Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 550

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 2
Chunk 550
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 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 contract. Leases with terms greater than one year are initially recognized on the consolidated balance sheets as right-of-use assets
and lease liabilities based on the present value of lease payments over the expected lease term. The Company has also elected to not apply
the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less and does not include
any options to purchase the underlying asset that the Company is reasonably certain to exercise.

Lease expense for minimum lease payments on operating
leases is recognized on a straight-line basis over the lease term. Variable lease payments are excluded from the right-of-use assets and
operating lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Operating lease expenses
are categorized within R&D and general and administrative expenses in the consolidated statements of operations and comprehensive
loss. Operating lease cash flows are categorized under net cash used in operating activities in the consolidated statements of cash flows.

As most of the Company’s leases do not provide
an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining
the present value of future payments.

Trade and other payables

These amounts represent liabilities for goods and
services provided to the Company prior to the end of the period and which are unpaid. Due to their short-term nature, they are measured
at amortized cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Segment information

The Company operates and manages its business as
one reportable and operating segment, which is the R&D of the use of psychedelic