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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 March 31, 2024

 

or

 

☐ 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

  

 

33326

(Address of principal executive offices)   (Zip Code)
     
(754) 231-1688
(Registrant’s telephone number, including area code)

 

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

 

Title of each class   Trading Symbol(s)   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 May 10, 2024, the number of shares outstanding of the registrant’s common stock, $0.0001 par value per share, was 834,896.

 

Except as otherwise indicated, all share and per share information in this Report 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 March 31, 2024 (unaudited) and December 31, 2023 1
   
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and March 31, 2023 2
   
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2024 and March 31, 2023 3
   
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and March 31, 2023 4
   
Notes to Unaudited Condensed Consolidated Financial Statements 5
   
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 14
   
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. 22
   
ITEM 4. Controls and Procedures. 22
   
PART II - OTHER INFORMATION 23
   
ITEM 1. Legal Proceedings. 23
   
ITEM 1A. Risk Factors. 23
   
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds. 23
   
ITEM 3. Defaults Upon Senior Securities. 23
   
ITEM 4. Mine Safety Disclosures. 23
   
ITEM 5. Other Information. 23
   
ITEM 6. Exhibits. 24
   

SIGNATURES

25

 

i
 

 

PART I FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ZYVERSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   March 31,   December 31, 
   2024   2023 
    (Unaudited)      
Assets          
           
Current Assets:          
Cash  $2,033,576   $3,137,674 
Prepaid expenses and other current assets   866,476    215,459 
Total Current Assets   2,900,052    3,353,133 
Equipment, net   4,333    6,933 
In-process research and development   18,647,903    18,647,903 
Vendor deposit   98,476    98,476 
Operating lease right-of-use asset   -    7,839 
Total Assets  $21,650,764   $22,114,284 
           
Liabilities and Stockholders’ Equity          
           
Current Liabilities:          
Accounts payable  $8,127,746   $8,431,583 
Accrued expenses and other current liabilities   1,454,970    1,754,533 
Operating lease liability   -    8,656 
Total Current Liabilities   9,582,716    10,194,772 
Deferred tax liability   844,914    844,914 
Total Liabilities   10,427,630    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 March 31, 2024 and December 31, 2023   -    - 
Series B preferred stock, 5,062 shares designated, 5,062 shares issued and outstanding as of March 31, 2024 and December 31, 2023   1    1 
Common stock, $0.0001 par value, 250,000,000 shares authorized; 834,903 and 405,212 shares issued as of March 31, 2024 and December 31, 2023, respectively, and 834,896 and 405,206 shares outstanding as of March 31, 2024 and December 31, 2023, respectively   83    40 
Additional paid-in-capital   117,276,079    114,300,849 
Accumulated deficit   (106,045,861)   (103,219,124)
Treasury stock, at cost, 7 shares at March 31, 2024 and December 31, 2023, respectively   (7,168)   (7,168)
Total Stockholders’ Equity   11,223,134    11,074,598 
           
Total Liabilities and Stockholders’ Equity  $21,650,764   $22,114,284 

 

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

 

1
 

 

ZYVERSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   2024   2023 
   For the Three Months Ended March 31, 
   2024   2023 
Operating Expenses:          
Research and development  $512,937   $1,055,943 
General and administrative   2,313,699    3,536,136 
Total Operating Expenses   2,826,636    4,592,079 
           
Loss From Operations   (2,826,636)   (4,592,079)
           
Other (Income) Expense:          
Interest (income) expense   101    (1,078)
           
Pre-Tax Net Loss   (2,826,737)   (4,591,001)
Income tax benefit   -    1,047,051 
Net Loss  $(2,826,737)  $(3,543,950)
           
Net Loss Per Share - Basic and Diluted  $(4.53)  $(135.88)
           
Weighted Average Number of Common Shares Outstanding - Basic and Diluted   623,600    26,081 

 

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

 

2
 

 

ZYVERSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

For The Three Months Ended March 31, 2024 and 2023

(Unaudited)

 

   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
   For the Three Months Ended March 31, 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 

 

   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
   For the Three Months Ended March 31, 2023 
   Series A   Series B           Additional       Total 
   Preferred Stock   Preferred Stock   Common Stock   Paid-In   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
Balance - December 31, 2022   8,635   $     1    5,062   $     1    25,760   $     902   $104,583,271   $(4,921,178)  $99,662,997 
Reclassification of formerly redeemable common stock   -    -    -    -    188    7    331,324    -    331,331 
Issuance of common stock pursuant to vendor agreements   -    -    -    -    371    13    395,187    -    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    26,320   $922   $105,562,569   $(8,465,128)  $97,098,365 

 

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

 

3
 

 

ZYVERSA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   2024   2023 
   For the Three Months Ended March 31, 
   2024   2023 
Cash Flows From Operating Activities:          
Net loss  $(2,826,737)  $(3,543,950)
Adjustments to reconcile net loss to net cash used in operating activities:          
Stock-based compensation   223,573    287,461 
Issuance of common stock pursuant to vendor agreements   79,200    395,200 
Depreciation of fixed assets   2,600    2,600 
Non-cash rent expense   7,839    22,047 
Deferred tax benefit   -    (1,047,051)
Changes in operating assets and liabilities:          
Prepaid expenses and other current assets   (651,017)   (1,096,204)
Accounts payable   (303,837)   355,441 
Operating lease liability   (8,656)   (24,249)
Accrued expenses and other current liabilities   (299,563)   59,253 
Net Cash Used In Operating Activities   (3,776,598)   (4,589,452)
           
Cash Flows From Financing Activities:          
Exercise of warrants   2,672,500    - 
Registration and issuance costs associated with preferred stock issuance   -    (34,674)
           
Net Cash Provided By (Used In) Financing Activities   2,672,500    (34,674)
           
Net Decrease in Cash   (1,104,098)   (4,624,126)
           
Cash - Beginning of Period   3,137,674    5,902,199 
           
Cash - End of Period  $2,033,576   $1,278,073 
           
Supplemental Disclosures of Cash Flow Information:          
Reclassification of formerly redeemable common stock  $-   $331,331 

 

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

 

4
 

 

ZYVERSA THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

 

Note 1 – Business Organization, Nature of Operations and Basis of Presentation

 

Organization and Operations

 

ZyVersa is a clinical stage biopharmaceutical company leveraging proprietary technologies to develop first-in-class drugs for patients with chronic renal or inflammatory diseases with high unmet medical needs. The Company’s mission is to develop drugs that optimize health outcomes and improve patients’ quality of life.

 

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2024 and for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on March 25, 2024.

 

On December 4, 2023, the Company effected a reverse stock split of its common stock at a ratio of 1-for-35 (the “2023 Reverse Split”). Upon the effectiveness of the 2023 Reverse Split, every 35 issued shares of common stock were reclassified and combined into one share of common stock. In addition, the number of shares of common stock issuable upon the exercise of the Company’s equity awards, convertible securities and warrants was proportionally decreased, and the corresponding conversion price or exercise price was proportionally increased. No fractional shares were issued as a result of the 2023 Reverse Split.

 

On April 25, 2024, the Company effected a reverse stock split of its common stock at a ratio of 1-for-10 (the “2024 Reverse Split”). Upon the effectiveness of the 2024 Reverse Split, every 10 issued shares of common stock were reclassified and combined into one share of common stock. In addition, the number of shares of common stock issuable upon the exercise of the Company’s equity awards, convertible securities and warrants was proportionally decreased, and the corresponding conversion price or exercise price was proportionally increased. No fractional shares were issued as a result of the 2024 Reverse Split.

 

Accordingly, all share and per share amounts for all periods presented in these financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the 2023 Reverse Split and the 2024 Reverse Split and adjustment of the conversion price or exercise price of each outstanding equity award, convertible security and warrant as if the transaction had occurred as of the beginning of the earliest period presented. See Note 8 – Subsequent Events – Reverse Stock Split.

 

5
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Note 2 - Going Concern and Management’s Plans

 

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

As of March 31, 2024, the Company had cash of approximately $2.0 million and a working capital deficit of approximately $6.7 million. During the three months ended March 31, 2024, the Company incurred a net loss of approximately $2.8 million and used cash in operations of approximately $3.8 million. The Company has an accumulated deficit of approximately $106.0 million as of March 31, 2024.

 

The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. It is expected that its research and development and general and administrative expenses will continue to increase and, as a result, the Company will eventually need to generate significant product revenues to achieve profitability.

 

Consequently, the Company will be required to raise additional funds through equity or debt financing. Management believes that the Company has access to capital resources and continues to evaluate additional financing opportunities; however, and there can be no assurance that it will be successful in securing additional capital or that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. The aforementioned conditions raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance date of these financial statements.

 

Note 3 – Summary of Significant Accounting Policies

 

Since the date the Company’s December 31, 2023 financial statements were issued in its 2023 Annual Report on Form 10-K, there have been no material changes to the Company’s significant accounting policies.

 

Use of Estimates

 

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and the amounts disclosed in the related notes to the financial statements. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, fair value calculations for equity securities, derivative liabilities, share based compensation and acquired intangible assets, as well as establishment of valuation allowances for deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that actual results could differ from those estimates.

 

6
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Net Loss Per Common Share

 

Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and dilutive common-equivalent shares outstanding during each period.

 

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

 

   2024   2023 
   For the Three Months Ended 
   March 31, 
   2024   2023 
Warrants [1]    689,520    24,653 (2)
Options   10,243    6,086 
Series A Convertible Preferred Stock   72    2,467 (3)
Series B Convertible Preferred Stock   2,067    1,446 (4)
Total potentially dilutive shares   701,902    34,653 

 

[1] As part of the InflamaCORE, LLC license agreement, warrants to purchase 341 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 6 - Commitments and Contingencies - License Agreements for details.
[2] Does not include an additional 9,869 shares if the Successor Series A warrant exercise price resets to its floor price.
[3] Does not include an additional 9,689 shares if the Successor Series A Convertible Preferred Stock conversion price resets to its floor price.
[4] Does not include an additional 620 shares if the Successor Series B Convertible Preferred Stock conversion price resets to its floor price.

 

Segment Reporting

 

The Company operates and manages its business as one reportable and operating segment. All assets and operations are in the U.S. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

 

Reclassifications

 

Certain prior period balances have been reclassified from security deposits to vendor deposits on the condensed consolidated balance sheet in order to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 are effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption to have any material effects on its financial condition, results of operation or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-09.

 

7
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Note 4 – Accrued Expenses and Other Current Liabilities

 

Accrued expenses and other current liabilities consisted of the following as of March 31, 2024 and December 31, 2023:

 

   March 31,   December 31, 
   2024   2023 
         
L&F milestone payment liability  $-   $500,000 
Payroll accrual   668,803    668,803 
Other accrued expenses   51,969    41,969 
Bonus accrual   726,937    536,500 
Registration delay liability [1]   7,261    7,261 
Total accrued expenses and other current liabilities  $1,454,970   $1,754,533 

 

[1]See Note 7 – Stockholders’ Permanent and Temporary Equity for details of the registration delay liability.

