Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 206

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 206
---
.S. dollars for reporting purposes.
See Note 2 to our financial statements included in this Annual Report for further information, under the heading “Foreign Currency
Translation.”

Liquidity and Capital Resources

We have incurred net losses since inception and
expect to incur substantial and increasing losses in the future as we expand our R&D activities in an effort to move our drug candidates
into later stages of development. Historically, we have funded our operations primarily through the sale of equity securities, proceeds
from the exercise of options, tax grants from R&D activities and interest income.

We incurred total comprehensive losses of $46.7
million and $18.5 million for the fiscal years ended June 30, 2025 and 2024, respectively. The increase in net loss is attributable to
a $24.3 million increase driven by financing activities, including changes in the fair value of warrants and convertible debt, as well
as loss on extinguishment of debt during the fiscal year ended June 30, 2025. As of June 30, 2025, we had accumulated comprehensive losses
of $157.6 million.

As of June 30, 2025, we had cash and cash equivalents
of $15.0 million. Although we expect our negative cash flows from operating activities to continue, we believe our current cash balances,
together with anticipated cash flows and available financing arrangements, provide sufficient resources to meet our obligations and sustain
operations for at least one year from the issuance date of the financial statements in this Annual Report.

For the fiscal year ended June 30, 2025, we
experienced net cash outflows from operating activities of $12.5 million, a decrease of $3.3 million compared to the fiscal year ended
June 30, 2024. As of June 30, 2025, we had cash and cash equivalents of $15.0 million, an increase of $9.2 million compared to our cash
and cash equivalents as of June 30, 2024 of $5.9 million. As of June 30, 2025, our current assets exceed our current liabilities by $13.0
million, a $2.4 million increase compared to the difference between our current assets and current liabilities as of June 30, 2024 of
$10.6 million.

Going Concern

As of the date of this Annual Report, we believe
there is no longer substantial doubt about our ability to continue as a