OTC: ZVSA

Our
renal pipeline is initially focused on rare, chronic glomerular diseases. Our lead indication for VAR 200 is focal segmental
glomerulosclerosis (“FSGS”). We plan to initiate a Phase 2a basket trial in FSGS and Alport syndrome patients in
Q2-2026. VAR 200 has pharmacologic proof-of-concept data in animal models representative of FSGS, Alport Syndrome, and diabetic
kidney disease.

Our
Inflammasome ASC Inhibitor IC 100 focuses on chronic inflammatory diseases. Our lead indication for IC 100 is cardiometabolic
conditions associated with obesity. IC 100’s preclinical development is nearing completion. Our focus is on advancing IC 100
toward a currently planned IND submission in Q4-2026, followed by initiation of a Phase 1 trial in healthy overweight patients
with a BMI between 27 – 30 at risk for cardiometabolic conditions. We are preparing to initiate IND-enabling preclinical
studies in an animal model of diet-induced obesity, which develops metabolic complications, and an animal model representative of an
orphan renal disease in Q2-2026.

About
Chronic Kidney Disease (CKD)

Chronic
kidney disease (“CKD”) is an increasing public health problem which affects over 750 million people worldwide, and approximately
37 million in the United States. The National Kidney Foundation estimates that approximately 80 million adults are at risk for kidney
disease in the United States. With no disease modifying drug therapies commercially available, a sizeable percentage of kidney patients
progress to end-stage renal disease (“ESRD”), requiring dialysis or transplant to survive. According to the Centers for Disease
Control and Prevention, in 2018, approximately 131,600 people in the United States started treatment for ESRD, and nearly 786,000 people
are currently living with ESRD in the United States (of those 786,000 people, approximately 71% are on dialysis, and 29% are living with
a kidney transplant). Further, the economic burden associated with chronic kidney disease is substantial, with Medicare Fee-for-Service
spending of $130 billion in 2018 according to the National Kidney Foundation. We believe the high incidence level and the steep monetary
burden caused by CKD create a need for effective, disease modifying drug therapies. We believe that VAR 200 has the potential to help
reduce the number of patients developing renal failure by mediating removal of excess renal cholesterol and lipids that contribute to
kidney damage and dysfunction,

5

Our
lead renal indication is FSGS, which is a progressive form of kidney disease with no approved drug therapies. Approximately 40-60% of
FSGS patients develop end stage kidney disease within 10-20 years, requiring dialysis and ultimately kidney transplant to survive. FSGS
is an orphan disease affecting approximately 40,000 people in the United States. It is characterized by injury to the kidneys’
filtration system or “glomerular podocytes” leading to scarring that is focal (i.e., affecting only some glomerulus) and
segmental (i.e., affecting only part of glomerulus). Accumulation of cholesterol and lipids in renal glomeruli, which has been associated
with structural damage and impaired kidney function, has been seen in FSGS patient biopsies and in representative FSGS animal models.
Damage to the glomeruli causes protein to leak into urine, a condition known as proteinuria. As the level of protein increases in the
urine, patients develop a specific set of symptoms known as nephrotic syndrome. Proteinuria is strongly associated with kidney disease
progression, and nephrotic syndrome is generally predictive of a poor prognosis. Approximately 70% of FSGS patients present with nephrotic
syndrome at diagnosis. By mediating removal of excess cholesterol from renal glomeruli, we believe that VAR 200 has the potential to
preserve renal structure and function and thereby reduce proteinuria that leads to FSGS progression.

About
Inflammatory Diseases

Chronic
inflammatory diseases have been recognized as one of the most significant causes of death in the world today, with more than 50% of all
deaths worldwide attributable to inflammation-related diseases such as ischemic heart disease, stroke, cancer, diabetes mellitus, chronic
kidney disease, non-alcoholic fatty liver disease (“NAFLD”), and autoimmune and neurodegenerative conditions. Excessive and
persistent activation of inflammasomes have been linked to the pathophysiology of these types of chronic diseases.

Inflammasomes
are comprised of 3 proteins: (i) one of several types of sensor molecules, (ii) an apoptosis-associated speck-like protein
containing a caspase recruitment domain (“ASC”), and (iii) proinflammatory caspase-1 (“pro-caspase-1”).
There are multiple types of inflammasomes that trigger inflammation. They are named based on their associated sensor molecule, such
as NLRP1, NLRP2, NLRP3, NLRC4, AIM2, and Pyrin. Numerous inflammatory diseases are often associated with activation of multiple
types of inflammasomes. For example, obesity is associated with activation of AIM2 and NLRP3, insulin resistance is associated with
AIM2, NLRP3, and NLRC4 and diabetic nephropathy is associated with activation of AIM2, NLRP3, and NLRC4. The ASC component of inflammasomes
is a promising drug target since it is a component of the six most common types of inflammasomes referenced above. We believe
targeting ASC is more effective than targeting a specific sensor protein such as NLRP3, that inhibits only one type of
inflammasome. In addition to its pivotal role in inflammasome formation and activation required for initiation of an inflammatory
response, ASC also plays a role in the perpetuation of inflammation associated with extracellular release of ASC specks. By
targeting ASC, we believe IC 100 has potential to effectively control inflammation in a multitude of inflammatory
diseases.

Our
Pipeline

The
goal of our pipeline is to target renal and inflammatory indications with high unmet medical needs, which we believe can be addressed
by our mechanisms of action. We intend to further enhance and expand our product portfolio through the development of multiple indications
for VAR 200 and IC 100 each, and through potential in-licensing of promising renal and anti-inflammatory product candidates.

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Our
current pipeline consists of the following:

Development
Phase: Phase in which a drug formulation is developed that ensures the proper drug delivery parameters are met

Preclinical
Phase: Phase in which in vitro (laboratory) and in vivo (animal) studies are conducted to gather evidence to justify
clinical trials in humans

Phase
1: First testing in healthy humans, primarily to test safety

Phase
2: Testing in a small number of patients to assess safety, monitor how a drug is metabolized, and gather initial data on efficacy

Phase
3: Large trial in patients to test efficacy and safety that are used for regulatory approval

Business
Strategy

We
seek to be recognized as a leading biopharmaceutical company at the forefront of innovation for patients with high unmet medical needs.
We are committed to restoring health and transforming the lives of patients through development of biopharmaceutical products. Our strategy
is to:

●
Advance
development of Cholesterol Efflux MediatorTM VAR 200. We intend to advance development of VAR 200 by initiating
a small Phase 2a trial in FSGS and Alport syndrome patients in Q2-2026.

●
Advance
development of Inflammasome ASC Inhibitor IC 100. We intend to advance our IC 100 preclinical program toward a planned IND
submission Q4-2026, followed by initiation of a Phase 1 trial in healthy patients with a BMI between 27 – 30 at
risk for cardiometabolic conditions. In preparation for IND submission, we are preparing to initiate an IND-enabling preclinical
study in a diet-induced obesity animal model,that develops cardiometabolic conditions.

●
Capitalize
on our indication expansion strategy to maximize the commercial potential for each of our product platforms by developing multiple
indications in their respective therapeutic areas. Our current pipeline includes three potential indications for our Cholesterol
Efflux MediatorTM VAR 200 Platform, FSGS (lead indication), Alport Syndrome, and diabetic kidney disease. Two near-term
potential indications for our Inflammasome ASC inhibitor IC 100 platform are cardiometabolic conditions associated with obesity (lead
indication) and an orphan renal disease. We intend to leverage our knowledge from preclinical and clinical programs from both product
platforms to identify other opportunities for indication expansion.

●
Maintain
rights to develop and commercialize our product candidates. We intend to maintain the rights to develop and commercialize
our product candidates in the United States, while pursuing strategic alliances and collaborations with other pharmaceutical companies
to accelerate development, share risk, supplement our resources and maximize potential outside the United States.

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●
Expand
our product candidate portfolio. We plan to expand our product portfolio by leveraging our expertise in development and commercialization
to identify and in-license additional drug candidates with significant clinical and commercial potential. In addition to indication
expansion for our VAR 200 and IC 100 platforms, our business strategy includes identifying and opportunistically acquiring development
and commercialization rights to technologies relating to the treatment of kidney and inflammatory diseases.

●
Continue
to strengthen and expand our intellectual property portfolio. The intellectual property for VAR 200 is comprised of a portfolio
of issued and pending patents in the United States and other countries. We have 2 patent families covering glomerular disorders and
disease, and diabetic kidney disease. Likewise, we plan to seek orphan drug designation for FSGS and Alport Syndrome, which would
provide 7 years exclusivity in United States and 10 years in European Union, if approved in each of those jurisdictions. Intellectual
Property for IC 100 is comprised of a portfolio of issued and pending patents in the United States and other countries. We have 5
patent families covering composition of matter, biomarkers, and methods of use. Additionally, we plan to seek orphan exclusivity
for any rare disease indications we develop for IC 100. For both product platforms, our proprietary position is reinforced by additional
technical know-how and trade secrets. We plan to actively seek to obtain, where appropriate, the broadest intellectual property protection
possible for our product candidates by filing for patents or other applicable intellectual property protection covering new or enhanced
proprietary technology, and new formulations, dosing regimens, and administration routes in development.

The
dates and events reflected in the foregoing are estimates only, and there can be no assurances that the events included will be completed
on the anticipated timeline presented, or at all. Further, there can be no assurances that we will be successful in the development of
any of our product candidates, or any other products or product candidates we may develop in the future, or that any product candidate
we may develop in the future, will receive FDA approval for any indication.

Our
Product Candidates

Cholesterol
Efflux Mediator TM VAR 200 (2-hydroxypropyl-beta-cyclodextrin, 2HPβCD)

Cholesterol
Efflux Mediator VAR 200 is an injectable drug in clinical development for treatment of chronic glomerular diseases, initially focusing
on FSGS as the lead. Alport syndrome and diabetic kidney disease indications may be pursued based on our indication expansion strategy.