 

Note 5 – Income Taxes

 

Income tax expense and the effective tax rate were as follows:

 

(in thousands)  2024   2023 
   For the Three Months Ended 
   March 31, 
(in thousands)  2024   2023 
         
Income tax benefit  $-   $1,047,051 
Effective tax rate   0.00%   22.81%

 

The tax provisions for the three months ended March 31, 2024 and 2023 were computed using the estimated effective tax rates applicable to the taxable jurisdictions for the full year. The Company’s tax rate is subject to management’s quarterly review and revision, as necessary. The Company’s effective tax rate was 0.00% and 22.81% for the three months ended March 31, 2024 and 2023. The decrease in the quarterly rates is primarily the result of the Company recording a full valuation allowance during the three months ended March 31, 2024 due to the reversal of a significant deferred tax liability that existed as of March 31, 2023.

 

Note 6 – Commitments and Contingencies

 

Litigations, Claims and Assessments

 

The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records contingent liabilities resulting from such claims, if any, when a loss is assessed to be probable and the amount of the loss is reasonably estimable.

 

8
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

License Agreements

 

L&F Research LLC

 

The Company entered into a License Agreement with L&F Research LLC (“L&F Research”) effective December 15, 2015, as amended (the “L&F License Agreement”) pursuant to which L&F granted the Company an exclusive royalty-bearing, worldwide, sublicensable license under the patent and intellectual property rights and know-how specific to and for the development and commercialization of VAR 200, for the treatment, inhibition or prevention of kidney disease in humans and symptoms thereof, including focal segmental glomerulosclerosis.

 

On February 28, 2023, the Company and L&F executed an Amendment and Restatement Agreement that waived L&F’s right to terminate the L&F License Agreement or any other remedies, for non-payment of the First Milestone Payment, until (a) March 31, 2023 as to $1,000,000 of such milestone payments (“Waiver A”) and (b) January 31, 2024 as to $500,000 milestone payments (“Waiver B”). Waiver A was contingent upon (i) forgiveness by the Company of $351,579 in aggregate principal amount outstanding under a certain convertible note, and (ii) a cash payment by the Company to L&F in the amount of $648,421, on or before March 31, 2023. Waiver B was contingent upon a cash payment by the Company to L&F in the amount of $500,000 on or before the earlier of (x) January 31, 2024, and (y) ten business days from the date that the Company received net proceeds of at least $30,000,000 from the issuance of new equity capital. All other terms of the L&F License remain in effect.

 

On March 29, 2023, the Company paid the $648,421 of cash to L&F, thus meeting the conditions of Waiver A, which also had the effect of canceling the Note Receivable and the Put Option and resulted in a reclassification of 188 shares of common stock and $331,331 classified as temporary equity to permanent equity.

 

On January 30, 2024, the Company paid $500,000 of cash to L&F, thus meeting the conditions of Waiver B.

 

Operating Leases

 

On January 18, 2019, the Predecessor entered into a lease agreement for approximately 3,500 square feet of office space in Weston, Florida for a term of five years. Under the lease agreement, the annual base rent, which excludes the Predecessor’s share of taxes and operating costs, was approximately $89,000 for the first year and increases approximately 3% every year thereafter for a total base rent lease commitment of approximately $497,000. On January 15, 2024, the Company extended the lease for an additional year for a total base rent lease commitment of $112,064. The Company used the short-term lease practical expedient which permits the Company to not capitalize leases with a term equal to or less than 12 months.

 

The Company recognized right-of-use asset amortization of $7,839 in connection with its operating lease for the three months ending March 31, 2024 and the Company recognized rent expense of $22,047 in connection with its operating lease for the three months ending March 31, 2024.

 

9
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

A summary of the Company’s right-of-use assets and liabilities is as follows:

 

   2024   2023 
   For the Three Months Ended 
   March 31, 
   2024   2023 
         
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows used in operating activities  $8,656   $24,249 
           
Right-of-use assets obtained in exchange for lease obligations          
Operating leases  $-   $- 
           
Weighted Average Remaining Lease Term          
Operating leases   -    0.84 Years 
           
Weighted Average Discount Rate          
Operating leases   -    6.5%

 

Note 7 – Stockholders’ Permanent and Temporary Equity

 

Common Stock

 

During the three months ended March 31, 2024, the Company entered into a marketing agreement with a vendor in which the Company issued an aggregate of 9,000 shares of common stock and cash in exchange for marketing services. The $79,200 fair value of the common stock was established as a prepaid expense and the Company will recognize the expense over the terms of the contracts.

 

Temporary Equity

 

See Note 6 – Commitments and Contingencies for discussion of the movement of temporary equity to permanent equity on March 29, 2023.

 

Stock-Based Compensation

 

For the three months ended March 31, 2024 the Company recorded stock-based compensation expense of $223,573 (of which, $15,447 was included in research and development and $208,126 was included in general and administrative expense) related to options issued to employees and consultants. For the three months ended March 31, 2023 the Company recorded stock-based compensation expense of $287,461 (of which, $49,455 was included in research and development and $238,006 was included in general and administrative expense) related to options issued to employees and consultants. As of March 31, 2024 there was $803,890 of unrecognized stock-based compensation expense, which the Company expects to recognize over a weighted average period of 1.6 years.

 

10
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Stock Options

 

The grant date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was determined using the Black Scholes method, with the following assumptions used:

 

   For the Three Months Ended
   March 31,
   2024  2023
Fair value of common stock on date of grant  N/A  $2.11 - $2.23
Risk free interest rate  N/A  3.53% - 4.27%
Expected term (years)  N/A  6.00
Expected volatility  N/A  120% - 122%
Expected dividends  N/A  0.00%

 

A summary of the option activity for the three months ended March 31, 2024 is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Number of   Exercise   Life   Intrinsic 
   Options   Price   In Years   Value 
                 
Outstanding, January 1, 2024   10,243   $2,218.51                 
Granted   -    -           
Exercised   -    -           
Forfeited   -    -           
Outstanding, March 31, 2024   10,243   $2,218.51    6.1   $- 
                     
Exercisable, March 31, 2024   6,150   $3,438.48    5.0   $- 

 

The following table presents information related to stock options as of March 31, 2024:

 

Options Outstanding  Options Exercisable 
           Weighted      
      Outstanding    Average    Exercisable 
 Exercise    Number of    Remaining Life    Number of 
 Price    Options    In Years    Options 
$152.50    4,157    9.1    429 
$738.50    286    8.8    95 
$791.00    38    8.9    12 
$1,760.50    1,910    1.8    1,910 
$3,965.50    37    8.2    37 
$4,053.00    2,095    5.0    2,095 
$5,726.00    1,720    7.2    1,572 
      10,243    5.0    6,150 

 

11
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Stock Warrants

 

Between February 26, 2024 and March 6, 2024, investors in the December 2023 Offering exercised warrants to purchase 213,800 shares of common stock at an exercise price of $12.50 per share for total proceeds of $2,672,500.

 

Between January 17 and February 23, 2024, a December 2023 Offering investor exercised pre-funded warrants to purchase 131,500 shares of common stock on a cashless basis to purchase 131,481 shares of common stock at an exercise price of $0.001 per share.

 

A summary of the warrant activity for the three months ended March 31, 2024, is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Number of   Exercise   Life   Intrinsic 
   Warrants   Price   In Years   Value 
                 
Outstanding, January 1, 2024 [1]   903,320   $123.44                    
Issued   -    -           
Exercised [2]   (213,800)   12.50           
Outstanding, March 31, 2024   689,520   $157.92    3.67   $- 
                     
Exercisable, March 31, 2024   689,320   $157.46    3.67   $- 

 

[1]Warrants outstanding exclude 131,500 December 2023 Pre-Funded Warrants outstanding with an exercise price of $0.001.
[2]Warrants exercised exclude 131,500 December 2023 Pre-Funded Warrants exercised with an exercise price of $0.001.

 

The following table presents information related to stock warrants as of March 31, 2024:

 

Warrants Outstanding  Warrants Exercisable 
      Outstanding    Weighted Average    Exercisable  
 Exercise    Number of    Remaining Life    Number of 
 Price    Warrants    In Years    Warrants 
$12.50    586,200    3.58    586,200 
$47.50    20,347    4.95    20,347 
$57.75    19,965    4.27    19,965 
$350.00    27,551    4.07    27,551 
$700.00    13,944    3.70    13,944 
$1,760.50    300    0.27    100 
$2,415.00    3,651    3.70    3,651 
$4,025.00    17,335    3.70    17,335 
$4,053.00    227    0.05    227 
      689,520    3.67    689,320 

 

12
 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Effectiveness Failure

 

In connection with the Business Combination, the Company conducted the Successor Series A Preferred Stock Financing. On or about February 20, 2023, the Company failed to have the SEC declare a registration statement effective (the “Effectiveness Failure”) which covered the Successor Series A Preferred Stock registrable securities within the time period prescribed by the Securities Purchase Agreement (the “SPA”). The SPA entitles the investors to receive registration delay payments (“Registration Delay Payments”) equal to 1.5% of each investor’s purchase price on the date of the Effectiveness Failure and every thirty days thereafter that the Effectiveness Failure persists. Failure to make the Registration Delay Payments on a timely basis result in the accrual of interest at the rate of 2.0% per month. On April 28, 2023, the proceeds from the April 2023 Offering were used to make most of the Registration Delay Payments and redeem substantially all of the Successor Series A Preferred Stock (see Successor Series A Preferred Stock Financing above). As of March 31, 2024, the Company has accrued additional Registration Delay Payments of approximately $7,261 in the aggregate.

 

Note 8 – Subsequent Events

 

2024 Reverse Stock Split

 

On April 25, 2024, the Company effected a reverse stock split of its common stock at a ratio of 1-for-10 (the “2024 Reverse Split”). Upon the effectiveness of the 2024 Reverse Split, every 10 issued shares of common stock were reclassified and combined into one share of common stock. In addition, the number of shares of common stock issuable upon the exercise of the Company’s equity awards, convertible securities and warrants was proportionally decreased, and the corresponding conversion price or exercise price was proportionally increased. No fractional shares were issued as a result of the 2024 Reverse Split. See Note 1 – Business Organization, Nature of Operations and Basis of Presentation for additional details.

