Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 410

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1B
Chunk 410
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 commercialization of our drug candidates. We also anticipate
we will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance, and investor and public relations
expenses associated with operating as a U.S. public company.

Other Income (Expense)

Benefit from R&D Tax Credit

We receive tax incentives
from the Australian government for R&D activities. Subject to certain exclusions, the Australian Government tax incentives provide
benefits for eligible R&D activities. 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.
As our aggregated turnover is less than A$20 million and we are 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.

Benefit from R&D tax credit decreased by $9.7
million (from $11.4 million to $1.8 million) for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024.
The decrease primarily due to the multiple years of tax incentives being granted and successful lodgement of overseas findings on the
Company’s lead assets, which we revised the estimates for the R&D tax incentive receivable, primarily based on historical experience
of claims in the fiscal year ended June 30, 2024.

Foreign Exchange Losses 

Foreign exchange losses increased by $0.3 million
for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024, primarily due to unfavorable currency exchange
rates during the period.

87

Change in fair value of convertible rights

On October 17, 2024, we issued a convertible debenture
as part of a financing arrangement. The convertible debenture was repaid in full on March 13, 2025, and the convertible rights associated
with the convertible debenture were derecognized along with the debt repayment. The changes in the fair value of the convertible rights
amounted to $0.3 million for the fiscal year ended June 30, 2025.

Change in fair value of warrant liabilities

In 2024 and 2025 we issued warrants in connection
with our