---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2014

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 000-51652

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

|Nevada                          | 20-8365999         
|------------------------------- | -------------------
|(State or other jurisdiction of | (IRS Employer      
|incorporation or organization)  | Identification No.)

51 West 52ndStreet, 7thFloor, New York, NY USA 10019(Address of principal executive offices) (Zip Code)

1-844-689-3939(Registrants telephone
number, including area code)

N/A(Former name, former address and
former fiscal year, if changed since last report)

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

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

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

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


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

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APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date:
38,260,097 shares of common stock outstanding as of May 14,
2014.

ii

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TABLE OF CONTENTS

|PART I - FINANCIAL INFORMATION                                                                       | 1 
|---------------------------------------------------------------------------------------------------- | --
|                                                                                                     |   
|ITEM 1. FINANCIAL STATEMENTS.                                                                        | 1 
|                                                                                                     |   
|ITEM 2. MANAGEMENTS DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. | 2 
|                                                                                                     |   
|ITEM 3. QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISKS.                           | 9 
|                                                                                                     |   
|ITEM 4. CONTROLS AND PROCEDURES.                                                                     | 9 
|                                                                                                     |   
|PART II  OTHER INFORMATION                                                                          | 10
|                                                                                                     |   
|ITEM 1. LEGAL PROCEEDINGS.                                                                           | 10
|                                                                                                     |   
|ITEM 1A. RISK FACTORS.                                                                               | 10
|                                                                                                     |   
|ITEM 2. UNREGISTERED SALES OF EQUITY
      SECURITIES AND USE OF PROCEEDS.                           | 10
|                                                                                                     |   
|ITEM 3. DEFAULTS UPON SENIOR SECURITIES.                                                             | 10
|                                                                                                     |   
|ITEM 4. MINE SAFETY DISCLOSURES                                                                      | 10
|                                                                                                     |   
|ITEM 5. OTHER INFORMATION.                                                                           | 10
|                                                                                                     |   
|ITEM 6. EXHIBITS.                                                                                    | 11
|                                                                                                     |   
|SIGNATURES                                                                                           | 12

iii

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

1

---







ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(Unaudited)





---

ANAVEX LIFE SCIENCES CORP.
  (A Development Stage
  Company)
  INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
  March 31, 2014 and
  September 30, 2013
  (Unaudited)

|ASSETS                                                                                                                                                                                                           |   |             |   |   |               |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | - | - | ------------- | -
|                                                                                                                                                                                                                 |   | March 31,   |   |   | September 30, |  
|                                                                                                                                                                                                                 |   | 2014        |   |   | 2013          |  
|                                                                                                                                                                                                                 |   |             |   |   |               |  
|Current                                                                                                                                                                                                          |   |             |   |   |               |  
|Cash                                                                                                                                                                                                             | $ | 9,193,558   |   | $ | 345,074       |  
|Prepaid expenses                                                                                                                                                                                                 |   | 28,478      |   |   | 48,375        |  
|                                                                                                                                                                                                                 |   | 9,222,036   |   |   | 393,449       |  
|Deferred financing charges                                                                                                                                                                                       |   | 1,068,541   |   |   | -             |  
|Equipment                                                                                                                                                                                                        |   | 1,943       |   |   | -             |  
|                                                                                                                                                                                                                 | $ | 10,292,520  |   | $ | 393,449       |  
|                                                                                                                                                                                                                 |   |             |   |   |               |  
|LIABILITIES                                                                                                                                                                                                      |   |             |   |   |               |  
|                                                                                                                                                                                                                 |   |             |   |   |               |  
|Current                                                                                                                                                                                                          |   |             |   |   |               |  
|Accounts payable and accrued liabilities                                                                                                                                                                         | $ | 1,689,605   |   |   | 1,741,797     |  
|Promissory notes payable                                                                                                                                                                                         |   | 193,720     |   | $ | 210,863       |  
|                                                                                                                                                                                                                 |   | 1,883,325   |   |   | 1,952,660     |  
|Derivative financial instruments - warrants                                                                                                                                                                      |   | -           |   |   | 904,000       |  
|Convertible debentures, net of debt discounts                                                                                                                                                                    |   | 1,011       |   |   | -             |  
|                                                                                                                                                                                                                 |   | 1,884,336   |   |   | 2,856,660     |  
|                                                                                                                                                                                                                 |   |             |   |   |               |  
|CAPITAL DEFICIT                                                                                                                                                                                                  |   |             |   |   |               |  
|                                                                                                                                                                                                                 |   |             |   |   |               |  
|Capital stock                                                                                                                                                                                                    |   |             |   |   |               |  
|Authorized: 
            150,000,000
      common shares, par value $0.001 per
      share 
         Issued and
      outstanding: 
            38,260,098
      common shares (September 30, 2013 - 37,237,588) |   | 38,261      |   |   | 37,238        |  
|Additional paid-in capital                                                                                                                                                                                       |   | 49,595,118  |   |   | 38,644,523    |  
|Common stock to be issued                                                                                                                                                                                        |   | 640,000     |   |   | 60,000        |  
|Deficit accumulated during the development
      stage                                                                                                                                                           |   | (41,865,195 | ) |   | (41,204,972   | )
|                                                                                                                                                                                                                 |   | 8,408,184   |   |   | (2,463,211    | )
|                                                                                                                                                                                                                 | $ | 10,292,520  |   | $ | 393,449       |  

SEE ACCOMPANYING NOTES

---

ANAVEX LIFE SCIENCES CORP.
  (A Development Stage
  Company)
  INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  for the
  three and six months ended March 31, 2014 and 2013
  and for the period from
  January 23, 2004 (Date of Inception) to March 31, 2014
  (Unaudited)

January 23, 2004Three months ended March 31,
      
      
      Six months ended March 31,
      
      
      (Date of Inception)2014
      
      
      2013
      
      
      2014
      
      
      2013
      
      
      to
        March 31, 2014Operating expensesGeneral and administrative -
        Notes 9 and 10
      $
      903,015
      
      $
      126,551
      
      $
      1,207,443
      
      $
      415,415
      
      $
      18,406,207Research and development
      
      118,152
      
      
      560
      
      
      123,332
      
      
      127,563
      
      
      12,946,128Total operating expenses
      
      (1,021,167
      )
      
      (127,111
      )
      
      (1,330,775
      )
      
      (542,978
      )
      
      (31,352,335
      )Other income (expenses)Interest and finance
        expenses, net
      
      (5,079
      )
      
      (16,558
      )
      
      (8,366
      )
      
      (26,783
      )
      
      (685,728
      )Accretion of debt discounts
      
      (1,011
      )
      
      -
      
      
      (1,011
      )
      
      -
      
      
      (2,175,672
      )Change in fair value of
        derivative financial instruments
      
      -
      
      
      -
      
      
      683,000
      
      
      -
      
      
      234,726Debt conversion expense
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (504,160
      )Loss on settlement of
        accounts payable
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (1,754,933
      )Loss on extinguishment of debt
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (5,010,868
      )Foreign exchange gain (loss)
      
      8,397
      
      
      37,569
      
      
      (3,071
      )
      
      10,144
      
      
      (65,421
      )Total other income
        (expenses), net
      
      2,307
      
      
      21,011
      
      
      670,552
      
      
      (16,639
      )
      
      (9,962,056
      )Net loss and comprehensive
        loss for the period
      $
      (1,018,860
      )
      $
      (106,100
      )
      $
      (660,223
      )
      $
      (559,617
      )
      $
      (41,314,391
      )Loss per shareBasic
      $
      (0.03
      )
      $
      (0.00
      )
      $
      (0.02
      )
      $
      (0.02
      )Diluted
      $
      (0.03
      )
      $
      (0.00
      )
      $
      (0.04
      )
      $
      (0.02
      )Weighted average number of
        shares outstandingBasic
      
      37,881,209
      
      
      30,240,687
      
      
      37,680,823
      
      
      30,240,687Diluted
      
      37,881,209
      
      
      30,240,687
      
      
      37,680,823
      
      
      30,240,687


SEE ACCOMPANYING NOTES

---

ANAVEX LIFE SCIENCES CORP.
  (A Development Stage
  Company)
  INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  for the
  six months ended March 31, 2014 and 2013
  and for the period from January 23,
  2004 (Date of Inception) to March 31, 2014
  (Unaudited)

|                                                                          |   |                            |   |   |                     |   |   | January 23, 2004        |  
|------------------------------------------------------------------------- | - | -------------------------- | - | - | ------------------- | - | - | ----------------------- | -
|                                                                          |   | Six months ended March 31, |   |   | (Date of Inception) |  
|                                                                          |   | 2014                       |   |   | 2013                |   |   | to
      March 31, 2014 |  
|                                                                          |   |                            |   |   |                     |   |   |                         |  
|Cash Flows used in Operating Activities                                   |   |                            |   |   |                     |   |   |                         |  
|Net loss for the period                                                   | $ | (660,223                   | ) | $ | (559,617            | ) | $ | (41,314,391             | )
|Adjustments to reconcile net loss to net cash used in
      operations:   |   |                            |   |   |                     |   |   |                         |  
|Amortization and depreciation                                             |   | 384                        |   |   | 576                 |   |   | 6,015                   |  
|Accretion of debt discount                                                |   | 1,011                      |   |   | -                   |   |   | 2,175,672               |  
|Stock-based compensation                                                  |   | -                          |   |   | -                   |   |   | 5,845,047               |  
|Common shares to be issued for services                                   |   | 610,000                    |   |   | -                   |   |   | 610,000                 |  
|Amortization of deferred financing charge                                 |   | 1,199                      |   |   | 1,215               |   |   | 165,126                 |  
|Change in fair value of derivative financial instruments                  |   | (683,000                   | ) |   | -                   |   |   | (234,726                | )
|Consulting expense recorded in exchange for
      shares to be issued     |   | -                          |   |   | -                   |   |   | 236,337                 |  
|Common shares issued for consulting expenses                              |   | -                          |   |   | -                   |   |   | 406,405                 |  
|Promissory note issued for severance                                      |   | -                          |   |   | -                   |   |   | 71,500                  |  
|Common shares issued for severance                                        |   | -                          |   |   | -                   |   |   | 415,600                 |  
|Common shares issued for research and
      development expenses          |   | -                          |   |   | -                   |   |   | 800,000                 |  
|Management fees contributed                                               |   | -                          |   |   | -                   |   |   | 14,625                  |  
|Debt conversion expense                                                   |   | -                          |   |   | -                   |   |   | 504,160                 |  
|Loss on settlement of accounts payable                                    |   | -                          |   |   | -                   |   |   | 1,754,933               |  
|Loss on extinguishment of debt                                            |   | -                          |   |   | -                   |   |   | 5,010,868               |  
|Rent contributed                                                          |   | -                          |   |   | -                   |   |   | 3,750                   |  
|Unrealized foreign exchange                                               |   | (17,143                    | ) |   | (3,590              | ) |   | (22,080                 | )
|Changes in non-cash working capital balances related to
      operations: |   |                            |   |   |                     |   |   |                         |  
|VAT recoverable                                                           |   | -                          |   |   | -                   |   |   | -                       |  
|Prepaid expenses                                                          |   | (12,253                    | ) |   | -                   |   |   | (12,253                 | )
|Accounts payable and accrued liabilities                                  |   | (22,494                    | ) |   | 300,541             |   |   | 6,215,965               |  
|Net cash used in operating activities                                     |   | (782,519                   | ) |   | (260,875            | ) |   | (17,347,447             | )
|                                                                          |   |                            |   |   |                     |   |   |                         |  
|Cash Flows used in Investing Activities                                   |   |                            |   |   |                     |   |   |                         |  
|Acquisition of equipment                                                  |   | (2,327                     | ) |   | -                   |   |   | (7,958                  | )
|Net cash used in investing activities                                     |   | (2,327                     | ) |   | -                   |   |   | (7,958                  | )
|                                                                          |   |                            |   |   |                     |   |   |                         |  
|Cash Flows provided by Financing Activities                               |   |                            |   |   |                     |   |   |                         |  
|Issuance of common shares, net of share
      issue costs                 |   | 398,170                    |   |   | -                   |   |   | 11,446,288              |  
|Share subscriptions received                                              |   | (30,000                    | ) |   | -                   |   |   | 30,000                  |  
|Proceeds from promissory notes                                            |   | -                          |   |   | 250,000             |   |   | 5,649,000               |  
|Financing fees                                                            |   | (734,840                   | ) |   | -                   |   |   | (842,990                | )
|Repayment of promissory note                                              |   | -                          |   |   | -                   |   |   | (100,000                | )
|Issuance of convertible debentures                                        |   | 10,000,000                 |   |   |                     |   |   | 10,000,000              |  
|Due to related parties                                                    |   | -                          |   |   | -                   |   |   | 33,665                  |  
|Shareholder advances                                                      |   | -                          |   |   | -                   |   |   | 333,000                 |  
|Net cash provided by financing activities                                 |   | 9,633,330                  |   |   | 250,000             |   |   | 26,548,963              |  
|                                                                          |   |                            |   |   |                     |   |   |                         |  
|Increase (decrease) in cash during the
      period                       |   | 8,848,484                  |   |   | (10,875             | ) |   | 9,193,558               |  
|Cash, beginning of period                                                 |   | 345,074                    |   |   | 11,362              |   |   | -                       |  
|Cash, end of period                                                       | $ | 9,193,558                  |   | $ | 487                 |   | $ | 9,193,558               |  
|                                                                          |   |                            |   |   |                     |   |   |                         |  
|Supplemental Cash Flow Information - Note
      11                        |   |                            |   |   |                     |   |   |                         |  

