ZyVersa Therapeutics(ZVSA) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements The company's unaudited Q1 2025 financial statements show a net loss and a significant working capital deficit Condensed Consolidated Balance Sheets The balance sheet reflects a working capital deficit of $9.9 million and a slight increase in total assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $1,612 | $1,531 | | Total Current Assets | $2,110 | $1,716 | | Total Assets | $20,986 | $20,599 | | Liabilities & Equity | | | | Total Current Liabilities | $12,004 | $11,231 | | Total Liabilities | $12,855 | $12,083 | | Total Stockholders' Equity | $8,130 | $8,516 | | Working Capital | ($9,894) | ($9,515) | Condensed Consolidated Statements of Operations The company's Q1 2025 net loss improved to $2.3 million, driven by lower operating expenses Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $259 | $513 | | General and administrative | $1,886 | $2,314 | | Total Operating Expenses | $2,145 | $2,827 | | Loss From Operations | ($2,145) | ($2,827) | | Net Loss | ($2,257) | ($2,827) | | Net Loss Per Share | ($0.73) | ($4.53) | Condensed Consolidated Statements of Cash Flows Cash from financing activities offset operating cash use, resulting in a slight increase in cash reserves Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | ($1,772) | ($3,777) | | Net Cash Provided By Financing Activities | $1,853 | $2,673 | | Net Increase / (Decrease) in Cash | $81 | ($1,104) | | Cash - End of Period | $1,612 | $2,034 | Notes to Unaudited Condensed Consolidated Financial Statements Notes highlight a going concern uncertainty, a recent financing, a vendor dispute, and a reverse stock split - Going Concern: The company had cash of ~$1.6M, a working capital deficit of ~$9.9M, and an accumulated deficit of ~$114.9M as of March 31, 2025, raising substantial doubt about its ability to continue as a going concern[26][28] - Financing: In March 2025, the company closed a private placement of pre-funded and common warrants, resulting in gross proceeds of approximately $2.0 million[55] - Vendor Dispute: The company is disputing vendor invoices for retroactive interest and unsupported charges, with an unaccrued disputed amount of $941,074[42] - Subsequent Event: After March 31, 2025, an investor exercised 2,105,265 pre-funded warrants at an exercise price of $0.0001 per share[60] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses improved Q1 2025 results but highlights a critical liquidity position and going concern risk - The company is a clinical-stage biopharmaceutical firm focused on developing drugs for renal and inflammatory diseases, with lead candidates VAR 200 and IC 100[62][63] - The company has not generated any revenue to date and expects to continue incurring significant operating losses for the foreseeable future[64][66] Results of Operations The Q1 2025 net loss improved due to significant decreases in both R&D and G&A expenses Comparison of Operating Expenses (in thousands) | Expense Category | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | $259 | $513 | $254 | 49.5% | | General and administrative | $1,886 | $2,314 | $428 | 18.5% | | Total Operating Expenses | $2,145 | $2,827 | $682 | 24.1% | - The decrease in R&D costs is attributed to lower IC100 manufacturing costs ($62k), reduced CRO fees for VAR200 ($106k), and lower consultant costs ($95k)[79] - The decrease in G&A expenses is primarily due to lower stock-based compensation ($156k), reduced director and officer insurance ($143k), and decreased marketing expenses ($119k)[80] Liquidity and Capital Resources The company's critical liquidity, with cash for only 'month-to-month' operations, necessitates urgent financing - The company's cash of $1.6 million as of March 31, 2025 is only sufficient to fund operating expenses and capital requirements on a month-to-month basis[86][87] - The company has a working capital deficiency of $9.9 million and an accumulated deficit of $114.9 million as of March 31, 2025[86][87] - Additional financing is needed to fund operations and complete development of product candidates, but there is no assurance that such financing will be available on acceptable terms, if at all[87][90] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, this disclosure is not applicable - Not applicable[103] Controls and Procedures Management concluded disclosure controls were effective and actions were taken to remediate a material weakness - Management concluded that disclosure controls and procedures were effective as of March 31, 2025[105] - The company has implemented additional controls to address the material weakness related to segregation of duties that was identified as of December 31, 2024[106] PART II - OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - None[109] Risk Factors As a smaller reporting company, this section refers to the Annual Report on Form 10-K for risk factors - As a "smaller reporting company", the company is not required to provide this information and refers investors to its Annual Report on Form 10-K filed on March 27, 2025[110] Other Information No directors or officers engaged in new or modified Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter[114] Exhibits This section lists all exhibits filed with the report, including financing agreements and certifications - This section lists the exhibits filed with the report, including documents related to the March 2025 private placement and required CEO/CFO certifications[116]