Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 658

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 4
Chunk 658
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 and clinical trials,
and contract manufacturing activities. We record the estimated costs of R&D activities based upon the estimated amount of services
provided but not yet invoiced and includes these costs in trade and other payables on the consolidated balance sheets and within R&D
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.

90

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.

Emerging Growth Company Status and Smaller
Reporting Company Status

We are an emerging growth
company, as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act permits an emerging growth company
such as us to take advantage of an extended transition period to comply with new or revised accounting standards. We have elected to
avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application
dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised
standard and may do so until such time that we either (i) irrevocably elect to opt out of such extended transition period or (ii) no
longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early
adoption is permitted for private companies.

We will continue to remain
an emerging growth company until the earliest of the following:

●the last day of the fiscal year following the fifth anniversary of
the date of the completion of the first sale of common equity securities pursuant to an effective registration statement under the Securities
Act;

●the last day of the fiscal year in which our total annual gross
                                            revenue is equal to or more than $1.235 billion;

●the date on which we have issued more than $1.0 billion