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Consolidated Statement of Changes in Capital Deficit
  For the
  period from January 23, 2004 (Date of Inception) to March 31, 2014

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

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Consolidated Statement of Changes in Capital Deficit
  For the
  period from January 23, 2004 (Date of Inception) to March 31, 2014

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

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Consolidated Statement of Changes in Capital Deficit
  For the
  period from January 23, 2004 (Date of Inception) to March 31, 2014

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

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Consolidated Statement of Changes in Capital Deficit
  For the
  period from January 23, 2004 (Date of Inception) to March 31, 2014

|                                                                                           |  |              |  |   |             |  |   |            |   |   |              |   |   | Deficit     |   |   |            |  
|------------------------------------------------------------------------------------------ |  | ------------ |  | - | ----------- |  | - | ---------- | - | - | ------------ | - | - | ----------- | - | - | ---------- | -
|                                                                                           |  | Common Stock |  |   | Accumulated |  |   |            |  
|                                                                                           |  | Shares       |  |   | Par Value   |  |   | Additional |   |   | Common       |   |   | During the  |   |   |            |  
|                                                                                           |  |              |  |   |             |  |   | Paid-in    |   |   | Shares to be |   |   | Development |   |   |            |  
|                                                                                           |  |              |  |   |             |  |   | Capital    |   |   | Issued       |   |   | Stage       |   |   | Total      |  
|                                                                                           |  |              |  |   |             |  |   |            |   |   |              |   |   |             |   |   |            |  
|Balance, September 30, 2009 - brought
      forward                                        |  | 20,746,761   |  | $ | 20,747      |  | $ | 8,383,663  |   | $ | 300,000      |   | $ | (12,562,233 | ) | $ | (3,857,823 | )
|Cumulative effect of accounting changes                                                    |  | -            |  |   | -           |  |   | (333,056   | ) |   | -            |   |   | (550,804    | ) |   | (883,860   | )
|Capital stock issued for cash on October 2,
      2009 - at $2.25                          |  | 266,666      |  |   | 267         |  |   | 599,733    |   |   | (300,000     | ) |   | -           |   |   | 300,000    |  
|Capital stock issued in settlement of promissory note on
      February 2, 2010 - at $2.02 |  | 49,505       |  |   | 49          |  |   | 99,951     |   |   | -            |   |   | -           |   |   | 100,000    |  
|Capital stock issued for cash on April 9,
      2010 - at $2.60                            |  | 92,499       |  |   | 93          |  |   | 240,405    |   |   | -            |   |   | -           |   |   | 240,498    |  
|Capital stock issued in settlement of debt on April 30,
      2010 - at $2.85              |  | 9,825        |  |   | 9           |  |   | 27,991     |   |   | -            |   |   | -           |   |   | 28,000     |  
|Finders' fees paid in cash                                                                 |  | -            |  |   | -           |  |   | (24,050    | ) |   | -            |   |   | -           |   |   | (24,050    | )
|Capital stock issued for cash on June 29, 2010 - at $2.50                                  |  | 941,000      |  |   | 941         |  |   | 2,351,559  |   |   | -            |   |   | -           |   |   | 2,352,500  |  
|Finders' fees paid in cash                                                                 |  | -            |  |   | -           |  |   | (206,500   | ) |   | -            |   |   | -           |   |   | (206,500   | )
|Capital stock issued in settlement of debt on July 5, 2010
      - at $2.50                |  | 400,000      |  |   | 400         |  |   | 999,600    |   |   | -            |   |   | -           |   |   | 1,000,000  |  
|Capital stock issued for cash on September
      3, 2010 - at $2.75                        |  | 163,000      |  |   | 163         |  |   | 448,087    |   |   | -            |   |   | -           |   |   | 448,250    |  
|Capital stock issued for finders' fees on September 3, 2010
      - at $2.75               |  | 9,000        |  |   | 9           |  |   | (9         | ) |   | -            |   |   | -           |   |   | -          |  
|Finders' fees paid in cash                                                                 |  | -            |  |   | -           |  |   | (15,125    | ) |   | -            |   |   | -           |   |   | (15,125    | )
|Shares issud on conversion of promissory note on September
      30, 2010 - at $2.25       |  | 328,058      |  |   | 328         |  |   | 737,802    |   |   | -            |   |   | -           |   |   | 738,130    |  
|Shares issud on conversion of promissory
      note on September 30, 2010 - at $2.35       |  | 510,638      |  |   | 511         |  |   | 1,199,489  |   |   | -            |   |   | -           |   |   | 1,200,000  |  
|Reclassification of dervative liability on modification of
      note                      |  | -            |  |   | -           |  |   | 3,144,520  |   |   | -            |   |   | -           |   |   | 3,144,520  |  
|Settlementterms of accounts payable                                                        |  | -            |  |   | -           |  |   | 444,000    |   |   | -            |   |   | -           |   |   | 444,000    |  
|Stock-based compensation                                                                   |  | -            |  |   | -           |  |   | 770,055    |   |   | -            |   |   | -           |   |   | 770,055    |  
|Equity component of convertible promissory
      note                                      |  | -            |  |   | -           |  |   | 44,220     |   |   | -            |   |   | -           |   |   | 44,220     |  
|Net loss for the year                                                                      |  | -            |  |   | -           |  |   | -          |   |   | -            |   |   | (8,783,037  | ) |   | (8,783,037 | )
|                                                                                           |  |              |  |   |             |  |   |            |   |   |              |   |   |             |   |   |            |  
|Balance, September 30, 2010                                                                |  | 23,516,952   |  | $ | 23,517      |  | $ | 18,912,335 |   | $ | -            |   | $ | (21,896,074 | ) | $ | (2,960,222 | )

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Consolidated Statement of Changes in Capital Deficit
  For the
  period from January 23, 2004 (Date of Inception) to March 31, 2014

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

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Consolidated Statement of Changes in Capital Deficit
  For the
  period from January 23, 2004 (Date of Inception) to March 31, 2014

|                                                                                         |  |              |  |   |             |  |   |            |   |   |              |  |   | Deficit     |   |   |            |  
|---------------------------------------------------------------------------------------- |  | ------------ |  | - | ----------- |  | - | ---------- | - | - | ------------ |  | - | ----------- | - | - | ---------- | -
|                                                                                         |  | Common Stock |  |   | Accumulated |  |   |            |  
|                                                                                         |  | Shares       |  |   | Par Value   |  |   | Additional |   |   | Common       |  |   | During the  |   |   |            |  
|                                                                                         |  |              |  |   |             |  |   | Paid-in    |   |   | Shares to be |  |   | Development |   |   |            |  
|                                                                                         |  |              |  |   |             |  |   | Capital    |   |   | Issued       |  |   | Stage       |   |   | Total      |  
|                                                                                         |  |              |  |   |             |  |   |            |   |   |              |  |   |             |   |   |            |  
|Balance, September 30, 2011 - brought
      forward                                      |  | 26,571,574   |  | $ | 26,572      |  | $ | 28,034,245 |   | $ | -            |  | $ | (29,203,221 | ) | $ | (1,142,404 | )
|                                                                                         |  |              |  |   |             |  |   |            |   |   |              |  |   |             |   |   |            |  
|Capital stock issued for cash on December
      6, 2011 - at $1.25                       |  | 615,600      |  |   | 616         |  |   | 768,884    |   |   | -            |  |   | -           |   |   | 769,500    |  
|Less: Share issue costs                                                                  |  | -            |  |   | -           |  |   | (77,000    | ) |   | -            |  |   | -           |   |   | (77,000    | )
|                                                                                         |  |              |  |   |             |  |   |            |   |   |              |  |   |             |   |   |            |  
|Capital stock issued for cash on February 9, 2012 - at
      $1.25                       |  | 270,000      |  |   | 270         |  |   | 337,230    |   |   | -            |  |   | -           |   |   | 337,500    |  
|Less: Share issue costs                                                                  |  | -            |  |   | -           |  |   | (33,750    | ) |   | -            |  |   | -           |   |   | (33,750    | )
|                                                                                         |  |              |  |   |             |  |   |            |   |   |              |  |   |             |   |   |            |  
|Equity units issued for services on
      February 9, 2012 - at $1.99                    |  | 8,000        |  |   | 8           |  |   | 15,888     |   |   | -            |  |   | -           |   |   | 15,896     |  
|Equity units issued for settlement of loans payable on May
      31, 2012                |  | 2,700,513    |  |   | 2,700       |  |   | 5,176,884  |   |   | -            |  |   | -           |   |   | 5,179,584  |  
|Capital stock issued for services on July
      12, 2012 - at $1.00                      |  | 75,000       |  |   | 75          |  |   | 74,925     |   |   | -            |  |   | -           |   |   | 75,000     |  
|Stock-based compensation                                                                 |  | -            |  |   | -           |  |   | 302,208    |   |   | -            |  |   | -           |   |   | 302,208    |  
|Net loss for the period                                                                  |  | -            |  |   | -           |  |   | -          |   |   | -            |  |   | (8,301,705  | ) |   | (8,301,705 | )
|                                                                                         |  |              |  |   |             |  |   |            |   |   |              |  |   |             |   |   |            |  
|Balance, September 30, 2012                                                              |  | 30,240,687   |  |   | 30,241      |  |   | 34,599,514 |   |   | -            |  |   | (37,504,926 | ) |   | (2,875,171 | )
|Equity units issued for settlement of loans payable on July
      5, 2013                |  | 4,208,910    |  |   | 4,209       |  |   | 2,563,011  |   |   | -            |  |   | -           |   |   | 2,567,220  |  
|Capital stock issued for cash on July 5,
      2013 - at $0.40                           |  | 2,196,133    |  |   | 2,196       |  |   | 563,257    |   |   | -            |  |   | -           |   |   | 565,453    |  
|Less: Share issue costs                                                                  |  |              |  |   |             |  |   | (112,174   | ) |   | -            |  |   | -           |   |   | (112,174   | )
|Initial purchase shares issued under
      Purchase Agreement on July 5, 2013 - at $0.40 |  | 591,858      |  |   | 592         |  |   | 99,750     |   |   | -            |  |   | -           |   |   | 100,342    |  
|Less: Share issue costs                                                                  |  | -            |  |   | -           |  |   | (71,335    | ) |   | -            |  |   | -           |   |   | (71,335    | )
|Common stock to be issued for cash - at
      $0.50                                      |  | -            |  |   | -           |  |   | -          |   |   | 60,000       |  |   | -           |   |   | 60,000     |  
|Stock-based compensation                                                                 |  | -            |  |   | -           |  |   | 1,002,500  |   |   |              |  |   |             |   |   | 1,002,500  |  
|Net loss for the period                                                                  |  | -            |  |   | -           |  |   | -          |   |   | -            |  |   | (3,700,046  | ) |   | (3,700,046 | )
|                                                                                         |  |              |  |   |             |  |   |            |   |   |              |  |   |             |   |   |            |  
|Balance, September 30, 2013 - brought
      forward                                      |  | 37,237,588   |  | $ | 37,238      |  | $ | 38,644,523 |   | $ | 60,000       |  | $ | (41,204,972 | ) | $ | (2,463,211 | )

