IHL-42X is a fixed dose combination drug targeting obstructive sleep apnea (OSA), a medical condition with no available registered pharmaceutical treatment for millions of sufferers in the USA alone. bioavailability/bioequivalence ('BA/BE') clinical trial assessed the pharmacokinetics and tolerability of IHL-42X consistent with FDA development plan. Analysis of data underway, however, no serious adverse events were reported. Phase 2/3 FDA IND-enabling RePOSA clinical trial continues after dosing commenced i ...

NEW YORK and MELBOURNE, Australia, May 30, 2024 (GLOBE NEWSWIRE) -- Incannex Healthcare Inc. (Nasdaq: IXHL), ('Incannex' or the 'Company'), a pharmaceutical company developing unique medicinal cannabinoid pharmacotherapies and psychedelic medicine therapies is pleased to announce that patient dosing has commenced in the Company's Phase 2/3 clinical trial to assess safety and efficacy of IHL-42X in patients with obstructive sleep apnea ('OSA'). IHL-42X is the Company's proprietary fixed dose combination drug ...

NEW YORK and MELBOURNE, Australia, May 30, 2024 (GLOBE NEWSWIRE) -- Incannex Healthcare Inc. (Nasdaq: IXHL), ('Incannex' or the 'Company'), a pharmaceutical company developing unique medicinal cannabinoid pharmacotherapies and psychedelic medicine therapies is pleased to announce that patient dosing has commenced in the Company's Phase 2/3 clinical trial to assess safety and efficacy of IHL-42X in patients with obstructive sleep apnea ('OSA'). IHL-42X is the Company's proprietary fixed dose combination drug ...

[Special Note Regarding Forward-Looking Statements](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions investors about forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ materially - The report contains forward-looking statements regarding future operations, financial condition, business strategy, R&D activities, and regulatory approvals, which are subject to risks and uncertainties[9](index=9&type=chunk)[10](index=10&type=chunk)[13](index=13&type=chunk) - Investors are cautioned not to unduly rely on these statements, as actual results may differ materially due to competitive and rapidly changing environments, and new risks may emerge[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) [PART I—FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining the company's re-domiciliation, accounting policies, and specific financial line items [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Consolidated Balance Sheet Highlights (in thousands USD) | Metric | March 31, 2024 | June 30, 2023 | | :-------------------------------- | :------------- | :------------ | | Cash and cash equivalents | $9,305 | $22,120 | | Total current assets | $16,319 | $22,997 | | Total assets | $17,250 | $23,783 | | Total current liabilities | $2,864 | $2,550 | | Total liabilities | $3,112 | $2,958 | | Total stockholders' equity | $14,138 | $20,825 | [Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement outlines the company's financial performance over periods, including revenues, expenses, net loss, and comprehensive loss Consolidated Statements of Operations and Comprehensive Loss Highlights (in thousands USD) | Metric | 3 Months Ended Mar 31, 2024 | 3 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | | :---------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $3,277 | $1,639 | $8,520 | $4,597 | | General and administrative | $4,138 | $2,012 | $11,777 | $5,530 | | Total operating expenses | $7,415 | $3,651 | $20,297 | $45,474 | | Net loss | $(6,031) | $(3,571) | $(11,998) | $(44,637) | | Net loss per share: Basic and diluted | $(0.38) | $(0.22) | $(0.76) | $(2.93) | | Total comprehensive loss | $(6,851) | $(3,773) | $(12,401) | $(46,666) | - Net loss for the three months ended March 31, 2024, increased to **$6.031 million** from **$3.571 million** in the prior year period. For the nine months, net loss decreased significantly to **$11.998 million** from **$44.637 million**, primarily due to the absence of a large acquisition of in-process R&D expense incurred in the prior year[20](index=20&type=chunk) [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement details changes in the company's equity accounts, reflecting contributions, distributions, and comprehensive income or loss Stockholders' Equity Changes (in thousands USD) | Metric | Balance at June 30, 2023 | Balance at March 31, 2024 | | :-------------------------- | :----------------------- | :------------------------ | | Common stock | $2 | $2 | | Additional paid-in capital | $116,290 | $122,004 | | Accumulated deficit | $(92,212) | $(104,210) | | Foreign currency translation reserve | $(3,255) | $(3,658) | | Total Stockholders' Equity | $20,825 | $14,138 | - Total stockholders' equity decreased from **$20.825 million** at June 30, 2023, to **$14.138 million** at March 31, 2024, primarily due to a net loss of **$11.998 million** and a currency translation adjustment of **$403 thousand**, partially offset by **$5.714 million** in share-based compensation[23](index=23&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows Highlights (in thousands USD) | Metric | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(12,203) | $(8,167) | | Net cash used in investing activities | $(274) | $(145) | | Net cash provided by financing activities | $- | $8,207 | | Net decrease in cash and cash equivalents | $(12,477) | $(105) | | Cash and cash equivalents at end of period | $9,305 | $24,880 | - The company experienced a significant net decrease in cash and cash equivalents of **$12.477 million** for the nine months ended March 31, 2024, compared to a **$105 thousand** decrease in the prior year, primarily due to increased cash used in operating activities and no proceeds from financing activities in the current period[27](index=27&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the amounts presented in the consolidated financial statements [Note 1 – Re-domiciliation and Business](index=11&type=section&id=Note%201%20%E2%80%93%20Re-domiciliation%20and%20Business) This note describes the company's re-domiciliation from Australia to Delaware and its impact on the corporate structure and Nasdaq listing - Incannex Healthcare Inc. re-domiciled from Australia to Delaware in November 2023, becoming the new ultimate parent company and assuming Incannex Australia's Nasdaq listing[29](index=29&type=chunk)[30](index=30&type=chunk) - The re-domiciliation involved a share exchange ratio where holders of Incannex Australia's ordinary shares received one share of Incannex Healthcare Inc. common stock for every 100 ordinary shares, and ADS holders received one common stock share