Filed by Automated Filing Services Inc. (604) 609-0244 - Anavex Life Sciences Corp.

10QSB/A 1 form10qsba.htm AMENDMENT NO. 1 TO QUARTERLY REPORT FOR THE PERIOD ENDED DECEMBER 31, 2007 Filed by Automated Filing Services Inc. (604) 609-0244 - Anavex Life Sciences Corp. - Form 10-QSB

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

Form 10-QSB/A
(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________to __________

Commission file number 000-51652

ANAVEX LIFE SCIENCES CORP.
(Exact name of small business issuer as specified in its charter)

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

14 Rue Kleberg, CH-1201 Geneva, Switzerland
(Address of principal executive offices)

011-41-2271-65-300
(Issuer's telephone number)

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 19,724,722 common shares issued and outstanding as of February 5, 2008

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

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

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

It is the opinion of management that the interim financial statements for the quarter ended December 31, 2007 include all adjustments necessary in order to ensure that the interim financial statements are not misleading.

Our interim financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

INTERIM FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

(Unaudited)

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

INTERIM BALANCE SHEETS

December 31, 2007 and September 30, 2007

(Stated in US Dollars)

(Unaudited)

		December 31,			September 30,
ASSETS		2007			2007

Current
Cash	$	48,582		$	25
Prepaid expense and deposit		10,000			-

		58,582			25
Patents – Note 3		72,000			-

	$	130,582		$	25

LIABILITIES

Current
Accounts payable and accrued liabilities – Note 5	$	298,724		$	462,529
Promissory note payable – Note 4		200,000			-

		498,724			462,529

STOCKHOLDERS’ DEFICIENCY

Capital stock – Note 6
Authorized:
150,000,000 common shares, par value $0.001 per share
Issued and outstanding:
19,724,722 common shares (September 30, 2007: 19,514,722)		19,725			19,515
Additional paid-in capital		2,240,984			1,229,526
Deficit accumulated during the development stage		(2,628,851	)		(1,711,545	)

		(368,142	)		(462,504	)

	$	130,582		$	25

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

INTERIM STATEMENTS OF OPERATIONS

for the three months ended December 31, 2007 and 2006 and

for the period from January 23, 2004 (Date of Inception) to December 31, 2007

(Stated in US Dollars)

(Unaudited)

								January 23,
								2004
								(Date of
		Three months ended						Inception) to
		December 31,						December 31,
		2007			2006			2007


Expenses
Accounting and audit fees	$	2,150		$	5,419		$	51,781
Bank charges and interest		1,542			127			5,174
Consulting fees – Note 5		370,700			-			811,623
Legal fees		14,040			3,798			101,824
Management fees – Note 5		-			-			14,625
Office and miscellaneous		22,877			398			65,212
Registration and filing fees		3,897			2,597			20,710
Rent – Note 5		30,000			-			103,750
Research and development		223,150			-			1,182,848
Stock-based compensation – Note 6		248,668			-			248,668
Website design and maintenance		-			-			23,846

Loss before other item		(917,024	)		(12,295	)		(2,630,061	)

Other income (expense)		(282	)		44			1,210

Net loss for the period	$	(917,306	)	$	(12,295	)	$	(2,628,851	)

Basic and diluted loss per share	$	(0.05	)	$	(0.00	)

Weighted average number of shares outstanding		19,525,639			19,200,000

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

INTERIM STATEMENTS OF CASH FLOWS

for the three months ended December 31, 2007 and 2006 and

for the period from January 23, 2004 (Date of Inception) to December 31, 2007

(Stated in US Dollars)

(Unaudited)

								January 23,
								2004
								(Date of
		Three months ended						Inception) to
		December 31,						December 31,
		2007			2006			2007

Cash Flows used in Operating Activities
Net loss for the period	$	(917,306	)	$	(12,295	)	$	(2,628,851	)
Add items not involving cash:
Stock-based compensation		248,668			-			248,668
Common shares issued for consulting services		193,000			-			193,000
Common shares issued for research and
development expenses		-			-			800,000
Management fees contributed		-			-			14,625
Rent contributed		-			-			3,750
Adjustments to reconcile net loss to net cash used
in operating activities:
Prepaid expense and deposit		(10,000	)		220			(10,000	)
Accounts payable and accrued liabilities		(118,805	)		4,316			345,725

Net cash used in operating activities		(604,443	)		(7,749	)		(1,035,083	)

