Company: IXHL
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043682
Chunk: 67

Company: Incannex Healthcare Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 67
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, net of tax

Currency translation adjustment, net of tax, decreased
by $0.7 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease was due to
the depreciation of the Australian dollar against the U.S. dollar. We maintain our consolidated financial statements in Australian dollars,
our functional currency, while our financial statements are translated into U.S. dollars for reporting purposes.

Currency translation adjustment, net of tax decreased
by $0.2 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The decrease was due to the
depreciation of the Australian dollar against the U.S. dollar.

26

Liquidity and Capital Resources

Sources of Liquidity

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 $16.2
million and $12.4 million for the nine months ended March 31, 2025 and nine months ended March 31, 2024, respectively. We incurred net
losses of $15.3 million and $12.0 million for the nine months ended March 31, 2025 and nine months ended March 31, 2024, respectively.
As of March 31, 2025, we had accumulated deficit of $126.0 million.

As of March 31, 2025, we had cash and cash equivalents
of $6.7 million. We expect our negative cash flows from operating activities to continue and thus have determined that the losses and
negative cash flows from operations and uncertainty in generating sufficient cash to meet our obligations and sustain our operations raise
substantial doubt about our ability to continue as a going concern for at least one year from the issuance date of the financial statements
included in this Quarterly Report. We do not currently have an update to our previously disclosed cash runway estimate. We have based
our cash runway estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently
expect.

For the nine months ended March 31, 2025