Incannex Healthcare Inc.
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
IXHL$2.24-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-043682
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001213900-25-110299
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 64 current paragraphs.
44 unchanged; 16 reworded; 4 added; 17 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
General and administrative expenses increased by $2.2 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was primarily attributable to increases in executive and director compensation, additional consulting charges including recurring monthly fees from advisory firms, and the recognition of amortized share-based payment expenses in the current quarter.
Current report
Share of earnings (loss) of joint venture
Current report
Share of earnings (loss) of joint venture increased by $6,000 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to the investment in Mind Clinics Australia
Current report
On October 22, 2025, the Company repurchased 1,480,000 shares of its common stock at a price of $0.41 per share, for a total cost of $600,000. This repurchase reduced the number of outstanding shares to 346,225,507 from 347,705,507. The Company will continue to assess market conditions and may deploy the buyback program at its discretion as appropriate.
Removed paragraphs (17)
Previous report
Recent Developments
Previous report
Equity-Line of Credit Purchase Agreement
Previous report
On September 6, 2024, we entered into an equity line of credit Purchase Agreement (the “ELOC Purchase Agreement”) with Arena Business Solutions Global SPC II, Ltd (“Arena Global”). Under the ELOC Purchase Agreement Arena Global has committed to purchase up to $50 million of our common stock par value $0.0001 per share, at our direction from time to time, subject to the satisfaction of the conditions in the ELOC Purchase Agreement. The purchase price per share of our common stock is obtained by multiplying by 96% the daily volume weighted average price (“VWAP”) on The Nasdaq Global Market (“Nasdaq”) for the trading day specified in the sale notice (same trading day or one trading day following such notice) delivered to Arena Global. The ELOC Purchase Agreement will terminate automatically upon the earliest to occur of (i) the first day of the month next following the 36-month anniversary of the date of the ELOC Purchase Agreement; or (ii) the date on which Arena Global shall have purchased shares of our common stock under the ELOC Purchase Agreement for an aggregate gross purchase price equal to the Commitment Amount (as defined in the ELOC Purchase Agreement). In connection with the ELOC Purchase Agreement we agreed, among other things to issue to Arena Global, as a commitment fee, that number of shares of our common stock equal to 250,000 divided by the simple average of the daily VWAP of our common stock during the five trading days immediately preceding the effectiveness of a “shelf” registration statement on Form S-3 on which the estimated number of shares of our common stock are registered. As additional consideration for Arena Global’s execution and delivery of the ELOC Purchase Agreement, we issued on October 31, 2024, a five-year warrant (the “ELOC Warrant”) exercisable for 585,000 shares of our common stock with an exercise price equal to $1.66 per share. However, we may not sell common stock to Arena Global under the ELOC Purchase Agreement if (i) a shelf Registration Statement on Form S-3 that registers the common stock issuable under the ELOC Purchase Agreement has not been declared effective by the SEC; (ii) the number of shares of our common stock issuable to Arena Global pursuant to a sale notice causes the aggregate number of shares of our common stock beneficially owned by Arena Global and its affiliates would exceed 9.99% of the number of shares of our common stock then outstanding; (iii) the Shareholder Approval (as defined in the ELOC Purchase Agreement) to issue Common Stock in excess of the Exchange Cap (a cap limiting the issuance of shares pursuant to the ELOC Purchase Agreement and ELOC Warrant to 19.99% of the Company’s issued and outstanding shares on the date of the ELOC Purchase Agreement (3,526,802 shares of Common Stock) to the extent such prior stockholder approval would be required for compliance with the rules and regulations of Nasdaq); or (iv) such sale of shares of our common stock would exceed, during any 12-…
Excerpt shortened here; the source contains the full paragraph.
