Harvey Lalach </TD>
    <TD align=left width="40%" >President, Chief Financial
      Officer, Secretary and Director </TD>
    <TD align=center width="5%" >44 </TD>
    <TD align=center width="28%">April 25, 2006 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cameron Durrant
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="40%"
    >Director </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="5%"
    >49 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="28%">December 17, 2007 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Alison Ayers </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="40%"
    >Director </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="5%"
    >57 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="28%">May
      20, 2008 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>David Tousley </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="40%"
    >Director </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="5%"
    >54 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="28%">June
      3, 2008 </TD></TR></TABLE></DIV>
<P align=justify><I>Business Experience</I></P>
<P align=justify>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.</P>
<P align=justify><U>Dr. Herve de Kergrohen</U></P>
<P align=justify>Dr. de Kergrohen has held CEO, chairman or director roles with
more than 12 companies in the United States and Europe. During his tenure as CEO
of Praxim, Dr. de Kergrohen led Praxim beyond research and development to become
an innovative orthopedic provider and a leader in robotic-assisted surgery. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_40></A>
<P align=center>40</P>
<P align=justify>In 2000, Dr. de Kergrohen co-founded Global Biomedical
Partners, the asset management firm of International Biomedicine Holdings, a
$400-million fund based in Basel, Switzerland. Under his guidance International
Biomedicine Holdings became the lead investor in several emerging biotech
companies in the U.S. before they became NASDAQ listed. </P>
<P align=justify>Dr. de Kergrohen&#146;s background includes work as a fund manager
with public equity funds such as DH LifeSciences, which he founded while working
as the head analyst at Darier Hentsch &amp; Cie in Geneva. He also led the
worldwide healthcare team of UBS Asset Management, advising the management of $1
trillion in assets. </P>
<P align=justify>From 1989 to 1995, Dr. de Kergrohen worked in the U.S. pharmaceutical
  industry at Sandoz Pharmaceuticals and GD Searle, holding various positions
  in drug development and marketing. </P>
<P align=justify>Dr. de Kergrohen currently serves as an advisor to various public
  organizations such as Eclosion, a Geneva-based biotech incubator that he helped
  create, the Handicap Agency in Paris and the United Nations Development Program.
  He is the founder of BioData, a biotech conference held annually in Geneva.
</P>
<P align=justify>Dr. de Kergrohen holds a Medical Degree from Universit&#233; Louis
Pasteur in Strasbourg and a MBA from INSEAD (Fontainebleau, France). He has
contributed more than 100 articles to various journals around the world. </P>
<P align=justify><U>Harvey Lalach</U></P>
<P align=justify>For the past 22 years Mr. Lalach has been involved in various
aspects of the securities industry. From 1986 through to 1997 he was involved in
various roles in financial institutions starting at the Vancouver Stock Exchange
and later working in securities related roles for BMO Nesbitt Burns and TD Bank
and for the past 10 years Mr. Lalach has focused on the operation and
administration of numerous start-up US and Canadian public companies serving as
both director and officer in various capacities. Most recently Mr. Lalach served
as President and CEO for Assure Energy, Inc. (OTCBB: ASUR) and Quarry Oil &amp;
Gas Corp. (TSXV: QUC). Throughout his career, Mr. Lalach has gained extensive
experience in the management and governance of listed public companies. </P>
<P align=justify><U>Cameron Durrant</U></P>
<P align=justify>Mr. Durrant is currently Worldwide Vice President, Virology
Global Strategic Marketing for Johnson + Johnson (NYSE: JNJ). Dr. Durrant was
President and CEO of Pediamed Pharmaceuticals, Inc. Dr. Durrant&#146;s background
also includes executive-level positions with Merck &amp; Co. (NYSE: MRK), Glaxo
Smith Kline PLL (NYSE GSK) and Pharmacia Healthcare Ltd. (now Pfizer Inc. (NYSE:
PFE)). Dr. Durrant was a regional winner and national finalist for Ernst &amp;
Young&#146;s Entrepreneur of the Year award in 2005. Dr. Durrant holds a MBA from
Henley Management College at Oxford and a MB and BCh (equivalent to American MD
degree) from the Welsh National School of Medicine in Cardiff, U.K.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_41></A>
<P align=center>41</P>
<P align=justify><U>Alison Ayers</U></P>
<P align=justify>Ms. Ayers is the current Worldwide Commercial Head for Oncology
for Pfizer Inc. (NYSE: PFE). She is a member of the leadership team that
develops Pfizer&#146;s oncology strategic plan and which manages the portfolio,
including asset prioritization, development planning, strategic and investment
decisions including licensing and acquisitions.</P>
<P align=justify>Previously, Ms. Ayers was Commercial Head, Infectious Disease,
Worldwide Marketing for Pfizer, responsible for strategic leadership for the
company&#146;s infectious disease portfolio. Under her leadership, Pfizer&#146;s
infectious disease portfolio exceeded $3 billion in sales in 2005, with two
compounds achieving sales growth of 20-30%.</P>
<P align=justify>Before joining Pfizer Ms. Ayers was Vice President of Portfolio
Management for Pharmacia Healthcare Ltd, where she developed and implemented
strategies to maximize earnings from the company&#146;s complex global $2.5 billion
diversified products portfolio, which is comprised of more than 600 mature,
non-promoted products. In her earlier role as Vice President, Commercial
Development, Oncology for Pharmacia, Ms. Ayers was responsible for providing
commercial leadership for the company&#146;s oncology pipeline, and held a pivotal
role in the acquisition of biotech company Sugen, which delivered Pfizer&#146;s
leading angiogenesis inhibitor, Sutent. Pharmacia was acquired by Pfizer in
2003.</P>
<P align=justify>Ms. Ayers&#146; background also includes senior positions in
business and product planning for numerous bioscience and pharmaceutical
companies, including Merck &amp; Co. (NYSE: MRK), The Health Care Group, U.S.
