Company: IXHL
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001213900-25-092837
Chunk: 151

Company: Incannex Healthcare Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 151
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 more clinical or other data than we currently anticipate to establish whether or to what extent our drug candidate has
an abuse potential, which could increase the development costs and/or delay the marketing approval and launch of that product. In addition,
drug candidates containing controlled substances are subject to DEA regulations relating to manufacturing, storage, distribution and physician
prescription procedures, including:

●DEA registration and inspection of facilities. Facilities conducting research, manufacturing, distributing, importing or exporting,
or dispensing controlled substances must be registered to perform these activities and have the security, control, recordkeeping, reporting
and inventory mechanisms required by the DEA to prevent drug loss and diversion. All these facilities must renew their registrations annually,
except dispensing facilities, which must renew every three years. The DEA conducts periodic inspections of certain registered establishments
that handle controlled substances. We will need to identify wholesale distributors with the appropriate DEA registrations and authority
to distribute the products to pharmacies and other healthcare providers, and these distributors would need to obtain Schedule II or III
distribution registrations. Obtaining and maintaining the necessary registrations may result in delay of the importation, manufacturing
or distribution of our drug candidates. If we fail to obtain or maintain the necessary registrations, the DEA may seek civil penalties,
refuse to renew necessary registrations or initiate proceedings to restrict, suspend or revoke those registrations. In certain circumstances,
violations could lead to criminal proceedings.

●State-Controlled Substance Laws. Individual states have also established controlled substance laws and regulations. We, our
third-party manufacturers, our distributors or our other partners must obtain applicable DEA and state registrations, permits or licenses,
as applicable, in order to be able to obtain, manufacture, process, handle, distribute, import or export controlled substances for clinical
trials or commercial sale. While some states automatically schedule a drug based on federal action, other states schedule drugs through
rulemaking or a legislative action. State scheduling may delay commercial sale of any product for which we obtain FDA approval, and adverse
scheduling could have a material adverse effect on the commercial sales of such product. Failure to meet applicable regulatory requirements
could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law, which
could have a material adverse effect on our business, financial condition and results of operations.

●Clinical trials. To conduct clinical trials with any of our investigational drug candidates that fall into categories of substances
that are “controlled substances,” each of our research sites must submit a research protocol to the DEA and obtain and