Company: IXHL
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110299
Chunk: 41

Company: Incannex Healthcare Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 41
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 the instrument is not considered
to be indexed to the reporting entity’s own stock. The Company measured the ELOC Warrant as a liability at fair value as at each
reporting period with changes in fair value recognized as other (income) expense, net in the consolidated statements of operations and
comprehensive income (loss).

Convertible Debenture Financing

On September 6, 2024, the Company entered into
a Securities Purchase Agreement (the “September 2024 Purchase Agreement”) with Arena Investors, LP (“Arena Investors”),
which provided for the issuance of secured convertible debentures in an aggregate principal amount of up to $10 million at an aggregate
purchase price of up to $9 million (a 10% original issue discount), divided into three separate tranches, each subject to closing conditions.
Under the September 2024 Purchase Agreement, the conversion price of each secured convertible debenture equaled 115% of the closing price
of the Common Stock on the trading day preceding the date of the issuance of the respective secured convertible debenture, subject to
subsequent adjustments and alternative conversion prices based on the then-current trading price of the Common Stock on Nasdaq, as further
detailed in the September 2024 Purchase Agreement. For each secured convertible debenture purchased under the September 2024 Purchase
Agreement, the Company would have issued a warrant to the purchaser, exercisable to purchase up to the number of shares of Common Stock
equal to 25% of the total principal amount of the related secured convertible debenture, divided by 115% of the closing price of the Company’s
Common Stock on the trading day immediately preceding the applicable closing date. The Company was not obligated to issue warrants for
any tranche that does not close. The exercise price of each warrant would have been 115% of the closing price of the Common Stock on the
issuance date, and the warrants were to have a five-year term. Additionally, the Company has agreed to pay a financial advisor up to 7%
of the gross proceeds raised under the September 2024 Purchase Agreement.

9

Note 2 – Basis of Presentation and Summary of Significant
Accounting Policies (continued)

The Company completed the closing of the first
tranche under the September 2024 Purchase Agreement for the issuance of a 10% original issue discount secured convertible debenture (the
“First Tranche Debenture”) in the principal amount of $3,333,333 at