Company: IXHL
Filing Date: 2025-04-07
Form Type: 424B5
Source: 0001213900-25-029414
Chunk: 18

Company: Incannex Healthcare Inc.
Filing Date: 2025-04-07
Form: 424B5
Chunk 18
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 illustration of
the dilution you would incur if you participate in this offering. As noted above, we are contractually prohibited from selling shares
pursuant to the Sales Agreement at a price less than $1.08 per share prior to the thirtieth day after
the Release Date and may only sell seven shares of our common stock prior to the Stockholder Approval as we currently do not have sufficient
authorized shares to issue more than these seven shares of our common stock in compliance with the March 2025 Securities Purchase Agreements.

<div align='center'>S-7</div>

Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales could occur, could depress the market price of our common stock.

Sales of a substantial number
of shares of our common stock in the public market, or the perception that such sales could occur, could depress the market price of our
common stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that
future sales of our common stock, including under the Sales Agreement, would have on the market price of our common stock.

We may issue and sell up
to 32,240,144 shares of our common stock under the ATM assuming an offering price of $0.5201 per share (the last reported sale price of
our common stock on April 4, 2025), assuming the receipt of the Stockholder Approval. These shares are being offered and sold by us in
a registered public offering pursuant to the ATM and are in addition to the 347,222,700 shares of our common stock underlying the outstanding
Series A Warrants, assuming full zero strike price exercise of the Series A Warrants. We have also granted registration rights with respect
to the shares of common stock and Warrant Shares issued in the Private Placement, and once the applicable resale registration statement
is declared effectives, those shares will become freely tradeable.

As a result, a large number
of additional shares may become available for sale into the public market. If these shares are sold, or if it is perceived that they may
be sold, the market price of our common stock could decline significantly.

There is an increased potential for short sales of our common stock due to the sale of shares pursuant to the March 2025 Purchase Agreements, which could materially affect the market price of our common stock.

Downward pressure on the
market price of our common stock that likely will result