Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 679

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 4
Chunk 679
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 at the average exchange rates for the periods
presented and stockholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in
determining net loss but are included as a foreign exchange adjustment to other comprehensive income, a component of stockholders’
equity.

The following table presents data regarding the
dollar exchange rate of relevant currencies:

    June 30, 2025  
    June 30, 2024 
  
    Exchange rate on balance sheet dates 

    USD: AUD Exchange Rate 
     0.6550  
     0.6624 
  
    Average exchange rate for the period 

    USD: AUD Exchange Rate 
     0.6482  
     0.6556 

Income tax

The Company is governed by Australia and U.S income
tax laws. The Company follows ASC 740, Accounting for Income Taxes, when accounting for income taxes, which requires an asset and liability
approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for
temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable
income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized.

For uncertain tax positions that meet a “more
likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the consolidated financial statements.
The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense
in the consolidated statements of operations.

Net loss per share attributable to holders of common stock

The Company has reported losses since inception
and has computed basic net loss per share by dividing net loss by the weighted-average number of shares of common stock outstanding for
the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per share after giving consideration
to all potentially dilutive share issuances, including unvested restricted shares and outstanding options. Because the Company has reported
net losses since inception, these potential issuances of common stock have been anti-dilutive and basic and diluted loss per share were
the same for all periods presented.

Comprehensive Loss

Comprehensive loss includes net loss as well as
other changes in stockholders’ equity that result from transactions and economic events other