Previous report
Convertible Debenture Financing
Previous report
On September 6, 2024, we entered into that certain Securities Purchase Agreement (the “September 2024 Purchase Agreement”) with Arena Investors, LP (“Arena Investors”) pursuant to which we will issue secured convertible debentures in an aggregate principal amount of up to $10 million at an aggregate purchase price of up to $9 million, divided into three separate tranches that are each subject to closing conditions, with a 10% original issue discount (the “September 2024 Debentures”). The conversion price of each September 2024 Debenture would be equal to 115% of the closing price of our common stock on the trading day preceding the date of the issuance of the respective September 2024 Debenture, subject to adjustments related to the trading price of our common stock on Nasdaq.
Previous report
Pursuant to the September 2024 Purchase Agreement, we and certain of our subsidiaries (the “Subsidiaries”) and Arena Special Opportunities (Offshore) Master II LP (“Arena Opportunities”) entered into a security agreement effective as of October 14, 2024 (the “Security Agreement”), pursuant to which we (i) pledged the equity interests in the Subsidiaries and (ii) granted to Arena Opportunities a security interest in, among other items, all of our owned assets, whether currently owned or later acquired, and all proceeds therefrom (the “Assets”), as set forth in the Security Agreement. In addition, our Subsidiary, Incannex Healthcare Pty Ltd (IHPL) entered into a patent security agreement (the “Patent Security Agreement”) and a trademark security agreement (the “Trademark Security Agreement”), each effective as of October 14, 2024, pursuant to which IHPL granted to the investors a security interest in its patents, patent applications, and all proceeds therefrom and a security interest in its trademarks, trademark applications, and all proceeds therefrom, respectively. In addition, pursuant to the Security Agreement, the Subsidiaries granted to Arena Opportunities a security interest in its Assets and, pursuant to a Subsidiary Guarantee effective as of October 14, 2024 (the “Subsidiary Guarantee”), jointly and severally agreed to guarantee and act as surety for our obligation to repay the Debentures and other obligations under the other transaction documents.
Previous report
As additional consideration for the Purchaser’s purchase of each September 2024 Debenture, we will issue a warrant (a “September 2024 Debenture Warrant”), with a five year expiration, each exercisable for number of shares of our common stock equal to 25% of the total principal amount of the related September 2024 September 2024 Debenture purchased by the Purchaser on the applicable closing date divided by 115% of the closing price of our common stock on the trading day immediately preceding such closing date. We are not obligated to issue a September 2024 Debenture Warrant with respect to any September 2024 Debenture tranche that does not close. The exercise price of each September 2024 Debenture Warrant will be 115% of the closing price of our common stock on its issuance date.
Previous report
We must register the shares of our common stock issuable upon conversion of the September 2024 Debentures and exercise of the September 2024 Debenture Warrants. However, the issuance of the common stock underlying the September 2024 Debenture and the September 2024 Debenture Warrants are subject to stockholder approval to the extent the issuance would exceed 19.99% of the number of shares of our common stock outstanding as of the date of the September 2024 Purchase Agreement.
Previous report
As described in Note 16 of the Financial Statements included in this Quarterly Report, on October 17, 2024, we completed the closing of the first tranche for the issuance of a 10% original issue discount secured convertible debenture (the “First Tranche Debenture”) in the principal amount of $3,333,333 at an aggregate purchase price of $3 million, with 10% original issue discount and payment-in-kind interest rate at 5%, to Arena Opportunities pursuant to the September 2024 Purchase Agreement. The First Tranche Debenture matures on April 14, 2026. In addition, we issued a warrant to Arena Investors exercisable for up to 453,749 shares of common stock (the “First Tranche Warrant”). The exercise price of the First Tranche Warrant is $1.89 per share.
Previous report
The net proceeds received from the issuance of the First Tranche Debenture, after deduction of expenses reimbursable to the Arena Investors, was $2,877,588.
Previous report
Pursuant to the September 2024 Purchase Agreement, we and Arena Opportunities entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which we agreed to file with the SEC a registration statement on Form S-3 after the closing of each tranche of the debenture to register for resale the shares of common stock issued upon conversion of the applicable debenture and the shares issuable upon exercise of any warrants issued in the applicable closing, within 20 calendar days after the closing date of the first tranche (the “Filing Deadline”) and to have such registration statement declared effective within 60 days after the Filing Deadline (or in the event of full review by the SEC, within 90 calendar days after the Filing Deadline). On November 6, 2024, we filed with the SEC the Resale Registration Statement, registering for resale up to 61,389,758 shares of common stock, including up to 10,101,009 shares of common stock issuable upon conversion of the First Tranche Debenture and up to 453,749 shares of common stock issuable upon the exercise of the First Tranche Warrant.
