Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement.

Equity line of credit agreement with Arena Business Solutions Global SPC II, Ltd

On September 9, 2024, Incannex Healthcare Inc. ("Company") entered into an equity line of credit agreement ("ELOC Agreement") with Arena Business Solutions Global SPC II, Ltd ("Investor"). Under the ELOC Agreement, the Company has the right to sell, and the Investor the obligation to buy, up to $50 million of the Company's shares of common stock ("Common Shares"). The purchase price of the Common Shares is obtained by multiplying by 96% the daily volume weighted average price ("VWAP") on Nasdaq for the trading day specified in the sale notice (same trading day or one trading day following such notice) delivered to the Investor. The ELOC Agreement will be effective for 36 months from its execution.

As consideration for the Investor's execution and delivery of the ELOC Agreement, the Company will (i) issue to the Investor, as a commitment fee, that number of Common Shares equal to 250,000 divided by the simple average of the daily VWAP of the Common Shares during the five trading days immediately preceding the effectiveness of a "shelf" registration statement on Form S-3 on which the estimated number of such Common Shares are registered, and (ii) issue a warrant ("ELOC Warrant") exercisable for 585,000 Common Shares, with a five year expiration and an exercise price equal to 115% of the closing price of the Common Shares on the warrant issuance date.

However, the Company may not sell Common Shares to the Investor under the ELOC Agreement if (i) a shelf Registration Statement on Form S-3 that registers the Common Shares issuable under the ELOC Agreement has not been declared effective by the Securities and Exchange Commission ("SEC"); (ii) the number of Common Shares issuable to the Investor pursuant to a sale notice causes the aggregate number of Common Shares beneficially owned by the Investor and its affiliates as a result of previous issuances and sales of Common Shares to Investor under the ELOC Agreement would exceed 9.99% of the then outstanding Common Shares; (iii) after giving effect to such sale (a) the aggregate number of Common Shares issued under the ELOC Agreement, (b) the aggregate number of Common Shares issued upon exercise of the ELOC Warrant, (c) the aggregate number of Common Shares issued upon conversion of a secured convertible note issued to Arena Investors, LP (as discussed below) and upon exercise of the warrant issued in connection with such convertible note, would exceed 19.99% of the outstanding Common Shares as of the date of the ELOC Agreement, unless the Company obtains the requisite shareholder approval for issuances in excess of such limit; or (iv) such sale of Common Shares would exceed, during any 12-month period, one-third of the Company's public float under the SEC's "baby shelf" rule for SEC-registered transactions by an issuer with a public float under $75 million when using a "shelf" registration statement on Form S-3.

The foregoing summary of the terms and conditions of the ELOC Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the ELOC Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

The closing of the ELOC Agreement, and thus use by the Company of the equity line of credit, is subject to the satisfaction of customary closing conditions.

Securities Purchase Agreement for issuance of convertible notes to Arena Investors, LP

On September 9, 2024, the Company entered into a Securities Purchase Agreement ("Securities Purchase Agreement") with Arena Investors, LP ("Purchaser"). Under the Securities Purchase Agreement, the Company will issue secured Convertible Notes ("Notes") for up $10 million, divided into three separate tranches that are each subject to closing conditions, with a 10% original issue discount. The conversion price of each Note would be equal to 115% of the closing price of the Common Shares on the trading day preceding the date of the issuance of the Note, subject to adjustments related to the trading price of the Common Shares on Nasdaq.