for every 4 ADSs[31](index=31&type=chunk) [Note 2 – Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=Note%202%20%E2%80%93%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the accounting principles, policies, and methods used in preparing the financial statements, including the transition to US GAAP - The company transitioned from IFRS to US GAAP retrospectively for all prior periods presented following the re-domiciliation[35](index=35&type=chunk) - Research and development costs are expensed as incurred, and the company accrues for estimated R&D activities by third-party service providers[55](index=55&type=chunk)[57](index=57&type=chunk) - The acquisition of APIRx Pharmaceutical USA, LLC in August 2022 was accounted for as an asset acquisition, with **$35.400 million** charged to acquisition of in-process R&D expense due to no alternative future use of the product candidates[61](index=61&type=chunk)[63](index=63&type=chunk) - The company's functional currency is the Australian Dollar, but financial statements are presented in U.S. dollars, with translation adjustments recorded in other comprehensive income[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 3 – Prepaid expenses and other current assets](index=18&type=section&id=Note%203%20%E2%80%93%20Prepaid%20expenses%20and%20other%20current%20assets) This note provides a breakdown of the company's prepaid expenses and other current assets, highlighting key components and changes Prepaid Expenses and Other Current Assets (in thousands USD) | Item | March 31, 2024 | June 30, 2023 | | :-------------------------- | :------------- | :------------ | | Prepayments | $421 | $686 | | R&D tax credit recoverable | $6,406 | $- | | GST recoverable | $187 | $191 | | Total other assets | $7,014 | $877 | - The significant increase in total other assets is primarily driven by the recognition of **$6.406 million** in R&D tax credit recoverable as of March 31, 2024, which was not present at June 30, 2023[76](index=76&type=chunk) [Note 4 – Property, Plant and Equipment, net](index=18&type=section&id=Note%204%20%E2%80%93%20Property,%20Plant%20and%20Equipment,%20net) This note details the company's property, plant, and equipment, including gross amounts, accumulated depreciation, and net carrying values Property, Plant and Equipment, Net (in thousands USD) | Item | March 31, 2024 | June 30, 2023 | | :-------------------------------- | :------------- | :------------ | | Furniture, fittings and equipment | $194 | $157 | | Assets under construction | $393 | $160 | | Total property, plant and equipment, gross | $587 | $317 | | Accumulated depreciation and amortization | $(64) | $(23) | | Total property, plant and equipment, net | $523 | $294 | - Net property, plant and equipment increased to **$523.000 thousand** at March 31, 2024, from **$294.000 thousand** at June 30, 2023, mainly due to an increase in assets under construction[78](index=78&type=chunk) [Note 5 – Trade and other payables, accrued expenses and other current liabilities](index=18&type=section&id=Note%205%20%E2%80%93%20Trade%20and%20other%20payables,%20accrued%20expenses%20and%20other%20current%20liabilities) This note presents a breakdown of the company's current liabilities, including trade payables, accrued expenses, and employee leave entitlements Current Liabilities (in thousands USD) | Item | March 31, 2024 | June 30, 2023 | | :------------------------------------------------ | :------------- | :------------ | | Trade payables | $1,255 | $1,748 | | Accrued expenses | $1,133 | $426 | | Employee leave entitlements | $315 | $263 | | Total Trade and other payables, accrued expenses and other current liabilities | $2,703 | $2,437 | - Accrued expenses significantly increased from **$426.000 thousand** to **$1.133 million**, while trade payables decreased from **$1.748 million** to **$1.255 million**[79](index=79&type=chunk) [Note 6 – Leases](index=19&type=section&id=Note%206%20%E2%80%93%20Leases) This note provides information on the company's lease arrangements, including lease terms, discount rates, and future minimum lease payments Operating Lease Summary | Metric | March 31, 2024 | June 30, 2023 | | :-------------------- | :------------- | :------------ | | Weighted-average remaining lease term (years) | 1.26 | 1.79 | | Discount rate | 9.18% | 9.18% | Future Minimum Lease Payments as of March 31, 2024 (in thousands USD) | Period | Amount | | :------------- | :----- | | June 30, 2024 | $50 | | June 30, 2025 | $205 | | June 30, 2026 | $199 | | June 30, 2027 | $48 | | June 30, 2028 | $32 | | Total minimum lease payments | $534 | | Less amount representing interest | $125 | | Total operating lease liabilities | $409 | - The company records loss contingencies when probable and estimable, and discloses material contingencies when reasonably possible. Currently, management does not believe any actions would have a material impact on financial results[83](index=83&type=chunk) [Note 7 – Commitments and contingencies](index=20&type=section&id=Note%207%20%E2%80%93%20Commitments%20and%20contingencies) This note discusses the company's potential future obligations and contingent liabilities, assessing their probable financial impact - The company records loss contingencies when probable and estimable, and discloses material contingencies when reasonably possible. Currently, management does not believe any actions would have a material impact on financial results[83](index=83&type=chunk) [Note 8 – Stockholder's equity/Issued capital](index=20&type=section&id=Note%208%20%E2%80%93%20Stockholder's%20equity%2FIssued%20capital) This note details the company's common stock, including authorized, issued, and outstanding shares, and significant equity transactions - The company's common stock authorized is **100,000,000 shares** with a par value of **$0.0001** per share. As of March 31, 2024, and March 31, 2023, **15,873,113 shares** were issued and outstanding[84](index=84&type=chunk)[86](index=86&type=chunk) - In the nine months ended March 31, 2023, Incannex Australia issued **634,146 ordinary shares** for **$8.830 million** in a private placement and **2,181,695 ordinary shares** for the acquisition of APIRx Pharmaceuticals[86](index=86&type=chunk)[87](index=87&type=chunk) [Note 9 – Additional paid-in capital](index=21&type=section&id=Note%209%20%E2%80%93%20Additional%20paid-in%20capital) This note explains the changes in additional paid-in capital, primarily from equity issuances and share-based compensation Additional Paid-in Capital (in thousands USD) | Item | March 31, 2024 | March 31, 2023 | | :-------------------------------- | :------------- | :------------- | | Opening