VAR
200 was developed to mediate removal of excess cholesterol that damages renal glomeruli, with the intent to preserve renal structure
and function and reduce proteinuria that leads to glomerular disease progression. We are planning to initiate a small Phase 2a basket
trial in FSGS and Alport syndrome patients in Q2-2026.

Role
of Cholesterol and Lipid Accumulation in Glomerular Diseases (Including FSGS, Alport Syndrome, and Diabetic Kidney Disease)

In
chronic glomerular diseases, cholesterol and lipids accumulates in glomerular podocytes, due in part to impaired transport out of the
cell, or “efflux,” resulting from reduced expression of the cholesterol transporters ABCA1 and ABCG1. Glomerular lipid accumulation
has been demonstrated in in vitro podocyte studies, human biopsy data, and in animal models of various kidney diseases, including
FSGS, Alport syndrome, and diabetic kidney disease. As shown below, the lipid accumulation causes distorted podocyte structure, damaged
podocyte foot processes, and podocyte detachment and loss, which impairs kidney filtration resulting in proteinuria and disease progression.
Preclinical animal models with VAR 200 show that reduction in podocyte cholesterol and lipids protects against ongoing kidney damage
and progression of disease, which we hypothesize will translate to patients with kidney disease and potentially reduce or delay the need
for dialysis and ultimately transplant.

8

VAR
200 Mechanism of Action

VAR
200’s active ingredient, 2HβCD, is comprised of seven sugar molecules bound together in a 3-D ring with a hydrophobic core
and hydrophilic exterior. VAR 200 mediates cholesterol and lipid efflux both passively and actively by interacting with hydrophilic components
of the glomerular membrane.

Passive
Cholesterol Efflux

Passive
cholesterol efflux occurs with formation of 2HPβCD dimers, which bind to the cell membrane surface and incorporate cholesterol into
its hydrophobic core as an inclusion complex. Release of the 2HPβCD/cholesterol inclusion complex from the cell membrane surface
brings the cholesterol into solution for transfer to cholesterol acceptors, such as high-density lipoprotein (“HDL”).

Active
Cholesterol Efflux

Active
cholesterol efflux occurs through mediating metabolism of free cholesterol into oxysterols. Oxysterols activate the liver X receptor
(“LXR”)-transcription factors, resulting in induction of cellular cholesterol efflux pathways, including upregulation cholesterol
efflux transporters, ABCA1 and ABCG1, which transport free cholesterol outside the cell to cholesterol acceptors, such as HDL.

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Preclinical
Support for VAR 200

We
believe that VAR 200 has an established benefit/risk profile supported by IND-enabling preclinical studies demonstrating safety and proof
of concept, which led to FDA clearance to progress into Phase 2 clinical trials. Data from animal models representing FSGS, Alport Syndrome,
and diabetic kidney disease consistently demonstrate that VAR 200 promotes cholesterol and lipid removal from podocytes, protecting the
kidney’s filtration system from damage and reducing protein spillage into the urine or “proteinuria.” These types of
outcomes are thought to be key to delaying or preventing progression of kidney disease. For a detailed overview of VAR 200’s preclinical
data, refer to the VAR 200 White Paper at https://www.zyversa.com/renal-lipids/white-paper-renal-lipids-in-the-pathogenesis-of-kidney-disease.

Inflammasome
ASC Inhibitor IC 100

IC
100 is a humanized monoclonal antibody inflammasome ASC inhibitor in preclinical development for the treatment of numerous inflammatory
diseases, with cardiometabolic conditions associated with obesity as the lead. IC 100 was developed with the intent of attenuating chronic
aberrant inflammation that is pathogenic in a multitude of inflammatory diseases by attenuating initiation and perpetuation of inflammation
to stop disease progression and improve quality of life.

Our
focus is on advancing IC 100 toward a planned IND submission in Q4-2026, following which we intend to initiate a Phase 1 trial
in healthy subjects who are overweight (BMI 27 -30) and at risk of cardiometabolic conditions. Non-GLP toxicology data with IC 100 in
mice and non-human primates (“NHP”) demonstrate no adverse effects nor anti-drug antibodies at doses as high as 300 mg/kg.
We are preparing to initiate IND-enabling preclinical studies in an animal models of diet-induced obesity that develops metabolic complications,
and an animal model representative of an orphan renal disease in Q2-2026.

Role
of Inflammasomes in Inflammatory Diseases

Excessive
and persistent activation of inflammasomes have been linked to the pathophysiology of inflammatory diseases. Inflammasomes are multiprotein
complexes that initiate an immune response to pathogens or internal danger signals. They are comprised of three basic proteins: (i) one
of several types of sensor molecules (e.g., NLRP1, NLRP2, NLRP3, NLRC4, AIM2, and Pyrin), (ii) adaptor protein, ASC, and (iii) pro-caspase
1. Each sensor molecule responds to different pathogens or internal danger signals. Inflammasomes are named by their sensor molecule
(e.g., NLRP3 inflammasome).

As
depicted below, in the presence of harmful pathogens or cell damage, an intracellular sensor molecule (e.g., NLRP3) is triggered, stimulating
recruitment of adaptor ASC, which in turn recruits pro-caspase-1 to form an inflammasome. The inflammasome is the organizing center that
recruits additional ASC and polymerizes in a prion-like structure to form a large filamentous signaling platform, known as an ASC Speck.
ASC Specks provide a scaffold for pro-caspase-1 recruitment, which triggers conversion of pro-caspase-1 to active caspase-1, which in
turn converts the cytokine pro-IL-1ß to its active form IL-1ß, initiating the inflammatory response. Activated caspase-1
also drives cleavage of Gasdermin D, which triggers pyroptosis, a form of programmed cell death, releasing active cytokines and ASC Specks
into the extracellular space, with continued activation of pro-IL-1ß, heightening and perpetuating the inflammatory response in
neighboring cells and tissues. Although inflammasome triggering of the innate immune response is essential for protection against pathogens,
persistent overactivation of inflammasomes can lead to chronic inflammation underlying a multitude of inflammatory conditions and diseases.
Numerous inflammatory diseases are associated with activation of multiple types of inflammasomes. For example, obesity is triggered by
AIM2 and NLRP3 and Parkinson’s disease is triggered by NLRP1, NLRP3, and AIM2.

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Inflammasome
ASC Inhibitor IC 100 Mechanism of Action

IC
100 was designed to bind to key amino acids in adaptor protein ASC that govern ASC recruitment into the inflammasome complex and ASC
Speck formation:

●
By
inhibiting ASC recruitment into the inflammasome complex, inflammasome formation is inhibited thereby blocking initiation of the
inflammatory cascade; and

●
By
disrupting ASC Speck formation, both intracellularly and extracellularly, damaging perpetuation of inflammation is blocked.

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Inflammasome
Activation in One Condition Can Impact Another

A
paper published in Translational Research demonstrates that inflammasome activity and signaling proteins triggered by one unique
inflammatory condition can impact and potentially interact with another. The authors provided extensive evidence that traumatic
brain injury (TBI) and Alzheimer’s disease (AD) are linked by activation of multiple types of inflammasomes (NLRP3, NLRP1, and
AIM2). In each condition, inflammasome activation leads to cell death and release of active cytokines and ASC specks to neighboring
cells allowing for one condition to potentially exacerbate the other. For example, individuals with a history of moderate TBI have a
2.3 times greater risk of developing AD. Likewise, AD pathology is potentially exacerbated by inflammasome activation in patients
with TBI through IL-18 and pathological ASC speck interactions with amyloid beta and phosphorylated tau, hallmarks of AD. The
authors reported that inflammasome ASC represents a promising therapeutic target for TBI and AD because of ASC’s unique role
in heightening and perpetuating inflammation in neighboring cells, and its pathological interactions with amyloid beta and
phosphorylated tau. In a subsequent study, also published in Translational Research by several of the same authors, researchers
evaluated if blocking inflammasome activity by inhibiting ASC with IC 100 reduces the elevated inflammatory response in AD mice
after TBI. Data demonstrated that IC 100 resulted in reduction of inflammasome-mediated cytokine IL-1β in the injured cortex of
AD mice at 1-week post-injury.

Preclinical
Support for IC 100

Non-GLP
toxicology studies in mice and non-human primates demonstrate that IC 100 has a good safety profile. There were no drug-related adverse
events at doses up to 300 mg/kg in either species. Likewise, epigenetic screening demonstrates a lower immunogenicity potential than
many biologics. Based on our preclinical study in an animal model representing MS, inflammation was attenuated without immunosuppression.

IC
100 has preclinical data substantiating its mechanism of action in both CNS and Non-CNS diseases, summarized below. For a
detailed overview of IC 100’s preclinical data, refer to the IC 100 White Paper at
https://investors.zyversa.com/static-files/64964310-ab95-4a06-bc47-dd44c63dc5c7.

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For a detailed overview of IC
100’s preclinical data, refer to the IC 100 White Paper at https://investors.zyversa.com/static-files/64964310-ab95-4a06-bc47-dd44c63dc5c7.

Market
and Commercial Opportunity

We
believe that each of our product candidates has potential for treatment of numerous diseases with significant unmet medical needs. VAR
200 has potential to treat Alport syndrome, diabetic nephropathy, and other glomerular diseases in addition to its lead indication, focal
segmental glomerulosclerosis (FSGS). IC 100 has potential to treat multiple and diverse inflammatory diseases, including, but not limited
to orphan renal diseases, Parkinson’s and Alzheimer’s diseases, in addition to its lead indication, cardiometabolic conditions
associated with obesity.

