Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 730

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 5
Chunk 730
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 sheets as right-of-use assets
and lease liabilities based on the present value of lease payments over the expected lease term. The Company has also elected to not apply
the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less and does not include
any options to purchase the underlying asset that the Company is reasonably certain to exercise.

Lease expense for minimum lease payments on operating
leases is recognized on a straight-line basis over the lease term. Variable lease payments are excluded from the right-of-use assets and
operating lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Operating lease expenses
are categorized within R&D and general and administrative expenses in the consolidated statements of operations and comprehensive
loss. Operating lease cash flows are categorized under net cash used in operating activities in the consolidated statements of cash flows.

As most of the Company’s leases do not provide
an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining
the present value of future payments.

Trade and other payables

These amounts represent liabilities for goods and
services provided to the Company prior to the end of the period and which are unpaid. Due to their short-term nature, they are measured
at amortized cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Segment information

The Company operates and manages its business as
one reportable and operating segment, which is the R&D of the use of psychedelic medicine and therapies. The Company’s Chief
Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for the purposes of
allocating resources and evaluating financial performance. The Company’s long-lived assets are primarily in Australia.

F-9

Revenue Recognition

The Company recognizes revenue to depict the transfer
of goods and services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange
for those goods and services by applying the following steps:

●Identify the contract with a client;

●Identify the performance obligations in the contract;

●Determine the transaction price;

●Allocate the transaction price to the performance obligations;
and

●Recognize revenue when, or as, the Company satisfies a performance
obligation.

Revenue may be earned over time as the performance
obligations are satisfied or at a point in time which is when the entity has earned a right to payment, the customer has possession of
the