balance | $116,290 | $69,074 | | Equity instruments issued to management and directors | $5,714 | $1,631 | | Share placements | $- | $8,830 | | Asset acquisition shares issued | $- | $34,170 | | At March 31 | $122,004 | $115,700 | - Additional paid-in capital increased by **$5.714 million** for the nine months ended March 31, 2024, primarily due to equity instruments issued to management and directors[89](index=89&type=chunk) [Note 10 – General and Administration expenses](index=22&type=section&id=Note%2010%20%E2%80%93%20General%20and%20Administration%20expenses) This note provides a detailed breakdown of general and administrative expenses, including salaries, compliance, and legal costs General and Administration Expenses (in thousands USD) | Item | 3 Months Ended Mar 31, 2024 | 3 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Salaries, and other employee benefits | $2,873 | $979 | $7,706 | $3,122 | | Compliance, legal and regulatory | $821 | $517 | $2,393 | $1,210 | | Total general and administration expenses | $4,138 | $2,012 | $11,777 | $5,530 | - General and administrative expenses significantly increased across all categories for both the three and nine-month periods, with salaries and employee benefits showing the largest increase[94](index=94&type=chunk) [Note 11 – Share-based payments](index=22&type=section&id=Note%2011%20%E2%80%93%20Share-based%20payments) This note describes the company's share-based compensation plans, including expense recognition and restricted stock activity Share-based Compensation Expense (in thousands USD) | Item | 3 Months Ended Mar 31, 2024 | 3 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | General and administrative | $2,116 | $531 | $5,584 | $2,092 | | Total share-based compensation expense | $2,116 | $531 | $5,584 | $2,092 | Restricted Stock Activity (in thousands, except per share data) | Item | Unvested and Outstanding as of June 30, 2023 | Unvested and Outstanding as of March 31, 2024 | | :-------------------------------- | :------------------------------------------- | :-------------------------------------------- | | Numbers of Shares | 62,514 | 1,739,215 | | Weighted Average Grant Date Fair Value ($) | 149 | 1,006 | - Share-based compensation expense for general and administrative activities increased significantly to **$5.584 million** for the nine months ended March 31, 2024, from **$2.092 million** in the prior year[95](index=95&type=chunk) [Note 12 – Income Tax](index=24&type=section&id=Note%2012%20%E2%80%93%20Income%20Tax) This note details the company's income tax provisions, including the reconciliation of tax benefits and the valuation allowance against deferred tax assets Income Tax Benefit Reconciliation (in thousands USD) | Item | March 31, 2024 | June 30, 2023 | | :-------------------------------- | :------------- | :------------ | | Accounting loss before tax | $(11,998) | $(52,766) | | Income tax benefit at the applicable tax rate of 30% | $(3,599) | $(15,830) | | Non-deductible expenses | $8,064 | $36,510 | | Non-assessable income | $(8,154) | $(171) | | Deferred tax assets not recognized | $875 | $581 | | Net unrecognized tax benefit at 30% | $9,075 | $4,989 | - The company has established a valuation allowance against its deferred tax assets due to a history of operating losses, indicating uncertainty regarding the realization of future tax benefits[101](index=101&type=chunk) [Note 13 – Loss per share](index=24&type=section&id=Note%2013%20%E2%80%93%20Loss%20per%20share) This note explains the calculation of basic and diluted loss per share, considering the impact of net losses on potential common stock Loss Per Share (in thousands, except per share amounts) | Metric | 3 Months Ended Mar 31, 2024 | 3 Months Ended Mar 31, 2023 | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic loss per share | $0.38 | $0.22 | $0.76 | $2.93 | | Total comprehensive loss for the year | $6,031 | $3,571 | $11,998 | $44,637 | | Weighted average number of common stocks | 15,873,113 | 15,873,113 | 15,873,113 | 15,221,900 | - Basic and diluted loss per share are the same for all periods presented due to the company reporting net losses since inception, making potential common stocks anti-dilutive[102](index=102&type=chunk) [Note 14 – Related Party Transactions](index=24&type=section&id=Note%2014%20%E2%80%93%20Related%20Party%20Transactions) This note discloses transactions and balances with related parties, confirming their commercial terms and lack of outstanding payables - There were no amounts payable to any related parties as of March 31, 2024, and June 30, 2023, and transactions between related parties are on commercial terms[103](index=103&type=chunk)[104](index=104&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key drivers of financial performance, liquidity, capital resources, and critical accounting policies. It emphasizes the company's status as a development-stage enterprise with ongoing R&D expenditures [Overview](index=25&type=section&id=Overview) This section provides an overview of the company's development-stage status, funding sources, and anticipated R&D tax offsets - The company is a development-stage enterprise focused on drug candidates, incurring net losses since inception and expecting substantial losses as R&D activities expand[108](index=108&type=chunk) - Operations are primarily funded through equity sales, option exercises, tax grants from R&D activities, and interest income[108](index=108&type=chunk) - The company anticipates being entitled to a **48.5%** refundable tax offset for eligible R&D activities from the Australian government[109](index=109&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over the reporting periods, focusing on key revenue and expense drivers [Operating Expenses](index=26&type=section&id=Operating%20Expenses) This section details the company's research and development, and general and administrative expenses, explaining their changes and underlying causes Operating Expenses (in thousands USD) | Expense Category | 3 Months Ended Mar 31, 2024 | 3 Months Ended Mar 31, 2023 | % Change | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Research and development | $3,277 | $1,639 | 100% | $8,520 | $4,597 | 85% | | General and administrative | $4,138 | $2,012 | 106% | $11,777 | $5,530 | 113% | | Total operating expenses | $7,415 | $3,651 | 103% | $20,297 | $45,474 | (55)% | - R&D expenses increased by **$1.600 million** (**100%**) for the three months and **$3.900 million** (**85%**) for the nine months, driven by increased clinical research and product development activities, including new clinical trials for