Previous report
Facility Agreement
Previous report
On October 9, 2024, we entered into a Facility Agreement (the “Facility Agreement”) with FC Credit Pty Ltd (“FC Credit”), pursuant to which FC Credit will provide a term loan facility for up to $4.7 million (the “Loan Facility”). On October 10, 2024, we received approximately $4.6 million as the initial drawdown amount, after deducting certain fees payable by us under the Facility Agreement. The Loan Facility has a term of 12 months from the date of the initial drawdown (the “Final Repayment Date”). Interest under the Loan Facility will accrue at the rate of 14.5% per annum and is payable on the last date of each calendar month and on the Final Repayment Date.
Previous report
This facility provides us with immediate access to funds based on research and development expenses incurred during the 2023 and 2024 financial years, aligning with the end of the Australian financial year. The Research and Development Tax Incentive (“RDTI”) program is a key program under the Australian government's innovation framework, designed to encourage companies to undertake research and development activities that benefit Australia. It offers a tax rebate, currently at 48.5%, for eligible research and development expenses, allowing companies to recoup almost half of their research and development spending.
Previous report
General and administrative expenses decreased by $1.9 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease was primarily attributable to a decrease in employee benefits, resulting from a reduction in the amount of restricted stock issued to our directors and officers.
Previous report
General and administrative expenses decreased by $2.5 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The decrease was primarily attributable to a decrease in employee benefits, resulting from a reduction in the amount of restricted stock issued to our directors and officers.
Previous report
Benefit from R&D tax incentive decreased by $6.0 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024. The decrease was due to a lower estimate of our R&D tax incentive receivable for the nine months ended March 31, 2025.
Reworded paragraphs (16)
Previous wording
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). This Quarterly Report contains forward-looking statements. This discussion and analysis contain forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section in our Annual Report on Form 10-K, as filed with the SEC on September 30, 2024 (the “2024 Annual Report”) and this Quarterly Report. We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Quarterly Report. We undertake no obligation to update forward-looking statements, which reflect events or circumstances occurring after the date of this Quarterly Report.
Current wording
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). This Quarterly Report contains forward-looking statements. This discussion and analysis contain forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section in our Annual Report on Form 10-K, as filed with the SEC on September 29, 2025 (the “2025 Annual Report”). We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Quarterly Report. We undertake no obligation to update forward-looking statements, which reflect events or circumstances occurring after the date of this Quarterly Report.
Previous wording
Comparison of the Three and Nine Months Ended March 31, 2025 and 2024
Current wording
Comparison of the Three Months Ended September 30, 2025 and 2024
Previous wording
We have generated revenue from Clarion Clinics for patient services for the three and nine months end March 31, 2025. However, we do not expect to generate material revenues unless and until our drug candidates are approved.
Current wording
We have not generated revenue for the three months end September 30, 2025 and we do not expect to generate material revenues unless and until our drug candidates are approved.
Previous wording
Research and development expenses decreased by $0.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily due to the completion of the IHL-42X safety and pharmacokinetics clinical trial and the pausing of patient recruitment in the Australian Phase 2 clinical trial for IHL-675A in rheumatoid arthritis. This decision was made to reallocate resources for the IHL675A program and focus on expanding research efforts in the United States, where an expedited regulatory pathway may be available. The primary R&D expense for the period was the Phase 2/3 RePOSA clinical trial investigating IHL-42X in patients with OSA.
