UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
| Filed by the Registrant | ☒ |
| Filed by a Party other than the Registrant | ☐ |
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to 240.14a-12 |
ZYVERSA THERAPEUTICS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box)
| ☒ | No fee required. |
| ☐ | Fee paid previously with preliminary materials |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
ZYVERSA THERAPEUTICS, INC.
2200 N. Commerce Parkway, Suite 208
Weston, Florida 33326
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Wednesday, June 11, 2025, at 9:00 AM Eastern Time
Dear Stockholder:
You are cordially invited to attend the 2025 Annual Meeting of Stockholders of ZyVersa Therapeutics, Inc., a Delaware corporation. The meeting will be held in a virtual-only format via live webcast on Wednesday, June 11, 2025, at 9:00 a.m. Eastern Time. To access the webcast, please visit http://www.virtualshareholdermeeting.com/ZVSA2025 and enter the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, on your proxy card, or in the instructions that accompanied your proxy materials. The purposes of the annual meeting are as follows:
| 1 . | To elect two Class III director nominees (Stephen C. Glover and Robert G. Finizio) to hold office for a term of three years and until their successors are duly elected and qualified. | |
| 2. | To ratify the selection by our audit committee of CBIZ CPAs P.C. (CBIZ) as our independent registered public accounting firm for the year ending December 31, 2025. | |
| 3. | To approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 100,000 shares to 382,122 shares. | |
| 4. | To approve the issuance of up to an aggregate of 1,637,000 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the inducement letter entered into by the Company and certain holders of outstanding warrants on November 5, 2024 (the November 2024 Warrant Inducement), in accordance with Nasdaq Listing Rule 5635(d). | |
| 5. | To approve the issuance of up to an aggregate of 2,105,265 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the securities purchase agreement entered into by the Company and an institutional accredited investor on March 5, 2025 (the March 2025 PIPE), to in accordance with Nasdaq Listing Rule 5635(d). | |
| 6. | To conduct any other business properly brought before the meeting. |
Please monitor the Investor Relations section of our website at http://investors.zyversa.com for updated information regarding the annual meeting. If you are planning to attend our virtual annual meeting, please check the website one week prior to the annual meeting date. As always, we encourage you to submit a proxy to vote your shares prior to the annual meeting.
These items of business are more fully described in the Proxy Statement accompanying this notice.
The record date for the Annual Meeting is April 15, 2025. Only stockholders of record at the close of business on that date or their proxies may vote at the meeting or any adjournment thereof.
By Order of the Board of Directors
/s/ Stephen C. Glover
Stephen C. Glover
Chairman, Chief Executive Officer, and President
Weston, Florida
April 17, 2025
We are primarily providing access to our proxy materials over the internet pursuant to the U.S. Securities and Exchange Commission s notice and access rules. On or about April 18, 2025, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials that will indicate how to access our 2025 Proxy Statement and 2024 Annual Report on the internet and will include instructions on how you can receive a paper copy of the annual meeting materials, including the notice of annual meeting, proxy statement, and proxy card.
Whether or not you expect to attend the meeting electronically, please submit a proxy for your shares promptly using the directions on your Notice, proxy card, or in the instructions that accompanied your proxy materials. You have three ways to vote prior to the meeting: (1) over the internet at http://www.proxyvote.com, (2) by telephone by calling the toll-free number 1-800-690-6903, or (3) if you elected to receive printed proxy materials by mail, by marking, dating, and signing your proxy card and returning it in the accompanying postage-paid envelope. Even if you have submitted a proxy, you may still vote electronically at the virtual meeting if you attend. Please note, however, that if your shares are held of record by a broker, bank, or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
TABLE OF CONTENTS
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ZYVERSA THERAPEUTICS, INC.
2200 N. Commerce Parkway, Suite 208
Weston, Florida 33326
PROXY STATEMENT
FOR THE 2025 ANNUAL MEETING OF STOCKHOLDERS
June 11, 2025, at 9:00 AM Eastern Time
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Who is ZyVersa Therapeutics, Inc.?
ZyVersa Therapeutics, Inc. (the Company, ZyVersa, we, us, or our) is a clinical stage biopharmaceutical company leveraging proprietary technologies to develop drugs for patients with chronic renal or inflammatory diseases with high unmet medical needs. Our mission is to develop drugs that optimize health outcomes and improve patients quality of life.
We have two proprietary globally licensed drug development platforms, each of which was discovered by research scientists at the University of Miami, Miller School of Medicine (the University of Miami or University). These development platforms are:
| ● | Cholesterol Efflux Mediator TM VAR 200 (2-hydroxypropyl-beta-cyclodextrin or 2HPCD) is an injectable drug in clinical development for treatment of renal diseases. VAR 200 was licensed from LF Research LLC on December 15, 2015. LF Research was founded by the University of Miami research scientists who discovered the use of VAR 200 for renal diseases. | |
| ● | Inflammasome ASC Inhibitor IC 100 is a humanized monoclonal antibody in preclinical development for treatment of inflammatory conditions. IC 100 was licensed from InflamaCore, LLC on April 18, 2019. InflamaCore, LLC was founded by the University of Miami research scientists who invented IC 100. |
We believe that each of our product candidates has the potential to treat numerous indications in their respective therapeutic areas. Our strategy is to focus on indication expansion to maximize commercial potential.
Our renal pipeline is initially focused on rare, chronic glomerular diseases. Our lead indication for VAR 200 is focal segmental glomerulosclerosis (FSGS). On January 21, 2020, we filed an Investigational New Drug application (IND) for VAR 200, and the United States Food and Drug Administration (FDA) has allowed our development plans to proceed to a Phase 2a trial in patients with FSGS based on the risk/benefit profile of the active ingredient (2HPCD). Prior to initiating a Phase 2a trial in patients with FSGS, we are planning to initiate a small open-label Phase 2a trial in patients with diabetic kidney disease in H1-2025, in which we expect to obtain patient proof-of-concept data more quickly than in an FSGS trial. This will enable assessment of drug effects as patients proceed through treatment and will provide insights for developing a lager Phase 2a/b protocol in patients with FSGS. An IND amendment for evaluation of VAR 200 in a Phase 2a trial in patients with diabetic kidney disease was filed with the FDA on February 16, 2024. VAR 200 has pharmacologic proof-of-concept data in animal models representative of FSGS, Alport Syndrome, and diabetic kidney disease, providing opportunity for indication expansion.
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Our Inflammasome ASC Inhibitor IC 100 focuses on chronic inflammatory diseases. Our lead indication for IC 100 is obesity with metabolic complications. IC 100s preclinical development is nearing completion. Our focus is on advancing IC 100 toward a currently planned IND submission in H2-2025, followed by initiation of a Phase 1 trial in healthy overweight patients with a BMI between 27 30. IC 100 has preclinical data in animal models representing six different indications, each demonstrating that IC 100 attenuates pathogenic inflammasome signaling pathways leading to reduced inflammation and improved histopathological and/or functional outcomes. Those indications are stroke-related cardiovascular injury, retinopathy of prematurity (ROP), multiple sclerosis (MS), acute respiratory distress syndrome (ARDS), spinal cord injury, and traumatic brain injury (TBI). Likewise, Preclinical studies are underway in Alzheimers and Parkinsons diseases, and we are preparing to initiate IND-enabling preclinical studies in animal models of diet-induced obesity.
Business Combination
On December 12, 2022 (the Closing Date), we consummated the previously announced Business Combination (as defined below) pursuant to the terms of that certain Business Combination Agreement (the Business Combination Agreement), by and among ZyVersa Therapeutics, Inc., a Florida corporation (Old ZyVersa), the representative of Old ZyVersas shareholders named therein (the Securityholder Representative), Larkspur Health Acquisition Corp., a Delaware corporation (Larkspur), and Larkspur Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Larkspur (Merger Sub). Pursuant to the terms of the Business Combination Agreement (and upon all other conditions of the Business Combination Agreement being satisfied or waived), on the Closing Date of the Business Combination and transactions contemplated thereby (the Business Combination), (i) Larkspur changed its name to ZyVersa Therapeutics, Inc., a Delaware corporation (the Company) and (ii) Merger Sub merged with and into Old ZyVersa (the Merger), with Old ZyVersa as the surviving company in the Merger and, after giving effect to such Merger, Old ZyVersa became a wholly-owned subsidiary of the Company.
Prior to the completion of the Business Combination, the Company was a shell company. Following the Business Combination, the business of Old ZyVersa is the business of the Company. The Company was incorporated in the State of Delaware on March 17, 2021 and its subsidiary, Old ZyVersa, was incorporated on March 11, 2014. Larkspur Merger Sub, Inc. was incorporated in the State of Delaware on July 13, 2022.
Our principal executive offices are located at 2200 North Commerce Parkway, Suite 208, Weston, Florida 33326, and our telephone number is (754) 231-1688. Our website address is http://www.zyversa.com. The information contained on or otherwise accessible through our website is not part of this proxy statement.
Unless expressly indicated or the context otherwise requires, references in this proxy statement to the Company, the Registrant, ZyVersa, we, us, and our refer to ZyVersa (and the business of Old ZyVersa which became the business of ZyVersa after giving effect to the Business Combination).
Why did I receive a notice regarding the availability of proxy materials on the Internet?
Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the SEC), we have elected to provide access to our proxy materials over the Internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (Notice), because the board of directors of the Company is soliciting your proxy to vote at the 2025 Annual Meeting of Stockholders (the Annual Meeting), including at any adjournment or postponement of the Annual Meeting. Using the instructions found in the proxy notice, all stockholders will have the ability to access the proxy materials on the website or request to receive a printed set of the proxy materials.
We intend to mail the Notice of Internet Availability of Proxy Materials on or about April 18, 2025, to all stockholders of record entitled to vote at the Annual Meeting.
Will I receive any other proxy materials by mail?
No, you will not receive any other proxy materials by mail unless you request a paper copy of proxy materials. To request that a full set of the proxy materials be sent to your specified postal address, please go to http://www.proxyvote.com, call 1 (800) 579-1639, or send an email to sendmaterial@proxyvote.com. Please have your proxy card in hand when you access the website or call, and follow the instructions provided therein. You will need your unique 16-digit control number from your Proxy notice,, your proxy card, or in the instructions that accompanied your proxy materials. If you are requesting materials by email, please include in the subject line your unique 16-digit control number from your proxy card.
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How do I attend the Annual Meeting?
The meeting will be held in a virtual-only format via live webcast on Wednesday, June 11, 2025, at 9:00 a.m. Eastern Time. You will be able to listen and participate in the Annual Meeting as well as vote and submit your questions during the live webcast of the meeting by visiting http://www.virtualshareholdermeeting.com/ZVSA2025 and entering the 16-digit control number included in your Notice, on your proxy card, or in the instructions that accompanied your proxy materials.
Information on how to vote electronically at the Annual Meeting is discussed below. As always, we encourage you to submit a proxy to vote your shares prior to the Annual Meeting.
Who can vote at the Annual Meeting?
Only stockholders of record at the close of business on April 15, 2025, will be entitled to vote at the Annual Meeting. On this record date, there were 3,619,456 shares of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on April 15, 2025, your shares were registered directly in your name with our transfer agent, Continental Stock Transfer Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote electronically by internet before or at the virtual Annual Meeting. Before the virtual Annual Meeting, you may also vote by phone or mail. Voting directions are summarized below. Whether or not you plan to attend the virtual Annual Meeting, we urge you to submit a proxy in advance of the meeting to ensure your vote is counted. You may still attend the virtual Annual Meeting and vote at the Annual Meeting even if you have already submitted a proxy to vote.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on April 15, 2025, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in street name and your Notice is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You may still attend the Annual Meeting by visiting http://www.virtualshareholdermeeting.com/ZVSA2025 and entering the 16-digit control number included in your Notice. However, since you are not the stockholder of record, you may not vote your shares electronically at the meeting unless you have requested and obtained a valid proxy from your broker or other agent. If you obtained a valid proxy from your broker or other agent, you may vote electronically at the virtual Annual Meeting by visiting http://www.virtualshareholdermeeting.com/ZVSA2025 and entering the 16-digit control number included in your valid proxy.
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What am I voting on?
