Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 773

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 6
Chunk 773
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 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.S. dollars for reporting purposes.
See Note 2 to our financial statements included in this Annual Report for further information, under the heading “Foreign Currency
Translation.”

Liquidity and Capital Resources

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 $46.7
million and $18.5 million for the fiscal years ended June 30, 2025 and 2024, respectively. The increase in net loss is attributable to
a $24.3 million increase driven by financing activities, including changes in the fair value of warrants and convertible debt, as well
as loss on extinguishment of debt during the fiscal year ended June 30, 2025. As of June 30, 2025, we had accumulated comprehensive losses
of $157.6 million.

As of June 30, 2025, we had cash and cash equivalents
of $15.0 million. Although we expect our negative cash flows from operating activities to continue, we believe our current cash balances,
together with anticipated cash flows and available financing arrangements, provide sufficient resources to meet our obligations and sustain
operations for at least one year from the issuance date of the financial statements in this Annual Report.

For the fiscal year ended June 30, 2025, we
experienced net cash outflows from operating activities of $12.5 million, a decrease of $3.3 million compared to the fiscal year ended
June