Current wording
Research and development expenses decreased by $1.8 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily due to the completion of the IHL-42X safety and pharmacokinetics clinical trial and the pausing of patient recruitment in the Australian Phase 2 clinical trial for IHL-675A in rheumatoid arthritis. This decision was made to reallocate resources for the IHL675A program and focus on expanding research efforts in the United States, where an expedited regulatory pathway may be available. We have since resumed development activities for this candidate. The primary R&D expense for the period was the Phase 2/3 RePOSA clinical trial investigating IHL-42X in patients with OSA.
Previous wording
Although research and development activities are central to our business model, the successful development of our drug candidates is highly uncertain. There are numerous factors associated with the successful development of our drug candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials. As a result, we expect our research and development expenses will increase substantially in connection with our ongoing and planned clinical and preclinical development activities in the near term and in the future to the extent our development activities are successful. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of our drug candidates. Our research and development expenses have varied, and our future research and development expenses may vary, significantly based on a wide variety of factors such as:
Current wording
We generally expect research and development costs to increase as we progress our candidates through clinical trials. Although research and development activities are central to our business model, the successful development of our drug candidates is highly uncertain. There are numerous factors associated with the successful development of our drug candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials. As a result, we expect our research and development expenses will increase substantially in connection with our ongoing and planned clinical and preclinical development activities in the near term and in the future to the extent our development activities are successful. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of our drug candidates. Our research and development expenses have varied, and our future research and development expenses may vary, significantly based on a wide variety of factors such as:
Previous wording
We receive tax incentives from the Australian government for research and development activities. Subject to certain exclusions, the Australian Government tax incentives provide benefits for eligible research and development activities. Entities are entitled to either (i) a 48.5% refundable tax offset for eligible companies with an aggregated turnover of less than A$20 million per annum or (ii) a non-refundable 38.5% tax offset for all other eligible companies. Our aggregated turnover is less than A$20 million and not be controlled by one or more income tax exempt entities, we anticipate being entitled to a claim of 48.5% refundable tax offset for costs relating to eligible research and development activities during the year.
Current wording
We receive tax incentives from the Australian government for research and development activities. Subject to certain exclusions, the Australian Government tax incentives provide benefits for eligible research and development activities. Entities are entitled to either (i) a 48.5% refundable tax offset for eligible companies with an aggregated turnover of less than A$20 million per annum or (ii) a non-refundable 38.5% tax offset for all other eligible companies. Our aggregated turnover is less than A$20 million and we are not controlled by one or more income tax exempt entities, we anticipate being entitled to a claim of 48.5% refundable tax offset for costs relating to eligible research and development activities during the year.
Previous wording
Benefit from R&D tax incentive decreased by $0.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was due to a lower estimate of our R&D tax incentive receivable for the three months ended March 31, 2025.
Current wording
Benefit from R&D tax incentive decreased by $0.4 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in the R&D tax incentive receivable for the three months ended September 30, 2025, was primarily due to a lower estimate based on historical experience of claims.
Previous wording
Foreign exchange losses decreased by $0.1 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due to favourable currency exchange rates. Interest income decreased over the same period, reflecting lower interest received from cash deposits.
Current wording
Foreign exchange losses increased by $8,000 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to favourable currency exchange rates. Interest income decreased over the same period, reflecting lower interest received from cash deposits.
Previous wording
Currency translation adjustment, net of tax, decreased by $0.7 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease was due to the depreciation of the Australian dollar against the U.S. dollar. We maintain our consolidated financial statements in Australian dollars, our functional currency, while our financial statements are translated into U.S. dollars for reporting purposes.
Current wording
Currency translation adjustment, net of tax, decreased by $116,000 for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was due to the depreciation of the Australian dollar against the U.S. dollar. We maintain our consolidated financial statements in Australian dollars, our functional currency, while our financial statements are translated into U.S. dollars for reporting purposes.
Previous wording
We incurred total comprehensive losses of $16.2 million and $12.4 million for the nine months ended March 31, 2025 and nine months ended March 31, 2024, respectively. We incurred net losses of $15.3 million and $12.0 million for the nine months ended March 31, 2025 and nine months ended March 31, 2024, respectively. As of March 31, 2025, we had accumulated deficit of $126.0 million.
