[10-Q] ZyVersa Therapeutics, Inc. Quarterly Earnings Report
ZyVersa Therapeutics, Inc. reported a sharply higher Q3 2025 loss driven by a major write-down of R&D assets and continued cash burn. Net loss for the quarter was $19.8 million versus $2.4 million a year earlier, and $24.3 million for the nine months versus $8.0 million, largely due to an $18.6 million impairment of in-process research and development after a sustained decline in market capitalization.
Operating expenses rose to $20.8 million in Q3 2025 from $2.3 million, while research and development and general and administrative costs both declined year over year. Cash was $0.5 million at September 30, 2025, with a working capital deficit of $11.8 million and an accumulated deficit of $136.9 million. The company used $4.7 million of cash in operations over nine months and raised $3.7 million via a March 2025 private warrant placement and a July 2025 warrant inducement.
Management states that these conditions raise substantial doubt about ZyVersa’s ability to continue as a going concern. In July 2025, Nasdaq denied continued listing, and the common stock was delisted on October 6, 2025; trading moved to the OTCQB under the symbol ZVSA.
- None.
- $18.6 million impairment of in-process R&D in Q3 2025, eliminating a major intangible asset and driving a steep increase in reported loss.
- Going-concern uncertainty: cash of about $0.5 million and a working capital deficit of $11.8 million as of September 30, 2025 lead management to disclose substantial doubt about continuing operations.
- Significant net loss increase: nine-month 2025 net loss rose to $24.3 million from $8.0 million a year earlier despite reductions in core R&D and G&A costs.
- Nasdaq delisting: Nasdaq denied continued listing, and the stock was delisted on October 6, 2025, with trading moving to OTCQB under the symbol ZVSA, which may reduce liquidity and capital markets access.
Insights
Large impairment, minimal cash, delisting, and going-concern doubt materially weaken ZyVersa’s equity profile.
ZyVersa recorded a Q3 2025 net loss of
Liquidity is strained: cash was only
Management explicitly states that these factors raise substantial doubt about the company’s ability to continue as a going concern for at least one year from issuance of the financial statements. The
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| * | The Company’s common stock is quoted on the OTCQB® Venture Market under the symbol “ZVSA.” |
As
of November 17, 2025, the number of shares outstanding of the registrant’s common stock, $
ZYVERSA THERAPEUTICS, INC.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| PART I - FINANCIAL INFORMATION | 1 |
| Item 1. Financial Statements. | 1 |
| Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 | 1 |
| Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 | 2 |
| Unaudited Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity for the Three and Nine Months Ended September 30, 2025 and 2024 | 3 |
| Unaudited Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2025 and 2024 | 5 |
| Notes to Unaudited Condensed Consolidated Financial Statements | 6 |
| ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 13 |
| ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. | 19 |
| ITEM 4. Controls and Procedures. | 19 |
| PART II - OTHER INFORMATION | 20 |
| ITEM 1. Legal Proceedings. | 20 |
| ITEM 1A. Risk Factors. | 20 |
| ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds. | 20 |
| ITEM 3. Defaults Upon Senior Securities. | 20 |
| ITEM 4. Mine Safety Disclosures. | 20 |
| ITEM 5. Other Information. | 20 |
| ITEM 6. Exhibits. | 21 |
| SIGNATURES | 22 |
ZYVERSA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Vendor deposits | - | |||||||
| Total Current Assets | ||||||||
| In-process research and development | - | |||||||
| Vendor deposits | - | |||||||
| Deferred offering costs | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ (Deficit) Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Deferred tax liability | - | |||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 7) | - | - | ||||||
| Stockholders’ (Deficit) Equity: | ||||||||
| Preferred stock, $ | ||||||||
| Series A preferred stock, | - | - | ||||||
| Series B preferred stock, | ||||||||
| Preferred stock | ||||||||
| Common stock, $ | ||||||||
| Common stock | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock, at cost, | ( | ) | ( | ) | ||||
| Total Stockholders’ (Deficit) Equity | ( | ) | ||||||
| Total Liabilities and Stockholders’ (Deficit) Equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 1 |
ZYVERSA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Impairment of in-process research and development | - | - | ||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Loss From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (Income) Expense: | ||||||||||||||||
| Interest expense | ||||||||||||||||
| Change in fair value of equity payable | ( | ) | - | ( | ) | - | ||||||||||
| Pre-Tax Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit (provision) | - | ( | ) | |||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss Per Share | ||||||||||||||||
| - Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted Average Number of Common Shares Outstanding | ||||||||||||||||
| - Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 2 |
ZYVERSA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
For The Three and Nine Months Ended September 30, 2025 and 2024
