Incannex cancels remaining Series A Warrants to reduce dilution

MELBOURNE, Australia and NEW YORK - Incannex Healthcare Inc. (NASDAQ:IXHL), a clinical-stage biopharmaceutical company with a current market capitalization of $7.95 million, announced today the binding agreement to cancel the remaining 172 million Series A Warrants, a move aimed at reducing potential future share dilution. According to InvestingPro data, the company’s stock has experienced significant volatility, with a beta of 2.24 and a 90% decline over the past year. This follows a similar action taken earlier this month, which eliminated the first 175.2 million shares susceptible to dilution. Combined, these agreements will prevent up to 347.2 million shares from entering the market, pending final execution. InvestingPro analysis reveals the company holds more cash than debt and maintains a healthy current ratio of 2.12, though it’s currently experiencing rapid cash burn.

Joel Latham, President and CEO of Incannex, stated that this decision is a significant milestone in strengthening the company’s capital structure. "This transaction ensures that up to 347 million shares will no longer be eligible to enter the market, providing clarity and confidence for our shareholders," he said, emphasizing the company’s commitment to managing dilution risk.

The cancellation payment to the Series A Warrant holders will amount to up to $12.2 million. Incannex’s proactive measure comes as the company prepares for the release of topline data from its Phase 2 RePOSA trial of IHL-42X for obstructive sleep apnea (OSA), expected in July 2025. Despite current challenges, analysts tracked by InvestingPro anticipate sales growth of 24.55% in the current fiscal year, with 15+ additional insights available to subscribers. IHL-42X, a potential first-in-class oral pharmaceutical treatment, is being developed for a condition that currently lacks FDA-approved drug therapies and affects millions worldwide.

Incannex’s approach to value creation and governance is reflected in this strategic step, as stated by Latham. The company’s lead clinical program, IHL-42X, is an oral fixed-dose combination of dronabinol and acetazolamide, targeting the underlying mechanisms of OSA. The RePOSA Phase 2/3 clinical trial is enrolling more than 560 patients globally, with the U.S. Phase 2 portion’s topline readout anticipated in July 2025.

For more details on the warrant cancellation transaction, refer to the Form 8-K filed with the SEC on May 28, 2025, including the Letter Agreements referenced therein. This article is based on a press release statement from Incannex Healthcare Inc.

In other recent news, Incannex Healthcare Inc. has amended its Sales Agreement with A.G.P/Alliance Global Partners to increase the maximum offering of its common stock by an additional $2,514,214. This amendment follows a previous sale of approximately $16,768,095 worth of shares under the same agreement. The company has also revised the terms of its Series A warrants, initially issued in a private placement, allowing for a portion of net proceeds from stock sales to be allocated to warrant holders. These net proceeds, after deducting a 3% placement agent fee and legal expenses, could reach up to $12,499,828. Additionally, Incannex entered a Sales Agreement for potential stock sales in an "at-the-market" equity offering, although it is not obligated to sell any shares. The agreement includes a 3% commission for A.G.P., and sales could occur on The Nasdaq Global Market or other U.S. trading markets. The company has also limited the minimum sale price of its common stock to $1.08 per share for a specified period following a private placement. These developments are part of Incannex’s ongoing efforts to manage its financial arrangements and strategic decisions effectively.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.