Cash Flows used in Investing Activity
Acquisition of patents		(72,000	)		-			(72,000	)

Cash Flows provided by Financing Activities
Promissory note		200,000			-			200,000
Due to related parties		-			-			33,665
Issuance of common shares for cash		525,000			-			589,000
Shareholder advances		-			-			333,000

Net cash provided by financing activities		725,000			-			1,155,665

Increase (decrease) in cash during the period		48,557			(7,759	)		48,582

Cash, beginning of period		25			12,275			-

Cash, end of period	$	48,582		$	4,516		$	48,582

Non-cash Transaction – Note 7

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

INTERIM STATEMENT OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period January 23, 2004 (Date of Inception) to December 31, 2007

(Stated in US Dollars)

(Unaudited)

								Deficit
				Common Stock				Accumulated
						Additional		During the
						Paid-in		Development
		Shares		Par Value		Capital		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 – Note 5		-		-		1,625		-			1,625
Rent contributed – Note 5		-		-		750		-			750
Debt forgiven by directors – Note 5		-		-		33,666		-			33,666
Net (loss) for the period		-		-		-		(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 research and development services
on September 25, 2007	- at $3.60	92,500		93		332,907		-			333,000
Net loss for the period		-		-		-		(1,579,993	)		(1,579,993	)

…/cont’d

SEE ACCOMPANYING NOTES

Continued

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

INTERIM STATEMENT OF STOCKHOLDER’S EQUITY (DEFICIENCY)

for the period January 23, 2004 (Date of Inception) to December 31, 2007

(Stated in US Dollars)

(Unaudited)

								Deficit
				Common Stock				Accumulated
						Additional		During the
						Paid-in		Development
		Shares		Par Value		Capital		Stage			Total

Balance, September 30, 2007		19,514,722		19,515		1,229,526		(1,711,545	)		(462,504	)

Capital stock issued for cash	- at $3.50	150,000		150		524,850		-			525,000
Capital stock issued for consulting fees	- at $3.86	50,000		50		192,950		-			193,000
Capital stock issued for debt settlement	- at $4.50	10,000		10		44,990		-			45,000
Stock-based compensation – Note 6		-		-		248,668		-			248,668
Net loss for the period		-		-		-		(917,306	)		(917,306	)

Balance, December 31, 2007		19,724,722	$	19,725	$	2,240,984	$	(2,628,851	)	$	(368,142	)

SEE ACCOMPANYING NOTES

ANAVEX LIFE SCIENCES CORP.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

(Unaudited)

Note 1	Interim Financial Statements

	The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim financial statements should be read in conjunction with the Company’s September 30, 2007 audited financial statements.

	Operating results for the three month period ended December 31, 2007 are not necessarily indicative of the results that may be expected for the year ended September 30, 2008.

Note 2	Continuance of Operations

	The interim financial statements have been prepared using generally accepted accounting principles in the United States of America applicable for a going concern which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. As at December 31, 2007, the Company has a working capital deficiency of $440,142 , has not yet attained profitable operations and has accumulated losses of $2,628,851 since its inception. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. Realization values may be substantially different from carrying values as shown in these financial statements should the Company be unable to continue as a going concern. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amount of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

Note 3	Significant Accounting Policy

	Patents

	Patents are recorded at cost and are amortized on a straight-line basis over their useful life.

Anavex Life Sciences Corp.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007

(Stated in US Dollars)

(Unaudited) – Page 10

Note 4	Promissory Note Payable

	The promissory note payable bears interest at 10% per annum, is unsecured and is repayable on or before March 13, 2008.

Note 5	Related Party Transactions

	The following amounts were contributed to the Company by the directors of the Company:

		Three months ended				January 23,
		December 31,				2004 (Date of
						Inception) to
						December 31,
		2007		2006		2007

Management fees	$	-	$	-	$	14,625
Rent		-		-		3,750
Debt forgiven by directors		-		-		33,666

	$	-	$	-	$	52,041

The following amounts were charged to the Company by directors and officers of the Company:

		Three months ended				January 23,
		December 31,				2004 (Date of
						Inception) to
						December 31,
		2007		2006		2007

Consulting fees	$	90,000	$	-	$	368,000

	Included in accounts payable and accrued liabilities at December 31, 2007 is $108,000 (September 30, 2007 - $167,824) owing to directors and officers of the Company.