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Consolidated Statement of Changes in Capital Deficit
  For the
  period from January 23, 2004 (Date of Inception) to March 31, 2014

|                                                                                              |  |              |  |   |             |  |   |            |   |   |              |   |   | Deficit     |   |   |            |  
|--------------------------------------------------------------------------------------------- |  | ------------ |  | - | ----------- |  | - | ---------- | - | - | ------------ | - | - | ----------- | - | - | ---------- | -
|                                                                                              |  | Common Stock |  |   | Accumulated |  |   |            |  
|                                                                                              |  | Shares       |  |   | Par Value   |  |   | Additional |   |   | Common       |   |   | During the  |   |   |            |  
|                                                                                              |  |              |  |   |             |  |   | Paid-in    |   |   | Shares to be |   |   | Development |   |   |            |  
|                                                                                              |  |              |  |   |             |  |   | Capital    |   |   | Issued       |   |   | Stage       |   |   | Total      |  
|                                                                                              |  |              |  |   |             |  |   |            |   |   |              |   |   |             |   |   |            |  
|Balance, September 30, 2013 - brought
      forward                                           |  | 37,237,588   |  | $ | 37,238      |  | $ | 38,644,523 |   | $ | 60,000       |   | $ | (41,204,972 | ) | $ | (2,463,211 | )
|Equity units issued under Purchase Agreement                                                  |  | 400,000      |  |   | 400         |  |   | 187,770    |   |   | -            |   |   | -           |   |   | 188,170    |  
|Commitment shares issued under terms of
      Purchase Agreement                              |  | 2,510        |  |   | 3           |  |   | (3         | ) |   | -            |   |   | -           |   |   | -          |  
|Capital stock issued for cash - at $0.50                                                      |  | 120,000      |  |   | 120         |  |   | 59,880     |   |   | (60,000      | ) |   |             |   |   | -          |  
|Capital stock issued for cash - at $0.30                                                      |  | 500,000      |  |   | 500         |  |   | 149,500    |   |   | 30,000       |   |   |             |   |   | 180,000    |  
|Share issue costs, net of recovery                                                            |  | -            |  |   | -           |  |   | (2,452     | ) |   | -            |   |   | -           |   |   | (2,452     | )
|Issuance of detachable warrants                                                               |  | -            |  |   | -           |  |   | 5,989,900  |   |   | -            |   |   | -           |   |   | 5,989,900  |  
|Agent's warrants issued in connection with convertible
      debentures                       |  | -            |  |   | -           |  |   | 334,900    |   |   | -            |   |   | -           |   |   | 334,900    |  
|                                                                                              |  |              |  |   |             |  |   |            |   |   |              |   |   |             |   |   |            |  
|Beneficial conversion feature on convertible debentures
      issued                          |  | -            |  |   | -           |  |   | 4,010,100  |   |   | -            |   |   | -           |   |   | 4,010,100  |  
|Reclassification of derivative financial
      instruments upon modification of warrant terms |  | -            |  |   | -           |  |   | 221,000    |   |   | -            |   |   | -           |   |   | 221,000    |  
|                                                                                              |  |              |  |   |             |  |   |            |   |   |              |   |   |             |   |   |            |  
|Capital stock to be issued pursuant to
      employment agreement                             |  | -            |  |   | -           |  |   | -          |   |   | 610,000      |   |   | -           |   |   | 610,000    |  
|Net loss for the period                                                                       |  | -            |  |   | -           |  |   | -          |   |   | -            |   |   | (660,223    | ) |   | (660,223   | )
|                                                                                              |  |              |  |   |             |  |   |            |   |   |              |   |   |             |   |   |            |  
|Balance, March 31, 2014                                                                       |  | 38,260,098   |  | $ | 38,261      |  | $ | 49,595,118 |   | $ | 640,000      |   | $ | (41,865,195 | ) | $ | 8,408,184  |  

SEE ACCOMPANYING NOTES

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2012
  (Unaudited)

|Note 1 | Business Description, Basis of Presentation and
      Liquidity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Anavex Life Sciences Corp. (the Company) is a
      pharmaceutical company engaged in the development of drug candidates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | The Companys lead compound, ANAVEX 2-73 is being
      developed to treat Alzheimers disease through disease modification.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | In pre-clinical studies conducted in France and in
      Greece, ANAVEX 2-73 demonstrated anti- amnesic and neuroprotective
      properties. Based on these pre-clinical studies, the Company sponsored a
      Phase 1 single ascending dose study of ANAVEX 2-73, which was initiated
      and completed in 2011. This study was conducted in Germany in
      collaboration with ABX-CRO Advanced Pharmaceutical Services. The study
      indicated that ANAVEX 2-73 was well tolerated by study subjects in doses
      up to 55mg. Clinical trials had been delayed due to lack of funding.
      During the six months ended March 31, 2014, the Company completed the
      closing of a securities purchase agreement in the aggregate principal
      amount of $10,000,000 (Note 6), the proceeds from which the Company
      intends to use to further its business plan and clinical trials of ANAVEX
      2-73 and ANAVEX PLUS.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | The Company  plans to continue human clinical trials, among them a prospective Phase 1b/2a study  of ANAVEX 2-73 and ANAVEX PLUS, and a Phase 2 trial thereafter and to identify  and initiate discussions with potential partners in the next 12 months.  Further, the Company may acquire or develop new intellectual property and  assign, license, or otherwise transfer our intellectual property to further its  goals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Basis of Presentation and Liquidity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | These interim condensed consolidated financial statements
      have been prepared, without audit, pursuant to the rules and regulations
      of the Securities and Exchange Commission. Accordingly, certain
      information and footnote disclosures normally included in the annual
      financial statements in accordance with generally accepted accounting
      principles have been condensed or omitted pursuant to such rules and
      regulations. In the opinion of management, the disclosures are adequate to
      make the information presented not misleading.                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | These statements reflect all adjustments, consisting of
      normal recurring adjustments, which in the opinion of management are
      necessary for fair presentation of the information contained herein. These
      interim condensed financial statements should be read in conjunction with
      the audited financial statements included in its annual report on Form
      10-K for the year ended September 30, 2013. The Company follows the same
      accounting policies in the preparation of interim reports.                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Certain amounts for the prior periods have been  reclassified to conform to the current period’s presentation.  These reclassifications did not impact  reported results or earnings per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 2

|Note 1 | Business Description, Basis of Presentation and
      Liquidity (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | Operating results for the six months ended March 31, 2014
      are not necessarily indicative of the results that may be expected for the
      year ended September 30, 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | Basic and Diluted Loss per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | The basic loss per common share is computed by dividing
      net loss available to common stockholders by the weighted average number
      of common shares outstanding. Diluted loss per common share is computed
      similar to basic loss per common share except that the denominator is
      increased to include the number of additional common shares that would
      have been outstanding if the potential common shares had been issued and
      if the additional common shares were dilutive. Additionally, the numerator
      is also adjusted for changes in fair value of the warrant liability which
      is presumed to be share settled. For the six months ended March 31, 2014,
      loss per share excludes 77,305,632 (2012  4,697,847) potentially dilutive
      common shares (related to outstanding options and warrants) as their
      effect was anti- dilutive.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Note 2 | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | There are no new accounting pronouncements that the
      Company recently adopted or are pending the Companys adoption that are
      expected to have a material impact on the Companys results of operations,
      financial position or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Note 3 | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                    |   |       |  |   | March 31, 2014 |  |   |       | 
| | ------------------ | - | ----- |  | - | -------------- |  | - | ----- | 
| |                    |   |       |  |   | Accumulated    |  |   |       | 
| |                    |   | Cost  |  |   | Depreciation   |  |   | Net   | 
| |                    |   |       |  |   |                |  |   |       | 
| | Computer equipment | $ | 2,327 |  | $ | 384            |  | $ | 1,943 | 

| |                    |   |       |  |   | September 30, 2013 |  |   |     | 
| | ------------------ | - | ----- |  | - | ------------------ |  | - | --- | 
| |                    |   |       |  |   | Accumulated        |  |   |     | 
| |                    |   | Cost  |  |   | Depreciation       |  |   | Net | 
| |                    |   |       |  |   |                    |  |   |     | 
| | Computer equipment | $ | 5,631 |  | $ | 5,631              |  | $ | -   | 

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 3

|Note 4 | Derivative Financial
      Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | During the year ended September 30, 2013, the Company
      issued an aggregate of 6,448,966 common stock purchase warrants that were
      required to be accounted for as liabilities pursuant to ASC 815.                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | At September 30, 2013, these common stock purchase
      warrants were still outstanding and were being accounted for pursuant to
      the guidance of ASC 815, whereby these derivative instruments are required
      to be recorded as liabilities on the balance sheet measured at fair value
      and were marked-to-market at each balance sheet date with the change in
      fair value being recorded in the consolidated statements of operations as
      other income or expense.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | Effective in the six months ended March 31, 2014, the
      common stock purchase warrants were amended. As of the modification date,
      these warrants are no longer required to be accounted for as liabilities.                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | Pursuant to the guidance of ASC 815, the Company
      reclassified the fair value of these instruments on the date of
      modification into equity, with the change in fair value up to the date of
      modification being recorded on the consolidated statements of operations
      as other income.                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | A summary of the Companys derivative liabilities for the
      three months ended March 31, 2014 and for the year ended September 30,
      2013 is as follows:                                                                                                                                                                                                                                                                                                                               

| |                                                       |   | March 31, |   |   | September 30, |  
| | ----------------------------------------------------- | - | --------- | - | - | ------------- | -
| |                                                       |   | 2014      |   |   | 2013          |  
| |                                                       |   |           |   |   |               |  
| | Balance, beginning of the period                      | $ | 904,000   |   | $ | -             |  
| | Fair value at issuance of derivative liability        |   | -         |   |   | 919,000       |  
| | Change in fair value of derivative
      liability    |   | (683,000  | ) |   | (15,000       | )
| | Transfer to equity upon modification of warrant terms |   | (221,000  | ) |   | -             |  
| | Balance, end of the period                            | $ | -         |   | $ | 904,000       |  

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 4

|Note 5 | Promissory Notes Payable
|------ | ------------------------

| |                                                                                                                                                                                                                         |   | March 31, |   |   | September 30, |  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- | - | - | ------------- | -
| |                                                                                                                                                                                                                         |   | 2014      |   |   | 2013          |  
| | Promissory note dated December 31, 2012
      with a principal balance of $90,390 (CDN$100,000) bearing interest at 12%
      per annum, due on June 30, 2014                                                           |   | 90,390    |   |   | 100,000       |  
| |                                                                                                                                                                                                                         |   |           |   |   |               |  
| | Promissory note dated January 9, 2013 with
      a principal balance of $78,348 (CDN$86,677), bearing interest at 12% per
      annum, secured by all the present and future assets of the Company; due on
      demand |   | 78,348    |   |   | 84,060        |  
| |                                                                                                                                                                                                                         |   |           |   |   |               |  
| | Promissory note dated January 9, 2013 with
      a principal balance of $24,982 (CDN$27,639), bearing interest at 12% per
      annum, secured by all the present and future assets of the Company; due on
      demand |   | 24,982    |   |   | 26,803        |  
| |                                                                                                                                                                                                                         |   | 193,720   |   |   | 210,863       |  
| | Less: current portion                                                                                                                                                                                                   |   | (193,720  | ) |   | (210,863      | )
| |                                                                                                                                                                                                                         | $ | -         |   | $ | -             |  

On December 31, 2012, the Company
  issued a promissory note having a principal balance of $90,390 (CDN$100,000)
  with terms that included interest at 12% per annum and matured on June 30, 2013,
  in exchange for an accounts payable owing with respect to unpaid consulting
  fees. This note was not repaid on June 30, 2013 and the maturity date has been
  extended to June 30, 2014.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 5

|Note 5 | Promissory Notes Payable
      (contd)                                                    
|------ | --------------------------------------------------------------------------------------------
|       |                                                                                             
|       | On January 9, 2013, the Company
      issued two (2) promissory notes (the Secured Notes);

| | a) | The Company issued a promissory note in the amount of
      $78,348 (CDN$86,677) to the former President, Secretary, Treasurer, CFO
      and director of the Company (the President) in exchange for unpaid
      consulting fees owing to the President. The note is bearing interest at
      12% per annum and was due June 30, 2013.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                            
| | b) | The Company issued a promissory note in the amount of
      $24,982 (CDN$27,639) to a former director of the Company (the Director)
      in exchange for unpaid consulting fees owing to the Director. The note is
      bearing interest at 12% per annum and was due June 30,
      2013.                                             

The Secured Notes are secured by a
  right to delay the transfer of any or all of the Companys assets until the
  obligations of the Secured Notes are satisfied, including a restriction on the
  transfer of cash by the Company and a security interest over the intellectual
  property of the Company. The security interests of the Secured Notes is ranked
  senior to any and all security interests granted prior to the issuance of the
  notes and to all subsequent security interests granted, unless the holders agree
  in writing to other terms.

In addition, the Secured Notes contain
  a provision whereby if they are not repaid within 10 days of their maturity
  dates, they shall bear late fees in addition to interest accruing, at a rate of
  $100 per day per note. In an event of default by the Company, under the terms of
  the Secured Notes, the notes shall bear additional late fees of $500 per day per
  note.

Subsequent to the issuance of these
  Secured Notes, the former President resigned as President, Secretary, Treasurer,
  CFO and director of the Company and the former Director resigned as director of
  the Company.