There are five matters scheduled for a vote:
| ● | Proposal No. 1 - To elect two Class III director nominees (Stephen C. Glover and Robert G. Finizio) to hold office for a term of three years and until their successors are duly elected and qualified. | |
| ● | Proposal No. 2 - To ratify the selection by our audit committee of CBIZ as our independent registered public accounting firm for the year ending December 31, 2025. | |
| ● | Proposal No. 3 - To approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 100,000 shares to 382,122 shares. | |
| ● | Proposal No. 4 - To approve the issuance of up to an aggregate of 1,637,000 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock issued in the November 2024 Warrant Inducement, in accordance with Nasdaq Listing Rule 5635(d). | |
| ● | Proposal No. 5 - To approve the issuance of up to an aggregate of 2,105,265 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued in the March 2025 PIPE, in accordance with Nasdaq Listing Rule 5635(d). |
What if another matter is properly brought before the meeting?
The board of directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting in accordance with our bylaws and other applicable law, the persons named in the accompanying proxy card may vote on those matters in accordance with their best judgment.
How do I vote?
Proposal 1: You may either vote For the nominees to the board of directors or you may Withhold your vote for the nominees. Proposals 2, 3, 4, and 5: You may vote For or Against or abstain from voting on the following proposals: to ratify the selection of CBIZ as our independent registered public accounting firm (Proposal 2); to approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 100,000 shares to 382,122 shares (Proposal 3); to approve the issuance of up to an aggregate of 1,637,000 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the November 2024 Warrant Inducement in accordance with Nasdaq Listing Rule 5635(d) (Proposal 4); and to approve the issuance of up to an aggregate of 2,105,265 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the March 2025 PIPE in accordance with Nasdaq Listing Rule 5635(d) (Proposal 5).
The procedures for voting are fairly simple:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote by internet before or at the virtual Annual Meeting. Before the virtual Annual Meeting, you may also vote by phone or mail. Voting directions are summarized below. Whether or not you plan to attend the virtual meeting, we urge you to submit a proxy in advance of the meeting to ensure your vote is counted. You may still attend the virtual Annual Meeting and vote at the meeting even if you have already submitted a proxy to vote.
| ● | To Submit a Proxy to Vote by Internet Before the Meeting: Go to http://www.proxyvote.com up until 11:59 p.m. Eastern Time on June 10, 2025 to ensure your vote is counted. Follow the instructions to obtain your records and to create an electronic voting instruction form. You will be asked to provide your unique 16-digit control number that appears on your Notice, proxy card, or other proxy materials. |
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| ● | To Vote by Internet At the Annual Meeting: Go to http:// www.virtualshareholdermeeting.com/ZVSA2025 and enter the 16-digit control number that appears on your Notice, proxy card, or other proxy materials and follow the instructions. | |
| ● | To Submit a Proxy to Vote by Phone: Dial 1-800-690-6903 toll-free using a touch-tone phone up until 11:59 p.m. Eastern Time on June 10, 2025 to ensure your vote is counted. Follow the recorded instructions. You will be asked to provide your unique 16-digit control number that appears on your Notice, proxy card, or other proxy materials. | |
| ● | To Submit a Proxy to Vote by Mail: Mark, sign, and date your proxy card and return it promptly in the postage-paid envelope provided, or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a Notice containing voting instructions from that organization rather than from the Company. Simply follow the voting instructions in your Notice provided by your broker, bank, or other agent to ensure that your vote is counted.
To vote electronically at the virtual Annual Meeting, you must request and obtain a valid proxy form from your broker, bank, or other agent. If you obtain a valid proxy from your broker or other agent, you may vote at the virtual meeting by visiting http://www.virtualshareholdermeeting.com/ZVSA2025 and enter the 16-digit control number included in your proxy materials.
The ability to submit a proxy by internet allows you to submit a proxy to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. If you choose to submit a proxy to vote your shares online by internet, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you hold as of the close of business on April 15, 2025.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not submit a proxy to vote in advance of the virtual Annual Meeting by internet, phone, or mail, and you do not vote electronically at the virtual Annual Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the New York Stock Exchange (the NYSE), deems the particular proposal to be a routine matter. Brokers and nominees can use their discretion to vote uninstructed shares with respect to matters that are considered to be routine, but not with respect to non-routine matters. Under the rules and interpretations of NYSE, which apply regardless of whether an issuer is listed on the NYSE or Nasdaq, non-routine matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. Accordingly, your broker or nominee may not vote your shares on Proposal Nos. 1, 3, 4, or 5 without your instructions, but may vote your shares on Proposal No. 2, even in the absence of your instruction.
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What if I mail a proxy card or otherwise submit a proxy to vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise submit a proxy to vote without marking voting selections, your shares will be voted, as applicable:
| ● | For the election of the two Class II director nominees (Stephen C. Glover and Robert G. Finizio) to hold office for a term of three years and until their successors are duly elected and qualified. | |
| ● | For the ratification of the selection of CBIZ as our independent registered public accounting firm for the year ending December 31, 2025. | |
| ● | For an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 100,000 shares to 382,122 shares. | |
| ● | For the approval of the issuance of up to an aggregate of 1,637,000 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the November 2024 Warrant Inducement, in accordance with Nasdaq Listing Rule 5635(d). | |
| ● | For the approval of the issuance of up to an aggregate of 2,105,265 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the March 2025 PIPE, in accordance with Nasdaq Listing Rule 5635(d). |
If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using your proxyholders best judgment.
Who is paying for this proxy solicitation?
The Company will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. The Company may also reimburse brokerage firms, banks, and other agents for the cost of forwarding proxy materials to beneficial owners. We may retain Morrow Sodali LLC to aid in the solicitation of proxies. If retained, we anticipate that Morrow Sodali LLC will receive a fee of approximately $15,000, as well as reimbursement for certain costs and out-of-pocket expenses incurred by them in connection with their services, all of which will be paid by the Company.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each of your Notices to ensure that all of your shares are voted.
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Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
| ● | You may submit another properly completed proxy card with a later date. | |
| ● | You may grant a subsequent proxy by telephone or through the internet. | |
| ● | You may send a timely written notice that you are revoking your proxy to our Secretary at 2200 N. Commerce Parkway, Suite 208, Weston, Florida 33326. | |
| ● | You may attend the Annual Meeting virtually and vote electronically by visiting http://www.virtualshareholdermeeting.com/ZVSA2025 and entering the 16-digit control number included in your Notice, on your proxy card, or in the instructions that accompanied your proxy materials. Simply attending or participating in the Annual Meeting will not, by itself, revoke your proxy. |
Your latest proxy card or other proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank to revoke your proxy.
When are stockholder proposals and director nominations due for the 2026 Annual Meeting?
Stockholders may submit proposals on matters appropriate for stockholder action at annual meetings for inclusion in our proxy statement in accordance with regulations adopted by the SEC under Rule 14a-8 of the Exchange Act. To be considered for inclusion in the proxy statement and form of proxy relating to our 2026 annual meeting of stockholders, such proposals must be received by our Secretary at our executive offices at 2200 N. Commerce Parkway, Suite 208, Weston, Florida, 33326, no later than December 19, 2025. Our Bylaws set an advance notice procedure for proposals a stockholder wishes to present directly at an annual meeting (rather than submitting for inclusion in our proxy statement under Rule 14a-8) and for director nominations. To be considered for presentation at the 2025 annual meeting, proposals that are not submitted for inclusion in our proxy statement under Rule 14a-8 and nominations (whether or not submitted for inclusion in our proxy statement under Rule 14a-19) submitted through our advance notice procedure must be delivered to, or mailed and received at, the above address not later than March 13, 2026 nor earlier than February 11, 2026. However, if the date of the 2026 annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the 90th day prior to such annual meeting or, if later, the 10th day following the day on which public disclosure of the date of such annual meeting was first made by the Company. You are also advised to review our Bylaws, which contain a description of the information required to be submitted with notices of any such proposal or nomination as well as additional requirements about advance notice of stockholder proposals and director nominations.
To comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than Company nominees must, in addition to complying with the requirement of our Bylaws, provide notice no later than April 13, 2026 that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934, as amended. Such notice may be mailed to the Corporate Secretary at 2200 N. Commerce Parkway, Suite 208, Weston, Florida, 33326, or emailed to pwolfe@zyversa.com.
How are votes counted?
Votes will be counted by the inspector of elections appointed for the meeting, who will separately count, (a) for the proposal to elect directors, votes For, Withhold, and broker non-votes, and (b) with respect to the other proposals, votes For and Against, abstentions, and, if applicable, broker non-votes. Assuming a quorum is present, abstentions and broker non-votes, if any, will have no effect on the outcome of Proposal Nos. 1, 3, 4, or 5. Because Proposal No. 2 is routine, we do not expect that any broker non-votes will occur with respect to such proposal. Broker non-votes, if any, will have no effect on the outcome of Proposal No. 2.
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What are broker non-votes ?
As discussed above, when a beneficial owner of shares held in street name does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be non-routine, the broker or nominee does not have discretionary authority to vote the shares. When there is at least one routine matter to be considered at a meeting, and a broker exercises its discretionary authority to vote on any such routine matter with respect to any uninstructed shares, broker non-votes occur with respect to the non-routine matters for which the broker lacks discretionary authority to vote such uninstructed shares.
How many votes are needed to approve each proposal?
| ● | Proposal No. 1 For the election of the directors, directors are elected by a plurality of the votes cast in favor. The two nominees receiving the most FOR votes from the votes cast on the election of the directors will be elected as directors. Assuming a quorum is present, abstentions and broker non-votes will have no effect on this proposal. | |
| ● | Proposal No. 2 To ratify the selection of CBIZ as our independent registered public accounting firm for the year ending December 31, 2025, the proposal must be approved by the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such proposal. Abstentions and broker non-votes, if any, will have no effect on this proposal. Because this proposal is routine, we do not expect that any broker non-votes will occur with respect to this proposal. | |
| ● | Proposal No. 3 To approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 100,000 shares to 382,122 shares, the proposal must be approved by the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such proposal. Abstentions and broker non-votes will have no effect on this proposal. | |
| ● | Proposal No. 4 To approve the issuance of up to an aggregate of 1,637,000 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the November 2024 Warrant Inducement, in accordance with Nasdaq Listing Rule 5635(d), the proposal must be approved by the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such proposal. Abstentions and broker non-votes will have no effect on this proposal. | |
| ● | Proposal No. 5 To approve the issuance of up to an aggregate of 2,105,265 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, issued pursuant to the March 2025 PIPE in accordance with Nasdaq Listing Rule 5635(d), the proposal must be approved by the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such proposal. Abstentions and broker non-votes will have no effect on this proposal. |
What is the quorum requirement?
A quorum of stockholders is generally required to hold a valid meeting of stockholders. A quorum is present if the holders of thirty-three and one-third percent (33 1/3%) of the voting power of the stock issued and outstanding and entitled to vote at a meeting are present in person (virtually, in the case of this virtual Annual Meeting) or are represented by proxy.
Any shares that you hold of record will be counted towards the establishment of a quorum only if you submit a valid proxy or if you or your proxy attends the meeting virtually. If you are a beneficial holder of shares held through a broker, bank, or other nominee, your shares will be counted towards the establishment of a quorum if you provide voting instructions with respect to such shares, if you obtain a proxy to vote such shares and attend the meeting virtually, or if you fail to provide voting instructions with respect to such shares and your broker, bank, or other nominee exercises its discretionary authority and votes your shares on Proposal No. 2 at the meeting.
Shares for which abstentions or broker non-votes occur on any proposal will be counted towards the establishment of a quorum.
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How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a current report on Form 8-K within four business days after the meeting, we intend to file a current report on Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional current report on Form 8-K to publish the final results.
What can I do if I need technical assistance during the meeting?
If you encounter any difficulties accessing the virtual meeting during the meeting time, please call the technical support number that will be posted on the live webcast log-in page.
If I can t attend the meeting, how do I vote or listen to it later?
You do not need to attend the virtual Annual Meeting to vote if you submitted a proxy to vote in advance of the meeting. A replay of the meeting, including the questions answered during the meeting, will be available at https://investors.zyversa.com for one year following the meeting date.
What happens if a change to the Annual Meeting date or time is necessary due to exigent circumstances?