(Unaudited)
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||||||||
| For the Three and Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Series A | Series B | Additional | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common Stock | Treasury Stock | Paid-In | Accumulated | (Deficit) | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | | |||||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to vendor agreements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Private placement of warrants [1] | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Warrant modification | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance - March 31, 2025 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to vendor agreements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Exercise of pre-funded warrants | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Private placement of warrants additional offering costs | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance - June 30, 2025 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to vendor agreements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Warrant inducement offer - exercise proceeds [2] | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Warrant modification | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance - September 30, 2025 | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||
| 3 |
| For the Three and Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Series A | Series B | Additional | Total | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Preferred Stock | Common Stock | Treasury Stock | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||||||||||||||
| Balance - December 31, 2023 | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||
| Exercise of warrants | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Exercise of pre-funded warrants | - | - | - | - | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to vendor agreements | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Round up share adjustment due to reverse split | - | - | - | - | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance - March 31, 2024 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance - June 30, 2024 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Warrant inducement offer - exercise proceeds [3] | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Warrant modification | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance - September 30, 2024 | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||
| Balance | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||
| [1] | |
| [2] | |
| [3] |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
ZYVERSA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2025 | 2024 | |||||||
| For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Impairment of in-process research and development | - | |||||||
| Stock-based compensation | ||||||||
| Issuance of common stock pursuant to vendor agreements | ||||||||
| Depreciation of fixed assets | - | |||||||
| Non-cash rent expense | - | |||||||
| Deferred tax (benefit) provision | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Accounts payable | ||||||||
| Vendor deposits | ( | ) | ||||||
| Operating lease liability | - | ( | ) | |||||
| Accrued expenses and other current liabilities | ||||||||
| Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Exercise of warrants | - | |||||||
| Private placement of warrants | - | |||||||
| Warrant inducement offer - exercise proceeds | ||||||||
| Exercise of pre-funded warrants | - | |||||||
| Deferred offering costs | ( | ) | ||||||
| Registration and issuance costs associated with warrant issuance | ( | ) | ( | ) | ||||
| Net Cash Provided By Financing Activities | ||||||||
| Net Decrease in Cash | ( | ) | ( | ) | ||||
| Cash - Beginning of Period | ||||||||
| Cash - End of Period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | - | $ | - | ||||
| Income taxes | $ | - | $ | - | ||||
| Non-cash investing and financing activities: | ||||||||
| Warrant modification - incremental value | $ | $ | ||||||
| Accounts payable and accrued expenses for offering costs | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
ZYVERSA THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
Note 1 – Business Organization, Nature of Operations and Basis of Presentation
Organization and Operations
ZyVersa Therapeutics, Inc. (“ZyVersa” and the “Company”) 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 September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024. The results of operations for the nine months ended September 30, 2025 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, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025.
On
April 25, 2024,
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 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.
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 September 30, 2025, the Company had cash of approximately $
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, 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, 2024 financial statements were issued in its 2024 Annual Report on Form 10-K, there have been no material changes to the Company’s significant accounting policies.
| 6 |
ZYVERSA THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
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, 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.
