Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 31

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 8
Chunk 31
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 benefits of possible
controls and procedures relative to their costs. In addition, the design of any system of controls is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under
all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance
with policies or procedures may deteriorate. Because of its inherent limitations, internal control over financial reporting may not prevent
or detect errors or misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance
with the policies or procedures may deteriorate. Management, with the participation of our principal executive and principal financial
officers, assessed the effectiveness of our internal control over financial reporting on June 30, 2025. In making these assessments, management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control
- Integrated Framework (2013). Based on its assessment, management has concluded that our internal control over financial reporting was
not effective as of June 30, 2025.

A material weakness is defined as a deficiency,
or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management has concluded
that we did not maintain effective disclosure controls and procedures due to the material weakness in internal control over financial
reporting which existed as of June 30, 2025, relating to the documentation of accounting policies and procedures, particularly relating
to the correct application of complex accounting measures.

Remediation Efforts

The measures that we are undertaking to remediate
the material weakness in internal control over financial reporting have and will include: (a) hiring qualified internal control personnel
or consultants to manage the implementation of internal control policies, procedures and improvement of the internal audit function, as
applicable; (b) developing and implementing written policies and procedures for accounting and financial reporting that meet the standards
applied to public companies listed in the United States; and (c) conducting internal control training to management, key operations personnel
and the accounting department, so that management and relevant personnel understand the requirements and elements of internal control
over financial reporting