We intend to hold the Annual Meeting in a virtual-format only via live webcast. Please monitor the Investor Relations section of our website at https://investors.zyversa.com for updated information. If you are planning to attend our Annual Meeting virtually, please check the website one week prior to the Annual Meeting date. As always, we encourage you to vote your shares prior to the Annual Meeting.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which are subject to the safe harbor created by those sections, concerning our business, operations, and financial performance and condition as well as our plans, objectives, and expectations for business operations and financial performance and condition. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. You can identify these statements by words such as anticipate, assume, believe, could, estimate, expect, intend, may, plan, should, will, would, and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about our business and the industry in which we operate and managements beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this proxy statement may turn out to be inaccurate. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, those risks and uncertainties described herein, under Item 1A Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, and any risk factors disclosed in subsequent Quarterly Reports on Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information available to us as of the filing date of this proxy statement. Unless required by law, we do not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this proxy statement.
This proxy statement also contains market data related to our business and industry. These market data include projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may harm on our business, results of operations, financial condition, and the market price of our common stock.
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| Proposal No. 1 : | Election of Directors. |
| What am I voting on? | Election of two Class III director nominees (Stephen C. Glover and Robert G. Finizio) to hold office for a term of three years and until their successors are duly elected and qualified. | |
| Vote recommendation : | FOR the election of the one director nominee. | |
| Vote required : | For the election of the directors, directors are elected by a plurality of the votes cast in favor. The two nominees receiving the most FOR votes from the votes cast on the election of the directors, will be elected as directors. | |
| Effect of abstentions : | None. | |
| Effect of broker non-votes : | None. |
Our Second Amended and Restated Certificate of Incorporation (as amended, the Certificate of Incorporation) provides that our directors are divided into three classes, Class I directors, Class II directors, and Class III directors, each serving staggered three-year terms. The term of our Class III directors (Stephen C. Glover and Robert G. Finizio) will expire at the Annual Meeting.
Our board of directors is comprised of five members all of whom were previously elected by our stockholders. The board of directors has determined that Robert G. Finizio is an independent director, as defined by The Nasdaq Stock Market Rules. The director nominees are currently directors of the Company. If elected at the Annual Meeting, the nominees would serve until the 2028 annual meeting of stockholders and until a successor has been duly elected and qualified, or, if sooner, until the directors death, resignation, or removal. Our policy is to encourage directors and nominees for director to attend annual meetings of our stockholders.
Biographical information and the attributes, skills, and experience of each nominee that led our nominating and corporate governance committee and board of directors to determine that such nominee should serve as a director are discussed in the Executive Officers and Directors section of this proxy statement.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THE NAMED NOMINEES.
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| Proposal No. 2 : | Ratification of Selection of Independent Registered Public Accounting Firm. |
| What am I voting on? | Ratification of the selection of CBIZ as our independent registered public accounting firm for the year ending December 31, 2025. | |
| Vote recommendation : | FOR the ratification of CBIZ. | |
| Vote required : | A majority in voting power of the of the votes cast on the proposal (excluding abstentions and broker non-votes). | |
| Effect of abstentions : | None. | |
| Effect of broker non-votes : | Because this is a routine proposal, we do not expect that there will be any broker non-votes. Broker non-votes, if any, will have no effect on this proposal. |
Marcum LLP (Marcum) audited our financial statements for the fiscal year ended December 31, 2024. As reported on our current report on Form 8-K filed with the SEC on April 7, 2025, on April 7, 2025, the audit committee approved the engagement of CBIZ following CBIZs acquisition of the attest business of Marcum. The audit committee of the board of directors has selected CBIZ as our independent registered public accounting firm for the year ending December 31, 2025 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Our lead audit partner at CBIZ serves no more than five consecutive years in that role. Representatives of Marcum and CBIZ are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Marcums reports on the Companys financial statements for the fiscal years ended December 31, 2024 and 2023 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except for the inclusion of an explanatory paragraph regarding the substantial doubt about the Companys ability to continue as a going concern.
During the Companys two most recent fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through April 4, 2025, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused Marcum to make reference to the subject matter of the disagreements in connection with the reports on the Companys financial statements for such years. In addition, during the Companys two most recent fiscal years ended December 31, 2024 and 2023 and the subsequent interim period through April 4, 2025, there were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions), except that the Company concluded on material weaknesses in the Companys internal control over financial reporting as of December 31, 2024 and 2023 that business process controls across the entitys financial reporting processes were not effectively designed and implemented to properly address the risk of material misstatement, including controls without proper segregation of duties between preparer and reviewer.
We previously provided Marcum with a copy of the disclosures above and requested that Marcum furnish us with a letter addressed to the SEC stating whether it agrees with such disclosures, and, if not, stating the respects in which it does not agree. A copy of Marcums letter, dated April 7, 2025, was filed as Exhibit 16.1 with our current report on Form 8-K filed with the SEC on April 7, 2025.
The audit committee approved the appointment of CBIZ as our independent registered public accounting firm to perform independent audit services for the fiscal year ending December 31, 2025. During the fiscal years ended December 31, 2023, and December 31, 2024, and the subsequent interim period through April 7, 2025, we did not consult with CBIZ regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Companys consolidated financial statements, or (ii) any matter that was either the subject of a disagreement (as described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K and the related instructions).
Neither our bylaws nor other governing documents or law require stockholder ratification of the selection of CBIZ as our independent registered public accounting firm. However, the audit committee is submitting the selection of CBIZ to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the audit committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the audit committee in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.
Information regarding the fees paid to our independent registered public accounting firm in 2024 and 2023 and our pre-approval policies relating to such fees is discussed in the Independent Registered Public Accounting Firm section of this proxy statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 2 TO RATIFY THE
SELECTION OF CBIZ AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE YEAR ENDING DECEMBER 31, 2025 .
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| What am I voting on? | Approval of an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 100,000 shares to 382,122 shares. | |
| Vote recommendation : | FOR the approval of the amendment and restatement of our 2022 Omnibus Equity Incentive Plan. | |
| Vote required : | A majority in voting power of the of the votes cast on the proposal (excluding abstentions and broker non-votes). | |
| Effect of abstentions : | None. | |
| Effect of broker non-votes : | None. |
Summary of the Proposal
At the Annual Meeting, we will request that our stockholders approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan (the 2022 Plan), attached hereto as Annex A . The amendment and restatement of the 2022 Plan was approved by our board of directors on March 3, 2025, subject to approval by our stockholders. If approved, the amendment and restatement will increase the number of shares of our common stock reserved under the 2022 Plan by 100,000 shares to 382,122 shares.
If the amendment and restatement of the 2022 Plan is approved by our stockholders at the Annual Meeting, it will be effective as of the day of the Annual Meeting, and future grants will be made on or after such date under the amended 2022 Plan. If the amendment and restatement of the 2022 Plan is not approved by our stockholders, then it will not become effective, and the 2022 Plan will continue in accordance with its terms as previously approved by our stockholders.
Requested Shares
The board of directors believes that the future success of the Company depends, in large part, on our ability to attract, motivate, and retain high-caliber employees, consultants, and directors. Equity compensation is a key component of our compensation program because it helps us attract, motivate, and retain talented employees, consultants, and directors and align their interests with those of our stockholders.
As of April 17, 2025, and excluding the proposed increase in the number of shares reserved under the 2022 Plan, there were 277,965 shares available for issuance under the 2022 Plan pursuant to future awards. Based on our historical grant practices, as summarized below, our current stock price and our projected recruiting and retention needs, we anticipate that the Company will no longer be able to grant annual equity awards under our long-term incentive program for employees and our non-employee director compensation program beginning in 2026 unless we reserve more shares for issuance under the 2022 Plan.
To maintain the flexibility to keep pace with our competitors and effectively attract, motivate and retain a high-caliber workforce, we are asking our stockholders to authorize an additional 100,000 shares for issuance under the 2022 Plan, which would increase the aggregate number of shares available for issuance as future awards under the 2022 Plan to 382,122 shares, with such amount subject to adjustment for certain corporate events, under the applicable share counting rules, and under the evergreen feature.
It is essential that we continue the use of equity compensation to better position us in the market and allow us to retain our skilled employees while attracting talented new employees to help us achieve our objectives, which include increasing stockholder value by growing the business. Without the approval of an addition to our share reserve, we will not be able to continue to compete in this highly competitive market, which would ultimately result in the loss of critical talent and inhibit our ability to meet our future growth objectives.
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We intend to grant future equity awards under the 2022 Plan in amounts that are reasonable and consistent with market data prepared by the compensation committees independent consultant. Based on our historical grant practices, our current stock price and projected recruiting and retention needs, we believe that the proposed share increase would allow us to continue granting equity awards under the 2022 Plan to employees, consultants, and directors for approximately one more year. However, the additional shares could last for a different period if historical practice does not match our future needs, or if our stock price changes materially.
Key Plan Features
The 2022 Plan includes provisions that are designed to protect our stockholders interests and to reflect corporate governance best practices including:
| ● | No single trigger acceleration . Generally, there is no single-trigger acceleration of vesting upon change in control. The 2022 Plan does not provide for automatic vesting of awards upon a change in control. | |
| ● | Awards subject to forfeiture/clawback . Certain awards granted under the 2022 Plan are subject to recoupment in accordance with our compensation recovery policy that we adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, we may impose other clawback, recovery, or recoupment provisions in an award agreement, including a reacquisition right in respect of previously acquired shares or other cash or property upon the occurrence of cause. | |
| ● | No liberal change in control definition . The change in control definition in the 2022 Plan is not a liberal definition. A change in control transaction must actually occur in order for the change in control provisions in the 2022 Plan to be triggered. | |
| ● | No discounted stock options or stock appreciation rights . All stock options and stock appreciation rights granted under the 2022 Plan must have an exercise or strike price equal to or greater than the fair market value of our common stock on the date the stock option or stock appreciation right is granted. | |
| ● | Administration by our compensation committee . In general, the 2022 Plan will be administered by the compensation committee of the board of directors. | |
| ● | No re-pricing of stock options or stock appreciation rights. The 2022 Plan does not permit the repricing of the exercise price of stock options or stock appreciation rights that exceeds fair market value of a share of common stock on the date of such repricing without stockholder approval. | |
| ● | Limit on non-employee director awards and other awards . The maximum number of awards granted during any calendar year to any of our non-employee directors may not exceed $250,000 in total value (inclusive of any cash awards to a non-employee director for such year that are not made pursuant to the 2022 Plan), or $500,000 with respect to the initial year of the non-employee directors term. |
Stockholder Approval
If this Proposal No. 3 is approved, the amendment and restatement of the 2022 Plan will become effective as of the date of the Annual Meeting.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information with respect to our compensation plans under which equity compensation was authorized as of December 31, 2024.
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| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||
| Plan category | (a) | (b) | (c) | |||||||||
| Equity compensation plans approved by security holders (1) | 9,288 | (2) | $ | 2,301.04 | 177,638 | (3) | ||||||
| Equity compensation plans not approved by security holders | 324 | $ | 744.66 | - | ||||||||
| Total | 9,612 | $ | 3,045.70 | 117,638 | ||||||||
| (1) | Includes the 2014 Plan, which we assumed in the 2024 Business Combination, and the 2022 Plan. No new awards may be granted under the 2014 Plan. |
| (2) | Includes 5,131 and 4,157 shares of common stock issuable upon exercise of outstanding options pursuant to the 2014 Equity Incentive Plan and 2022 Omnibus Equity Incentive Plan, respectively, as of December 31, 2024. |
| (3) | The 2022 Plan contains an evergreen provision, pursuant to which the number of shares of common stock available for issuance under the 2022 Plan will automatically increase on the first day of January each calendar year during the term of the 2022 Plan by an amount equal to 4% of the number of shares outstanding on December 31, 2024. |
Burn Rate
The following table provides detailed information regarding the activity related to our 2022 Plan for 2023 and 2024:
| 2023 | 2024 | |||||||
| Total number of shares of common stock subject to stock options granted | 4,157 | 0 | ||||||
| Total number of shares of common stock subject to stock options inducement grants | 324 | 0 | ||||||
| Total number of shares of common stock subject to full value awards granted | 0 | 0 | ||||||
| Total number of shares of common stock outstanding as of December 31 | 405,212 | 2,508,191 | ||||||
| Burn Rate | 1.1 | % | 0 | % | ||||
Our burn rate is calculated as the total amount of equity granted in any year, divided by the number of common shares outstanding. Our future burn rate will depend on a number of factors, including the number of participants in the 2022 Plan, our stock price, changes to our compensation strategy, changes in business practices or industry standards, changes in our capital structure due to stock splits or similar events, the compensation practices of our competitors or changes in compensation practices in the market generally, and the methodology used to establish the equity award mix.
