0001493152-23-004396 | S-1/A | XBRL Viewer

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

Common stock, value

242

Additional paid-in capital

50,208,183

40,065,109

35,923,373

Accumulated deficit

(62,342,142)

(52,896,817)

(44,812,656)

Total Stockholders’ Deficit

(12,133,694)

(12,831,466)

(8,889,041)

Total Liabilities and Stockholders’ Deficit

2,346,121

1,126,174

$ 685,567

Investments held in Trust Account

Current Assets:

Cash

213,564

928,389

Prepaid expenses

225,000

251,800

Total Current Assets

438,564

1,180,189

Prepaid expenses

46,730

213,168

78,911,942

75,750,000

Total Assets

79,397,236

77,143,357

Current Liabilities:

Accrued expenses

1,625,140

200,247

Derivative liability

76,588

Total Current Liabilities

1,625,140

276,835

Business combination fee payable

3,375,000

Total Liabilities

5,000,140

3,651,835

Commitments and contingencies (Note 6)

Class A common stock subject to possible redemption; 7,500,000 shares (redemption value of $10.10 per share)

78,556,033

75,750,000

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

Additional paid-in capital

Accumulated deficit

(4,159,185)

(2,258,726)

Total Stockholders’ Deficit

(4,158,937)

(2,258,478)

Total Liabilities and Stockholders’ Deficit

79,397,236

77,143,357

Larkspur Health Acquisition Corp [Member] | Common Class A [Member]

Larkspur Health Acquisition Corp [Member] | Common Class B [Member]

Common stock, value

General and administrative

Common stock, value

$ 194

$ 216

^[1]

[1]	Includes an aggregate of up to 281,250 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Notes 5 and 7).

Condensed Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt discount	$ 0	$ 39,492	$ 140,633
Temporary equity, shares outstanding	331,331	331,331	331,331
Preferred stock par value (in Dollars per share)	$ 0.00001	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	5,000,000	5,000,000	5,000,000
Preferred stock, shares issued	2,253,056	0	0
Preferred stock, shares outstanding	2,253,056	0	0
Common stock par value (in Dollars per share)	$ 0.00001	$ 0.00001	$ 0.00001
Common stock, shares authorized	75,000,000	75,000,000	75,000,000
Common stock, shares issued	24,167,257	24,167,257	24,167,257
Common stock, shares outstanding	24,167,257	24,167,257	24,167,257
Debt discount			$ 216,692
Larkspur Health Acquisition Corp [Member]
Preferred stock par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Larkspur Health Acquisition Corp [Member] \| Common Class A [Member]
Common stock par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	320,272	317,600
Common stock, shares outstanding	320,272	317,600
Common stock subject to possible redemption (in Dollars per share)	7,767,159	7,500,000
Common stock subject to possible redemption per share (in Dollars per share)	$ 10.10	$ 10.10
Larkspur Health Acquisition Corp [Member] \| Common Class B [Member]
Common stock par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	1,941,790	2,156,250
Common stock, shares outstanding	1,941,790	2,156,250
Shares Subject To Forfeiture		281,250

Condensed Statements of Operations - USD ($)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Dec. 31, 2021

Sep. 30, 2021

Dec. 31, 2021

Dec. 31, 2020

Operating Expenses:

Research and development

$ 2,334,120

$ 406,948

$ 4,120,477

$ 1,490,309

$ 2,124,277

$ 6,468,887

1,061,046

1,707,459

4,526,428

4,437,471

5,580,099

5,364,171

Total Operating Expenses

3,395,166

2,114,407

8,646,905

5,927,780

7,704,376

11,833,058

Operating loss

(3,395,166)

(2,114,407)

(8,646,905)

(5,927,780)

(7,704,376)

(11,833,058)

Change in fair value of derivative liability

Interest expense

69,352

225,486

377,820

616,649

821,366

516,450

228,100

(246,507)

420,600

(215,900)

(228,100)

333,658

Gain on forgiveness of PPP Loan

(213,481)

Income tax

Deemed dividend to preferred stockholders

(3,692,618)

(1,879,906)

(9,445,325)

(6,115,048)

$ (8,084,161)

$ (12,683,166)

(9,684,637)

(10,015,837)

Net Loss Attributable to Common Stockholders

$ (13,377,255)

$ (1,879,906)

$ (19,461,162)

$ (6,115,048)

Class B Common Stock – Basic and diluted net loss per common share

$ (0.55)

$ (0.08)

$ (0.81)

$ (0.25)

$ (0.33)

$ (0.54)

Class B Common Stock – Weighted average shares outstanding, basic and diluted

24,167,257

23,636,577

Formation and operating costs

Operating Expenses:

$ 985,605

$ 174

$ 2,069

$ 2,285,405

$ 235,267

Operating loss

(985,605)

(174)

(2,069)

(2,285,405)

(235,267)

Interest income on assets held in Trust

354,069

463,636

Total other expense

354,069

540,224

5,433

Change in fair value of derivative liability

76,588

5,433

Pre tax loss

(631,536)

(174)

(2,069)

(1,745,181)

Income tax

(47,551)

Larkspur Health Acquisition Corp [Member] | Common Class A [Member]

$ (679,087)

$ (174)

$ (2,069)

$ (1,792,732)

$ (240,700)

Class B Common Stock – Basic and diluted net loss per common share

$ (0.07)

$ (0.18)

$ (0.12)

Class B Common Stock – Weighted average shares outstanding, basic and diluted

8,087,431

8,082,471

216,404

Larkspur Health Acquisition Corp [Member] | Common Class B [Member]

Class B Common Stock – Basic and diluted net loss per common share

$ (0.07)

$ (0.00)

$ (0.18)

$ (0.12)

Class B Common Stock – Weighted average shares outstanding, basic and diluted

1,941,790

1,875,000

1,940,562

1,875,000

^[1]

[1]	Excludes an aggregate of up to 281,250 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Notes 5 and 7).

Condensed Statements of Operations (Parenthetical)	Dec. 31, 2021 shares
Larkspur Health Acquisition Corp [Member] \| Common Class B [Member]
Shares Subject To Forfeiture	281,250

Condensed Statements of Stockholders' Deficiency - USD ($)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Mar. 31, 2021

Sep. 30, 2022

Jun. 30, 2022

Mar. 31, 2022

Sep. 30, 2021

Jun. 30, 2021

Mar. 31, 2021

Sep. 30, 2021

Sep. 30, 2022

Dec. 31, 2021

Sep. 30, 2021

Dec. 31, 2021

Dec. 31, 2020

$ (15,553,186)

$ (14,244,914)

$ (12,831,466)

$ (11,202,736)

$ (10,132,922)

$ (8,889,041)

$ (12,831,466)

$ (8,889,041)

$ (3,072,232)

959,200

^[1]

393,301

^[2]

3,000,000

494,022

695,940

1,941,746

1,398,469

1,025,218

896,229

4,141,736

3,677,453

153,324

20,249

Issuance of shares upon partial exercise of over allotment option

331

15,000

Conversion of convertible notes payable into preferred stock

(3,692,618)

(2,004,212)

(3,748,495)

(1,879,906)

(2,095,032)

(2,140,110)

(9,445,325)

(6,115,048)

(8,084,161)

(12,683,166)

^[3]

5,658,888

$ (10,132,922)

(12,133,694)

(15,553,186)

(14,244,914)

(11,684,173)

(11,202,736)

(10,132,922)

$ (11,684,173)

(12,133,694)

$ (12,831,466)

(11,684,173)

(12,831,466)

(8,889,041)

(3,372,123)

(2,978,484)

(2,258,478)

(1,228)

(439)

(2,258,478)

667

^[4]

667

^[5]

Issuance of shares upon partial exercise of over allotment option

Forfeit of shares upon partial exercise of over allotment option

Remeasurement of redeemable Class A Common Stock to redemption value

(107,727)

3,219,052

719,084

24,333

Class A common stock accretion to redemption value

19,623,313

(26,350,587)

Private placement units proceeds in excess of fair value

746,360

(1,106)

(679,087)

(393,639)

(720,006)

(174)

(789)

(2,069)

(1,792,732)

(240,700)

(439)

(4,158,937)

(3,372,123)

(2,978,484)

(1,402)

(1,228)

(439)

(1,402)

(4,158,937)

(2,258,478)

(1,402)

(2,258,478)

Preferred Stock [Member]

$ 1

133,541

Issuance of common stock in private placement, shares

$ 4

^[1]

$ 1

^[2]

317,322

133,541

^[2]

Conversion of convertible notes payable into preferred stock

^[3]

$ 18

Conversion of convertible notes payable into preferred stock, shares

1,802,193

$ 23

$ 1

$ 23

2,253,056

133,541

2,253,056

Common Stock [Member]

$ 242

$ 232

24,167,257

23,208,933

Issuance of common stock in private placement, shares

^[1]

^[2]

$ 9

923,076

Exercise of warrant, shares

$ 1

20,248

Issuance of shares upon partial exercise of over allotment option

Issuance of shares upon partial exercise of over allotment option, shares

15,000

Conversion of convertible notes payable into preferred stock

^[3]

$ 242

Common Stock [Member] | Common Class A [Member] | Larkspur Health Acquisition Corp [Member]

24,167,257

$ 32

320,272

317,600

Issuance of Class B common stock to Sponsor, shares

^[4]

^[5]

^[4]

^[5]

