Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 69

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 69
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approved marijuana and CBD-containing dietary supplements, future enacted
legislation or federal government action authorizing the sale, distribution, use, and insurance reimbursement of non-FDA approved marijuana
or CBD products could increase competition for and adversely affect our ability to generate sales from our drug candidates.

We are also aware that
a number of companies are increasing their efforts in discovery of non-traditional alternative compounds including psychedelics. A number
of for-profit biotechnology companies or institutions are specifically pursuing the development of psilocybin to treat mental health illnesses.
There are also other organizations or institutions evaluating the use of psilocybin in mental health and neurocognitive conditions. In
August 2025, the DEA forwarded to HHS a citizen petition proposing that the agencies reschedule psilocybin from Schedule I to Schedule
II under the federal CSA. Moving psilocybin to Schedule II would remove some of the onerous restrictions to which Schedule I controlled
substances are subject, including limitations on manufacturing and research. In addition, there are various companies exploring other
psychedelic compounds for the treatment of mental health and neurocognitive conditions.

Regulatory Authorities

The research, development, testing, manufacture,
quality control, approval, labeling, packaging, storage, recordkeeping, promotion, advertising, distribution, marketing, sales, among
other things, of drug products are extensively regulated by governmental authorities in the United States and other countries. We, along
with our third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval and post-approval
requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of
our drug candidates.

United States

U.S. Government Regulation of Drug Products

In the United States, the FDA regulates drugs under
the Federal Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations, which govern, among other things, pharmaceutical
product quality, safety, efficacy, development, manufacturing, testing, packaging, labeling, storage, recordkeeping, advertising and promotion.
In addition, controlled substances, like synthetic cannabidiol, THC, and psilocybin, as well as security, recordkeeping, storage, manufacturing,
distribution, and importation, among other things, are regulated by the DEA.

The process of obtaining required authorizations
from FDA or DEA and achieving and maintaining compliance with applicable laws and regulations requires the expenditure of substantial
time and financial resources. Failure to comply with