Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 13

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 8
Chunk 13
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 which Arena Global shall 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). We had also agreed to pay a financial advisor up to 7% of the gross proceeds raised under the ELOC Agreement.

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 did not meet the definition of an asset and, therefore, were expensed as incurred.

As additional consideration for Arena Global’s
execution and delivery of the ELOC Purchase Agreement, the Company had issued a five-year warrant (the “ELOC Warrant”) on
October 31, 2024, exercisable for 585,000 shares of common stock with an exercise price equal to $1.66 per share.

The Company determines whether to classify contracts, such as warrants,
that may be settled in the Company’s own stock as equity of the entity or as a liability. An equity-linked financial instrument
must be considered indexed to the Company’s own stock to qualify for equity classification. The Company classifies warrants as liabilities
for any contracts that may require a transfer of assets. Warrants classified as liabilities are accounted for at fair value and remeasured
at each reporting date until exercise, expiration or modification that results in equity classification. Any change in the fair value
of the warrants is recognized in the Consolidated Statements of Operations and Comprehensive Loss.

F-11

Refer to Note 13 – “Fair Value of Financial
Instruments” for the accounting of the ELOC Purchase Agreement.

Convertible Debenture Financing

On September 6, 2024, the Company entered into a Securities Purchase
Agreement (the “Debenture Purchase Agreement”) with Arena Investors, LP (“Arena Investors”), which had provided
for the issuance of secured convertible debentures in an aggregate principal amount of up to $10 million at an aggregate purchase
price of up to $9 million (a 10% original issue discount), divided into three separate tranches, each subject to closing conditions.
Under the Debenture Purchase Agreement, the conversion price of