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:
Schedule of Anti-dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share
| 2025 | 2024 | |||||||
| As of September 30, | ||||||||
| 2025 | 2024 | |||||||
| Warrants [1] | ||||||||
| Options | ||||||||
| Series A Convertible Preferred Stock | ||||||||
| Series B Convertible Preferred Stock | ||||||||
| Total potentially dilutive shares | ||||||||
| [1] |
Segment Reporting
The
Company has
Vendor Concentration
As
of September 30, 2025 and December 31, 2024, accounts payable to one vendor accounted for
Recently Issued Accounting Pronouncements
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 fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the requirement to disclose additional specified categories in the rate reconciliation in both percentage and dollar amounts. The standard, which is effective for the Company’s 2025 annual period, will be applied.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220 – 04). This update requires an entity to disclose more detailed information regarding expenses for the entity. The amendments require that at each interim and the annual reporting period, the entity must disclose amounts related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. Including the amounts, the entity is required to disclose and qualitative description of the amounts remaining in relevant expense captions, and to disclose the total amount of selling expenses and the definition of selling expenses. The amendments in this update should be applied prospectively to financial statements issued for reporting periods, and retrospectively to any prior periods presented in the financials. Although early adoption is permitted, the new guidance becomes effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. 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.
| 7 |
ZYVERSA THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
Note 4 – In-Process Research and Development
In December of 2022, in connection with a business combination, the Company recorded an indefinite-lived intangible asset related to in-process research and development (“IPR&D”). ASC 350 requires that intangible assets with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. As of September 30, 2025, management determined that it was more likely than not that the Company’s single reporting unit’s fair value was below its carrying amount, due to a significant and sustained decline in the Company’s market capitalization through September 30, 2025, therefore an impairment test was performed on the Company’s IPR&D intangible asset.
Current limitations on accessing significant capital in what is currently a risk averse environment for biotech (as evidenced by decreased investor appetite for risk, market volatility, regulatory uncertainty from a changing Food and Drug Administration and a challenging economic environment), has resulted in a sustained decline in the Company’s market capitalization, and the Company’s ability to further finance the development of its drug candidates to the next milestone could be adversely impacted. Accordingly, the Company determined that the carrying value of its IPR&D intangible asset may not be recoverable and it was fully impaired. Therefore, the Company recorded an $18.6 million impairment charge, reflected within operating expenses in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025.
Note 5 – Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following as of September 30, 2025 and December 31, 2024:
Schedule of Accrued Expenses and Other Current Liabilities
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Payroll accrual | $ | $ | ||||||
| Bonus accrual | ||||||||
| Other accrued expenses | ||||||||
| Accrued issuable equity | - | |||||||
| Registration delay liability | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
Note 6 – Income Taxes
The
Company’s effective tax rate was
Tax Law Change
On
July 4th, 2025, the President signed into law significant federal tax legislation, H.R.1 (the “Tax Reform Act of 2025”).
The legislation includes numerous changes to U.S. corporate income tax law, including but not limited to: permanent
The Company has evaluating the impact of the Tax Reform Act of 2025 on its condensed consolidated financial statements. There was no material impact given the Company’s tax loss profile and valuation allowance position.
Note 7 – 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.
Disputed Vendor Invoices
On
June 30, 2024 and July 1, 2024, the Company received two invoices from a vendor in the amounts of $
Operating Leases
On
January 18, 2019, the Company entered into a lease agreement for approximately
The
Company recognized rent expense in connection with its operating lease for the three months ended September 30, 2025 and 2024 of $
| 8 |
ZYVERSA THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
The
Company recognized rent expense in connection with its operating lease for the nine months ended September 30, 2025 and 2024 of $
Note 8 – Stockholders’ (Deficit) Equity
Common Stock
On
February 2, 2025, the Company entered into a marketing agreement with a vendor in which the Company agreed to issue
On
March 20, 2025, the Company entered into a marketing agreement with a vendor in which the Company agreed to issue
On
May 1, 2025, the Company entered into a marketing agreement with a vendor in which the Company agreed to issue
On
August 1, 2025, the Company entered into a marketing agreement with a vendor in which the Company agreed to issue
Equity Purchase Agreement
On
June 24, 2025, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Williamsburg Venture
Holdings, LLC (the “Purchaser”), whereby the Company has the right, but not the obligation, to sell to the Purchaser, and