IHL-42X and IHL-675A[111](index=111&type=chunk)[112](index=112&type=chunk) - G&A expenses rose by **$2.100 million** (**106%**) for the three months and **$6.200 million** (**113%**) for the nine months, primarily due to higher salaries, employee benefits (issuance of restricted stock), and increased compliance, legal, and accounting costs post-re-domiciliation[114](index=114&type=chunk)[115](index=115&type=chunk) [Other Income (Expense)](index=26&type=section&id=Other%20Income%20(Expense)) This section outlines non-operating income and expenses, including R&D tax credits, foreign exchange, and interest income Other Income/(Expense) (in thousands USD) | Item | 3 Months Ended Mar 31, 2024 | 3 Months Ended Mar 31, 2023 | % Change | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Benefit from R&D tax credit | $1,320 | $(83) | (1,690)% | $8,150 | $684 | 1,092% | | Foreign exchange gains (losses) | $(11) | $- | - | $(17) | $- | - | | Interest income | $75 | $163 | (54)% | $166 | $153 | 8% | | Total other income/(expense), net | $1,384 | $80 | 1,630% | $8,299 | $837 | 892% | - Benefit from R&D tax credit decreased by **$1.400 million** for the three months and **$7.500 million** for the nine months ended March 31, 2024, due to the finalization of the fiscal 2023 Australian tax return[116](index=116&type=chunk)[117](index=117&type=chunk) - Interest income decreased by **$88.000 thousand** for the three months due to lower cash deposits, while foreign exchange losses increased by **$11.000 thousand** due to unfavorable currency rates[118](index=118&type=chunk)[119](index=119&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations, discussing cash position, funding sources, and future capital needs [Sources of Liquidity](index=27&type=section&id=Sources%20of%20Liquidity) This section identifies the primary sources of funds available to the company, including cash on hand and anticipated funding requirements - As of March 31, 2024, the company had **$9.300 million** in cash and anticipates this will be sufficient to fund operations until at least December 2024[123](index=123&type=chunk) - The company expects to require substantial additional funds to achieve long-term goals and complete drug candidate development, as significant revenue is not anticipated until regulatory approval and product sales commence[125](index=125&type=chunk) [Cash Flows](index=27&type=section&id=Cash%20Flows) This section provides a detailed analysis of cash generated from or used in operating, investing, and financing activities Cash Flow Summary (in thousands USD) | Cash Flow Activity | 9 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(12,203) | $(8,167) | | Net cash used in investing activities | $(274) | $(145) | | Net cash provided by financing activities | $- | $8,207 | | Net decrease in cash | $(12,477) | $(105) | - Cash used in operating activities increased by **$4.000 million**, primarily due to an increase in prepaid expenses and other current assets[129](index=129&type=chunk) - Cash provided by financing activities decreased to nil in the current period, compared to **$8.207 million** in the prior year, due to no proceeds from common stock issuances[131](index=131&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights accounting policies that require significant management judgment and estimates, such as stock-based compensation and income taxes - Key accounting policies requiring significant management judgment and estimates include stock-based compensation and income taxes, particularly the valuation of awards and deferred tax assets[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Emerging Growth Company Status](index=30&type=section&id=Emerging%20Growth%20Company%20Status) This section explains the company's status as an emerging growth company and its election to use an extended transition period for accounting standards - The company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised accounting standards, which may affect comparability with other public companies[136](index=136&type=chunk)[137](index=137&type=chunk) [Fully Diluted Share Capital](index=30&type=section&id=Fully%20Diluted%20Share%20Capital) This section presents the total number of common stock equivalents, including outstanding shares, restricted stock, and warrants Fully Diluted Share Capital as of March 31, 2024 | Item | Number of Shares of Common Stock Equivalents | | :-------------------- | :------------------------------------------- | | Shares of Common Stock | 15,873,113 | | Restricted Stock | 1,739,215 | | Warrants | 1,978,346 | | Total - March 31, 2024 | 19,590,674 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Incannex Healthcare Inc. is permitted to omit the information typically required by this item - The company, as a 'smaller reporting company,' has omitted disclosures regarding quantitative and qualitative market risk[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting identified during the quarter - Management concluded that disclosure controls and procedures were effective as of March 31, 2024[140](index=140&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter ended March 31, 2024[141](index=141&type=chunk) [PART II—OTHER INFORMATION](index=31&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section provides additional non-financial information, including legal proceedings, risk factors, and equity security sales [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal, arbitration, or governmental proceedings that could materially impact its financial position or profitability - The company is not involved in any legal or arbitration proceedings that could have a material adverse impact on its financial position or profitability[144](index=144&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the 'Risk Factors' discussion in the company's 2023 Annual Report for a detailed understanding of the risks and uncertainties affecting the business - Readers are directed to Item 3D 'Risk Factors' in the 2023 Annual Report for a comprehensive discussion of risks and uncertainties[145](index=145&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item details the unregistered sales of equity securities related to the company's re-domiciliation, where shares of common stock and options were issued under an exemption from registration - The re-domiciliation involved the issuance of common stock and options, exempt from registration under Section 3(a)(10) of the Securities Act of 1933[146](index=146&type=chunk)[147](index=147&type=chunk) - Holders of Incannex Australia ordinary shares received one share of common stock for every 100 shares, and ADS