Incannex cut its FY2026 net loss to $19.3M from $46.9M mainly because a $21.9M warrant loss did not repeat, while the operating loss held near $23M and share sales lifted cash to $67.7M, ending its going-concern warning.
Net income
-$19M
Diluted EPS
$-1.66
Headline: a smaller loss, but the business spent about the same
Incannex Healthcare, a clinical-stage drug developer with no product sales, cut its net loss for the fiscal year ended June 30, 2026 to $19.3 million from $46.9 million. Almost none of that improvement came from the business itself. The loss from operations (what it cost to run the company before financing items) was $23.0 million, against $23.8 million a year earlier, nearly unchanged. The big swing was below that line: last year's result carried a $21.9 million loss on the changing value of warrants (rights sold to investors to buy shares later at a set price), which shrank to $0.6 million this year.
The other headline is the balance sheet. Cash rose from $15.0 million to $67.7 million after the company raised money by selling shares, and management now says there is no longer substantial doubt about its ability to continue as a going concern. That phrase is the formal warning that a company might run out of money within a year, so removing it is a material change.
Key figures
All figures in US dollars. Incannex has one reporting segment (drug development) and no revenue this year.
Metric
FY2026 (year to Jun 30, 2026)
FY2025
YoY Change
Revenue
$0
$0.09M (clinic services)
-100%
Research and development (R&D) expense
$5.2M
$10.7M
-52%
General and administrative (G&A) expense
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$17.8M
$13.1M
+36%
of which stock-based compensation
$7.6M
$2.6M
+$5.0M
Loss from operations
($23.0M)
($23.8M)
Loss 3% smaller
Australian R&D tax incentive (income)
$4.7M
$1.8M
+165%
Change in fair value of warrant liabilities
($0.6M)
($21.9M)
Loss 97% smaller
Net loss
($19.3M)
($46.9M)
Loss 59% smaller
Net loss per share (basic and diluted)
($1.66)
($40.82)
Not comparable (share count ~10x)
Weighted average shares outstanding
11.66M
1.15M
~10x
Cash burned by operations
$12.9M
$12.5M
+$0.4M
Cash and cash equivalents (year end)
$67.7M
$15.0M
+$52.7M
Share figures reflect the 1-for-30 reverse stock split (30 old shares combined into 1 new share) completed on February 26, 2026, which the filing applies to both years.
Takeaway: The 59% smaller net loss is almost entirely an accounting effect: last year's $21.9 million warrant revaluation loss did not repeat, while the operating loss was flat at about $23 million. What actually changed is funding. With $67.7 million in cash against $12.9 million of cash burned by operations in the year, Incannex removed its going-concern warning and can pay for its current sleep apnea study without raising money first.
What drove the operating line
R&D spending halved, and the filing says this is about timing. R&D fell by $5.5 million to $5.2 million. The filing attributes the drop "primarily" to "the timing of the completion of the RePOSA Study and commencement of the DReAMzz Study." In plain terms: the company finished one trial of its lead drug in July 2025 and did not start the next one until May 2026, so for most of the year it had no large trial running. This is not a lasting cost cut, and management says it expects R&D expense to "increase substantially" as development continues.
Overhead rose, mostly from non-cash share awards. G&A climbed $4.7 million to $17.8 million. The filing ties $5.0 million of that to stock-based compensation (employees and directors paid partly in shares or options, an expense that uses no cash), which rose from $2.6 million to $7.6 million because of equity awards granted in May 2025. Stripping those awards out, G&A was about $10.2 million versus about $10.5 million the year before, roughly flat. Salaries rose $0.3 million, while legal/compliance and advertising/investor relations each fell $0.3 million.
The result is an unusual cost mix for a drug developer: R&D was only about 23% of operating expenses this year ($5.2 million of $23.0 million). That share should rise once the new study is fully enrolling.