Issuance of shares upon partial exercise of over allotment option

Issuance of shares upon partial exercise of over allotment option, shares

2,672

Forfeit of shares upon partial exercise of over allotment option

Forfeit of shares upon partial exercise of over allotment option, shares

Remeasurement of redeemable Class A Common Stock to redemption value

Private placement Class A shares, shares

$ 25

248,150

Conversion of Note payable to Class A common stock, shares

$ 7

69,450

Private placement units proceeds in excess of fair value

$ 32

Common Stock [Member] | Common Class B [Member] | Larkspur Health Acquisition Corp [Member]

320,272

317,600

$ 194

$ 216

1,941,790

2,156,250

Issuance of Class B common stock to Sponsor, shares

$ 216

^[4]

$ 216

^[5]

2,156,250

^[4]

2,156,250

^[5]

Issuance of shares upon partial exercise of over allotment option

Issuance of shares upon partial exercise of over allotment option, shares

Forfeit of shares upon partial exercise of over allotment option

$ (22)

Forfeit of shares upon partial exercise of over allotment option, shares

(214,460)

Remeasurement of redeemable Class A Common Stock to redemption value

Private placement units proceeds in excess of fair value

$ 216

$ 194

$ 216

$ 194

$ 216

Additional Paid-in Capital [Member]

2,156,250

1,941,790

2,156,250

1,941,790

2,156,250

$ 43,096,095

$ 42,400,155

$ 40,065,109

$ 37,844,820

$ 36,819,602

$ 35,923,373

$ 40,065,109

$ 35,923,373

$ 29,057,026

959,196

^[1]

393,300

^[2]

2,999,991

494,022

695,940

1,941,746

1,398,469

1,025,218

896,229

4,141,736

3,677,453

153,324

20,248

Issuance of shares upon partial exercise of over allotment option

331

15,000

Conversion of convertible notes payable into preferred stock

^[3]

5,658,870

Additional Paid-in Capital [Member] | Larkspur Health Acquisition Corp [Member]

$ 36,819,602

50,208,183

43,096,095

42,400,155

39,243,289

37,844,820

36,819,602

$ 39,243,289

50,208,183

$ 40,065,109

39,243,289

40,065,109

35,923,373

24,784

24,784

^[4]

24,784

^[5]

Issuance of shares upon partial exercise of over allotment option

Forfeit of shares upon partial exercise of over allotment option

Remeasurement of redeemable Class A Common Stock to redemption value

3,219,027

719,077

Class A common stock accretion to redemption value

19,623,313

(24,332,561)

Private placement units proceeds in excess of fair value

746,360

Retained Earnings [Member]

24,784

(58,649,524)

(56,645,312)

(52,896,817)

(49,047,798)

(46,952,766)

(44,812,656)

(52,896,817)

(44,812,656)

(32,129,490)

^[1]

^[2]

Issuance of shares upon partial exercise of over allotment option

Conversion of convertible notes payable into preferred stock

(3,692,618)

(2,004,212)

(3,748,495)

(1,879,906)

(2,095,032)

(2,140,110)

(8,084,161)

(12,683,166)

^[3]

Retained Earnings [Member] | Larkspur Health Acquisition Corp [Member]

(46,952,766)

(62,342,142)

(58,649,524)

(56,645,312)

(50,927,704)

(49,047,798)

(46,952,766)

(50,927,704)

(62,342,142)

(52,896,817)

(50,927,704)

(52,896,817)

$ (44,812,656)

(3,372,371)

(2,978,732)

(2,258,726)

(1,895)

(1,106)

(2,258,726)

^[4]

^[5]

Issuance of shares upon partial exercise of over allotment option

Forfeit of shares upon partial exercise of over allotment option

Remeasurement of redeemable Class A Common Stock to redemption value

(107,727)

Class A common stock accretion to redemption value

(2,018,026)

Private placement units proceeds in excess of fair value

(1,106)

(679,087)

(393,639)

(720,006)

(174)

(789)

(240,700)

Subscription Receivables [Member] | Larkspur Health Acquisition Corp [Member]

(1,106)

(4,159,185)

(3,372,371)

(2,978,732)

(2,069)

(1,895)

(1,106)

(2,069)

(4,159,185)

(2,258,726)

(2,069)

(2,258,726)

(24,333)

(24,333)

^[4]

(24,333)

^[5]

Issuance of shares upon partial exercise of over allotment option

Forfeit of shares upon partial exercise of over allotment option

Remeasurement of redeemable Class A Common Stock to redemption value

24,333

Private placement units proceeds in excess of fair value

Business Organization, Nature of Operations, Basis of Presentation and Risks and Uncertainties

$ (24,333)

[1]	Includes gross proceeds of $996,400 less issuance costs of $37,200
[2]	Includes gross proceeds of $419,320 less issuance costs of $26,019
[3]	Includes principal and interest of $5,658,888
[4]	Includes an aggregate of up to 281,250 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Notes 5 and 7).
[5]	Includes an aggregate of up to 281,250 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Notes 5 and 7).

Condensed Statements of Stockholders' Deficiency (Parenthetical) - USD ($)	3 Months Ended
	Sep. 30, 2022	Mar. 31, 2022
Gross proceeds	$ 996,400	$ 419,320
Issuance costs	37,200	$ 26,019
Principal and interest	$ 5,658,888

Condensed Statements of Cash Flows - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended			12 Months Ended
Condensed Statements of Cash Flows - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities:
Net loss	$ (3,692,618)	$ (1,879,906)		$ (9,445,325)		$ (6,115,048)	$ (8,084,161)	$ (12,683,166)
Adjustments to reconcile net loss to net cash used in operating activities
Deferred offering costs paid
Stock-based compensation Warrants								153,324
Stock-based compensation Options				3,131,708		3,319,916	4,141,736	3,677,453
Amortization of debt discount	3,024	86,879		39,492		251,940	317,833	288,366
Gain on forgiveness of PPP Loan		(213,481)				(213,481)	(213,481)
Change in fair value of derivative liability	228,100	(246,507)		420,600		(215,900)	(228,100)	333,658
Depreciation of fixed assets				7,800		7,800	10,400	10,400
Changes in operating assets and liabilities:
Prepaid expenses and other current assets				(57,366)		(238,133)	(318,761)	823,859
Security deposit				(1)		11,666	11,665	23,328
Vendor deposits				160,000		(40,000)	10,000	229,000
Accounts payable				3,448,439		(680,762)	(311,862)	(601,474)
Accrued expenses and other current liabilities				1,216,322		(547,893)	(411,358)	2,635,419
Net cash used in operating activities				(1,078,331)		(4,459,895)	(5,076,089)	(5,109,833)
Cash flows from financing activities:
Sales of units in private offering				1,415,720				3,000,000
Payment of equity issuance costs				(63,219)
Proceeds from issuance of convertible notes payable						5,230,000	5,230,000	1,473,000
Payment of debt issuance costs								(141,735)
Issuance of put option								331
Proceeds from exercise of stock option								15,000
Proceeds from issuance of note payable – related party								213,481
Net cash provided by financing activities				1,352,501		5,230,000	5,230,000	4,560,077
Net change in cash				274,170		770,105	153,911	(549,756)
Cash at beginning of period				328,581		174,670	174,670	724,426
Cash at end of period	602,751	944,775	$ 944,775	602,751	$ 328,581	944,775	328,581	174,670
Non-cash financing activities:
Conversion of convertible notes payable and accrued interest into preferred stock				5,658,888
Accounts payable for deferred offering costs				1,506,211		25,000
Gain on forgiveness of PPP Loan							213,481
Bifurcated embedded redemption feature recorded as debt discount								211,559
Acceptance of notes receivable								351,579
Investor deposits exchanged for convertible notes payable								$ 322,500
Larkspur Health Acquisition Corp [Member]
Cash flows from operating activities:
Net loss	(679,087)	(174)	(2,069)	(1,792,732)	(240,700)
Adjustments to reconcile net loss to net cash used in operating activities
Interest income earned on Trust assets				(463,636)
Deferred offering costs paid
Change in fair value of derivative liability				76,588	5,433
Changes in operating assets and liabilities:
Prepaid expenses				193,238	(464,968)
Derivative liability				(76,588)	76,588
Accrued expenses				1,424,893	200,247
Accrued formation costs			1,812
Net cash used in operating activities			(257)	(714,825)	(428,833)
Cash flows from investing activities:
Cash deposited into Trust account				(2,698,306)	(75,750,000)
Net cash used in investing activities				(2,698,306)	(75,750,000)
Cash flows from financing activities:
Sales of units in private offering					3,176,000
Sales of units in public offering				2,698,306	75,000,000
Advance from related party			9,410
Deferred offering costs paid			(63,798)
Payment of offering costs					(1,093,778)
Proceeds from issuance of Class B common stock			22,063		25,000
Proceeds from issuance of note payable – related party			719,084
Net cash provided by financing activities			686,759	2,698,306	77,107,222
Net change in cash			686,502	(714,825)	928,389
Cash at beginning of period				928,389
Cash at end of period	$ 213,564	$ 686,502	686,502	213,564	928,389	$ 686,502	$ 928,389
Non-cash financing activities:
Private placement units proceeds in excess of fair value					746,360
Business combination fee payable					3,375,000
Deferred offering costs included in accrued offering costs			338,609
Initial classification of potentially redeemable Class A common stock				2,698,306	$ 75,750,000
Remeasurement of redeemable Class A Common Stock to redemption value				107,727
Class B common stock issued for subscription receivables			$ 2,937

Business Organization, Nature of Operations, Basis of Presentation and Risks and Uncertainties

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Note 1 – Business Organization, Nature of Operations, Basis of Presentation and Risks and Uncertainties

Organization and Operations

ZyVersa is a clinical stage biopharmaceutical company whose focus is on patients with inflammatory or renal disease who have high unmet medical needs.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. For additional information, these unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Financial Statements for the year ended December 31, 2021 incorporated by reference into this filing.

