Company: IXHL
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110299
Chunk: 8

Company: Incannex Healthcare Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 8
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 operates in an environment of rapid technological change and
substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services
of its employees, consultants and other third parties.

Significant Accounting Policies

The following is provided to update the Company’s
significant accounting policies disclosed in Note 2 to the Consolidated Financial Statements described in the Company’s 2025 Annual
Report that have had a material impact on the Company’s unaudited condensed consolidated financial statements and related notes. 

Equity-Line of Credit Purchase Agreement

On September 6, 2024, the Company entered into
an equity line of credit Purchase Agreement (the “ELOC Purchase Agreement”) with Arena Business Solutions Global SPC II, Ltd
(“Arena Global”). Under the ELOC Purchase Agreement, Arena Global had committed to purchase up to $50 million of the Company’s
Common Stock par value $0.0001 per share (the “Common Stock”), at the Company’s direction from time to time, subject
to the satisfaction of the conditions in the ELOC Purchase Agreement.

The purchase price per share of Common Stock
was obtained by multiplying by 96% the daily volume weighted average price (“VWAP”) on The Nasdaq Global Market
(“Nasdaq”) for the trading day specified in the sale notice (same trading day or one trading day following such notice)
delivered to Arena Global. The ELOC Purchase Agreement would have terminated automatically upon the earliest to occur of (i) the
first day of the month next following the 36-month anniversary of the date of the ELOC Purchase Agreement; or (ii) the date on which
Arena Global would have purchased shares of Common Stock under the ELOC Purchase Agreement for an aggregate gross purchase price
equal to the Commitment Amount (as defined in the ELOC Purchase Agreement). The Company had also agreed to pay a financial advisor
up to 7% of the gross proceeds raised under the ELOC Agreement.

8

Note 2 – Basis of Presentation and Summary of Significant
Accounting Policies (continued)

On December 9, 2024, in connection with the ELOC
Purchase Agreement, the Company issued 142,403 shares of Common Stock as a commitment fee to Arena Global. On January 16, 2025 the Company
issued 10,346 true-up shares of Common Stock to Arena Global. The Company evaluated that the costs incurred in connection with the commitment
fee and the true-up shares do not