Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 596

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 3
Chunk 596
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)
  
    Net cash provided by financing activities 
     21,396  
     - 
  
    Net (decrease)/increase in cash, cash equivalents and restricted cash 
    $8,875  
    $(16,122)

Net cash flows from operating activities

Net cash used in operating activities decreased
by $3.3 million in the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The decrease was primarily driven
by a $6.3 million reduction in share-based compensation expense (from $8.9 million to $2.6 million) and a decrease in cash paid related
to trade and other payables of $1.6 million (from $3.0 million to $1.4 million), partially offset by an increase in R&D tax incentive
received of $15.4 million (from outflow of $9.8 million to inflow of $5.6 million).

Net cash flows from investing activities

Net cash used in investing activities decreased
by $0.3 million in the fiscal year ended June 30, 2025 compared to fiscal year ended June 30, 2024. The decrease was due to less spending
on property, plant and equipment.

Cash flows from financing activities

Cash provided by financing activities increased
by $21.4 million in the fiscal year ended June 30, 2025, compared to the fiscal year ended June 30, 2024. This increase was primarily
driven by share issuance proceeds of $48.3 million, partially offset by cash outflows related to financing arrangements entered into
during the year, including the cancellation of warrants amounting to $24.8 million and the repayment of convertible debt totaling $3.8
million.

89

Critical Accounting Estimates

Our financial statements
are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements
and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and
expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience,
known trends and events, and various other factors we believe are reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate
our estimates and assumptions on an ongoing basis. Our actual results may differ from