The Company did not repay the notes on
  June 30, 2013. The Company has disputed the issuance and enforceability of the
  Secured Notes and should there be an attempt to enforce the Secured Notes or
  collection on them, the Company will consider a legal remedy. The Company has
  not accrued any late fees in connection with these Secured Notes as of March 31,
  2014 or September 30, 2013, as the Company does not consider these amounts to be
  legally enforceable.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 6

|Note 6 | Senior  Convertible Debentures
|------ | ------------------------------

| |                                                                                          |   | March 31,  |   |   | September 30, | 
| | ---------------------------------------------------------------------------------------- | - | ---------- | - | - | ------------- | 
| |                                                                                          |   | 2014       |   |   | 2013          | 
| |                                                                                          |   |            |   |   |               | 
| | Senior Convertible Debentures, non-interest
      bearing, unsecured, due March 18, 2044 |   | 10,000,000 |   |   | -             | 
| |                                                                                          |   |            |   |   |               | 
| |                                                                                          |   |            |   |   |               | 
| | Less: Debt Discount                                                                      |   | (9,998,989 | ) |   | -             | 
| |                                                                                          |   | 1,011      |   |   | -             | 
| | Less: current portion                                                                    |   | (1,011     | ) |   | -             | 
| |                                                                                          | $ | -          |   | $ | -             | 

On March 13, 2014, the Company entered
  into a Securities Purchase Agreement (the Purchase Agreement) with certain
  purchasers (the Purchasers) pursuant to which the Company issued senior
  convertible debentures in the aggregate principal amount of $10,000,000 (the
  Debentures).

In connection with the issuance of the
  Debentures, the Company issued an aggregate of 67,666,666 share purchase
  warrants as follows:

Non-Purchasers
      
      
      purchasers
      
      
      TotalSeries A Warrants
      
      33,333,333
      
      
      500,000
      
      
      33,833,333Series B Warrants
      
      33,333,333
      
      
      500,000
      
      
      33,833,33366,666,666
      
      
      1,000,000
      
      
      67,666,666


Each Series A warrant is exercisable
  into one common share of the Company at $0.30 per share until March 18,
  2019.

Each Series B warrant is exercisable
  into one common share of the Company at $0.42 per share until March 18, 2019

The
  Debentures are unsecured, non-interest bearing and are due on March 18, 2044. At
  any time, the Purchasers are entitled to convert the Debentures, in whole or in
  part, into common shares of the Company at $0.30 per share (the Conversion
  Price). The Conversion Price of the debenture will be adjusted in the event of
  common stock dividend, split or consolidation.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 7

|Note 6 | Senior Secured Convertible
      Debentures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Pursuant to the guidance of ASC 470-20 Debt with
      Conversion and Other Options, the Company allocated the proceeds from the
      issuance of the Debentures between the Debentures and the detachable
      Purchaser warrants using the relative fair value method. The fair value of
      the Purchaser warrants of $22,326,200 at issuance resulted in a debt
      discount at issuance of $5,989,900.                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | The Company recorded a beneficial conversion feature
      discount of $4,010,100 in respect of the Debentures issued, based on the
      intrinsic value of the conversion feature limited to a maximum of the
      total proceeds of the Debentures allocated to the Debentures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | The total debt discount at issuance of $10,000,000 is
      being amortized using the effective interest method over the term of the
      Debentures. During the six months ended March 31, 2014, the Company
      recorded accretion expense of $1,011 (2013: $Nil) in respect of the
      accretion of this discount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | In consideration for the Debentures issued, the Company
      issued an aggregate of 1,000,000 share purchase warrants to non-lenders as
      described above. The fair value of the Non- Purchaser Warrants of
      $334,900, along with finders fees and other financing costs directly
      associated with the issuance of the Debentures in the amount of $734,840,
      was recorded as a deferred financing charge and is being amortized to
      income over the term of the Debentures using the effective interest
      method. During the six months ended March 31, 2014, the Company had
      recorded financing expense of $1,199 (2013: $Nil) in respect of the
      amortization of these charges. Accumulated amortization as at March 31,
      2014 was $1,199 (2013: $Nil).
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | The fair value of the Purchaser and Non-Purchaser
      warrants at issuance was determined using the Black Scholes option pricing
      model with the following weighted average assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Risk-free interest rate
      1.56%Expected life (years)
      5.00Expected volatility
      97.16%Dividend yields
      0.00%


In connection with the Purchase
  Agreement, the Company also entered into a registration rights agreement with
  each Purchaser whereby the Company agreed to file a registration statement with
  the Securities and Exchange Commission (the SEC) covering the resale of the
  shares of the Companys common stock issuable upon conversion of the Debentures
  and upon exercise of the Purchaser warrants.

The Registration Statement was filed
  with the SEC on April 11, 2014.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 8

|Note 7 | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On May 24, 2006, the board of directors approved a six
      (6) for one (1) forward split of the authorized issued and outstanding
      common stock. The Companys authorized capital increased from 25,000,000
      shares of common stock to 150,000,000 shares of common stock.                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On September 24, 2007, the Company issued 222,222 common
      shares at $3.60 per share for a total of $800,000 for research and
      development expenses. The common shares were recorded based upon the
      quoted market price of the Companys common stock on the agreement date.                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On September 25, 2007, the Company settled a loan payable
      in the amount of $333,000 by issuing 92,500 common shares at $3.60 per
      share, being the quoted market price of the Companys common stock on the
      settlement date.                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On December 10, 2007, the Company issued 150,000 units at
      $3.50 per unit for proceeds of $525,000. Each unit consisted of one common
      share and one common share purchase warrant entitling the holder to
      purchase an additional common share at $5.00 per share until December 10,
      2009.                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On December 18, 2007, the Company issued 10,000 shares at
      $4.50 per share for a total of $45,000 pursuant to an agreement to settle
      a debt and issued 50,000 shares at $3.86 per share for a total of $193,000
      pursuant to a consulting agreement. The Company recorded compensation
      expense of $65,000 in respect of these issuances based on the excess of
      the fair value of these shares over the balances at which they were
      recorded by the Company.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On May 15, 2008, the Company issued 65,000 common shares
      at $5.24 per share for a total of $340,600 to its former CEO in accordance
      with the terms of a severance agreement upon the termination of his
      services. The common shares were recorded based upon the quoted market
      price of the Companys common stock on the agreement date.                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On August 19, 2008, the Company issued 25,000 common
      shares at $5.07 per share for a total of $ 126,750 to a director of the
      Company pursuant to an agreement to provide consulting services. The
      common shares were recorded based upon the quoted market price of the
      Companys common stock on the agreement date.                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On August 19, 2008, the Company issued 142,698 units at
      $4.25 per unit for proceeds of $606,467 pursuant to private placement
      agreements. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase an additional common
      share at $5.00 per share until August 19, 2009.                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On November 20, 2008, the Company issued 25,000 common
      shares at $2.63 per share for a total of $65,750 to a director of the
      Company pursuant to an agreement to provide consulting services. The
      common shares were recorded based upon the quoted market price of the
      Companys common stock on the issuance date.                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | On February 20, 2009, the Company issued 25,000 common
      shares at $2.50 per share for a total of $62,500 to a director of the
      Company pursuant to an agreement to provide consulting services. The
      common shares were recorded based upon the quoted market price of the
      Companys common stock on the issuance date.                                                                                                                                                 

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 9

|Note 7 | Capital Stock (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On March 6, 2009, the Company issued 89,148 units at
      $2.25 per unit for proceeds of $200,583 pursuant to private placement
      agreements. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase an additional common
      share at $4.00 per share until March 6, 2010.                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On March 20, 2009, the Company issued 10,800 units at
      $2.25 per unit for proceeds of $24,300 pursuant to private placement
      agreements. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase an additional common
      share at $4.00 per share until March 20, 2010.                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On March 20, 2009, the Company issued 2,500 common shares
      at $2.00 per share for a total of $5,000 to a public relations consultant
      pursuant to an agreement to provide consulting services. The common shares
      were recorded based upon the quoted market price of the Companys common
      stock on the issuance date.                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On May 14, 2009, the Company entered into a revised
      consulting agreement with a director whereby the consultant returned
      75,000 common shares to the Company for cancellation. The return of shares
      was recorded in the same amount at which they were originally issued.                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On June 11, 2009 the Company issued 36,000 units at $2.25
      per unit for proceeds of $81,000 pursuant to private placement agreements.
      Each unit consisted of one common share and one common share purchase
      warrant entitling the holder to purchase an additional common share at
      $4.00 per share until June 11, 2010. The Company paid finders fees in the
      amount of $8,100 in relation to this private placement.                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On June 11, 2009 the Company issued 29,227 common shares
      at $2.25 per share for service rendered by consultants. The common shares
      were recorded based upon the fair value of the Companys common stock on
      the issuance date of the shares.                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On June 19, 2009, the Company issued 495,556 units at
      $2.25 per unit for total proceeds of $1,115,000 pursuant to private
      placement agreements. Each unit consisted of one common share and one and
      one-half of a common share purchase warrant entitling the holder to
      purchase additional common shares at $2.25 per share until June 19, 2011.                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On June 26, 2009, the Company issued 22,222 common shares
      at $2.51 per share for finders fees related to the issuance of a $500,000
      note payable. The common shares were recorded based upon the quoted market
      price of the Companys common stock on the issue date.                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On August 19, 2009, the Company issued 128,888 units at
      $2.25 per unit for total proceeds of $289,998. Of these placements, 40,000
      units consisted of one common share and one share purchase warrant
      entitling the holder to purchase an additional common share at $4.00 per
      share until July 9, 2010 and 88,888 Units consisted of one common share
      and one and one- eighth share purchase warrant entitling the holder to
      purchase an additional common shares at $2.25 per share until August 4,
      2011. The Company paid finders fees totalling $19,000 in relation to
      these private placements.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 10

|Note 7 | Capital Stock (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On October 2, 2009 the Company issued 266,666 units at
      $2.25 per unit for proceeds of $600,000 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 shares at $2.25 per share until October 2, 2011. The
      Company had received $300,000 of this amount in the year ended September
      30, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On February 2, 2010 the Company issued 49,505 common
      shares of the Company, at their fair value of $2.02 per share pursuant to
      an agreement with a former officer to settle an outstanding amount owed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On April 9, 2010, the Company issued 92,499 units at
      $2.60 per unit for proceeds of $240,498 pursuant to private placement
      agreements. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $3.50 per share until April 9, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On April 30, 2010, the Company issued 9,825 common shares
      of the Company, at $2.85 per share as consideration for terminating a
      consulting agreement and for services rendered under the agreement. The
      common shares were recorded based upon the quoted market price of the
      Companys common stock on the date of the termination of the agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On June 29, 2010, the Company issued 941,000 units at
      $2.50 per unit for total proceeds of $2,352,500 pursuant to private
      placement agreements. Each unit consisted of one common share and one-half
      of a common share purchase warrant entitling the holder to purchase
      additional common shares at $3.50 per share until December 29, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On July 5, 2010, the Company issued 400,000 units in
      settlement of $1,000,000 owing to a creditor. Each unit consisted of one
      common share and one-half common share purchase warrant entitling the
      holder to purchase additional common shares at 3.50 per share until
      January 5, 2012. The fair value of the units issued was determined to be
      $1,444,000 on the date they were issued and thus the Company recorded a
      loss on settlement of accounts payable of $444,000 with a corresponding
      credit to additional paid-in capital of the same amount on date of
      issuance. The fair value of the shares included in the units was
      determined with reference to their quoted market price and the value of
      the warrants was determined using the Black-Scholes model with the
      following assumptions: exercise price - $3.50, stock price - $3.15,
      expected volatility  68.45%, expected life  1.5 years, dividend yield 
      0.00%.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On September 3, 2010, the Company issued 163,000 units at
      $2.75 per unit for proceeds of $448,250 pursuant to private placement
      agreements. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $3.75 per share until March 3, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On September 3, 2010, the Company issued 9,000 units at
      $2.75 per unit for finders fees related to the private placement of the
      same date. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $3.75 per share until March 3, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 11