the Purchaser is obligated to purchase, up to an aggregate of $
Stock-Based Compensation
For
the three months ended September 30, 2025 the Company recorded stock-based compensation expense of $
For
the nine months ended September 30, 2025 the Company recorded stock-based compensation expense of $
Stock Options
On
July 11, 2025, the Company granted ten-year stock options to purchase
| 9 |
ZYVERSA THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
The grant date fair value of stock options granted during the three and nine months September 30, 2025 and 2024 was determined using the Black Scholes method, with the following assumptions used:
Schedule of Stock Options Granted
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Fair value of common stock on date of grant | $ | N/A | $ | N/A | ||||||||||||
| Risk free interest rate | % | N/A | % | N/A | ||||||||||||
| Expected term (years) | N/A | $ | N/A | |||||||||||||
| Expected volatility | % | N/A | % | N/A | ||||||||||||
| Expected dividends | % | N/A | % | N/A | ||||||||||||
A summary of the option activity for the nine months ended September 30, 2025 is presented below:
Schedule of Stock Options Activity
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Life | Intrinsic | |||||||||||||
| Options | Price | In Years | Value | |||||||||||||
| Outstanding, January 1, 2025 | $ | |||||||||||||||
| Granted | ||||||||||||||||
| Exercised | - | - | ||||||||||||||
| Expired | ( | ) | ||||||||||||||
| Outstanding, September 30, 2025 | $ | $ | - | |||||||||||||
| Exercisable, September 30, 2025 | $ | $ | - | |||||||||||||
The following table presents information related to stock options as of September 30, 2025:
Schedule of Information Related to Stock Options
| Options Outstanding | Options Exercisable | |||||||||||||
| Weighted | ||||||||||||||
| Outstanding | Average | Exercisable | ||||||||||||
| Exercise | Number of | Remaining Life | Number of | |||||||||||
| Price | Options | In Years | Options | |||||||||||
| $ | - | |||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
Stock Warrants
On
March 7, 2025, the Company closed on a private placement (the “Private Placement”) with an institutional investor, pursuant
to which the Company sold pre-funded warrants (the “March 2025 Pre-Funded Warrants”) to purchase
| 10 |
ZYVERSA THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
Warrant Inducement Offer
On
July 8, 2025, the Company entered into a warrant exercise inducement offer letter agreement (the “Inducement Letter”) with
a holder (the “Holder”) of (i) outstanding Series A-2 common stock purchase warrants, as amended (the “Series A-2 Warrants”),
exercisable for up to an aggregate of
The
Holder agreed to exercise the Existing Warrants for cash at a reduced exercise price of $
The modification date fair value of warrants modified during the three and nine months ended September 30, 2025 and 2024 was determined using the Black Scholes method, with the following assumptions used:
Schedule of Issuance Date Fair Value of Stock Warrants
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Fair value of common stock on date of modification | $ | $ | $ | $ | ||||||||||||
| Risk free interest rate | % | % | % | % | ||||||||||||
| Expected term (years) | ||||||||||||||||
| Expected volatility | % | % | % | % | ||||||||||||
| Expected dividends | n/a | n/a | n/a | n/a | ||||||||||||
| 11 |
ZYVERSA THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
A summary of the warrant activity for the nine months ended September 30, 2025, is presented below:
Schedule of Warrant Activity
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Life | Intrinsic | |||||||||||||
| Warrants | Price | In Years | Value | |||||||||||||
| Outstanding, January 1, 2025 | $ | |||||||||||||||
| Issued[1] | ||||||||||||||||
| Repriced - Old [2] | ( | ) | ||||||||||||||
| Repriced - New [2] | ||||||||||||||||
| Repriced - Old [3] | ( | ) | ||||||||||||||
| Repriced - New [3] | ||||||||||||||||
| Repriced - Old [4] | ( | ) | ||||||||||||||
| Repriced - New [4] | ||||||||||||||||
| Forfeited | ( | ) | ||||||||||||||
| Exercised[1] | ( | ) | ||||||||||||||
| Outstanding, September 30, 2025 | $ | $ | - | |||||||||||||
| Exercisable, September 30, 2025 | $ | $ | - | |||||||||||||
| [1] | |
| [2] | |
| [3] | |
| [4] |
The following table presents information related to stock warrants as of September 30, 2025:
Schedule of Information Related to Stock Warrants
| Warrants Outstanding | Warrants Exercisable | |||||||||||||
| Outstanding | Weighted Average | Exercisable | ||||||||||||
| Exercise | Number of | Remaining Life | Number of | |||||||||||
| Price | Warrants | In Years | Warrants | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | - | - | ||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| 12 |
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 September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 should be read together 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. Additionally this discussion and analysis should be read together with the Company’s audited financial statements and related disclosures as of December 31, 2024 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 27, 2025. 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 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. The lead indication is focal segmental glomerulosclerosis (FSGS). Our anti-inflammatory drug candidate, which we refer to as Inflammasome ASC Inhibitor IC 100, is a humanized monoclonal IgG4 antibody targeting apoptosis-associated speck-like protein containing a caspase recruitment domain (“ASC”) in development to treat multiple inflammatory diseases. The lead indication is obesity with cardiometabolic comorbidities.