 

13
 


 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of the results of operations and financial condition of ZyVersa Therapeutics, Inc. (the “Company,” “we,” “us” or “our”) as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis should be read in conjunction with the Company’s audited financial statements and related disclosures as of December 31, 2023 and for the year then ended, which are included in the Form 10-K (the “Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March 25, 2024. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk Factors” in our Annual Report, and other factors that we may not know. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements above, to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

 

Business Overview

 

We are a clinical stage specialty biopharmaceutical company leveraging advanced proprietary technologies to develop first-in-class drugs for patients with renal or inflammatory diseases with high unmet medical needs.

 

Our lead renal drug candidate, which we refer to as Cholesterol Efflux MediatorTM VAR 200 (2-hydroxypropyl-beta-cyclodextrin or “2HβCD”), is in development to treat multiple renal indications. Our lead anti-inflammatory drug candidate, which we refer to as Inflammasome ASC Inhibitor IC 100, is a humanized monoclonal UgG4 antibody targeting ASC in development to treat multiple inflammatory diseases.

 

Financial Operations Overview

 

We have not generated any revenue to date and have incurred significant operating losses. Our net losses were $2,826,737 for the period from January 1, 2024 through March 31, 2024, compared to $3,543,950 for the period from January 1, 2023 through March 31, 2023. As of March 31, 2024, we had an accumulated deficit of approximately $106.0 million and cash of $2.0 million. We expect to continue to incur significant expenses for the foreseeable future and to incur operating losses. We expect our expenses will increase in connection with our ongoing activities as we:

 

  ● progress development of VAR 200 and IC 100;
     
  ● prepare and file regulatory submissions;
     
  ● begin to manufacture our product candidates for clinical trials;
     
  ● hire additional research and development, finance, and general and administrative personnel;
     
  ● protect and defend our intellectual property; and
     
  ● meet the requirements of being a public company.

 

We will need additional financing to support our continuing operations. We will seek to fund our operations through public or private equity or debt financings or other sources, which may include government grants and collaborations with third parties. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We will need to generate significant revenues to achieve profitability, and we may never do so.

 

14
 

 

Components of Operating Results

 

Revenue

 

Since inception, we have not generated any revenue and do not expect to generate any revenue from the sale of products in the near future. If our development efforts for our product candidates are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from collaboration or license agreements.

 

Operating Expenses

 

Research and Development Expenses

 

Research and development expenses consist of costs incurred in the discovery and development of our product candidates, and primarily include:

 

  ● expenses incurred under third party agreements with contract research organizations (“CROs”), and investigative sites, that conducted or will conduct our clinical trials and a portion of our pre-clinical activities;
     
  ● costs of raw materials, as well as manufacturing cost of our materials used in clinical trials and other development testing;
     
  ● expenses, including salaries, stock-based compensation and benefits of employees engaged in research and development activities;
     
  ● costs of equipment, depreciation and other allocated expenses; and
     
  ● fees paid for contracted regulatory services as well as fees paid to regulatory authorities including the US Food and Drug Administration (the “FDA”) for review and approval of our product candidates.

 

We expense research and development costs as incurred. Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid expenses or accrued expenses.

 

Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase for the foreseeable future as we continue clinical development for our product candidates. As products enter later stages of clinical development, they will generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Historically, our research and development costs have primarily related to the development of VAR 200 and IC 100. As we advance VAR 200 and IC 100, as well as identify any other potential product candidates, we will continue to allocate our direct external research and development costs to the products. We expect to fund our research and development expenses from our current cash and cash equivalents and any future equity or debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions.

 

15
 

 

The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from our product candidates. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including:

 

  ● the number of clinical sites included in the clinical trials;
     
  ● the length of time required to enroll suitable patients;
     
  ● the size of patient populations participating in the clinical trials;
     
  ● the number of doses a patient receives;
     
  ● the duration of patient follow-ups;
     
  ● the development state of the product candidates; and
     
  ● the efficacy and safety profile of the product candidates.

 

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals, and the expense of filing, prosecuting, defending and enforcing any patent claims or other intellectual property rights. We may never succeed in achieving regulatory approval for our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of our product candidates. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Product commercialization will take several years and likely millions of dollars in development costs.

 

General and Administrative Expenses

 

General and administrative expenses consist primarily of salaries, stock-based compensation and related costs for our employees in administrative, executive and finance functions. General and administrative expenses also include professional fees for legal, accounting, audit, tax and consulting services, insurance, human resource, information technology, office, and travel expenses.

 

We expect that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our continued research and development and potential commercialization of our product candidates. We also expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services, director and officer insurance, and investor and public relations costs.

 

16
 

 

Results of Operations

 

Comparison of the three months ended March 31, 2024 and the three months ended March 31, 2023

 

The following table summarizes our results of operations for the three months ended March 31, 2024 and for the three months ended March 31, 2023.

 

   For the         
   Three Months Ended         
   March 31,   Favorable (Unfavorable) 
(in thousands)  2024   2023   $ Change   % Change 
Operating expenses:                    
Research and development  $513   $1,056   $543    51.4%
General and administrative   2,314    3,536    1,222    34.6%
Total Operating Expenses   2,827    4,592    1,765    38.4%
                     
Loss from Operations   (2,827)   (4,592)   1,765    38.4%
                     
Other Income (Expense), Net   -    1    (1)   (100.0%)
                     
Pre-tax net loss   (2,827)   (4,591)   1,764    38.4%
Income tax benefit   -    1,047    (1,047)   (100.0%)
Net loss  $(2,827)  $(3,544)  $717    20.2%

 

Research and development expenses

 

Research and development expenses were $0.5 million for the three months ended March 31, 2024, a decrease of $0.5 million or 51.4% from the three months ended March 31, 2023. The decrease is attributable to lower manufacturing costs of IC100 of $0.4 million and lower research and development payroll costs of $0.2 million due to fewer employees. This was offset by an increase in CRO fees of $0.1 million for VAR200.

 

General and administrative expenses

 

General and administrative expenses were $2.3 million for the three months ended March 31, 2024, a decrease of $1.2 million or 34.6% from the three months ended March 31, 2023. The decrease is primarily attributable to a decrease of $0.4 million in payments for the Effectiveness Failure related to the PIPE shares, a decrease of $0.4 million for bonus accruals, a $0.2 million decrease in accounting fees and a $0.1 million decrease in director and officer insurance.

 

Cash Flows

 

The following table summarizes our cash flows from operating and financing activities for the three months ended March 31, 2024 and for the three months ended March 31, 2023:

 

   For the Three Months Ended
March 31,		   Increase 
(in thousands)  2024   2023   (decrease) 
Net cash provided by (used in)               
Operating activities  $(3,777)  $(4,589)  $812 
Financing activities   2,673    (35)   2,708 
Net (Decrease) Increase in Cash  $(1,104)  $(4,624)  $3,520 

 

17
 

 

Cash Flows from Operating Activities

 

Net cash used in operating activities was $3.8 million and $4.6 million for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024 and for the three months ended March 31, 2023, the net cash used in operating activities was primarily attributable to the net loss of approximately $2.8 million and $3.5 million, respectively, offset by $0.3 million and ($0.3) million, respectively, of net non-cash expenses, and approximately ($1.3) million and ($0.8) million, respectively, of cash used in the levels of operating assets and liabilities, respectively.

 

Net Cash Provided By (Used In) Financing Activities

 

Net cash provided by (used in) financing activities was $2.7 million and ($35) thousand for the three months ended March 31, 2024 and 2023, respectively. Cash provided by financing activities during the three months ended March 31, 2024 represented proceeds from the exercise of warrants.

 

Liquidity and Capital Resources

 

The following table summarizes our total current assets, liabilities and working capital deficiency at March 31, 2024 and 2023, respectively:

 

   March 31,   December 31, 
(in thousands)  2024   2023 
Current Assets  $2,900   $3,353 
Current Liabilities  $9,583   $10,195 
Working Capital Deficiency  $(6,683)  $(6,842)

 

Since our inception in 2014 through March 31, 2024, we have not generated any revenue and have incurred significant operating losses and negative cash flows from our operations. Based on our current operating plan, we expect our cash of $2.0 million as of March 31, 2024 will only be sufficient to fund our operating expenses and capital expenditure requirements on a month-to-month basis. However, it is difficult to predict our spending for our product candidates prior to obtaining FDA approval. Moreover, changing circumstances may cause us to expend cash significantly faster than we currently anticipate, and we may need to spend more cash than currently expected because of circumstances beyond our control.

 

Going Concern

 

Since inception we have been engaged in organizational activities, including raising capital and research and development activities. We have not generated revenues and have not yet achieved profitable operations, nor have we ever generated positive cash flow from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. We are subject to those risks associated with any pre-clinical stage pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that our research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, we operate in an environment of rapid technological change and are largely dependent on the services of our employees and consultants. Further, our future operations are dependent on the success of our efforts to raise additional capital. These uncertainties raise substantial doubt about our ability to continue as a going concern for 12 months after the issuance date of our financial statements. The accompanying financial statements have been prepared on a going concern basis. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of us to continue as a going concern, which contemplates the continuation of operations, realization of assets and liquidation of liabilities in the ordinary course of business. We incurred a net loss of $2.8 million for the three months ended March 31, 2024 and a net loss of $3.5 million for the three months ended March 31, 2023, and we had an accumulated deficit of $106.0 million at March 31, 2024. We anticipate incurring additional losses until such time, if ever, that we can generate significant revenue from our product candidates currently in development. Our primary source of capital has been the issuance of debt and equity securities. We believe that current cash is only sufficient to fund operations and capital requirements on a month-to-month basis. Additional financing will be needed by us to fund our operations, to complete development of and to commercially develop our product candidates. There is no assurance that such financing will be available when needed or on acceptable terms.

 

18
 

 

Contractual Obligations

 

The following summarizes our contractual obligations as of March 31, 2024 that will affect our future liquidity. Based on our current operating plan, we plan to satisfy the obligations identified below from our current cash balance and future financing.

 

Cash requirements for our current liabilities as of March 31, 2024 include approximately $9.6 million for accounts payable and accrued expenses.

 

Future Capital Needs

 

We expect our cash on hand will enable us to make investments in our continued development of VAR200 and IC100 on a month-to-month basis as cash is available. We intend to raise additional capital in the future to fund continued development.

 

We expect to raise additional capital by issuing equity, equity-linked securities, or debt in subsequent offerings. If we are unable to raise additional capital on terms favorable to us, we may not have sufficient liquidity to execute on our business strategy. We have various warrants outstanding that can be exercised for our common stock, many of which must be exercised in exchange for cash paid to us by the holders of such warrants. If the market price of our common stock is less than the exercise price of a holder’s warrants, it is unlikely that holders will exercise their warrants. As such, we do not expect to receive significant proceeds in the near term from the exercise of most of our warrants based on the current market price of our common stock and the exercise prices of such warrants.

 

Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provide liquidity while producing a modest return on investment. Accordingly, our cash equivalents will be invested primarily in money market funds.

