Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 153

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 153
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 identify
wholesale distributors with the appropriate DEA registrations and authority to distribute our drug candidates and any future drug candidates.
These distributors would need to obtain Schedule II, III or IV distribution registrations. This limitation in the ability to distribute
our drug candidates more broadly may limit commercial uptake and could negatively impact our prospects. The failure to obtain, or delay
in obtaining, or the loss of any of those registrations could result in increased costs. If our drug candidates are a Schedule II drug,
participants in our supply chain may have to maintain enhanced security with alarms and monitoring systems and they may be required to
adhere to recordkeeping and inventory requirements. This may discourage some pharmacies from carrying the product. In addition, our drug
candidates will likely be determined to have a high potential for abuse and therefore required to be administered at our trial sites,
which could limit commercial updates. Furthermore, state and federal enforcement actions, regulatory requirements and legislation intended
to reduce prescription drug abuse, such as the requirement that physicians consult a state prescription drug monitoring program, may make
physicians less willing to prescribe, and pharmacies to dispense, Schedule II products.

In May 2024, the DEA published a notice of proposed
rulemaking to reschedule marijuana (the cannabis plant and the various compounds, manufactures, salts, derivatives, mixtures, or preparations
from it) from Schedule I to Schedule III. And in August 2025, the DEA forwarded to HHS a citizen petition proposing that the agencies
reschedule psilocybin from Schedule I to Schedule II. HHS will conduct a scientific and medical review of the proposed rescheduling and
supporting data and, once completed, will issue a recommendation to the DEA. Even if a final rule rescheduling is implemented in either
case, we, our third-party manufacturers, and our other partners must still comply with all CSA requirements and DEA regulations applicable
to the rescheduled controlled substances with respect to our product drug candidates.

We currently source APIs from Taiwan, India and
the United States and our finished drug candidates are currently being manufactured in Colombia and the United States. In addition, we
may decide to develop, manufacture or commercialize our drug candidates in additional countries. As a result, we will also be subject
to controlled substance laws and regulations from the TGA in Australia and from other regulatory agencies in other countries where we
develop, manufacture or commercialize our drug candidates in the future.

60

Other countries may have different laws and regulations
with which we will be required to comply.