holders received one common stock share for every 4 ADSs[150](index=150&type=chunk) [Item 3. Defaults upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This item states that there are no defaults upon senior securities to report - Not applicable[149](index=149&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item states that there are no mine safety disclosures to report - Not applicable[150](index=150&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This item indicates that there is no other information to disclose - None[150](index=150&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report, including various agreements, corporate documents, and certifications - The report includes exhibits such as the Deed of Amendment and Restatement to Scheme Implementation Deed, Amended and Restated Certificate of Incorporation, Bylaws, Employment Agreements, Clinical Trial Research Agreements, and various certifications[151](index=151&type=chunk) [SIGNATURES](index=34&type=section&id=SIGNATURES) This section confirms the official signing and certification of the quarterly report by the company's principal executive and financial officers - The report was signed on May 15, 2024, by Joel Latham, Chief Executive Officer, Director and President, and Joseph Swan, Chief Financial Officer, Treasurer and Secretary[156](index=156&type=chunk)[157](index=157&type=chunk)

MELBOURNE, Australia and NEW YORK, May 07, 2024 (GLOBE NEWSWIRE) -- Incannex Healthcare Inc. (NASDAQ:IXHL), (Incannex or the Company), a leading cannabinoid and psychedelic medicine biotechnology company, is pleased to announce the successful completion of a pre-IND (Investigational New Drug) meeting with the U.S. Food and Drug Administration (FDA) regarding the development of CannQuit-O for treatment of Opioid Use Disorder (OUD). The pre-IND teleconference included representatives from various divisions of ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements and accompanying explanatory notes [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Financial Position (in thousands USD) | Metric | Dec 31, 2023 | Jun 30, 2023 | | :-------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $14,554 | $22,120 | | Total current assets | $21,332 | $22,997 | | Total assets | $22,359 | $23,783 | | Total current liabilities | $3,186 | $2,550 | | Total liabilities | $3,487 | $2,958 | | Total stockholders' equity | $18,872 | $20,825 | - Cash and cash equivalents decreased by **$7.57 million**, and total stockholders' equity decreased by **$1.95 million** from June 30, 2023, to December 31, 2023, while total liabilities increased by **$0.53 million**[16](index=16&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Operating Results (in thousands USD) | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 6 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $2,638 | $1,549 | $5,247 | $2,959 | | General and administrative | $5,345 | $2,090 | $7,629 | $3,521 | | Total operating expenses | $7,983 | $3,639 | $12,876 | $41,827 | | Loss from operations | $(7,983) | $(3,639) | $(12,876) | $(41,827) | | R&D tax incentive | $2,727 | $666 | $6,824 | $680 | | Net loss | $(5,241) | $(2,918) | $(5,968) | $(41,066) | | Net loss per share (Basic and diluted) | $(0.33) | $0.05 | $(0.38) | $(2.76) | - For the three months ended December 31, 2023, total operating expenses increased by **119.3% YoY**, driven by higher R&D and G&A expenses, and net loss increased by **79.6% YoY**[19](index=19&type=chunk) - For the six months ended December 31, 2023, total operating expenses decreased by **69.2% YoY**, and net loss significantly decreased by **85.5% YoY**, primarily due to the absence of a prior-year acquisition expense[19](index=19&type=chunk) - The R&D tax incentive saw substantial increases of **309%** for the three-month period and **903.5%** for the six-month period, significantly offsetting losses[19](index=19&type=chunk) [Consolidated Statements of Stockholders' Equity (Deficit)](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Stockholders' Equity (in thousands USD) | Metric | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Dec 31, 2022 | Jun 30, 2022 | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Common stock (Amount) | $2 | $2 | $2 | $2 | $1 | | Additional paid-in capital | $119,887 | $116,491 | $116,290 | $115,169 | $69,074 | | Accumulated deficit | $(98,179) | $(92,938) | $(92,212) | $(84,467) | $(43,401) | | Foreign currency translation reserve | $(2,838) | $(3,765) | $(3,255) | $(2,790) | $(963) | | Total stockholders' equity | $18,872 | $19,790 | $20,825 | $27,914 | $24,711 | - Total stockholders' equity decreased from **$20.83 million** at June 30, 2023, to **$18.87 million** at December 31, 2023, primarily due to net losses[22](index=22&type=chunk)[25](index=25&type=chunk) - Additional paid-in capital increased by **$3.6 million** from June 30, 2023, to December 31, 2023, mainly due to share-based compensation[22](index=22&type=chunk)[25](index=25&type=chunk) - The accumulated deficit increased by **$5.97 million** from June 30, 2023, to December 31, 2023, reflecting the net loss for the period[22](index=22&type=chunk)[25](index=25&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands USD) | Metric | 6 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(7,852) | $(5,437) | | Net cash used in investing activities | $(280) | $(113) | | Net cash provided by financing activities | $0 | $8,280 | | Net (decrease)/increase in cash | $(8,132) | $2,730 | | Cash and cash equivalents at end of period | $14,555 | $28,065 | - Net cash used in operating activities increased by **$2.42 million (44.5%)** for the six months ended December 31, 2023, compared to the prior year period[28](index=28&type=chunk) - Net cash provided by financing activities decreased to **$0** in 2023 from **$8.28 million** in 2022, indicating no new equity issuances for funding[28](index=28&type=chunk) - Overall, cash and cash equivalents decreased by **$8.13 million**, resulting in an ending balance of **$14.56 million** as of December 31, 2023[28](index=28&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) [Note 1 – Re-domiciliation and Business](index=11&type=section&id=Note%201%20%E2%80%93%20Re-domiciliation%20and%20Business) - Incannex Healthcare Inc (Delaware) acquired Incannex Healthcare Limited (Australia) in November 2023, making the Australian entity a wholly-owned subsidiary[31](index=31&type=chunk) - The share exchange ratio was **1 share of Incannex Healthcare Inc common stock for every 100 ordinary shares** of the Australian entity[33](index=33&type=chunk) - Issued and outstanding common stock