|Note 7 | Capital Stock (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On September 30, 2010, the Company issued 510,638 common
      shares at $2.35 per share pursuant to the terms of a convertible note
      payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On September 30, 2010, the Company issued 82,310 units at
      $2.25 per unit pursuant to the terms of convertible notes payable. Each
      unit consisted of one common share and one-half common share purchase
      warrant entitling the holder to purchase additional common shares at $3.50
      per share until September 30, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On September 30, 2010, the Company issued 245,748 units
      at $2.25 per unit pursuant to the terms of convertible notes payable. Each
      unit consisted of one common share and one common share purchase warrant
      entitling the holder to purchase additional common shares at $3.00 per
      share until September 30, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On November 18, 2010, the Company issued 393,846 units at
      $2.75 per unit for proceeds of $1,083,075 pursuant to a private placement
      agreement. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $4.50 per share until May 18, 2012. The Company paid a finders
      fee totalling $65,363 in respect of this private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On November 18, 2010, the Company issued 3,636 units at
      $2.75 per unit for finders fees related to the private placement of the
      same date. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $4.50 per share until May 18, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On November 18, 2010, the Company issued 853,075 units in
      the conversion of two notes payable originally convertible at $2.50. The
      Company recorded debt conversion expense of $504,160, related to the fair
      value of the additional units issued as a result of converting at the
      lower conversion price. Each unit consisted of one common share and one
      common share purchase warrant entitling the holder to purchase additional
      common shares at $3.00 per share until November 18, 2012. The fair value
      of the shares included in the units was determined with reference to their
      quoted market price and the value of the warrants was determined using the
      Black-Scholes model with the following assumptions: exercise price -
      $3.00, stock price - $4.12, expected volatility  78.33%, expected life 
      2.0 years, dividend yield  0.00%, risk-free rate  0.52%.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On November 18, 2010, the Company issued 145,063 shares
      of common stock at their fair value of $4.12 per share based on their
      quoted market price pursuant to settling non- convertible interest bearing
      notes payable outstanding in the amount of $398,922, including accrued
      interest of $26,032. The Company recorded a loss on settlement of debt of
      $198,738 based on the difference between the carrying value of the debt
      settled and the fair value of the shares issued.                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | On November 18, 2010, the Company issued 181,818 shares
      of common stock at their fair value of $4.12 per share based on the quoted
      value of units issued in a private placement on the same date to one
      creditor in settlement of $500,000 of debt owing. The Company recorded a
      loss on settlement of accounts payable of $249,090 based on the difference
      of the carrying value of the account payable and the fair value of the
      shares issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 12

|Note 7 | Capital Stock (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On November 25, 2010, the Company issued 29,851 units at
      $3.35 per unit for proceeds of $100,000 pursuant to a private placement
      agreement. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $4.50 per share until November 25, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On November 25, 2010, the Company issued 2,985 units at
      $3.35 per unit for finders fees related to the private placement of the
      same date. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $4.50 per share until November 25, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On February 1, 2011, the Company issued 61,014 units at
      $3.75 per unit for proceeds of $228,800 pursuant to a private placement
      agreement. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $5.25 per share until August 1, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On May 3, 2011, the Company issued 33,334 units at $3.00
      per unit for proceeds of $100,000 pursuant to a private placement
      agreement. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $4.00 per share until April 20, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On June 19, 2011, the Company issued 700,000 common
      shares at $2.25 per share for proceeds of $1,575,000 pursuant to the
      exercise of warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On September 26, 2011, the Company issued 650,000 units
      in settlement of $975,000 of debt owing. Each unit consisted of one common
      share and one-half common share purchase warrant entitling the holder to
      purchase additional common shares at $2.00 per share until September 26,
      2012. The Company recorded a loss on settlement of accounts payable in the
      amount of $84,963 based on the fair value of shares being $975,000 at
      their issuance and the fair value of the warrants determined to be
      $84,963. The fair value of the shares included in the units was determined
      with reference to their quoted market price and the value of the warrants
      was determined using the Black-Scholes model with the following
      assumptions: exercise price - $2.00, stock price - $1.50, expected
      volatility  69%, expected life  1.0 years, dividend yield  0.00%,
      risk-free interest rate  0.10%.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | On December 6, 2011, the Company issued 615,600 units at
      $1.25 per unit for proceeds of $769,500 pursuant to private placement
      agreements. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $2.00 per share until December 6, 2012. The Company paid
      finders fees of $77,000 in connection with this private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 13

|Note 7 | Capital Stock (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | On February 9, 2012 the Company issued 8,000 units for
      service rendered by a director and officer of the Company. Each unit
      consisted of one common share and one-half common share purchase warrant
      entitling the holder to purchase additional common shares at $2.00 per
      share until February 9, 2013. The fair value of the units issued was
      determined to be $15,896 on the date they were issued and the Company
      recorded consulting fees of $15,896 on the statement of operations for the
      year ended September 30, 2012. The fair value of the shares included in
      the units was determined with reference to their quoted market price and
      the value of the warrants was determined using the Black-Scholes model
      with the following assumptions: exercise price - $2.00, stock price -
      $1.74, expected volatility  84.88%, expected life  1.0 years, risk free
      interest rate  0.15%, dividend yield  0.00%.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | On February 9, 2012, the Company issued 270,000 units at
      $1.25 per unit for proceeds of $337,500 pursuant to private placement
      agreements. Each unit consisted of one common share and one-half common
      share purchase warrant entitling the holder to purchase additional common
      shares at $2.00 per share until February 9, 2013. The Company paid a
      finders fee of $33,750 in connection with this private placement. During
      the six months ended March 31, 2014, the Company recorded a recovery of
      $25,150 in respect of these finders fees, which has been recorded as
      additional paid in capital.                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | On May 31, 2012, the Company issued 2,700,513 units in
      settlement of $1,297,889 in promissory notes and $52,367 of accrued
      interest on these notes, which was included in accounts payable and
      accrued liabilities Each unit consisted of one common share and one common
      share purchase warrant entitling the holder to purchase additional common
      shares at $0.75 per share until November 30, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | On June 26, 2012, the Company agreed to issue 75,000
      common shares to the former president of the Company for past services and
      in final settlement of a consulting agreement dated February 1, 2007.
      These shares were issued on July 12, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | On July 5, 2013, the Company issued 4,208,910 units in
      settlement of $549,000 in promissory notes, $26,058 of accrued interest on
      these notes, which was included in accounts payable and accrued
      liabilities, and $1,108,506 in other accounts payable and accrued
      liabilities. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase additional common shares
      at $0.75 per share until July 5, 2018.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | On July 5, 2013, the Company issued 2,196,133 units at
      $0.40 per unit for gross proceeds of $878,453 pursuant to private
      placement agreements. Each unit consisted of one common share and one
      common share purchase warrant entitling the holder to purchase additional
      common shares at $0.75 per share until July 5, 2018. The Company paid
      finders fees of $89,680 and issued warrants to purchase 43,923 shares of
      common stock at $0.75 per share until July 5, 2018 in connection with this
      private placement. In addition, the Company incurred share issuance costs
      of $16,494.                                                                                                                                                                                                                                                                                                                                                       

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 14

|Note 7 | Capital Stock (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | All of the 6,448,966 warrant agreements issued on July 5,
      2013 contain a contingent call provision whereby the Company may have the
      option to call for cancellation all or any portion of the warrants for
      consideration equal to $0.001 per share, provided the quoted market price
      of the Companys common stock exceeds $1.50 for a period of twenty
      consecutive trading days, subject to certain minimum volume restrictions
      and other restrictions as provided in the warrant agreements.                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | On February 24, 2014, the Company issued 120,000 units at
      $0.50 per unit for gross proceeds of $60,000, which was received during
      the year ended September 30, 2013. Each unit consisted of one common share
      and one common share purchase warrant entitling the holder to purchase
      additional common shares at $1.00 per share for a period of five years
      from the date of issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | On February 24, 2014, the Company issued 500,000 units at
      $0.30 per unit for gross proceeds of $150,000. Each unit consisted of one
      common share and one common share purchase warrant entitling the holder to
      purchase additional common shares at $0.75 per share for a period of five
      years from the date of issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Common stock to be issued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | On February 28, 2014, the Company received $30,000 in
      share subscriptions in respect of the issuance of 100,000 units at $0.30
      per unit. Each unit consisted of one common share and one common share
      purchase warrant entitling the holder to purchase additional common shares
      at $0.75 per share for a period of five years from the date of issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 8 | Lincoln Park Purchase Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | On July 5, 2013, the Company entered into a $10,000,000
      purchase agreement (the Purchase Agreement) with Lincoln Park Capital
      Fund, LLC, (Lincoln Park) an Illinois limited liability company (the
      Financing) pursuant to which the Company may sell and issue to Lincoln
      Park, and Lincoln Park is obligated to purchase, up to $10,000,000 in
      value of its shares of common stock from time to time over a 25 month
      period. In connection with the Financing, the Company also entered into a
      registration rights agreement with Lincoln Park whereby the Company agreed
      to file a registration statement with the Securities and Exchange
      Commission (the SEC) covering the shares of the Companys common stock
      that may be issued to Lincoln Park under the Purchase Agreement.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 15

|Note 8 | Lincoln Park Purchase
      Agreement (Contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | The Company will determine, at its own discretion, the
      timing and amount of its sales of common stock, subject to certain
      conditions and limitations. The purchase price of the shares that may be
      sold to Lincoln Park under the Purchase Agreement will be based on the
      market price of the Companys shares of common stock immediately preceding
      the time of sale without any fixed discount, provided that in no event
      will such shares be sold to Lincoln Park when the closing sale price is
      less than $0.50 per share. There are no upper limits on the per share
      price that Lincoln Park may pay to purchase such common stock. The
      purchase price will be equitably adjusted for any reorganization,
      recapitalization, non-cash dividend, stock split or similar transaction
      occurring during the business days used to compute such price.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | Pursuant to the Purchase Agreement, Lincoln Park
      initially purchased 250,000 shares of the Companys common stock for
      $100,000. In consideration for entering into the Purchase Agreement, the
      Company issued to Lincoln Park 341,858 shares of common stock as a
      commitment fee and shall issue up to 133,409 shares pro rata, when and if,
      Lincoln Park purchases, at the Companys discretion, the remaining
      $10,000,000 aggregate commitment. The Purchase Agreement may be terminated
      by the Company at any time at its discretion without any cost to the
      Company.                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | On October 23, 2013, the registration statement was
      declared effective by the SEC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | The Company incurred $98,939 in direct expenses in
      connection with the Purchase Agreement and registration statement. These
      were recorded as share issuance costs as a charge against additional paid
      in capital during the year ended September 30, 2013 and during the six
      months ended March 31, 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | During the six months ended March 31, 2014, the Company
      issued to Lincoln Park an aggregate of 402,510 shares of common stock
      under the Purchase Agreement, including 400,000 shares of common stock for
      an aggregate purchase price of $188,170 and 2,510 commitment shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 16

|Note 9 | Related Party Transactions                                                                                                                                                                                                               
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                          
|       | During the three and six months ended March 31, 2014, the
      Company was charged consulting fees totaling $Nil and $Nil, respectively
      (2013: $10,654 and $81,072, respectively) by directors, officers of the
      Company.    
|       |                                                                                                                                                                                                                                          
|       | As of March 31, 2014, included in accounts payable and
      accrued liabilities was $23,196 (September 30, 2013: $30,447) owing to
      directors and officers of the Company and a former director and officer of
      the Company.  
|       |                                                                                                                                                                                                                                          
|       | During the year ended September 30, 2013, pursuant to an
      employment agreement with the President, Chief Executive Officer, Chief
      Financial Officer, Secretary and Treasurer, and Director, of the Company,
      the Company:

| | i)  | granted 2,000,000 fully vested share purchase options
      exercisable at $0.40 per share until July 5, 2023. No stock based
      compensation expense has been recognized during the three months ended
      March 31, 2014 and 2012 in connection with these options. The Company
      recognized stock based compensation expense of $1,002,500 during the year
      ended September 30, 2013 in connection with these options.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ii) | issued 4,000,000 shares of restricted common stock that
      vest as follows:                                                                                                                                                                                                                                                                                                                                                         

| |  | 25% upon the Company starting a Phase Ib/IIb human study                                                                                                           
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 25% upon the Company in-licensing additional assets in
      clinical or pre-clinical stage (vested during the six months ended March
      31, 2014)              
| |  | 25% upon the Company securing additional non-dilutive
      equity funding in 2013 of at least $5,000,000 with a share price higher
      than the previous funding
| |  | 25% upon the Company obtaining a listing on a major stock
      exchange                                                                                           

Included in operating results for the three and six months ended March 31, 2014 is an amount of $610,000 relating to the vesting of 1,000,000 shares of restricted common stock upon the achievement of certain performance conditions.  The fair value of $0.61 per share was determined with reference to the quoted market price of the Company's shares on the commitment date.  This amount has been included in common stock to be issued at March 31, 2014.