Description of the 2022 Plan
The principal terms of the 2022 Plan are described below. The following description of the 2022 Plan is a summary only and is qualified in its entirety by reference to the complete text of the 2022 Plan, as amended and restated, which is attached as Annex A to this proxy statement.
Administration . In general, the 2022 Plan will be administered by the compensation committee of the board of directors. The compensation committee will determine the persons to whom options to purchase shares of common stock, stock appreciation rights (SARs), restricted stock units, restricted or unrestricted shares of common stock, performance shares, performance units, incentive bonus awards, other stock-based awards and other cash-based awards may be granted. The compensation committee may also establish rules and regulations for the administration of the 2022 Plan and amendments or modifications of outstanding awards. The compensation committee may delegate authority to the Chief Executive Officer and other executive officers to grant options and other awards to employees (other than themselves), subject to applicable law and the 2022 Plan. No options, stock purchase rights or awards may be made under the 2022 Plan on or after the date that is 10 years after the effective date of the 2022 Plan, 2032 (or, the expiration date), but the 2022 Plan will continue thereafter while previously granted options, SARs or other awards remain outstanding.
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Eligibility . Persons eligible to receive options, SARs or other awards under the 2022 Plan are those employees, officers, directors, consultants, advisors and other individual service providers of our Company and our subsidiaries who, in the opinion of the compensation committee, are in a position to contribute to our success, or any person who is determined by the compensation committee to be a prospective employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary. The compensation committee and the Board have the sole discretion to select participants under the 2022 Plan and establish the size of awards granted under the plan. As of April 17, 2025, the Company and its subsidiaries had a total of seven employees, four non-employee directors, and approximately five consultants. As awards under the 2022 Plan are within the discretion of the compensation committee, we cannot determine how many individuals in each of the categories described above will receive awards.
Shares Subject to the 2022 Plan . Subject to the adjustment provisions of the 2022 Plan, and the automatic increase described below, the maximum aggregate number of shares of common stock that may be issued under the 2022 Plan, as amended and restated, is 382,122.
The number of shares of common stock available for issuance under the 2022 Plan automatically increases on January 1st of each year, commencing with January 1, 2023, and on each January 1 thereafter until the expiration date, in an amount equal to 4% of the total number of shares of our common stock outstanding on December 31st of the preceding calendar year, unless the board of directors takes action prior thereto to provide that there will not be an increase in the share reserve for such year or that the increase in the share reserve for such year will be of a lesser number of shares of common stock than would otherwise occur.
Incentive stock options, or ISOs, that are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the Code) may be granted under the 2022 Plan, as amended and restated, with respect to up to 5,000,000 shares of common stock authorized for issuance under the 2022 Plan. None of the additional shares of common stock available for issuance pursuant to the previous paragraph may be subject to ISOs.
If any option or SAR granted under the 2022 Plan terminates without having been exercised in full or if any award is forfeited, or if shares of common stock are withheld to cover withholding taxes on options or other awards or applied to the payment of the exercise price of an option or purchase price of an award, the number of shares of common stock as to which such option or award was forfeited, withheld or paid, will be available for future grants under the 2022 Plan. Awards settled in cash will not count against the number of shares available for issuance under the 2022 Plan.
No non-employee director may receive awards in any calendar year having an accounting value in excess of $250,000 (inclusive of any cash awards to the non-employee director for such year that are not made pursuant to the 2022 Plan); provided that in the case of a new non-employee director, such amount is increased to $500,000 for the initial year of the non-employee directors term.
The number of shares authorized for issuance under the 2022 Plan and the foregoing share limitations are subject to customary adjustments for stock splits, stock dividends, similar transactions or any other change affecting our common stock.
Terms and Conditions of Options . Options granted under the 2022 Plan may be either ISOs or nonstatutory stock options that do not meet the requirements of Section 422 of the Code. The compensation committee will determine the exercise price of options granted under the 2022 Plan. The exercise price of stock options may not be less than the fair market value per share of our common stock on the date of grant (or 110% of fair market value in the case of ISOs granted to a ten-percent stockholder). As of April 16, 2025, the closing market price of a share of our common stock as reported on Nasdaq was $0.7126 per share.
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No option may be exercisable for more than ten years (five years in the case of an ISO granted to a ten-percent stockholder) from the date of grant. Options granted under the 2022 Plan will be exercisable at such time or times as the compensation committee prescribes at the time of grant. No employee may receive ISOs that first become exercisable in any calendar year in an amount exceeding $100,000.
The compensation committee may, in its discretion, permit a holder of an option to exercise the option before it has otherwise become exercisable, in which case the shares of our common stock issued to the recipient will continue to be subject to the vesting requirements that applied to the option before exercise.
Generally, the option price may be paid in cash or by certified check, bank draft or money order. The compensation committee may permit other methods of payment, including (a) through delivery of shares of our common stock having a fair market value equal to the purchase price, (b) by a full recourse, interest bearing promissory note having such terms as the compensation committee may permit, or (c) a combination of these methods, as set forth in an award agreement or as otherwise determined by the compensation committee. The compensation committee is authorized to establish a cashless exercise program and to permit the exercise price (or tax withholding obligations) to be satisfied by reducing from the shares otherwise issuable upon exercise a number of shares having a fair market value equal to the exercise price.
No option may be transferred other than by will or by the laws of descent and distribution, and during a recipients lifetime an option may be exercised only by the recipient. However, the compensation committee may permit the holder of an option, SAR or other award to transfer the option, right or other award to immediate family members, a family trust for estate planning purposes or by gift to charitable institutions. The compensation committee will determine the extent to which a holder of a stock option may exercise the option following termination of service with us.
Stock Appreciation Rights . The compensation committee may grant SARs under the 2022 Plan. The compensation committee will determine the other terms applicable to SARs. The exercise price per share of a SAR will not be less than 100% of the fair market value of a share of our common stock on the date of grant, as determined by the compensation committee. The maximum term of any SAR granted under the 2022 Plan is ten years from the date of grant. Generally, each SAR will entitle a participant upon exercise to an amount equal to:
| ● | the excess of the fair market value on the exercise date of one share of our common stock over the exercise price, multiplied by | |
| ● | the number of shares of common stock covered by the SAR. |
Payment may be made in shares of our common stock, in cash, or partly in common stock and partly in cash, all as determined by the compensation committee.
Restricted Stock and Restricted Stock Units . The compensation committee may award restricted common stock and/or restricted stock units under the 2022 Plan. Restricted stock awards consist of shares of stock that are transferred to a participant subject to restrictions that may result in forfeiture if specified conditions are not satisfied. Restricted stock units confer the right to receive shares of our common stock, cash, or a combination of shares and cash, at a future date upon or following the attainment of certain conditions specified by the compensation committee. The restrictions and conditions applicable to each award of restricted stock or restricted stock units may include performance-based conditions. Dividends or distributions with respect to restricted stock may be paid to the holder of the shares as and when dividends are paid to stockholders or at the time that the restricted stock vests, as determined by the compensation committee. If any dividends or distributions are paid in stock before the restricted stock vests they will be subject to the same restrictions. Dividend equivalent amounts may be paid with respect to restricted stock units either when cash dividends are paid to stockholders or when the units vest. Unless the compensation committee determines otherwise, holders of restricted stock will have the right to vote the shares.
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Performance Shares and Performance Units . The compensation committee may award performance shares and/or performance units under the 2022 Plan. Performance shares and performance units are awards, denominated in either shares or U.S. dollars, which are earned during a specified performance period subject to the attainment of performance criteria, as established by the compensation committee. The compensation committee will determine the restrictions and conditions applicable to each award of performance shares and performance units.
Incentive Bonuses . The compensation committee may grant incentive bonus awards under the 2022 Plan from time to time. The terms of incentive bonus awards will be set forth in award agreements. Each award agreement will have such terms and conditions as the compensation committee determines, including performance goals and amount of payment based on achievement of such goals. Incentive bonus awards are payable in cash and/or shares of our common stock.
Other Stock-Based and Cash-Based Awards . The compensation committee may award other types of equity-based or cash-based awards under the 2022 Plan, including the grant or offer for sale of shares of our common stock that do not have vesting requirements and the right to receive one or more cash payments subject to satisfaction of such conditions as the compensation committee may impose.
Effect of Certain Corporate Transactions . The compensation committee may, at the time of the grant of an award provide for the effect of a change in control (as defined in the 2022 Plan) on any award, including (i) accelerating or extending the time periods for exercising, vesting in, or realizing gain from any award, (ii) eliminating or modifying the performance or other conditions of an award, or (iii) providing for the cash settlement of an award for an equivalent cash value, as determined by the compensation committee. The compensation committee may, in its discretion and without the need for the consent of any recipient of an award, also take one or more of the following actions contingent upon the occurrence of a change in control: (a) cause any or all outstanding options and SARs to become immediately exercisable, in whole or in part; (b) cause any other awards to become non-forfeitable, in whole or in part; (c) cancel any option or SAR in exchange for a substitute option; (d) cancel any award of restricted stock, restricted stock units, performance shares or performance units in exchange for a similar award of the capital stock of any successor corporation; (e) redeem any restricted stock for cash and/or other substitute consideration; (f) cancel or terminate any award for cash and/or other substitute consideration in exchange for an amount of cash and/or property equal to the amount, if any, that would have been attained upon the exercise of such award or realization of the participants rights as of the date of the occurrence of the change in control, but if the change in control consideration with respect to any option or SAR does not exceed its exercise price, the option or SAR may be cancelled without payment of any consideration; or (g) make such other modifications, adjustments or amendments to outstanding awards as the compensation committee deems necessary or appropriate.
Amendment, Termination . The board of directors may at any time amend the 2022 Plan for the purpose of satisfying the requirements of the Code, or other applicable law or regulation or for any other legal purpose, provided that, without the consent of our stockholders, the board of directors may not (a) increase the number of shares of common stock available under the 2022 Plan, (b) change the group of individuals eligible to receive options, SARs and/or other awards, or (c) extend the term of the 2022 Plan. No new awards may be granted on or after November 13, 2032.
U.S. Federal Income Tax Consequences
Following is a summary of the U.S. federal income tax consequences of option and other grants under the 2022 Plan. The summary, which is presented for the information of stockholders considering how to vote on this Proposal and not for plan participants, is general in nature and does not take into account all of the considerations that may apply and is not intended to serve as tax advice. Optionees and recipients of other rights and awards granted under the 2022 Plan are advised to consult their personal tax advisors before exercising an option or SAR or disposing of any stock received pursuant to the exercise of an option or SAR or following the vesting and payment of any award. In addition, the following summary is based upon an analysis of the Code as currently in effect, existing laws, judicial decisions, administrative rulings, regulations and proposed regulations, all of which are subject to change and does not address state, local, foreign or other tax laws.
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Treatment of Options
The Code treats incentive stock options and nonstatutory stock options differently. However, as to both types of options, no income will be recognized to the optionee at the time of the grant of the options under the 2022 Plan, nor will our Company be entitled to a tax deduction at that time.
Generally, upon exercise of a nonstatutory stock option (including an option intended to be an incentive stock option but which has not continued to so qualify at the time of exercise), an optionee will recognize ordinary income tax on the excess of the fair market value of the stock on the exercise date over the option price. Our Company will be entitled to a tax deduction in an amount equal to the ordinary income recognized by the optionee in the fiscal year which includes the end of the optionees taxable year. We will be required to satisfy applicable withholding requirements in order to be entitled to a tax deduction. In general, if an optionee, in exercising a nonstatutory stock option, tenders shares of our common stock in partial or full payment of the option price, no gain or loss will be recognized on the tender. However, if the tendered shares were previously acquired upon the exercise of an incentive stock option and the tender is within two years from the date of grant or one year after the date of exercise of the incentive stock option, the tender will be a disqualifying disposition of the shares acquired upon exercise of the incentive stock option.
