Incannex Healthcare Inc.
For the period ended Dec 31, 2025. Filed Feb 13, 2026.
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.
Dec 31, 2025 · Filed Feb 13, 2026
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 2025-09-30; filed 2025-11-14.
0001213900-25-110299
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-13.
0001213900-26-015867
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 64 previous paragraphs and 67 current paragraphs.
41 unchanged; 19 reworded; 2 added; 2 removed; 2 previous and 5 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 (2)
Current report
Historically, the Company has financed its operations to date primarily through partnerships, funds received from public offerings of common stock, a debt financing facility, as well as funding from governmental bodies.
Current report
Until such time as we can generate product revenues, if ever, we expect to finance our cash needs through the sale of common stock in public offerings and/or private placements, debt financings, or through other capital sources, including pursuant to the at-the-market offering program, collaborations with other companies or other strategic transactions. During the three months ended December 31, 2025, we sold 4,525,000 shares of our common stock pursuant to our at-the-market offering program. We paid commissions and fees of $75,000 to the sales agents in connection with these sales, resulting in net proceeds of $2.1 million. Any additional equity fundraising in the capital markets may be dilutive for our stockholders. To the extent that we raise additional capital through the sale of equity, convertible debt or other securities convertible into equity, the ownership interest of our stockholders will be diluted, and the terms of new securities may include liquidation or other preferences that adversely affect rights of our stockholders. Debt financing, if available at all, would likely involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, completing acquisitions or declaring or paying dividends. If we raise additional funds through strategic collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to our drug candidates or future revenue streams or grant licenses on terms that are not favorable to us.
Removed paragraphs (2)
Previous report
Going Concern
Previous report
Refer to Note 2 – Basis of Presentation and Summary of Significant Accounting Policies – Going Concern Basis
Reworded paragraphs (19)
Previous wording
Comparison of the Three Months Ended September 30, 2025 and 2024
Current wording
Comparison of the Three and Six Months Ended December 31, 2025 and 2024
Previous 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.
Current wording
We have not generated revenue for the three and six months ended December 31, 2025, and we do not expect to generate material revenue unless and until our drug candidates are approved.
Previous 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.
Current wording
Research and development expenses decreased by $0.9 million for the six months ended December 31, 2025 compared to the six months ended December 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. These decisions were 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
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:
Current wording
We generally expect research and development costs to increase as we progress our drug 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
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 wording
General and administrative expenses increased by $1.1 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The increase was primarily attributable to increases in recognition of amortized stock-based payment expenses in the current quarter and additional consulting charges including recurring monthly fees from advisory firms.
Previous 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.
Current wording
Benefit from R&D tax incentive decreased by $0.5 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The decrease in the R&D tax incentive receivable for the three months ended December 31, 2025, was primarily due to a lower estimate based on historical experience of claims.
Previous 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.
Current wording
Foreign exchange losses decreased by $0.3 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due to favorable currency exchange rates. Interest income decrease over the same period, reflecting lower interest received from cash deposits.
Previous wording
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 wording
Share of earnings (loss) of joint venture increased by $17,000 for the six months ended December 31, 2025, compared to the six months ended December 31, 2024, due to the investment in Mind Clinics Australia.
Previous 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.
Current wording
Currency translation adjustment, net of tax, increased by $0.1 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. The increase was due to the appreciation 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 have incurred net losses since inception and expect to incur substantial and increasing losses in the future as we expand our R&D activities in an effort to move our drug candidates into later stages of development. Historically, we have funded our operations primarily through the sale of equity securities, proceeds from the exercise of options, tax grants from R&D activities and interest income.
Current wording
We have incurred net losses since inception and expect to incur substantial and increasing losses in the future as we expand our R&D activities in an effort to move our drug candidates into later stages of development.
Previous 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.
Current wording
We incurred total comprehensive losses of $13.0 million and $11.4 million for the six months ended December 31, 2025 and six months ended December 31, 2024, respectively. We incurred net losses of $12.9 million and $11.3 million for the six months ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had accumulated deficit of $170.5 million. For the six months ended December 31, 2025, we experienced net cash used in operating activities of $13.8 million, an increase of $6.0 million compared to the six months ended December 31, 2024. In addition, during the three and six months ended December 31, 2025, the Company repurchased 3.1 million shares of its Common Stock at an aggregate cost of $1.2 million under the share repurchase program. The Company will continue to assess market conditions and may deploy the buyback program at its discretion as appropriate.
Previous 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.