Included in operating results for the
  period from January 23, 2004 (Date of inception) to March 31, 2014 is $18,375 in
  general and administrative expenses donated to the Company by the directors and
  $33,666 in debts forgiven by the directors of the Company.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 17

|Note 10 | Commitments
|------- | -----------

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

WeightedAverageExerciseNumber of Shares
      
      
      PriceBalance, September 30, 2012
      
      4,250,141
      
      $
      1.16Expired
      
      (1,549,628
      )
      $
      2.56Issued
      
      6,448,966
      
      $
      0.75Balance, September 30, 2013
      
      9,149,479
      
      $
      0.75Expired
      
      (2,700,513
      )
      $
      0.75Issued
      
      68,286,666
      
      $
      0.36Balance, March 31, 2014
      
      74,735,632
      
      $
      0.40


At March 31, 2014, the Company had
  74,735,632 share purchase warrants outstanding as follows:

Number
      
      
      Exercise Price
      
      
      Expiry Date6,448,966
      
      $
      0.75
      
      
      July 5, 2018500,000
      
      $
      0.75
      
      
      February 14, 2019120,000
      
      $
      1.00
      
      
      February 24, 201933,833,333
      
      $
      0.30
      
      
      March 13, 201933,833,333
      
      $
      0.42
      
      
      March 13, 201974,735,632


All of the 6,448,966 warrants expiring
  on July 5, 2018 and the 500,000 warrants expiring February 14, 2019 contain a
  contingent call provision whereby the Company may have the option to call for
  cancellation of all or any portion of the warrants for consideration equal to
  $0.001 per share, provided the quoted market price of the Companys common stock
  exceeds $1.50 for a period of twenty consecutive trading days, subject to
  certain minimum volume restrictions and other restrictions as provided in the
  warrant agreements.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 18

|Note 10 | Commitments (contd)
|------- | ---------------------

| | b) | Stockbased Compensation Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In April, 2007, the Company adopted a stock option plan
      which provides for the granting of stock options to selected directors,
      officers, employees or consultants in an aggregate amount of up to
      3,000,000 common shares of the Company and, in any case, the number of
      shares to be issued to any one individual pursuant to the exercise of
      options shall not exceed 10% of the issued and outstanding share capital.
      The granting of stock options, exercise prices and terms are determined by
      the Company's Board of Directors. If no vesting schedule is specified by
      the Board of Directors on the grant of options, then the options shall
      vest over a 4-year period with 25% of the options granted vesting each
      year commencing 1 year from the grant date. For stockholders who have
      greater than 10% of the outstanding common shares of the Company and who
      have granted options, the exercise price of their options shall not be
      less than 110% of the fair of the stock on grant date. Otherwise, options
      granted shall have an exercise price equal to their fair value on grant
      date.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | On February 2, 2011, the Company amended and restated the
      2007 stock option plan to increase the number of options authorized to
      4,000,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | A summary of the status of Companys outstanding stock
      purchase options for the year ended March 31, 2014 is presented
      below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                                   |  |           |   |   | Weighted |  |   |                  | 
| | --------------------------------- |  | --------- | - | - | -------- |  | - | ---------------- | 
| |                                   |  |           |   |   | Average  |  |   | Weighted Average | 
| |                                   |  | Number of |   |   | Exercise |  |   | Grant Date fair  | 
| |                                   |  | Shares    |   |   | Price    |  |   | value            | 
| | Outstanding at September 30, 2012 |  | 1,775,000 |   | $ | 2.94     |  |   |                  | 
| | Expired                           |  | (550,000  | ) | $ | 3.86     |  |   |                  | 
| | Forfeited                         |  | (150,000  | ) | $ | 3.72     |  |   |                  | 
| | Granted                           |  | 2,000,000 |   | $ | 0.40     |  | $ | 0.50             | 
| | Outstanding at September 30, 2013 |  | 3,075,000 |   | $ | 1.26     |  |   |                  | 
| | Expired                           |  | (505,000  | ) | $ | 2.50     |  |   |                  | 
| | Outstanding at March 31, 2014     |  | 2,570,000 |   | $ | 1.02     |  |   |                  | 
| | Exercisable at March 31, 2014     |  | 2,300,000 |   | $ | 0.79     |  |   |                  | 
| | Exercisable at September 30, 2013 |  | 2,305,000 |   | $ | 0.79     |  |   |                  | 

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 19

|Note 10 | Commitments (contd)
|------- | ---------------------

| | b) | Stockbased Compensation Plan  (contd)                              
| | -- | ----------------------------------------------------------------------
| |    |                                                                       
| |    | At March 31, 2014, the following stock options were
      outstanding:

Number of Shares
      
      
      
      
      
      
      
      
      
      
      
      Aggregate
      
      
      RemainingNumber
      
      
      Exercise
      
      
      
      
      
      Intrinsic
      
      
      ContractualTotal
      
      
      
      
      Vested
      
      
      Price
      
      
      Expiry Date
      
      
      Value
      
      
      Life
        (yrs)150,000
      
      (1
      )
      
      150,000
      
      $
      3.10
      
      
      June 30, 2014
      
      
      -
      
      
      0.2550,000
      
      (2
      )
      
      50,000
      
      $
      3.50
      
      
      June 30, 2014
      
      
      -
      
      
      0.25100,000
      
      (3
      )
      
      100,000
      
      $
      3.67
      
      
      March 30, 2016
      
      
      -
      
      
      2.00270,000
      
      (4
      )
      
      -
      
      $
      3.00
      
      
      February 8, 2017
      
      
      -
      
      
      2.862,000,000
      
      (5
      )
      
      2,000,000
      
      $
      0.40
      
      
      July 5, 2023
      
      
      -
      
      
      9.272,570,000
      
      
      
      
      2,300,000
      
      
      
      
      
      
      
      
      -


The aggregate intrinsic value is
  calculated as the difference between the exercise price of the underlying awards
  and the quoted market price of the Companys stock for the options that were
  in-the-money at March 31, 2014.

| | (1) | As of March 31, 2014 and September 30, 2013, these
      options had fully vested. The Company did not recognize any stock-based
      compensation for these options during the six months ended March 31, 2014
      (2013: $Nil).                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (2) | As of March 31, 2014 and September 30, 2013, these
      options had fully vested. The Company did not recognize any stock-based
      compensation during the six months ended March 31, 2014 (2013:
      $nil).                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (3) | As of March 31, 2014 and September 30, 2013, these
      options had fully vested. The fair value of these options at issuance was
      calculated to be $267,000. The Company did not recognize any stock-based
      compensation during the three months ended March 31, 2014 (2013:
      $Nil).                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (4) | As of March 31, 2014 and September 30, 2013, these
      options had not vested. The options vest upon one or more compounds:
      entering Phase II trial  90,000 options; entering Phase III trial 
      90,000 options; and receiving FDA approval  90,000 options. No
      stock-based compensation has been recorded in the financial statements as
      none of the performance conditions have yet been met.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (5) | As of March 31, 2014 and September 30, 2013 these options
      had fully vested. These options were granted during the year ended
      September 30, 2013 and vested immediately upon granting. The Company
      recognized stock based compensation expense of $Nil during the six months
      ended March 31, 2014 (2013: $Nil) in connection with these
      options.                                             

During the six months ended March 31,
  2014, 505,000 options expired for which the Company had recognized stock-based
  compensation of $Nil (2013: $Nil) during the three months ended March 31,
  2014.

---

Anavex Life Sciences Corp.
  (A Development Stage
  Company)
  Notes to the Interim Condensed Consolidated Financial
  Statements
  March 31, 2014 and 2013
  Unaudited  Page 20

|Note 10 | Commitments (contd)
|------- | ---------------------

| | b) | Stockbased Compensation Plan  (contd)                                     
| | -- | -----------------------------------------------------------------------------
| |    |                                                                              
| |    | At March 31, 2014, the following summarizes the unvested
      stock options:

| |                                        |  |            |   |   | Weighted |  |   | Weighted         | 
| | -------------------------------------- |  | ---------- | - | - | -------- |  | - | ---------------- | 
| |                                        |  |            |   |   | Average  |  |   | Average          | 
| |                                        |  | Number of  |   |   | Exercise |  |   | Grant-Date       | 
| |                                        |  | Shares     |   |   | Price    |  |   | Fair
      Value | 
| | Unvested options at September 30, 2012 |  | 870,000    |   | $ | 2.81     |  | $ | 1.82             | 
| | Granted                                |  | 2,000,000  |   | $ | 0.40     |  | $ | 0.50             | 
| | Expired                                |  | (100,000   | ) | $ | 3.86     |  | $ | 2.49             | 
| | Vested                                 |  | (2,000,000 | ) | $ | 0.40     |  | $ | 0.50             | 
| | Unvested options at September 30, 2013 |  | 770,000    |   | $ | 2.68     |  | $ | 1.74             | 
| | Expired                                |  | (500,000   | ) | $ | 2.50     |  | $ | 1.48             | 
| | Unvested options at March 31, 2014     |  | 270,000    |   | $ | 3.00     |  | $ | 2.21             | 

As of March 31, 2014, there was no
  unrecognized compensation cost associated with unvested share-based compensation
  awards that will become vested exclusive of achieving any performance milestones
  that is expected to be recognized in the current fiscal year. There has been no
  stock-based compensation recognized in the financial statements for the six
  months ended March 31, 2014 (2013: $nil) for options that will vest upon the
  achievement of performance milestones because the Company has determined that
  satisfaction of the performance milestones was not probable. Compensation
  relating to stock options exercisable upon achieving performance milestones will
  be recognized in the period the milestones are achieved.

|Note 11  | Supplemental Cash Flow
      Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         | Investing and financing activities that do not have a
      direct impact on current cash flows are excluded from the statement of
      cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         | During the six months ended March 31, 2014, the Company
      reclassified an amount of $221,000 into equity upon modification of the
      terms of certain derivative instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         | During the six months ended March 31, 2013, the Company
      issued three promissory notes in the aggregate principal amount of
      $212,292 in exchange for accounts payable owing to three vendors in
      respect of unpaid consulting fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         | These transactions have been excluded from the statements
      of cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Note  12 | Subsequent  Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         | On May 6, 2014, in favor of new directors  Bernd Metzner, PhD and Elliot Favus, MD, the Company’s board of directors (the  “Board”) approved the grant to each of options to purchase one hundred fifty  thousand (150,000) shares of Company common stock at the closing market price  for the common stock as of May 7, 2014 ($0.30), with said options to vest  annually over a three year period commencing on the first anniversary of the  date of each director’s appointment, as applicable.                                                                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         | On May 9, 2014, the Board approved a cash  bonus in the amount of $400,000 to the Company’s President and CEO, Christopher  Missling, related to the Company’s success in securing $10,000,000 in financing  under the March 13, 2014 Securities Purchase Agreement (the “March Financing”).  Additionally, the Board granted to Mr. Missling 500,000 options to purchase  shares of the Company’s common stock at a price per share equal to the common  stock’s closing price on May 8, 2014 ($0.33). The Board determined that the  March Financing constituted the achievement of certain milestones under Mr.  Missling employment agreement, entitling Mr. Missling to receive the applicable  distributions and benefits thereunder.

---

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking
statements. All statements other than statements of historical facts contained
in this Quarterly Report on Form 10-Q, including statements regarding our
anticipated future clinical and regulatory milestone events, future financial
position, business strategy and plans and objectives of management for future
operations, are forward-looking statements. The words believe, may,
estimate, continue, anticipate, intend, expect and similar
expressions, as they relate to us, are intended to identify forward-looking
statements. Such forward-looking statements include, without limitation,
statements regarding the anticipated start dates, durations and completion dates
of our ongoing and future clinical studies, statements regarding the anticipated
designs of our future clinical studies, statements regarding our anticipated
future regulatory submissions and statements regarding our anticipated future
cash position. We have based these forward-looking statements largely on our
current expectations and projections about future events, including the
responses we expect from the U.S. Food and Drug Administration, or FDA, and
other regulatory authorities and financial trends that we believe may affect our
financial condition, results of operations, business strategy, preclinical and
clinical trials and financial needs. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions including, without
limitation, the risks described in the section entitled Risk Factors. These
risks are not exhaustive. Other sections of this Quarterly Report on Form 10-Q
include additional factors which could adversely impact our business and
financial performance. Moreover, we operate in a very competitive and rapidly
changing environment. New risk factors emerge from time to time and it is not
possible for our management to predict all risk factors, nor can we assess the
impact of all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. You should not rely upon
forward-looking statements as predictions of future events. We cannot assure you
that the events and circumstances reflected in the forward-looking statements
will be achieved or occur and actual results could differ materially from those
projected in the forward-looking statements. Except as required by applicable
laws including the securities laws of the United States and Canada, we assume no
obligation to update or supplement forward-looking statements.

As used in this report, the terms we, us, our, Company,
and Anavex mean Anavex Life Sciences Corp., unless the context clearly
requires otherwise.

Our Current Business

We are a pharmaceutical company engaged in the development of
drug candidates. Our lead compounds ANAVEX 2-73 and ANAVEX PLUS, a combination
of ANAVEX 2-73 with donepezil (Aricept®), are being developed to treat
Alzheimers disease and potentially other central nervous system (CNS) diseases.

