Company: IXHL
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110299
Chunk: 71

Company: Incannex Healthcare Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 71
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ions, the Australian Government tax incentives provide benefits for eligible research
and development activities.  Entities are entitled to either (i) a 48.5% refundable tax offset for eligible companies with an
aggregated turnover of less than A$20 million per annum or (ii) a non-refundable 38.5% tax offset for all other eligible companies.
Our aggregated turnover is less than A$20 million and we are not controlled by one or more income tax exempt entities, we anticipate
being entitled to a claim of 48.5% refundable tax offset for costs relating to eligible research and development activities during the
year.

Benefit from R&D tax incentive decreased by
$0.4 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in the
R&D tax incentive receivable for the three months ended September 30, 2025, was primarily due to a lower estimate based on historical
experience of claims.

19

Foreign exchange losses and Interest Income

Foreign exchange losses increased by $8,000 for
the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to favourable currency exchange
rates. Interest income decreased over the same period, reflecting lower interest received from cash deposits.

Share of earnings (loss) of joint venture

Share of earnings (loss) of joint venture increased
by $6,000 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to the investment
in Mind Clinics Australia

Currency translation adjustment, net of tax

Currency translation adjustment, net of tax, decreased
by $116,000 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was due
to the depreciation of the Australian dollar against the U.S. dollar. We maintain our consolidated financial statements in Australian
dollars, our functional currency, while our financial statements are translated into U.S. dollars for reporting purposes.

Liquidity and Capital Resources

Sources of Liquidity

We have incurred net losses since inception and
expect to incur substantial and increasing losses in the future as we expand our R&D activities in an effort to move our drug candidates
into later stages of development. Historically, we have funded our operations primarily