Current wording
As of December 31, 2025, we had cash and cash equivalents of $68.9 million, an increase of $53.9 million compared to our cash and cash equivalents as of June 30, 2025 of $15.0 million. As of December 31, 2025, our current assets exceed our current liabilities by $72.0 million, a $59.9 million increase compared to the difference between our current assets and current liabilities as of June 30, 2025 of $13.0 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. However, we could use our capital resources sooner than we expect. Our operating plans may change, and we may need additional funds sooner than planned. The process of testing drug candidates in pre-clinical and clinical studies is costly, and the timing of progress in studies is uncertain. Because the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our drug candidates or whether, or when, we may achieve profitability.
Previous wording
Comparison of cash flows for the three months ended September 30, 2025 and three months ended September 30, 2024
Current wording
Comparison of cash flows for the six months ended December 31, 2025 and 2024
Previous 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.
Current wording
Cash used in operating activities increased by $5.9 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. The increase was due to a decrease in trade and other payables.
Previous 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.
Current wording
Cash used in investing activities increased by $38,000 for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. The increase was due to our investment in Mind Medicine Australia.
Previous 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.
Current wording
Cash provided by financing activities increased by $64.1 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. The increase was due to stock issuances under our at-the-market offering program offsetting with stock repurchases under the share repurchase program.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited interim condensed consolidated financial statements as of September 30, 2025, which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of these unaudited interim condensed consolidated financial statements requires our management to make judgments and estimates that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities during the reporting periods. We base our estimates on historical experience, known trends and events, and various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Current wording
Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited interim condensed consolidated financial statements as of December 31, 2025, which have been prepared in accordance with “U.S. GAAP”. The preparation of these unaudited interim condensed consolidated financial statements requires our management to make judgments and estimates that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities during the reporting periods. We base our estimates on historical experience, known trends and events, and various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Previous wording
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements described in the Company’s Annual Report on Form 10-K, we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Current wording
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements described in the 2025 Annual Report, we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Previous wording
We account for stock-based compensation arrangements with employees and non-employees using a fair value method which requires the recognition of compensation expense for costs related to all stock-based payments including share options. The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model. We use either the trinomial pricing or Black-Scholes option-pricing model to estimate the fair value of options granted. Stock-based compensation awards are expensed using the graded vesting method over the requisite service period, which is generally the vesting period, for each separately vesting tranche. We have elected a policy of estimating forfeitures at grant date. Option valuation models, including the trinomial pricing and Black-Scholes option-pricing model, require the input of several assumptions. These inputs are subjective and generally require significant analysis and judgment to develop.
Current wording
We account for stock-based compensation arrangements with employees and non-employees using a fair value method which requires the recognition of compensation expense for costs related to all stock-based payments including stock options. The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model. We use either the trinomial pricing or Black-Scholes option-pricing model to estimate the fair value of options granted. Stock-based compensation awards are expensed using the graded vesting method over the requisite service period, which is generally the vesting period, for each separately vesting tranche. We have elected a policy of estimating forfeitures at grant date. Option valuation models, including the trinomial pricing and Black-Scholes option-pricing model, require the input of several assumptions. These inputs are subjective and generally require significant analysis and judgment to develop.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Research and development expenses increased by $0.9 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The increase was primarily due to the late-stage and close-out costs associated with the IHL-42X safety and pharmacokinetics clinical trial. These costs were partially offset by the pausing of patient recruitment in the Australian Phase 2 clinical trial for IHL-675A in rheumatoid arthritis.
Current report — wording carried from elsewhere
General and administrative expenses increased by $3.4 million for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. The increase was primarily attributable to increases in recognition of amortized stock-based payment expenses in the current quarter and additional consulting charges including recurring monthly fees from advisory firms.
Current report — wording carried from elsewhere
Benefit from R&D tax incentive decreased by $0.9 million for the six months ended December 31, 2025 compared to the six months ended December 31, 2024. The decrease in the R&D tax incentive receivable for the six months ended December 31, 2025, was primarily due to a lower estimate based on historical experience of claims.
Current report — wording carried from elsewhere
Foreign exchange losses decreased by $0.3 million for the six months ended December 31, 2025 compared to the six months ended December 31, 2024, due to favorable currency exchange rates. Interest income decreased over the same period, reflecting lower interest received from cash deposits.
Current report — wording carried from elsewhere
Currency translation adjustment, net of tax, decreased by $0.1 million for the three months ended December 31, 2025, compared to the three months ended December 31, 2024. The increase was due to the appreciation of the Australian dollar against the U.S. dollar.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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.