In the opinion of management, the accompanying condensed financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed financial statements of the Company as of September 30, 2022, and for the three and nine months ended September 30, 2022 and 2021. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 or any other period.

Risks and Uncertainties

In early 2020, it became evident that there was a global outbreak of SARS-CoV-2, a novel strain of coronavirus that causes Coronavirus disease (COVID-19). At the onset, the Company experienced significant negative impacts on many aspects of its business. These effects included a delay in the launch of the VAR 200 Phase 2a trials as potential patient participants would not be willing to risk going into a facility for the trials. In addition, the private funding markets faltered, which deprived the Company of the necessary liquidity to fund the business. As a result, management implemented significant cost reduction measures to continue until economic conditions improved. In 2021, the Company secured additional funding by issuing new unsecured convertible promissory notes. In early 2022, the Company began reviewing additional financing strategies, fundings and deals with other investors, although there can be no assurance that the Company will be successful in closing any such deals. The full extent of COVID-19’s future impact on the Company’s operations and financial condition remains uncertain. A prolonged COVID-19 outbreak could have a material adverse impact on the Company’s results of operations, financial condition, and liquidity, including the timing and ability of the Company to progress its clinical development initiatives. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 1 — Business Organization, Nature of Operations and Risks and Uncertainties

Organization and Operations

ZyVersa Therapeutics, Inc. (“ZyVersa” or the “Company”) was organized as a corporation under the laws of the State of Florida on March 11, 2014 as Variant Pharmaceuticals, Inc. On April 25, 2019, the Company changed its name to ZyVersa Therapeutics, Inc.

ZyVersa is a clinical stage biopharmaceutical company whose focus is on patients with inflammatory or renal disease who have high unmet medical needs.

Risks and Uncertainties

In early 2020, it became evident that there was a global outbreak of SARS-CoV-2, a novel strain of coronavirus that causes Coronavirus disease (COVID-19). At the onset, the Company experienced significant negative impacts on many aspects of its business. These effects included a delay in the launch of the VAR 200 Phase 2a trials as potential patient participants would not be willing to risk going into a facility for the trials. In addition, the private funding markets faltered, which deprived the Company of the necessary liquidity to fund the business. As a result, management implemented significant cost reduction measures to continue until economic conditions improved. In 2021, the Company secured additional funding by issuing new unsecured convertible promissory notes. In early 2022, the Company began reviewing additional financing strategies, fundings and deals with other investors, although there can be no assurance that the Company will be successful in closing any such deals. The full extent of COVID-19’s future impact on the Company’s operations and financial condition remains uncertain. A prolonged COVID-19 outbreak could have a material adverse impact on the Company’s results of operations, financial condition and liquidity, including the timing and ability of the Company to progress its clinical development initiatives. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Business Organization, Nature of Operations, Basis of Presentation and Risks and Uncertainties

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN

Larkspur Health Acquisition Corp. (the “Company”) was incorporated in Delaware on March 17, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2022, the Company had not commenced any operations. All activity for the period from March 17, 2021 (inception) through September 30, 2022 relates to the Company’s initial public offering (the “Initial Public Offering” or “IPO”), which is described below, and consummation of its initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

The registration statement for the Company’s Initial Public Offering (the “Registration Statement”) was declared effective on December 20, 2021. On December 23, 2021, the Company consummated its Initial Public Offering of 7,500,000 units (“Units” and, with respect to the common stock included in the Units being offered, the “Public Shares”), generating gross proceeds of $75,000,000, which is described in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 317,600 units (the “Private Placement Units”) at a price of $10.00 per Private Unit in private placements to Larkspur Health LLC (the “Sponsor”).

As of December 23, 2021, transaction costs amounted to $6,639,594 consisting of $500,000 of underwriting fees, $3,375,000 of business combination fee payable (which are held in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”)), $2,179,470 of the excess of fair value over the purchase price of certain founder shares transferred to additional sponsor investors and $593,778 of Initial Public Offering costs. These costs were charged to additional paid-in capital or accumulated deficit to the extent additional paid-in capital is fully depleted upon completion of the Initial Public Offering. As described in Note 6, the $3,375,000 business combination fee is contingent upon the consummation of a Business Combination within 12 months, unless the time period to consummate a Business Combination is extended pursuant to the Company’s amended and restated certificate of incorporation.

Following the closing of the Initial Public Offering on December 23, 2021, an amount of $75,750,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement (as defined in Note 4) was placed in the Trust Account. The funds held in the Trust Account may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account, as described below.

On January 6, 2022 the underwriters partially exercised the over-allotment option for 267,159 units. The issuance of the units resulted in gross proceeds of $2.7 million. The remaining units expired on February 6, 2022, which resulted in the forfeiture of 214,460 founders’ shares.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)

Business Combination Agreement

On July 20, 2022, the Company entered into a Business Combination Agreement, (the “Business Combination Agreement”), with ZyVersa Therapeutics, Inc. (“ZyVersa”), Larkspur Merger Sub Inc. (“Merger Sub”) and Stephen Glover. Upon the consummation of the transactions contemplated by the Business Combination Agreement (the “Transactions”), Merger Sub will merge with and into ZyVersa, with ZyVersa surviving as a wholly-owned subsidiary of the Company (the “Business Combination”). The combined company is expected to be named ZyVersa Therapeutics, Inc.

The Business Combination Agreement provides that the following transactions will occur:

●

Immediately prior to the effective time of the Business Combination (the “Effective Time”), each share of ZyVersa’s Series A Preferred Stock that is issued and outstanding will automatically convert into a number of shares of ZyVersa’s common stock at the then-effective conversion rate, as calculated pursuant to ZyVersa’s Articles of Incorporation (the “Conversion”).

●

At the Effective Time, (a) each share of ZyVersa’s common stock issued and outstanding (including shares of ZyVersa’s common stock resulting from the Conversion) will be canceled and converted into a number of shares of the Company’s common stock, as determined pursuant to the terms of the Business Combination Agreement; and (b) each share of Merger Sub common stock issued and outstanding immediately prior to the Effective Time will be converted into and exchanged for one share of common stock of ZyVersa.

●

Effective as of the Effective Time, each ZyVersa warrant, to the extent then outstanding and unexercised, will automatically, without any action on the part of the holder thereof, be assumed and converted into a warrant to acquire a number of shares of the Registrant’s common stock at an adjusted exercise price per share, in each case, as determined pursuant to the terms of the Business Combination Agreement.

●

Each ZyVersa stock option that is outstanding and unexercised as of immediately prior to the Effective Time, whether or not vested, will be assumed and converted into an option to purchase a number of shares of the Registrant’s common stock, as determined pursuant to the terms of the Business Combination Agreement.

●

Each ZyVersa note that is outstanding as of immediately prior to the Effective Time which by its terms will not convert into ZyVersa’s common stock in connection with the Transactions, if any, will be assumed by the Company and will remain outstanding pursuant to the terms and conditions then in effect.

The consummation of the Transactions are subject to the satisfaction or waiver of certain customary closing conditions contained in the Business Combination Agreement, including, among other things, the Company and ZyVersa shall have received aggregate commitments of at least $10.0 million in connection with the sale of securities pursuant to the Stock Purchase Agreement entered into on July 20, 2022, as amended, by and between the Company and the purchasers listed on the signatory pages thereto.

The parties to the Business Combination Agreement have made customary representations and warranties, and have agreed to certain customary covenants in the Business Combination Agreement, including, among others, covenants with respect to the conduct of the Company, ZyVersa and Merger Sub, and their subsidiaries, prior to the closing of the Transactions.

The Business Combination Agreement may be terminated by the Company or ZyVersa, under certain circumstances, including, among others, (i) by mutual written consent of the Company and ZyVersa, (ii) by either the Company or ZyVersa if the Effective Time shall not have occurred prior to December 15, 2022, (iii) by either the Company or ZyVersa if any Governmental Order has become final and non-appealable and has the effect of making consummation of the Transactions illegal or otherwise preventing or prohibiting consummation of the Transactions, (iv) by either the Company or ZyVersa if any of the required proposals fail to receive the requisite vote for approval at the Company’s Shareholders’ Meeting, (v) by the Company, in the event that ZyVersa’s shareholders don’t consent to the Transactions, (vi) by the Company upon ZyVersa breaching any representation, covenant or agreement; or (vii) by ZyVersa upon the Company breaching any representation, covenant or agreement.

The Company expects to account for the Business Combination as a reverse recapitalization, whereby ZyVersa is deemed to be the accounting acquirer.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing of the Initial Public Offering, management has agreed that an amount equal to at least $10.10 per Unit sold in the Initial Public Offering, including proceeds of the Private Placement Units, will be held in a trust account (“Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.

