Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 348

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 348
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 convertible rights
amounted to $0.3 million for the fiscal year ended June 30, 2025.

Change in fair value of warrant liabilities

In 2024 and 2025 we issued warrants in connection
with our equity line of credit financing, convertible debenture financing and private investment in public equity financing. These warrants
were subsequently exercised or cancelled later during the year. The changes in the fair value of warrant liabilities amounted to $21.9
million for the fiscal year ended June 30, 2025.

Loss on extinguishment

As mentioned above, the convertible debenture was
repaid in full on March 13, 2025, and the associated convertible rights were derecognized along with the debt repayment. This resulted
in a total loss on extinguishment of $1.5 million, comprising a $1.0 million loss on the debt host contract and $0.5 million related to
the associated convertible rights.

ELOC commitment fee

We entered into an equity line of credit purchase
agreement in September 2024 and as part of that arrangement, we issued shares as commitment fee to secure the equity line of credit facility.
The commitment fee expense incurred for the fiscal year ended June 30, 2025 as a result of these share issuances was $1.1 million.

Currency Translation Adjustment Losses

Currency translation adjustment, net of tax increased
by $0.3 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The increase resulted primarily
from the translation of financial statements from the functional currency to U.S. dollars. For certain of our international subsidiaries,
the local currency is the functional currency, and their financial statements are then translated into U.S. dollars for reporting purposes.
See Note 2 to our financial statements included in this Annual Report for further information, under the heading “Foreign Currency
Translation.”

Liquidity and Capital Resources

We have incurred net losses since inception and
expect to incur substantial and increasing losses in the future as we expand our R&D activities in an effort to move our drug candidates
into later stages of development. Historically, we have funded our operations primarily through the sale of equity securities, proceeds
from the exercise of options, tax grants from R&D activities and interest income.

We incurred total comprehensive losses of $46.7
million and $18.5 million for the fiscal years ended June 30, 2025