Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 292

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 292
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The testing, marketing and sale of therapeutic
products entails an inherent risk of product liability. We rely on a number of third-party researchers and contractors to produce, collect,
and analyze data regarding the safety and efficacy of our drug candidates.

Notwithstanding our control procedures, we may
face product liability exposure related to the testing of our drug candidates in human clinical trials. If any of our drug candidates
are approved for sale, we may face exposure to claims by an even greater number of people than were involved in the clinical trials once
marketing, distribution and sales of our drug candidates begin. Regardless of merit or eventual outcome, liability claims may result in:

●decreased demand for our drug candidates;

●injury to our reputation;

●withdrawal of clinical trial participants;

●costs of related litigation;

●substantial monetary awards to patients and others;

●loss of revenues; and

●the inability to commercialize drug candidates.

With respect to product liability claims, we could
face additional liability beyond insurance limits if testing mistakes were to endanger any human subjects. In addition, if a claim is
made against us in conjunction with these research testing activities, the market price of our shares of common stock may be negatively
affected.

Product shipment delays could have a material adverse effect
on our business, results of operations and financial condition.

The shipment, import and export of our drug candidates
and the APIs used to manufacture them, along with the drugs used in our psychedelic-assisted psychotherapy services, will require import
and export licenses. In the United States, the FDA, U.S. Customs and Border Protection, and the DEA; in Canada, the Canada Border Services
Agency, Health Canada; in Europe, the EMA and the European Commission; in Australia and New Zealand, the Australian Customs and Board
Protection Service, the TGA, the New Zealand Medicines and Medical Device Safety Authority and the New Zealand Customs Service; and in
other countries, similar regulatory authorities, regulate the import and export of pharmaceutical products that contain controlled substances.
Specifically, the import and export processes require the issuance of import and export licenses by the relevant controlled substance
authority in both the importing and exporting country.

We may not be granted, or if granted, maintain,
such licenses from the authorities in certain countries. Even if we obtain the relevant licenses, shipments of API and our drug candidates
may be held up or lost in transit, which could cause significant delays and may lead to product batches being stored outside required
temperature ranges. Inappropriate