Financial Operations Overview
We have not generated any revenue to date and have incurred significant operating losses. Our net losses were $24.3 million for the period from January 1, 2025 through September 30, 2025, compared to $8.0 million for the period from January 1, 2024 through September 30, 2024. As of September 30, 2025, we had an accumulated deficit of approximately $136.9 million and cash of $0.5 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.
Recent Developments
On July 15, 2025, we received a determination letter (the “Letter”) from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Nasdaq Hearings Panel (the “Panel”) has determined to deny our request to continue our listing on The Nasdaq Capital Market. Our common stock was delisted on October 6, 2025. As a result of the delisting, there may be a very limited market in which our shares are traded, our stockholders may find it difficult to sell their shares of our common stock, and the trading price of our securities, if any, may be adversely affected. We applied for trading on the OTCQB® Venture Market (“OTCQB”) maintained by the OTC Markets Group Inc. to mitigate the risk of delisting from Nasdaq. Our application was approved on July 25, 2025, and our common stock began trading on OTCQB on July 28, 2025, under the symbol “ZVSA.”
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.
| 13 |
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 preclinical and 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 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.
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 resulting from 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 number and types of assessments; | |
| ● | 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 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 resources, information technology, office, and travel expenses.
| 14 |
We expect that our general and administrative expenses will increase in the future as we increase our 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.
Results of Operations
As we continue to explore commercial opportunities and partners in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials, services and other components associated with the development of our product candidates and manufacturing capabilities. We continue to monitor these developments closely to maintain operational efficiency and help mitigate potential future impacts.
Comparison of the three months ended September 30, 2025 and the three months ended September 30, 2024
The following table summarizes our results of operations for the three months ended September 30, 2025 and for the three months ended September 30, 2024.
| For the Three Months Ended | Favorable | |||||||||||||||
| September 30, | (Unfavorable) | |||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | $ | 365 | $ | 436 | $ | 71 | 16.3 | % | ||||||||
| General and administrative | 1,739 | 1,833 | 94 | 5.1 | % | |||||||||||
| Impairment of in-process research and development | 18,648 | - | (18,648 | ) | (100.0 | )% | ||||||||||
| Total Operating Expenses | 20,752 | 2,269 | (18,483 | ) | (814.6 | )% | ||||||||||
| Loss from Operations | (20,752 | ) | (2,269 | ) | (18,483 | ) | (814.6 | )% | ||||||||
| Other (Income) Expense, Net | (95 | ) | 132 | 227 | 172.0 | % | ||||||||||
| Pre-tax net loss | (20,657 | ) | (2,401 | ) | (18,256 | ) | (760.3 | )% | ||||||||
| Income tax benefit | 851 | - | 851 | 100.0 | % | |||||||||||
| Net loss | $ | (19,806 | ) | $ | (2,401 | ) | $ | (17,405 | ) | (724.9 | )% | |||||
Research and development expenses
Research and development expenses were $0.4 million for the three months ended September 30, 2025, a decrease of $0.1 million or 16.3% from the three months ended September 30, 2024. The decrease is attributable to lower research and development consultant costs of $75 thousand due to the use of fewer consultants in the current year.
General and administrative expenses
General and administrative expenses were $1.7 million for the three months ended September 30, 2025, a decrease of $0.1 million or 5.1% from the three months ended September 30, 2024. The decrease is primarily attributable to a decrease of $0.1 million due to lower director and officer insurance premiums, a $0.1 million decrease in professional fees due to lower accounting and legal expense, and a decrease of $0.1 million in stock-based compensation expense due to options becoming fully amortized in 2025. These decreases were slightly offset by an approximately $0.3 million increase in commitment fees related to the Equity Purchase Agreement entered into on June 24, 2025.