 

We expect to continue to incur substantial additional operating losses for at least the next several years as we continue to develop our product candidates and seek marketing approval and, subject to obtaining such approval, the eventual commercialization of our product candidates. If we obtain marketing approval for our product candidates, we will incur significant sales, marketing and outsourced manufacturing expenses. In addition, we expect to incur additional expenses to add operational, financial and information systems and personnel, including personnel to support our planned product commercialization efforts. We also expect to incur significant costs to comply with corporate governance, internal controls and similar requirements applicable to us as a public company.

 

Our future use of operating cash and capital requirements will depend on many forward-looking factors, including the following:

 

  ● the initiation, progress, timing, costs and results of clinical trials for our product candidates;
     
  ● the clinical development plans we establish for each product candidate;
     
  ● the number and characteristics of product candidates that we develop or may in-license;

 

19
 

 

  ● the terms of any collaboration agreements we may choose to execute;
     
  ● the outcome, timing and cost of meeting regulatory requirements established by the FDA or other comparable foreign regulatory authorities;
     
  ● the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
     
  ● the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us;
     
  ● the cost and timing of the implementation of commercial scale manufacturing activities; and
     
  ● the cost of establishing, or outsourcing, sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own.

 

To continue to grow our business over the longer term, we plan to commit substantial resources to research and development, clinical trials of our product candidates, and other operations and potential product acquisitions and in-licensing. We have evaluated and expect to continue to evaluate a wide array of strategic transactions as part of our plan to acquire or in-license and develop additional products and product candidates to augment our internal development pipeline. Strategic transaction opportunities that we may pursue could materially affect our liquidity and capital resources and may require us to incur additional indebtedness, seek equity capital or both. In addition, we may pursue development, acquisition or in-licensing of approved or development products in new or existing therapeutic areas or continue the expansion of our existing operations. Accordingly, we expect to continue to opportunistically seek access to additional capital to license or acquire additional products, product candidates or companies to expand our operations, or for general corporate purposes. Strategic transactions may require us to raise additional capital through one or more public or private debt or equity financings or could be structured as a collaboration or partnering arrangement. We have no arrangements, agreements, or understandings in place at the present time to enter into any acquisition, in-licensing or similar strategic business transaction. In addition, we continue to evaluate commercial collaborations and strategic relationships with established pharmaceutical companies, which would provide us with more immediate access to marketing, sales, market access and distribution infrastructure.

 

If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing or additional equity that we raise may contain terms, such as liquidation and other preferences that are not favorable to us or our existing stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to our technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us.

 

JOBS Act Accounting Election

 

ZyVersa is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The JOBS Act permits companies with emerging growth company status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. ZyVersa expects to use this extended transition period to enable it to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date the Company (1) is no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates.

 

20
 

 

In addition, the Company intends to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act.

 

Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

Critical Accounting Estimates

 

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

 

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above.

 

21
 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (who serve as our Principal Executive Officer and Principal Financial and Accounting Officer, respectively), to allow timely decisions regarding required disclosure.

 

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2024. Based upon their evaluation and due to the material weakness cited below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were ineffective.

 

Specifically, management’s conclusion was based on the following material weakness which existed as of December 31, 2023 and March 31, 2024:

 

  ●

Business process controls across the entity’s financial reporting processes were not effectively designed and implemented to properly address the risk of material misstatement, including controls without proper segregation of duties between preparer and reviewer

 

Our management is committed to taking further action and implementing necessary enhancements or improvements, including actions to address the material weakness identified as of December 31, 2023. Management expects to complete the development and implementation of its remediation plan during 2024.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Inherent Limitations of the Effectiveness of Controls

 

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. A control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

 

22
 

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

None.

 

ITEM 1A. RISK FACTORS.

 

As a “smaller reporting company”, we are not required to provide information required by this Item. However, investors are encouraged to review our current risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 25, 2024.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

As previously disclosed, on February 5, 2024, a Nasdaq Hearing Panel (the “Panel”) issued a decision (the “February 2024 Decision”) granting the Company’s request for an exception to the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Capital Market (the “Minimum Bid Price Requirement”), as set forth in Nasdaq Listing Rule 5550(a)(2), until May 3, 2024. The Panel subsequently extended the deadline for the Company to regain compliance to May 13, 2024.

 

On May 13, 2024, the Company received a letter (the “May 13 Letter”) from Nasdaq notifying the Company that it has regained compliance with the Minimum Bid Price Requirement. The Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the May 13 Letter pursuant to Nasdaq Listing Rule 5815(d)(4)(B). If, within that one-year monitoring period, the Listing Qualifications Staff (the “Staff”) of Nasdaq finds the Company again out of compliance with the Minimum Bid Price Requirement, notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and the Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, the Staff will issue a Delist Determination Letter and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened hearings panel if the initial Panel is unavailable.

 

23
 

 

ITEM 6. EXHIBITS.

 

Exhibit   Description
3.1   Certificate of Amendment filed with the Delaware Secretary of State on April 25, 2024 (incorporated by reference to Exhibit 3.1 of the Company’s current report on Form 8-K filed with the SEC on April 25, 2024).
31.1*   Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).
31.2*   Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).
32.1**   Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS**   XBRL Inline Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH*   Inline XBRL Taxonomy Extension Schema Document.
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101).

 

* Filed herewith.
** Furnished herewith.

 

24
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: May 15, 2024 By: /s/ Stephen C, Glover
    Stephen C. Glover
    Chief Executive Officer
    (Principal Executive Officer)
     
Dated: May 15, 2024 By: /s/ Peter Wolfe
    Peter Wolfe
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

25

 

Exhibit 31.1

 

Certification of

Principal Executive Officer

of ZYVERSA THERAPEUTICS, INC.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Stephen C. Glover, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of ZYVERSA THERAPEUTICS, INC.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
   
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and
     
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
   
  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: May 15, 2024 By: /s/ Stephen C. Glover
    Stephen C. Glover
    Chief Executive Officer
    (Principal Executive Officer)

 

 

 

Exhibit 31.2

 

Certification of

Principal Executive Officer

of ZYVERSA THERAPEUTICS, INC.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Peter Wolfe, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of ZYVERSA THERAPEUTICS, INC.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
   
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and
     
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
   
  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: May 15, 2024 By: /s/ Peter Wolfe
    Peter Wolfe
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of ZYVERSA THERAPEUTICS, INC. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

 

Dated: May 15, 2024 By: /s/ Stephen C. Glover
    Stephen C. Glover
    Chief Executive Officer
    (Principal Executive Officer)
     
Dated: May 15, 2024 By: /s/ Peter Wolfe
    Peter Wolfe
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 

