Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 225

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 225
---
 Black-Scholes
option-pricing model (“BSOPM”) to estimate the fair value of options granted. Stock-based compensation awards are expensed
using the graded vesting method over the requisite service period, which is generally the vesting period, for each separately vesting
tranche. The Company has elected a policy of estimating forfeitures at grant date. Option valuation models, including the trinomial pricing
and the BSOPM, require the input of several assumptions. These inputs are subjective and generally require significant analysis and judgment
to develop. Refer to Note 12 - “Stock-based payments” for a discussion of the relevant assumptions.

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 was committed to purchase up to $50 million of the
Company’s 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 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 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