Company: IXHL
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110299
Chunk: 6

Company: Incannex Healthcare Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 6
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Going Concern Basis

The financial report has been prepared on the going concern basis,
which assumes continuity of normal business activities and the realization of assets and the settlement of liabilities in the ordinary
course of business.

The Company has incurred total comprehensive losses of $6.2 million
and $5.1 million for the three months ended September 30, 2025 and 2024, respectively, and experienced net cash outflows from operating
activities of $9.2 million and $2.2 million for the three months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025 and June 30, 2025, the Company had cash and
cash equivalents of $73.3 million and $15.0 million, respectively, and current assets exceeded its current liabilities by $76.6 million
and $13.0 million, respectively.

Historically, the Company has financed its operations to date primarily
through partnerships, funds received from public offerings of common stock, a debt financing facility, as well as funding from governmental
bodies. The Company continues to plan for additional capital through the sale of common stock in public offerings and/or private placements,
debt financings, or through other capital sources, including pursuant to the ATM, collaborations with other companies or other strategic
transactions.

Based on the Company’s unrestricted cash and cash equivalents
as of September 30, 2025, the Company anticipates that it will be able to fund its planned operating expenses and capital expenditure
requirements for at least twelve months from the date of these financial statements.    

6

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

Principles of Consolidation

The accompanying unaudited condensed consolidated
financial statements include the accounts of the Company and its wholly-owned subsidiaries. Details of all controlled entities are set
out in Note 1. All intercompany balances and transactions have been eliminated on consolidation.

Equity Method Investment

The Company has a joint venture with Mind Medicine
Australia (“MMA”) to operate a psychedelic-assisted therapies services clinic in Melbourne, Australia. The Company owns 50%
of MMA and does not have control over the joint venture. The Company accounts for investments in unconsolidated entities where it exercises
significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes
its share of the investee's net income or loss. Loss