Bioscience, Inc. (Amex: UBS), Bristol-Myers Squibb Co. (NYSE: BMY) and Lederle
Laboratories. She holds a Master of Science with distinction in biopharmacy and
a Diploma in Business Studies, both from the University of London, UK, as well
as a Bachelor of Science with honors in physiology and biochemistry from the
University of Southampton, UK.</P>
<P align=justify><U>David Tousley</U></P>
<P align=justify>Mr. Tousley has over 25 years of senior-level experience in
biotech, specialty pharmaceuticals and full-phase pharmaceutical companies. He
has held the position of President, COO and CFO at companies including
airPharma, PediaMed Pharmaceuticals, Inc., AVAX Technologies Inc. (AVXT.OB), and
Pasteur, Merieux, Connaught, (known today as Sanofi-Pasteur SA). During his
career, Mr. Tousley has led all aspects of operations, including pharmaceutical
development, in both the private and public company environment. His
accomplishments include the raising over $90 million in debt and equity
financings and he has led key business development activities, including joint
ventures, partnerships, acquisitions and divestitures in the U.S., Europe and
Australia.</P>
<P align=justify>Mr. Tousley currently serves as a director of ImmunoGenetix
Therapeutics, Inc, a biotech company that is developing advanced DNA
immunotherapies for HIV infection. He holds an MBA in accounting from Rutgers
Graduate School of Business and a B.A. in English from Rutgers College, both in
New Jersey. Mr. Tousley belongs to the New Jersey Society of Certified Public
Accountants and the American Institute of Certified Public Accountants.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_42></A>
<P align=center>42</P>
<P align=justify><B><I>Certain Significant Employees</I></B></P>
<P align=justify>Our significant employees, their age, positions held, and
duration of such and a brief description of the background and business
experience for the past five years are as follows:</P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="90%" border=1>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD align=center style="BORDER-BOTTOM: #000000 1px solid"><B>Name</B> </TD>
      <TD width="40%" align=left style="BORDER-BOTTOM: #000000 1px solid"
    ><B>Position Held with Our Company</B> </TD>
      <TD width="5%" align=center style="BORDER-BOTTOM: #000000 1px solid"
    ><B>Age</B> </TD>
      <TD width="30%" align=left style="BORDER-BOTTOM: #000000 1px solid"
    ><B>Date First Appointed</B> </TD>
    </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Alexandre
      Vamvakides </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="40%"
    >Chief Scientific Officer </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="5%"
    >70 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="30%"
    >January 27, 2007 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>George Kalkanis
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="40%"
    >VP Strategic Planning </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="5%"
    >43 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="30%"
    >February 8, 2007 </TD></TR></TABLE></DIV>
<P align=justify><I>Business Experience</I></P>
<P align=justify>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.</P>
<P align=justify><U>Alexandre Vamvakides</U></P>
<P align=justify>Dr. Vamvakides has spent 30 years in research focusing on the
therapeutic/pharmacological areas of nootropes, anti-neurodegenerative
(anti-Alzheimer), antiepileptic, antidepressive, and prototype molecules. During
his career, Dr. Vamvakides has been published over 80 times in highly respected
Medical/Scientific journals. In the past 30 years, Dr. Vamvakides has pioneered
his expertise at the Institut National de la Sante et de la Recherche Medicale
(INSERM) in Paris France, at the University of Athens (Greece), Ciba-Geigy
(Basel, Switzerland) and Sanofi (Montpellier, France), and many other research
laboratories throughout Europe for the discovery and development of new concepts
in the therapeutic areas of Central Nervous System, oncology and
anti-inflammatory diseases. Dr. Vamvakides holds a M.Sc. in Chemistry from
Bordeaux University, France, a M.Sc. in Pharmacology, a M.Sc. in Biochemistry
and a Ph.D. in Molecular Pharmacology all from the University of Paris Medical
School. </P>
<P align=justify><U>George Kalkanis</U></P>
<P align=justify>Mr. Kalkanis has over 15 years experience in the area of
Business Analysis. His expertise is in analyzing information from various
sources and developing intelligent models that provide assessments in order to
support managerial business decision making. In the Pharmaceutical sector Dr.
Kalkanis has provided Business Forecasting and Marketing analysis solutions to
Pharmaceutical Companies in Greece, such as Novartis Inc. (NYSE: NVS) and
Boehringer Ingelheim GmbH. Dr. Kalkanis holds Masters and Doctorate Degrees from
the University of Manchester (UK) in the areas of Information engineering,
Computation and Applied Statistics. </P>
<P align=justify><B><I>Involvement in Certain Legal Proceedings</I></B></P>
<P align=justify>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. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_43></A>
<P align=center>43 </P>
<P align=justify>No director or executive officer has been involved in any of
the following events during the past five years:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>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; or</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE>
<P align=justify><B><I>Compliance with Section 16(a) of the Securities Exchange
Act of 1934 </I></B></P>
<P align=justify>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. </P>
<P align=justify>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, 2009, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><BR><BR><BR><B>Name</B> </TD>
    <TD align=center width="25%"><BR><BR><B>Number of Late</B>
      <BR><B>Reports</B> </TD>
    <TD align=center width="25%"><B>Number of</B> <BR><B>Transactions Not</B>
      <BR><B>Reported on a Timely</B> <BR><B>Basis</B> </TD>
    <TD align=center width="25%"><BR><B>Failure to File</B>
      <BR><B>Requested</B> <BR><B>Forms</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cameron Durrant
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="25%">1
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="25%">2
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="25%">N/A
    </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Athanasios
      Skarpelos </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="25%">1
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="25%">3
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="25%">N/A
    </TD></TR></TABLE></DIV>
<P align=justify><B><I>Code of Ethics</I></B></P>
<P align=justify>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 undertake herewith to
provide by mail to any person without charge, upon request, a copy of such code
of ethics if we receive the request in writing by mail to Anavex Life Sciences
Corp., 27 Marathonos Avenue, Athens, 15351, Greece, Attention: President. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_44></A>
<P align=center>44</P>
<P align=justify><B><I>Audit Committee and Audit Committee Financial Expert
</I></B></P>
<P align=justify>We have an audit committee, comprised of two directors, Harvey
Lalach and David Tousley. During the fiscal year ended September 30, 2009, our
audit committee did not hold a meeting. 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&#146;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 the responsibilities of the independent registered
public accounting firm relating to the audit or review of financial statements.
Currently David Tousley is considered as an &#147;audit committee financial expert&#148;
as defined in Item 407(d)(5)(ii) of Regulation S-K, and is Chairman of the audit
committee. </P>
<P align=justify><B><I>Nominating and Compensation Committees</I></B></P>
<P align=justify>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. </P>
<P align=justify>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 nomination 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. The process of
identifying and evaluating nominees for director typically begins with our board
of directors soliciting professional firms with whom we have an existing
business relationship, such as law firms, accounting firms or financial advisory
firms, for suitable candidates to serve as directors. It is followed by our
board of directors&#146; review of the candidates&#146; resumes and interview of
candidates. Based on the information gathered, our board of directors then makes
a decision on whether to recommend the candidates as nominees for director. We
do not pay any fee to any third party or parties to identify or evaluate or
assist in identifying or evaluating potential nominee. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_45></A>
<P align=center>45</P>
<P align=justify><B><I>Director Independence</I></B></P>
<P align=justify>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.</P>
<P align=justify>We determined that Harvey Lalach, Herve de Kergrohen and
Cameron Durrant are not independent as that term is defined by NASDAQ 5605(a)(2)
because Mr. Lalach is our President and Chief Financial Officer, Mr. de
Kergrohen is our Chief Executive Officer and Mr. Durrant has received certain
considerations for providing certain management and consulting services. We
determined that Alison Ayers and David Tousley are independent as that term is
defined by NASDAQ Rule 5605(a)(2). </P>
<P align=justify><B>ITEM 11. EXECUTIVE COMPENSATION</B></P>
<P align=justify><B><I>Summary Compensation </I></B></P>
