Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 193

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 193
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 those respective classifications. Decreased disclosure in our SEC filings as a result of our having availed ourselves of scaled disclosure
may make it harder for investors to analyze our results of operations and financial prospects.

We may become involved in securities litigation that could materially
divert management’s attention and harm our business, and insurance coverage may not be sufficient to cover all costs and damages.

We may be exposed to securities litigation even
if no wrongdoing occurred. Litigation is usually expensive and diverts management’s attention and resources, which could adversely
affect our business and cash resources. We may become involved in such litigation, and our stock price may fluctuate for many reasons,
including as a result of public announcements regarding the progress of our development efforts or the development efforts of current
or future collaboration partners or competitors, the addition or departure of our key personnel, the announcement of a strategic restructuring,
variations in our quarterly operating results and changes in market valuations of biopharmaceutical and biotechnology companies.

This risk is especially relevant to us because
biopharmaceutical and biotechnology companies have experienced significant stock price volatility in recent years. When the market price
of a stock has been volatile, as our stock price may be, holders of that stock have occasionally brought securities class action litigation
against the company that issued the stock. If any of our stockholders were to bring a lawsuit of this type against us, even if the lawsuit
is without merit, it could result in substantial costs for defending the lawsuit and diversion of the time, attention and resources of
our board of directors and management, which could significantly harm our profitability and reputation.

We are and may continue to be subject to short selling strategies.

Short sellers of
our stock may be manipulative and may attempt to drive down the market price of shares of our common stock. Short selling is the practice
of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities
back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the
sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than
it received in the sale. As it is therefore in the short seller’s best interests for the price of the stock to decline, often short
sellers (sometime known as “disclosed shorts”) publish, or arrange for the publication of, negative opinions regarding the
relevant issuer