Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 472

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1C
Chunk 472
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quisition of IPR&D

Acquisition of IPR&D expense was recorded in the fiscal year ended
June 30, 2024, in connection with the acquisition of APIRx Pharmaceutical USA, LLC (“APIRx”) in August 2022. We concluded
that the acquisition of APIRx did not meet the definition of business under Accounting Standards Codification (“ASC”) 805,
Business Combinations as APIRx did not have outputs present and a substantive process was not acquired and recorded the transaction as
an asset acquisition as a result. We determined that drug candidates pertaining to APIRx had no alternative future use at the time of
acquisition and charged $35.3 million, including transaction costs of $2.43 million, to the acquisition of IPR&D expense as of the
date of acquisition.

General and Administrative

General and administrative
expenses consist primarily of personnel-related expenses finance and accounting, human resources and other administrative functions,
including salaries, stock-based compensation and benefits for employees, legal fees, expenses relating to patent and corporate matters
and professional fees paid for accounting, auditing, consulting and tax services, as well as facilities-related costs not otherwise included
in R&D expenses and other costs such as insurance costs and travel expenses.

General and administrative expenses decreased by
$4.0 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The decrease was mainly due to a
decrease of $6.3 million (from $8.9 million to $2.6 million) in equity compensation and benefits for employees and directors, primarily
driven by less amortization expense incurred as the equity compensation was issued in May 2025 (compared to the prior period the equity
compensation was issued in December 2024). This decrease was partially offset by an increase of $1.4 million (from $2.8 million to $4.2
million) in salaries, and other employee benefits, which resulted from the appointment of Chief Medical Officer and additional middle
management positions during the period. Additionally, compliance, legal and regulatory expenses increased by $0.8 million (from $3.1 million
to $3.9 million) primarily due to enhanced reporting obligations.

We anticipate our general
and administrative expenses will increase substantially in the future as we expand our operations, including increasing our headcount
to support our continued R&D activities and preparing for potential commercialization of our drug candidates. We also anticipate
we