The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer in connection with the Business Combination. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.10 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

All of the Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Company’s Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation (the “Certificate of Incorporation”). In accordance with the rules of the U.S. Securities and Exchange Commission (the “SEC”) and its guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require common stock subject to redemption to be classified outside of permanent equity. Given that the Public Shares will be issued with other freestanding instruments (i.e., public warrants), the initial carrying value of Class A common stock classified as temporary equity will be the allocated proceeds determined in accordance with ASC 470-20. The Class A common stock is subject to ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement will be treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital). While redemptions cannot cause the Company’s net tangible assets to fall below $5,000,001, the Public Shares are redeemable and will be classified as such on the balance sheet until such date that a redemption event takes place.

The Company will not redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 (so that it does not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the Business Combination. If the Company seeks stockholder approval of the Business Combination, the Company will proceed with a Business Combination if a majority of the outstanding shares voted are voted in favor of the Business Combination, or such other vote as required by law or stock exchange rule. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its certificate of incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)

Notwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.

The holders of the Founder Shares have agreed (a) to waive their redemption rights with respect to the Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

If the Company has not completed a Business Combination within 12 months from the closing of the Initial Public Offering (or up to 18 months from the closing of the Initial Public Offering at the election of the Company in two separate three month extensions subject to satisfaction of certain conditions) (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The holders of the Founders Shares have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the holders of Founder Shares acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.10 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per Public Share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)

Going Concern Consideration

In connection with the Company’s assessment of going concern considerations in accordance with Account Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Combination Period is less than one year from the date of the issuance of the financial statements. There is no assurance that the Company’s plans to consummate a business combination will be successful within or the Company’s available funds will be sufficient to fund our operations through the Combination Period. As a result, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued or are available to be issued as well as the liquidity to fund operations. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, close of the Initial Public Offering and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN

As of December 31, 2021, the Company had not commenced any operations. All activity for the period from March 17, 2021 (inception) through December 31, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

The registration statement for the Company’s Initial Public Offering (the “Registration Statement”) was declared effective on December 20, 2021. On December 23, 2021, the Company consummated the Initial Public Offering of 7,500,000 units (“Units” and, with respect to the common stock included in the Units being offered, the “Public Shares”), generating gross proceeds of $75,000,000, which is described in Note 3.

As of December 23, 2021, transaction costs amounted to $6,639,594 consisting of $500,000 of underwriting fees, $3,375,000 of business combination fee payable (which are held in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”)), $2,179,470 of the excess of fair value over the purchase price of certain founder shares transferred to additional sponsor investors and $593,778 of Initial Public Offering costs. These costs were charged to additional paid-in capital or accumulated deficit to the extent additional paid-in capital is fully depleted upon completion of the Public Offering. As described in Note 6, the $3,375,000 business combination fee is contingent upon the consummation of a Business Combination within 12 months, unless the time period to consummate a Business Combination is extended pursuant to the Company’s amended and restated certificate of incorporation.

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)

The holders of the Founder Shares have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the holders of Founder Shares acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.10 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per public Share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Going Concern Consideration

In connection with the Company’s assessment of going concern considerations in accordance with Account Standards Update (“ASU”) 2014- 15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the combination period is less than one year from the date of the issuance of the financial statements. There is no assurance that the Company’s plans to consummate a business combination will be successful within the combination period. As a result, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued or are available to be issued The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

Risks and Uncertainties

Going Concern and Management’s Plans

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern and Management’s Plans

Note 2 – Going Concern and Management’s Plans

The Company has not yet achieved profitability and expects to continue to incur cash outflows from operations. It is expected that its research and development and general and administrative expenses will continue to increase and, as a result, the Company will eventually need to generate significant product revenues to achieve profitability. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statement issuance date.

The Company’s cash flow needs include the planned costs to operate its business, including amounts required to fund research and development, working capital, and capital expenditures. The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including the Company’s ability to successfully commercialize its products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings. We intend to raise additional capital in the future to fund operations. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash.

The accompanying unaudited condensed financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited condensed financial statements do not include any adjustment that might become necessary should the Company be unable to continue as a going concern.

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 2 — Going Concern and Management’s Plans

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment that might become necessary should the Company be unable to continue as a going concern.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Summary of Significant Accounting Policies

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Summary of Significant Accounting Policies

Note 3 – Summary of Significant Accounting Policies

Since the date the Company’s December 31, 2021 financial statements were issued in its 2021 Annual Financial Statements, there have been no material changes to the Company’s significant accounting policies, except as disclosed below.

Restricted Cash

Restricted cash consists of cash that is held in an escrow account to eventually pay bank fees associated with the closing of the Series A Preferred Stock financing in July 2022. See Note 9 - Stockholders’ Deficiency for additional details on the Series A Preferred Stock financing.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. This standard was adopted on January 1, 2022 and did not have a material impact on the Company’s condensed financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Companies should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. This standard was adopted on January 1, 2022 and did not have a material impact on the Company’s condensed financial statements.

Note 3 — Summary of Significant Accounting Policies

Use of Estimates

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and the amounts disclosed in the related notes to the financial statements. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, fair value calculations for equity securities, derivative liabilities and share based compensation as well as establishment of valuation allowances for deferred tax assets. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents in the financial statements. As of December 31, 2021 and 2020, the Company had no cash equivalents.

The Company has cash deposits which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions.

Equipment, Net

Equipment is stated at cost, net of accumulated depreciation, which is recorded commencing at the in-service date using the straight- line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which is 5 years. As of December 31, 2021 and 2020, equipment consisted of $52,000 of medical equipment, placed in service on September 1, 2019, less accumulated depreciation of $24,267 and $13,867 as of December 31, 2021 and 2020, respectively. During the years ended December 31, 2021 and 2020, the Company recognized depreciation expense of $10,400 in each year, which was included in general and administrative expenses in the statements of operations.

Financing Costs

Debt issuance costs, which primarily consist of direct, incremental professional fees incurred in connection with a debt financing, are reported as a direct deduction from the face amount of the notes payable and are amortized over the contractual term of the underlying notes payable using the effective interest method.

Convertible Promissory Notes

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Topic 815 “Derivatives and Hedging” (“ASC 815”) of the Financial Accounting Standards Board (“FASB”)” Accounting Standards Codification (“ASC”). The accounting treatment of derivative financial instruments requires that the Company record any bifurcated embedded features at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded in earnings each period as non-operating, non-cash income or expense. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Bifurcated embedded features are recorded at their initial fair values which create additional debt discount to the host instrument.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies (cont.)

Prior to the January 1, 2021 adoption of Accounting Standards Update (“ASU”) 2020-06, if the embedded conversion options did not require bifurcation, the Company then evaluated for the existence of a beneficial conversion feature by comparing the fair value of the Company’s underlying stock as of the commitment date to the effective conversion price of the instrument (the intrinsic value). The host instrument is measured at amortized cost with the carrying value being accreted to the stated principal amount of contractual maturity using the effective-interest method with a corresponding charge to interest expense. After the January 1, 2021 adoption of ASU 2020-06, the Company is no longer required to evaluate for the existence of a beneficial conversion feature.

Fair Value of Financial Instruments

The Company measures the fair value of financial assets and liabilities based on ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities;

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable; and

Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).

The carrying amounts of the Company’s financial instruments, such as cash, accounts payable and investor deposits approximate fair values due to the short-term nature of these instruments.

See Note 9 — Derivative Liabilities for additional details regarding the valuation technique and assumptions used in valuing Level 3 inputs.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Research and Development

Research and development expenses are charged to operations as incurred.

Stock-Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies (cont.)

Fair Value of Stock Options and Warrants

The Company has computed the fair value of stock options and warrants granted using the Black-Scholes option pricing model. Option forfeitures are accounted for at the time of occurrence. During 2021, the fair value of the Company’s common stock was determined by management with the assistance of a third-party valuation specialist using an income approach. During 2020, the fair value of the Company’s common stock was determined using a market approach based on recent sales of the Company’s common stock to third parties. The expected term used for options is the estimated period of time that options granted are expected to be outstanding. The expected term used for warrants is the contractual life. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” option grants. The Company does not currently have a public trading history for the common shares to support its historical volatility calculations. Accordingly, the Company is utilizing an expected volatility figure based on a review of the historical volatility of six comparable entities over a period of time equivalent to the expected life of the instrument being valued. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and dilutive common-equivalent shares outstanding during each period.

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

	2021		2020
	December 31,
	2021		2020
Warrants⁽¹⁾		2,154,352		2,154,352
Options		8,755,179		7,196,250
Convertible notes payable⁽²⁾		3,400,187		1,294,063
Total potentially dilutive shares		14,309,718		10,644,665

(1)	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 10 — Commitments and Contingencies — License Agreements for details.

(2)	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $3.25 per share on December 31, 2021 and 2020.

Reclassifications

Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or loss per share.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“The FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This amendment is effective for private entities for fiscal years beginning after December 15, 2021, including interim periods within fiscal years beginning after December 15, 2022. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases” and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018, and ASU No. 2018-20 “Leases (Topic 842) — Narrow Scope Improvements for Lessors” in December 2018. ASU 2018-10 and ASU 2018-20 provide certain amendments that affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company does not expect the adoption of ASU 2016-02 to have a significant impact on its statements of operations and cash flows. Management believes the primary effect of adopting the new standard will be to record right-of-use assets and obligations for current operating leases. The company intends to adopt ASU 2016-02 in its fiscal year ended December 31, 2022 and for interim periods during the year ended December 31, 2023.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies (cont.)

