Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 827

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7
Chunk 827
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 incurred in performing clinical and preclinical development activities.

85

Our R&D expenses
include:

●external costs incurred under agreements with CROs, contract
                                            manufacturers, consultants and other third parties to conduct and support our clinical trials
                                            and preclinical studies; and

●internal costs, including R&D personnel-related expenses
                                            such as salaries, and benefits, as well as allocated facilities costs and dues and subscriptions.

We expense R&D costs
as incurred.

R&D expenses decreased by $2.1 million for
the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The decrease was primarily due to a pause in our
development activities that occurred during the fiscal year ended June 30, 2025 for resource conservation reasons. We have since resumed
development activities for all of our lead drug candidates.

Although R&D activities
are central to our business model, the successful development of our drug candidates is highly uncertain. There are numerous factors
associated with the successful development of our drug candidates, including future trial design and various regulatory requirements,
many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors
beyond our control may impact our clinical development programs. Drug candidates in later stages of clinical development generally have
higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later
stage clinical trials. As a result, we expect our R&D expenses will increase substantially in connection with our ongoing and planned
clinical and preclinical development activities in the near term and in the future to the extent our development activities are successful.
At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the
preclinical and clinical development of our drug candidates. Our R&D expenses have varied, and our future R&D expenses may vary,
significantly based on a wide variety of factors such as:

●the number and scope, rate of progress, expense and results of
                                            our clinical trials and preclinical studies, including any modifications to clinical development
                                            plans based on feedback that we may receive from regulatory authorities;

●per patient trial costs;

●the number of trials required for approval;

●the number of sites included in the trials;

●the countries in which the trials are conducted;

●the length of time required to enroll eligible patients;

●the number of patients that participate in the trials;

●the