v3.24.1.1.u2
Cover - shares
 3 Months Ended
Mar. 31, 2024
May 10, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2024  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 001-41184  
Entity Registrant Name ZYVERSA THERAPEUTICS, INC.  
Entity Central Index Key 0001859007  
Entity Tax Identification Number 86-2685744  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 2200 N. Commerce Parkway  
Entity Address, Address Line Two Suite 208  
Entity Address, City or Town Weston  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 33326  
City Area Code (754)  
Local Phone Number 231-1688  
Title of 12(b) Security Common Stock, $0.0001 par value per share  
Trading Symbol ZVSA  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Elected Not To Use the Extended Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   834,896
v3.24.1.1.u2
Condensed Consolidated Balance Sheets - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Current Assets:    
Cash $ 2,033,576 $ 3,137,674
Prepaid expenses and other current assets 866,476 215,459
Total Current Assets 2,900,052 3,353,133
Equipment, net 4,333 6,933
In-process research and development 18,647,903 18,647,903
Vendor deposit 98,476 98,476
Operating lease right-of-use asset 7,839
Total Assets 21,650,764 22,114,284
Current Liabilities:    
Accounts payable 8,127,746 8,431,583
Accrued expenses and other current liabilities 1,454,970 1,754,533
Operating lease liability 8,656
Total Current Liabilities 9,582,716 10,194,772
Deferred tax liability 844,914 844,914
Total Liabilities 10,427,630 11,039,686
Commitments and contingencies (Note 6)
Stockholders’ Equity:    
Common stock, $0.0001 par value, 250,000,000 shares authorized; 834,903 and 405,212 shares issued as of March 31, 2024 and December 31, 2023, respectively, and 834,896 and 405,206 shares outstanding as of March 31, 2024 and December 31, 2023, respectively 83 40
Additional paid-in-capital 117,276,079 114,300,849
Accumulated deficit (106,045,861) (103,219,124)
Treasury stock, at cost, 7 shares at March 31, 2024 and December 31, 2023, respectively (7,168) (7,168)
Total Stockholders’ Equity 11,223,134 11,074,598
Total Liabilities and Stockholders’ Equity 21,650,764 22,114,284
Series A Preferred Stock [Member]    
Stockholders’ Equity:    
Preferred stock, value
Series B Preferred Stock [Member]    
Stockholders’ Equity:    
Preferred stock, value $ 1 $ 1
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2024
Dec. 31, 2023
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 1,000,000 1,000,000
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 250,000,000 250,000,000
Common stock, shares issued 834,903 405,212
Common stock, shares outstanding 834,896 405,206
Treasury stock shares 7 7
Series A Preferred Stock [Member]    
Preferred stock, shares authorized 8,635 8,635
Preferred stock, shares issued 50 50
Preferred stock, shares outstanding 50 50
Series B Preferred Stock [Member]    
Preferred stock, shares authorized 5,062 5,062
Preferred stock, shares issued 5,062 5,062
Preferred stock, shares outstanding 5,062 5,062
v3.24.1.1.u2
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Operating Expenses:    
Research and development $ 512,937 $ 1,055,943
General and administrative 2,313,699 3,536,136
Total Operating Expenses 2,826,636 4,592,079
Loss From Operations (2,826,636) (4,592,079)
Other (Income) Expense:    
Interest (income) expense 101 (1,078)
Pre-Tax Net Loss (2,826,737) (4,591,001)
Income tax benefit 1,047,051
Net Loss $ (2,826,737) $ (3,543,950)
Net Loss Per Share - Basic $ (4.53) $ (135.88)
Net Loss Per Share - Diluted $ (4.53) $ (135.88)
Weighted Average Number of Common Shares Outstanding - Basic 623,600 26,081
Weighted Average Number of Common Shares Outstanding - Diluted 623,600 26,081
v3.24.1.1.u2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
Preferred Stock [Member]
Series A Preferred Stock [Member]
Preferred Stock [Member]
Series B Preferred Stock [Member]
Common Stock [Member]
Treasury Stock, Common [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance - December 31, 2023 at Dec. 31, 2022 $ 1 $ 1 $ 902   $ 104,583,271 $ (4,921,178) $ 99,662,997
Balance, shares at Dec. 31, 2022 8,635 5,062 25,760        
Issuance of common stock pursuant to vendor agreements $ 13   395,187 395,200
Issuance of common stock pursuant to vendor agreements, shares     371        
Stock-based compensation   287,461 287,461
Net loss   (3,543,950) (3,543,950)
Balance - March 31, 2024 at Mar. 31, 2023 $ 1 $ 1 $ 922   105,562,569 (8,465,128) 97,098,365
Balance, shares at Mar. 31, 2023 8,635 5,062 26,320        
Balance - December 31, 2023 at Dec. 31, 2023 $ 1 $ 40 $ (7,168) 114,300,849 (103,219,124) 11,074,598
Balance, shares at Dec. 31, 2023 50 5,062 405,212 (7)      
Exercise of warrants $ 21 2,672,479 2,672,500
Exercise of warrants, shares     213,800        
Exercise of pre-funded warrants     $ 13 (13)
Exercise of pre-funded warrants, shares     131,481        
Issuance of common stock pursuant to vendor agreements $ 1 79,199 79,200
Issuance of common stock pursuant to vendor agreements, shares     9,000        
Round up share adjustment due to reverse split $ 8 (8)
Stock-based compensation 223,573 223,573
Net loss (2,826,737) (2,826,737)
Balance - March 31, 2024 at Mar. 31, 2024 $ 1 $ 83 $ (7,168) $ 117,276,079 $ (106,045,861) $ 11,223,134
Balance, shares at Mar. 31, 2024 50 5,062 834,903 (7)      
v3.24.1.1.u2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficiency) (Unaudited) - USD ($)
Preferred Stock [Member]
Series A Preferred Stock [Member]
Preferred Stock [Member]
Series B Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance - December 31, 2023 at Dec. 31, 2022 $ 1 $ 1 $ 902 $ 104,583,271 $ (4,921,178) $ 99,662,997
Balance, shares at Dec. 31, 2022 8,635 5,062 25,760      
Reclassification of formerly redeemable common stock $ 7 331,324 331,331
Reclassification of formerly redeemable common stock, shares     188      
Issuance of common stock pursuant to vendor agreements $ 13 395,187 395,200
Issuance of common stock pursuant to vendor agreements, shares     371      
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, 2024 at Mar. 31, 2023 $ 1 $ 1 $ 922 105,562,569 (8,465,128) 97,098,365
Balance, shares at Mar. 31, 2023 8,635 5,062 26,320      
Balance - December 31, 2023 at Dec. 31, 2023 $ 1 $ 40 114,300,849 (103,219,124) 11,074,598
Balance, shares at Dec. 31, 2023 50 5,062 405,212      
Issuance of common stock pursuant to vendor agreements $ 1 79,199 79,200
Issuance of common stock pursuant to vendor agreements, shares     9,000      
Stock-based compensation 223,573 223,573
Net loss (2,826,737) (2,826,737)
Balance - March 31, 2024 at Mar. 31, 2024 $ 1 $ 83 $ 117,276,079 $ (106,045,861) $ 11,223,134
Balance, shares at Mar. 31, 2024 50 5,062 834,903      
v3.24.1.1.u2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash Flows From Operating Activities:    
Net loss $ (2,826,737) $ (3,543,950)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock-based compensation 223,573 287,461
Issuance of common stock pursuant to vendor agreements 79,200 395,200
Depreciation of fixed assets 2,600 2,600
Non-cash rent expense 7,839 22,047
Deferred tax benefit (1,047,051)
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets (651,017) (1,096,204)
Accounts payable (303,837) 355,441
Operating lease liability (8,656) (24,249)
Accrued expenses and other current liabilities (299,563) 59,253
Net Cash Used In Operating Activities (3,776,598) (4,589,452)
Cash Flows From Financing Activities:    
Exercise of warrants 2,672,500
Registration and issuance costs associated with preferred stock issuance (34,674)
Net Cash Provided By (Used In) Financing Activities 2,672,500 (34,674)
Net Decrease in Cash (1,104,098) (4,624,126)
Cash - Beginning of Period 3,137,674 5,902,199
Cash - End of Period 2,033,576 1,278,073
Supplemental Disclosures of Cash Flow Information:    
Reclassification of formerly redeemable common stock $ 331,331
v3.24.1.1.u2
Business Organization, Nature of Operations and Basis of Presentation
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business Organization, Nature of Operations and Basis of Presentation

Note 1 – Business Organization, Nature of Operations and Basis of Presentation

 

Organization and Operations

 

ZyVersa is a clinical stage biopharmaceutical company leveraging proprietary technologies to develop first-in-class drugs for patients with chronic renal or inflammatory diseases with high unmet medical needs. The Company’s mission is to develop drugs that optimize health outcomes and improve patients’ quality of life.

 

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of March 31, 2024 and for the three months ended March 31, 2024 and 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on March 25, 2024.

 

On December 4, 2023, the Company effected a reverse stock split of its common stock at a ratio of 1-for-35 (the “2023 Reverse Split”). Upon the effectiveness of the 2023 Reverse Split, every 35 issued shares of common stock were reclassified and combined into one share of common stock. In addition, the number of shares of common stock issuable upon the exercise of the Company’s equity awards, convertible securities and warrants was proportionally decreased, and the corresponding conversion price or exercise price was proportionally increased. No fractional shares were issued as a result of the 2023 Reverse Split.

 

On April 25, 2024, the Company effected a reverse stock split of its common stock at a ratio of 1-for-10 (the “2024 Reverse Split”). Upon the effectiveness of the 2024 Reverse Split, every 10 issued shares of common stock were reclassified and combined into one share of common stock. In addition, the number of shares of common stock issuable upon the exercise of the Company’s equity awards, convertible securities and warrants was proportionally decreased, and the corresponding conversion price or exercise price was proportionally increased. No fractional shares were issued as a result of the 2024 Reverse Split.

 

Accordingly, all share and per share amounts for all periods presented in these financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the 2023 Reverse Split and the 2024 Reverse Split and adjustment of the conversion price or exercise price of each outstanding equity award, convertible security and warrant as if the transaction had occurred as of the beginning of the earliest period presented. See Note 8 – Subsequent Events – Reverse Stock Split.

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 
v3.24.1.1.u2
Going Concern and Management’s Plans
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern and Management’s Plans

Note 2 - Going Concern and Management’s Plans

 

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

As of March 31, 2024, the Company had cash of approximately $2.0 million and a working capital deficit of approximately $6.7 million. During the three months ended March 31, 2024, the Company incurred a net loss of approximately $2.8 million and used cash in operations of approximately $3.8 million. The Company has an accumulated deficit of approximately $106.0 million as of March 31, 2024.

 

The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. It is expected that its research and development and general and administrative expenses will continue to increase and, as a result, the Company will eventually need to generate significant product revenues to achieve profitability.

 

Consequently, the Company will be required to raise additional funds through equity or debt financing. Management believes that the Company has access to capital resources and continues to evaluate additional financing opportunities; however, and there can be no assurance that it will be successful in securing additional capital or that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. The aforementioned conditions raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance date of these financial statements.

 
v3.24.1.1.u2
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 3 – Summary of Significant Accounting Policies

 

Since the date the Company’s December 31, 2023 financial statements were issued in its 2023 Annual Report on Form 10-K, there have been no material changes to the Company’s significant accounting policies.

 

Use of Estimates

 

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and the amounts disclosed in the related notes to the financial statements. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, fair value calculations for equity securities, derivative liabilities, share based compensation and acquired intangible assets, as well as establishment of valuation allowances for deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that actual results could differ from those estimates.

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Net Loss Per Common Share

 

Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and dilutive common-equivalent shares outstanding during each period.

 

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

 

   2024   2023 
   For the Three Months Ended 
   March 31, 
   2024   2023 
Warrants [1]    689,520    24,653 (2)
Options   10,243    6,086 
Series A Convertible Preferred Stock   72    2,467 (3)
Series B Convertible Preferred Stock   2,067    1,446 (4)
Total potentially dilutive shares   701,902    34,653 

 

[1] As part of the InflamaCORE, LLC license agreement, warrants to purchase 341 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 6 - Commitments and Contingencies - License Agreements for details.
[2] Does not include an additional 9,869 shares if the Successor Series A warrant exercise price resets to its floor price.
[3] Does not include an additional 9,689 shares if the Successor Series A Convertible Preferred Stock conversion price resets to its floor price.
[4] Does not include an additional 620 shares if the Successor Series B Convertible Preferred Stock conversion price resets to its floor price.

 

Segment Reporting

 

The Company operates and manages its business as one reportable and operating segment. All assets and operations are in the U.S. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

 

Reclassifications

 

Certain prior period balances have been reclassified from security deposits to vendor deposits on the condensed consolidated balance sheet in order to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 are effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption to have any material effects on its financial condition, results of operation or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-09.

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 
v3.24.1.1.u2
Accrued Expenses and Other Current Liabilities
 3 Months Ended
Mar. 31, 2024
Payables and Accruals [Abstract]  
Accrued Expenses and Other Current Liabilities

Note 4 – Accrued Expenses and Other Current Liabilities

 

Accrued expenses and other current liabilities consisted of the following as of March 31, 2024 and December 31, 2023:

 

   March 31,   December 31, 
   2024   2023 
         
L&F milestone payment liability  $-   $500,000 
Payroll accrual   668,803    668,803 
Other accrued expenses   51,969    41,969 
Bonus accrual   726,937    536,500 
Registration delay liability [1]   7,261    7,261 
Total accrued expenses and other current liabilities  $1,454,970   $1,754,533 

 

[1]See Note 7 – Stockholders’ Permanent and Temporary Equity for details of the registration delay liability.

 
v3.24.1.1.u2
Income Taxes
 3 Months Ended
Mar. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 5 – Income Taxes

 

Income tax expense and the effective tax rate were as follows:

 

(in thousands)  2024   2023 
   For the Three Months Ended 
   March 31, 
(in thousands)  2024   2023 
         
Income tax benefit  $-   $1,047,051 
Effective tax rate   0.00%   22.81%

 

The tax provisions for the three months ended March 31, 2024 and 2023 were computed using the estimated effective tax rates applicable to the taxable jurisdictions for the full year. The Company’s tax rate is subject to management’s quarterly review and revision, as necessary. The Company’s effective tax rate was 0.00% and 22.81% for the three months ended March 31, 2024 and 2023. The decrease in the quarterly rates is primarily the result of the Company recording a full valuation allowance during the three months ended March 31, 2024 due to the reversal of a significant deferred tax liability that existed as of March 31, 2023.

 
v3.24.1.1.u2
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 6 – Commitments and Contingencies

 

Litigations, Claims and Assessments

 

The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records contingent liabilities resulting from such claims, if any, when a loss is assessed to be probable and the amount of the loss is reasonably estimable.