<P align=justify>The particulars of compensation paid to the following
persons:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>our principal executive officers;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>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, 2009 who had total compensation exceeding
      $100,000; and</P></TD></TR></TABLE>
<P align=justify>up to two additional individuals for whom disclosure would have
been provided under (b) but for the fact that the individual was not serving as
our executive officer at the end of the most recently completed financial year,
who we will collectively refer to as the named executive officers, for our
fiscal years ended September 30, 2009 and 2008, are set out in the following
summary compensation table:</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_46></A>
<P align=center>46 </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=bottom bgcolor="#EEEEEE">
      <TD colspan="10" align=center style="BORDER-BOTTOM: #000000 1px solid"
      >&nbsp;&nbsp;<B>SUMMARY COMPENSATION TABLE</B>&nbsp;&nbsp; </TD>
    </TR>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD align=center
      ><BR> <BR> <BR> <B>Name</B> <BR> <B>and Principal</B> <BR> <B>Position</B>
        <BR></TD>
      <TD width="6%" align=center
    ><BR> <BR> <BR> <BR> <BR> <B>Year</B> <BR></TD>
      <TD
      width="9%" align=center><BR> <BR>
        <BR> <BR> <B>Salary </B><BR> <B>($)</B> <BR></TD>
      <TD
      width="9%" align=center><BR> <BR>
        <BR> <BR> <STRONG>Bonus </STRONG><BR> <B>($)</B> <BR></TD>
      <TD
      width="9%" align=center><BR> <BR>
        <BR> <B>Stock</B> <BR> <STRONG>Awards </STRONG><BR> <B>($)</B> <BR></TD>
      <TD
      width="9%" align=center><BR> <BR>
        <BR> <B>Option</B> <BR> <STRONG>Awards </STRONG><BR> <B>($)</B> <BR></TD>
      <TD
      width="9%" align=center><B>Non-</B> <BR> <B>Equity</B> <BR> <B>Incentive</B> <BR> <B>Plan</B> <BR> <STRONG>Compensa-</STRONG>
        <BR> <B>tion</B> <BR> <B>($)</B> </TD>
      <TD
      width="9%" align=center><BR> <B>Nonqualified</B>
        <BR> <B>Deferred</B> <BR> <B>Compensation </B><BR> <B>Earnings</B> <BR>
        <B>($)</B> <BR></TD>
      <TD
      width="9%" align=center><BR> <B>All</B>
        <BR> <B>Other</B> <BR> <STRONG>Compensa-</STRONG> <BR> <B>tion</B> <BR>
        <B>($)</B> <BR></TD>
      <TD
      width="9%" align=center><BR> <BR>
        <BR> <BR> <B>Total</B> <BR> <B>($)</B> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Dr. Herve de <BR>
        Kergrohen<SUP>(1)</SUP> <BR> <I>Chief Executive</I> <BR> <I>Officer</I>
      </TD>
      <TD align=center width="6%"
    >2009 <BR>
        2008 <BR> <BR></TD>
      <TD align=right
      width="9%">$67,452 <BR>
        N/A <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        N/A <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        N/A <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        N/A <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        N/A <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        N/A <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        N/A <BR> <BR></TD>
      <TD align=right
      width="9%">$67,452 <BR>
        N/A <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD
    align=left >Harvey Lalach<SUP>(2)</SUP> <BR> <I>President, CFO</I> <BR> <I>and
        Secretary</I> </TD>
      <TD
    align=center width="6%" >2009 <BR>
        2008 <BR></TD>
      <TD
    align=right width="9%">$150,000 <BR>
        $111,500 <BR></TD>
      <TD
    align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD
    align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD
    align=right width="9%">$113,785 <BR>
        $264,694 <BR></TD>
      <TD
    align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD
    align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD
    align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD
    align=right width="9%">$263,785 <BR>
        $376,194 <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left
      >Alexandre <BR>
        Vamvakides<SUP>(3)</SUP> <BR> <I>Chief Scientific</I> <BR> <I>Officer</I>
      </TD>
      <TD align=center width="6%"
    >2009 <BR>
        2008 <BR> <BR></TD>
      <TD align=right
      width="9%">$215,565 <BR>
        $113,382 <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR> <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR> <BR></TD>
      <TD align=right
      width="9%">$215,565 <BR>
        $113,382 <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left
      >George Kalkanis<SUP>(4)</SUP> <BR> <I>VP Strategic</I> <BR> <I>Planning</I>
      </TD>
      <TD align=center width="6%"
    >2009 <BR>
        2008 <BR></TD>
      <TD align=right
      width="9%">$28,000 <BR>
        $90,000 <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD align=right width="9%">Nil <BR>
        Nil <BR></TD>
      <TD align=right
      width="9%">$28,000 <BR>
        $90,000 <BR></TD>
    </TR>
  </TABLE>
</DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Dr. de Kergrohen was appointed as our Chief Executive
      Officer and one of our directors on June 16, 2009.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>Mr. Lalach was appointed President, CFO and Secretary on
        April 25, 2006. The fair value of the options granted to Harvey Lalach
        during the fiscal year ended September 30, 2008 was $378,675 of which
        $264,694 was expensed as stock-based compensation during the fiscal year
        ended September 30, 2008 and $113,785 was expensed as stock-based compensation
        during the year ended September 30, 2009.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>Dr. Vamvakides was appointed Chief Scientific Officer on
      January 31, 2007.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(4) </TD>
    <TD>
      <P align=justify>Mr. Kalkanis was appointed VP Strategic Planning on
      February 8, 2007. Our contract with Mr. Kalkanis expired on January 31,
      2009, but he still makes himself available to assist our
company.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(5) </TD>
    <TD>
      <P align=justify>Details of our stock-based compensation arrangements, including
        the assumptions used in calculating the fair value of our share based
        awards, are disclosed in footnote 8 to our financial statements.</P></TD></TR></TABLE>
<P align=justify><B><I>Employment or Consulting Agreements </I></B></P>
<P align=justify><I>Dr. Herve de Kergrohen </I></P>
<P align=justify>On June 16, 2009, we appointed Dr. Herve de Kergrohen as our
Chief Executive Officer pursuant to a consulting agreement effective June 12,
2009. In return for acting as Chief Executive Officer, we agreed to pay Dr. de
Kergrohen the following consideration: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>pay a consulting fee at the rate CHF 35,000 per
    month;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>pay an incentive bonus of CHF 100,000 on the annual
      anniversary of the term of the agreement;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>grant 700,000 stock options exercisable at $2.25 per
      option until June 12, 2014; 233,334 options vest on June 12, 2010; 233,333
      options vest when one or more compounds enter Phase 2 trial; and 233,333
      vest when one or more compounds enter Phase 3
trial;</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_47></A>
<P align=center>47</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>pay a 4% finders bonus on up to the first $100 million
      and a 2% finders bonus on any amounts that exceed $100 million of any
      funding (joint-venture, licensing, and/or drug development funding) or
      trade sale secured from non-investment banking enterprises as a direct
      result of introduction and closing by Dr. de Kergrohen; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>reimburse any reasonable business expenses incurred in
      performing duties and promoting the business of our company, including,
      but not limited to, travel and lodging expenses, following presentation of
      documentation in accordance with our business expense reimbursement
      policies.</P></TD></TR></TABLE>
<P align=justify>The agreement is for a period of two years and either party may
terminate the agreement by providing the other party with 60 days written
notice. </P>
<P align=justify><I>Alexandre Vamvakides</I></P>
<P align=justify>We have a collaboration agreement with Alexandre Vamvakides
dated February 1, 2007 to provide the services of a Chief Scientific Officer and
to acquire property for the development of a new drug compound including three
patents and one patent application. Pursuant to the agreement, we agreed to the
following: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>invest a minimum of $200,000 every fiscal year into
      scientific research;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>hire the Chief Scientific Officer as a consultant to
      carry out our research and development program at $6,000 per
  month;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>pay to the director 6% of the net income earned from the
      exploitation of the patent and patent application; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>disburse a one-time payment to the director an amount of
      $72,000 before December 31, 2007 as consideration for the transfer of the
      patents and the patent application, which has been
paid.</P></TD></TR></TABLE>
<P align=justify>The agreement is in force until terminated by either Mr.
Vamvakides or our company. During the fiscal year ended September 30, 2008, we
agreed to increase the compensation of Mr. Vamvakides to 7,000 Euros per month.
