Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 136

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 136
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 requiring a transition period when a new
CRO, clinical trial investigator or other third party begins work. If third parties do not successfully carry out their contractual duties
or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain
are compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, any clinical trials
such third parties are associated with may be extended, delayed or terminated, and we may not be able to obtain marketing approval for
or successfully commercialize our drug candidates. As a result, we believe that our financial results and the commercial prospects for
our drug candidates in the subject indication would be harmed, our costs could increase and our ability to generate revenue could be
delayed.

In addition, we are obligated under our contracts
with CROs to reimburse these CROs for certain expenses incurred by them in the performance of the services they provide to us. The precise
timing and amounts of these expenses and our corresponding reimbursement obligations are and may continue to be uncertain and outside
of our control. We incur the costs for these reimbursement obligations when invoiced by the CRO. We often receive invoices long after
the CRO has performed the services that are the subject of the invoice. As a result, our related operating expenses have and may continue
to vary significantly period-to-period and are not necessarily indicative of the expenses associated with the activities of the CRO conducted
during the period covered by the periodic report in which these expenses are disclosed.

Because
we have relied on third parties, our internal capacity to perform these functions is limited. Outsourcing these functions involves risk
that third parties may not perform to our standards, may not produce results in a timely manner or may fail to perform at all. In addition,
the use of third-party service providers requires us to disclose our proprietary information to these parties, which could increase the
risk that this information will be misappropriated. We currently have a small number of employees, which limits the internal resources
we have available to identify and monitor our third-party providers. To the extent we are unable to identify and successfully manage
the performance of third-party service providers in the future, our business may be adversely affected. Though we carefully manage our
relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays
or challenges will not have a material adverse impact on our business, financial condition and prospects.