For incentive stock options, there is no taxable income to an optionee at the time of exercise. However, the excess of the fair market value of the stock on the date of exercise over the exercise price will be taken into account in determining whether the alternative minimum tax will apply for the year of exercise. If the shares acquired upon exercise are held until at least two years from the date of grant and more than one year from the date of exercise, any gain or loss upon the sale of such shares, if held as capital assets, will be long-term capital gain or loss (measured by the difference between the sales price of the stock and the exercise price). Under current federal income tax law, a long-term capital gain will be taxed at a rate which is less than the maximum rate of tax on ordinary income. If the two-year and one year holding period requirements are not met (a disqualifying disposition), an optionee will recognize ordinary income in the year of disposition in an amount equal to the lesser of (i) the fair market value of the stock on the date of exercise minus the exercise price or (ii) the amount realized on disposition minus the exercise price. The remainder of the gain will be treated as long-term capital gain, depending upon whether the stock has been held for more than a year. If an optionee makes a disqualifying disposition, our Company will be entitled to a tax deduction equal to the amount of ordinary income recognized by the optionee.
In general, if an optionee, in exercising an incentive stock option, tenders shares of common stock in partial or full payment of the option price, no gain or loss will be recognized on the tender. However, if the tendered shares were previously acquired upon the exercise of another incentive stock option and the tender is within two years from the date of grant or one year after the date of exercise of the other option, the tender will be a disqualifying disposition of the shares acquired upon exercise of the other option.
As noted above, the exercise of an incentive stock option could subject an optionee to the alternative minimum tax. The application of the alternative minimum tax to any particular optionee depends upon the particular facts and circumstances which exist with respect to the optionee in the year of exercise. However, as a general rule, the amount by which the fair market value of the common stock on the date of exercise of an option exceeds the exercise price of the option will constitute an item of adjustment for purposes of determining the alternative minimum taxable income on which the alternative tax may be imposed. As such, this item will enter into the tax base on which the alternative minimum tax is computed and may therefore cause the alternative minimum tax to become applicable in any given year.
Treatment of Stock Appreciation Rights
Generally, the recipient of a SAR will not recognize any income upon grant of the SAR, nor will our Company be entitled to a deduction at that time. Upon exercise of a SAR, the holder will recognize ordinary income, and our Company generally will be entitled to a corresponding deduction, equal to the excess of fair market value of our common stock at that time over the exercise price.
Treatment of Stock Awards
Generally, absent an election to be taxed currently under Section 83(b) of the Code (or, a Section 83(b) Election), there will be no federal income tax consequences to either the recipient or our Company upon the grant of a restricted stock award or award of performance shares. At the expiration of the restriction period and the satisfaction of any other restrictions applicable to the restricted shares, the recipient will recognize ordinary income and our Company generally will be entitled to a corresponding deduction equal to the fair market value of the common stock at that time. If a Section 83(b) Election is made within 30 days after the date the restricted stock award is granted, the recipient will recognize an amount of ordinary income at the time of the receipt of the restricted shares, and our Company generally will be entitled to a corresponding deduction, equal to the fair market value (determined without regard to applicable restrictions) of the shares at such time, less any amount paid by the recipient for the shares. If a Section 83(b) Election is made, no additional income will be recognized by the recipient upon the lapse of restrictions on the shares (and prior to the sale of such shares), but, if the shares are subsequently forfeited, the recipient may not deduct the income that was recognized pursuant to the Section 83(b) Election at the time of the receipt of the shares.
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The recipient of an unrestricted stock award, including a performance unit award, will recognize ordinary income, and our Company generally will be entitled to a corresponding deduction, equal to the fair market value of our common stock that is the subject of the award when the Award is made.
The recipient of a restricted stock unit generally will recognize ordinary income as and when the units vest and are settled. The amount of the income will be equal to the fair market value of the shares of our common stock issued at that time, and our Company will be entitled to a corresponding deduction. The recipient of a restricted stock unit will not be permitted to make a Section 83(b) Election with respect to such award.
Treatment of Incentive Bonus Awards and Other Stock or Cash Based Awards
Generally, the recipient of an incentive bonus or other stock or cash based award will not recognize any income upon grant of the award, nor will our Company be entitled to a deduction at that time. Upon payment with respect to such an award, the recipient will recognize ordinary income, and our Company generally will be entitled to a corresponding deduction, equal to the amount of cash paid and/or the fair market value of our common stock issued at that time.
Potential Limitation on Company Deductions
Section 162(m) of the Code generally disallows a tax deduction for compensation in excess of $1 million paid in a taxable year by a publicly held corporation to its chief executive officer and certain other covered employees. Our board of directors and the compensation committee intend to consider the potential impact of Section 162(m) on grants made under the 2022 Plan, but reserve the right to approve grants of options and other awards for an executive officer that exceed the deduction limit of Section 162(m).
Tax Withholding
As and when appropriate, we shall have the right to require each optionee purchasing shares of common stock and each grantee receiving an award of shares of common stock under the 2022 Plan to pay any federal, state or local taxes required by law to be withheld.
New Plan Benefits
The compensation committee and the board of directors retain discretion under the 2022 Plan to determine which directors, officers, employees and consultants will receive awards and the amount and type of awards. Therefore, we are not able to determine the total number of individuals who will participate in the 2022 Plan or the total amount of awards granted thereunder.
Registration with the SEC
The Company intends to file a Registration Statement on Form S-8 relating to the issuance of additional shares under the 2022 Plan with the SEC pursuant to the Securities Act after approval of the amended and restated 2022 Plan by our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL
NO. 3 TO APPROVE THE AMENDMENT AND RESTATEMENT OF OUR 2022 OMNIBUS EQUITY
INCENTIVE PLAN, AND ADOPT THE FOLLOWING RESOLUTION:
RESOLVED , that the amended and restated 2022 Omnibus Equity Incentive Plan is hereby APPROVED .
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| Proposal No. 4 : | Approval of Issuance of Common Stock Upon Exercise of Certain Warrants issued pursuant to the November 2024 Warrant Inducement in Accordance with Nasdaq Listing Rule 5635(d). |
| What am I voting on? | Approval of the issuance of up to an aggregate of 1,637,000 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, in accordance with Nasdaq Listing Rule 5635(d). | |
| Vote recommendation : | FOR the approval of the issuance of up to an aggregate of 1,637,000 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, in accordance with Nasdaq Listing Rule 5635(d). | |
| Vote required : | A majority in voting power of the of the votes cast on the proposal (excluding abstentions and broker non-votes). | |
| Effect of abstentions : | None. | |
| Effect of broker non-votes : | None. |
General
We are asking stockholders to approve the issuance of the shares of our common stock underlying the A-2 Warrants (such shares, the A-2 Shares), as discussed below, in accordance with Nasdaq Listing Rule 5635(d), as described in more detail below.
Warrant Issuance
On November 5, 2024, we entered into a warrant exercise inducement offer letter agreement (the Inducement Letter) with certain holders (the Holders) of outstanding (i) Series A Common Stock purchase warrants (the Series A Warrants) exercisable for up to an aggregate of 199,950 shares of our common stock, (ii) Series B Common Stock purchase warrants (the Series B Warrants) exercisable for up to an aggregate of 139,950 shares of our common stock, (iii) Series A-1 Common Stock purchase warrants (the Series A-1 Warrants) exercisable for up to an aggregate of 392,000 shares of common stock, and (iv) Series B-1 Common Stock purchase warrants (the Series B-1 Warrants) exercisable for up to an aggregate of 86,600 shares of common stock (collectively, the Existing Warrants), which Existing Warrants were issued by us on December 11, 2023 and August 2, 2024. The Series A Warrants and the Series B Warrants were exercisable at an exercise price of $12.50 per share and the Series A-1 Warrants and the Series B-1 Warrants were exercisable at an exercise price of $3.46 per share.
Pursuant to the Inducement Letter, the Holders agreed to exercise the Existing Warrants for cash at a reduced exercise price of $2.06 per share in consideration of the Companys agreement to issue each Holder new warrants to purchase up to a number of shares of common stock equal to 200% of the number of shares of common stock issued pursuant to such Holders exercise of Existing Warrants, comprised of new Series A-2 warrants to purchase up to 1,637,000 shares of our common stock (the Series A-2 Warrants) with an exercise term of five years from the initial exercise date. The initial exercise date of the Series A-2 Warrants is the Series A-2 Stockholder Approval Date (as defined below), and the exercise price thereof is $2.06 per share. If all of the Series A-2 Warrants are exercised in full, the Company will receive aggregate gross proceeds of approximately $3.4 million.
Additionally, on March 5, 2025, the Company entered into an Amendment to the Series A-2 Warrants (the Warrant Amendment), which amended warrants to purchase up to 957,000 shares of common stock issued to the purchaser of the amended warrants on November 6, 2024 to reduce the exercise price of the amended warrants to $1.00 per share.
The issuance of the A-2 Shares is subject to stockholder approval in accordance with Nasdaq Listing Rule 5635(d) of The Nasdaq Stock Market LLC (Series A-2 Stockholder Approval and the date on which Series A-2 Stockholder Approval is received and deemed effective, the Series A-2 Stockholder Approval Date). We agreed to convene a stockholders meeting on or before the 120th day following the closing of the warrant inducement transaction to approve the issuance of the A-2 Shares upon exercise of the Series A-2 Warrants, if required, with the recommendation of our board of directors that such proposal be approved. We agreed to solicit proxies from our stockholders in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. Consequently, we are including this Proposal No. 4 in this proxy statement.
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We agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) to register the resale of the shares of common stock underlying the A-2 Warrants and to use commercially reasonable efforts to cause such registration statement to become effective within 120 days of its initial filing. We filed such registration statement and it was declared effective by the SEC on December 26, 2024.
The summary of the terms of the A-2 Warrants above is qualified in its entirety by reference to the copy of the form of the Series A-2 Warrant, which is included herewith as Annex B , and incorporated herein by reference. You should read this summary together with the form evidencing the A-2 Warrants.
Stockholder Approval
As described above, pursuant to the Inducement Letter, we agreed to hold a meeting of stockholders on or before the 120th day following the closing of the warrant inducement transaction to obtain Series A-2 Stockholder Approval. The recommendation of our board of directors is that such proposal be approved, we are soliciting proxies from our stockholders in connection therewith. If we do not obtain Series A-2 Stockholder Approval at this Annual Meeting, we are required to call a meeting of stockholders every 90 days thereafter to seek Series A-2 Stockholder Approval until the earlier of the date that Series A-2 Stockholder Approval is obtained or the A-2 Warrants are no longer outstanding. As discussed above, one of the purposes of the Annual Meeting is to satisfy the above requirement of the Inducement Letter.
A vote in favor of this Proposal No. 4 is a vote FOR approval of the issuance of the A-2 Shares upon exercise of the Series A-2 Warrants issued under the terms of the Inducement Letter. The exercise of the Series A-2 Warrants, in their entirety, could result in the issuance of 20% or more of our common stock outstanding as of November 6, 2024, the date that we issued the Series A-2 Warrants.
Nasdaq Listing Rule 5635(d) requires stockholder approval in connection with a transaction other than a public offering involving the sale, issuance, or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the lower of (i) the Companys Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement, or (ii) the average of the Companys Nasdaq Official Closing Price (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement.
The Series A-2 Warrants were issued in connection with the exercise of the Existing Warrants pursuant to the terms of the Inducement Letter (as further described above) but were not and are not exercisable at all prior to Series A-2 Stockholder Approval. Accordingly, because the A-2 Shares issuable upon exercise of the Series A-2 Warrants issued under the Inducement Letter total more than 19.99% of our outstanding shares of common stock on the date the Series A-2 Warrants were issued, and because the Series A-2 Warrants further have anti-dilutive rights, we are seeking stockholder approval of this proposal in respect of the issuance of the shares of common stock upon the exercise of the Series A-2 Warrants pursuant to Nasdaq Listing Rule 5635(d).
Potential Adverse Effects - Dilution and Impact on Existing Stockholders
The issuance of shares of common stock upon exercise of the Series A-2 Warrants will have a dilutive effect on current stockholders in that the percentage ownership of the Company held by such current stockholders will decline as a result of the issuance of the A-2 Shares. This means also that our current stockholders will own a smaller interest in us as a result of the exercise of the Series A-2 Warrants and therefore have less ability to influence significant corporate decisions requiring stockholder approval. Issuance of the A-2 Shares could also have a dilutive effect on the book value per share and any future earnings per share. Dilution of equity interests could also cause prevailing market prices for our common stock to decline.