Note 6	Commitments

	a)	Share Purchase Warrants

		A summary of the Company’s share purchase warrants outstanding is presented below:

	Number of	Exercise
	Shares	Price

Outstanding, September 30, 2007	-	-
Issued	150,000	$5.00

Balance, December 31, 2007	150,000

Anavex Life Sciences Corp.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007

(Stated in US Dollars)

(Unaudited) – Page 11

		At December 31, 2007, the Company has 150,000 share purchase warrants outstanding entitling the holder thereof the right to purchase one common share for each warrant held at $5.00 per share until December 21, 2009.

	b)	Stock Options

		At December 31, 2007, the Company has stock purchase options outstanding entitling a director of the Company and consultants to purchase a total of 1,070,000 common shares of the Company.

		A summary of the status of company’s outstanding stock purchase options for the three months ended December 31, 2007 is presented below:

		Weighted
		Average
	Number of	Exercise
	Shares	Price

Outstanding, September 30, 2007	770,000	$3.00
Granted	300,000	$3.84

Outstanding, December 31, 2007	1,070,000	$3.23

Exercisable, December 31, 2007	125,000

The following summarizes information about the stock options outstanding at December 31, 2007:

	Exercise
Number	Price	Expiry Date

100,000	$3.86	December 1, 2010
50,000	$3.75	November 1, 2012
150,000	$3.85	December 3, 2012
770,000	$3.00	February 8, 2017

1,070,000

At December 31, 2007, the weighted average remaining contractual life of the outstanding share purchase options is 7.86 years.

Anavex Life Sciences Corp.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2007

(Stated in US Dollars)

(Unaudited) – Page 12

	During the three months ended December 31, 2007, a compensation charge associated with the grant of stock options in the amount of $248,668 (2006: $Nil) was recognized in the financial statements.

	All stock-based compensation charges have been determined under the fair value method using the Black-Scholes option-pricing model with the following assumptions:

	Three months ended
	December 31,
	2007	2006

Expected dividend yield	0.0%	-
Expected volatility	82.93%	-
Risk-free interest rate	2.9% - 3.785%	-
Expected terms in years	2 – 2-1/2 years	-

The volatility was determined based on an index of volatility from comparable companies. The expected term of the options granted is derived from the simplified method as prescribed by SEC Staff Accounting Bulletin No. 107.

Note 7	Non-cash Transaction

	Investing and financing activities that do not have an impact on current cash flows are excluded from the statements of cash flows.

	During the three months ended December 31, 2007, the Company issued 10,000 shares at $4.50 per share for a total of $45,000 (2006: $Nil) pursuant to an agreement to issue shares to settle debt. This transaction was excluded from the statements of cash flows.

Item 2. Management's Discussion and Analysis or Plan of Operation.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our interim financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our interim financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors" of this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "Anavex" mean Anavex Life Sciences Corp., unless otherwise indicated. We have no subsidiaries.

Corporate History

Our company was incorporated in the State of Nevada on January 24, 2004 originally under the name of Thrifty Printing, Inc. On January 25, 2007, we completed a merger with our wholly-owned subsidiary, Anavex Life Sciences Corp. As a result, we have changed our name from “Thrifty Printing, Inc.” to “Anavex Life Sciences Corp.” We changed the name of our company to better reflect the new direction and business of our company.

Our name change was effected with NASDAQ on January 25, 2007 and our common shares became quoted on the OTC Bulletin Board on January 25, 2007 under the new stock symbol of "AVXL".

Our principal business office is located at 14 Rue Kleberg, CH-1201 Geneva, Switzerland. Our registered office for service in the State of Nevada is located at 3990 Warren Way, Reno, NV 89509.

Our Current Business

We are an emerging biopharmaceutical company engaged in the discovery and development of novel drug targets for the treatment of cancer and neurological diseases. Our proprietary SIGMACEPTOR™ discovery Platform involves the rational drug design of compounds that fulfill specific criteria based on unmet market needs and new scientific advances.

Our SIGMACEPTOR™-N program involves the development of novel and original drug candidates, targeting neurological and neurodegenerative diseases (Alzheimer’s disease, epilepsy, depression, etc.). Our lead drug candidates exhibit high, non-exclusive affinity for sigma receptors with strong evidence for anti-amnesic,

neuroprotective, anti-apoptotic, anti-oxidative, anti-inflammatory, anti-convulsive, anti-depressant and anxiolytic properties.

