Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 261

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 261
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losses and negative cash flows from operating activities since inception. For example, for the fiscal years ended June 2024 and 2025,
we had total comprehensive losses of $46.7 million and $18.5 million, respectively, and we had negative cash flows from operating activities
of $12.5 million and $5.8 million, respectively. As of June 30, 2025, we had accumulated comprehensive losses of $157.6 million.

We
expect to continue to incur losses from operations for the foreseeable future and expect the costs of drug development to increase in
the future as more patients are recruited for our clinical trials. Because of the numerous risks and uncertainties associated with the
research, development and manufacturing of our drug candidates, we may experience larger than expected future losses and, particularly
if we fail to successfully develop one or more of our drug candidates, we may never become profitable or if we become profitable, main
profitability.

We
rely on R&D tax incentives to provide resources to conduct our business operations. If the amount of R&D tax incentives decreases,
our results of operations and cash resources may be materially affected.

In fiscal 2024 and 2025, respectively, we received
$1.7 million and $11.4 million in R&D tax incentives from the Australian government as a result of the clinical trials activities
conducted in Australia. In Australia, entities are entitled to either (i) a 48.5% refundable tax offset for eligible companies with an
aggregated turnover of less than A$20 million per annum or (ii) a non-refundable 38.5% tax offset for all other eligible companies. Our
aggregated turnover is less than A$20 million and not controlled by one or more income tax exempt entities. We anticipate being entitled
to a claim of 48.5% refundable tax offset for costs relating to eligible R&D activities during the year. Such incentives provide material
resources to conduct our business operations.

However,
we have no control on the rate of R&D tax incentives or on the conditions to receive these incentives. Certain R&D costs that
we incur in the future may be ineligible for cash incentives. For example, costs incurred outside Australia in connection with our future
clinical trials are generally not eligible for cash incentives. In addition, the federal government of Australia and the Australian Taxation
Office (“ATO”) could change the rules of the regulatory regime or amend past tax returns and, as a result