UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 001-41184

ZYVERSA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware		86-2685744
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2200 N. Commerce Parkway, Suite 208 Weston, FL		33326
(Address of principal executive offices)		(Zip Code)

(754) 231-1688
(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		ZVSA		The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: ☒

As of November 11, 2024, the number of shares outstanding of the registrant’s common stock, $0.0001 par value per share, was 2,344,191.

Except as otherwise indicated, all share and per share information in this Quarterly Report on Form 10-Q gives effect to the reverse stock split of the registrant’s outstanding common stock at a ratio of one-for-ten shares, which was effected as of 4:01 p.m. Eastern Time on April 25, 2024.

ZYVERSA THERAPEUTICS, INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PART I FINANCIAL INFORMATION	1

Item 1. Financial Statements	1

Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	1

Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	2

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023	3

Unaudited Condensed Consolidated Statements of Cash flows for the Nine Months Ended September 30, 2024 and 2023	4

Notes to Unaudited Condensed Consolidated Financial Statements	5

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	13

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.	20

ITEM 4. Controls and Procedures.	20

PART II - OTHER INFORMATION	21

ITEM 1. Legal Proceedings.	21

ITEM 1A. Risk Factors.	21

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.	21

ITEM 3. Defaults Upon Senior Securities.	21

ITEM 4. Mine Safety Disclosures.	21

ITEM 5. Other Information.	21

ITEM 6. Exhibits.	22

SIGNATURES	23

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

ZYVERSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2024			2023
	(Unaudited)
Assets

Current Assets:
Cash	$	122,921		$	3,137,674
Prepaid expenses and other current assets		267,494			215,459
Total Current Assets		390,415			3,353,133
Equipment, net		-			6,933
In-process research and development		18,647,903			18,647,903
Vendor deposit		178,476			98,476
Deferred offering costs		207,130			-
Operating lease right-of-use asset		-			7,839
Total Assets	$	19,423,924		$	22,114,284

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable	$	9,284,631		$	8,431,583
Accrued expenses and other current liabilities		2,257,372			1,754,533
Operating lease liability		-			8,656
Total Current Liabilities		11,542,003			10,194,772
Deferred tax liability		854,621			844,914
Total Liabilities		12,396,624			11,039,686

Commitments and contingencies (Note 6)		-

Stockholders’ Equity:
Preferred stock, $0.0001 par value, 1,000,000 shares authorized:
Series A preferred stock, 8,635 shares designated, 50 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		-			-
Series B preferred stock, 5,062 shares designated, 5,062 shares issued and outstanding as of September 30, 2024 and December 31, 2023		1			1
Preferred stock value		1			1
Common stock, $0.0001 par value, 250,000,000 shares authorized; 1,074,203 and 405,212 shares issued at September 30, 2024 and December 31, 2023, respectively, and 1,074,196 and 402,205 shares outstanding as of September 30, 2024 and December 31, 2023, respectively		107			40
Common stock, value		107			40
Additional paid-in-capital		118,245,220			114,300,849
Accumulated deficit		(111,210,860	)		(103,219,124	)
Treasury stock, at cost, 7 shares at September 30, 2024 and December 31, 2023, respectively		(7,168	)		(7,168	)
Total Stockholders’ Equity		7,027,300			11,074,598

Total Liabilities and Stockholders’ Equity	$	19,423,924		$	22,114,284

The accompanying notes are an integral part of these condensed consolidated financial statements.

ZYVERSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2024			2023			2024			2023
	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Operating Expenses:
Research and development	$	436,043		$	673,943		$	1,658,030		$	2,950,462
General and administrative		1,833,578			2,228,735			6,192,205			9,694,097
Impairment of in-process research and development		-			-			-			69,280,171
Impairment of goodwill		-			-			-			11,895,033
Total Operating Expenses		2,269,621			2,902,678			7,850,235			93,819,763
Loss From Operations		(2,269,621	)		(2,902,678	)		(7,850,235	)		(93,819,763	)

Other (Income) Expense:
Interest (income) expense		131,635			210			131,794			(555	)

Pre-Tax Net Loss		(2,401,256	)		(2,902,888	)		(7,982,029	)		(93,819,208	)
Income tax (provision) benefit		-			485			(9,707	)		8,859,762
Net Loss		(2,401,256	)		(2,902,403	)		(7,991,736	)		(84,959,446	)
Deemed dividend to preferred stockholders		-			(32,373	)		-			(7,948,209	)
Net Loss Attributable to Common Stockholders	$	(2,401,256	)	$	(2,934,776	)	$	(7,991,736	)	$	(92,907,655	)

Net Loss Per Share
- Basic and Diluted	$	(2.43	)	$	(30.18	)	$	(9.79	)	$	(1,591.46	)

Weighted Average Number of Common Shares Outstanding
- Basic and Diluted		988,378			97,252			816,293			58,379

The accompanying notes are an integral part of these condensed consolidated financial statements.

ZYVERSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For The Three and Nine Months Ended September 30, 2024 and 2023

(Unaudited)

	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
	For the Three and Nine Months Ended September 30, 2024
	Series A				Series B														Additional						Total
	Preferred Stock				Preferred Stock				Common Stock				Treasury Stock						Paid-In			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity

Balance - December 31, 2023		50	$	-		5,062	$	1		405,212	$	40		(7	)	$	(7,168	)	$	114,300,849		$	(103,219,124	)	$	11,074,598
Exercise of warrants		-		-		-		-		213,800		21		-			-			2,672,479			-			2,672,500
Exercise of pre-funded warrants		-		-		-		-		131,481		13		-			-			(13	)		-			-
Issuance of common stock pursuant to vendor agreements		-		-		-		-		9,000		1		-			-			79,199			-			79,200
Round up share adjustment due to reverse split		-		-		-		-		75,410		8		-			-			(8	)		-			-
Stock-based compensation		-		-		-		-		-		-		-			-			223,573			-			223,573
Net loss		-		-		-		-		-		-		-			-			-			(2,826,737	)		(2,826,737	)
Balance - March 31, 2024		50		-		5,062		1		834,903		83		(7	)		(7,168	)		117,276,079			(106,045,861	)		11,223,134
Stock-based compensation		-		-		-		-		-		-		-			-			160,664			-			160,664
Net loss		-		-		-		-		-		-		-			-			-			(2,763,743	)		(2,763,743	)
Balance - June 30, 2024		50		-		5,062		1		834,903		83		(7	)		(7,168	)		117,436,743			(108,809,604	)		8,620,055
Warrant inducement offer - exercise proceeds ^[1]		-		-		-		-		239,300		24		-			-			400,900			-			400,924
Warrant modification																				246,912						246,912
Stock-based compensation		-		-		-		-		-		-		-			-			160,665			-			160,665
Net loss		-		-		-		-		-		-		-			-			-			(2,401,256	)		(2,401,256	)
Balance - September 30, 2024		50	$	-		5,062	$	1		1,074,203	$	107		(7	)	$	(7,168	)	$	118,245,220		$	(111,210,860	)	$	7,027,300

	For the Three and Nine Months Ended September 30, 2023
	Series A						Series B														Additional						Total
	Preferred Stock						Preferred Stock				Common Stock				Treasury Stock						Paid-In			Accumulated			Stockholders’
	Shares			Amount			Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity

Balance - December 31, 2022		8,635		$	1			5,062	$	1		25,760	$	3		-		$	-		$	104,584,170		$	(4,921,178	)	$	99,662,997
Reclassification of formerly redeemable common stock		-			-			-		-		188		-		-			-			331,331			-			331,331
Issuance of common stock pursuant to vendor agreements		-			-			-		-		371		-		-			-			395,200			-			395,200
Registration costs associated with preferred stock issuance		-			-			-		-		-		-		-			-			(34,674	)		-			(34,674	)
Stock-based compensation		-			-			-		-		-		-		-			-			287,461			-			287,461
Net loss		-			-			-		-		-		-		-			-			-			(3,543,950	)		(3,543,950	)
Balance - March 31, 2023		8,635			1			5,062		1		26,319		3		-			-			105,563,488			(8,465,128	)		97,098,365
Registered offering of common stock ^[2]		-			-			-		-		31,473		3		-			-			9,831,016			-			9,831,019
Redemption of Series A Preferred Stock		(8,400	)		(1	)		-		-		-		-		-			-			(10,080,000	)		-			(10,080,001	)
Conversion of Series A Preferred Stock into common stock		(35	)		-			-		-		50		-		-			-			-			-			-
Shares issued as consideration for extension of lock-up period		-			-			-		-		8,698		1		-			-			1,156,777			-			1,156,778
Issuance of common stock pursuant to vendor agreements		-			-			-		-		1,086		-		-			-			210,000			-			210,000
Stock-based compensation		-			-			-		-		-		-		-			-			365,742			-			365,742
Treasury stock acquired, at cost		-			-			-		-		-		-		(7	)		(7,168	)		-			-			(7,168	)
Net loss		-			-			-		-		-		-		-			-			-			(78,513,093	)		(78,513,093	)
Balance - June 30, 2023		200			-			5,062		1		67,626		7		(7	)		(7,168	)		107,047,023			(86,978,221	)		20,061,642
Balance		200			-			5,062		1		67,626		7		(7	)		(7,168	)		107,047,023			(86,978,221	)		20,061,642
Registered offering of common stock ^[3]		-			-			-		-		9,303		1		-			-			1,575,937			-			1,575,938
Warrant modification		-			-			-		-		-		-		-			-			181,891			-			181,891
Redemption of Series A Preferred Stock		(150	)		-			-		-		-		-		-			-			(215,048	)		-			(215,048	)
Exercise of pre-funded warrants		-			-			-		-		27,061		3		-			-			944			-

SEC Form 10-Q filed by ZyVersa Therapeutics Inc.