If the Series A-2 Warrants are exercised in full for cash, a total of 1,637,000 shares of common stock will be issuable to the Holder of the Series A-2 Warrants and this dilutive effect may be material to current stockholders of the Company.
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Risks Related to the Series A-2 Warrants
Provisions of the Series A-2 Warrants could discourage an acquisition of us by a third party.
Certain provisions of the Series A-2 Warrants could make it more difficult or expensive for a third party to acquire us. The Series A-2 Warrants prohibit us from engaging in certain transactions constituting fundamental transactions unless, in certain situations and among other things, the surviving entity assumes our obligations under the Series A-2 Warrants. Further, the Series A-2 Warrants provide that, in the event of certain transactions constituting fundamental transactions, with some exceptions, holders of such warrants will have the right, at their option, to receive from us or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of our common stock in the fundamental transaction in the amount of the Black Scholes value (as described in such warrants) of the unexercised portion of the applicable Series A-2 Warrants on the date of the consummation of the fundamental transaction. These and other provisions of the Series A-2 Warrants could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to the holders of our common stock.
The Series A-2 Warrants may be accounted for as liabilities and the changes in value of such Series A-2 Warrants may have a material effect on our financial results.
We are currently evaluating the terms of the Series A-2 Warrants. It is possible that we and/or our auditors will conclude that, because of the terms of such Series A-2 Warrants, such Series A-2 Warrants should be accounted for as liability instruments. As a result, we would be required to classify the Series A-2 Warrants as liabilities. Under the liability accounting treatment, we would be required to measure the fair value of these instruments at the end of each reporting period and recognize changes in the fair value from the prior period in our operating results for the current period. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors that are outside our control. In the event the Series A-2 Warrants are required to be accounted for under liability accounting treatment, we will recognize noncash gains or losses due to the quarterly fair valuation of these warrants, which could be material. The impact of changes in fair value on our financial results may have an adverse effect on the market price of our common stock and/or our stockholders equity, which may make it harder for us to, or prevent us from, meeting the continued listing standards of Nasdaq.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 4 TO AUTHORIZE
THE ISSUANCE OF THE A-2 SHARES UPON EXERCISE OF THE SERIES A-2 WARRANTS ISSUED
UNDER THE TERMS OF THE INDUCEMENT LETTER AND PURSUANT TO NASDAQ LISTING
RULE 5635(d).
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| Proposal No. 5 : | Approval of Issuance of Common Stock Upon Exercise of Certain Warrants issued in the March 2025 PIPE in Accordance with Nasdaq Listing Rule 5635(d). |
| What am I voting on? | Approval of the issuance of up to an aggregate of 2,105,265 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, in accordance with Nasdaq Listing Rule 5635(d). | |
| Vote recommendation : | FOR the approval of the issuance of up to an aggregate of 2,105,265 shares of the Companys common stock issuable upon the exercise of certain warrants to purchase the Companys common stock, in accordance with Nasdaq Listing Rule 5635(d). | |
| Vote required : | A majority in voting power of the of the votes cast on the proposal (excluding abstentions and broker non-votes). | |
| Effect of abstentions : | None. | |
| Effect of broker non-votes : | None. |
General
We are asking stockholders to approve the issuance of the shares of our common stock underlying the Series A-3 Warrants (such shares, the A-3 Shares), as discussed below, in accordance with Nasdaq Listing Rule 5635(d), as described in more detail below.
Warrant Issuance
On March 5, 2025, the Company entered into a Securities Purchase Agreement (the Purchase Agreement) with an institutional accredited investor (the Investor), pursuant to which the Company agreed to issue and sell, in a private placement priced at-the-market under the rules of The Nasdaq Stock Market (the Private Placement), an aggregate of (i) pre-funded warrants (the Pre-Funded Warrants) to purchase up to an aggregate of 2,105,265 shares (the Pre-Funded Warrant Shares) of common stock, and (ii) Series A-3 common stock purchase warrants (the Series A-3 Warrants and, together with the Pre-Funded Warrants, the Warrants) to purchase up to an aggregate of 2,105,265 shares of common stock (the A-3 Shares and, together with the Pre-Funded Warrant Shares, the Warrant Shares). The purchase price of each Pre-Funded Warrant was $0.9499. The Private Placement closed on March 7, 2025, and the Company executed and delivered the Warrants.
Each A-3 Warrant has an initial exercise price of $1.00 per share (subject to adjustments as set forth therein) and is exercisable upon the Series A-3 Stockholder Approval Date (as defined below). The Series A-3 Warrants will expire five years from the Series A-3 Stockholder Approval Date. Under the terms of the Warrants, a holder will not have the right to exercise any portion of the Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of the Companys common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, upon notice from the holder to the Company, the holder may increase the beneficial ownership limitation to 9.99% of the number of the Companys common stock outstanding immediately after giving effect to the exercise of Warrants.
Pursuant to the Purchase Agreement, within 10 calendar days of the filing of the Companys Annual Report on Form 10-K for the year ended December 31, 2024, the Company has agreed to file a registration statement (the Registration Statement) with the SEC to register the resale of the Warrant Shares. The Company further agreed to use commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC within 75 days after the date of the closing of the Private Placement. We filed such registration statement and it was declared effective by the SEC on April 9, 2025.
The issuance of the A-3 Shares is subject to stockholder approval in accordance with Nasdaq Listing Rule 5635(d) of The Nasdaq Stock Market LLC (Series A-3 Stockholder Approval and the date on which the Series A-3 Stockholder Approval is received and deemed effective, the Series A-3 Stockholder Approval Date). We agreed to convene a stockholders meeting on or before the 90th following the closing of the Private Placement to approve the issuance of the A-3 Shares upon exercise of the Series A-3 Warrants, if required, with the recommendation of our board of directors that such proposal be approved. We agreed to solicit proxies from our stockholders in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. Consequently, we are including this Proposal No. 5 in this proxy statement.
The summary of the terms of the Series A-3 Warrants above is qualified in its entirety by reference to the copy of the form of the Series A-3 Warrant, which is included herewith as Annex C , and incorporated herein by reference. You should read this summary together with the form evidencing the Series A-3 Warrants.
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Stockholder Approval
As described above, pursuant to the Purchase Agreement, we agreed to hold a meeting of stockholders on or before the 90th day following the closing of Private Placement to obtain Series A-3 Stockholder Approval. The recommendation of our board of directors is that such proposal be approved, we are soliciting proxies from our stockholders in connection therewith. If we do not obtain Series A-3 Stockholder Approval at this Annual Meeting, we are required to call a meeting of stockholders every 90 days thereafter to seek Series A-3 Stockholder Approval until the earlier of the date that the Series A-3 Stockholder Approval is obtained or the Series A-3 Warrants are no longer outstanding. As discussed above, one of the purposes of the Annual Meeting is to satisfy the above requirement of the Purchase Agreement.
A vote in favor of this Proposal No. 5 is a vote FOR approval of the issuance of the A-3 Shares upon exercise of the Series A-3 Warrants issued under the terms of the Purchase Agreement. The exercise of the Series A-3 Warrants, in their entirety, could result in the issuance of 20% or more of our common stock outstanding as of March 5, 2025, the date that we issued the Series A-3 Warrants.
Nasdaq Listing Rule 5635(d) requires stockholder approval in connection with a transaction other than a public offering involving the sale, issuance, or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the lower of (i) the Companys Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement, or (ii) the average of the Companys Nasdaq Official Closing Price (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement.
The Series A-3 Warrants were issued in connection with the Private Placement (as further described above) but were not and are not exercisable at all prior to Series A-3 Stockholder Approval. Accordingly, because the A-3 Shares issuable upon exercise of the Series A-3 Warrants issued under the Private Placement total more than 19.99% of our outstanding shares of common stock on the date the Series A-3 Warrants were issued, and because the Series A-3 Warrants further have anti-dilutive rights, we are seeking stockholder approval of this proposal in respect of the issuance of the shares of common stock upon the exercise of the Series A-3 Warrants pursuant to Nasdaq Listing Rule 5635(d).
Potential Adverse Effects - Dilution and Impact on Existing Stockholders
The issuance of shares of common stock upon exercise of the Series A-3 Warrants will have a dilutive effect on current stockholders in that the percentage ownership of the Company held by such current stockholders will decline as a result of the issuance of the A-3 Shares. This means also that our current stockholders will own a smaller interest in us as a result of the exercise of the Series A-3 Warrants and therefore have less ability to influence significant corporate decisions requiring stockholder approval. Issuance of the A-3 Shares could also have a dilutive effect on the book value per share and any future earnings per share. Dilution of equity interests could also cause prevailing market prices for our common stock to decline.
If the Series A-3 Warrants are exercised in full for cash, a total of 2,105,265 shares of common stock will be issuable to the Holder of the Series A-3 Warrants and this dilutive effect may be material to current stockholders of the Company.
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Risks Related to the Series A-3 Warrants
Provisions of the Series A-3 Warrants could discourage an acquisition of us by a third party.
Certain provisions of the Series A-3 Warrants could make it more difficult or expensive for a third party to acquire us. The Series A-3 Warrants prohibit us from engaging in certain transactions constituting fundamental transactions unless, in certain situations and among other things, the surviving entity assumes our obligations under the Series A-3 Warrants. Further, the Series A-3 Warrants provide that, in the event of certain transactions constituting fundamental transactions, with some exceptions, holders of such warrants will have the right, at their option, to receive from us or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of our common stock in the fundamental transaction in the amount of the Black Scholes value (as described in such warrants) of the unexercised portion of the applicable Series A-3 Warrants on the date of the consummation of the fundamental transaction. These and other provisions of the Series A-3 Warrants could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to the holders of our common stock.
The Series A-3 Warrants may be accounted for as liabilities and the changes in value of such Series A-3 Warrants may have a material effect on our financial results.
We are currently evaluating the terms of the Series A-3 Warrants. It is possible that we and/or our auditors will conclude that, because of the terms of such Series A-3 Warrants, such Series A-3 Warrants should be accounted for as liability instruments. As a result, we would be required to classify the Series A-3 Warrants as liabilities. Under the liability accounting treatment, we would be required to measure the fair value of these instruments at the end of each reporting period and recognize changes in the fair value from the prior period in our operating results for the current period. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors that are outside our control. In the event the Series A-3 Warrants are required to be accounted for under liability accounting treatment, we will recognize noncash gains or losses due to the quarterly fair valuation of these warrants, which could be material. The impact of changes in fair value on our financial results may have an adverse effect on the market price of our common stock and/or our stockholders equity, which may make it harder for us to, or prevent us from, meeting the continued listing standards of Nasdaq.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 5 TO AUTHORIZE
THE ISSUANCE OF THE A-3 SHARES UPON EXERCISE OF THE Series A-3 WARRANTS ISSUED
UNDER THE TERMS OF THE PURCHASE AGREEMENT AND PURSUANT TO NASDAQ LISTING
RULE 5635(d).
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EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth the names and ages of all of our executive officers and directors as of April 17, 2025.
| Name | Age | Position | ||
| Stephen C. Glover | 65 | Chief Executive Officer, President, and Chairman | ||
| Karen A. Cashmere | 73 | Chief Commercial Officer | ||
| Peter Wolfe | 57 | Chief Financial Officer and Secretary | ||
| Pablo A. Guzman, M.D. | 75 | Chief Medical Officer and Senior Vice President of Medical Affairs | ||
| Robert G. Finizio | 54 | Director | ||
| Gregory Freitag | 63 | Director | ||
| Min Chul Park, Ph.D. | 43 | Director | ||
| James Sapirstein | 63 | Director |
Executive Officers
Biographical information regarding our executive officers as of April 17, 2025 is set forth below. Our executive officers are appointed by our board of directors.
