Company: IXHL
Filing Date: 2025-04-17
Form Type: PRER14A
Source: 0001213900-25-033013
Chunk: 56

Company: Incannex Healthcare Inc.
Filing Date: 2025-04-17
Form: PRER14A
Chunk 56
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 restrictions
regarding penny stock transactions may limit an investor’s ability to sell to a third-party and our trading activity in the secondary
market may be reduced. We believe that effecting the Reverse Stock Split may help us avoid delisting from Nasdaq and any resulting consequences.

In addition, our board of directors believes that
the increase in the market price of our common stock that will result from the Reverse Stock Split could encourage investor interest and
improve the marketability of our common stock to a broader range of investors, and thus enhance our liquidity. Because of the trading
volatility often associated with low-priced stocks, many brokerage firms and institutional investors have internal
policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual
brokers from recommending low-priced stocks to their customers. Additionally, because brokers’ commissions on low-priced stocks generally
represent a higher percentage of the stock price than commissions on higher-priced stocks, the current share price of our common stock
may result in an investor paying transaction costs that represent a higher percentage of total share value than would be the case if our
share price were higher. Our board of directors believes that the higher share price that may result from the Reverse Stock Split could
enable institutional investors and brokerage firms with such policies and practices to invest in our common stock.

The Reverse Stock Split may not result in a permanent
increase in the market price of our common stock, which will continue to be dependent on many factors, including general economic, market
and industry conditions and other factors detailed from time to time in the reports we file with the SEC. Even if we are able to obtain
approval and complete the Reverse Stock Split in accordance with the terms and restrictions of the Purchase Agreements (which we may not
be able to do), there can be no assurance this reverse stock split would result in a sustained daily closing price in excess of a $1.00
for the 10 or 20 trading days required by the Nasdaq Staff for us to regain compliance with Nasdaq’s bid price requirements.

Certain Risks Associated with the Reverse Stock Split

There can be no assurance that the total market
capitalization of our common stock after the implementation of the Reverse Stock Split will be equal to or greater than the total market
capitalization before the Reverse Stock Split. Also, we cannot assure you that the Reverse Stock Split will lead to a sustained increase
in the trading price of our common stock. The trading price of our common stock may change due to a variety of