In pre-clinical studies conducted  in France and in Greece, ANAVEX 2-73 demonstrated anti-amnesic and  neuroprotective properties in various animal models including the transgenic  mouse model Tg2576. Based on pre-clinical studies, we sponsored a Phase 1  single ascending dose study of ANAVEX 2-73, which was initiated and completed  in 2011. This study was conducted in Germany in collaboration with ABX-CRO  Advanced Pharmaceutical Services (ABX-CRO). The study indicated that ANAVEX  2-73 was well tolerated by study subjects in doses up to 55mg. The Company plans to continue human clinical trials,  among them a prospective Phase 1b/2a study of ANAVEX 2-73 and ANAVEX PLUS, and  a Phase 2 trial thereafter in 2014. Additionally, we  intend to identify and initiate discussions with potential partners in the next  12 months. Further, we may acquire or develop new intellectual property and  assign, license, or otherwise transfer our intellectual property to further our  goals.

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Our Pipeline

Our pipeline includes one drug candidate and several compounds
in different stages of pre-clinical study.

Our proprietary SIGMACEPTOR Discovery Platform produced small
molecule drug candidates with unique modes of action, based on our understanding
of sigma receptors. Sigma receptors may be targets for therapeutics to combat
many human diseases, including Alzheimers disease. When bound by the
appropriate ligands, sigma receptors influence the functioning of multiple
biochemical signals that are involved in the pathogenesis (origin or
development) of disease.

Compounds that have been subjects of our research include the
following:

ANAVEX 2-73

ANAVEX 2-73 may offer a disease-modifying approach in
Alzheimers disease (AD) by using ligands that activate sigma-1 receptors.

In AD animal models, ANAVEX 2-73 has shown pharmacological,
histological and behavioral evidence as a potential neuroprotective,
anti-amnesic, anti-convulsive and anti-depressive therapeutic agent, due to its
potent affinity to sigma-1 receptors and moderate affinities to M1-4 type
muscarinic receptors. In addition, ANAVEX 2-73 has shown a potential dual
mechanism which may impact both amyloid and tau pathology. In a transgenic AD
animal model Tg2576 ANAVEX 2-73 induced a statistically significant
neuroprotective effect against the development of oxidative stress in the mouse
brain, as well as significantly increased the expression of functional and
synaptic plasticity markers that is apparently amyloid-beta independent. It also
statistically alleviated the learning and memory deficits developed over time in
the animals, regardless of sex, both in terms of spatial working memory and
long-term spatial reference memory.

Based on the results of pre-clinical testing, we initiated and
completed a Phase 1 single ascending dose (SAD) clinical trial of ANAVEX 2-73 in
2011. In this Phase 1 SAD trial, the maximum tolerated single dose was defined
per protocol as 55-60 mg. This dose is above the equivalent dose shown to have
positive effects in mouse models of AD. There were no significant changes in
laboratory or electrocardiogram (ECG) parameters. ANAVEX 2-73 was well tolerated
below the 55-60 mg dose with only mild adverse events in some subjects. Observed
adverse events at doses above the maximum tolerated single dose included
headache and dizziness, which were moderate in severity and reversible. These
side effects are often seen with drugs that target central nervous system (CNS)
conditions, including AD.

The ANAVEX 2-73 Phase 1 SAD trial was conducted as a
randomized, placebo-controlled study. Healthy male volunteers between the ages
of 18 and 55 received single, ascending oral doses over the course of the trial.
Study endpoints included safety and tolerability together with pharmacokinetic
parameters. Pharmacokinetics includes the absorption and distribution of a drug,
the rate at which a drug enters the blood and the duration of its effect, as
well as chemical changes of the substance in the body. This study was conducted
in Germany in collaboration with ABX-CRO, a clinical research organization that
has conducted several Alzheimers disease studies, and the Technical University
of Dresden.

ANAVEX PLUS

ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil
(Aricept®) is a potential novel combination drug for Alzheimers disease.
Aricept® (donepezil) is now generic. ANAVEX 2-73 showed in combination with
donepezil an unexpected and clear synergic effect of memory improvement by up to
80% in animal models. A patent application was filed in the US for the
combination of donepezil and ANAVEX 2-73 and if granted would give patent
protection at least until 2033.

In a humanized calibrated cortical network computer model the
unexpected pre-clinical synergy between ANAVEX 2-73 and donepezil was confirmed
and ANAVEX PLUS showed an anticipated ADAS-Cog response of 7 points at 12 weeks
and 5.5 points at 26 weeks, which represents more than 2x the ADAS-Cog of
donepezil alone.

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ANAVEX 3-71

ANAVEX 3-71, previously named AF710B is a preclinical drug
candidate with a novel mechanism of action via sigma-1 receptor activation and
M1 muscarinic allosteric modulation, which has shown to enhance neuroprotection
and cognition in Alzheimer's disease. ANAVEX 3-71 is a CNS-penetrable
mono-therapy that bridges treatment of both cognitive impairments with disease
modifications. It is highly effective in very small doses against the major
Alzheimer's hallmarks in transgenic (3xTg-AD) mice, including cognitive
deficits, amyloid and tau pathologies, and also has beneficial effects on
inflammation and mitochondrial dysfunctions. ANAVEX 3-71 indicates extensive
therapeutic advantages in Alzheimer's and other protein-aggregation-related
diseases given its ability to enhance neuroprotection and cognition via sigma-1
receptor activation and M1 muscarinic allosteric modulation.

ANAVEX 1-41

ANAVEX 1-41 is a sigma-1 agonist. Pre-clinical tests revealed
significant neuroprotective benefits (i.e., protects nerve cells from
degeneration or death) through the modulation of endoplasmic reticulum,
mitochondrial and oxidative stress, which damages and destroys cells and is
believed by some scientists to be a primary cause of AD. In addition, in animal
models, ANAVEX 1-41 prevented the expression of caspase-3, an enzyme that plays
a key role in apoptosis (programmed cell death) and loss of cells in the
hippocampus, the part of the brain that regulates learning, emotion and memory.
These activities involve both muscarinic and sigma-1 receptor systems through a
novel mechanism of action.

ANAVEX 1037

ANAVEX 1037 is designed for the treatment of prostate cancer.
It is a low molecular weight, synthetic compound exhibiting high affinity for
sigma-1 receptors at nanomolar levels and moderate affinity for sigma-2
receptors and sodium channels at micromolar levels. In advanced pre-clinical
studies, this compound revealed antitumor potential with no toxic side effects.
It has also been shown to selectively kill human cancer cells without affecting
normal/healthy cells and also to significantly suppress tumor growth in
immune-deficient mice models. Scientific publications describe sigma receptor
ligands positively, highlighting the possibility that these ligands may stop
tumor growth and induce selective cell death in various tumor cell lines. Sigma
receptors are highly expressed in different tumor cell types. Binding by
appropriate sigma-1 and/or sigma-2 ligands can induce selective apoptosis. In
addition, through tumor cell membrane reorganization and interactions with ion
channels, our drug candidates may play an important role in inhibiting the
processes of metastasis (spreading of cancer cells from the original site to
other parts of the body), angiogenesis (the formation of new blood vessels) and
tumor cell proliferation.

Our compounds are in the pre-clinical and clinical testing
stages of development, and there is no guarantee that the activity demonstrated
in pre-clinical models will be shown in human testing.

Our Target Indications

We have developed compounds with potential application to two
broad categories and several specific indications. The two categories are
diseases of the central nervous system, and cancer. Specific indications
include:

- Alzheimers disease  In 2014, an estimated 5.2 million Americans are
  suffering from Alzheimers disease. The Alzheimers Association® reports that
  by 2025, 7.1 million Americans will be afflicted by the disease, a 40 percent
  increase from currently affected patients. Medications on the market today
  treat only the symptoms of AD and do not have the ability to stop its onset or
  its progression. There is an urgent and unmet need for both a disease
  modifying cure for Alzheimers disease as well as for better symptomatic
  treatments.
- Depression - Depression is a major cause of morbidity worldwide according
  to the World Health Organization (WHO). Pharmaceutical treatment for
  depression is dominated by blockbuster brands, with the leading nine brands
  accounting for approximately 75% of total sales. However, the dominance of the
  leading brands is waning, largely due to the effects of patent expiration and
  generic competition. Our market research leads us to believe that the
  worldwide market for pharmaceutical treatment of depression exceeds $11
  billion annually.

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- Epilepsy - Epilepsy is a common chronic neurological disorder
  characterized by recurrent unprovoked seizures. These seizures are transient
  signs and/or symptoms of abnormal, excessive or synchronous neuronal activity
  in the brain. According to the Centers for Disease Control and Prevention,
  epilepsy affects 2.2 million Americans. Today, epilepsy is often controlled,
  but not cured, with medication that is categorized as older traditional
  anti-epileptic drugs and second generation anti epileptic drugs. Because
  epilepsy afflicts sufferers in different ways, there is a need for drugs used
  in combination with both traditional anti-epileptic drugs and second
  generations anti-epileptic drugs. Decision Resources, one of the worlds
  leading research and advisory firms for pharmaceutical and healthcare issues,
  finds that the epilepsy market will increase from $2.9 billion in 2011 to
  nearly $3.7 billion in 2016.
- Neuropathic Pain  We define neuralgia, or neuropathic pain, as pain that
  is not related to activation of pain receptor cells in any part of the body.
  Neuralgia is more difficult to treat than some other types of pain because it
  does not respond well to normal pain medications. Special medications have
  become more specific to neuralgia and typically fall under the category of
  membrane stabilizing drugs or antidepressants. Our market research leads us to
  believe the worldwide market for pharmaceutical treatment of neuropathic pain
  exceeds $5 billion annually.
- Malignant Melanoma - Predominantly a skin cancer, malignant melanoma can
  also occur in melanocytes found in the bowel and the eye. Malignant melanoma
  accounts for 75% of all deaths associated with skin cancer. The treatment
  includes surgical removal of the tumor, adjuvant treatment, chemo and
  immunotherapy, or radiation therapy. According to IMS Health the worldwide
  Malignant Melanoma market is expected to grow from about $900 million in 2012
  to $4.4 billion by 2022.
- Prostate Cancer  Specific to men, prostate cancer is a form of cancer
  that develops in the prostate, a gland in the male reproductive system. The
  cancer cells may metastasize from the prostate to other parts of the body,
  particularly the bones and lymph nodes. Drug therapeutics for Prostate Cancer
  are expected to increase from $8.1 billion in 2012 to nearly $18.6 billion in
  2017 according to BCC Research.
- Pancreatic Cancer - Pancreatic cancer is a malignant neoplasm of the
  pancreas. In the United States approximately 45,000 new cases of pancreatic
  cancer will be diagnosed this year and approximately 38,000 patients will die
  as a result of their cancer. Our market research leads us to believe that the
  market for the pharmaceutical treatment of pancreatic cancer will exceed $1.2
  billion by 2015.

Recent Corporate Developments

Since the commencement of our second quarter ended March 31,
2014, we have experienced the following significant corporate developments:

- March 13, 2014, we entered into a Securities Purchase Agreement (the
  Securities Purchase Agreement) with the Selling Security
  Holders pursuant to which the Company agreed to sell, and the Selling Security
  Holders agreed to purchase, Senior Convertible Debentures due March 18, 2044
  (the Debentures) in the aggregate principal amount of $10,000,000. In
  addition to the Debentures, we agreed to issue to the Selling Security Holders
  two (2) series of warrants representing the right to purchase up to an
  aggregate of 67,666,666 shares of the Companys common stock (the
  Warrants and together with the Debentures, the Securities).
  The purchase and sale of the Securities was consummated on March 18, 2014, and
  resulted in gross proceeds to the Company in the amount of $10,000,000, before
  deducting agent fees and other transaction-related expenses.
- In March, 2014, we agreed with Lincoln  Park to issue up to $500,000 worth of common stock at $0.30 per share and that  with such investment, Lincoln Park will receive a Series A Warrant with an  exercise price of $0.30 and a Series B Warrant with an exercise price of $0.42,  each respectively representing the right to purchase up to an aggregate of  1,666,667 shares of the Company’s common stock.
- On May 6, 2014, in favor of new  directors Bernd Metzner, PhD and Elliot Favus, MD, our board of directors (the  “Board”) approved the grant to each of options to purchase one hundred fifty  thousand (150,000) shares of our company’s common stock at the closing market  price for the common stock as of May 7, 2014 ($0.30), with said options to vest  annually over a three year period commencing on the first anniversary of the  date of each director’s appointment, as applicable.
- On May 9, 2014, the Board approved a  cash bonus in the amount of $400,000 to our company’s President and CEO,  Christopher Missling, related to our company’s success in securing $10,000,000  in financing under the March 13, 2014 Securities Purchase Agreement (the “March  Financing”). Additionally, the Board granted to Mr. Missling 500,000 options to  purchase shares of our company’s common stock at a price per share equal to the  common stock’s closing price on May 8, 2014 ($0.33). The Board determined that  the March Financing constituted the achievement of certain milestones under Mr.  Missling employment agreement, entitling Mr. Missling to receive the applicable  distributions and benefits thereunder.