Cholesterol
Efflux MediatorTM VAR 200 Opportunity

According
to a report from Precedence Research, the global renal drug market was $20 billion in 2024 and projected to reach $30 billion by 2034.
There are two key drivers of this growth. The first is the significant increase in obesity and diabetes which lead to renal disease.
The second is a resurgence in development of innovative new drug therapies resulting from the increasing economic and societal burdens
of chronic kidney disease, as well as advances in technology facilitating a better understanding of the molecular mechanisms underlying
kidney disease. A more recent growth driver is data from the Parasol project supporting use of 2-year changes in proteinuria as an endpoint
for approval of FSGS drugs, that will shorten the regulatory path. The Parasol project, co-chaired by Dr. Aliza Thompson, Director of
the Cardio-Renal Division at the FDA, was prompted by the urgent need to develop safe and effective therapies for people with FSGS since
there are no approved drug therapies. The goal of Parasol was to define a traditional or reasonably likely surrogate endpoint for use
in FSGS clinical trials to enable accelerated approval of novel therapies and expedite access to effective treatments for this rare but
devastating glomerular disorder. PARASOL was a partnership among NephCure, the National Kidney Foundation, the International Society
of Glomerular Disease, and the Kidney Health Initiative, who brought together all the relevant parties - patients, clinical nephrologists,
industry sponsors, basic scientists, biostatisticians, and regulatory authorities. PARASOL’s analysis of 1600 FSGS patients found
that a reduction in proteinuria over 24 months was strongly associated with a reduced risk of kidney failure. Based on the data, Parasol
recommended proteinuria as a surrogate endpoint for full regulatory approval of FSGS drugs.

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Following
is a summary of the market for VAR 200’s current pipeline.

IC
100 Opportunity

Anti-Inflammatory
Biologics Market

According
to a report from Precedence Research, the global anti-inflammatory biologics market was valued at $104.81 billion in 2024, and it is
projected to reach $185.51 billion by 2034. This growth is driven by the rising incidence of chronic inflammatory diseases associated
with population aging, lifestyle changes, and environmental factors. The growth trajectory is expected to accelerate over time with R&D
focus on use of anti-inflammatory biologics, such as inflammasome inhibitors, as add-on to GLP-1 drugs to treat the inflammatory comorbidities
of obesity. According to Morgan Stanley, global sales of GLP-1 drugs were $6 billion in 2023. With the surging demand seen in 2024, they
project global sales to reach between $105 to $144 billion by 2030. Key drivers are the unsurpassed weight loss achieved and the broadening
evidence that these drugs have potential to improve outcomes in numerous obesity-related comorbidities. Following is a summary of the
market for IC 100’s current pipeline.

Other
Development Candidates

We
continue to seek to identify and acquire commercialization rights to other technologies relating to renal and inflammatory diseases.

Strategic
Alliances and Arrangements

Unless
otherwise specifically provided herein, all share and per share information (including information relating to warrants) reflect the
1-for-35 reverse stock split and the 1-for-10 reverse stock split that we effected on December 4, 2023, and April 25, 2024, respectively.

14

L&F
Research LLC License Agreement

We
entered into a License Agreement with L&F Research LLC (“L&F Research”) effective December 15, 2015, as amended (the
“L&F License Agreement”), pursuant to which L&F Research granted us an exclusive, royalty-bearing, worldwide, sublicensable
license under the patent and intellectual property rights and know-how specific to and for the development and commercialization of VAR
200, for the treatment, inhibition or prevention of kidney disease in humans and symptoms thereof, including FSGS. L&F Research was
founded by the VAR 200 inventors and researchers at the University of Miami Miller School of Medicine, who licensed the intellectual
property from the University of Miami. Pursuant to the L&F License Agreement, we (i) paid L&F Research an upfront license fee
of $200,000 upon signing; (ii) agreed to make additional payments to L&F Research upon the achievement of certain development milestones
up to an aggregate maximum of $21.5 million; and (iii) agreed to pay L&F Research royalty payments on net sales of any resulting
product upon the achievement of certain net sales milestones, ranging from 5% to 10% based on certain annual net sales thresholds. In
addition, upon the signing of and pursuant to the L&F License Agreement, we issued to L&F Research four (4) warrants (the “L&F
Warrants”), of which one (1) warrant was exercised for 200 shares of common stock and the remaining three (3) warrants are exercisable
in the aggregate for 300 shares of our common stock upon certain terms and conditions set forth in the L&F License Agreement and
the L&F Warrants.

On
December 23, 2022, we entered into a Second Amendment to Waiver of Certain Rights under License Agreement (the “Second Amendment”)
with L&F Research LLC (“L&F Research”), amending the previously disclosed Waiver of Certain Rights under License
Agreement, dated March 2, 2022, between ZyVersa Therapeutics, Inc., a Florida corporation (“Old ZyVersa”) and L&F Research,
as amended (the “Waiver Agreement”). The Second Amendment further extended to March 31, 2023, the period that L&F Research
waived its right to terminate the License Agreement and exercise any other remedies thereunder, with respect to $1,500,000 of aggregate
milestone payments due to L&F Research pursuant to the L&F License Agreement (the “Milestone Payments”).

On
February 28, 2023, we entered into an Amendment and Restatement Agreement (the “Restatement”) with L&F Research, amending
and restating the Waiver Agreement, as amended. The Restatement provides that, with respect to the Milestone Payments, L&F Research
waives its right to terminate the L&F License Agreement and exercise any other remedies thereunder, until (a) March 31, 2023, as
to $1,000,000 of such Milestone Payments (“Waiver A”), and (b) January 31, 2024, as to $500,000 of such Milestone Payments
(“Waiver B”). Waiver A is contingent upon (i) forgiveness by the Company of $351,579 in aggregate principal amount outstanding
under the previously disclosed Promissory Note, dated December 13, 2020, between L&F Research, as the borrower, and Old ZyVersa,
as the lender (the “Note”), and (ii) a cash payment by the Company to L&F Research in the amount of $648,421, in each
case, to be effectuated on or before March 31, 2023. Waiver B is contingent upon a cash payment by the Company to L&F Research in
the amount of $500,000 to be effectuated on or before the earlier of (x) January 31, 2024, and (y) ten business days from the date that
the Company receives net proceeds of at least $30,000,000 from the issuance of new equity capital. All other terms of the L&F License
Agreement remain in effect.

On
March 29, 2023, the Company paid the $648,421 of cash to L&F, thus meeting the conditions of Waiver A, which also had the effect
of canceling the Note Receivable and the Put Option.

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

The
L&F License Agreement will terminate at the expiration of the last-to-expire of all royalty payment obligations under the L&F
License Agreement and we have the right to terminate the L&F License Agreement upon 60 days’ notice.

The
L&F License is terminable by either party if the other party is in material breach of the agreement, and has not cured the breach
within 60 days of notice. If we fail to make payments under the agreement, L&F Research may terminate the agreement on 10 days’
notice. Further, L&F Research has the right to terminate the L&F License Agreement immediately upon written notice to us if we
directly, or through assistance granted to a third party, commence any interference or opposition proceeding with respect to, challenges
the validity or enforceability of, or opposes any extension of or the grant of a supplementary protection certificate with respect to,
any Licensor Patent Right (as defined in the agreement).

In
the event we do not complete the Throughput Milestones by the Throughput Milestone Completion Date (as each term is defined in the agreement),
L&F Research may elect upon 90 days written notice to us to either (a) terminate the agreement in its entirety; or (b) terminate
the exclusivity provisions of the agreement and convert the license to non-exclusive. However, before L&F Research terminates the
agreement or terminates exclusivity, the parties will negotiate in good faith to agree upon a revised date for the relevant Throughput
Milestone if we fail to achieve a particular Throughput Milestone by the specified time occurs because of a Force Majeure Event or a
Significant Change (as those terms are defined in the agreement). In the event we cannot agree as to whether a Force Majeure Event or
Significant Change has occurred by the later of the date of failure to meet the original Throughput Milestone Completion Date or 15 days
after our notice that a Force Majeure Event or Significant Change has occurred, L&F Research may exercise its termination rights.

15

InflamaCORE,
LLC License Agreement

We
entered into a License Agreement with InflamaCORE, LLC (“InflamaCORE”) effective as of April 18, 2019 (the “InflamaCORE
License Agreement”), pursuant to which InflamCORE granted us an exclusive, worldwide, royalty-bearing, sublicensable license to
patents, intellectual property rights, technology, and know-how to and for the development and commercialization of IC 100, in all therapeutic
and diagnostic uses in all diseases and conditions. InflamaCORE was founded by the IC 100 inventors and researchers at the University
of Miami Miller School of Medicine, who licensed the intellectual from the University of Miami and Selexis SA, a cell line development
company in Switzerland. Pursuant to the InflamaCORE License Agreement, we (i) paid InflamaCORE an upfront license fee of $346,321.08
upon signing; (ii) agreed to make additional payments to InflamaCORE upon the achievement of certain development milestones up to an
aggregate maximum of $22.5 million; (iii) agreed to pay InflamaCORE royalty payments on net sales of certain resulting products upon
the achievement of certain net sales milestones, ranging from 5% to 10% depending on the level of net sales; (iv) agreed to pay University
of Miami royalty payments on net sales of certain resulting products upon the achievement of certain net sales milestones, ranging from
3% to 6% of net sales, depending on the level of net sales; and (v) were granted a sublicense to all third-party technologies, including
the Selexis cell line technology, and agreed to pay to InflamaCORE the obligations of their Selexis license. Pursuant to the Selexis
license, we paid an upfront license fee to Selexis of CHF 50,000. We are also obligated to pay to Selexis (through reimbursement of InflamaCORE)
(i) an annual maintenance fee of CHF 10,000, (ii) payments upon the achievement of certain development milestones up to an aggregate
maximum of approximately CHF 1.1 million, and (iii) a royalty payment on net sales equal to a low single digit. Additionally, upon the
execution of and pursuant to the InflamaCORE License Agreement, we issued (i) 114 shares of our common stock to the University of Miami,
(ii) and four (4) warrants to InflamaCORE (the “InflamaCORE Warrants”) of which one (1) warrant exercisable for 227 shares
of common stock expired in April 2024 and the remaining three (3) warrants are exercisable in the aggregate for 342 shares of our common
stock upon certain terms and conditions set forth in the InflamaCORE License Agreement and the InflamaCORE Warrants.

