Company: IXHL
Filing Date: 2025-04-28
Form Type: DEF 14A
Source: 0001213900-25-036057
Chunk: 30

Company: Incannex Healthcare Inc.
Filing Date: 2025-04-28
Form: DEF 14A
Chunk 30
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 of our products and product candidates. 16 Potential Adverse Effects of the Approval of the Warrant Stockholder Approval Provisions Following approval of the Issuance Proposal, existing stockholders will likely suffer substantial dilution in their ownership interests as a result of the potential issuance of shares of common stock upon exercise of the Series A Warrants. As of the closing on March 10, 2025, we issued Pre -FundedWarrants to purchase up to 1,887,045shares of our common stock and Series A Warrants to purchase up to 11,574,090shares of our common stock. Assuming full adjustment of the exercise price equal to the Floor Price of $0.216 per share and exercise pursuant to the zero exercise price provisions in the Series A Warrants, the exercise of the Series A Warrants would result in the issuance of up to 347,222,700 additional shares of our common stock. In that case, the ownership interest of our existing stockholders would be correspondingly reduced. The issuance of those 347,222,700 additional shares would be approximately 1,260% of the 27,546,753shares 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 -FundedWarrants 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. 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