</P>
<P align=justify>On October 19, 2009 we signed a stock option agreement with
Alexandre Vamvakides which amended the June 11, 2009 stock option agreement to
include vesting provisions. All other terms of the June 11, 2009 stock option
agreement remain unchanged. Pursuant to the stock option agreement, we granted
to Mr. Vamvakides options to purchase 500,000 shares of our common stock at an
exercise price of $2.50 per share until June 11, 2014. The options vest as to
100,000 per compound entered into Phase II trial. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_48></A>
<P align=center>48</P>
<P align=justify><I>Cameron Durrant</I></P>
<P align=justify>On May 20, 2008, we entered into a consulting agreement with
Cameron Durrant to provide certain management and consulting services to our
company. Consideration for his services included:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>the issuance of 200,000 shares of common stock to be paid
      installments of 25,000 shares every quarter;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>the issuance of 400,000 stock options exercisable at
      $5.25 per share for a period of three years, subject to vesting
      provisions; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>a payment of a finders fee for any financing our company
      receives in the amount of 4% on the first $100,000,000 and 2% on the
      balance.</P></TD></TR></TABLE>
<P align=justify>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: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>200,000 options upon the execution of the amended
      consulting agreement;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>50,000 options on August 14, 2009</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>50,000 options on November 14, 2009</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>50,000 on February 14, 2010</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>50,000 options on May 14, 2010</P></TD></TR></TABLE>
<P align=justify>Mr. 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. </P>
<P align=justify>The contract has a two year term that started May 20, 2008 and
expires on May 20, 2010. </P>
<P align=justify><I>Harvey Lalach</I></P>
<P align=justify>We have 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 has been extend 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. </P>
<P align=justify><B><I>Outstanding Equity Awards at Fiscal Year-End </I></B></P>
<P align=justify>The following table sets forth for each named executive officer
and director certain information concerning the outstanding equity awards as of
September 30, 2009.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_49></A>
<P align=center>49 </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD align=center>&nbsp; </TD>
      <TD colspan="5"
    align=center> <B>Option Awards</B> </TD>
      <TD colspan="4"
    align=center> <B>Stock Awards</B> </TD>
    </TR>
    <TR vAlign=top bgcolor="#EEEEEE">
      <TD
      align=center><BR> <BR> <BR> <BR> <BR>
        <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <B>Name</B> </TD>
      <TD
      width="10%" align=center><BR> <BR>
        <BR> <BR> <BR> <BR> <BR> <BR> <BR> <B>Number of</B> <BR> <B>Securities</B>
        <BR> <B>Underlying</B> <BR> <B>Unexercised </B><BR> <B>Options</B> <BR>
        <B>Exercisable </B></TD>
      <TD
      width="10%" align=center><BR> <BR>
        <BR> <BR> <BR> <BR> <BR> <BR> <BR> <B>Number of</B> <BR> <B>Securities</B>
        <BR> <STRONG>Underlying</STRONG> <BR> <STRONG>Unexercised </STRONG><BR>
        <B>Options</B> <BR> <STRONG>Unexercisable</STRONG> </TD>
      <TD
      width="10%" align=center><BR> <BR>
        <BR> <BR> <BR> <B>Equity</B> <BR> <B>Incentive</B> <BR> <B>Plan</B> <BR>
        <B>Awards:</B> <BR> <B>Number of</B> <BR> <B>Securities</B> <BR> <STRONG>Underlying</STRONG>
        <BR> <STRONG>Unexercised </STRONG><BR> <B>Unearned </B><BR> <STRONG>Options</STRONG>
      </TD>
      <TD
      width="10%" align=center><BR> <BR>
        <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <STRONG>Option</STRONG>
        <BR> <STRONG>Exercise </STRONG><BR> <B>Price</B> </TD>
      <TD
      width="10%" align=center><BR> <BR>
        <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <BR> <B>Option</B> <BR> <STRONG>Expiration</STRONG>
        <BR> <B>Date</B> </TD>
      <TD
      width="10%" align=center><BR> <BR>
        <BR> <BR> <BR> <BR> <BR> <BR> <B>Number</B> <BR> <B>of Shares</B> <BR>
        <B>or Units</B> <BR> <B>of Stock</B> <BR> <B>that</B> <BR> <STRONG>Have
        Not</STRONG> <BR> <B>Vested</B> </TD>
      <TD
      width="10%" align=center><BR> <BR>
        <BR> <BR> <BR> <BR> <B>Market </B><BR> <B>Value</B> <BR> <B>of</B> <BR>
        <B>Shares or</B> <BR> <B>Units of</B> <BR> <B>Stock</B> <BR> <B>that</B>
        <BR> <STRONG>Have Not</STRONG> <BR> <B>Vested</B> </TD>
      <TD
      width="10%" align=center><BR> <BR>
        <B>Equity</B> <BR> <B>Incentive</B> <BR> <B>Plan</B> <BR> <B>Awards :
        </B><BR> <STRONG>Number of</STRONG> <BR> <B>Unearned</B> <BR> <B>Shares,</B>
        <BR> <B>Units or</B> <BR> <B>Other</B> <BR> <B>Rights</B> <BR> <B>that</B>
        <BR> <STRONG>Have Not</STRONG> <BR> <B>Vested</B> </TD>
      <TD width="10%"
    align=center><B>Equity</B> <BR> <B>Incentive</B> <BR> <B>Plan</B> <BR> <B>Awards :</B> <BR> <B>Market
        or</B> <BR> <STRONG>Payout</STRONG> <BR> <STRONG>Value of</STRONG> <BR>
        <STRONG>Unearned </STRONG><BR> <B>Shares,</B> <BR> <B>Units or</B> <BR>
        <B>Other</B> <BR> <B>Rights</B> <BR> <B>that</B> <BR> <STRONG>Have Not</STRONG>
        <BR> <B>Vested</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>Dr. Herve de <BR>
        Kergrohen </TD>
      <TD align=right width="10%">Nil </TD>
      <TD align=right width="10%">Nil </TD>
      <TD align=right
      width="10%">700,000 </TD>
      <TD align=right width="10%">$2.50 </TD>
      <TD align=right width="10%">June 12, 2014 </TD>
      <TD align=right width="10%">Nil </TD>
      <TD align=right width="10%">Nil </TD>
      <TD align=right width="10%">Nil </TD>
      <TD align=right width="10%">Nil </TD>
    </TR>
    <TR vAlign=top>
      <TD
    align=left>Harvey <BR>
        Lalach </TD>
      <TD align=right width="10%">150,000 <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">150,000 <BR></TD>
      <TD align=right width="10%">$5.00 <BR></TD>
      <TD align=right width="10%">June 3, 2013 <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>George <BR>
        Kalkanis </TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right
      width="10%">150,000 <BR></TD>
      <TD align=right width="10%">$3.00 <BR></TD>
      <TD align=right width="10%">Feb 8, 2017 <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD
    align=left>Alison <BR>
        Ayers </TD>
      <TD
    align=right width="10%">150,000 <BR></TD>
      <TD
    align=right width="10%">Nil <BR></TD>
      <TD
    align=right width="10%">150,000 <BR></TD>
      <TD
    align=right width="10%">$5.00 <BR></TD>
      <TD
    align=right width="10%">June 3, 2013 <BR></TD>
      <TD
    align=right width="10%">Nil <BR></TD>
      <TD
    align=right width="10%">Nil <BR></TD>
      <TD
    align=right width="10%">Nil <BR></TD>
      <TD
    align=right width="10%">Nil <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD
    align=left>Cameron <BR>
        Durrant <BR></TD>
      <TD
    align=right width="10%">400,000 <BR>
        250,000 <BR>
        150,000 </TD>
      <TD
    align=right width="10%">Nil <BR>
        Nil <BR>
        Nil </TD>
      <TD
    align=right width="10%">Nil <BR>
        150,000 <BR>
        Nil </TD>
      <TD
    align=right width="10%">$5.25 <BR>
        $2.50 <BR>
        $3.85 </TD>
      <TD
    align=right width="10%">May 20, 2011 <BR>
        May 12, 2012 <BR>
        Dec 12, 2012 </TD>
      <TD align=right width="10%">Nil <BR>
        <BR></TD>
      <TD align=right width="10%">Nil <BR>
        <BR></TD>
      <TD align=right width="10%">Nil <BR>
        <BR></TD>
      <TD align=right width="10%">Nil <BR>
        <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>David <BR>
        Tousley </TD>
      <TD align=right
      width="10%">150,000 <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">$5.00 <BR></TD>
      <TD align=right width="10%">June 3, 2013 <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD
    align=left>Alexandre <BR>
        Vamvakides </TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">500,000 <BR></TD>
      <TD align=right width="10%">$2.50 <BR></TD>
      <TD align=right width="10%">June11, 2014 <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
      <TD align=right width="10%">Nil <BR></TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>We have not adopted any other equity compensation plan other
than our 2007 Stock Option Plan.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_50></A>
<P align=center>50</P>
<P align=justify><B><I>Compensation of Directors</I></B></P>
<P align=justify>The table below shows the compensation of our directors who
were not our named executive officers for the fiscal years ended September 30,
2009 and 2008:</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=center><BR><BR><BR><BR><B>Name</B> </TD>
    <TD align=center width="7%" ><BR><BR><B>Year</B> <BR><BR></TD>
    <TD align=center width="14%" ><BR><BR><B>Fees Earned or</B>
      <BR><B>Paid in Cash</B> <BR><B>($)</B> </TD>
    <TD align=center width="11%"><BR><BR><B>Stock</B> <BR><B>Awards</B>
      <BR><B>($)</B> </TD>
