Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 431

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1B
Chunk 431
---
 Global was committed to purchase up to $50 million of the
Company’s common stock, at the Company’s direction from time to time, subject to the satisfaction of the conditions in the
ELOC Purchase Agreement.

The purchase price per share of Common Stock was
obtained by multiplying by 96% the daily volume weighted average price (“VWAP”) on The Nasdaq Global Market for the trading
day specified in the sale notice (same trading day or one trading day following such notice) delivered to Arena Global. The ELOC Purchase
Agreement would have terminated automatically upon the earliest to occur of (i) the first day of the month next following the 36-month
anniversary of the date of the ELOC Purchase Agreement; or (ii) the date on which Arena Global shall have purchased shares of Common Stock
under the ELOC Purchase Agreement for an aggregate gross purchase price equal to the Commitment Amount (as defined in the ELOC Purchase
Agreement). We had also agreed to pay a financial advisor up to 7% of the gross proceeds raised under the ELOC Agreement.

On December 9, 2024, in connection with the ELOC
Purchase Agreement, the Company issued 142,403 shares of common stock as a commitment fee to Arena Global. On January 16, 2025
the Company issued 10,346 true-up shares of common stock to Arena Global. The Company evaluated that the costs incurred in connection
with the commitment fee and the true-up shares did not meet the definition of an asset and, therefore, were expensed as incurred.

As additional consideration for Arena Global’s
execution and delivery of the ELOC Purchase Agreement, the Company had issued a five-year warrant (the “ELOC Warrant”) on
October 31, 2024, exercisable for 585,000 shares of common stock with an exercise price equal to $1.66 per share.

The Company determines whether to classify contracts, such as warrants,
that may be settled in the Company’s own stock as equity of the entity or as a liability. An equity-linked financial instrument
must be considered indexed to the Company’s own stock to qualify for equity classification. The Company classifies warrants as liabilities
for any contracts that may require a transfer of assets. Warrants classified as liabilities are accounted for at fair value and remeasured
at each reporting date until exercise, expiration or modification that results in equity classification. Any change in the fair value
of the