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

License Agreements

 

L&F Research LLC

 

The Company entered into a License Agreement with L&F Research LLC (“L&F Research”) effective December 15, 2015, as amended (the “L&F License Agreement”) pursuant to which L&F granted the Company an exclusive royalty-bearing, worldwide, sublicensable license under the patent and intellectual property rights and know-how specific to and for the development and commercialization of VAR 200, for the treatment, inhibition or prevention of kidney disease in humans and symptoms thereof, including focal segmental glomerulosclerosis.

 

On February 28, 2023, the Company and L&F executed an Amendment and Restatement Agreement that waived L&F’s right to terminate the L&F License Agreement or any other remedies, for non-payment of the First Milestone Payment, until (a) March 31, 2023 as to $1,000,000 of such milestone payments (“Waiver A”) and (b) January 31, 2024 as to $500,000 milestone payments (“Waiver B”). Waiver A was contingent upon (i) forgiveness by the Company of $351,579 in aggregate principal amount outstanding under a certain convertible note, and (ii) a cash payment by the Company to L&F in the amount of $648,421, on or before March 31, 2023. Waiver B was contingent upon a cash payment by the Company to L&F in the amount of $500,000 on or before the earlier of (x) January 31, 2024, and (y) ten business days from the date that the Company received net proceeds of at least $30,000,000 from the issuance of new equity capital. All other terms of the L&F License remain in effect.

 

On March 29, 2023, the Company paid the $648,421 of cash to L&F, thus meeting the conditions of Waiver A, which also had the effect of canceling the Note Receivable and the Put Option and resulted in a reclassification of 188 shares of common stock and $331,331 classified as temporary equity to permanent equity.

 

On January 30, 2024, the Company paid $500,000 of cash to L&F, thus meeting the conditions of Waiver B.

 

Operating Leases

 

On January 18, 2019, the Predecessor entered into a lease agreement for approximately 3,500 square feet of office space in Weston, Florida for a term of five years. Under the lease agreement, the annual base rent, which excludes the Predecessor’s share of taxes and operating costs, was approximately $89,000 for the first year and increases approximately 3% every year thereafter for a total base rent lease commitment of approximately $497,000. On January 15, 2024, the Company extended the lease for an additional year for a total base rent lease commitment of $112,064. The Company used the short-term lease practical expedient which permits the Company to not capitalize leases with a term equal to or less than 12 months.

 

The Company recognized right-of-use asset amortization of $7,839 in connection with its operating lease for the three months ending March 31, 2024 and the Company recognized rent expense of $22,047 in connection with its operating lease for the three months ending March 31, 2024.

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

A summary of the Company’s right-of-use assets and liabilities is as follows:

 

   2024   2023 
   For the Three Months Ended 
   March 31, 
   2024   2023 
         
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows used in operating activities  $8,656   $24,249 
           
Right-of-use assets obtained in exchange for lease obligations          
Operating leases  $-   $- 
           
Weighted Average Remaining Lease Term          
Operating leases   -    0.84 Years 
           
Weighted Average Discount Rate          
Operating leases   -    6.5%

 
v3.24.1.1.u2
Stockholders’ Permanent and Temporary Equity
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Stockholders’ Permanent and Temporary Equity

Note 7 – Stockholders’ Permanent and Temporary Equity

 

Common Stock

 

During the three months ended March 31, 2024, the Company entered into a marketing agreement with a vendor in which the Company issued an aggregate of 9,000 shares of common stock and cash in exchange for marketing services. The $79,200 fair value of the common stock was established as a prepaid expense and the Company will recognize the expense over the terms of the contracts.

 

Temporary Equity

 

See Note 6 – Commitments and Contingencies for discussion of the movement of temporary equity to permanent equity on March 29, 2023.

 

Stock-Based Compensation

 

For the three months ended March 31, 2024 the Company recorded stock-based compensation expense of $223,573 (of which, $15,447 was included in research and development and $208,126 was included in general and administrative expense) related to options issued to employees and consultants. For the three months ended March 31, 2023 the Company recorded stock-based compensation expense of $287,461 (of which, $49,455 was included in research and development and $238,006 was included in general and administrative expense) related to options issued to employees and consultants. As of March 31, 2024 there was $803,890 of unrecognized stock-based compensation expense, which the Company expects to recognize over a weighted average period of 1.6 years.

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Stock Options

 

The grant date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was determined using the Black Scholes method, with the following assumptions used:

 

   For the Three Months Ended
   March 31,
   2024  2023
Fair value of common stock on date of grant  N/A  $2.11 - $2.23
Risk free interest rate  N/A  3.53% - 4.27%
Expected term (years)  N/A  6.00
Expected volatility  N/A  120% - 122%
Expected dividends  N/A  0.00%

 

A summary of the option activity for the three months ended March 31, 2024 is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Number of   Exercise   Life   Intrinsic 
   Options   Price   In Years   Value 
                 
Outstanding, January 1, 2024   10,243   $2,218.51                 
Granted   -    -           
Exercised   -    -           
Forfeited   -    -           
Outstanding, March 31, 2024   10,243   $2,218.51    6.1   $- 
                     
Exercisable, March 31, 2024   6,150   $3,438.48    5.0   $- 

 

The following table presents information related to stock options as of March 31, 2024:

 

Options Outstanding  Options Exercisable 
           Weighted      
      Outstanding    Average    Exercisable 
 Exercise    Number of    Remaining Life    Number of 
 Price    Options    In Years    Options 
$152.50    4,157    9.1    429 
$738.50    286    8.8    95 
$791.00    38    8.9    12 
$1,760.50    1,910    1.8    1,910 
$3,965.50    37    8.2    37 
$4,053.00    2,095    5.0    2,095 
$5,726.00    1,720    7.2    1,572 
      10,243    5.0    6,150 

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Stock Warrants

 

Between February 26, 2024 and March 6, 2024, investors in the December 2023 Offering exercised warrants to purchase 213,800 shares of common stock at an exercise price of $12.50 per share for total proceeds of $2,672,500.

 

Between January 17 and February 23, 2024, a December 2023 Offering investor exercised pre-funded warrants to purchase 131,500 shares of common stock on a cashless basis to purchase 131,481 shares of common stock at an exercise price of $0.001 per share.

 

A summary of the warrant activity for the three months ended March 31, 2024, is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Number of   Exercise   Life   Intrinsic 
   Warrants   Price   In Years   Value 
                 
Outstanding, January 1, 2024 [1]   903,320   $123.44                    
Issued   -    -           
Exercised [2]   (213,800)   12.50           
Outstanding, March 31, 2024   689,520   $157.92    3.67   $- 
                     
Exercisable, March 31, 2024   689,320   $157.46    3.67   $- 

 

[1]Warrants outstanding exclude 131,500 December 2023 Pre-Funded Warrants outstanding with an exercise price of $0.001.
[2]Warrants exercised exclude 131,500 December 2023 Pre-Funded Warrants exercised with an exercise price of $0.001.

 

The following table presents information related to stock warrants as of March 31, 2024:

 

Warrants Outstanding  Warrants Exercisable 
      Outstanding    Weighted Average    Exercisable  
 Exercise    Number of    Remaining Life    Number of 
 Price    Warrants    In Years    Warrants 
$12.50    586,200    3.58    586,200 
$47.50    20,347    4.95    20,347 
$57.75    19,965    4.27    19,965 
$350.00    27,551    4.07    27,551 
$700.00    13,944    3.70    13,944 
$1,760.50    300    0.27    100 
$2,415.00    3,651    3.70    3,651 
$4,025.00    17,335    3.70    17,335 
$4,053.00    227    0.05    227 
      689,520    3.67    689,320 

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 

Effectiveness Failure

 

In connection with the Business Combination, the Company conducted the Successor Series A Preferred Stock Financing. On or about February 20, 2023, the Company failed to have the SEC declare a registration statement effective (the “Effectiveness Failure”) which covered the Successor Series A Preferred Stock registrable securities within the time period prescribed by the Securities Purchase Agreement (the “SPA”). The SPA entitles the investors to receive registration delay payments (“Registration Delay Payments”) equal to 1.5% of each investor’s purchase price on the date of the Effectiveness Failure and every thirty days thereafter that the Effectiveness Failure persists. Failure to make the Registration Delay Payments on a timely basis result in the accrual of interest at the rate of 2.0% per month. On April 28, 2023, the proceeds from the April 2023 Offering were used to make most of the Registration Delay Payments and redeem substantially all of the Successor Series A Preferred Stock (see Successor Series A Preferred Stock Financing above). As of March 31, 2024, the Company has accrued additional Registration Delay Payments of approximately $7,261 in the aggregate.

 
v3.24.1.1.u2
Subsequent Events
 3 Months Ended
Mar. 31, 2024
Subsequent Events [Abstract]  
Subsequent Events

Note 8 – Subsequent Events

 

2024 Reverse Stock Split

 

On April 25, 2024, the Company effected a reverse stock split of its common stock at a ratio of 1-for-10 (the “2024 Reverse Split”). Upon the effectiveness of the 2024 Reverse Split, every 10 issued shares of common stock were reclassified and combined into one share of common stock. In addition, the number of shares of common stock issuable upon the exercise of the Company’s equity awards, convertible securities and warrants was proportionally decreased, and the corresponding conversion price or exercise price was proportionally increased. No fractional shares were issued as a result of the 2024 Reverse Split. See Note 1 – Business Organization, Nature of Operations and Basis of Presentation for additional details.
v3.24.1.1.u2
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Use of Estimates

Use of Estimates

 

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and the amounts disclosed in the related notes to the financial statements. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, fair value calculations for equity securities, derivative liabilities, share based compensation and acquired intangible assets, as well as establishment of valuation allowances for deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that actual results could differ from those estimates.

 

 

ZYVERSA THERAPEUTICS, INC.

 

Notes to Condensed Consolidated Financial Statements

 
Net Loss Per Common Share

Net Loss Per Common Share

 

Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and dilutive common-equivalent shares outstanding during each period.

 

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

 

   2024   2023 
   For the Three Months Ended 
   March 31, 
   2024   2023 
Warrants [1]    689,520    24,653 (2)
Options   10,243    6,086 
Series A Convertible Preferred Stock   72    2,467 (3)
Series B Convertible Preferred Stock   2,067    1,446 (4)
Total potentially dilutive shares   701,902    34,653 

 

[1] As part of the InflamaCORE, LLC license agreement, warrants to purchase 341 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 6 - Commitments and Contingencies - License Agreements for details.
[2] Does not include an additional 9,869 shares if the Successor Series A warrant exercise price resets to its floor price.
[3] Does not include an additional 9,689 shares if the Successor Series A Convertible Preferred Stock conversion price resets to its floor price.
[4] Does not include an additional 620 shares if the Successor Series B Convertible Preferred Stock conversion price resets to its floor price.