The
InflamaCORE License Agreement will terminate at the expiration of the last-to-expire of all royalty payment obligations under the InflamaCORE
License Agreement and we have the right to terminate the InflamaCORE License Agreement upon 60 days’ notice. The license may be
terminated by either party if the other party is in material breach of the agreement, and has not cured the breach within 60 days of
notice. If we fail to make payments under the agreement, InflamaCORE may terminate the agreement on 10 days’ notice. Further, the
agreement may be terminated by a party upon the bankruptcy or insolvency of the other party.

Upon
any termination of the InflamaCORE License Agreement, the license granted to us will automatically terminate and revert back to InflamaCORE.

Manufacturing

We
do not currently own or operate any facilities to formulate, manufacture, test, store, package or distribute VAR 200, IC 100 and any
other product candidate that we are developing or may seek to develop and do not currently have the capabilities to conduct such activities.
We currently rely on third parties to manufacture, store and test VAR 200, IC 100 and any other product candidate that we may seek to
develop. We will depend on third-party suppliers and manufacturing organizations for all our required raw materials and drug substance
and to formulate, manufacture, test, store, package and distribute clinical trial quantities of VAR 200, IC 100 and any other product
candidate that we may seek to develop. We plan to continue developing our network of third-party suppliers and manufacturing organizations,
but in the future we may decide to consider investing in our own manufacturing and supply capabilities if there is a technical need or
a strategic or financial benefit.

16

We
have internal personnel and utilizes consultants with extensive technical, manufacturing, analytical and quality experience to oversee
our contract manufacturing and testing activities. Manufacturing is subject to extensive regulations that impose procedural and documentation
requirements, including, but not limited to, record-keeping, manufacturing processes and controls, personnel, quality control and quality
assurance. Our systems, procedures and contractors are required to be in compliance with these regulations and are assessed through regular
monitoring and formal audits.

Research
and Development

We
spent approximately $1.1 million for the year ended December 31, 2025, and $1.8 million for the year ended December 31, 2024. For the
year ended December 31, 2025, there was an $18.6 million impairment charge related to in-process research and development (“IPR&D”),
which was recorded upon the determination that the carrying value of our IPR&D intangible asset may not be recoverable.

Sales
and Marketing

We
currently have no marketing, sales or distribution capabilities. To commercialize any product that is approved for commercial sale, we
must either develop our own sales, marketing and distribution infrastructure or collaborate with third parties that have such commercial
infrastructure and relevant marketing and sales experience. We expect to be able to build our commercial infrastructure over time in
advance of any anticipated launch of our products, and we may rely on licensing, co-sale and co-promotion agreements with strategic partners
for the commercialization of our products. If we establish the commercial infrastructure to support the potential marketing of VAR 200,
IC 100 and any other product candidate that we may seek to develop, such commercial infrastructure could be expected to include a targeted
sales force supported by sales management, internal sales support, a market access group, an internal marketing group and distribution
support. To establish the proper commercial infrastructure, we would need to invest significant financial and management resources prior
to any approval of VAR 200, IC 100 and any other product candidate that we may seek to develop.

Competition

The
pharmaceutical and biotechnology industry is highly competitive. These competitors include many public and private companies, universities,
governmental agencies and other research organizations actively engaged in the research and development of products that may be similar
to our product candidates that we seek to develop or address similar indications. Many competitors have substantially greater financial,
technical and human resources than we possess and may be better equipped to develop, manufacture and market their products. We also expect
that the number of companies seeking to develop products and therapies similar to our products may increase over time. Competitive factors
in the pharmaceutical and biotechnology industry include product efficacy, safety, ease of use, price, demonstrated cost-effectiveness,
marketing effectiveness, stakeholder support, service, reputation, and access to technical information. Any products that we develop
and seek to commercialize may not be able to compete with the products of our competitors with respect to one or more of these considerations.

For
instance, there are currently several other companies with drugs in clinical development for FSGS, targeting inflammation, hypertension,
and fibrosis. Among our competitors, there are products in various phases of development, including compounds in Phase 2 and Phase 3
of development. However, we believe that VAR 200 may be the only drug currently in development that lipotoxicity. The current treatment
algorithm for renal disease includes multiple drug therapies to address the various pathways contributing to renal disease. We believe
that VAR 200 could potentially be used in combination with other treatment modalities addressing other pathogenic pathways.

Additionally,
there are a number of other companies developing drugs targeting inflammasome pathways, mainly NLRP3 inflammasome pathways, some of which
have clinical trials underway in multiple indications. Indications being evaluated in current Phase 2 clinical trials include obesity-related
cardometabolic comorbidities, obesity-related osteoarthritis, recurrent pericarditis, and Parkinson’s disease. We believe that
IC 100 may be the only monoclonal antibody targeting the ASC component of the inflammasome, which can potentially inhibit multiple types
of inflammasomes and disrupt the structure and function of ASC specks to prevent initiation and perpetuation of inflammation.

17

Intellectual
Property

We
seek to protect our products and technologies through a combination of patents, regulatory exclusivity, and proprietary know-how. Our
goal is to obtain, maintain, and enforce patent protection for our products, formulations, processes, methods, and other proprietary
technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the United
States and in other countries. Our policy is to actively seek to obtain, where appropriate, the broadest intellectual property protection
possible for our current compositions and methods and any future compositions and methods under development, proprietary information,
and proprietary technology through a combination of contractual arrangements and patents, where applicable, both in the United States
and abroad. However, even patent protection may not always afford complete protection against competitors who seek to circumvent our
patents. For additional information, see section entitled “Risk Factors — Risks Related to Our Intellectual Property.”

Pursuant
to the L&F License Agreement, we have an exclusive, sublicensable, worldwide license to the inventions relating to 2-hydroxypropyl-beta-cyclodextrin
(“2HPβCD”) for the treatment of kidney disease in humans, including FSGS, as described in certain method-of-use patents
and pending applications filed in the United States and selected foreign countries (Canada, China, Europe, Japan, and Mexico) from two
international patent applications filed pursuant to the provisions of the Patent Cooperation Treaty (“PCT”). Currently, there
are 4 issued United States patents and 12 foreign granted or allowed applications. These patents, and any patents that issue from the
pending applications, are anticipated to have a term to at least 2033, absent of any patent term adjustments or extensions.

Pursuant
to the InflamaCORE License Agreement, we have an exclusive, sublicensable, worldwide license to the inventions relating to recognition,
diagnosis, and treatment of inflammatory responses and inflammation mediated by inflammasomes and components thereof, including but not
limited to IC 100 which is a humanized IgG4 antibody directed against a specific amino acid sequence of the pyrin domain of Apoptosis-associated
speck-like protein (“ASC”). The patent portfolio for IC 100 includes 5 patent families covering composition of matter, biomarker,
and method-of-use patents and their related national stage filings in the United States and selected foreign countries (Australia, Brazil,
Canada, Chile, China, Colombia, Europe, India, Indonesia, Israel, Japan, Malaysia, Mexico, Philippines, Singapore, South Africa, South
Korea, Thailand, Vietnam). Currently, there are 6 issued United States patents, 14 foreign granted patents or allowed applications, and
59 pending applications. These patents, including composition of matter patents that have a term until December 2037, and any patents
that issue from the pending applications are anticipated to have a term until at least 2028, absent of any patent term adjustments or
extensions.

At
this time, ZyVersa has no patents or patent applications outside of those connected to the L&F or InflamaCORE License Agreements.

Even
though we have licensed issued patents, there is no guarantee that the validity of the patents will be upheld if challenged by a third
party. There can be no assurance that any of our intellectual property rights will afford us any protection from competition.

We
use the trade names Cholesterol Efflux Mediator™ and Lipid Efflux Mediator™ in association with our VAR 200 pharmaceutical
preparations and plan to seek federal trademark protection in the United States and foreign national trademark protection where available
and when appropriate. No other applications for trademark protection have been filed for any names or logos for products or technologies
in development. We intend to use these marks in connection with our pharmaceutical product candidates currently in development as added
levels of intellectual property protection for our proprietary technologies.

Regulatory
Matters

In
the United States, the FDA regulates drug products, biological products, and medical devices under the Federal Food, Drug, and Cosmetic
Act (“FDCA”), the Public Health Service Act (“PHSA”), and other federal laws and regulations. These FDA-regulated
products are also subject to state and local statutes and regulations, as well as applicable laws or regulations in foreign countries.
The FDA, and comparable regulatory agencies in state and local and local jurisdictions and in foreign countries, impose substantial requirements
on the research, development, testing, manufacture, quality control, labeling, packaging, storage, distribution, record-keeping, approval,
post-approval monitoring, advertising, promotion, marketing, sampling and import and export of FDA-regulated products.

18

Government
Regulation

Any
product development activities related to VAR 200, IC 100, and any other product candidates that we may seek to develop or acquire in
the future will be subject to extensive regulation by various government authorities, including the FDA and other federal, state and
local statutes and regulations and comparable regulatory authorities in other countries, which regulate the design, research, clinical
and non-clinical development, testing, manufacturing, storage, distribution, import, export, labeling, advertising and marketing of pharmaceutical
products and devices. Generally, before a new drug can be sold, considerable data demonstrating its quality, safety and efficacy must
be obtained, organized into a format specific to each regulatory authority, submitted for review and approved by the regulatory authority.
The data is often generated in two distinct development states: pre-clinical and clinical. VAR 200, IC 100, and any other product candidates
that we may seek to develop or acquire in the future must be approved by the FDA through the New Drug Application (“NDA”),
Biologic Licensing Application (“BLA”) or other applicable approval process before they may be legally marketed in the United
States.