Stephen C. Glover. Mr. Glover is one of our co-founders and has served as our Chief Executive Officer, President and Chairman since December 2022. Mr. Glover served as Chief Executive Officer and President of Old ZyVersa from March 2014 to December 2022, a member of the board of directors from March 2014 to September 2021, and Chairman from September 2021 to December 2022. Mr. Glover is formerly the Co-Founder of Coherus Biosciences where he was focused on business strategy, partnerships, product development efforts, and capitalization of the company. Prior to Coherus, he was the President of Insmed Therapeutic Proteins (from 2007 to 2010), as well as Chief Business Officer of Insmed Incorporated (from 2007 to 2010). At Insmed, Mr. Glover was responsible for the creation of the biosimilar business unit and the divestiture of the business to Merck. As Chief Business Officer he led Insmeds strategic review process which resulted in the merger of Insmed and Transave. Mr. Glover received his B.S. in Marketing from Illinois State University. Mr. Glover has multifaceted experience in Fortune 100, start up, and entrepreneurial environments and he serves on the board of PDS Biotechnology, The Coulter Foundation (University of Miami) and Asclepius Lifesciences. Mr. Glover was selected to serve on our board of directors based on his extensive experience in the therapeutics industry, his deep knowledge of ZyVersa and his ongoing experience as a board member of other life sciences companies. Mr. Glover was appointed to our board of directors by ZyVersa pursuant to the Business Combination Agreement.
Karen A. Cashmere. Ms. Cashmere has served as our Chief Commercial Officer since December 2022. Ms. Cashmere served in the same capacity at Old ZyVersa from January 2019 to December 2022, and as Acting Vice President, Development and Marketing from August 2014 to January 2019. Ms. Cashmere has more than 25 years experience in business planning and execution for biopharmaceutical and medical device companies ranging in size from start-up to Fortune 100 companies. She formerly led the Marketing Communications function at Mako Surgical Corporation, an emerging robotic orthopedics company, where she was responsible for creating awareness and driving sales of Robotic Arm Systems priced at over $1 million each and their associated implants for partial knee and total hip arthroplasty.
Peter Wolfe. Mr. Wolfe has served as our Chief Financial Officer and Secretary since December 2022. Mr. Wolfe served as Senior Vice President, Finance and Administration at Old ZyVersa from 2019 to December 2022, and prior to that had served as Vice President of Finance from October 2015 to 2019. Mr. Wolfe has spent his career in various financial roles in the financial services, specialty finance, and the pharmaceutical/healthcare industries. Most recently Mr. Wolfe has spent his time cultivating start-up organizations in various healthcare entities, often dealing with complicated business models to develop a financial framework for success for many of these first of their kind businesses. Mr. Wolfe has spent the last 24 years of his career in the healthcare industry with one fourth of that time spent at Kos Pharmaceuticals, a publicly traded, fully-integrated specialty pharmaceutical company. Mr. Wolfe has his BBA from the University of Miami and his MBA from the University of Pittsburgh.
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Pablo A. Guzman, M.D. Dr. Guzman has served as our Chief Medical Officer and Senior Vice President of Medical Affairs since January 2023. Prior to that, he was a consultant with us beginning January 2015. Since 2017, Dr. Guzman has served on the Scientific Advisory Board at Therapeutic Solutions International, Inc., a company focused on immune modulation. He received his Bachelors degree in Biology from St Peters University in Jersey City in 1971, his Medical Degree from the University of Puerto Rico School of Medicine in 1975, and his Interventional Cardiology Fellowship at The Johns Hopkins Hospital in Baltimore in 1980. He is Board certified in Internal Medicine (1978) and Cardiovascular Diseases (1981). He joined the staff at Johns Hopkins in 1980 and his duties included patient care, teaching, and both clinical and basic science research in the dog lab. He has over 30 articles in peer reviewed journals and many abstracts, some of them presented in national meetings including the American Heart Association and the American College of Cardiology. Dr. Guzman sits on the Board of Trustees at Holy Cross Health, a member of Trinity Health since 2015. He sits on the Scientific Advisory Board of Campbell Neurosciences Inc. and Therapeutics Solutions International.
Non-Employee Directors
Biographical information as of April 17, 2025 and the attributes, skills, and experience of each director that led our nominating and corporate governance committee and our board of directors to determine that such individual should serve as a director are discussed below.
Robert G. Finizio. Mr. Finizio has served as a member of our board of directors since December 2022. Mr. Finizio served in the same capacity at Old ZyVersa from September 2018 to December 2022. Mr. Finizio is currently the Executive Director of PleoPharma a, pharmaceutical development company focused on finding safe and effective FDA approved treatments for substance use disorders where therapies are lacking. Mr. Finizio is the Co-Founder of TherapeuticsMD Inc., an innovative womens health pharmaceutical company, and served as its Chief Executive Officer and Director from 2008 to November 2021. Mr. Finizio has over 20 years of healthcare experience. Mr. Finizio sits on the board of directors for two non-profit organizations, BioFlorida and the Boca Raton Police Foundation. Mr. Finizio graduated from the University of Miami with a Bachelor of Arts degree majoring in Premed and Psychology. Mr. Finizio was selected to serve on our board of directors based on his extensive experience with early-stage company development in the healthcare industry. Mr. Finizio was appointed to our board of directors by ZyVersa pursuant to the Business Combination Agreement.
Gregory Freitag. Gregory Freitag has served as a member of our board of directors since January 2023. Mr. Freitag is currently a member of the board of directors of PDS Biotechnology Corporation (NASDAQ: PDSB), a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies based on its proprietary Veramune and Infectimune T cell-activating platforms. He served from February 2011 until June 2024 as a member of the board of directors of Axogen, Inc. (NASDAQ: AXGN), a leading regenerative medicine company dedicated to peripheral nerve repair. Mr. Freitag was Axogens Special Counsel from June 2020 until March 2021, General Counsel from September 2011 until June 2020, Chief Financial Officer from September 2011 until May 2014 and August 2015 until March 2016, and Senior Vice President Business Development from May 2014 until October 2018. Mr. Freitag holds a J.D. from the University of Chicago and a B.A. in Economics Business and Law Society from Macalester College, Minnesota. Mr. Freitag was selected to serve on the Board and as the chair of the Companys Audit Committee because of his proven leadership and experience as a senior-level executive, his particular knowledge of public companies, including reporting, compliance and financial markets related thereto, his finance management and legal expertise, his former position as a public company chief financial officer and over 30 years of experience in the life sciences sector.
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Min Chul Park, Ph.D. Dr. Park has served as a member of our board of directors since December 2022. Mr. Park served in the same capacity at Old ZyVersa from May 2021 to December 2022. Dr. Park is an Assistant Professor at Inje Universitys College of Pharmacy. Dr. Park was formerly the Chief Executive Officer, and Director of Curebio Therapeutics, a biopharmaceutical company in Seoul, Korea, which develops peptide drugs for cancer, alopecia, and wound care, from October 2020 to April 2022. Dr. Park also served as Executive Vice President, CTO, and Director of Curebio from August 2017 to March 2022. Dr. Park served as an Adjust Professor at Korea Universitys Department of Pharmacy from March 2019 to February 2022. With 10 years in the pharmaceutical industry, Dr. Park has worked in the field of drug target discovery, assay development, and drug candidate optimization. He has expertise in basic and applied molecular and cellular biology. In his former role at Curebio Therapeutics, Dr. Park led financing and business development deals, including co-development agreements with three pharmaceutical companies, and one in-license deal. Additionally, he developed cosmetic peptides, and he co-developed antibodies, circulating tumor cell-based diagnostics, and a cancer stem cell assay system. Additionally, Dr. Park is a co-founder of TME Therapeutics, Co. and is currently on its Scientific Advisory Board. Until 2017, Dr. Park was CEO and Director at Neomics Co. in Seoul, Korea, where he helped expand the contract experiment and biomaterial business, and he led efforts to merge Neomics with Curebio and Bumyoung Bio Co., Ltd to form Curebio. Dr. Park developed cosmetic peptides, and a dermatology peptide drug candidate that he out-licensed. Dr. Park began his career as a Senior Research Associate at Medicinal Bioconvergence Research Center at Seoul National University, where he developed and led an out-licensing deal for an exosome isolation device, and he was responsible for two out-licensing deals for an anti-tumorigenic peptide. Dr. Park obtained his Ph.D. in pharmaceutical bioscience at the Seoul National University, Department of Pharmacy. Dr. Park was selected to serve on our board of directors based on his in-depth knowledge of the pharmaceutical industry and drug development technology. Dr. Park was appointed to our board of directors by ZyVersa pursuant to the Business Combination Agreement.
James Sapirstein. Mr. Sapirstein has served as a member of our board of directors since January 2023. Mr. Sapirstein is currently the Chairman of Onconetix, Inc (ONCO:NASDAQ). He served as Chairman and CEO of Entero Therapeutics (ENTO:NASDAQ) from October 2019 until February 2025. Mr. Sapirstein served as Chief Executive Officer of Contravir Pharmaceuticals from March 2014 until October 2018. All of these are publicly listed companies. Mr. Sapirstein has raised over $600 Million dollars in venture capital and public capital markets financing in his various engagements as Chief Executive Officer. He was named as a Finalist for the Ernst Young Entrepreneur of the Year award in 2015 as well as in 2016. He was Chairman of the Board for BioNJ, an association of biopharma industries in New Jersey from February 2017 to February 2019. In addition, he is a member of the Board of Directors for BIO (Biotechnology Innovation Organization), the leading biotechnology trade organization promoting public policy and networking in the healthcare space, where he sits on the Emerging Companies Section Governing Board and Health Section Board. Mr. Sapirstein was selected to serve as a member of the Board because of his extensive experience as an executive in the biotech and pharmaceutical sectors and as a director for multiple public companies in such sectors.
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CORPORATE GOVERNANCE AND BOARD MATTERS
Family Relationships
There are no family relationships among the members of the board of directors and executive officers.
Independence of the Board of Directors
As required under The Nasdaq Stock Market (Nasdaq) listing standards, a majority of the members of a listed companys board of directors must qualify as independent, as affirmatively determined by the board of directors. The board of directors consults with our counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding the definition of independent, including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.
Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and us, our senior management and our independent auditors, the board of directors has affirmatively determined that all of our current directors, other than Mr. Glover due to his position as our current Chief Executive Officer and President, are independent within the meaning of the applicable rules and regulations of the SEC and the listing requirements and rules of Nasdaq. In making this determination, the board of directors found that none of the independent nominees for director had a material or other disqualifying relationship with the Company.
Board Leadership Structure
Stephen C. Glover serves as the Chairman of our board of directors, as well as our Chief Executive Officer and President. Our board of directors periodically monitors the potential benefits and consequences of splitting the roles of Chairman and principal executive officer, but has determined that, at this time, it is appropriate and in our best interest for such roles to remain vested in one person due to our current size, the size of our board of directors, and the participation of our independent directors in the oversight of our operations and strategy. Our board of directors does not have a lead independent director, as we believe that the current size of our board of directors permits all of our independent directors to actively participate in this oversight role. As we grow in size, our board of directors will continue to evaluate the appropriateness of splitting the roles of Chairman and principal executive officer and creating a lead independent director position.
As discussed above, except for our Chief Executive Officer, our board of directors is comprised of independent directors. The active involvement of these independent directors, combined with the qualifications and significant responsibilities of our Chief Executive Officer, provide balance in the board of directors and promote strong, independent oversight of our management and affairs.
Role of the Board of Directors in Risk Oversight
The board of directors has an active role, as a whole and also at the committee level, in overseeing management of the Companys risks. The board of directors regularly reviews information regarding our credit, liquidity, and operations, as well as the risks associated with each. The audit committees charter mandates the audit committee to review and discuss with management and our independent registered public accounting firm, as appropriate, our major financial risk exposures and the steps taken by management to monitor and control these exposures. The compensation committee is responsible for supervising, administering and evaluating incentive, equity-based and other compensatory plans of the Company in which executive officers and key employees participate. The nominating and corporate governance committee manages risks associated with the independence of the board of directors. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board of directors is regularly informed through committee reports about such risks.
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In addition, the Company has embedded environmental, social, and governance (ESG) considerations in our governance structures (including in the charters of the nominating and corporate governance and the audit committees of our board of directors), strategies, risk management, and reporting. The oversight of the board of directors of ESG matters is integrated into our governance structures, including the nominating and corporate governance committee responsibility in reviewing the Companys policies, practices and disclosures with respect to sustainability and ESG factors; the audit committee responsibility for reviewing managements use of non-GAAP ESG measures and metrics; and the compensation committees responsibility for reviewing and discussing with management our initiatives, programs and approach regarding equity and inclusion. The Companys management works to identify priority ESG issues for the Company.
Meetings of the Board of Directors
Our board of directors met four times during 2024. Each member of the board of directors attended 75% or more of the aggregate number of meetings of the board of directors and of the committees on which the member served, held during the portion of 2025 for which the member was a director or committee member.