Our SIGMACEPTOR™-C program involves the development of novel and original drug candidates targeting cancer. Our lead drug candidates exhibit high, non-exclusive affinity for sigma receptors with strong evidence for selective pro-apoptotic, anti-metastatic and low toxicity properties in various types of solid cancers such as colon, prostate, breast, lung, etc.

Plan of Operation

Overview

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.

Over the next 12 months, we will continue to develop our proprietary SIGMACEPTOR™ Discovery Platforms to determine which compounds, if any, are ready for the next stage of research, be it pre-clinical or clinical trials. We will also, through the direction of or Chief Scientific Officer Dr. Vamvakides, engage certain research institutions and laboratories for the conduct of specific research and reports.

Capital Resource Requirements

For the next 12 months we plan to expend a total of approximately $6,595,000 to continue the development of our proprietary SIGMACEPTOR™ Discovery Platforms. The majority of our capital resources requirement is needed to enter one or more of our current compounds into clinical trials. Specifically, we estimate our operating expenses and working capital requirements for the next 12 months to be as follows:

Estimated Expenses for the Next 12 Months
Research and Development Activities	$	5,200,000
Officer and Employee Compensation		400,000
Sales and Marketing		175,000
Legal, Accounting and Professional Fees		120,000
General and Administrative		700,000
Total	$	6,595,000

Research and Development Activities

ANAVEX's SIGMACEPTOR(TM)-N program pipeline is focused on developing disease-modifying treatments for neurological conditions.

Considerable advancements have been made with ANAVEX 1-41. In recent pre-clinical animal studies, the compound demonstrated significant neuroprotective benefits through the prevention of oxidative stress, which damages and destroys cells and is believed to be a primary cause of Alzheimer's disease. The novel mechanism of action of ANAVEX 1-41 demonstrates that the compound may influence the course of Alzheimer's disease and prevent or limit the creation of plaques that destroy brain cells in the hippocampus, the part of the brain that regulates learning, emotion and memory. Published results were presented at the Neuroscience 2007 conference in San Diego, California. Testing on ANAVEX 1-41 is being conducted in cooperation with Universite Montpellier in France. Phase 1 trials of ANAVEX 1-41 on humans are scheduled to commence in late 2008 or early 2009.

Our company has also made promising developments with ANAVEX 2-73 and its optimized derivative ANAVEX 19-144, its lead drug candidate to treat epilepsy. Results from epilepsy animal models reveal that both compounds have significant anticonvulsant, anti-amnesic and neuroprotective properties. These activities involve muscarinic and sigma-1 receptor components, which is significant because it indicates a unique mode of action that may help control epilepsy and prevent the process that causes long-term damage to tissue and cells as well as biochemical and physiological alterations to the brain. Published results were presented at the Neuroscience 2007 conference in San Diego. Ongoing pre-clinical studies are being conducted in collaboration with Universite Montpellier and are scheduled for completion by the end of May 2008.

ANAVEX's SIGMACEPTOR(TM)-C program pipeline involves the development of novel and original drug candidates targeting cancer. To date we have identified over 50 compounds that have exhibited growth inhibiting activity at a low micromolar and two of them even lower at a nanomolar range concentration.

ANAVEX 7-1037, the company's lead drug candidate for the treatment of colorectal cancer and other types of solid tumors, recently revealed chemotherapeutic potential without toxic side effects in advanced pre-clinical studies. The compound has been shown to kill human colon cancer cells and also significantly suppress tumor growth in immune-deficient mice. Published results were presented at the 15th Euroconference on Apoptosis in Portoroz, Slovenia. Testing on ANAVEX 7-1037 is being conducted in cooperation with the Academy of Athens' Institute of Biomedical Research.

Published results for ANAVEX 1-41, ANAVEX 2-73 and ANAVEX 7-1037 are available at www.anavex.com/publications.html.

Officer and Employee Compensation

We currently employ three executive officers including a president, a chief executive officer and a chief scientific officer. Additionally we have four employees to assist in product research, strategic planning and business development. We anticipate we may spend up to approximately $400,000 in officer and employee compensation during the next 12 months.

General Administration

We anticipate spending approximately $700,000 on general and administration costs in the next 12 months. These costs will consist primarily of rent and facility support expenses as well as finance and administrative support compensation but excluding legal fees and auditor’s fees.