The
clinical stages of development can generally be divided into three sequential phases that may overlap: Phase 1, Phase 2 and Phase 3 clinical
trials. In Phase 1, generally, small numbers of healthy volunteers are exposed to single escalating doses and then multiple escalating
doses of the product candidate. The primary purpose of these studies is to assess the metabolism, pharmacologic action, side effect tolerability
and safety of the drug. Phase 2 trials typically involve studies in disease-affected patients to determine the dose required to produce
the desired benefits. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected. In some instances,
formal Phase 1 and Phase 2 trials may not be deemed necessary or required by the FDA. Such is often the case when the safety and efficacy
of an API is considered to be well understood by the FDA. In Phase 3 studies, the drug or treatment is given to large groups of people
to confirm its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow the
drug or treatment to be used safely. Under established regulatory pathways, pharmaceutical products with APIs equal or similar to those
known by the FDA often enter more streamlined development programs than compounds entirely new to the agency.

Post-approval
studies, sometime referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies may be used
to gain additional experience from the treatment of patients in the intended therapeutic condition or to gain additional indications
for a medication. In certain instances, the FDA may mandate the performance of Phase 4 studies.

Development
of Drugs and Biological Products in the United States

In
the United States, the process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local
and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the
applicable United States requirements at any time during the product development process, approval process or after approval, may subject
an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications,
withdrawal of an approval, a clinical hold, warning letters, product recalls or withdrawal from the market, product seizures, total or
partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, or
civil or criminal penalties.

Prior
to the start of human clinical studies for a new drug or biological product in the United States, pre-clinical laboratory and animal
tests are often performed under the FDA’s Good Laboratory Practices regulations. The Sponsor must submit the results of the pre-clinical
tests, together with manufacturing information, analytical data, any available clinical data and literature and a proposed clinical protocol
to the FDA as part of the Investigational New Drug (“IND”) application. Similar filings are required in other countries.
The amount of data that must be supplied in the IND depends on the phase of the study. Phase 1 studies typically require less data than
larger Phase 3 studies. A clinical plan must be submitted to the FDA prior to commencement of a clinical trial. If the FDA has concerns
about the clinical plan or the safety of the proposed study, they may suspend or terminate the study at any time. Studies must be conducted
in accordance with good clinical practice and regular reporting of study progress and any adverse experiences is required. Studies are
also subject to review by independent institutional review boards responsible for overseeing studies at particular investigator sites
and protecting human research study subjects. An independent institutional review board may also suspend or terminate a study once initiated.
Accordingly, submission of an IND does not guarantee approval by the FDA allowing clinical trials to begin, or, once begun, that issues
will not arise that could cause the trial to be suspended or terminated.

19

Review
and Approval of Drugs and Biological Products in the United States

Following
completion of Phase 3 trials, data from the trials are analyzed to determine safety and effectiveness. Complete development data is then
filed with the FDA in a NDA or BLA, along with proposed labeling for the product and information about the manufacturing and testing
processes and facilities that will be used to ensure product quality. The NDA and BLA applications are the vehicle through which drug
sponsors formally propose that the FDA approve a new pharmaceutical product for sale and marketing in the United States. The NDA or BLA
must contain proof of safety, purity, potency and efficacy, which entails extensive pre-clinical and clinical testing. The data gathered
during the animal studies and human clinical trials of an IND become part of the NDA or BLA.

The
review and evaluation of an NDA or BLA by the FDA may take several years to complete. The FDA may conduct pre-approval inspections of
the manufacturing facilities for the new product to determine whether they comply with cGMP requirements and may also audit data from
clinical and pre-clinical trials.

The
FDA may place conditions on approvals including the requirement for a risk evaluation and mitigation strategy (“REMS”) to
assure the safe use of the agent. If the FDA concludes a REMS is needed, the Sponsor of the application must submit a proposed REMS,
which may include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods,
patient registries and other risk minimization tools.

IND
and Clinical Trials of Drugs and Biological Products

Prior
to commencing a human clinical trial of a drug or biological product, an IND, which contains the results of preclinical studies along
with other information, such as information about product chemistry, manufacturing and controls and a proposed protocol, must be submitted
to the FDA. An IND is a request for authorization from the FDA to administer an investigational drug or biological product to humans.
The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA within the 30-day time period raises concerns
or questions about the conduct of the clinical trial. In such a case, the IND sponsor must resolve any outstanding concerns with the
FDA before the clinical trial may begin. A separate submission to the existing IND must be made for each successive clinical trial to
be conducted during drug development.

An
independent Institutional Review Board (“IRB”) for each site proposing to conduct the clinical trial must review and approve
the investigational plan for the trial before it commences at that site. Informed written consent must be obtained from each trial subject.

Human
clinical trials for drug and biological products typically are conducted in sequential phases that may overlap:

●
Phase
I: The investigational drug/biologic is given initially to healthy human subjects or patients with the target disease or condition
in order to determine metabolism and pharmacologic actions of the drug in humans, side effects and, if possible, to gain early evidence
on effectiveness. During Phase I clinical trials, sufficient information about the investigational drug/biologic’s pharmacokinetics
and pharmacologic effects may be obtained to permit the design of well-controlled and scientifically valid Phase II clinical trials.

●
Phase
II: Clinical trials are conducted to evaluate the effectiveness of the drug/biologic for a particular indication or in a limited
number of patients in the target population to identify possible adverse effects and safety risks, to determine the efficacy of the
drug/biologic for specific targeted diseases and to determine dosage tolerance and optimal dosage. Multiple Phase II clinical trials
may be conducted by the Sponsor to obtain information prior to beginning larger and more expensive Phase III clinical trials.

20

●
Phase
III: When Phase II clinical trials demonstrate that a dosage range of the drug/biologic appears effective and has an acceptable
safety profile, and provide sufficient information for the design of Phase III clinical trials, Phase III clinical trials in an expanded
patient population at multiple clinical sites may begin. They are intended to further evaluate dosage, effectiveness and safety,
to establish the overall benefit-risk relationship of the investigational drug/biologic and to provide an adequate basis for product
labeling and approval by the FDA. In most cases, the FDA requires two adequate and well-controlled Phase III clinical trials to demonstrate
the efficacy of the drug in an expanded patient population at multiple clinical trial sites.

All
clinical trials must be conducted in accordance with FDA regulations, including good clinical practice (“GCP”) requirements,
which are intended to protect the rights, safety and well-being of trial participants, define the roles of clinical trial sponsors, administrators
and monitors and ensure clinical trial data integrity. Regulatory authorities, including the FDA, an IRB, a data safety monitoring board
or the Sponsor, may suspend or terminate a clinical trial at any time on various grounds, including a finding that the participants are
being exposed to an unacceptable health risk or that the clinical trial is not being conducted in accordance with FDA requirements.

During
the development of a new drug or biologic, sponsors are given opportunities to meet with the FDA at certain points. These points may
be prior to submission of an IND, at the end of Phase II clinical trials, and before a NDA or BLA is submitted. Meetings at other times
may be requested. These meetings can provide an opportunity for the Sponsor to share information about the data gathered to date, for
the FDA to provide advice and for the Sponsor and the FDA to reach agreement on the next phase of development. Sponsors typically use
the end-of-Phase II clinical trials meetings to discuss their Phase II clinical trials results and present their plans for the pivotal
Phase III registration trial that they believe will support approval of the new drug/biologic.

An
investigational drug product that is a combination of two different drugs in the same dosage form must comply with an additional rule
that requires that each component make a contribution to the claimed effects of the drug product. This typically requires larger studies
that test the drug against each of its components.

Disclosure
of Clinical Trial Information

Sponsors
of clinical trials of FDA-regulated products, including drugs, biologics, and devices, are required to register and disclose certain
clinical trial information. Information related to the product, patient population, phase of investigation, study sites and investigators,
and other aspects of the clinical trial, is made public as part of the registration. Sponsors also are obligated to discuss summary results
of their clinical trials on clinicaltrials.gov within 1 year after primary completion (the date when the last data point for the primary
outcome measure is collected from the last enrolled participant). Disclosure of the clinical trial results can be delayed until the new
product or new indication being studied has been approved. Competitors may use this publicly available information to gain knowledge
regarding the progress of development programs.

The
NDA and Biologics License Application (BLA) Approval Processes

Our
drug or biological products must be approved by the FDA through the NDA and BLA approval processes, respectively, before they may be
legally marketed in the U.S. These FDA-required processes for drugs or biological products to be marketed in the U.S. generally involve
the following:

●
completion
of non-clinical laboratory tests, in the case of a NDA, completion of animal studies and formulation studies conducted according
to good laboratory practice or other applicable regulations;

●
submission
of an IND application;

●
performance
of human clinical trials conducted in accordance with GCP to establish the safety and efficacy of the proposed drug or biological
product for its intended use or uses;

●
submission
to the FDA of a NDA or BLA (as applicable) after completion of all pivotal clinical trials;

●
FDA
pre-approval inspection of manufacturing facilities and audit of clinical trial sites; and

●
FDA
approval of a NDA or BLA, as applicable.

21

In
order to obtain approval to market a drug or biological product in the U.S., a marketing application must be submitted to the FDA that
provides data establishing to the FDA’s satisfaction the safety and effectiveness of the investigational drug for the proposed
indication. The cost of preparing and submitting a NDA or BLA is substantial. Each NDA or BLA submission requires a user fee payment
(exceeding $2.5 million in fiscal year 2019), unless a waiver or exemption applies. The manufacturer or sponsor of an approved BLA is
also subject to annual establishment fees. The application includes all relevant data available from pertinent non-clinical studies,
or preclinical studies and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed
information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other information. Data can
come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of
alternative sources, including studies initiated by investigators that meet GCP requirements.