Impairment of in-process research and development
Impairment of in-process research and development was $18.6 million for the three months ended September 30, 2025 compared to $0.0 for the three months ended September 30, 2024. The impairment is a result of a significant and sustained decline in the Company’s market capitalization through September 30, 2025.
Other (Income) Expense, Net
Other (income) expense, net was $0.1 million for the three months ended September 30, 2025, an increase of $0.2 million from the three months ended September 30, 2024. The decrease in expense is primarily attributable to a mark to market adjustment in the fair value of equity payable due to the decreased price in stock.
| 15 |
Comparison of the nine months ended September 30, 2025 and the nine months ended September 30, 2024
The following table summarizes our results of operations for the nine months ended September 30, 2025 and for the nine months ended September 30, 2024.
| For the Nine Months Ended | Favorable | |||||||||||||||
| September 30, | (Unfavorable) | |||||||||||||||
| (in thousands) | 2025 | 2024 | $ Change | % Change | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | $ | 1,034 | $ | 1,658 | $ | 624 | 37.6 | % | ||||||||
| General and administrative | 5,259 | 6,192 | 933 | 15.1 | % | |||||||||||
| Impairment of in-process research and development | 18,648 | - | (18,648 | ) | (100.0 | )% | ||||||||||
| Total Operating Expenses | 24,941 | 7,850 | (17,091 | ) | (217.7 | )% | ||||||||||
| Loss from Operations | (24,941 | ) | (7,850 | ) | (17,091 | ) | (217.7 | )% | ||||||||
| Other (Income) Expense, Net | 185 | 132 | (53 | ) | (40.2 | )% | ||||||||||
| Pre-tax net loss | (25,126 | ) | (7,982 | ) | (17,144 | ) | (214.8 | )% | ||||||||
| Income tax benefit | 852 | (10 | ) | 862 | 8620.0 | % | ||||||||||
| Net loss | $ | (24,274 | ) | $ | (7,992 | ) | $ | (16,282 | ) | (203.7 | )% | |||||
Research and development expenses
Research and development expenses were $1.0 million for the nine months ended September 30, 2025, a decrease of $0.6 million or 15.1% from the nine months ended September 30, 2024. The decrease is attributable to lower research and development consultant costs of $0.3 million due to fewer consultants, lower CRO fees of $0.2 million for VAR 200 and lower pre-clinical costs of IC 100 of $0.1 million.
General and administrative expenses
General and administrative expenses were $5.3 million for the nine months ended September 30, 2025, a decrease of $0.9 million or 20.6% from the nine months ended September 30, 2024. The decrease is primarily attributable to a decrease of $0.4 million due to lower director and officer insurance premiums, a $0.2 million decrease in investor and public relations marketing expense, a $0.2 million decrease in professional fees due to lower accounting and legal expense, and a decrease of $0.4 million in stock-based compensation expense due to options becoming fully amortized in 2025. These decreases were slightly offset by an approximately $0.3 million increase in commitment fees related to the Equity Purchase Agreement entered into on June 24, 2025.
Impairment of in-process research and development
Impairment of in-process research and development was $18.6 million for the nine months ended September 30, 2025 compared to $0.0 for the nine months ended September 30, 2024. The impairment is a result of a significant and sustained decline in the Company’s market capitalization through September 30, 2025.
Other (Income) Expense, Net
Other (income) expense, net was $0.2 million for the nine months ended September 30, 2025, an increase of $50 thousand from the nine months ended September 30, 2024. The increase in expense is primarily attributable to $250 thousand interest expense charged by a vendor for outstanding amounts owed offset by $200 thousand of income from a mark to market adjustment in the fair value of equity payable due to the decreased price in stock.
