Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 118

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 118
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armaceutical company,
and the success of our drug candidates is therefore uncertain. None of our drug candidates has been approved for commercial sale in any
jurisdiction, and we expect it to be several years before any of them may be approved, if ever. We will not be able to generate product
revenue unless and until our drug candidates, alone or with future partners, successfully complete clinical trials, receive regulatory
approval and are successfully commercialized. Although we have entered into a joint venture with respect to PSX-001 and may again seek
to obtain revenue from collaboration or licensing agreements with third parties, these agreements and joint ventures may not provide us
with material or ongoing revenues.

We have experienced significant recurring operating
losses and negative cash flows from operating activities since inception. For example, for the fiscal years ended June 2024 and 2025,
we had total comprehensive losses of $46.7 million and $18.5 million, respectively, and we had negative cash flows from operating activities
of $12.5 million and $5.8 million, respectively. As of June 30, 2025, we had accumulated comprehensive losses of $157.6 million.

We
expect to continue to incur losses from operations for the foreseeable future and expect the costs of drug development to increase in
the future as more patients are recruited for our clinical trials. Because of the numerous risks and uncertainties associated with the
research, development and manufacturing of our drug candidates, we may experience larger than expected future losses and, particularly
if we fail to successfully develop one or more of our drug candidates, we may never become profitable or if we become profitable, main
profitability.

We
rely on R&D tax incentives to provide resources to conduct our business operations. If the amount of R&D tax incentives decreases,
our results of operations and cash resources may be materially affected.

In fiscal 2024 and 2025, respectively, we received
$1.7 million and $11.4 million in R&D tax incentives from the Australian government as a result of the clinical trials activities
conducted in Australia. In Australia, entities are entitled to either (i) a 48.5% refundable tax offset for eligible companies with an
aggregated turnover of less than A$20 million per annum or (ii) a non-refundable 38.5% tax offset for all other eligible companies. Our
aggregated turnover is less than A$20 million and not controlled by one or more income tax