Companies
also must develop additional information about the characteristics of the drug or biological product and finalize a process for the NDA
or BLA sponsor’s manufacturing the product in compliance with current good manufacturing practice (“cGMP”) requirements.
The manufacturing process must be capable of consistently producing quality batches of the product candidate, and the manufacturer must
develop methods for testing the finished drug or biological product. Additionally, appropriate packaging must be selected and tested,
and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its
shelf-life.

The
results of drug or biological product development, non-clinical studies and clinical trials, along with descriptions of the manufacturing
process, tests conducted on the drug or biological product, proposed labeling and other relevant information are submitted to the FDA
as part of a NDA or BLA requesting approval to market the product.

The
FDA reviews all NDAs or BLAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for
filing. FDA may request additional information rather than accept a NDA or BLA for filing. In this event, the NDA or BLA must be resubmitted
with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. The FDA
has 60 days from its receipt of a NDA or BLA to conduct an initial review to determine whether the application will be accepted for filing
based on the agency’s threshold determination that it is sufficiently complete to permit substantive review.

Once
the NDA or BLA submission is accepted for filing, the FDA begins an in-depth review of the NDA or BLA to determine, among other things,
whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance
with cGMP to ensure the product’s identity, strength, quality and purity. The FDA has agreed to specific performance goals on the
review of NDAs and BLA’s and seeks to review standard NDAs or BLAs within 12 months and prior review biologics within 8 months
from submission of the respective applications. The review process may be extended by the FDA for three additional months to consider
certain late submitted information or information intended to clarify information already provided in the submission.

After
the FDA evaluates the NDA or BLA, it will issue either an approval letter or a complete response letter. An approval letter authorizes
commercial marketing of the drug or biologic product with specific prescribing information for specific indications. A complete response
letter indicates that the application is not ready for approval. A complete response letter may require additional clinical data and/or
an additional pivotal clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials,
preclinical studies or manufacturing. Even if such additional information is submitted, the FDA may ultimately decide that the NDA or
BLA does not satisfy the criteria for approval. The FDA may also refer applications for novel drug or biological products or drug or
biological products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes
clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and, if so,
under what conditions. The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations carefully
and generally follows such recommendations when making decisions.

22

Before
approving a NDA or BLA, the FDA typically will inspect the facilities where the product is manufactured. The FDA will not approve the
product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to
assure consistent production of the product within required specifications. After the FDA evaluates the NDA or BLA and the manufacturing
facilities, it issues either the approval letter or the complete response letter. If the FDA determines the application, manufacturing
process or manufacturing facilities are not acceptable, its complete response letter typically will outline the deficiencies and often
will request additional testing or information, which may include additional large-scale clinical testing or information in order for
the FDA to reconsider the application. This may significantly delay further review of the application.

If
the FDA finds that a clinical site did not conduct the clinical trial in accordance with GCP regulations, the FDA may determine the data
generated by the clinical site should be excluded from the primary efficacy analyses provided in the NDA or BLA. Additionally, notwithstanding
the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory
criteria for approval.

If,
or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA or BLA, the FDA will issue
the approval letter. The FDA has committed to reviewing such resubmissions in 2 or 6 months depending on the type of information included.
An approval letter authorizes commercial marketing and distribution of the product with specific prescribing information for specific
indications. As a condition of approval, the FDA may require substantial post-approval testing and surveillance to monitor the product’s
safety or efficacy after a product is approved, including additional clinical trials and may impose other conditions, including labeling
restrictions, which can materially affect the product’s potential market and profitability. These so-called Phase IV or post-approval
clinical trials may be a condition for continuing drug approval. The results of Phase IV clinical trials can confirm the effectiveness
of a product candidate and can provide important safety information. In addition, the FDA now has express statutory authority to require
sponsors to conduct post-marketing trials to specifically address safety issues identified by the agency. Once granted, product approvals
may be withdrawn if compliance with regulatory standards is not maintained or problems or safety issues are identified following initial
marketing.

The
FDA also has authority to require a REMS to ensure that the benefits of a drug or biological product outweigh its risks. A sponsor may
also voluntarily propose a REMS as part of the NDA submission. The need for a REMS is determined as part of the review of the NDA or
BLA. Elements of a REMS may include “dear doctor letters,” a medication guide, more elaborate targeted educational programs,
and in some cases elements to assure safe use (“ETASU”), which is the most restrictive REMS. ETASU can include, but are not
limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring
and the use of patient registries. These elements are negotiated as part of the NDA or BLA approval, and in some cases the approval date
may be delayed. Once implemented, REMS are subject to periodic assessment and modification.

Changes
to some of the conditions established in an approved application, including changes in indications, labeling, device components or manufacturing
processes or facilities, may require submission and FDA approval of a new NDA or BLA, or NDA or BLA supplement before the change can
be implemented. A NDA or BLA supplement for a new indication typically requires clinical data similar to that in the original application,
and the FDA uses the same procedures and actions in reviewing NDA or BLA supplements as it does in reviewing NDAs or BLAs.

Even
if a product candidate receives regulatory approval, the approval may be limited to specific disease states, patient populations and
dosages, or might contain significant limitations on use in the form of warnings, precautions or contraindications, or in the form of
onerous risk management plans, restrictions on distribution or post-marketing trial requirements. Further, even after regulatory approval
is obtained, later discovery of previously unknown problems with a product may result in restrictions on the product or even complete
withdrawal of the product from the market. Delay in obtaining, or failure to obtain, regulatory approval for our products, or obtaining
approval but for significantly limited use, would harm our business. Also, new government requirements, including those resulting from
new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our
products in development. In addition, we cannot predict what adverse governmental regulations may arise from future U.S. or foreign governmental
action.

23

Hatch-Waxman
Act

Under
the Drug Price Competition and Patent Term Restoration Act of 1984, as amended, commonly known as the Hatch-Waxman Act, a portion of
a product’s U.S. patent term that was lost during clinical development and regulatory review by the FDA may be restored. The Hatch-Waxman
Amendments also provide a process for listing patents pertaining to approved products in the FDA’s Approved Drug Products with
Therapeutic Equivalence Evaluations (commonly known as the Orange Book) and for a competitor seeking approval of an application that
references a product with listed patents to make certifications pertaining to such patents. In addition, the Hatch-Waxman Amendments
provide for a statutory protection, known as non-patent exclusivity, against the FDA’s acceptance or approval of certain competitor
applications.

Patent
Term Restoration

Patent
term restoration can compensate for time lost during drug development and the regulatory review process by returning up to five years
of patent life for a patent that covers a new product or its use. This period is generally one-half the time between the effective date
of an IND (falling after issuance of the patent) and the submission date of a NDA, plus the time between the submission date of a NDA
and the approval of that application, provided the Sponsor acted with diligence. Patent term restorations, however, cannot extend the
remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved
drug may be extended and the extension must be applied for prior to expiration of the patent. The USPTO, in consultation with the FDA,
reviews and approves the application for any patent term extension or restoration.

Orange
Book Listing

In
seeking approval for a drug through a NDA, applicants are required to list with the FDA each patent whose claims cover the applicant’s
product. Upon approval of a drug, each of the patents listed by the NDA holder in the drug’s application or otherwise are published
in the FDA’s Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of
approval of an abbreviated new drug application (“ANDA”). An ANDA permits marketing of a drug product that has the same active
ingredient(s) in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be therapeutically
equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or
submit results of, preclinical studies or clinical trials to prove the safety or effectiveness of their drug product. Drugs approved
under and ANDA are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists
under prescriptions written for the original listed drug. Any applicant who files an ANDA seeking approval of a generic equivalent version
of a drug listed in the Orange Book or a 505(b)(2) NDA referencing a drug listed in the Orange Book must certify to the FDA that (i)
no patent information on the drug product that is the subject of the application has been submitted to the FDA; (ii) such patent has
expired; (iii) the date on which such patent expires; or (iv) such patent is invalid or will not be infringed upon by the manufacture,
use or sale of the drug product for which the application is submitted. This last certification is known as a paragraph IV certification.
A notice of the paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and
to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers. The applicant also may elect to submit a “section
viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use
rather than certify to a listed method-of-use patent. If the reference NDA holder and patent owners assert a patent challenge directed
to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDA is prohibited
from approving the application until the earlier of 30 months from the receipt of the notice of the paragraph IV certification, the expiration
of the patent, when the infringement case concerning each such patent was favorably decided in the applicant’s favor or such shorter
or longer period as may be ordered by a court. This prohibition is generally referred to as the thirty-month stay. The ANDA or 505(b)(2)
application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the branded reference
drug has expired. Thus, approval of an ANDA or 505(b)(2) NDA could be delayed for a significant period depending on the patent certification
the applicant makes and the reference drug sponsor’s decision to initiate patent litigation.

24

Market
Exclusivity

Market
exclusivity provisions under the FDCA also can delay the submission or the approval of certain drug applications. The Hatch-Waxman Act
establishes periods of regulatory exclusivity for certain approved drug products, during which the FDA cannot approve (or in some cases
accept) an ANDA or 505(b)(2) application that relies on the branded reference drug. For instance, the FDCA provides a five-year period
of non-patent marketing exclusivity within the U.S. to the first applicant to gain approval of a NDA for a new chemical entity (“NCE”).
A drug is a NCE if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or
ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an ANDA or a 505(b)(2)
NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference
to all the data required for approval. However, an application may be submitted after four years if it contains a Paragraph IV certification.
The Hatch- Waxman Act also provides three years of marketing exclusivity to the holder of a NDA (including a 505(b)(2) NDA) for a particular
condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new
clinical studies (other than bioavailability or bioequivalence studies) conducted or sponsored by the applicant were deemed by the FDA
to be essential to the approval of the application, including, for example, new indications, dosages or strengths of an existing drug.
This three- year exclusivity period protects against FDA approval of ANDAs and 505(b)(2) NDA for drugs that include the innovation that
required the new clinical data, but does not prohibit the FDA from approving ANDAs for drugs containing the original active ingredient.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA; however, an applicant submitting a full
NDA is required to conduct or obtain a right of reference to all of the non-clinical studies and adequate and well-controlled clinical
trials necessary to demonstrate safety and effectiveness.

