Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 293

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 293
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 storage may damage the product shipment resulting in delays in clinical trials or, upon commercialization,
a partial or total loss of revenue from one or more shipments of API or our drug candidates. A delay in a clinical trial or, upon commercialization,
a partial or total loss of revenue from one or more shipments of API or our drug candidates, could have a material adverse effect on our
business, results of operations and financial condition.

58

Our drug candidates will be subject to controlled substance laws
and regulations. Failure to receive necessary approvals may delay the launch of our drug candidates and failure to comply with these laws
and regulations may adversely affect the results of our business operations.

Our drug candidates contain controlled substances
as defined in the CSA. For a description of the CSA requirements, as enforced by the DEA, on facilities researching, manufacturing, distributing,
dispensing, importing, or exporting controlled substances, see “Regulatory Authorities - United States - Regulation of Controlled
Substances.”

Our lead drug candidates are based on synthetic
cannabinoids and psilocybin, which are both currently classified as Schedule I controlled substances by the DEA. However, products that
obtain marketing approval for medical use in the United States that contain cannabis, cannabis extracts, or psilocybin should be placed
in Schedules II-V, since approval by the FDA satisfies the “accepted medical use” requirement. If and when any of our future
drug candidates receive FDA approval, the DEA will make a scheduling determination. The scheduling process may take significantly longer
than the 90-day deadline set forth in the CSA, thereby delaying the launch of our drug candidates in the United States. If the FDA, the
DEA or any international regulatory authority determines that our future drug candidates may have potential for abuse, it may require
us to generate more clinical or other data than we currently anticipate to establish whether or to what extent our drug candidate has
an abuse potential, which could increase the development costs and/or delay the marketing approval and launch of that product. In addition,
drug candidates containing controlled substances are subject to DEA regulations relating to manufacturing, storage, distribution and physician
prescription procedures, including:

●DEA registration and inspection of facilities. Facilities conducting research, manufacturing, distributing, importing or exporting,
or dispensing controlled substances must be registered to perform these activities and have the security, control, recordkeeping, reporting
and inventory mechanisms required by the DEA to prevent drug loss and diversion. All these facilities must renew their registrations annually,
except dispensing facilities,