As required under applicable Nasdaq listing standards, during the fiscal year ended December 31, 2024, the Companys independent directors met at least twice in regularly scheduled executive sessions at which only independent directors were present.
Committees of the Board of Directors
The board of directors has an audit committee, a compensation committee, and a nominating and corporate governance committee. The board of directors has adopted a written charter for each committee that is available to stockholders on the Investors Relations section of our website at http://www.zyversa.com.
The following table provides membership information for each of the committees of the board of directors as of April 17, 2025:
| Name | Audit | Compensation |
Nominating and Corporate Governance |
|||||||
| Robert G. Finizio | * | |||||||||
| Gregory Freitag | * | |||||||||
| Stephen C. Glover | ||||||||||
| Min Chul Park, Ph.D. | ||||||||||
| James Sapirstein | * |
Below is a description of the audit committee, compensation committee, and nominating and corporate governance committee of the board of directors. Our board of directors may from time to time establish other committees. The Companys Chief Executive Officer and other executive officers regularly report to the non-executive directors and the audit committee, the compensation committee, and the nominating and corporate governance committee to ensure effective and efficient oversight of our activities and to assist in proper risk management and the ongoing evaluation of management controls. We believe that the leadership structure of our board of directors provides appropriate risk oversight of the Companys activities. Each of the committees has authority to engage legal counsel and other advisors, as each deems necessary or appropriate to carry out such committees duties and responsibilities.
Audit Committee
Our board of directors has determined that each member of the audit committee qualifies as an independent director under the Nasdaq Listing Rules and the independence requirements of Rule 10A-3 under the Exchange Act. The audit committee held four meetings and acted through written consent in lieu of holding a meeting one time during 2024.
The board of directors determined that Gregory G. Freitag qualifies as an audit committee financial expert, as defined in applicable SEC rules. The board of directors made a qualitative assessment of Mr. Freitags level of knowledge and experience based on a number of factors, including his educational background, past experience including as CFO of numerous companies, and service on other boards of directors.
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The purpose of the audit committee is to assist the board of directors in fulfilling its responsibility to oversee: (a) the integrity of the Companys financial statements, the Companys accounting and financial reporting processes and financial statement audits, (b) the Companys compliance with legal and regulatory requirements, (c) the Companys systems of internal control over financial reporting and disclosure controls and procedures, (d) the independent auditors engagement, qualifications, performance, compensation and independence, (e) review and approval of related party transactions in accordance with the Policies and Procedures for Related Party Transactions, (f) compliance with the Companys Code of Business Conduct and Ethics and the Audit Committee Procedures for Reporting Potential Wrongdoing, (g) the communication among the Companys independent auditors, the Companys financial and senior management and the board of directors, and (h) assessment and management of risk, including oversight of information technology and cybersecurity risk management. Our board of directors has adopted a written charter for the audit committee, which is available free of charge on our corporate website (http://www.zyversa.com).
Report of the Audit Committee of the Board of Directors
The audit committee reviewed and discussed the audited financial statements for the year ended December 31, 2024 with the Companys management. The audit committee discussed with the Companys independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. The audit committee also received the written disclosures and the letter from the Companys independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firms independence. Based on the foregoing, the audit committee recommended to the board of directors that the audited financial statements be included in the Companys Annual Report on Form 10-K for the year ended December 31, 2024.
Gregory Freitag (Chairperson)
Robert G. Finizio
James Sapirstein
The material in this report is not soliciting material, is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the Securities Act ) or the Securities Exchange Act of 1934, as amended (the Exchange Act ), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Compensation Committee
Our board of directors has determined that each member of the compensation committee qualifies as an independent director under the Nasdaq Listing Rules. The compensation committee held one meeting and acted through written consent in lieu of holding a meeting one time during 2024.
The purpose of the compensation committee is to evaluate, recommend, approve and review executive officer and director compensation arrangements, plans and programs of the Company and to administer the Companys cash-based and equity-based plans for employees and consultants. The compensation committees principal functions are to: (1) review and approve all forms of non-equity and equity-based compensation of the Companys executive officers and directors; (2) administer the Companys equity-based compensation plans; and (3) produce an annual report on executive compensation for use in the Companys proxy statement to the extent required under the federal securities laws. Our board of directors has adopted a written charter for the compensation committee, which is available free of charge on our corporate website (http://www.zyversa.com).
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Compensation Committee Processes and Procedures
Typically, the compensation committee will meet at least twice annually and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chairperson of the compensation committee, in consultation with the Chief Executive Officer. The compensation committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the compensation committee to make presentations, to provide financial or other background information or advice, or to otherwise participate in compensation committee meetings. Our Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the compensation committee regarding the Chief Executive Officers compensation.
The compensation committee may delegate such of its authority and responsibilities as it deems proper to subcommittees of the compensation committee, subject to all applicable laws and regulations.
Under its charter, the compensation committee has the sole authority and right, at the expense of the Company, to retain legal and other consultants, experts and advisers of its choice to assist the compensation committee in connection with its functions, including any studies or investigations, and has direct oversight of the work performed by such advisers. In connection with the retention of such advisers (other than in-house legal counsel), the compensation committee must consider the factors related to the independence of such advisers, including with respect to each such adviser (or the advisers employer): (a) the provision of other services to the Company by such adviser (or their employer); (b) the amount of fees received from the Company, as a percentage of the total revenue of such adviser (or their employer); (c) the policies and procedures of such adviser (or their employer) that are designed to prevent conflicts of interest; (d) any business or personal relationship of such adviser (or their employer) with a member of the compensation committee or an executive officer of the Company; (e) any shares of Company capital stock or other Company securities owned by such adviser (or their employer); and (f) such other factors as the compensation committee deems relevant or may be required from time to time pursuant to the applicable SEC rules or the Exchange Act; however, there is no requirement that any adviser be independent. The compensation committee has the sole authority to approve the fees and other retention terms of such advisers.
Compensation Committee Interlocks and Insider Participation
No member of our compensation committee was at any time during fiscal year 2024, or at any other time, one of our officers or employees. None of our executive officers have served as a director or member of a compensation committee (or other committee serving an equivalent function) of any entity, one of whose executive officers served as a director of our board of directors or member of our compensation committee.
Nominating and Corporate Governance Committee
Our board of directors has determined that each member of the nominating and corporate governance committee qualifies as an independent director under the Nasdaq Listing Rules. The nominating and corporate governance committee held one meeting and acted through written consent in lieu of holding a meeting one time during 2024.
The purpose of the nominating and corporate governance committee is to exercise general oversight with respect to the governance of the board of directors of the Company by (i) identifying, reviewing the qualifications of, and recommending to the board of directors proposed nominees for election to the board of directors , consistent with criteria approved by the board of directors , (ii) selecting, or recommending that the board of directors select, the director nominees for the next annual meeting of stockholders, (iii) overseeing the annual evaluation of the board of directors and management, and (iv) recommending director nominees to the board of directors for each committee of the board of directors. Our board of directors has adopted a written charter for the nominating and corporate governance committee, which is available free of charge on our corporate website (http://www.zyversa.com).
The nominating and corporate governance committee makes recommendations to the full board of directors regarding the size of the board of directors, the composition of the board of directors, the process for filling vacancies on the board of directors and the tenure of members of the board of directors. It also makes recommendations to the board of directors regarding the criteria for board of directors and committee membership, including a description of any specific, minimum qualifications that the nominating and corporate governance committee believes must be met by a director nominee, and a description of any specific qualities or skills that the nominating and corporate governance committee believes are necessary for one or more of the Companys directors to possess, and periodically reassesses the adequacy of such criteria and submits any proposed changes to the board of directors for approval. In identifying and evaluating proposed director candidates, the nominating and corporate governance committee considers the extent to which a nominee will contribute to an appropriately diverse board of directors and may consider, in addition to the minimum qualifications and other criteria for board of directors membership approved by the board of directors from time to time, all facts and circumstances that it deems appropriate or advisable, including, among other things, the skills of the proposed director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the board of directors.
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The nominating and corporate governance committee will consider director candidates properly recommended by stockholders. The nominating and corporate governance committee does not intend to alter the manner in which it evaluates candidates, based on whether or not the candidate was recommended by a stockholder. However, if the Company is legally required by contract or otherwise to provide third parties with the ability to nominate individuals for election to the board of directors, the selection and nomination of such director nominees shall be governed by such contract or other arrangement and shall not be the responsibility of the nominating and corporate governance committee. Stockholders who wish to recommend individuals for consideration by the nominating and corporate governance committee to become nominees for election to the board of directors may do so by delivering a written recommendation to the nominating and corporate governance committee at the following address: 2200 N. Commerce Parkway, Suite 208, Weston, Florida, 33326. Submissions must include the full name of the proposed nominee, a description of the proposed nominees business experience for at least the previous five years, complete biographical information, a description of the proposed nominees qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of the Companys stock and has been a holder for at least one year. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer, which is available on the Companys website. The Companys Code of Business Conduct and Ethics is a code of ethics, as defined in Item 406(b) of Regulation S-K. The Company will make any legally required disclosures regarding amendments to, or waivers of, provisions of its code of ethics on its corporate website (http://www.zyversa.com).
Stockholder Communications with the Board of Directors
Stockholders and interested parties may communicate with the Companys board of directors, any committee chairperson, or the non-management directors as a group by writing to the board of directors or committee chairperson in care of ZyVersa Therapeutics, Inc. at 2200 N. Commerce Parkway, Suite 208, Weston, FL 33326, Attention: Stephen Glover and Peter Wolfe, with copies to Thompson Hine LLP at 300 Madison Avenue, 27th Floor, New York, New York 10017, Attention: Faith L. Charles. Each communication will be forwarded, depending on the subject matter, to the board of directors, the appropriate committee chairperson, or all non-management directors.
Hedging and Pledging Policy
The Company has an Insider Trading Policy that prohibit directors and employees from engaging in short sales of the Companys securities; purchases or sales of puts, calls, or other derivative securities based on the Companys securities; or purchases of financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of Company securities.
Our Insider Trading Policy also prohibits directors and employees from purchasing Company securities on margin, borrowing against Company securities held in a margin account, or pledging Company securities as collateral for a loan, subject to an exception for pledging Company securities as collateral for a loan (other than a margin loan) if the director or employee clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities and upon approval by our Chief Financial Officer.
While the Company has not adopted a formal policy governing transactions by the Company in its securities, the Company will not engage in transactions in Company securities, or adopt any securities repurchase plans, while in possession of material non-public information relating to the Company or its securities other than in compliance with applicable law, subject to the policies and procedures adopted by the Company.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth beneficial ownership of the Companys common stock as of April 15, 2025 by:
| ● | each of the Companys named executive officers, directors, and director nominees; | |
| ● | all of the Companys executive officers, directors, and director nominees as a group; and | |
| ● | each person known to be the beneficial owner of more than 5% of the outstanding common stock of the Company. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes securities that the individual or entity has the right to acquire, such as through the exercise of warrants or stock options or the vesting of restricted stock units, within 60 days of April 15, 2025. Shares subject to warrants or options that are currently exercisable or exercisable within 60 days of April 15, 2025 or subject to restricted stock units that vest within 60 days of April 15, 2025 are considered outstanding and beneficially owned by the person holding such warrants, options, or restricted stock units for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
Certain beneficial owners of our common stock own warrants to purchase shares of our common stock that contain blockers preventing the holder from exercising its warrants if as a result of such exercise the holder would beneficially own more than 4.99% or 9.99%, as applicable, of our common stock. In preparing the table below, we have given affect to those blockers where applicable. Except as noted by footnote, and subject to community property laws where applicable, based on the information provided to the Company, the persons and entities named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. Unless otherwise indicated, the business address of each beneficial owner listed in the table below is c/o ZyVersa Therapeutics, Inc., 2200 N. Commerce Parkway, Suite 208, Weston, Florida 33326.
The beneficial ownership of our common stock is based on 3,619,456 shares of common stock issued and outstanding as of April 15, 2025, based on our knowledge and publicly available information. Unless otherwise indicated, the business address of each beneficial owner listed in the table below is c/o ZyVersa Therapeutics, Inc., 2200 N. Commerce Parkway, Suite 208, Weston, Florida 33326.