Biosimilar
Exclusivity

The
Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) creates an abbreviated approval pathway for biosimilar products
under section 351(k) of the Public Health Service Act (“PHSA”). A biosimilar product or “biosimilar” is a biological
product that is highly similar to and has no clinically meaningful differences from an existing FDA-licensed reference product. Biosimilarity
must be shown through analytical studies, animal studies, and at least one clinical study, absent a waiver. A biosimilar product may
be deemed interchangeable with a prior licensed product if it is biosimilar and meets additional requirements under the BPCIA, including
that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times,
the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or
risks of diminished efficacy relative to exclusive use of the reference biologic. An interchangeable product may be substituted for the
reference product without the involvement of the prescriber.

Under
the BPCIA, no section 351(k) application for a biosimilar may be submitted for four (4) years from the date of licensure of the reference
product. Additionally, a reference biologic is granted twelve (12) years of exclusivity from the time of first licensure of the reference
product, During this twelve (12)-year exclusivity period, another company may still market a competing version of the reference product
if the FDA approves a full BLA for the competing product submitted under section 351(a) of the PHSA containing the competing sponsor’s
own pre-clinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of the
other company’s product. The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable
with the reference product may obtain exclusivity against a finding of interchangeability for other biologics for the same condition
of use for the lesser of (i) one (1) year after first commercial marketing of the first interchangeable biosimilar; (ii) eighteen (18)
months after the first interchangeable biosimilar is approved if there is no patent challenge; (iii) eighteen (18) months after resolution
of a lawsuit over the patents of the reference biologic in favor of the first interchangeable biosimilar applicant; or (iv) forty-two
(42) months after the first interchangeable biosimilar’s application has been approved if a patent lawsuit is ongoing within the
forty-two (42)-month period.

Expedited
Development and Review Programs

Fast
Track Designation

Fast
track designation may be granted for a product that is intended to treat a serious or life-threatening disease or condition for which
preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition. The sponsor of an investigational
drug product may request that the FDA designate the drug candidate for a specific indication as a fast track drug concurrent with, or
after, the submission of the IND for the drug candidate. The FDA must determine if the drug candidate qualifies for fast track designation
within 60 days of receipt of the sponsor’s request. For fast track products, sponsors may have greater interactions with the FDA
and the FDA may initiate review of sections of a fast track product’s NDA before the application is complete. This rolling review
is available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast track product
may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information
and the sponsor must pay applicable user fees. At the time of NDA filing, the FDA will determine whether to grant priority review designation.
Additionally, fast track designation may be withdrawn if the FDA believes that the designation is no longer supported by data emerging
in the clinical trial process.

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Breakthrough
Therapy Designation

The
FDA may also accelerate the approval of a designated Breakthrough Therapy, which is a drug that is intended, alone or in combination
with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates
that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as
substantial treatment effects observed early in clinical development. The sponsor of a Breakthrough Therapy may request the FDA to designate
the drug as a Breakthrough Therapy at the time of, or any time after, the submission of a IND for the drug. If the FDA designates a drug
as a Breakthrough Therapy, it must take actions appropriate to expedite the development and review of the application, which may include
(i) holding meetings with the sponsor and the review team throughout the development of the drug; (ii) providing timely advice to, and
interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the
nonclinical and clinical data necessary for approval is as efficient as practicable; (iii) involving senior managers and experienced
review staff, as appropriate, in a collaborative, cross-disciplinary review; (iv) assigning a cross-disciplinary project lead for the
FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review
team and the sponsor; and (v) taking steps to ensure that the design of the clinical trials is as efficient as practicable, when scientifically
appropriate, such as by minimizing the number of patients exposed to a potentially less efficacious treatment.

Accelerated
Approval

Accelerated
approval may be granted for a product that is intended to treat a serious or life-threatening condition and that generally provides a
meaningful therapeutic advantage to patients over existing treatments. A product eligible for accelerated approval may be approved on
the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be
measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or
mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or
lack of alternative treatments. The accelerated approval pathway is most often used in settings in which the course of a disease is long,
and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate
or intermediate clinical endpoint occurs rapidly. The accelerated approval pathway is contingent on a sponsor’s agreement to conduct
additional post-approval confirmatory studies to verify and describe the product’s clinical benefit. These confirmatory trials
must be completed with due diligence and, in some cases, the FDA may require that the trial be designed, initiated, and/or fully enrolled
prior to approval. Failure to conduct required post-approval studies, or to confirm a clinical benefit during post-marketing studies,
would allow the FDA to withdraw the product from the market on an expedited basis. All promotional materials for product candidates approved
under accelerated regulations are subject to prior review by the FDA.

Orphan
Drugs

Under
the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally
a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United
States but for which there is no reasonable expectation that the cost of developing and making the product for this type of disease or
condition will be recovered from sales of the product in the United States.

Orphan
drug designation must be requested before submitting a NDA. After the FDA grants orphan drug designation, the identity of the drug and
its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the
duration of, the regulatory review and approval process.

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The
first NDA applicant to receive FDA approval for a particular active moiety to treat a rare disease for which it has such designation
is entitled to a seven-year exclusive marketing period in the U.S. for that product, for that indication. During the seven-year exclusivity
period, the FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances,
such as a showing of clinical superiority to the product with orphan drug exclusivity by means of greater effectiveness, greater safety,
or providing a major contribution to patient care, or in instances of drug supply issues. Orphan drug exclusivity does not prevent the
FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition. Other benefits
of orphan drug designation include tax credits for certain research and an exemption from the NDA user fee.

Pediatric
Information

Under
the Pediatric Research Equity Act, or PREA, NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the
drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric
subpopulation for which the drug is safe and effective. The FDA may grant full or partial waivers, or deferrals, for submission of data.
Unless otherwise required by regulation, PREA does not apply to any drug for an indication for which orphan designation has been granted,
with certain exceptions.

The
Best Pharmaceuticals for Children Act, or BPCA, provides NDA holders a six-month extension of any exclusivity — patent or nonpatent
— for a drug if certain conditions are met. Conditions for exclusivity include the FDA’s determination that information relating
to the use of a new drug in the pediatric population may produce health benefits in that population, the FDA making a written request
for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe.
Applications under the BPCA are treated as priority applications, with all of the benefits that designation confers.

Post-Marketing
FDA Regulations

Following
approval of a new product, a pharmaceutical company and the approved product are subject to continuing regulation by the FDA and other
federal and state regulatory authorities, including, among other things, monitoring and record-keeping activities, reporting to applicable
regulatory authorities of adverse experiences with the product, providing the regulatory authorities with updated safety and efficacy
information, product sampling and distribution requirements, and complying with promotion and advertising requirements, which include,
among others, standards for direct-to-consumer advertising, restrictions on promoting drugs for uses or in patient populations not described
in the drug’s approved labeling (known as “off-label use”), limitations on industry-sponsored scientific and educational
activities, and requirements for promotional activities involving the internet. Although physicians may prescribe legally available drugs
for off-label uses, manufacturers may not market or promote such off-label uses. Modifications or enhancements to the products or labeling
or changes of site of manufacture are often subject to the approval of the FDA and other regulators, which may or may not be received
or may result in a lengthy review process.

The
FDA, state and foreign regulatory authorities have broad enforcement powers. Failure to comply with applicable regulatory requirements
could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include the following:

●
untitled
letters or warning letters;

●
fines,
disgorgement, restitution or civil penalties;

●
injunctions
(e.g., total or partial suspension of production) or consent decrees;

●
product
recalls, administrative detention, or seizure;

●
customer
notifications or repair, replacement or refunds;

●
operating
restrictions or partial suspension or total shutdown of production;

●
delays
in or refusal to grant requests for future product approvals or foreign regulatory approvals of new products, new intended uses,
or modifications to existing products;

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●
withdrawals
or suspensions of FDA product marketing approvals or foreign regulatory approvals, resulting in prohibitions on product sales;

●
clinical
holds on clinical trials;

●
FDA
refusal to issue certificates to foreign governments to export products for sale in other countries; and

●
criminal
prosecution.

Any
of these sanctions could result in higher than anticipated costs or lower than anticipated sales and have a material adverse effect on
our reputation, business, financial condition and results of operations. Such actions by government agencies could also require us to
expend a large amount of resources to respond to the actions. Any agency or judicial enforcement action could have a material adverse
effect on our business.

Prescription
drug advertising is subject to federal, state and foreign regulations. In the United States, the FDA regulates prescription drug promotion,
including direct-to-consumer advertising. Prescription drug promotion materials must be submitted to the FDA in conjunction with their
first use. Any distribution of prescription drug products and pharmaceutical samples must comply with the U.S. Prescription Drug Marketing
Act (“PDMA”), a part of the FDCA. Once a product is approved, its manufacture is subject to comprehensive and continuing
regulations by the FDA. The FDA regulations require the products be manufactured in specific approved facilities and in accordance with
cGMP, and NDA or BLA holders must list their products and register their manufacturing establishments with the FDA. These regulations
also impose certain organizational, procedural and documentation requirements with respect to manufacturing and quality assurance activities.
Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are subject to periodic unannounced
inspections by the FDA and certain state agencies for compliance with cGMP and other laws.

NDA
or BLA holders using contract manufacturers, laboratories or packagers are responsible for the selection and monitoring of qualified
firms. These firms are subject to inspections by the FDA at any time, and the discovery of violations could result in enforcement actions
that interrupt the operation of any such facilities or the ability to distribute products manufactured, processed or tested by them.
Newly-discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the
addition of new warnings and contraindications, and also may require the implementation of other risk management measures.