    <TD align=center width="11%"><BR><BR><B>Option</B> <BR><B>Awards</B>
      <BR><B>($)</B> </TD>
    <TD align=center width="11%"><BR><B>Non-Equity</B> <BR><B>Incentive
      Plan</B> <BR><B>Compensation</B> <BR><B>($)</B> </TD>
    <TD align=center width="11%"><B>Nonqualified</B> <BR><B>Deferred</B>
      <BR><B>Compensation</B> <BR><B>Earnings</B> <BR><B>($)</B> </TD>
    <TD align=center width="11%"><BR><BR><B>All other</B>
      <BR><B>Compensation</B> <BR><B>($)</B> </TD>
    <TD align=center width="11%"><BR><BR><BR><B>Total</B> <BR><B>($)</B>
</TD></TR>
  <TR vAlign=top>
    <TD align=left>Cameron <BR>Durrant <SUP>(1)</SUP> </TD>
    <TD align=left width="7%" >2009 <BR>2008 </TD>
    <TD align=left width="14%" >Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">$556,177 <BR>$256,954 </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">$556,177 <BR>$256,954 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Alison <BR>Ayers <SUP>(2)</SUP> </TD>
    <TD align=left width="7%" >2009 <BR>2008 </TD>
    <TD align=left width="14%" >Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">$113,785 <BR>$264,694 </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">$120,100 <BR>$264,694 </TD></TR>
  <TR vAlign=top>
    <TD align=left>David <BR>Tousley <SUP>(3)</SUP> </TD>
    <TD align=left width="7%" >2009 <BR>2008 </TD>
    <TD align=left width="14%" >Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">$113,785 <BR>$264,694 </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">$120,100 <BR>$264,694 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Panos <BR>Kontzalis <SUP>(4)</SUP> </TD>
    <TD align=left width="7%" >2009 <BR>2008 </TD>
    <TD align=left width="14%" >Nil <BR>$167,000 </TD>
    <TD align=left width="11%">Nil <BR>$340,600 </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>$539,600 </TD></TR>
  <TR vAlign=top>
    <TD align=left>Angela <BR>Vernadaki <SUP>(5)</SUP> </TD>
    <TD align=left width="7%" >2009 <BR>2008 </TD>
    <TD align=left width="14%" >Nil <BR>$43,080 </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>Nil </TD>
    <TD align=left width="11%">Nil <BR>$43,080 </TD></TR></TABLE></DIV><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Cameron Durrant was granted options during the year ended
      September 30, 2009 having a fair value of $525,500 of which $503,021 was
      expensed as stock based compensation during the year and was granted
      options during the year ended September 30, 2008 having a fair value of
      $309,910 of which $52,956 was expensed as stock based compensation during
      the year ended September 30, 2009 and $256,954 was expensed as stock based
      compensation during the year ended September 30, 2008.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>Alison Ayers was granted options during the year ended
      September 30, 2008 having a fair value of $378,479 of which $113,785 was
      expensed as stock based compensation during the year ended September 30,
      2009 and $264,694 was expensed as stock based compensation during the year
      ended September 30, 2008.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>David Tousley was granted options during the year ended
        September 30, 2008 having a fair value of $378,479 of which $113,785 was
        expensed as stock based compensation during the year ended September 30,
        2009 and $264,694 was expensed as stock based compensation during the
        year ended September 30, 2008.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(4) </TD>
    <TD>
      <P align=justify>Dr. Kontzalis resigned from our company on May 20,
      2008.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(5) </TD>
    <TD>
      <P align=justify>Ms. Vernadaki resigned from our company on February 29,
      2008.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(6) </TD>
    <TD>
      <P align=justify>Details of our stock-based compensation arrangements, including
        the assumptions used in calculating the fair value of our share based
        awards, are disclosed in footnote 8 to our financial statements.</P></TD></TR></TABLE>
<P align=justify>We reimburse our directors for expenses incurred in connection
with attending board meetings. We have not paid any director&#146;s fees or other
cash compensation for services rendered as a director since our inception to
September 30, 2009. </P>
<P align=justify>During the fiscal year ended September 30, 2009, there were no
standard or other arrangements pursuant to which any of our directors were
compensated for services provided in their capacity as directors. </P>
<P align=justify>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. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_51></A>
<P align=center>51
</P>
<P align=justify><B><I>Retirement or Similar Benefit Plans</I></B></P>
<P align=justify>There are no arrangements or plans in which we provide
retirement or similar benefits for our directors or executive officers.</P>
<P align=justify><B><I>Resignation, Retirement, Other Termination, or Change in
Control Arrangements</I></B></P>
<P align=justify>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&#146; or executive officers&#146;
responsibilities following a change in control.</P>
<P align=justify><B>ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS </B></P>
<P align=justify>The following table sets forth, as of December 22, 2009,
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, by each of our current directors and executive officers. Each
person has sole voting and investment power with respect to the shares of common
stock, except as otherwise indicated. Beneficial ownership consists of a direct
interest in the shares of common stock, except as otherwise indicated. </P>
<P align=justify><B><I>Security ownership of certain beneficial
owners</I></B></P>
<P align=justify>In the following tables, we have determined the number and
percentage of shares beneficially owned in accordance with Rule 13d-3 of the
<I>Securities Exchange Act of 1934</I> based on information provided to us by
our controlling stockholder, executive officers and directors, and this
information does not necessarily indicate beneficial ownership for any other
purpose. In determining the number of shares of our common stock beneficially
owned by a person and the percentage ownership of that person, we include any
shares as to which the person has sole or shared voting power or investment
power, as well as any shares subject to warrants or options held by that person
that are currently exercisable or exercisable within 60 days. </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="90%" border=1>

  <TR vAlign=top>
    <TD align=center><BR><B>Title of class</B> </TD>
    <TD align=center width="30%"><B>Name and address of</B> <BR><B>beneficial
      owner</B> </TD>
    <TD align=center width="30%"><B>Amount and nature of</B> <BR><B>beneficial
      ownership</B> </TD>
    <TD align=center width="19%"><B>Percent of</B> <BR><B>class
      </B><B><SUP>1</SUP></B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Common Stock <BR><BR><BR></TD>
    <TD align=left width="30%">Athanasios Skarpelos <BR>2, Place du Port
      <BR>Geneva, Switzerland <BR>CH 1204 </TD>
    <TD align=center width="30%">6,725,832 <BR><BR><BR></TD>
    <TD align=center width="19%">32.01%
<BR><BR><BR></TD></TR></TABLE></DIV><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_52></A>
<P align=center>52 </P>
<P align=justify><B><I>Security Ownership of Management</I></B></P>
<DIV align=center>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="90%" border=1>
    <TR vAlign=top>
      <TD align=center><BR> <B>Title of class</B> </TD>
      <TD align=center width="30%"><B>Name and address of</B> <BR> <B>beneficial
        owner</B> </TD>
      <TD colspan="2" align=center ><B>Amount and nature of</B> <BR> <B>beneficial
        ownership</B> <BR></TD>
      <TD align=center width="20%"><B>Percent of</B> <BR> <B>class </B><B><SUP>1</SUP></B>
      </TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>Common Stock <BR> <BR> <BR> <BR></TD>
      <TD align=left width="30%"><B>Dr. Herve de Kergrohen</B> <BR>
        22 Chemin Du Nantet <BR>
        Collonge-Bellerive CH 1245 <BR>
        Switzerland <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    >Nil <BR> <BR> <BR> <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" ><BR> <BR> <BR> <BR></TD>
      <TD align=center width="20%">Nil <BR> <BR> <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>Common Stock <BR> <BR> <BR> <BR></TD>
      <TD align=left width="30%"><B>Harvey Lalach</B> <BR>
        4837 Canyon Ridge Crescent <BR>
        Kelowna, British Columbia <BR>
        Canada <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    >750,000 <SUP>2</SUP> <BR> <BR> <BR> <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" >Direct <BR> <BR> <BR> <BR></TD>
      <TD align=center width="20%">3.45% <BR> <BR> <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>Common Stock <BR> <BR></TD>
      <TD align=left width="30%"><B>Alexandre Vamvakides</B> <BR>
        3, Cite De L&#146;alma <BR>
        Paris, France </TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    >Nil <BR> <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" ><BR> <BR></TD>
      <TD align=center width="20%">Nil <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>Common Stock <BR> <BR></TD>
      <TD align=left width="30%"><B>George Kalkanis</B> <BR>
        20 Efklodou Street <BR>