A larger Australian tax refund helped. Incannex has Australian operations and receives a 48.5% refundable tax offset on eligible R&D spending. That benefit rose to $4.7 million from $1.8 million, which the filing attributes to "expanded eligibility for certain R&D expenditures incurred in the fiscal years ended June 30, 2026 and 2025". Part of it therefore relates to the prior year's spending, so it may not repeat at this level while R&D spending is this low.
Below the line: last year's financing charges faded
FY2025 carried about $26.9 million of losses tied to financing deals, according to the filing, including the $21.9 million warrant revaluation, a $1.5 million loss on repaying a convertible loan early and a $1.1 million commitment fee paid in shares for an equity credit line. In FY2026 those largely disappeared. The one that remains is the warrant line: the 2,000,000 warrants sold with the March 2026 share offering (exercise price $6.50) are booked as a $4.1 million liability on the balance sheet and revalued each quarter. If the share price rises, that revaluation produces a loss, so this line can swing future results again.
Cash, dilution and a buyback
Financing brought in $65.9 million net in FY2026. Share sales raised $78.7 million, including a March 2026 registered direct offering of about 2.0 million shares at $5.00 each with the warrants attached. Against that, the company spent $9.4 million buying back its own shares. The filing shows 1.30 million shares repurchased in April 2026 at an average $3.66 and 0.51 million in May at $4.55, below the $5.00 at which it had sold shares in March. The buyback program expired in August 2026.
Net of all this, shares outstanding rose from 6.48 million to 12.54 million over the year, a 94% increase. Weighted over the year, the share count was about ten times FY2025's. That is why the loss per share fell from $40.82 to $1.66: each existing share now represents a much smaller slice of the company, so the per-share figure says little about how the business performed.
As of September 24, 2026, unrestricted cash was $68.4 million. At FY2026's operating cash burn of $12.9 million, that would last about five years. But that pace reflects a year with little trial activity, so it overstates the real runway. Management's own statement is narrower: cash is enough to fund planned operations "for at least twelve months," and the company expects to "require substantial capital to fund our operations beyond this period."
Pipeline: what the money is for
IHL-42X (obstructive sleep apnea, the lead program). It is a pill combining two existing drugs, dronabinol and acetazolamide. The Phase 2 part of the RePOSA trial finished in July 2025, and the FDA granted Fast Track designation (a status that allows more frequent FDA contact and a faster review path) in December 2025. Before a Phase 3 trial (the large, late-stage study usually needed for approval), the company is running the DReAMzz Study: a Phase 2 trial testing nine dose combinations in about 120 patients at 14 US sites to settle the best ratio of the two drugs. It started in May 2026, began screening patients in July 2026, and is expected to finish in mid-2027. Its results will shape the Phase 3 design.
PSX-001 (generalized anxiety disorder). This is synthetic psilocybin given together with talk therapy. In the completed PsiGAD1 Phase 2 trial, patients' anxiety scores (HAM-A, a standard clinician-rated anxiety scale) fell by an average of 12.8 points from baseline, and 27% of treated patients reached full remission. The company has a cleared US application to run clinical trials and says it is assessing options for the next step, which means no trial is funded yet.
IHL-675A (inflammation, starting with rheumatoid arthritis). This combines CBD with hydroxychloroquine. The Australian Phase 2 trial was paused in November 2024 for slow enrollment and then terminated without enough data to draw conclusions. The program is on hold while money goes to the lead assets.
Outlook
Management gives no financial guidance beyond expecting R&D and G&A expenses to "increase substantially." Our read: FY2027 will likely show a larger operating loss than FY2026, because the DReAMzz Study runs for the full year instead of a few weeks, and the low-R&D year that flattered this result will not repeat. For the next 12 months, the main question for investors is not the income statement. It is whether DReAMzz produces a clear dose ratio on its mid-2027 timeline, and whether $68 million covers both that study and the start of a Phase 3 trial without another round of heavy share issuance. Given a 94% rise in share count this year and $4.1 million of warrants that are revalued each quarter, further dilution remains the main risk for existing shareholders.