Cash Requirements

We had cash in the amount of $48,582 as of December 31, 2007 and cash on hand as of the date of filing this quarterly report on Form 10-QSB is not sufficient to fund our current estimates of our operating expenses and working capital requirements for the next 12 months.

We anticipate that we will not be able to generate revenues until we further develop our compound candidates and market them to pharmaceutical companies, which could take up to several years or more. Our company will not likely generate cash flow sufficient to meet our capital expenditure requirements for many years to come, if ever. We will require additional monies during the next 12 month period to execute our business plan. We plan to obtain this additional money through the sale of our equity securities or through borrowing the money from existing shareholders or third parties.

It is possible that we may not be able to obtain funds required for our continued operation through the sale of our equity securities or through borrowing the money from existing shareholders or third parties. The additional financing we seek may not 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, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further financing and the eventual success of our research and development program in discovering and developing a compound to the point where it can be marketed to pharmaceutical companies. Then, we will be dependant on the market acceptance of any product we may offer and the continuing successful development of our product offerings and related technologies. Finally, we will be required to achieve a profitable level of operations. However, these steps are a long way off for our company at its present stage and we must focus for the time being on raising funds and conducting our planned research and development. Because we intend to raise the additional funds through the sale of our equity securities, the issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Recent Share Issuances

On September 11, 2007, we issued 222,222 shares of our common stock as payment for services rendered by Eurogenet Laboratories. The shares were issued at a price of $3.60 per share. Eurogenet Laboratories has accepted the shares in full consideration of the debt owed by our company.

On September 21, 2007, we issued 92,500 shares of our common stock as payment for debt to Athanasios Skarpelos. The shares were issued at a price of $3.60 per share. Athanasios Skarpelos has accepted the shares in full consideration of the debt owed by our company.

On December 17, 2007 we issued 10,000 shares of our common stock as payment to our employee George Kalkanis for services. The shares were issued at a price of $4.50 per share.

On December 17, 2007 we issued 150,000 shares of our common stock in conjunction with a private placement where the company sold 150,000 units of the company at a price of $3.50 per unit. Each unit consisted of one common share and one common share purchase warrant.

On December 17, 2007 we issued 50,000 shares of our common stock to a consultant for professional services. The shares were issued at a price of $3.86 per share.

We issued all of the common shares to a non U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

Off-Balance Sheet Arrangements

Our company has no outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Our company does not engage in trading activities involving non-exchange traded contracts.

RISK FACTORS

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements". Prospective investors should consider carefully the risk factors set out below.

Risks Related To Our Business

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

We are an early development stage company and have not generated any revenues to date and have no operating history. All of our potential drug compounds are in the concept stage and have not undergone significant testing in non-clinical studies or in clinical trials. Moreover, we cannot be certain that our research and development efforts will be successful or, if successful, that our potential drug compounds will ever be approved for sales to pharmaceutical companies or generate commercial revenues. We have no relevant operating history upon which an

evaluation of our performance and prospects can be made. We are subject to all of the business risks associated with a new enterprise, including, but not limited to, risks of unforeseen capital requirements, failure of potential drug compounds either in non-clinical testing or in clinical trials, failure to establish business relationships and competitive disadvantages as against larger and more established companies. If we fail to become profitable, we may suspend or cease operations.

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

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

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

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

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

It will take several years before we are able to develop marketable potential drug compounds, if at all. Our research and development plans will require substantial additional capital, arising from costs to:

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

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

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

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

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

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

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

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

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

If any of our future clinical development potential drug compounds become the subject of problems, including those related to, among others:

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

Our ability to sustain our development programs will become critically compromised. For example, efficacy or safety concerns may arise, whether or not justified, that could lead to the suspension or termination of our clinical programs.

Each clinical phase is designed to test attributes of the drug and problems that might result in the termination of the entire clinical plan can be revealed at any time throughout the overall clinical program. The failure to demonstrate efficacy in our clinical trials would have a material adverse effect on our future business prospects, financial condition and operating results.

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

We will need to establish relationships with leading scientists and research institutions. We believe that such relationships are pivotal to establishing products using our technologies as a standard of care for various indications. Additionally, although in discussion, there is no assurance that our current research partners will continue to work with us or that we will be able to attract additional research partners. If we are not able to establish scientific relationships to assist in our research and development, we may not be able to successfully develop our potential drug compounds. If this happens, our business will be adversely affected.

