Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 669

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 4
Chunk 669
---
 believes that the Company is not exposed to significant credit risk due to the financial position of
the depository institutions in which those deposits are held. As of June 30, 2025 and 2024, all deposits are held in banks outside of
the United States.

Cash and Cash Equivalents

Cash and cash equivalents, which includes cash
and deposits held at call with financial institutions with original maturities of three months or less that are readily convertible to
known amounts of cash, are carried at cost, which approximates fair value.

Property, Plant and Equipment, Net

Recognition and Measurement

All property, plant and equipment is recognized
at historical cost less depreciation.

F-8

Depreciation

Depreciation is calculated using the straight-line
method to allocate their cost, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements
and certain leased plant and equipment, the shorter lease term as follows:

●Machinery 10-15 years

●Vehicles 3-5 years

●Furniture, fittings and equipment 3-8 years

Furniture, fittings and equipment include assets
in the form of office fit outs. These assets and other leasehold improvements are recognized at their fair value and depreciated over
the shorter of their useful life or the lease term, unless the entity expects to use the assets beyond the lease term.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property,
plant and equipment, net, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. If circumstances require that a long-lived asset be tested for possible impairment, the Company compares
the undiscounted cash flows expected to be generated by the asset group to the carrying amount of the asset group. If the carrying amount
of the long-lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying
amount exceeds its fair value. Fair value is generally determined using the asset’s expected future discounted cash flows or market
value, if readily determinable.

During the fiscal years ended June 30, 2025 and
2024, the Company did not record any impairment charges on its long-lived assets.

Leases

The Company determines if an arrangement is, or
contains, a lease at inception and then classifies the lease as operating or financing based on the underlying terms and conditions of
the