        Athens, Greece 10442 </TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    >910,000 <BR> <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" >Direct <BR> <BR></TD>
      <TD align=center width="20%">4.15% <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>Common Stock <BR> <BR></TD>
      <TD align=left width="30%"><B>Cameron Durrant</B> <BR>
        #90 Fairmount Road West <BR>
        Califon, NJ 07830-3330 </TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    >850,000 <SUP>3</SUP> <BR> <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" >Direct <BR> <BR></TD>
      <TD align=center width="20%">3.89% <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>Common Stock <BR> <BR></TD>
      <TD align=left width="30%"><B>Alison Ayers</B> <BR>
        27 O&#146;Connor Circle <BR>
        West Orange, NJ 07052 </TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    >150,000 <SUP>4</SUP> <BR> <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" >Direct <BR> <BR></TD>
      <TD align=center width="20%">0.71% <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>Common Stock <BR> <BR></TD>
      <TD align=left width="30%"><B>David Tousley</B> <BR>
        14610 Pawnee Lane <BR>
        Leawood, KS 66224 </TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    >150,000 <SUP>5</SUP> <BR> <BR></TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" >Direct <BR> <BR></TD>
      <TD align=center width="20%">0.71% <BR> <BR></TD>
    </TR>
    <TR vAlign=top>
      <TD align=center>&nbsp;&nbsp;</TD>
      <TD align=left width="30%"><B>Directors &amp; Executive</B> <B>Officers
        as a group (7</B> <B>persons)</B> </TD>
      <TD style="BORDER-RIGHT: #000000 0px solid" align=right width="15%"
    ><B>2,810,000</B> </TD>
      <TD style="BORDER-RIGHT: #000000 0px solid; BORDER-LEFT: #000000 0px solid"
    align=right width="15%" >&nbsp;</TD>
      <TD align=center width="20%">11.80% </TD>
    </TR>
  </TABLE>
</DIV>
<P style="MARGIN-LEFT: 5%" align=justify><SUP>1</SUP> Percentage of ownership is
based on 21,013,427 shares of our common stock issued and outstanding as of
December 22, 2009. 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.<BR><SUP>2 </SUP>Includes 600,000
shares of common stock and 150,000 stock options exercisable within 60 days.
<BR><SUP>3</SUP>Includes 850,000 stock options exercisable within 60
days.<BR><SUP>4 </SUP>Includes 150,000 stock options exercisable within 60 days.
<BR><SUP>5</SUP>Includes 150,000 stock options exercisable within 60 days. </P>
<P align=justify><B><I>Changes in Control</I></B></P>
<P align=justify>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.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_53></A>
<P align=center>53</P>
<P align=justify><B>ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE </B></P>
<P align=justify><B><I>Transactions with related persons</I></B></P>
<P align=justify>Other than as disclosed below and elsewhere, there has been no
transaction, since October 1, 2007, 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 director or indirect material interest. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>any director or executive officer of our
  company;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>any beneficial owner of shares carrying more than 5% of
      the voting rights attached to our outstanding shares of common stock;
      and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(iii) </TD>
    <TD>
      <P align=justify>any member of the immediate family (including spouse,
      parents, children, siblings and in-laws) of any of the foregoing
      persons.</P></TD></TR></TABLE>
<P align=justify>On May 15, 2008, we terminated the services of Panos Kontzalis,
our Chief Executive Officer and agreed to a severance package consisting of the
issuance of 65,000 shares of our common stock. In addition, we issued a
promissory note payable to him in the amount of $200,000. This promissory note
is without interest and had specified repayment terms. We repaid $100,000 in
accordance with the repayment terms. We are in default of the payment terms for
the entire $100,000 balance owing. </P>
<P align=justify><B><I>Compensation of Executive Officers and Directors</I></B>
</P>
<P align=justify>For information regarding compensation of our executive
officers and directors, please see &#147;Item 11. Executive Compensation.&#148; </P>
<P align=justify><B>ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES </B></P>
<P align=justify><B><I>Fees Paid to Our Independent Registered Public Accounting
Firm </I></B></P>
<P align=justify>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, 2009 and 2008: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee><B>Fees</B> </TD>
    <TD align=left width="1%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#eeeeee><B>2009</B> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#eeeeee>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#eeeeee><B>2008</B> </TD>
    <TD align=left width="2%"  bgColor=#eeeeee>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Audit fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>80,838 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>58,511 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Audit related fees </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">Nil </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">Nil </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Tax fees </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>3,850 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>Nil </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;All other fees </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">Nil </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">Nil </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Total Fees</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>84,688</B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><B>$</B></TD>
    <TD align=right width="12%" bgColor=#e6efff><B>58,511</B> </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_54></A>
<P align=center>54 </P>
<P align=justify><B><I>Audit Fees</I></B><I>.</I> 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 Dunwoody LLP for
the fiscal years ended September 30, 2009 and 2008, in connection with statutory
and regulatory filings or engagements.</P>
<P align=justify><B><I>Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Registered Public Accounting Firm</I></B><B><I><FONT
color=#808080> </FONT></I></B></P>
<P align=justify>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. </P>
<P align=justify>Our audit committee has considered the nature and amount of
fees billed by BDO Dunwoody LLP and believes that the provision of services for
activities unrelated to the audit was compatible with maintaining BDO Dunwoody
LLP&#146;s independence. </P>
<P align=center><B>PART IV </B></P>
<P align=justify><B>ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES </B></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><B>Exhibit</B> <BR><B>Number</B> </TD>
    <TD align=left width="90%" >
      <P align=justify><BR><B>Description</B> </P></TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(3)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    >
      <P align=justify><B>Articles of Incorporation and Bylaws</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>3.1 </TD>
    <TD align=left width="90%" >
      <P align=justify>Articles of Incorporation (incorporated by reference to
      an exhibit to our Registration Statement on Form SB-2 filed on January 13,
      2005) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>3.2 </TD>
    <TD align=left width="90%" >
      <P align=justify>Bylaws (incorporated by reference to an exhibit to our
      Registration Statement on Form SB-2 filed on January 13, 2005) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>3.3 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(4)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    >
      <P align=justify><B>Instruments defining rights of security holders,
      including indentures</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>4.1 </TD>
    <TD align=left width="90%" >
      <P align=justify>Specimen Stock Certificate (incorporated by reference to
      an exhibit to our Registration Statement on Form SB-2 filed on January 13,
      2005) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>4.2 </TD>
    <TD align=left width="90%" >
      <P align=justify>Form of Convertible Loan Agreement (incorporated by
      reference to an exhibit to our Form 8-K filed on April 3, 2009) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>4.3 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>4.4 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(10)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    >
      <P align=justify><B>Material Contracts</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.1 </TD>
    <TD align=left width="90%" >
      <P align=justify>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)
      </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.2 </TD>
    <TD align=left width="90%" >
      <P align=justify>Abstract of Disclosure of Greek Patent Number 1002616
      (incorporated by reference&nbsp;to an exhibit to our Current Report on
      Form 8-K filed on February 7, 2007) </P></TD></TR></TABLE></DIV><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_55></A>
<P align=center>55<BR></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><B>Exhibit</B> <BR><B>Number</B> </TD>
    <TD align=left width="90%" >