shares in the financial statements are retrospectively adjusted to reflect the **100:1 exchange ratio** as if it occurred on July 1, 2022[34](index=34&type=chunk) [Note 2 – Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=Note%202%20%E2%80%93%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Following re-domiciliation, the company transitioned from IFRS to **US GAAP**, applying US GAAP retrospectively for all prior periods presented[37](index=37&type=chunk) - The company's consolidated financial statements include Incannex Healthcare Inc and its wholly-owned subsidiaries, with all intercompany balances and transactions eliminated[40](index=40&type=chunk) - Significant estimates include valuation of equity-based instruments, accrued R&D expense, and R&D tax credit[42](index=42&type=chunk) - The company faces risks common to the biopharmaceutical industry, including financing, regulatory approval, and competition[43](index=43&type=chunk) - Research and development costs are expensed as incurred, including salaries, supplies, clinical trials, and manufacturing costs[57](index=57&type=chunk) USD:AUD Exchange Rate | Date | Exchange Rate | | :--- | :------------ | | Dec 31, 2023 (Balance Sheet) | 0.6840 | | Jun 30, 2023 (Balance Sheet) | 0.6630 | | Dec 31, 2023 (Average for period) | 0.6526 | | Jun 30, 2023 (Average for period) | 0.6764 | [Note 3 – Prepaid expenses and other current assets](index=18&type=section&id=Note%203%20%E2%80%93%20Prepaid%20expenses%20and%20other%20current%20assets) Prepaid Expenses and Other Current Assets (in thousands USD) | Item | Dec 31, 2023 | Jun 30, 2023 | | :------------------------ | :----------- | :----------- | | Prepayments | $1,188 | $686 | | R&D tax credit recoverable | $5,337 | $0 | | GST recoverable | $253 | $191 | | **Total** | **$6,778** | **$877** | - The R&D tax credit recoverable increased from **$0 to $5.34 million**, contributing to a substantial increase in total other assets[78](index=78&type=chunk) [Note 4 – Property, Plant and Equipment, net](index=18&type=section&id=Note%204%20%E2%80%93%20Property,%20Plant%20and%20Equipment,%20net) Property, Plant and Equipment, net (in thousands USD) | Item | Dec 31, 2023 | Jun 30, 2023 | | :-------------------------------- | :----------- | :----------- | | Furniture, fittings and equipment | $195 | $157 | | Assets under construction | $412 | $160 | | Total property, plant and equipment, gross | $607 | $317 | | Accumulated depreciation and amortization | $(48) | $(23) | | **Total property, plant and equipment, net** | **$559** | **$294** | - Net property, plant, and equipment increased by **$0.265 million (90.1%)** from June 30, 2023, to December 31, 2023, primarily due to an increase in assets under construction[80](index=80&type=chunk) [Note 5 – Trade and other payables, accrued expenses and other current liabilities](index=18&type=section&id=Note%205%20%E2%80%93%20Trade%20and%20other%20payables,%20accrued%20expenses%20and%20other%20current%20liabilities) Current Liabilities (in thousands USD) | Item | Dec 31, 2023 | Jun 30, 2023 | | :------------------------------------------------- | :----------- | :----------- | | Trade payables | $1,952 | $1,748 | | Accrued expenses | $734 | $426 | | Employee leave entitlements | $331 | $263 | | **Total Trade and other payables, accrued expenses and other current liabilities** | **$3,017** | **$2,437** | - Total current liabilities increased by **$0.58 million (23.8%)** from June 30, 2023, to December 31, 2023, mainly due to increases in trade payables and accrued expenses[81](index=81&type=chunk) [Note 6 – Leases](index=19&type=section&id=Note%206%20%E2%80%93%20Leases) - In fiscal 2023, the Group entered into three new lease agreements for its corporate head office, Melbourne office, and Clarion Clinic site[82](index=82&type=chunk) Lease Metrics (as of Dec 31, 2023) | Metric | Value | | :-------------------- | :---- | | Weighted-average remaining lease term | 1.48 years | | Discount rate | 9.18% | | Operating lease cost (6 months ended Dec 31, 2023) | $79 thousand | | Cash paid for operating lease liabilities (6 months ended Dec 31, 2023) | $73 thousand | Future Minimum Lease Payments (in thousands USD) | Period | Amount | | :----------- | :----- | | June 30, 2024 | $103 | | June 30, 2025 | $214 | | June 30, 2026 | $208 | | June 30, 2027 | $50 | | June 30, 2028 | $34 | | **Total minimum lease payments** | **$609** | | Less amount representing interest | $(139) | | **Total operating lease liabilities** | **$470** | [Note 7 – Commitments and contingencies](index=20&type=section&id=Note%207%20%E2%80%93%20Commitments%20and%20contingencies) - The company records loss contingencies when probable and estimable, and discloses material contingencies when reasonably possible[85](index=85&type=chunk) - Management does not believe there are any current legal or tax actions that would have a material impact on the company's financial position[85](index=85&type=chunk) [Note 8 – Stockholder's equity/Issued capital](index=20&type=section&id=Note%208%20%E2%80%93%20Stockholder's%20equity/Issued%20capital) - Post-re-domiciliation, the company has **100,000,000 authorized shares** of common stock with a par value of **$0.0001 per share**[86](index=86&type=chunk) - As of December 31, 2023, there were **15,873,113 shares** of common stock outstanding[88](index=88&type=chunk) - In the prior period, the company raised **$8.83 million** from a share placement and issued shares for the acquisition of APIRx Pharmaceuticals[88](index=88&type=chunk)[89](index=89&type=chunk) [Note 9 – Additional paid-in capital](index=21&type=section&id=Note%209%20%E2%80%93%20Additional%20paid-in%20capital) Additional Paid-in Capital (in thousands USD) | Item | Dec 31, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Opening balance | $116,294 | $69,075 | | Equity instruments issued to management and directors | $3,598 | $2,150 | | Share placements | - | $8,830 | | Asset acquisition shares issued | - | $34,171 | | **At December 31** | **$119,892** | **$116,298** | - Additional paid-in capital increased by **$3.6 million** from December 31, 2022, to December 31, 2023, primarily due to equity instruments issued to management and directors[90](index=90&type=chunk) - Prior period activities included **$8.83 million** from share placements and **$34.17 million** from asset acquisition shares issued[90](index=90&type=chunk)[91](index=91&type=chunk) [Note 10 – General and Administration expenses](index=22&type=section&id=Note%2010%20%E2%80%93%20General%20and%20Administration%20expenses) General and Administration Expenses (in thousands USD) | Item | Dec 31, 2023 | Dec 