Company: IXHL
Filing Date: 2025-04-17
Form Type: PRER14A
Source: 0001213900-25-033013
Chunk: 32

Company: Incannex Healthcare Inc.
Filing Date: 2025-04-17
Form: PRER14A
Chunk 32
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 reduced. The issuance of those 347,222,700
additional shares would be approximately 1,260% of the 27,546,753 shares of our common stock outstanding as of April 11, 2025 and 92.19%
of our total shares of common stock outstanding assuming the exercise of all Pre-Funded Warrants and the issuance of the maximum number
of shares of common stock that may be issuable upon exercise of the Series A Warrants.

As a result of these zero exercise price provisions,
it is unlikely investors would choose to cash exercise the Series A Warrants, and we are unlikely to receive any cash proceeds from the
exercise of the Series A Warrants. Similarly, as a result of the zero exercise price provisions, it is unlikely investors would choose
to exercise the Series A Warrants on a “net” or “cashless” basis that would reduce the number of shares issuable
upon exercise of the Series A Warrant by a number of shares having an aggregate value equal to the exercise price.

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The sale into the public market of these shares,
or the perception that such sales could occur, could cause the market price of shares of our common stock could decline significantly
and the volatility of the market price of our common stock could increase significantly, even if our research and development efforts
are going well.

When an investor sells stock that it does not
own, it is known as a short sale. The short selling investor, anticipating that the price of the stock will go down, intends to buy stock
to cover its sale at a later date. If the price of the stock goes down, the short selling investor will profit to the extent of the difference
between the price at which it originally sold it less its later purchase price. Short sales often enable the short selling investors to
profit in a down market. Short sales in the past have, and could again, place significant downward pressure on the price of our common
stock. The Purchase Agreements do not contain a prohibition on the investors against short sales of our common stock following
closing of the Private Placement, including short sales between the closing of the Private Placement and the date of Warrant Stockholder
Approval. As such, receipt of the Warrant Stockholder Approval and, in particular the large number of shares then issuable upon exercise
of the Series A Warrants and the exercise price adjustment provisions surrounding share combination events and Release Dates in the Series
A Warrants, could encourage