 
Segment Reporting

Segment Reporting

 

The Company operates and manages its business as one reportable and operating segment. All assets and operations are in the U.S. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

 
Reclassifications

Reclassifications

 

Certain prior period balances have been reclassified from security deposits to vendor deposits on the condensed consolidated balance sheet in order to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share.

 
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reporting segment are required to provide both the new disclosures and all of the existing disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 are effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption to have any material effects on its financial condition, results of operation or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-09.
v3.24.1.1.u2
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Schedule of Anti-dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

 

   2024   2023 
   For the Three Months Ended 
   March 31, 
   2024   2023 
Warrants [1]    689,520    24,653 (2)
Options   10,243    6,086 
Series A Convertible Preferred Stock   72    2,467 (3)
Series B Convertible Preferred Stock   2,067    1,446 (4)
Total potentially dilutive shares   701,902    34,653 

 

[1] As part of the InflamaCORE, LLC license agreement, warrants to purchase 341 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 6 - Commitments and Contingencies - License Agreements for details.
[2] Does not include an additional 9,869 shares if the Successor Series A warrant exercise price resets to its floor price.
[3] Does not include an additional 9,689 shares if the Successor Series A Convertible Preferred Stock conversion price resets to its floor price.
[4] Does not include an additional 620 shares if the Successor Series B Convertible Preferred Stock conversion price resets to its floor price.
v3.24.1.1.u2
Accrued Expenses and Other Current Liabilities (Tables)
 3 Months Ended
Mar. 31, 2024
Payables and Accruals [Abstract]  
Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of March 31, 2024 and December 31, 2023:

 

   March 31,   December 31, 
   2024   2023 
         
L&F milestone payment liability  $-   $500,000 
Payroll accrual   668,803    668,803 
Other accrued expenses   51,969    41,969 
Bonus accrual   726,937    536,500 
Registration delay liability [1]   7,261    7,261 
Total accrued expenses and other current liabilities  $1,454,970   $1,754,533 

 

[1]See Note 7 – Stockholders’ Permanent and Temporary Equity for details of the registration delay liability.
v3.24.1.1.u2
Income Taxes (Tables)
 3 Months Ended
Mar. 31, 2024
Income Tax Disclosure [Abstract]  
Schedule of Income Taxes Expense Effective Tax Rate

Income tax expense and the effective tax rate were as follows:

 

(in thousands)  2024   2023 
   For the Three Months Ended 
   March 31, 
(in thousands)  2024   2023 
         
Income tax benefit  $-   $1,047,051 
Effective tax rate   0.00%   22.81%
v3.24.1.1.u2
Commitments and Contingencies (Tables)
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Right of Use Assets and Liabilities

A summary of the Company’s right-of-use assets and liabilities is as follows:

 

   2024   2023 
   For the Three Months Ended 
   March 31, 
   2024   2023 
         
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows used in operating activities  $8,656   $24,249 
           
Right-of-use assets obtained in exchange for lease obligations          
Operating leases  $-   $- 
           
Weighted Average Remaining Lease Term          
Operating leases   -    0.84 Years 
           
Weighted Average Discount Rate          
Operating leases   -    6.5%
v3.24.1.1.u2
Stockholders’ Permanent and Temporary Equity (Tables)
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Schedule of Stock Options Granted

The grant date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was determined using the Black Scholes method, with the following assumptions used:

 

   For the Three Months Ended
   March 31,
   2024  2023
Fair value of common stock on date of grant  N/A  $2.11 - $2.23
Risk free interest rate  N/A  3.53% - 4.27%
Expected term (years)  N/A  6.00
Expected volatility  N/A  120% - 122%
Expected dividends  N/A  0.00%
Schedule of Stock Option Activity

A summary of the option activity for the three months ended March 31, 2024 is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Number of   Exercise   Life   Intrinsic 
   Options   Price   In Years   Value 
                 
Outstanding, January 1, 2024   10,243   $2,218.51                 
Granted   -    -           
Exercised   -    -           
Forfeited   -    -           
Outstanding, March 31, 2024   10,243   $2,218.51    6.1   $- 
                     
Exercisable, March 31, 2024   6,150   $3,438.48    5.0   $- 
Schedule of Information Related to Stock Options

The following table presents information related to stock options as of March 31, 2024:

 

Options Outstanding  Options Exercisable 
           Weighted      
      Outstanding    Average    Exercisable 
 Exercise    Number of    Remaining Life    Number of 
 Price    Options    In Years    Options 
$152.50    4,157    9.1    429 
$738.50    286    8.8    95 
$791.00    38    8.9    12 
$1,760.50    1,910    1.8    1,910 
$3,965.50    37    8.2    37 
$4,053.00    2,095    5.0    2,095 
$5,726.00    1,720    7.2    1,572 
      10,243    5.0    6,150 
Summary of Warrant Activity

A summary of the warrant activity for the three months ended March 31, 2024, is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining   Aggregate 
   Number of   Exercise   Life   Intrinsic 
   Warrants   Price   In Years   Value 
                 
Outstanding, January 1, 2024 [1]   903,320   $123.44                    
Issued   -    -           
Exercised [2]   (213,800)   12.50           
Outstanding, March 31, 2024   689,520   $157.92    3.67   $- 
                     
Exercisable, March 31, 2024   689,320   $157.46    3.67   $- 

 

[1]Warrants outstanding exclude 131,500 December 2023 Pre-Funded Warrants outstanding with an exercise price of $0.001.
[2]Warrants exercised exclude 131,500 December 2023 Pre-Funded Warrants exercised with an exercise price of $0.001.
Schedule of Information Related to Stock Warrants

The following table presents information related to stock warrants as of March 31, 2024:

 