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. The Company does not expect the adoption of this standard to have a material effect on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Companies should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If a Company elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company does not expect the adoption of this standard to have a material effect on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which simplifies the accounting for convertible instruments by eliminating certain accounting models when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in-capital. Under this ASU, certain debt instruments with embedded conversion features will be accounted for as a single liability measured at its amortized cost. Additionally, this ASU eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments. The new guidance is effective for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company early adopted ASU 2020-06 effective January 1, 2021 which eliminated the need to assess whether a beneficial conversion feature needed to be recognized upon either (a) the 2021 issuance of new convertible notes; or (b) the 2021 resolution of any contingent beneficial conversion features.

Summary of Significant Accounting Policies

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.

The accompanying unaudited financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K.

In the opinion of the Company’s management, the unaudited financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of September 30, 2022 and its results of operations and cash flows for the three and nine months ended September 30, 2022. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2022 or any future interim period.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and cash equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2022.

Investments held in Trust Account

As of September 30, 2022, the Company had $78,911,942 in Investments held in the Trust Account. The Company classifies these investments as trading securities which are recorded at fair value with realized and unrealized gains and losses recorded in the statement of operations.

Offering Costs Associated with a Public Offering

The Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering costs of $593,778 consist principally of costs incurred in connection with formation and preparation for the Initial Public Offering. These costs, together with the underwriter discount of $500,000 and deferred business combination fee payable of $3,375,000, were charged to additional paid-in capital upon completion of the Initial Public Offering.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company’s effective tax rate was 7.5% and 0.0% for the three months ended September 30, 2022 and 2021, respectively, and 2.7% and 0.0% for the three months ended September 30, 2022 and for the period from March 17, 2021 (inception) through September 30, 2021, respectively. The effective tax rate differs from the statutory tax rate of 0% for the three and nine months ended September 30, 2022 and 2021, due to changes in the valuation allowance on the deferred tax assets.

The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31, 2022 and introduces a 15% corporate alternative minimum tax (“CAMT”) on adjusted financial statement income. The CAMT will be effective for us beginning in fiscal year 2024. We currently are not expecting the IRA to have a material adverse impact on our financial statements.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 or December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

Net Loss per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. The Company has two classes of stock, which are referred to as Class A Common Stock and Class B Common Stock. Income and losses are shared pro rata between the two classes of stock. Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Accretion associated with the redeemable shares of Class A common stock is excluded from income (loss) per common share as the redemption value approximates fair value.

The calculation of diluted loss per share of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the Private Placement since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2022 and September 30, 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented.

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	Class A			Class B			Class A			Class B
	For the Three Months						For the Nine Months
	Ended September 30, 2022						Ended September 30, 2022
	Class A			Class B			Class A			Class B
Basic and diluted net loss per common share
Numerator:
Allocation of net loss	$	(547,607	)	$	(131,480	)	$	(1,444,749	)	$	(347,983	)
Denominator:
Basic and diluted weighted average common shares outstanding		8,087,431			1,941,790			8,082,471			1,940,562
Basic and diluted net loss per common share	$	(0.07	)	$	(0.07	)	$	(0.18	)	$	(0.18	)

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

The following table presents information about the Company’s assets and liabilities that are measured at fair value at September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level		September 30, 2022		December 31, 2021
Assets:
Investments held in Trust Account		1	$	78,911,942	$	75,750,000

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and is accounted for as a liability pursuant to ASC 480. The warrants issued in connection with the Initial Public Offering and the Private Placement are recorded in equity as they qualify for equity treatment under ASC 815-40.

Class A common stock subject to possible redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at September 30, 2022 and December 31, 2021, the shares of Class A common stock subject to possible redemption in the amount of $78,556,033 and $75,750,000, respectively, are presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. The increase of $2,806,033 during the nine months ended September 30, 2022 in the Class A common stock subject to possible redemption is a remeasurement adjustment to the redemption value of $107,727 and proceeds from the partial exercise of the over-allotment option of $2,698,306.

Recent Accounting Standards

In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”)”, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company on January 1, 2023. The Company does not expect the adoption of the ASU to have a material impact on the Company’s financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC.

Emerging Growth Company

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Use of Estimates

Cash and cash equivalents

Investments held in Trust Account

At December 31, 2021, the Company had $75,750,000 in Investments held in the Trust Account.

Offering Costs Associated with a Public Offering

The Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering costs of $593,778 consist principally of costs incurred in connection with formation and preparation for the Public Offering. These costs, together with the underwriter discount of $500,000 and deferred business combination fee payable of $3,375,000, were charged to additional paid-in capital upon completion of the Public Offering.

Income Taxes

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

Net Loss per Common Share

The calculation of diluted loss per share of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of December 31, 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented.

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	For the Period from March 17, 2021 (inception) through December 31, 2021
	Class A Common Stock			Class B Common Stock
Basic and diluted net loss per common share
Numerator:
Allocation of net loss, as adjusted	$	(24,906	)	$	(215,794	)
Denominator:
Basic and diluted weighted average shares outstanding		216,404			1,875,000
Basic and diluted net loss per common share	$	(0.12	)	$	(0.12	)

Concentration of Credit Risk

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Fair Value of Financial Instruments

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

The following table presents information about the Company’s assets and liabilities that are measured at fair value at December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description	Level		December 31, 2021
Assets:
Investments held in Trust Account		1	$	75,750,000

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and is accounted for as a liability pursuant to ASC 480. It is recorded as a $76,588 liability at December 31, 2021. The warrants issued in connection with the initial public offering and the private placement are recorded in equity as they qualify for equity treatment under ASC 815-40.

Class A common stock subject to possible redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at December 31, 2021, the shares of Class A common stock subject to possible redemption in the amount of $75,750,000 are presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Recent Accounting Standards

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Net Loss Per Common Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Loss Per Common Share

Note 4 – Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and dilutive common-equivalent shares outstanding during each period.

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

For the Nine Months Ended
September 30

2022 2021

Warrants^[1][2] 8,699,397 2,754,352

Options 10,039,348 8,693,024

Series A Convertible Preferred Stock 5,945,045 -

Convertible notes payable ^[3] 2,977,528 3,352,810

Total potentially dilutive shares 27,661,318 14,800,186

[1]	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are included in the amount currently reported.

[2]	Includes warrants to purchase 5,945,045 shares of common stock which are contingently issuable upon the automatic conversion of the Series A Preferred Stock that was outstanding at September 30, 2022, which occurs upon the closing of the Business Combination. See Note 9 - Stockholders’ Deficiency for additional details on the Series A Preferred Stock financing.

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 4 – Net Loss Per Common Share - Continued

[3]

The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $1.94 and $3.25 per share as of September 30, 2022 and 2021, respectively.

Accrued Expenses and Other Current Liabilities

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Note 5 – Accrued Expenses and Other Current Liabilities

As of September 30, 2022 and December 31, 2021, accrued expenses and other current liabilities consisted of the following:

September 30, 2022 December 31, 2021

L&F milestone payment liability $ 1,501,887 $ 1,500,000

L&F Note (351,579 ) (351,579 )

L&F, net 1,510,308 1,148,421

Payroll accrual 879,026 -

Accrued Interest 660,123 748,767

Deferred rent 12,077 16,913

Other -

Total accrued expenses and other current liabilities $ 2,701,534 $ 1,914,101

Note 5 — Accrued Expenses and Other Current Liabilities

As of December 31, 2021 and 2020, accrued expenses and other current liabilities consisted of the following:

	2021			2020
	December 31,
	2021			2020
L&F milestone payment liability	$	1,500,000		$	1,500,000
L&F Note (see Note 4)		(351,579	)		(351,579	)
L&F, net		1,148,421			1,148,421
Payroll accrual		—			911,737
Accrued interest		748,767			244,706
Deferred rent		16,913			20,502
Other		—			93
Total accrued expenses and other current liabilities	$	1,914,101		$	2,325,459

Convertible Notes Payable

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Debt Disclosure [Abstract]

Convertible Notes Payable

Note 6 – Convertible Notes Payable

Unsecured Convertible Promissory Notes

A summary of the outstanding convertible promissory notes as of September 30, 2022 and December 31, 2021 is as follows:

September 30, 2022 December 31, 2021

Convertible notes payable - current portion $ 3,936,000 $ 6,016,000

Deferred debt discount - current portion - (39,492 )

Total convertible notes payable - current portion, net $ 3,936,000 $ 5,976,508

Covnertible notes payable - related parties - current portion $ 25,000 $ 3,175,000

Deferred debt discount - current portion - -

Total convertible notes payable - relatied parties - current portion, net $ $

Total convertible notes payable, net $ 3,961,000 $ 9,151,508

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 6 – Convertible Notes Payable – Continued

During January 2022, the Company and its convertible note holders agreed to extend the maturity of the Notes and the 2021 Notes to December 31, 2022. The extensions qualified as modifications because the terms were not substantially different. Accordingly, the extended notes were treated as a continuation of the original Notes and 2021 Notes.

During the three and nine months ended September 30, 2022, the Company recorded $69,804 and $379,737, respectively, of interest expense in the unaudited condensed statements of operations related to the Notes and 2021 Notes, including amortization of debt discount of $3,024 and $39,492, respectively. During the three and nine months ended September 30, 2021, the Company recorded $225,887 and $617,002, respectively, of interest expense in the unaudited condensed statements of operations related to the Notes and 2021 Notes, including amortization of debt discount of $86,879 and $251,940, respectively.