      <P align=justify><BR><B>Description</B> </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.3 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.4 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.5 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.6 </TD>
    <TD align=left width="90%" >
      <P align=justify>Form of Stock Option Agreement (incorporated by reference
      to an exhibit to our Current Report on Form 8-K filed on February 22,
      2007) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.7 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.8 </TD>
    <TD align=left width="90%" >
      <P align=justify>2007 Stock Option Plan (incorporated by reference to an
      exhibit to our Current Report on Form 8-K filed on September 28, 2007)
    </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.9 </TD>
    <TD align=left width="90%" >
      <P align=justify>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 </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.10 </TD>
    <TD align=left width="90%" >
      <P align=justify>Form of Convertible Loan Agreement (incorporated by
      reference to an exhibit to our Current Report on Form 8-K filed on April
      3, 2009) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.11 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.13 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.14 </TD>
    <TD align=left width="90%" >
      <P align=justify>Form of Subscription Agreement (incorporated by reference
      to an exhibit to our Current Report on Form 8-K filed on April 3, 2009)
      </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.15 </TD>
    <TD align=left width="90%" >
      <P align=justify>Form of Warrant Certificate (incorporated by reference to
      an exhibit to our Current Report on Form 8-K filed on April 3, 2009)
    </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.16 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.17 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.18 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.19 </TD>
    <TD align=left width="90%" >
      <P align=justify>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) </P></TD></TR>
  <TR vAlign=top>
    <TD align=left>10.20 </TD>
    <TD align=left width="90%" >
      <P align=justify>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)
</P></TD></TR></TABLE></DIV><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_56></A>
<P align=center>56 </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>
    <TR vAlign=top>
      <TD align=left><B>Exhibit</B> <BR> <B>Number</B> </TD>
      <TD align=left width="90%" ><BR> <B>Description</B> </TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.21 </TD>
      <TD align=left width="90%" > <P align=justify>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)
        </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.22 </TD>
      <TD align=left width="90%" > <P align=justify>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)
        </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.23 </TD>
      <TD align=left width="90%" > <P align=justify>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)
        </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.24 </TD>
      <TD align=left width="90%" > <P align=justify>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) </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.25 </TD>
      <TD align=left width="90%" > <P align=justify>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) </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.26 </TD>
      <TD align=left width="90%" > <P align=justify>Form of Subscription Agreement
          (incorporated by reference to an exhibit to our Current Report on Form
          8-K filed on November 24, 2009) </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.27 </TD>
      <TD align=left width="90%" > <P align=justify>Form of Warrant Certificate
          (incorporated by reference to an exhibit to our Current Report on Form
          8-K filed on August 12, 2009) </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>10.28 </TD>
      <TD align=left width="90%" > <P align=justify>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) </P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(14)</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><B>Code of Ethics</B> </P></TD>
    </TR>
    <TR vAlign=top>
      <TD align=left>14.1 </TD>
      <TD align=left width="90%" > <P align=justify>Code of Conduct (incorporated
          by reference to an exhibit to our Current Report on Form 8-K filed on
          September 28, 2007) </P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(21)</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><B>Subsidiaries</B> </P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>21.1 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify>Anavex Life Sciences (France) SA, incorporated under the
          laws of France </P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(31)</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><B>Section 302 Certification</B> </P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><a href="exhibit31-1.htm">31.1*
        </a></TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><a href="exhibit31-1.htm">Section 302 Certification of
          Dr. Herve de Kergrohen </a> </P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><a href="exhibit31-2.htm">31.2*
        </a></TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><a href="exhibit31-2.htm">Section 302 Certification of
          Harvey Lalach </a></P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>(32)</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><B>Section 906 Certification</B> </P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><a href="exhibit32-1.htm">32.1*
        </a></TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><a href="exhibit32-1.htm">Section 906 Certification of
          Dr. Herve de Kergrohen </a></P></TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><a href="exhibit32-2.htm">32.2*
        </a></TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="90%"
    > <P align=justify><a href="exhibit32-2.htm">Section 906 Certification of
          Harvey Lalach </a> </P></TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>* Filed herewith.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_57></A>
<P align=center>57 </P>
<P align=center><B>SIGNATURES</B></P>
<P align=justify>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. </P>
<P align=justify><B>ANAVEX LIFE SCIENCES CORP.<BR></B></P>
<P align=justify>By: <BR>
  <u><i>/s/ Herve de Kergrohen</i></u><BR>
  Dr. Herve de Kergrohen<BR>
  Chief Executive Officer and Director <BR>
  (Principal Executive Officer) <BR>
  Date: December 24, 2009</P>
<P align=justify>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.<FONT
color=#808080> </FONT></P>
<P align=justify>&nbsp;</P>
<P align=justify>By: <BR>
  <u><i>/s/ Herve de Kergrohen</i></u><BR>
  Dr. Herve de Kergrohen<BR>
  Chief Executive Officer and Director <BR>
  (Principal Executive Officer) <BR>
  Date: December 24, 2009</P>
<P align=justify>&nbsp;</P>
<P align=justify>By: <BR>
  <u><i>/s/ Harvey Lalach </i></u><BR>
  Harvey Lalach <BR>
  President, Chief Financial Officer, Secretary and Director <BR>
  (Principal Financial Officer and Principal Accounting Officer) <BR>
  Date: December 24, 2009</P>
<P align=justify>&nbsp;</P>
<P align=justify><i><u>/s/ Alison Ayers </u></i><BR>
  Alison Ayers <BR>
  Director <BR>
  Date: December 24, 2009</P>
<P align=justify>&nbsp;</P>
<P align=justify><i><u>/s/ Cameron Durrant </u></i><BR>
  Cameron Durrant <BR>
  Director<BR>
  Date: December 24, 2009</P>
<P align=justify>&nbsp;</P>

<P align=justify><i><u>/s/ David Tousley </u></i><BR>
  David Tousley <BR>
  Director <BR>
  Date: December 24, 2009</P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>exhibit31-1.htm
<DESCRIPTION>SECTION 302 CERTIFICATION - CEO
<TEXT>
<!DOCTYPE HTML PUBLIC "exhibit31-1.pdf">


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<P align=right>Exhibit 31.1 </P>
<P align=center><B>CERTIFICATION PURSUANT TO </B><BR>
  <B>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 </B></P>
<P align=justify>I, Herve de Kergrohen, certify that:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD >1.</TD>
    <TD colspan="2" vAlign=top> I have reviewed this annual report on Form 10-K
      of Anavex Life Sciences Corp.; </TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD colspan="2" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD >2.</TD>
    <TD colspan="2" vAlign=top>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; </TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD colspan="2" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD >3.</TD>
    <TD colspan="2" vAlign=top>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; </TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD colspan="2" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD >4.</TD>
    <TD colspan="2" vAlign=top>The registrant&#146;s other certifying officer
      and I are 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: </TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD colspan="2" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD> <P align=justify>Designed such disclosure controls and procedures, or
        caused such disclosure controls and procedures to be designed under our
        supervision, to ensure that material information relating to the registrant,