Cash Flows
The following table summarizes our cash flows from operating and financing activities for the nine months ended September 30, 2025 and for the nine months ended September 30, 2024:
| For the Nine Months Ended | ||||||||||||
| September 30, | Increase | |||||||||||
| (in thousands) | 2025 | 2024 | (decrease) | |||||||||
| Net cash provided by (used in) | ||||||||||||
| Operating activities | $ | (4,701 | ) | $ | (6,305 | ) | $ | 1,604 | ||||
| Financing activities | 3,698 | 3,290 | 408 | |||||||||
| Net Decrease in Cash | $ | (1,003 | ) | $ | (3,015 | ) | $ | 2,012 | ||||
| 16 |
Cash Flows from Operating Activities
Net cash used in operating activities was approximately $4.7 million and $6.3 million for the nine months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, the net cash used in operating activities was primarily attributable to the net loss of approximately $24.3 million and $8.0 million, respectively, offset by $18.2 million and $0.6 million, respectively, of net non-cash expenses, and approximately $1.3 million and $1.0 million, respectively, of cash generated by (used in) the levels of operating assets and liabilities, respectively.
Net Cash Provided By Financing Activities
Net cash provided by financing activities was $3.7 million and $3.3 million for the nine months ended September 30, 2025 and 2024, respectively. Cash provided by financing activities during the nine months ended September 30, 2025 represented $2.0 million of proceeds from the private placement of warrants and $2.1 million from the exercise proceeds of a warrant inducement offer. This was partially offset by ($0.4) million in registration and issuance costs associated with warrant issuance. Cash provided by financing activities during the nine months ended September 30, 2024 represented $2.7 million proceeds from the exercise of warrants and $0.8 million exercise proceeds of a warrant inducement offer. This was partially offset by ($0.2) million in registration and issuance costs associated with the warrant issuance.
Liquidity and Capital Resources
The following table summarizes our total current assets, liabilities and working capital deficiency at September 30, 2025 and 2024, respectively:
| September 30, | December 31, | |||||||
| (in thousands) | 2025 | 2024 | ||||||
| Current Assets | $ | 996 | $ | 1,716 | ||||
| Current Liabilities | $ | 12,766 | $ | 11,231 | ||||
| Working Capital Deficiency | $ | (11,770 | ) | $ | (9,515 | ) | ||
Since our inception in 2014 through September 30, 2025, 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 $0.5 million as of September 30, 2025 will only be sufficient to fund our operating expenses and capital expenditure requirements on a month-to-month basis. 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, which contemplates the continuation of operations, realization of assets and liquidation of liabilities in the ordinary course of business. 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 to continue as a going concern. We incurred a net loss of $24.3 million for the nine months ended September 30, 2025 and had an accumulated deficit of $136.9 million on September 30, 2025. 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 to fund our operations, to complete development of and to commercialize our product candidates. There is no assurance that such financing will be available when needed or on acceptable terms.
Contractual Obligations
The following summarizes our contractual obligations as of September 30, 2025 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 September 30, 2025 are approximately $12.8 million for accounts payable and accrued expenses.
Future Capital Needs
We expect our cash on hand will enable us to invest in our continued development of VAR 200 and IC 100 on a month-to-month basis as cash is available. We intend to raise additional capital in the future to fund continued development.
| 17 |
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 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 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 exceeding our immediate requirements in investments designed to preserve the principal balance and provide liquidity while producing a modest return on investment.
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, the eventual commercialization of our product candidates if approved. 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, to support our planned product development efforts, and other initiatives. We also expect to incur significant costs to comply with corporate governance, internal controls, and requirements applicable to public companies.
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 development plans and clinical trials for our product candidates; | |
| ● | the number and characteristics of product candidates that we develop or in-license; | |
| ● | 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 approved or development products and develop additional products and product candidates to augment our internal development pipeline or expand our existing operations. 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. Strategic transactions may also 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. 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 apply to private companies. ZyVersa expects to use this extended transition period to enable compliance 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.
In addition, the Company intends to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act.
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Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements with 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 condensed 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. Our critical accounting estimates are described below.
Impairment of In-Process Research and Development
The Company reviews for the impairment of in-process research and development whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized for the amount by which the carrying value of the asset exceeds its fair value. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgement, and actual results may differ from assumed and estimated amounts.
There are other items within our financial statements that require estimation but are not deemed critical, as defined above.