Automatic Conversion of the 2021 Notes

On July 8, 2022, as a result of the Additional Series A Preferred Stock Financing (which resulted in a Qualified Equity Financing with cumulative gross proceeds that exceeded $500,000), the 2021 Notes consisting of $5,230,000 of principal and $428,888 of accrued interest, automatically converted into 1,802,193 shares of Series A Preferred Stock, at an effective conversion price of $3.14 per share of Series A Preferred Stock. In addition, Series A Warrants to purchase 2,035,571 shares of common stock will be issued to the former 2021 Note holders upon the automatic conversion of the Series A Preferred Stock., which occurs upon the closing of the Business Combination discussed further in Note 8 – Commitments and Contingencies.

Note 6 — Convertible Notes Payable

Unsecured Convertible Promissory Notes

Between October 2019 and July 2020, the Company issued 24-month Unsecured Convertible Promissory Notes (“the Notes”) to investors and brokers in the aggregate principal amount of $3,961,000 (of which $1,795,500 related to 2020 issuances). Of the total, $25,000 of Notes were issued to a related party (a member of the Company management team). The Notes bear interest at a rate equal to 6% per annum and shall be due on the earlier of (i) twenty-four months following the initial closing, as defined; (ii) when, upon or after the occurrence of an event of default; or (iii) upon the occurrence of any change of control of the Company. In the event of the Company closing a Qualified Offering, defined as; (i) an initial public offering that results in gross proceeds of at least $20 million or becoming an entity whose shares of common stock are listed on a qualified exchange, (ii) a reverse merger with a publicly traded company, (iii) a Reg. A offering of the Company’s equity securities that results in gross proceeds of at least $20 million, or (iv) an offering of the Company’s equity securities resulting in gross proceeds of not less than $20 million, the principal and accrued interest due under the Notes shall automatically convert on the same terms and conditions received by the investors in such Qualified Offering. The automatic conversion price shall equal the lesser of (A) $3.25 per share or (B) 80% of the price per share of the (i) in the case of an Initial Public Offering (“IPO”) or Reg A Offering, the lowest price per share of the qualified offering securities issued, (ii) in the case of a reverse merger, the gross price per share of common stock payable to the Company’s stockholders, or (iii) in the case of a private placement, the price per share of the conversion shares (the “Redemption Feature Conversion Price”). The Company analyzed the embedded features of the Notes and determined that the Notes contained (i) an automatic conversion upon a Qualified Offering at a fixed price of $3.25 per share which did not contain a beneficial conversion feature, (ii) a redemption feature upon default which did not require bifurcation, (iii) a redemption feature upon a Qualified Offering at the Redemption Feature Conversion Price with an aggregate fair value of $373,000 ($170,500 related to 2020 issuances) which was bifurcated from the debt host and recorded with a credit to derivative liabilities and a debit to debt discount, and (iv) a put option triggered upon a change of control with a fair value of $64,342 ($41,058 related to 2020 issuances) which was bifurcated from the debt host and recorded with a credit to derivative liabilities and a debit to debt discount. The debt discount is being amortized over the term of the Notes using the effective interest method and the derivative liabilities are marked-to-market at each reporting date. See Note 9 — Derivative Liabilities for additional details.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 6 — Convertible Notes Payable (cont.)

During February and March 2021, the Company issued new Unsecured Convertible Promissory Notes (“2021 Notes”) with an aggregate principal balance of $5,230,000, of which $3,150,000 were issued to related parties of the Company (including members of the Company’s management team, a founder and a significant stockholder). The 2021 Notes bear interest at the rate of 6% per annum, compounded daily, and were due on December 31, 2021. In the Event the Company commences a debt financing after February 15, 2021 (the “Qualified Debt Financing”), the 2021 Notes shall automatically convert into a promissory note in the same form and with the same terms and conditions as those issued in the Qualified Debt Financing and in a principal amount equal to the then outstanding principal and accrued and unpaid interest under the 2021 Notes (the “Note Obligations”). Upon the Closing by the Company of a minimum of $500,000 equity financing after February 15, 2021 (the “Qualified Equity Financing”), the 2021 Notes shall automatically convert into the equity securities sold in a Qualified Equity Financing (the “Subsequent Round Securities”) at the same price and on the same terms and conditions received by any investor in such Qualified Equity Financing. The number of Subsequent Round Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) an amount equal to the Note Obligations outstanding on the closing of such Qualified Equity Financing by the lowest price per security at which the Subsequent Round Securities are sold in the Qualified Equity Financing (the “Conversion Price”). If at any time before the Qualified Equity Financing, a change of control occurs, an amount equal to the Note Obligations outstanding on the closing of such change of control shall automatically convert simultaneously with the closing of the change of control at the price of $3.25 per share. The Company analyzed the embedded features of the 2021 Notes and determined that the 2021 Notes contained (i) an automatic conversion upon a Qualified Debt Financing which did not require bifurcation, (ii) an automatic conversion upon a Qualified Equity Financing at a fixed price of $3.25 per share which did not require bifurcation, (iii) an automatic conversion upon a Change of Control at a fixed price of $3.25 per share which did not require bifurcation, and (iv) a redemption feature upon default which did not require bifurcation.

A summary of the outstanding convertible promissory notes as of December 31, 2021 and 2020 is as follows:

	2021			2020
	As of December 31,
	2021			2020
Convertible notes payable – current portion	$	6,016,000		$	2,165,500
Deferred debt discount – current portion		(39,492	)		(140,633	)
Total convertible notes payable-current portion, net	$	5,976,508		$	2,024,867
Convertible notes payable – related parties-current portion	$	3,175,000		$	25,000
Convertible notes payable – non-current portion	$	—		$	1,770,500
Deferred debt discount – non-current portion		—			(216,692	)
Total convertible notes payable – non-current portion, net	$	—		$	1,553,808
Total convertible notes payable, net	$	9,151,508		$	3,603,675

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 6 — Convertible Notes Payable (cont.)

As of December 31, 2021, $2,165,500 of Notes were past due and all of the 2021 Notes became due. The remaining $1,795,500 of Notes are due during 2022, with the latest maturity date being during July 2022. See Note 13 — Subsequent Events for information related to the extension of the maturity dates of all of the Notes and 2021 Notes to December 31, 2022.

The Company is required to pay a cash fee equal to 8% of the aggregate gross proceeds to the extent the placement agent first identified and brought to the Company any investor in the Notes financing. In connection with Notes financing, the Company incurred an aggregate of $228,236 ($141,735 related to 2020 issuances and the remainder related to 2019 issuances) of placement agent and legal fees which were recorded as debt discount which are being amortized over the term of the Notes using the effective interest method.

During the years ended December 31, 2021 and 2020, the Company recorded amortization of debt discount as interest expense in the statements of operations of $317,833 and $288,366, respectively, related to the Notes.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Derivative Liabilities

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

Note 7 – Derivative Liabilities

The following table sets forth a summary of the changes in the fair value of Level 3 derivative liabilities that are measured at fair value on a recurring basis:

For the Nine Months Ended
September 30

2022 2021

Beginning balance as of January 1 $ 560,600 $ 788,700

Change in fair value of derivative liabilities 212,100 7,507

Ending balance as of March 31 $ 772,700 $ 796,207

Change in fair value of derivative liabilities (19,600 ) 23,100

Ending balance as of June 30 $ 753,100 $ 819,307

Change in fair value of derivative liabilities 228,100 (246,507 )

Ending balance as of September 30 $ 981,200 $ 572,800

For the derivative liability valuations, as of September 30, 2022, the significant unobservable inputs used in the discounted cash flow were a discount rate of 25%, the probability of a Qualified Offering occurring of 90%, the probability of a change of control occurring of 0%, the probability of a renegotiation of the terms of 5% and the probability of dissolution of 5%. As of September 30, 2021, the significant unobservable inputs used in the discounted cash flow were a discount rate of 25%, the probability of a Qualified Offering occurring of 85%, the probability of a change of control occurring of 0%, the probability of a renegotiation of the terms of 0% and the probability of dissolution of 15%. For the valuations as of September 30, 2022 and 2021, the Black-Scholes assumptions were as follows:

September 30,

2022 2021

Fair value of common stock $ 1.94 $ 3.25

Risk free insert rate 3.33 % 0.04% - 0.07%

Expected term (years) 0.21 - 0.25 0.06 - 0.05

Expected volatility 74 % 85 %

Expected dividends 0.00 % 0.00 %

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 9 — Derivative Liabilities

During the years ended December 31, 2020 and 2019, the Company recorded new Level 3 derivative liabilities that were measured at fair value at issuance, related to the redemption features and put options of certain convertible notes payable. See Note 6 — Convertible Notes Payable for additional details. The redemption features were valued using a combination of a discounted cash flow and a Black-Scholes valuation technique.