        including its consolidated subsidiaries, is made known to us by others
        within those entities, particularly during the period in which this report
        is being prepared;</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD> <P align=justify>Designed such internal control over financial reporting,
        or caused such internal control over financial reporting to be designed
        under our 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;</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD> <P align=justify>Evaluated the effectiveness of the registrant&#146;s
        disclosure controls and procedures and presented in this report our 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</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD> <P align=justify>Disclosed in this report any change in the registrant&#146;s
        internal control over financial reporting that occurred during the registrant&#146;s
        most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter
        in the case of an annual report) that has materially affected, or is reasonably
        likely to materially affect, the registrant&#146;s internal control over
        financial reporting; and</P></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">5. </TD>
    <TD colSpan=2>
      <P align=justify>The registrant&#146;s other certifying officer and I have
      disclosed, based on our most recent evaluation of internal control over
      financial reporting, to the registrant&#146;s auditors and the audit committee
      of the registrant&#146;s board of directors (or persons performing the
      equivalent functions):</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>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&#146;s ability to
      record, process, summarize and report financial information; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>Any fraud, whether or not material, that involves
      management or other employees who have a significant role in the
      registrant&#146;s internal control over financial
reporting.</P></TD></TR></TABLE>
<P align=justify>Date: December 24, 2009</P>
<P align=justify><i><u>/s/ Herve de Kergrohen</u></i><BR>
  Dr. Herve de Kergrohen<BR>
  Chief Executive Office and Director <BR>
  (Principal Executive Officer)</P>
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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exhibit31-2.htm
<DESCRIPTION>SECTION 302 CERTIFICATION - CFO
<TEXT>
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<P align=right>Exhibit 31.2 </P>
<P align=center><B>CERTIFICATION PURSUANT TO </B><BR>
  <B>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 </B></P>
<P align=justify>I, Harvey Lalach, certify that:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD vAlign=top>1.</TD>
    <TD colSpan=2> I have reviewed this annual report on Form 10-K of Anavex Life
      Sciences Corp.; </TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top>2.&nbsp;</TD>
    <TD colSpan=2>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; </TD>
  </TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width="5%">3. </TD>
    <TD colSpan=2> <P align=justify>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;</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=top width="5%">4. </TD>
    <TD colSpan=2> <P align=justify>The registrant&#146;s other certifying officer
        and I are 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:</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD> <P align=justify>Designed such disclosure controls and procedures, or
        caused such disclosure controls and procedures to be designed under our
        supervision, to ensure that material information relating to the registrant,
        including its consolidated subsidiaries, is made known to us by others
        within those entities, particularly during the period in which this report
        is being prepared;</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD> <P align=justify>Designed such internal control over financial reporting,
        or caused such internal control over financial reporting to be designed
        under our 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;</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD> <P align=justify>Evaluated the effectiveness of the registrant&#146;s
        disclosure controls and procedures and presented in this report our 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</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD> <P align=justify>Disclosed in this report any change in the registrant&#146;s
        internal control over financial reporting that occurred during the registrant&#146;s
        most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter
        in the case of an annual report) that has materially affected, or is reasonably
        likely to materially affect, the registrant&#146;s internal control over
        financial reporting; and</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD vAlign=top width="5%">5. </TD>
    <TD colSpan=2> <P align=justify>The registrant&#146;s other certifying officer
        and I have disclosed, based on our most recent evaluation of internal
        control over financial reporting, to the registrant&#146;s auditors and
        the audit committee of the registrant&#146;s board of directors (or persons
        performing the equivalent functions):</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD> <P align=justify>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&#146;s
        ability to record, process, summarize and report financial information;
        and</P></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD> <P align=justify>Any fraud, whether or not material, that involves management
        or other employees who have a significant role in the registrant&#146;s
        internal control over financial reporting.</P></TD>
  </TR>
</TABLE>
<P align=justify>Date: December 24, 2009</P>
<P align=justify><i><u>/s/ Harvey Lalach</u></i><BR>
  Harvey Lalach<BR>
  President, Chief Financial Officer, Secretary and Director <BR>
  (Principal Financial Officer and Principal Accounting Officer)</P>
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<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exhibit32-1.htm
<DESCRIPTION>SECTION 906 CERTIFICATION - CEO
<TEXT>
<!DOCTYPE HTML PUBLIC "exhibit32-1.pdf">


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   <TITLE>Filed by sedaredgar.com - Anavex Life Sciences Corp. - Exhibit 32.1</TITLE>
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<P align=right>Exhibit 32.1</P>
<P align=center><B>CERTIFICATION PURSUANT TO </B><BR><B>SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002 </B><BR></P>
<P align=justify>The undersigned, Herve de Kergrohen, hereby certifies, pursuant
to Section 906 of <I>the Sarbanes-Oxley Act of 2002</I>, that: </P>
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style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>the annual report on Form 10-K of Anavex Life Sciences
      Corp. for the period ended September 30, 2009 fully complies with the
      requirements of Section 13(a) or 15(d) of the <I>Securities Exchange Act
      of 1934</I>; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE>
<P align=justify>Date: December 24, 2009</P>
<P align=justify><i><u>/s/ Herve de Kergrohen<br>
  </u></i> Dr. Herve de Kergrohen<BR>
  Chief Executive Office and Director <BR>
  (Principal Executive Officer)</P>
<P align=justify>&nbsp;</P>
<P align=justify>A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Anavex Life
Sciences Corp. and will be retained by Anavex Life Sciences Corp. and furnished
to the Securities and Exchange Commission or its staff upon request.</P>
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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>exhibit32-2.htm
<DESCRIPTION>SECTION 906 CERTIFICATION - CFO
<TEXT>
<!DOCTYPE HTML PUBLIC "exhibit32-2.pdf">


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   <TITLE>Filed by sedaredgar.com - Anavex Life Sciences Corp. - Exhibit 32.2</TITLE>
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<P align=right>Exhibit 32.2</P>
<P align=center><B>CERTIFICATION PURSUANT TO </B><BR><B>SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002 </B><BR></P>
<P align=justify>The undersigned, Harvey Lalach, hereby certifies, pursuant to
Section 906 of <I>the Sarbanes-Oxley Act of 2002</I>, that: </P>
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style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>the annual report on Form 10-K of Anavex Life Sciences
      Corp. for the period ended September 30, 2009 fully complies with the
      requirements of Section 13(a) or 15(d) of the <I>Securities Exchange Act
      of 1934</I>; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE>
<P align=justify>Date: December 24, 2009</P>
<P align=justify><i><u>/s/ Harvey Lalach<br>
  </u></i> Harvey Lalach<BR>
  President, Chief Financial Officer, Secretary and Director <BR>
  (Principal Financial Officer and Principal Accounting Officer)</P>
<P align=justify>&nbsp;</P>
<P align=justify>A signed original of this written statement required by Section
906, or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Anavex Life
Sciences Corp. and will be retained by Anavex Life Sciences Corp. and furnished
to the Securities and Exchange Commission or its staff upon request.</P>
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