INCANNEX HEALTHCARE LIMITED ABN 93 096 635 246 (and controlled entities) HALF-YEAR INFORMATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 PROVIDED TO THE ASX UNDER LISTING RULE 4.2A.3 Appendix 4D Half Year Report for the

INCANNEX HEALTHCARE LIMITED

(and controlled entities)

HALF-YEAR INFORMATION

FOR THE SIX MONTHS ENDED 31 DECEMBER

PROVIDED TO THE ASX UNDER LISTING RULE 4.2A.3

Half Year Report for the six months to 31 December 2021

INCANNEX HEALTHCARE LIMITED

Incannex Healthcare Limited

Interim Financial Report

for the half-year ended 31 December

Incannex Healthcare Limited

Interim Financial Report 31 December 2021

Mr Troy Valentine - Non-executive Chairman

Mr Peter Widdows - Non-executive Director

Dr Sud Agarwal - Non-Executive Director

Level 35, 525 Collins Street Melbourne VIC 3000

HLB Mann Judd (WA Partnership)

Level 4, 130 Stirling Street, Perth WA 6000

AUTOMIC REGISTRY SERVICES

Level 5, 126 Phillip Street, SYDNEY, NSW, AUSTRALIA, 2000

Level 35, 525 Collins Street, Melbourne VIC 3000

Westpac Banking Group

SECURITIES EXCHANGE LISTING

Australian Securities Exchange

Level 4, North Tower Rialto, 525 Collins Street, Melbourne

Incannex Healthcare Limited

Interim Financial Report 31 December 2021

Your directors submit the interim financial report of the

consolidated entity, comprising Incannex Healthcare Limited ("the Company" or "IHL") and its controlled entities

(collectively "the Group") for the half-year ended 31 December 2021. To comply with the provisions of the Corporations Act

2001, the directors report as follows:

The names of directors who held office during or since the

end of the interim period and until the date of this report are noted below. All directors were in office for the entire period.

PRINCIPAL ACTIVITIES

The Group continued research and development of its medicinal

cannabinoid compounds. On 20 November 2020 the Group also established a separate business to research and develop the use of psychedelic

medicine and therapies for the treatment of mental health disorders.

REVIEW OF OPERATIONS

The consolidated loss for the half-year after tax was A$5,244,874

(2020: loss of A$3,821,439). During this period, the Group worked towards implementing separate strategies for its two business segments.

The Company continued to advance its

novel drug development programs using combination cannabinoid compounds to treat unmet medical conditions. Three proprietary drug

formulations are being applied to five indications: (i) obstructive sleep apnoea; (ii) traumatic brain injury (concussion); (iii)

rheumatoid arthritis; (iv) lung inflammation; and (v) inflammatory bowel disease.

Psychedelic Medicine and Therapies

The Company advanced its research and development program

for the application of psylocibin combined with psychotherapy to treat general anxiety disorder. During the December 2021 half year, the

Company received approval to proceed to a phase 2 clinical trial from the Monash University Human Research Ethics Committee. IHL also

held a pre-IND meeting with the United States Food and Drug Administration (FDA) regarding its psilocybin clinical trial program. Other

psychedelic therapy clinical programs are also being considered by the Company.

The Group raised A$16,129,282 in new capital (before costs)

during the period through the exercise of options - significantly enhancing its working capital position - refer to note 7

Other than the above items, and in the period between the

end of the half-year and the date of this report there has not arisen any other item, transaction or event of a material or unusual nature

likely, in the opinion of the directors of the Company, to significantly affect the operations of the Group, the results of those operations,

or the state of affairs of the Group, in future financial years.

Incannex Healthcare Limited

Interim Financial Report 31 December 2021

AUDITOR'S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors,

HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the review of the interim financial

report. This Independence Declaration is set out on the next page and forms part of this Directors' Report for the half-year ended

This report is signed in accordance with a resolution of

the Board of Directors made pursuant to s306(3) of the Corporations Act 2001.

AUDITOR'S INDEPENDENCE

As lead auditor for the review of

the consolidated financial report of Incannex Healthcare Limited for the half-year ended 31 December 2021, I declare that to the best

of my knowledge and belief, there have been no contraventions of:

Incannex Healthcare Limited

Interim Financial Report 31 December 2021

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

The accompanying notes form part of these

financial statements

Incannex Healthcare Limited

Interim Financial Report 31 December 2021

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

The accompanying notes form part of these

financial statements

Incannex Healthcare Limited

Interim Financial Report 31 December 2021

CONSOLIDATED STATEMENT OF CASH FLOWS

THE HALF-YEAR ENDED 31 DECEMBER 2021

The accompanying notes form part of these

financial statements

Incannex Healthcare Limited

Interim Financial Report 31 December 2021

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 31 DECEMBER 2021