The following table sets forth a summary of the changes in the fair value of Level 3 derivative liabilities that are measured at fair value on a recurring basis:

Beginning balance as of January 1, 2020	$	243,483
Issuance of derivative liabilities		211,559
Change in fair value of derivative liabilities		333,658
Ending balance as of December 31, 2020		788,700
Issuance of derivative liabilities		—
Change in fair value of derivative liabilities		(228,100	)
Ending balance as of December 31, 2021	$	560,600

For the issuances during the year ended December 31, 2020, the significant unobservable inputs used in the discounted cash flow at the respective issuance date were a discount rate of 25%, the probability of a Qualified Offering occurring between 68% to 71% and the probability of a change of control between 1% to 5%. For the valuations of issuances during the year ended December 31, 2020 the Black-Scholes assumptions were as follows:

	For the Year Ended December 31, 2020
Fair value of common stock on date of issuance	$	3.25
Risk free interest rate		0.14% – 1.55	%
Expected term (years)		0.11 – 0.91
Expected volatility		130% – 142	%
Expected dividends		0.00	%

For the derivative liability valuation, as of December 31, 2021, the significant unobservable inputs used in the discounted cash flow were a discount rate of 25%, the probability of a Qualified Offering occurring of 85% and the probability of a change of control occurring of 0%. As of December 31, 2020, the significant unobservable inputs used in the discounted cash flow were a discount rate of 25%, the probability of a Qualified Offering occurring of 75% and the probability of a change of control occurring of 5%. For the valuations as of December 31, 2021 and 2020, the Black-Scholes assumptions were as follows:

	December 31,
	2021			2020
Fair value of common stock on date of issuance	$	3.25		$	3.25
Risk free interest rate		0.06% – 0.19	%		0.09% – 0.10	%
Expected term (years)		0.00 – 0.50			0.16 – 0.67
Expected volatility		75	%		142	%
Expected dividends		0.00	%		0.00	%

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Commitments and Contingencies

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Commitments and Contingencies

Note 8 – Commitments and Contingencies

Litigations, Claims and Assessments

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records contingent liabilities resulting from such claims, if any, when a loss is assessed to be probable and the amount of the loss is reasonably estimable.

Business Combination Agreement

On July 20, 2022, the Company entered into a Business Combination Agreement, (the “Business Combination Agreement”), with Larkspur Health Acquisition Corp. (“Larkspur” or the “Registrant”), a blank-check special purpose acquisition company, Larkspur Merger Sub Inc. (“Merger Sub”) and Stephen Glover. Upon the consummation of the transactions contemplated by the Business Combination Agreement (the “Transactions”), Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Larkspur (the “Business Combination”). The combined company is expected to be named ZyVersa Therapeutics, Inc.

The Business Combination Agreement provides that the following transactions will occur:

	●	Immediately prior to the Effective Time, each share of the Company’s Series A Preferred Stock that is issued and outstanding will automatically convert into (a) a number of shares of the Company’s common stock at the then-effective conversion rate, as calculated pursuant to the Company’s Articles of Incorporation (the “Conversion”) and (b) a five-year warrant to acquire a number of shares of the Company’s common stock at an exercise price equal to the lower of: (a) $1.37 per share; (b) the price per share associated with a Qualified Offering (as defined); or (c) the implied value per share associated with the Business Combination; all as determined pursuant to the terms of the Business Combination Agreement.

	●	At the Effective Time, (a) each share of the Company’s common stock issued and outstanding (including shares of the Company’s common stock resulting from the Conversion) will be canceled and converted into a number of shares of the Registrant’s common stock, as determined pursuant to the terms of the Business Combination Agreement; and (b) each share of Merger Sub common stock issued and outstanding immediately prior to the Effective Time will be converted into and exchanged for one share of common stock of the Company.

	●	Each Company stock option that is outstanding and unexercised as of immediately prior to the Effective Time, whether or not vested, will be assumed and converted into an option to purchase a number of shares of the Registrant’s common stock, as determined pursuant to the terms of the Business Combination Agreement.

	●	Each Company note that is outstanding as of immediately prior to the Effective Time which by its terms will not convert into the Company’s common stock in connection with the Transactions, if any, will be assumed by the Registrant and will remain outstanding pursuant to the terms and conditions then in effect.

The consummation of the Transactions is subject to the satisfaction or waiver of certain customary closing conditions contained in the Business Combination Agreement, including, among other things, the consummation of a private placement of convertible preferred stock and warrants by Larkspur. In addition, a condition in the agreement governing such private placement requires ZyVersa and Larkspur to obtain at least $10.0 million of commitments to invest in ZyVersa’s Series A Preferred Stock Financing or Larkspur’s private placement.

The parties to the Business Combination Agreement have made customary representations and warranties, and have agreed to certain customary covenants in the Business Combination Agreement, including, among others, covenants with respect to the conduct of Larkspur, the Company and Merger Sub, and their subsidiaries, prior to the closing of the Transactions.

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 8 – Commitments and Contingencies – Continued

Business Combination Agreement - Continued

The Business Combination Agreement may be terminated by Larkspur or the Company, under certain circumstances, including, among others, (i) by mutual written consent of Larkspur and the Company, (ii) by either Larkspur or the Company if the Effective Time shall not have occurred prior to December 15, 2022, (iii) by either Larkspur or the Company if any Governmental Order has become final and non-appealable and has the effect of making consummation of the Transactions illegal or otherwise preventing or prohibiting consummation of the Transactions, (iv) by either Larkspur or the Company if any of the required proposals fail to receive the requisite vote for approval at Larkspur’s Shareholders’ Meeting, (v) by Larkspur, in the event that the Company’s shareholders don’t consent to the Transactions, (vi) by Larkspur upon the Company breaching any representation, covenant or agreement; or (vii) by the Company upon Larkspur breaching any representation, covenant or agreement.

The Company expects to account for the Business Combination as a forward merger, whereby Larkspur is deemed to be the account acquiror.

License Agreements

L&F Research LLC

On March 7, 2022, the Company and L&F executed a Waiver Agreement that waives L&F’s right to terminate the license agreement or any other remedies, for non-payment of the $1,500,000 of milestone payments, until August 31, 2022. All other terms of the license agreement remain in effect.

On August 26, 2022, the Company and L&F executed a Waiver Agreement that waives L&F’s right to terminate the license agreement or any other remedies, for non-payment of the $1,500,000 of milestone payments, until January 3, 2023. All other terms of the license agreement remain in effect.

Operating Leases

The Company recognized rent expense in connection with its operating leases of $42,225 and $36,702 during the three months ended September 30, 2022 and 2021, respectively, and $118,519 and $110,979 during the nine months ended September 30, 2022 and 2021, respectively.

Note 10 — Commitments and Contingencies

Litigations, Claims and Assessments

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. The Company records contingent liabilities resulting from such claims, if any, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable.

License Agreements

L&F Research LLC

On December 15, 2015, the Company entered into a license agreement with L&F whereby L&F granted to ZyVersa an exclusive license for certain technology, based on the terms and conditions set forth in the agreement. The term of the license agreement shall commence on the effective date and, unless earlier terminated in accordance with the terms of the agreement, continue until the expiration of the last-to-expire of all royalty payment obligations of licensee.

The license agreement contains an up-front cash payment of $200,000 (paid and recognized as research and development expense in 2015), $21.5 million in aggregate milestone cash payments (the Company will recognize expense associated with the milestone cash payments when such milestones become probable of being achieved; $1,500,000 of expense was recognized during 2020 (of which, $500,000 was originally due and payable in 2021) related to the U.S. Food and Drug Administration (“FDA”) acceptance of an investigational new drug application as well as commencement of Phase 2a clinical trials; the next milestone of $2,500,000 is earned upon a positive end of Phase 2 meeting with the FDA), royalties ranging from 5%-10% on sales of the product when it comes to market (the Company will recognize royalty expense if and when sales occur; none recognized to-date) and warrants to purchase an aggregate of 878,947 shares of common stock at an exercise price of $1.00 per share that were issued in 2015 with a grant date fair value of $766,384 that become exercisable for a period of five years from the date of achievement of specified milestones (a warrant to purchase 351,579 shares of common stock was exercisable upon its issuance in 2015 and, accordingly, the Company recognized its grant date fair value of $306,411 during 2015 as research and development expense with a corresponding credit to additional paid-in capital; the Company will recognize expense associated with the remaining warrants when it is probable that the associated performance conditions will be achieved; a warrant to purchase 175,789 shares of common stock became exercisable in January 2020 upon the FDA acceptance of an investigational new drug application for a compound or product, as defined, at which time the Company recognized expense equal to the grant date fair value of $153,324; warrants to purchase 351,578 shares of common stock were not exercisable as of December 31, 2021 as the milestones were not achieved). For the consideration above that has yet to have been expensed or paid, the Company will recognize associated expense when such items become both probable of being achieved and such value is estimable.

On January 9, 2020, an amendment was entered into to the license agreement that provided for the following amendments: (i) partially extended the timing of payment of $1,000,000 of milestone cash payments associated with the successful completion of Phase 1 clinical trials ($500,000 payable upon commencement of Phase 2a clinical trials (the “Phase 1/2 Milestone”) and $500,000 payable upon the one year anniversary of the Phase 1/2 Milestone (“First Anniversary Milestone”); and (ii) upon the condition that L&F exercises its warrant upon achievement of the Phase 1/2 Milestone, the $351,579 exercise price is to be withheld from the cash payment due to L&F in connection with the Phase ½ Milestone. See Note 4 — Note Receivable for further details around promissory note agreement entered into upon the exercise of warrants by L&F and Note 11 — Stockholders’ Equity — Put Option for discussion about the put option agreement entered into by the Company and L&F in connection with the L&F Note Agreement.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 10 — Commitments and Contingencies (cont.)