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 September 30, 2025. Based upon their evaluation, 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 effective.
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 errors 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 errors or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
There have been no material changes as of the date of this Quarterly Report on Form 10-Q to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 27, 2025, other than those described below.
Our common stock has been delisted from The Nasdaq Capital Market.
Effective October 6, 2025, our common stock was delisted from The Nasdaq Capital Market. Our common stock is currently quoted on the OTCQB under the ticker symbol “ZVSA.” We can provide no assurance that our common stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our common stock on this market, whether the trading volume of our common stock will be sufficient to provide for an efficient trading market or whether quotes for our common stock will continue on this market in the future. Stocks trading in the OTC Markets generally have substantially less liquidity; consequently, it can be much more difficult for stockholders and broker/dealers to purchase and sell our shares in an orderly manner or at all. Due in part to the decreased trading price of our common stock and reduced analyst coverage, the trading price of our common stock may change quickly, and brokers may not be able to execute trades as quickly as they previously could when our common stock was listed on a national exchange.
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.
Insider Trading Plans
During
the nine months ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company
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ITEM 6. EXHIBITS.
| Exhibit | Description | |
| 3.1 | Second Amended and Restated Certificate of Incorporation of ZyVersa Therapeutics, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 10-Q filed with the SEC on August 9, 2024). | |
| 3.2 | Second Amended and Restated Bylaws of ZyVersa Therapeutics, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 13, 2022). | |
| 3.3 | Certificate of Designation relating to the Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on December 13, 2022). | |
| 4.1 | Form of Series A-4 Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 9, 2025). | |
| 10.1 | Inducement Letter, dated July 8, 2025 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 9, 2025). | |
| 10.2 | Financial Advisory Agreement, dated July 8, 2025 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on July 9, 2025). | |
| 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. |
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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: November 19, 2025 | By: | /s/ Stephen C, Glover |
| Stephen C. Glover | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Dated: November 19, 2025 | By: | /s/ Peter Wolfe |
| Peter Wolfe | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
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FAQ
How did ZyVersa Therapeutics (ZVSA) perform financially in Q3 2025?
ZyVersa reported a Q3 2025 net loss of $19.8 million, compared with $2.4 million in Q3 2024. For the nine months ended September 30, 2025, net loss was $24.3 million versus $8.0 million a year earlier, mainly due to an $18.6 million impairment of in-process R&D.
What is ZyVersa Therapeutics' cash position and working capital as of September 30, 2025?
As of September 30, 2025, ZyVersa held $527,978 in cash and had current assets of $996,000 against current liabilities of $12.8 million, resulting in a working capital deficiency of approximately $11.8 million.
Why did ZyVersa record an $18.6 million impairment charge in 2025?
The company fully impaired its in-process R&D intangible asset, recording a charge of about $18.6 million, after determining that a significant and sustained decline in its market capitalization indicated the asset’s carrying value was no longer recoverable.
What going-concern risks does ZyVersa Therapeutics (ZVSA) disclose?
ZyVersa notes continued operating losses, limited cash of roughly $0.5 million, a working capital deficit of $11.8 million, and an accumulated deficit of $136.9 million. Management states these conditions raise substantial doubt about its ability to continue as a going concern for at least one year from the financial statement issuance date.
How did ZyVersa finance its operations during the nine months ended September 30, 2025?
Net cash used in operating activities was about $4.7 million. Financing activities provided $3.7 million, primarily from a $2.0 million March 2025 private placement of pre-funded and common warrants and $2.1 million of cash proceeds from a July 2025 warrant exercise inducement, partially offset by issuance and registration costs.
What happened to ZyVersa Therapeutics' Nasdaq listing in 2025?
On July 15, 2025, ZyVersa received a Nasdaq determination denying continued listing. Its common stock was delisted on October 6, 2025. The shares subsequently began trading on the OTCQB market on July 28, 2025 under the symbol ZVSA.
What are ZyVersa Therapeutics' main development programs?
ZyVersa is developing VAR 200, a cholesterol efflux mediator for renal diseases with a lead indication in FSGS, and IC 100, an inflammasome ASC inhibitor antibody for inflammatory diseases with a lead indication in obesity with cardiometabolic comorbidities.
