Full Press Release Details
Incannex Healthcare Inc. Executes Strategic
Cancellation of 50.4% of Series A Warrants, Significantly Reducing Potential Dilution
Raises $12.5M via ATM to Strengthen Shareholder
Position Ahead of IHL-42X Phase 2 Data
NEW YORK and MELBOURNE, Australia - May
20, 2025 - Incannex Healthcare Inc. (Nasdaq: IXHL) ("Incannex" or the "Company"), a clinical-stage
biopharmaceutical company pioneering the development of combination drug therapies, today announced the successful completion of a $16.7
million gross proceeds capital raise through its at-the-market (ATM) facility. $12.5 million of these proceeds will be used to cancel
up to 50.4% of the Series A Warrants previously issued as part of a prior financing agreement.
This strategic initiative significantly reduces
potential future dilution attributable to the Series A Warrants, with up to 5,841,038 of these warrants eligible for cancellation. If
triggered, the adjustment features of these Series A Warrants could otherwise have resulted in up to 175.2 million additional shares being
issued. This move underscores Incannex's proactive approach to capitalization management and shareholder alignment.
"This is a positive development for Incannex
shareholders," said Joel Latham, President and CEO of Incannex. "We've completed a targeted warrant cancellation
that eliminates a significant overhang and reduces significant potential dilution from our prior financing. We believe this initiative
demonstrates our commitment to responsible capital management and puts shareholders in a stronger position ahead of our Phase 2 IHL-42X
"Following the successful execution of this
warrant cancellation, we plan to continue to evaluate further strategic initiatives to continue improving our capital structure. We view
this as an important precedent and a signal to the market that we are focused on long-term value creation and protecting shareholder interests."
This initiative demonstrates Incannex's
continued commitment to shareholder value creation, responsible capital planning, and strengthening of its long-term financial position
as it advances its clinical pipeline.
For more information, please refer to the Form
8-K filed with the SEC on May 15, 2025, including the Letter Agreements referenced therein.
IHL-42X is designed to treat obstructive sleep
apnea ("OSA") by targeting its underlying pathophysiology. An oral fixed-dose combination of dronabinol and acetazolamide,
IHL-42X is currently advancing through the RePOSA Phase 2/3 clinical trial, which is expected to enroll more than 560 patients at sites
Designed to act synergistically, IHL-42X uniquely
targets two physiological pathways associated with the intermittent hypoxia ("IH") and hypercapnia that characterize OSA.
In a prior Australian Phase 2 clinical trial, IHL-42X was shown to reduce the Apnea-Hypopnea Index ("AHI") in all dosage strengths,
with the lowest dose reducing AHI by an average of 51 percent relative to baseline. RePOSA, a global Phase 2/3 clinical trial is underway,
evaluating IHL-42X in individuals with OSA who are either non-compliant, intolerant, or na ve to positive airway pressure devices,
including CPAP, with the Phase 2 portion conducted in the United States. A topline readout from the U.S. Phase 2 portion is anticipated
About Incannex Healthcare Inc.
Incannex is leading the way in developing combination
medicines that target the underlying biological pathways associated with chronic conditions, including obstructive sleep apnea, rheumatoid
arthritis and generalized anxiety disorder. The company is advancing three clinical-stage product candidates based on evidence-based
innovation, and supported by streamlined operations. Incannex's lead clinical program, IHL-42X, is an oral fixed-dose combination
of dronabinol and acetazolamide designed to target underlying mechanisms and act synergistically in the treatment of obstructive sleep
apnea. In a Phase 2 development program, IHL-675A is an oral fixed-dose combination of cannabidiol and hydroxychloroquine sulfate designed
to act synergistically to alleviate inflammatory conditions, such as rheumatoid arthritis. Approved for Phase 2 clinical development,
PSX-001 is an oral synthetic psilocybin treatment for the treatment of generalized anxiety disorder. Incannex's programs target
disorders that have limited, inadequate, or no approved pharmaceutical treatment options. For additional information on Incannex, please
visit our website at www.incannex.com.
Forward Looking Statements
This press release contains "forward-looking
statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act
of 1995. Examples of forward-looking statements in this press release include statements about, among other things: Incannex's
business strategy, future operations; Incannex's ability to execute on its objectives, prospects, or plans, evaluations and judgments
regarding Incannex's research and development efforts, including any implications that the results of earlier clinical trials will
be representative or consistent with later clinical trials or final results; the expected timing of enrollment for these trials and the
availability of data or results of these trials, and the potential benefits, safety or of Incannex's drug candidates. Forward-looking
statements are statements other than historical facts and relate to future events or circumstances or Incannex's future performance,
and they are based on management's current assumptions, expectations, and beliefs concerning future developments and their potential
effect on Incannex's business; Incannex's ability to obtain the requisite stockholder approval for the exercise of the Series
A Warrants; Incannex's ability to potentially improve its capital structure in the future. These forward-looking statements are
subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press
release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking
statements. These risks and uncertainties include, among others: the continued availability of financing; Incannex's ability to
raise capital to fund continuing operations, to complete capital raising transactions and to potentially improve its capital structure;
the impact of any infringement actions or other litigation brought against Incannex; the success of Incannex's development efforts,
including Incannex's ability to progress its drug candidates through clinical trials on the timelines expected; competition from
other providers and products; that the market for its drug candidates may not grow at the rates anticipated or at all; Incannex's
compliance with the various evolving and complex laws and regulations applicable to its business and its industry; and Incannex's
ability to protect its proprietary technology and intellectual property; and other factors relating to Incannex's industry, its
operations and results of operations. The forward-looking statements made in this press release speak only as of the date of this press
release, and Incannex assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes
in expectations, except as otherwise required by law. Incannex's reports filed with the U.S. Securities and Exchange Commission
(SEC) including its annual report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on September 30, 2024, and
the other reports it files from time to time, including subsequently filed annual, quarterly and current reports, are made available
on Incannex's website upon their filing with the SEC. These reports contain more information about Incannex, its business and the
risks affecting its business, as well as its results of operations for the periods covered by the financial results included in this
press release. For additional information on Incannex, please visit our website at www.incannex.com.
Edison Group for Incannex