Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 313

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 313
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 liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage.
We also expect that we will need to hire additional accounting, finance and other personnel in connection with our efforts to comply with
the requirements of being a public company, and our management and other personnel will need to devote a substantial amount of time towards
maintaining compliance with these requirements. We cannot predict or estimate the amount or timing of additional costs we may incur to
respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified
persons to serve on our board of directors and committees thereof or as executive officers.

We are exposed to fluctuations in exchange
rates which may adversely affect our operating results.

We maintain our consolidated financial statements
in our functional currency, which is the Australian Dollar. For financial reporting purposes, we present our consolidated financial statements
in the U.S. dollar, the reporting currency. Part of our monetary assets and liabilities are denominated in a currency other than our
functional currency and are subject to risks associated with currency exchange fluctuation. We are exposed to changes in exchange rates
arising from the mismatch of cash flows due to currency exchange fluctuations.

We are also subject to currency translation risk,
which arises from the translation into our functional currency for reporting purposes of income from operations conducted in other currencies,
which can cause volatility in reported earnings from our business conducted overseas and translation gains and losses. In preparing our
financial statements, we translate as follows: assets and liabilities are translated at the exchange rates at the balance sheet dates,
expenses and other income (expense), net are translated at the average exchange rates for the periods presented and stockholders’
equity is translated based on historical exchange rates. Translation adjustments are not included in determining net loss but are included
as a foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity. We do not believe that a hypothetical
10% increase or decrease in the relative value of the U.S. dollar to other currencies would have had a material effect on our consolidated
financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report. We
do not currently maintain a program to hedge exposures to non-U.S. dollar currencies.

68

We write business on a global basis, and our results
of operations may be affected by fluctuations in the value of currencies other than the U.S. Dollar. The primary international currencies
in which we currently operate are the Australian Dollar. However