31, 2022 | Change ($) | Change (%) | | :------------------------------ | :----------- | :----------- | :--------- | :--------- | | Salaries, and other employee benefits | $4,825 | $2,142 | $2,683 | 125.2% | | Compliance, legal and regulatory | $1,573 | $695 | $878 | 126.3% | | Advertising and investor relations | $705 | $427 | $278 | 65.1% | | Occupancy expenses | $153 | $35 | $118 | 337.1% | | Other administration expenses | $349 | $188 | $161 | 85.6% | | **Total general and administration expenses** | **$7,629** | **$3,521** | **$4,108** | **116.7%** | - Total G&A expenses more than doubled, increasing by **$4.11 million (116.7%)** for the six months ended December 31, 2023, primarily due to higher salaries and legal costs[93](index=93&type=chunk) [Note 11 – Share-based payments](index=22&type=section&id=Note%2011%20%E2%80%93%20Share-based%20payments) Share-based Compensation Expense (in thousands USD) | Item | Dec 31, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | General and administrative | $3,471 | $1,100 | | **Total share-based compensation expense** | **$3,471** | **$1,100** | - Share-based compensation expense increased by **$2.37 million (215.5%)** for the six months ended December 31, 2023[94](index=94&type=chunk) - As of December 31, 2023, there were **1,739,215 unvested restricted shares** outstanding with a fair value of **$1,006k**[95](index=95&type=chunk) - As of December 31, 2023, there were **284,008 stock options outstanding** with a weighted average exercise price of **$36.37**[97](index=97&type=chunk) - Unrecognized compensation cost related to unvested share options was **$411 thousand**, expected to be recognized over **1.08 years**[98](index=98&type=chunk) [Note 12 – Income Tax](index=24&type=section&id=Note%2012%20%E2%80%93%20Income%20Tax) - The company reported an accounting loss before tax of **$(5,805) thousand** for the six months ended December 31, 2023[100](index=100&type=chunk) - Due to a history of operating losses, the company has a valuation allowance against its deferred tax assets, with **$6,485 thousand** in net unrecognized tax benefit[100](index=100&type=chunk) [Note 13 – Loss per share](index=24&type=section&id=Note%2013%20%E2%80%93%20Loss%20per%20share) Net Loss Per Share (Basic and Diluted) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :------------------------------------------------- | :----------- | :----------- | | Basic loss per share (cents) | 37.60 | 275.58 | | Basic loss per share (USD) | $0.38 | $2.76 | | Total comprehensive loss for the year (in thousands) | $5,968 | $41,066 | | Weighted average number of common stocks | 15,873,113 | 14,901,631 | - Basic and diluted loss per share are the same because potential common stocks are anti-dilutive due to net losses[101](index=101&type=chunk) [Note 14 – Related Party Transactions](index=24&type=section&id=Note%2014%20%E2%80%93%20Related%20Party%20Transactions) - Related party transactions are conducted on commercial terms[102](index=102&type=chunk) - No amounts were payable to related parties as of December 31, 2023, and June 30, 2023[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, liquidity, capital resources, and operational results [Overview](index=25&type=section&id=Overview) - The company is an early-stage development enterprise with drug candidates, incurring net losses since inception[107](index=107&type=chunk) - Operations are primarily funded by equity securities sales, option exercises, R&D tax grants, and interest income[107](index=107&type=chunk) - The company anticipates being entitled to a **43.5% refundable tax offset** for eligible R&D activities from the Australian government[108](index=108&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) [Research and development](index=27&type=section&id=Research%20and%20development) - R&D expenses increased by **$1.1 million (71%)** for the three months ended December 31, 2023, due to clinical research and product development[111](index=111&type=chunk) - R&D expenses increased by **$2.3 million (77%)** for the six months ended December 31, 2023, driven by new clinical trials[112](index=112&type=chunk) [Acquisition of in-process research and development](index=27&type=section&id=Acquisition%20of%20in-process%20research%20and%20development) - No acquisition of in-process R&D expense was recorded for the three or six months ended December 31, 2023[109](index=109&type=chunk) - A **$35.3 million expense** was recorded in the six months ended December 31, 2022, related to the APIRx Pharmaceutical USA, LLC acquisition[109](index=109&type=chunk)[113](index=113&type=chunk) [General and Administrative](index=27&type=section&id=General%20and%20Administrative) - G&A expenses increased by **$3.3 million (156%)** for the three months ended December 31, 2023, mainly due to a **$3.1 million** increase in salaries and employee benefits[114](index=114&type=chunk) - G&A expenses increased by **$4.1 million (117%)** for the six months ended December 31, 2023, driven by a **$2.7 million** increase in salaries and a **$0.9 million** increase in legal costs[115](index=115&type=chunk) [Benefit from R&D tax credit](index=27&type=section&id=Benefit%20from%20R&D%20tax%20credit) - The R&D tax credit increased by **$2.1 million (308%)** for the three months ended December 31, 2023[116](index=116&type=chunk) - The R&D tax credit increased by **$6.1 million (904%)** for the six months ended December 31, 2023[117](index=117&type=chunk) - The increase is attributed to higher tax credits received from the Australian Taxation Office due to increased research and clinical trials activities[116](index=116&type=chunk)[117](index=117&type=chunk) [Foreign exchange losses and Interest Income](index=27&type=section&id=Foreign%20exchange%20losses%20and%20Interest%20Income) - Foreign exchange losses and interest income decreased by **$40 thousand** for the three months ended December 31, 2023, due to lower interest income and increased currency exchange losses[118](index=118&type=chunk) - Foreign exchange losses and interest income increased by **$3 thousand** for the six months ended December 31, 2023, due to higher interest income partially offset by foreign exchange losses[119](index=119&type=chunk) [Currency translation adjustment, net of tax](index=28&type=section&id=Currency%20translation%20adjustment,%20net%20of%20tax) - The currency translation adjustment, net of tax, decreased by **$2.8 million** for the three months ended December 31, 2023[120](index=120&type=chunk) - The currency translation adjustment, net of tax, decreased by **$2.2 million** for the six months ended December 31, 2023[121](index=121&type=chunk) - The