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

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

If our competitors receive regulatory approvals for and begin marketing similar products in the United States, the European Union, Japan and other territories before we do, greater awareness of their products as compared to ours will cause our competitive position to suffer;
Information from our competitors or the academic community indicating that current products or new products are more effective than our future products could be, if and when they are generated, impede our market penetration or decrease our future market share; and,

The price for our future products, as well as pricing decisions by our competitors, may have an effect on our revenues.

If this happens, our business will be adversely affected.

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

Successful research and development of pharmaceutical products is high risk. Most products and development candidates fail to reach the market. Our success depends on the discovery of new drug compounds that we can commercialize. It is possible that our potential drug compounds may never reach the market for a number of reasons. They may be found ineffective or may cause harmful side-effects during non-clinical testing or clinical trials or fail to receive necessary regulatory approvals. We may find that certain potential drug compounds cannot be manufactured at a commercial scale and, therefore, they may not be economical to produce. Our potential drug compounds could also fail to achieve market acceptance or be precluded from commercialization by proprietary rights of third parties. Furthermore, we do not expect our potential drug compounds to be commercially available for a number of years, if at all. If none of our potential drug compounds reach the commercial market, our business will likely fail and investors will lose all of their investment in our company. If this happens, our business will be adversely affected.

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

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

Our reliance on third parties, such as university laboratories, contract manufacturing organizations and contract or clinical research organizations, may result in delays in completing, or a failure to complete, non-clinical testing or clinical trials if they fail to perform under our agreements with them.

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

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

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

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

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

The nature of our business exposes us to potential liability risks inherent in the testing, manufacturing and marketing of our potential drug compounds. We currently do not have any potential drug compounds in clinical trials, however, when any of our potential drug compounds enter into clinical trials or become marketed products they could potentially harm people or allegedly harm people and we may be subject to costly and damaging product liability claims. Some of the patients who participate in clinical trials are already critically ill when they enter a trial. The waivers we obtain may not be enforceable and may not protect us from liability or the costs of product liability litigation. Although we intend to obtain product liability insurance that we believe is adequate, we are subject to the risk that our insurance will not be sufficient to cover claims. The insurance against, defense or payment of liabilities could cost us significant amounts of money to defend against or pay out, causing our business to suffer.

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

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

We do not know whether our patent application will result in an issued patent;
Our patents and patent application are registered in the Greek National Office of Industrial Property and do not offer us protection for our patents and patent application outside of Europe;
Competitors may interfere with our patent process in a variety of ways. Competitors may claim that they invented the claimed invention prior to us. Competitors may also claim that we are infringing on their patents and therefore cannot practice our technology as claimed under our patents and patent applications. Competitors may also contest our patents and patent application, if issued, by showing the patent examiner that the invention was not original, was not novel or was obvious. In litigation, a competitor could claim that our patents and patent application are not valid for a number of reasons. If a court agrees, we would lose that patents or patent application. As a company, we have no meaningful experience with competitors interfering with our patents or patent applications.

Because of the time, money and effort involved in obtaining and enforcing patents, our management may spend less time and resources on developing potential drug compounds than they otherwise would, which could increase our operating expenses and delay product programs.
Receipt of a patent may not provide much practical protection. If we receive a patent with a narrow scope, then it will be easier for competitors to design products that do not infringe on our patent.
In addition, competitors also seek patent protection for their inventions. Due to the number of patents in our field, we cannot be certain that we do not infringe on existing patents or that we will not infringe on patents granted in the future. If a patent holder believes our potential drug compound infringes on their patent, the patent holder may sue us even if we have received patent protection for our technology. If someone else claims we infringe on their patent, we would face a number of issues which could cause a slow down or cessation of our research and development , including the following:

Defending a lawsuit takes significant time and can be very expensive.
If the court decides that our potential drug compound infringes on the competitor’s patent, we may have to pay substantial damages for past infringement.
The court may prohibit us from selling or licensing the potential drug compound unless the patent holder licenses the patent to us. The patent holder is not required to grant us a license. If a license is available, we may have to pay substantial royalties or grant cross licenses to our patents.
Redesigning our potential drug compounds so that they do not infringe on other patents may not be possible or could require substantial funds and time.