Current wording
We incurred total comprehensive losses of $6.2 million and $5.1 million for the three months ended September 30, 2025 and three months ended September 30, 2024, respectively. We incurred net losses of $6.4 million and $5.4 million for the three months ended September 30, 2025 and three months ended September 30, 2024, respectively. As of September 30, 2025, we had accumulated deficit of $164.0 million.
Previous wording
As of March 31, 2025, we had cash and cash equivalents of $6.7 million. We expect our negative cash flows from operating activities to continue and thus have determined that the losses and negative cash flows from operations and uncertainty in generating sufficient cash to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern for at least one year from the issuance date of the financial statements included in this Quarterly Report. We do not currently have an update to our previously disclosed cash runway estimate. We have based our cash runway estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect.
Current wording
As of September 30, 2025, we had cash and cash equivalents of $73.3 million. Although we expect our negative cash flows from operating activities to continue, we believe our current cash balances, together with anticipated cash flows and available financing arrangements, provide sufficient resources to meet our obligations and sustain operations for at least one year from the issuance date of the financial statements included in this Quarterly Report.
Previous wording
For the nine months ended March 31, 2025, we experienced net cash used in operating activities of $11.0 million, a decrease of $1.2 million compared to the nine months ended March 31, 2024. As of March 31, 2025, we had cash and cash equivalents of $6.7 million, an increase of $0.8 million compared to our cash and cash equivalents as of June 30, 2024 of $5.9 million. As of March 31, 2025, our current assets exceed our current liabilities by $8.2 million, a $2.4 million decrease compared to the difference between our current assets and current liabilities as of June 30, 2024 of $10.6 million.* *
Current wording
For the three months ended September 30, 2025, we experienced net cash used in operating activities of $9.2 million, an increase of $7.0 million compared to the three months ended September 30, 2024. As of September 30, 2025, we had cash and cash equivalents of $73.3 million, an increase of $58.3 million compared to our cash and cash equivalents as of June 30, 2025 of $15.0 million. As of September 30, 2025, our current assets exceed our current liabilities by $76.6 million, a $63.7 million increase compared to the difference between our current assets and current liabilities as of June 30, 2025 of $13.0 million.* *
Previous wording
Comparison of cash flows for the for the nine months ended March 31, 2025 and nine months ended March 31, 2024
Current wording
Comparison of cash flows for the three months ended September 30, 2025 and three months ended September 30, 2024
Previous wording
Cash used in operating activities decreased by $1.2 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The decrease due to …
Current wording
Cash used in operating activities increased by $6.9 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase due to an increase in trade and other payables.
Previous wording
Cash used in investing activities decreased by $0.3 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024. The decrease was due to reduced spending on property, plant and equipment.
Current wording
Cash used in investing activities increased by $42,000 for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was due to our investment in Mind Medicine Australia.
Previous wording
Cash used in financing activities increased by $11.8 million for the nine months ended March 31, 2025 and the nine months ended March 31, 2024.
Current wording
Cash provided in financing activities increased by $67.2 million for the three months ended September 30, 2025 and the three months ended September 30, 2024. The increase was due to share issuances under our ATM.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Research and development expenses decreased by $1.5 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024. The decrease was primarily due to the completion of the IHL-42X safety and pharmacokinetics clinical trial and the pausing of patient recruitment in the Australian Phase 2 clinical trial for IHL-675A in rheumatoid arthritis. This decision was made to reallocate resources for the IHL-675A program and focus on expanding research efforts in the United States, where an expedited regulatory pathway may be available. The primary R&D expense for the period was the Phase 2/3 RePOSA clinical trial investigating IHL-42X in patients with OSA.
Previous report — wording carried elsewhere
Foreign exchange losses increased by $0.3 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, due to unfavorable currency exchange rates. Interest income decreased over the same period, reflecting lower interest received from cash deposits.
Previous report — wording carried elsewhere
Currency translation adjustment, net of tax decreased by $0.2 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. The decrease was due to the depreciation of the Australian dollar against the U.S. dollar.