Warrants Outstanding  Warrants Exercisable 
      Outstanding    Weighted Average    Exercisable  
 Exercise    Number of    Remaining Life    Number of 
 Price    Warrants    In Years    Warrants 
$12.50    586,200    3.58    586,200 
$47.50    20,347    4.95    20,347 
$57.75    19,965    4.27    19,965 
$350.00    27,551    4.07    27,551 
$700.00    13,944    3.70    13,944 
$1,760.50    300    0.27    100 
$2,415.00    3,651    3.70    3,651 
$4,025.00    17,335    3.70    17,335 
$4,053.00    227    0.05    227 
      689,520    3.67    689,320 
v3.24.1.1.u2
Business Organization, Nature of Operations and Basis of Presentation (Details Narrative)
Apr. 25, 2024
Dec. 04, 2023
Subsequent Event [Line Items]    
Reverse stock split   the Company effected a reverse stock split of its common stock at a ratio of 1-for-35 (the “2023 Reverse Split”). Upon the effectiveness of the 2023 Reverse Split, every 35 issued shares of common stock were reclassified and combined into one share of common stock.
Subsequent Event [Member]    
Subsequent Event [Line Items]    
Reverse stock split the Company effected a reverse stock split of its common stock at a ratio of 1-for-10 (the “2024 Reverse Split”). Upon the effectiveness of the 2024 Reverse Split, every 10 issued shares of common stock were reclassified and combined into one share of common stock.  
v3.24.1.1.u2
Going Concern and Management’s Plans (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Cash $ 2,033,576   $ 3,137,674
Working capital deficit 6,700,000    
Net loss 2,826,737 $ 3,543,950  
Net cash used In operating activities (3,776,598) $ (4,589,452)  
Accumulated deficit $ 106,045,861   $ 103,219,124
v3.24.1.1.u2
Schedule of Anti-dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive shares 701,902 34,653
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive shares [1] 689,520 24,653 [2]
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive shares 10,243 6,086
Series A Convertible Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive shares 72 2,467 [3]
Series B Convertible Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potentially dilutive shares 2,067 1,446 [4]
[1] As part of the InflamaCORE, LLC license agreement, warrants to purchase 341 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 6 - Commitments and Contingencies - License Agreements for details.
[2] Does not include an additional 9,869 shares if the Successor Series A warrant exercise price resets to its floor price.
[3] Does not include an additional 9,689 shares if the Successor Series A Convertible Preferred Stock conversion price resets to its floor price.
[4] Does not include an additional 620 shares if the Successor Series B Convertible Preferred Stock conversion price resets to its floor price.
v3.24.1.1.u2
Schedule of Anti-dilutive Securities Excluded From Calculation of Diluted Net Loss Per Share (Details) (Parenthetical)
 3 Months Ended
Mar. 31, 2024
shares
Series A Warrant [Member]  
Shares available for conversion 9,869
Series A Convertible Preferred Stock [Member]  
Shares available for conversion 9,689
Series B Convertible Preferred Stock [Member]  
Shares available for conversion 620
v3.24.1.1.u2
Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Payables and Accruals [Abstract]    
L&F milestone payment liability $ 500,000
Payroll accrual 668,803 668,803
Other accrued expenses 51,969 41,969
Bonus accrual 726,937 536,500
Registration delay liability [1] 7,261 7,261
Total accrued expenses and other current liabilities $ 1,454,970 $ 1,754,533
[1] See Note 7 – Stockholders’ Permanent and Temporary Equity for details of the registration delay liability.
v3.24.1.1.u2
Schedule of Income Taxes Expense Effective Tax Rate (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Tax Disclosure [Abstract]    
Income tax benefit $ 1,047,051
Effective tax rate 0.00% 22.81%
v3.24.1.1.u2
Income Taxes (Details Narrative)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Tax Disclosure [Abstract]    
Effective tax rate 0.00% 22.81%
v3.24.1.1.u2
Schedule of Right of Use Assets and Liabilities (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]    
Operating cash flows used in operating activities $ 8,656 $ 24,249
Operating leases
Weighted average remaining lease term   10 months 2 days
Weighted average discount rate   6.50%
v3.24.1.1.u2
Commitments and Contingencies (Details Narrative)
 3 Months Ended
Jan. 30, 2024
USD ($)
Jan. 15, 2024
USD ($)
Mar. 29, 2023
USD ($)
shares
Feb. 28, 2023
USD ($)
Jan. 18, 2019
USD ($)
ft²
Mar. 31, 2024
USD ($)
Cash payment           $ 7,261
Operating lease rent expense           22,047
Lessee, Lease, Description [Line Items]            
Operating lease asset amortization           $ 7,839
Lease Commitment [Member]            
Operating lease rent expense   $ 112,064        
Predecessor [Member]            
Number of operating lease square feet | ft²         3,500  
Lease cost         $ 89,000  
Operating lease rent expense         $ 497,000  
License Agreement [Member] | L&F Research LLC [Member]            
Milestone payment description       the Company and L&F executed an Amendment and Restatement Agreement that waived L&F’s right to terminate the L&F License Agreement or any other remedies, for non-payment of the First Milestone Payment, until (a) March 31, 2023 as to $1,000,000 of such milestone payments (“Waiver A”) and (b) January 31, 2024 as to $500,000 milestone payments (“Waiver B”).    
License Agreement [Member] | L&F Research LLC [Member] | Waiver A [Member]            
Debt forgiveness       $ 351,579    
Cash payment     $ 648,421 648,421    
Reclassification shares of common stock | shares     188      
Reclassification shares of common stock value classified as temporary to permanent equity     $ 331,331      
License Agreement [Member] | L&F Research LLC [Member] | Waiver B [Member]            
Cash payment $ 500,000     $ 500,000    
Maturity date       Jan. 31, 2024    
Net proceeds from issuance of equity capital       $ 30,000,000    
v3.24.1.1.u2
Schedule of Stock Options Granted (Details)
 3 Months Ended
Mar. 31, 2023
$ / shares
Expected term (years) 6 years
Expected dividends 0.00%
Minimum [Member]  
Fair value of common stock on date of grant $ 2.11
Risk free interest rate 3.53%
Expected volatility 120.00%
Maximum [Member]  
Fair value of common stock on date of grant $ 2.23
Risk free interest rate 4.27%
Expected volatility 122.00%
v3.24.1.1.u2
Schedule of Stock Option Activity (Details)
 3 Months Ended
Mar. 31, 2024
USD ($)
$ / shares
shares
Equity [Abstract]  
Number of options, outstanding beginning balance | shares 10,243
Weighted average exercise price, beginning balance | $ / shares $ 2,218.51
Number of options, granted | shares
Weighted average exercise price, granted | $ / shares
Number of options, exercised | shares
Weighted average exercise price, exercised | $ / shares
Number of options, forfeited | shares
Weighted average exercise price, forfeited | $ / shares
Number of options, outstanding ending balance | shares 10,243
Weighted average exercise price, ending balance | $ / shares $ 2,218.51
Weighted average remaining life in years, outstanding 6 years 1 month 6 days
Aggregate intrinsic value, ending balance | $
Number of options, exercisable ending balance | shares 6,150
Weighted average exercise price, Exercisable | $ / shares $ 3,438.48
Weighted average remaining life in years, exercisable 5 years
Aggregate intrinsic value, exercisable | $
v3.24.1.1.u2
Schedule of Information Related to Stock Options (Details)
 3 Months Ended
Mar. 31, 2024
$ / shares
shares
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, Number of options 10,243
Options exercisable, weighted average remaining life in life 5 years
Options exercisable, Number of options 6,150
Exercise Price One [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, exercise price | $ / shares $ 152.50
Options outstanding, Number of options 4,157
Options exercisable, weighted average remaining life in life 9 years 1 month 6 days
Options exercisable, Number of options 429
Exercise Price Two [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, exercise price | $ / shares $ 738.50
Options outstanding, Number of options 286
Options exercisable, weighted average remaining life in life 8 years 9 months 18 days
Options exercisable, Number of options 95
Exercise Price Three [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, exercise price | $ / shares $ 791.00
Options outstanding, Number of options 38
Options exercisable, weighted average remaining life in life 8 years 10 months 24 days
Options exercisable, Number of options 12
Exercise Price Four [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, exercise price | $ / shares $ 1,760.50
Options outstanding, Number of options 1,910
Options exercisable, weighted average remaining life in life 1 year 9 months 18 days
Options exercisable, Number of options 1,910
Exercise Price Five [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, exercise price | $ / shares $ 3,965.50
Options outstanding, Number of options 37
Options exercisable, weighted average remaining life in life 8 years 2 months 12 days
Options exercisable, Number of options 37
Exercise Price Six [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, exercise price | $ / shares $ 4,053.00
Options outstanding, Number of options 2,095
Options exercisable, weighted average remaining life in life 5 years
Options exercisable, Number of options 2,095
Exercise Price Seven [Member]  
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]  
Options outstanding, exercise price | $ / shares $ 5,726.00
Options outstanding, Number of options 1,720
Options exercisable, weighted average remaining life in life 7 years 2 months 12 days
Options exercisable, Number of options 1,572
v3.24.1.1.u2
Summary of Warrant Activity (Details)
 3 Months Ended
Mar. 31, 2024
USD ($)
$ / shares
shares
Equity [Abstract]  
Number of warrants, outstanding beginning balance 903,320 [1]
Weighted average exercise price, beginning balance | $ / shares $ 123.44 [1]
Number of warrants, granted
Number of warrants, exercised (213,800) [2]
Weighted average exercise price, exercised | $ / shares $ 12.50 [2]
Number of warrants, outstanding ending balance 689,520
Weighted average exercise price, ending balance | $ / shares $ 157.92
Weighted average remaining life in years, outstanding 3 years 8 months 1 day
Aggregate intrinsic value, ending balance | $
Number of warrants, exercisable ending balance 689,320
Weighted average exercise price, Exercisable | $ / shares $ 157.46
Weighted average remaining life in years, exercisable 3 years 8 months 1 day
Aggregate intrinsic value, exercisable | $
[1] Warrants outstanding exclude 131,500 December 2023 Pre-Funded Warrants outstanding with an exercise price of $0.001.
[2] Warrants exercised exclude 131,500 December 2023 Pre-Funded Warrants exercised with an exercise price of $0.001.
v3.24.1.1.u2
Summary of Warrant Activity (Details) (Parenthetical)
 3 Months Ended
Mar. 31, 2024
$ / shares
shares
Class of Warrant or Right [Line Items]  
Number of warrants, outstanding 10,243
Number of warrants, exercised 213,800 [1]
December 2023 Pre-Funded Warrants [Member]  
Class of Warrant or Right [Line Items]  
Number of warrants, outstanding 131,500
Warrants exercise price | $ / shares $ 0.001
Number of warrants, exercised 131,500
Exercise price | $ / shares $ 0.001
[1] Warrants exercised exclude 131,500 December 2023 Pre-Funded Warrants exercised with an exercise price of $0.001.
v3.24.1.1.u2
Schedule of Information Related to Stock Warrants (Details) - $ / shares
 3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
 [1]
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Number of warrants, outstanding 689,520 903,320
Number of warrants, exercisable 689,320  
Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Number of warrants, outstanding 689,520  
Warrant exercisable, weighted average remaining life in life 3 years 8 months 1 day  
Number of warrants, exercisable 689,320  
Exercise Price One [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 12.50  
Number of warrants, outstanding 586,200  
Warrant exercisable, weighted average remaining life in life 3 years 6 months 29 days  
Number of warrants, exercisable 586,200  
Exercise Price Two [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 47.50  
Number of warrants, outstanding 20,347  
Warrant exercisable, weighted average remaining life in life 4 years 11 months 12 days  
Number of warrants, exercisable 20,347  
Exercise Price Three [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 57.75  
Number of warrants, outstanding 19,965  
Warrant exercisable, weighted average remaining life in life 4 years 3 months 7 days  
Number of warrants, exercisable 19,965  
Exercise Price Four [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 350.00  
Number of warrants, outstanding 27,551  
Warrant exercisable, weighted average remaining life in life 4 years 25 days  
Number of warrants, exercisable 27,551  
Exercise Price Five [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 700.00  
Number of warrants, outstanding 13,944  
Warrant exercisable, weighted average remaining life in life 3 years 8 months 12 days  
Number of warrants, exercisable 13,944  
Exercise Price Six [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 1,760.50  
Number of warrants, outstanding 300  
Warrant exercisable, weighted average remaining life in life 3 months 7 days  
Number of warrants, exercisable 100  
Exercise Price Seven [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 2,415.00  
Number of warrants, outstanding 3,651  
Warrant exercisable, weighted average remaining life in life 3 years 8 months 12 days  
Number of warrants, exercisable 3,651  
Exercise Price Eight [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 4,025.00  
Number of warrants, outstanding 17,335  
Warrant exercisable, weighted average remaining life in life 3 years 8 months 12 days  
Number of warrants, exercisable 17,335  
Exercise Price Nine [Member] | Warrant [Member]    
WarrantsOutstandingAndExercisableLineItems [Line Items]    
Weighted average exercise price, outstanding $ 4,053.00  
Number of warrants, outstanding 227  
Warrant exercisable, weighted average remaining life in life 18 days  
Number of warrants, exercisable 227  
[1] Warrants outstanding exclude 131,500 December 2023 Pre-Funded Warrants outstanding with an exercise price of $0.001.
v3.24.1.1.u2
Stockholders’ Permanent and Temporary Equity (Details Narrative) - USD ($)
 3 Months Ended
Mar. 06, 2024
Mar. 31, 2024
Mar. 31, 2023
Feb. 23, 2024
Feb. 20, 2023
Subsidiary, Sale of Stock [Line Items]          
Stock based compensation expense   $ 223,573 $ 287,461    
Unrecognized stock-based compensation expense   $ 803,890      
weighted average period   1 year 7 months 6 days      
Gross proceeds pre-funded warrants   $ 2,672,500    
Percentage of registration delay payments         1.50%
Debt Instrument, Interest Rate, Stated Percentage         2.00%
Delay payment   7,261      
Pre Funded Warrants [Member] | Investor [Member]          
Subsidiary, Sale of Stock [Line Items]          
Warrants to purchase common shares       131,500  
Warrant exercise price       $ 0.001  
Warrants exercised on cashless basis       131,481  
December 2023 Offering [Member]          
Subsidiary, Sale of Stock [Line Items]          
Warrants to purchase common shares 213,800        
Warrant exercise price $ 12.50        
Gross proceeds pre-funded warrants $ 2,672,500        
Research and Development Expense [Member]          
Subsidiary, Sale of Stock [Line Items]          
Stock based compensation expense   15,447 49,455    
General and Administrative Expense [Member]          
Subsidiary, Sale of Stock [Line Items]          
Stock based compensation expense   $ 208,126 $ 238,006    
Marketing Agreements [Member]          
Subsidiary, Sale of Stock [Line Items]          
Shares issued for services   9,000      
Prepaid expense fair value of shares   $ 79,200      
v3.24.1.1.u2
Subsequent Events (Details Narrative)
Apr. 25, 2024
Dec. 04, 2023
Subsequent Event [Line Items]    
Reverse stock split   the Company effected a reverse stock split of its common stock at a ratio of 1-for-35 (the “2023 Reverse Split”). Upon the effectiveness of the 2023 Reverse Split, every 35 issued shares of common stock were reclassified and combined into one share of common stock.
Subsequent Event [Member]    
Subsequent Event [Line Items]    
Reverse stock split the Company effected a reverse stock split of its common stock at a ratio of 1-for-10 (the “2024 Reverse Split”). Upon the effectiveness of the 2024 Reverse Split, every 10 issued shares of common stock were reclassified and combined into one share of common stock.  
ZyVersa Therapeutics (NASDAQ:ZVSA)
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