ZyVersa Therapeutics, Inc.

Previous wording

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.

Current wording

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, 2026 and for the three months ended March 31, 2026 and 2025 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, 2025 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 31, 2026. 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.

Previous wording

Our renal drug candidate, which we refer to as Cholesterol Efflux Mediator TM 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.

Current wording

Our renal drug candidate, which we refer to as Cholesterol Efflux Mediator TM 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-related cardiometabolic comorbidities.

Previous wording

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:

Current wording

We have not generated any revenue to date and have incurred significant operating losses. Our net losses were $1.8 million for the period from January 1, 2026 through March 31, 2026, compared to $2.3 million for the period from January 1, 2025 through March 31, 2025. As of March 31, 2026, we had an accumulated deficit of approximately $139.4 million and cash of $0.3 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:

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

Other (income) expense, net was $489 thousand for the three months ended March 31, 2026, an increase of $377 thousand from the three months ended March 31, 2025. The increase in expense is primarily attributable to a $344 thousand fair value option loss on convertible notes, a $35 thousand increase from a mark-to-market adjustment in the fair value of equity payable offset by a $16 thousand change in fair value of warrant liabilities due to change in stock price, and a $13 thousand increase in interest expense.

Previous wording

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:

Current wording

The following table summarizes our cash flows from operating and financing activities for the three months ended March 31, 2026 and for the three months ended March 31, 2025:

Previous wording

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.

Current wording

Net cash used in operating activities was $0.8 million and $1.8 million for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026 and 2025, the net cash used in operating activities was primarily attributable to the net loss of approximately $1.8 million and $2.3 million, respectively, offset by $0.4 million and $0.2 million, respectively, of net non-cash expenses, and approximately $0.6 million and $0.3 million, respectively, of cash generated from (used for) changes in the levels of operating assets and liabilities, respectively.

Previous wording

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.

Current wording

Net cash provided by financing activities was $1.0 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively. Cash provided by financing activities during the three months ended March 31, 2026 represented proceeds from a $1.0 million convertible note and warrants. Cash provided by financing activities during the three months ended March 31, 2025 represented proceeds of $2.0 million from the private placement of pre-funded warrants and warrants offset by $0.1 million of cash registration and issuance costs associated with the warrant issuance.

Previous wording

****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.

Current wording

Since our inception in 2014 through March 31, 2026, 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 $0.3 million as of March 31, 2026 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.

Previous wording

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.

Current wording

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 $1.8 million for the three months ended March 31, 2026 and had an accumulated deficit of $139.4 million on March 31, 2026. 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.

Previous wording

Cash requirements for our current liabilities as of September 30, 2025 are approximately $12.8 million for accounts payable and accrued expenses.

Current wording

Cash requirements for our current liabilities as of March 31, 2026 include approximately $13.5 million for accounts payable and accrued expenses and approximately $1.3 million for convertible debt and warrant liabilities.

Previous wording

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.

Current wording

We expect our cash on hand will enable us to make investments 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.