decrease is attributed to currency translation from the Australian dollar (functional currency) to the US dollar (reporting currency)[120](index=120&type=chunk)[121](index=121&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - Operations are mainly financed through equity securities issuance and interest earned from cash on term deposit[122](index=122&type=chunk) - As of December 31, 2023, cash was **$14.5 million**, anticipated to be sufficient until at least December 2024[123](index=123&type=chunk) - Substantial additional funds will be required for long-term goals, as significant revenue is not expected until regulatory approval[125](index=125&type=chunk) - The company's capital risk management objective is to balance current working capital against R&D programs and corporate overheads[124](index=124&type=chunk) [Cash Flows](index=29&type=section&id=Cash%20Flows) Cash Flow Summary (in thousands USD) | Metric | 6 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(7,852) | $(5,437) | | Net cash used in investing activities | $(280) | $(113) | | Net cash provided by financing activities | $0 | $8,280 | | **Net increase in cash** | **$(8,132)** | **$2,730** | [Cash flows from operating activities](index=29&type=section&id=Cash%20flows%20from%20operating%20activities) - Cash used in operating activities increased by **$2.4 million** for the six months ended December 31, 2023[129](index=129&type=chunk) - This increase was primarily due to a **$5.66 million** increase in prepaid expenses and other current assets, partially offset by positive changes in payables and share-based compensation[129](index=129&type=chunk) [Cash flows from investing activities](index=29&type=section&id=Cash%20flows%20from%20investing%20activities) - Cash used in investing activities increased by **$167 thousand** for the six months ended December 31, 2023[130](index=130&type=chunk) - This increase was due to increased purchases of equipment to conduct clinical trials[130](index=130&type=chunk) [Cash flows from financing activities](index=29&type=section&id=Cash%20flows%20from%20financing%20activities) - Cash provided by financing activities decreased to **$0** for the six months ended December 31, 2023, from **$8.28 million** in the prior year[131](index=131&type=chunk) - This decrease was due to a decrease in the proceeds from issuances of common stock[131](index=131&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) [Stock Based Compensation](index=29&type=section&id=Stock%20Based%20Compensation) - Compensation expense for stock options is recorded based on the fair market value of the awards on the date of grant and amortized over the vesting period[133](index=133&type=chunk) - The company uses a binomial option pricing model to estimate the fair value of share options and other equity-based compensation[133](index=133&type=chunk) [Income Taxes](index=30&type=section&id=Income%20Taxes) - Income taxes are accounted for using the liability method, recognizing deferred tax assets and liabilities for temporary differences[134](index=134&type=chunk) - A valuation allowance is established for deferred tax assets if realization is not "more likely than not"[134](index=134&type=chunk) [Emerging Growth Company Status](index=30&type=section&id=Emerging%20Growth%20Company%20Status) - The company is an "emerging growth company" as defined in the JOBS Act[136](index=136&type=chunk) - The company elected to use the extended transition period for new or revised accounting standards[137](index=137&type=chunk) [Fully Diluted Share Capital](index=30&type=section&id=Fully%20Diluted%20Share%20Capital) Fully Diluted Share Capital (as of Dec 31, 2023) | Item | Number of Shares of Common Stock Equivalents | | :--------------------- | :------------------------------------------- | | Shares of Common Stock | 15,873,113 | | Restricted Stock | 2,316,715 | | Warrants | 1,978,346 | | **Total** | **20,168,174** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," the company is permitted to omit the information typically required for this item - The company is exempt from providing detailed market risk disclosures due to its "smaller reporting company" status[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2023 [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of December 31, 2023[140](index=140&type=chunk) [Changes in Internal Control over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No changes in internal control over financial reporting occurred during the quarter that materially affected or are reasonably likely to materially affect internal controls[141](index=141&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal or arbitration proceedings - The company is not involved in any legal or arbitration proceedings that could materially affect its financial position or profitability[144](index=144&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section outlines key risks and uncertainties by referencing other detailed company filings - Key risks and uncertainties are discussed in Item 3D "Risk Factors" of the 2023 Annual Report on Form 20-F and in Part II, Item 1A of this Quarterly Report[145](index=145&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details unregistered equity sales related to the re-domiciliation, which were exempt from registration - The re-domiciliation involved an exchange of securities, with ratios of **1:100 for ordinary shares**, **1:100 for options**, and **1:4 for ADSs**[148](index=148&type=chunk) - These issuances were exempt from registration under Section 3(a)(10) of the Securities Act of 1933[147](index=147&type=chunk) - No proceeds were used from these unregistered sales of equity securities[147](index=147&type=chunk) [Item 3. Defaults upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This item is not applicable to the company - This item is not applicable[149](index=149&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[150](index=150&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information to report[150](index=150&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed with the Quarterly Report - The exhibit list includes various corporate documents, employment and research agreements, and required certifications[151](index=151&type=chunk)[154](index=154&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) - The report was signed by the Chief Executive Officer and Chief Financial Officer on February 14, 2024[157](index=157&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...

(Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2022 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...