5

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Results of Operations

Revenue

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

Operating Expenses

Three months ended March 31, 2014 compared to three months
    ended March 31, 2013

Our operating expenses for the three months ended March 31,
    2014 were $1,021,167, which represents an increase of $894,056, or 703.4%
    compared to $127,111 for the three month period ended March 31, 2013. The
    increase was mainly attributable to (i) the non-cash compensation of $610,000
    relating to the vesting of common stock under our Presidents employment
    agreement, pursuant to performance conditions met during the period; and (ii) an
    increase in research and development expenses in the current period and an
    increase in investor relations expense and other professional fees as a result
    of our capital raising efforts. We expect our research and development expenses
    will continue to increase over the remaining quarters in the current fiscal year
    as a result of funding secured during the current period. We continue to target
    potential research partners to further advance our clinical trials.

Other income (expenses)

The aggregate amount in the other income (expense) for the
    three month period ended March 31, 2014, amounted to $2,307 as compared to
    $21,011 for the comparable three month period ended March 31, 2013. The largest
    single decrease was as a result of a decrease in interest expense in the current
    period as a result of the settlement of various promissory notes during the
    fourth quarter of fiscal 2013.

Six months ended March 31, 2014 compared to six months ended
    March 31, 2013

Our operating expenses for the six months ended March 31, 2014
    were $1,330,775, which represents an increase of $787,797, or 145.1% compared to
    $542,978 for the six month period ended March 31, 2013. The increase was mainly
    attributable to (i) the non-cash compensation of $610,000 relating to the
    vesting of common stock under our Presidents employment agreement, pursuant to
    performance conditions met during the period; and (ii) an increase in investor
    relations expenses and other professional fees and incidentals as a result of
    our capital raising efforts.

Other income (expenses)

The aggregate amount in the other income (expense) for the six
    month period ended March 31, 2014, amounted to $670,552 as compared to $(16,639)
    for the comparable three month period ended March 31, 2013. The largest single
    increase was as a result of a non-cash benefit related to a change in the
    calculated fair value during the period of stock purchase warrants being
    accounted for as derivative liabilities in accordance with US GAAP. These gains
    arose as a result of the requirement of generally accepted accounting principles
    in the United States to re-measure derivatives to their respective fair values
    each reporting period with the changes in fair value being reported as a
    non-operating item on the consolidated statement of operations.

On December 21, 2013, we entered into amendment agreements with
    all of the holders of these warrants such that these warrants are no longer
    required to be accounted for in this manner. As a result of the modification, we
    expect this type of non-operating income will not be incurred in future
    periods.

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Liquidity and Capital Resources

*Working Capital*

March 31, 2014
            
            
            September 30, 2013Current Assets
            
            9,222,036
            
            
            393,449Current Liabilities
            
            1,883,325
            
            
            1,952,660Working Capital (Deficiency)
            $
            7,338,711
            
            
            (1,559,211
            )


As of March 31, 2014, we had $9,193,558 in cash, an increase of
    $8,848,484 from September 30, 2013. The principal reason for this increase is
    due to cash received in respect of the issuance of senior convertible debentures
    in the aggregate principal amount of $10,000,000 that were issued in the current
    period. We intend to use the funds from these debentures to implement our plan
    of operation of researching and developing our compounds, the related patents
    and any further intellectual property we may acquire. TheWe intend to use the
    majority of our capital resources to complete the next clinical trial for ANAVEX
    PLUS, and to perform work necessary to prepare for further clinical development.

***Cash Flows***

Six Month Period Ended March 31,2014
            
            
            2013Cash flows used in operating
              activities
            $
            (782,519
            )
            $
            (260,875
            )Cash flows from investing activities
            
            (2,327
            )
            
            NilCash flows from financing
              activities
            
            9,633,330
            
            
            250,000Increase (decrease) in cash
            $
            8,848,484
            
            $
            (10,875
            )


Cash flow used in operating activities

Our cash used in operating activities for the six month period
    ended March 31, 2014 was $782,519 compared to $260,875 used in operating
    activities for the comparative six month period ended March 31, 2013. The
    increase in cash used in operating activities was primarily as a result of the
    repayment of current trade payables in the current period as a result of cash
    available from financings.

Cash used in investing activities

Cash used in investing activities was $2,327 in the current six
    month period ended March 31, 2014 as compared to $Nil in the comparative period.
    This is as a result of a small equipment purchase in the current period.

Cash flow provided by financing activities

Our cash provided by financing activities for the six month
    period ended March 31, 2014 was $9,633,330, attributable to cash received from
    the issuance of convertible debentures in the aggregate principal amount of
    $10,000,000, less related fees and expenses of $734,840 incurred in connection
    with the closing of these debentures. We also received cash from the issuance of
    common shares under the Purchase Agreement with Lincoln Park Capital Fund, LLC
    (described under Future Financing below).

In the comparative six month period ended March 31, 2013, we
    had cash inflows of $250,000 from activities related to the issuance of short
    term debt.

Other Financing

On July 5, 2013, the Company entered into a Purchase Agreement
    (Purchase Agreement) with Lincoln Park Capital Fund, LLC (Lincoln Park).
    Pursuant to the Purchase Agreement, Lincoln Park initially purchased 250,000
    shares of the Companys common stock for $100,000. During the six months ended
    March 31, 2014, we issued an aggregate of 402,510 shares of common stock under
    the Purchase Agreement, including 400,000 shares of common stock for an
    aggregate purchase price of $188,170 and 2,510 commitment shares.

The Company has the right, in its sole discretion over a
    25-month period, to sell to Lincoln Park up to the additional aggregate
    commitment of $9.9 Million of shares of common stock. There are no upper limits
    on the per share price that Lincoln Park may pay to purchase such common stock.
    Furthermore, the Company controls the timing and amount of any future sales, if
    any, of shares of common stock to Lincoln Park except that, pursuant to the
    terms of the Purchase Agreement, we would be unable to sell shares to Lincoln
    Park if and when the closing sale price of our common stock is below $0.50 per
    share, subject to adjustment as set forth in the Purchase Agreement. Lincoln
    Park has no right to require any sales and is obligated to purchase common stock
    as directed by the Company.

7

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Other than our rights related to the Lincoln Park financing,
        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.

We expect that we will be able to continue to fund our
    operations through existing cash on hand and through equity and debt financing
    in the future. If we raise additional financing by issuing equity securities,
    our existing stockholders ownership will be diluted. Obtaining commercial
    loans, assuming those loans would be available, will increase our liabilities
    and future cash commitments.

Off-Balance Sheet Arrangements

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

Application of Critical Accounting Policies

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

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

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

Research and Development Expenses

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

In addition, we incur expenses in respect of the acquisition of
    intellectual property relating to patents and trademarks. The probability of
    success and length of time 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, we expense the acquisition of patents and trademarks.

8

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Stock-based Compensation

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

Stock-based payments to non-employees are measured at the fair
    value of the consideration received, or the fair value of the equity instruments
    issued, or liabilities incurred, whichever is more reliably measurable. The fair
    value of stock-based payments to non-employees is periodically re-measured until
    the counterparty performance is complete, and any change therein is recognized
    over the vesting period of the award and in the same manner as if we had paid
    cash instead of paying with or using equity based instruments. The cost of the
    stock-based payments to non-employees that 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.

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

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

Recent Accounting Pronouncements

There are no new accounting pronouncements that we recently
    adopted or are pending our adoption that are expected to have a material impact
    on the Companys results of operations, financial position or cash flows.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISKS.

We are a smaller reporting company as defined by Rule 12b-2 of
    the Securities Exchange Act of 1934 and are not required to provide information
    under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of
    1934, our management, with the participation of our principal executive officer
    and principal financial officer, evaluated our disclosure controls and
    procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of
    1934) as of the end of the period covered by this Quarterly Report on Form 10-Q.
    Disclosure controls and procedures are controls and other procedures that are
    designed to ensure that information required to be disclosed in our reports
    filed or submitted under the Securities Exchange Act of 1934 is recorded,
    processed, summarized and reported, within the time periods specified in the
    Securities and Exchange Commissions rules and forms. Disclosure controls and
    procedures include controls and procedures designed to ensure that information
    required to be disclosed in our reports filed under the Securities Exchange Act
    of 1934 is accumulated and communicated to our principal executive officer and
    principal financial officer to allow timely decisions regarding required
    disclosure.

Based on that evaluation, our management, with the
    participation of our principal executive officer and principal financial
    officer, concluded that as of the end of the period covered by this Quarterly
    Report on Form 10-Q, our disclosure controls and procedures were not effective.
    The ineffectiveness of our disclosure controls and procedures was due to the
    material weaknesses disclosed in our Annual Report on Form 10-K filed on
    December 30, 2013.

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We intend to take appropriate and reasonable steps to make the
        necessary improvements to remediate these deficiencies. However, due to our size
        and nature, segregation of all conflicting duties has not always been possible
      and may not be economically feasible.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial
    reporting during the fiscal quarter ended March 31, 2014 that have materially
    affected, or are reasonably likely to materially affect our internal control
    over financial reporting.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We know of no material, existing or pending legal proceedings
    to which we or our subsidiary 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.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of
    the Securities Exchange Act of 1934 and are not required to provide information
    under this item. However, current and prospective investors are encouraged to
    review the risks set forth in Part I, Item 1A, Risk Factors in our most recent
    Annual Report on Form 10-K as filed with the Securities and Exchange Commission
    on December 30, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

Exhibit Number
            Description(3)
            Articles of Incorporation and Bylaws3.1
            Articles of Incorporation (incorporated by reference to
                  an exhibit to our Registration Statement on Form SB-2 filed on January 13,
                2005)3.2
            Bylaws (incorporated by reference to an exhibit to our
                Current Report on Form 8-K filed on September 28, 2007)3.3
            Articles of Merger filed with the Secretary of State of
                  Nevada on January 10, 2007 and which is effective January 25, 2007
                  (incorporated by reference to an exhibit to our Current Report on Form 8-K
                filed on January 25, 2007)(4)
            Instruments defining rights of security holders,
                including indentures4.1
            Specimen Stock Certificate (incorporated by reference to
                  an exhibit to our Registration Statement on Form SB-2 filed on January 13,
                2005)4.2
            Form of Convertible Loan Agreement (incorporated by
                reference to an exhibit to our Form 8-K filed on April 3, 2009)4.3
            8% Convertible Loan Agreement dated June 3, 2009
                  (incorporated by reference to an exhibit to our Current Report on Form 8-K
                filed on June 23, 2009)4.4
            8% Convertible Loan Agreement dated June 19, 2009
                  (incorporated by reference to an exhibit to our Current Report on Form 8-K
                filed on June 26, 2009)(10)
            Material Contracts10.1
            Form of Amendment No. 1 to Common Stock Securities
                  Purchase Warrant, entered into December 21, 2013Agreement, dated March 13,
                  2014, by and among the Company and the Purchasers named therein
                  (incorporated by reference to an exhibit to our Current Report on Form 8-K
                filed on February 10March 19, 20132014)10.2
            Form of Registration Rights Agreement, dated March 13,
                  2014, by and among the Company and the parties identified therein
                  (incorporated by reference to an exhibit to our Current Report on Form 8-K
                filed on March 19, 2014)10.3
            Form of Senior Convertible Debenture (incorporated by
                  reference to an exhibit to our Current Report on Form 8-K filed on March
                19, 2014)10.4
            Form of Series A/B Warrant (incorporated by reference to
                an exhibit to our Current Report on Form 8-K filed on March 19, 2014)(31)
            Section 302 Certifications31.1*
            Section 302 Certification of Christopher Missling, PhD.(32)
            Section 906 Certifications32.1*
            Section 906 Certification of Christopher Missling, PhD.(99)
            Additional Exhibits99.1
            Insider Trading Policy Adopted August 27, 2010
                  (incorporated by reference to an exhibit to our Current Report on Form 8-K
                filed on September 27, 2010)(101)
            XBRL101.INS*
            XBRL INSTANCE DOCUMENT101.SCH*
            XBRL TAXONOMY EXTENSION SCHEMA101.CAL*
            XBRL TAXONOMY EXTENSION CALCULATION LINKBASE101.DEF*
            XBRL TAXONOMY EXTENSION DEFINITION LINKBASE101.LAB*
            XBRL TAXONOMY EXTENSION LABEL LINKBASE101.PRE*
            XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE


* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
    1934, the registrant has duly caused this report to be signed on its behalf by
    the undersigned, thereunto duly authorized.

ANAVEX LIFE SCIENCES CORP.



|/s/Christopher Missling, PhD                            | 
|------------------------------------------------------- | 
|                                                        | 
|Christopher Missling, PhD                               | 
|Chief Executive Officer and Chief Financial Officer     | 
|(Principal Executive, Financial and Accounting Officer) | 
|Date: May 14, 2014                                      | 

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