Healthcare
and Reimbursement Regulation

If
VAR 200, IC 100 and any other product candidate that we seek to develop, are approved by the FDA, government coverage and reimbursement
policies will both directly and indirectly affect our ability to successfully commercialize the product, and such coverage and reimbursement
policies will be affected by future healthcare reform measures. Government health administration authorities, private health insurers
and other organizations generally decide which drugs they will pay for and establish reimbursement levels for healthcare. In particular,
in the United States, private health insurers and other third-party payors often provide reimbursement for products based on the level
at which the government (through the Medicare or Medicaid programs) provides reimbursement for such treatments. Patients who are prescribed
treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all
or part of the associated healthcare costs. Many patients are unlikely to use our products unless coverage is provided and reimbursement
is adequate to cover a significant portion of the cost of our products. Sales of our products will therefore depend substantially, both
domestically and abroad, to the extent they are reimbursed by government health administration authorities, such as Medicare and Medicaid,
private health coverage insurers and other third-party payors. The market for our products will depend significantly on access to third-party
payors’ formularies, or lists of products or treatments for which third-party payors provide coverage and reimbursement. Also,
third-party payors are developing increasingly sophisticated methods of controlling healthcare costs. Coverage and reimbursements for
therapeutic products can differ significantly from payor to payor. A third-party payors’ decision to provide coverage for a medical
product or service does not imply that an adequate reimbursement rate will be approved. One third-party payor’s decision to cover
a particular medical product or service does not assure that other payors will also provide coverage for the medical product or services,
or to provide coverage at an adequate reimbursement rate. As a result, the coverage determination process will require us to provide
scientific and clinical support for the use of or products to each payor separately, with no assurance that adequate coverage and reimbursement
will be obtained.

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In
the United States and other potentially significant markets for VAR 200, IC 100 and any other product candidate that we seek to develop,
government authorities and other third-party payors are developing increasingly sophisticated methods of controlling healthcare costs.
For example, third-party payors are attempting to limit or regulate the price of medical products, particularly for new and innovative
products and therapies, which has resulted in lower average selling prices. Further, the increased emphasis on managed healthcare in
the United States will put additional pressure on product pricing, reimbursement and usage. These pressures can arise from rules and
practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare
reform, pharmaceutical reimbursement policies and pricing in general.

The
United States and some foreign jurisdictions have enacted or are considering a number of additional legislative and regulatory proposals
designed to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and
payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals
of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been
a particular focus of these efforts and has been significantly affected by major legislative initiatives, including the Patient Protection
and Affordable Care Act, or ACA, enacted in March 2010. In the future, there may be additional proposals relating to the reform of the
United States health care system, some of which could further limit the prices we are able to charge for our products, or the amounts
of reimbursement available for our products. If drug products are made available to authorized users of the Federal Supply Schedule of
the General Services Administration, additional laws and requirements apply. All of these activities are also potentially subject to
federal and state consumer protection and unfair competition laws.

Further,
if a drug product is reimbursed by Medicare, Medicaid or other federal or state healthcare programs, we, and our business activities,
including but not limited to our sales, marketing and scientific/educational grant programs must comply with the False Claims Act, as
amended, the federal Anti-Kickback Statute, as amended, other healthcare fraud and abuse laws and similar state laws. Additionally, if
an outpatient prescription drug product is reimbursed by Medicare or Medicaid, pricing and rebate programs must comply with, as applicable,
the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990, as amended, and the Medicare Prescription Drug Improvement
and Modernization Act of 2003.

Other
Regulatory Matters and Compliance Requirements

Manufacturing,
sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in
addition to the FDA, including, in the United States, the Centers for Medicare & Medicaid Services (“CMS”), other divisions
of the Department of Health and Human Services, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal
Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency, and state and local governments.
Sales, marketing and scientific/educational programs must also comply with federal and state fraud and abuse laws. Pricing and rebate
programs must comply with the Medicaid rebate requirements of the U.S. Omnibus Budget Reconciliation Act of 1990. If products are made
available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements
apply. The handling of any controlled substances must comply with the U.S. Controlled Substances Act and Controlled Substances Import
and Export Act. Products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act.
Manufacturing, sales, promotion and other activities are also potentially subject to federal and state consumer protection and unfair
completion laws.

The
distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing,
storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.

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The
Federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers of drugs,
devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance
Program (with certain exceptions) to report information related to certain payments or other transfers of value made or distributed to
physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching
hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.

In
addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct
our business. The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information
Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, imposes certain requirements
relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes
HIPAA’s privacy and security standards directly applicable to “business associates”— independent contractors
or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of
a covered entity. HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties
directly applicable to business associates and possibly other persons, and gave state attorneys general new authority to file civil actions
for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with
pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances,
many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. For
example, California recently enacted legislation, the California Consumer Privacy Act, or CCPA, which went into effect January 1, 2020.
The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California
residents, including the right to opt out of certain disclosures of their information. The CCPA also creates a private right of action
with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach.

Corruption
Laws

The
U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from
making improper payments or providing anything of value to improperly influence foreign government officials for the purpose of obtaining
or retaining business, or obtaining an unfair advantage. In recent years, there has been a substantial increase in the global enforcement
of anti-corruption laws. Our anticipated non-U.S. operations and our anticipated expansion into additional countries outside the United
States, including in developing countries, could increase the risk of such violations. Violations of these laws may result in severe
criminal or civil sanctions, could disrupt our business, and could adversely affect our reputation, business and results of operations
or financial condition.

International
Regulation of Drugs

Before
we can market VAR 200, IC 100 and any other product candidate that we seek to develop, in any jurisdiction outside of the United States,
we must obtain the necessary marketing authorizations in such jurisdiction. Many such jurisdictions require extensive safety and efficacy
data similar to the data required by the FDA before granting marketing authorization. We may not be successful in obtaining marketing
authorizations that we seek outside of the United States. If we are successful in obtaining marketing authorization in one jurisdiction,
including the United States, that authorization does not ensure that we will receive marketing authorization in any other jurisdiction.
The authorizations that are required to market a pharmaceutical product vary greatly from jurisdiction to jurisdiction. If we obtain
marketing approval in any jurisdiction outside of the United States, we will be subject to ongoing regulation in such jurisdiction, consistent
with the ongoing regulations to which we would be subject in the United States.

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International
Data Privacy and Security Laws

Certain
non-U.S. laws, such as the GDPR govern the privacy and security of health information in certain circumstances, some of which are more
stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating
compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal
penalties and private litigation. For example, in Europe, the GDPR went into effect in May 2018 and introduces strict requirements for
processing the personal data of individuals within the EEA. The GDPR also increases the scrutiny of transfers of personal data from clinical
trial sites located in the EEA to the United States and other jurisdictions that the European Commission does not recognize as having
“adequate” data protection laws. Further, recent legal developments in Europe have created complexity and compliance uncertainty
regarding certain transfers of information from the EEA to the United States. For example, on June 16, 2020, the Court of Justice of
the European Union, or the CJEU, declared the EU-U.S. Privacy Shield framework, or the Privacy Shield, to be invalid. As a result, Privacy
Shield is no longer a valid mechanism for transferring personal data from the EEA to the United States. Moreover, it is uncertain whether
the standard contractual clauses will also be invalidated by the European courts or legislature, which seems possible given the rationale
behind the CJEU’s concerns about U.S. law and practice on government surveillance. Companies that must comply with the GDPR face
increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential
fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Additionally, following the United Kingdom’s withdrawal from the European Union and the EEA, companies have to comply with the
GDPR and the GDPR as incorporated into United Kingdom national law, the latter regime having the ability to separately fine up to the
greater of £17.5 million or 4% of global turnover. The relationship between the United Kingdom and the European Union in relation
to certain aspects of data protection law remains unclear, for example around how data can lawfully be transferred between each jurisdiction,
which exposes us to further compliance risk. In Canada, PIPEDA and similar provincial laws impose obligations on companies with respect
to processing personal information, including health-related information, and provides individuals certain rights with respect to such
information, including the right to access and challenge the accuracy of their personal information held by an organization. Failure
to comply with PIPEDA could result in significant fines and penalties.

Employees

As
of December 31, 2025, we had six (6) full-time employees. We believe our relations with our employees are good. In addition, we utilize
and will continue to utilize consultants, clinical research organizations and third parties to perform our pre-clinical studies, clinical
studies, manufacturing and regulatory functions.

Corporate
Information

We
were incorporated under the name “Larkspur Health Acquisition Corp.” on March 17, 2021 under the laws of the State of Delaware
for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination, involving one or more other businesses. On December 12, 2022, we changed our name to “ZyVersa Therapeutics, Inc.”
in connection with the Business Combination (as hereinafter defined) with ZyVersa Therapeutics, Inc., a Florida corporation (“Old
ZyVersa”). Our principal executive offices are located at 2200 North Commerce Parkway, Suite 208, Weston, Florida 33326. Our telephone
number is (754) 231-1688 and our website address is https://www.zyversa.com. On our website, investors can obtain, free of charge,
a copy of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Code of Business Conduct and Ethics,
including disclosure related to any amendments or waivers thereto, other reports and any amendments thereto filed or furnished pursuant
to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we file such material electronically with, or furnish
it to, the U.S. Securities and Exchange Commission (the “SEC”). None of the information posted on our website is incorporated
by reference into this Annual Report on Form 10-K. The SEC also maintains a website at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding the Company and other companies that file materials with the SEC electronically.

This
Annual Report on Form 10-K and the information incorporated herein by reference contain references to registered or common law trademarks,
service marks and trade names owned by us or other companies. Solely for convenience, such trademarks, service marks and trade names
referred to in this report and the information incorporated herein, including logos, artwork, and other visual displays, may appear without
the ® or ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert,
to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and
trade names. We do not intend to use or display of other companies’ trademarks, service marks or trade names to imply a relationship
with, or endorsement or sponsorship of us by, any other companies. Other trademarks, service marks and trade names appearing in this
report are the property of their respective owners.

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