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

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

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

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

We face burdens relating to the recent trend toward stricter corporate governance and financial reporting standards. New legislation or regulations such as Section 404 of the Sarbanes-Oxley Act of 2002 follow the trend of imposing stricter corporate governance and financial reporting standards have led to an increase in our costs of compliance including increases in consulting, auditing and legal fees. The new rules could make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. A failure to comply with these new laws and regulations may impact market perception of our financial condition and could materially harm our

business. Additionally, it is unclear what additional laws or regulations may develop, and we cannot predict the ultimate impact of any future changes in law.

Risks Related to Our Common Stock

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.

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

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

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

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

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

If a market for our shares of common stock does not develop, shareholders may be unable to sell their shares of common stock.

There is currently a limited market for our common stock, which trades through the Over-the-Counter Bulletin Board quotation system. Trading of stock through the Over-the-Counter Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in the stock, in which case it could be difficult for shareholders to sell their stock.

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

Our common stock is quoted on the OTC Bulletin Board service of the Financial Industry Regulatory Authority . Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading

prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of the shares.

Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations and FINRA’s sales practice requirements, which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

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

Other Risks

Trends, Risks and Uncertainties.

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of the risk factors before making an investment decision with respect to our common stock.

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

Our independent auditors have noted in their report concerning our financial statements as of September 30, 2007 that we have incurred substantial losses since inception, which raises substantial doubt abut our ability to continue as a going concern. In the event we are not able to continue operations you will likely suffer a complete loss of your investment in our securities. See our auditors’ report on our consolidated financial statements elsewhere in this Form 10-KSB.

Item 3. Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at December 31, 2007, which is the end of the period covered by this report. This evaluation was carried out by our principal executive officer and our principal financial officer. Based on this evaluation, our principal executive officer and our principal financial officer have concluded that the design and operation of our disclosure controls and procedures are effective as at the end of the period covered by this report. There were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting in our most recent fiscal quarter.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibit
Number	Description
(3)	(i) Articles of Incorporation; and (ii) Bylaws
3.1	Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2, filed on January 13, 2005).
3.2	Bylaws (incorporated by reference from our Registration Statement on Form SB-2, filed on January 13, 2005).
3.3	Articles of Merger filed with the Secretary of State of Nevada on January 10, 2007 and which is effective January 25, 2007 (incorporated by reference from our Current Report on Form 8-K, filed on January 25, 2007).
(4)	Instruments defining rights of security holders, including indentures
4.1	Specimen Stock Certificate (incorporated by reference from our Registration Statement on Form SB-2, filed on January 13, 2005).
4.2	2007 Stock Option Plan (incorporated by reference from our Current Report on Form 8-K, filed September 28, 2007).
(10)	Material Contracts
10.1	Agreement between Anavex Life Sciences Corp. and Dr. Alexandre Vamvakides, dated January 31, 2007 (incorporated by reference from our Current Report on Form 8-K, filed February 7, 2007).
10.2	Abstract of Disclosure of Greek Patent Number 1002616 (incorporated by reference from our Current Report on Form 8-K, filed February 7, 2007).
10.3	Abstract of Disclosure of Greek Patent Number 1004208 (incorporated by reference from our Current Report on Form 8-K, filed February 7, 2007).
10.4	Abstract of Disclosure of Greek Patent Number 1004868 (incorporated by reference from our Current Report on Form 8-K, filed February 7, 2007).
10.5	Written description of Greek Patent Application Number 20070100020 (incorporated by reference from our Current Report on Form 8-K, filed February 7, 2007).
10.6	Form of Stock Option Agreement (incorporated by reference from our Current Report on Form 8-K, filed February 22, 2007).
10.7	Shares for Services and Subscription Agreement dated September 11, 2007 between our company and Eurogenet Labs S.A. (incorporated by reference from our Current Report on Form 8-K, filed September 27, 2007).
(14)	Code of Ethics
14.1	Code of Conduct (incorporated by reference from our Current Report on Form 8-K, filed September 28, 2007).
(31)	Rule 13a-14(a)/15d-14(a) Certifications
31.1*	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Dr. Panos Kontzalis
31.2*	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Harvey Lalach
(32)	Section 1350 Certifications
32.1*	Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith.

SIGNATURES

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

ANAVEX LIFE SCIENCES CORP.

By: /s/ Panos Kontzalis
Dr. Panos Kontzalis, Chief Executive Officer
(Principal Executive Officer)
February 19 , 2008


By: /s/ Harvey Lalach
Harvey Lalach, President, Chief Financial Officer and Secretary
(Principal Financial Officer and Principal Accounting Officer)
February 19 , 2008