Company: IXHL
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110299
Chunk: 75

Company: Incannex Healthcare Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 75
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iced and includes these costs in trade and other payables on the consolidated
balance sheets and within research and development expenses on the consolidated statements of operations and comprehensive loss.

We accrue for these costs based on factors such
as estimates of the work completed and in accordance with agreements established with its third-party service providers. We make significant
judgments and estimates in determining the accrued liabilities balance at the end of each reporting period. As actual costs become known,
we adjust our accrued liabilities. We have not experienced any material differences between accrued costs and actual costs incurred.

Benefit from R&D Tax Incentive

Benefit from R&D tax credit consists of the
R&D tax credit received in Australia, which is recorded within other income (expense), net. The Company recognizes grants once both
of the following conditions are met: (i) the Company is able to comply with the relevant conditions of the grant and (ii) the grant is
received. 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company” (as
defined by Item 10 of Regulation S-K), we are permitted to omit information required by this item.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and
Procedures

We maintain disclosure
controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act that are designed to ensure
that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives. Our management, with the participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of the design and operation
of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of September 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level due to the
material weakness in internal control over financial reporting which existed as of September 30, 2025