Company: IXHL
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-043682
Chunk: 42

Company: Incannex Healthcare Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 42
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 documentation of accounting
policies and procedures, particularly relating to the correct application of complex accounting measures as previously reported in our
2024 Annual Report.

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A material weakness is
defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Management has concluded that we did not maintain effective disclosure controls and procedures due to the material weakness in internal
control over financial reporting which existed as of March 31, 2025, relating to the documentation of accounting policies and procedures,
particularly relating to the correct application of complex accounting measures.

Remediation Efforts

The measures that we are
undertaking to remediate the material weakness in internal control over financial reporting have and will include: (a) hiring qualified
internal control personnel or consultants to manage the implementation of internal control policies, procedures and improvement of the
internal audit function, as applicable; (b) developing and implementing written policies and procedures for accounting and financial reporting
that meet the standards applied to public companies listed in the United States; and (c) conducting internal control training to management,
key operations personnel and the accounting department, so that management and relevant personnel understand the requirements and elements
of internal control over financial reporting mandated by the US securities laws.

We believe we have made
progress in accordance with our remediation plan even though the material weaknesses will not be considered remediated until we have completed
implementing the necessary additional applicable controls and operate with them for a sufficient period of time to allow management and
our auditors to concluded that these controls are operating effectively.

We cannot determine when
our remediation plan will be fully completed and we cannot provide any assurance that these remediation efforts will be successful or
that our internal control over financial reporting will be effective as a result of these efforts.

Changes in Internal Control over Financial
Reporting

Other than the remediation
of the material weakness discussed above, there were no changes in our internal controls over financial reporting (as such term is defined
in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during three months ended March 31, 2025 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become