Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 434

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1B
Chunk 434
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 (b) the hybrid instrument that embodies both the embedded derivative instrument
and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes
in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument
would be considered a derivative instrument. The nature of the host instrument is therefore evaluated to determine if it is more akin
to a debt-like or equity-like host. In this assessment, the Company considers the stated and implied substantive features of the contract
as well as the economic characteristics and risks of the hybrid instrument. Each term and feature are then weighed based on the relevant
facts and circumstances to determine the nature of the host contract. Terms and features of the hybrid.

F-12

On February 5, 2025, Arena Investors converted
a total of $100,000 debt into shares of the Company’s common stock.

 On March 13, 2025 the Company repaid in full
the Debenture by making a cash payment of $3,851,111.00, representing the outstanding principal, interest, amounts and redemption premiums
due as of February 28, 2025. In connection with the repayment of the Debenture, the Debenture Purchase Agreement, the Security Documents
(as defined in the Debenture Purchase Agreement) and the ELOC Purchase Agreement were terminated, except with respect to the indemnification
and registration rights set forth therein. The (i) Debenture Warrant, (ii) Registration Rights Agreement, dated as of October 14, 2025,
by and between the Company and Arena Investors and (iii) the ELOC Warrant remain in effect.

Refer to Note 13 – “Fair Value
of Financial Instruments” for the accounting of the Convertible Debenture.

Private placement arrangement

On March 7, 2025, the Company entered into a private
placement (the “Private Placement”) pursuant to a securities purchase agreement (the “March 2025 Securities Purchase
Agreement”) with certain institutional investors for the purchase and sale of approximately $12.5 million in gross proceeds
of 9,687,045 shares of the Company’s common stock for a purchase price of $1.08 per share of common stock (and, in
lieu thereof, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 1,887,045 shares of common