Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 205

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 205
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 30, 2024.

Foreign Exchange Losses 

Foreign exchange losses increased by $0.3 million
for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024, primarily due to unfavorable currency exchange
rates during the period.

87

Change in fair value of convertible rights

On October 17, 2024, we issued a convertible debenture
as part of a financing arrangement. The convertible debenture was repaid in full on March 13, 2025, and the convertible rights associated
with the convertible debenture were derecognized along with the debt repayment. The changes in the fair value of the 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