InflamaCORE

On April 18, 2019, the Company entered into a license agreement with InflamaCORE, LLC (“InflamaCORE”) whereby InflamaCORE agreed to grant the Company an exclusive license to the InflamaCORE Program Technology. The term of the license agreement shall commence on the effective date and, unless earlier terminated in accordance with the terms of the agreement, continue until the expiration of the last-to-expire of all royalty payment obligations of licensee. In conjunction with this license agreement, InflamaCORE entered into an agreement with the University of Miami to aggregate all of the intellectual property and technology developed by InflamaCORE scientists, who are all employees of the University of Miami, under the InflamaCORE umbrella. The term of the agreement shall commence on the effective date and shall remain in effect until the later of (a) the date on which all issued patents and filed patent applications within the patent rights have expired or been abandoned and no royalties are due or (b) twenty (20) years, unless earlier terminated in accordance with the terms of the agreement. The two agreements were executed with the understanding that ZyVersa will further develop the intellectual property and technology under the license agreement.

In consideration for the license, the Company agreed to pay an up-front fee to InflamaCORE in the amount of $346,321 to cover the patent cost reimbursement to the University of Miami. InflamaCORE is also entitled to six milestone payments totaling $22,500,000 (the first milestone payment of $200,000 is triggered by the submission of an investigational new drug application for the first indication of a therapeutic licensed product). ZyVersa is required to pay sales royalties to InflamaCORE between 5% and 10%, which expire upon the latest of: (a) expiration of the last-to-expire of a patent or (b) expiration of regulatory exclusivity, as defined in the agreement. ZyVersa is required to pay sales royalties to the University of Miami between 3% and 6%. Finally, InflamaCORE will receive five-year warrants to purchase an aggregate of 1,000,000 shares of ZyVersa common stock, of which, a warrant to purchase 400,000 shares of common stock, with an issue date fair value of $815,822, which was recorded as research and development expenses, was issued at the execution of the agreement at an exercise price of $2.30 per share and the remaining warrants to purchase 600,000 shares of common stock are to be issued at a price per share equal to the fair value of the Company’s common stock at the time of issuance upon the satisfaction of certain milestones, unless the Company closes an initial public offering, at which point all warrants will be issued. If the Company completes its IPO within the three-year period immediately prior to the expiration date, the expiration date shall automatically be extended until the third anniversary of the effective date of the Company’s IPO. The University of Miami also received 200,000 shares of ZyVersa common stock, with a grant date fair value of $460,000, which was recorded as research and development expenses, under the agreement. As of December 31, 2021, the Company did not pay or owe any royalties, the performance milestones associated with the cash payments and issuance of warrants were not achieved and the Company did not accrue for any payments or issue the remaining warrants associated with the license agreement.

Operating Leases

On January 18, 2019, the Company entered into a lease agreement for approximately 3,500 square feet of office space in Weston, Florida for a term of five years. Under the lease agreement, the annual base rent, which excludes the Company’s share of taxes and operating costs, is approximately $89,000 for the first year and increases approximately 3% every year thereafter for a total base rent lease commitment of approximately $497,000. As of December 31, 2021, the landlord is holding a security deposit of $58,323, of which $11,665 will be refunded in March 2022 and is included in prepaid expenses and other current assets on the balance sheet.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 10 — Commitments and Contingencies (cont.)

On May 1, 2019, the Company entered into a sublease agreement for approximately 3,450 square feet of office space in West Conshohocken, Pennsylvania for a term of one year and seven months. Under the sublease agreement, the monthly base rent, which excludes utilities, is $7,475 per month for a total base rent lease commitment of $142,025. The lease ended on November 30, 2020 and was not renewed.

The Company recognized rent expense in connection with its operating leases of $148,125 and $247,592 during the years ended December 31, 2021 and 2020, respectively.

Future minimum payments under these operating lease agreements are as follows:

For the Year Ended December 31,	Amount
2022	$	101,173
2023		104,211
2024		8,705
Total	$	214,089

Commitments and Contingencies

NOTE 6 — COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies

Registration Rights

The holders of the Founder Shares, Private Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriters a 45-day option from the date of Initial Public Offering to purchase up to 1,125,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. The over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and is accounted for as a liability pursuant to ASC 480. It is recorded as a $0 and $76,588 liability at September 30, 2022 and December 31, 2021, respectively. On January 6, 2022 the underwriters partially exercised the over-allotment option for 267,159 units. The issuance of the units resulted in gross proceeds of $2.7 million. The remaining units expired on February 6, 2022, which resulted in the forfeiture of 214,460 founders’ shares.

The underwriters are entitled to a cash underwriting discount of $500,000 in the aggregate payable upon the closing of the Initial Public Offering. In addition, the underwriters will be entitled to a business combination fee of $3,375,000 in the aggregate. The business combination fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 6 — COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies

Registration Rights

The holders of the Founder Shares, Private Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 6 — COMMITMENTS AND CONTINGENCIES (cont.)

Underwriting Agreement

Stockholders’ Deficiency

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Stockholders’ Deficiency

Note 9 – Stockholders’ Deficiency

Series A Preferred Stock Financing

On March 31, 2022, the Company sold 133,541 shares of Series A Preferred Stock to investors at a price of $3.14 per share, generating $419,320 in gross proceeds ($393,301 net proceeds), of which $100,000 was from related parties. Escrow and placement agent fees were $26,019, which were recorded as a reduction of additional paid-in capital.

The Series A Preferred Stock is convertible, at the option of the holder, at any time into shares of common stock at a conversion price of $3.14 per share, subject to standard antidilution adjustments. In addition, in the event of any non-exempt issuances by the Company for less than the in-force conversion price, the Series A Preferred Stock conversion price shall be reduced on a weighted average basis. Each share of Series A Preferred Stock shall automatically be converted into shares of common stock at the then effective conversion price concurrently with (i) the closing of a Public Transaction or (ii) the date specified by written consent or agreement of the holders of a majority of the then outstanding shares of Series A Preferred stock. A Public Transaction represents either (a) a firm commitment underwritten public offering; or (b) the closing of a transaction with a special purpose acquisition company (“SPAC”) listed on the Nasdaq Stock Market in which the Company would become a wholly owned subsidiary of the SPAC

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 9 – Stockholders’ Deficiency - Continued

Series A Preferred Stock Financing - Continued

The Series A Preferred stockholders shall vote together with the common stockholders on an as-converted basis and dividends will only be paid on an as-converted basis when, and if paid to common stockholders. In the event of any liquidation, dissolution or winding up of the Company or upon a Deemed Liquidation Event, the Series A Preferred stockholders will be entitled to be paid, out of the assets of the Company available for distribution before any payments are made to common stockholders, one times the original purchase price, plus declared and unpaid dividends on each share of Series A Preferred Stock or, if greater, the amount that the Series A Preferred Stock holders would receive on an as-converted basis. The balance of any proceeds shall be distributed pro rata to the common stockholders. Deemed Liquidation Events include (a) a merger or consolidation in which ZyVersa or a subsidiary thereof is a constituent party which results in a change-of-control (a “Merger Event”); or (b) the sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of ZyVersa (a “Disposition Event”).

The Series A Preferred Stock is not mandatorily redeemable and therefore it is not subject to classification as a liability. The Company determined that the Deemed Liquidation Events were within the control of the Company and, therefore, the Series A Preferred Stock should be classified as permanent equity. Specifically, Merger Events and Disposition Events require the approval of the board of directors pursuant to state law and the ZyVersa preferred stockholders are unable to control the vote of the board of directors. The Company determined that the embedded conversion options were clearly and closely related to the preferred stock host and, therefore, the embedded conversion options need not be bifurcated. However, if the conversion price is reset in connection with a subsequent issuance of securities, the Company will need to assess the accounting for the price reset. Due to the Company’s adoption of ASU 2020-06 on January 1, 2021, it wasn’t necessary to assess the embedded conversion options for a beneficial conversion feature.

On May 10, 2022, the Company obtained the requisite approvals to (a) amend the Series A Preferred Stock Designation within the Company’s Certificate of Incorporation to reduce the effective conversion price of the Series A Preferred Stock from $3.14 per share of common stock to $2.78 per share of common stock; and (b) to issue warrants to purchase 150,832 shares of common stock, to the March 2022 Series A Preferred Stock purchasers, upon the automatic conversion of the Series A Preferred Stock, which occurs upon the closing of the Business Combination. The warrants are exercisable at an initial exercise price of $3.20 per share of common stock (subject to reduction upon completion of a Public Transaction, if the deemed offering price is less than the current exercise price) and expire in five years (the “Series A Warrants”) or upon an earlier change of control that doesn’t meet the definition of a Public Transaction. The Company determined that (a) the Series A Warrants qualified to be equity-classified, without subsequent remeasurement and (b) the contingently issuable nature of the Series A Warrants doesn’t alter the Company’s conclusion that the embedded conversion options were clearly and closely related to the preferred stock host and, therefore, the embedded conversion options need not be bifurcated. The Company also determined that the reduction of the Series A Preferred Stock conversion price, combined with the contingent issuance of the Series A Warrants (collectively the “Amended Securities”), represented a significant change requiring the application of extinguishment accounting. Accordingly, it was necessary to record the $331,200 incremental value of the Amended Securities (as compared to the value of the original Series A Preferred Stock) as a deemed dividend for the purpose of calculating loss per share.

On July 8, 2022, the Company sold an additional 94,393 shares of Series A Preferred Stock to investors at a price of $3.14 per share of Series A Preferred Stock, generating $296,400 in gross proceeds. In addition, Series A Warrants to purchase an aggregate of 106,616 shares of common stock will be issued to the holders upon the automatic conversion of the Series A Preferred Stock, which occurs upon the closing of the Business Combination. Placement agent fees of $21,200 were recorded as a reduction of additional paid-in capital.

On September 16, 2022, the Company sold an additional 222,929 shares of Series A Preferred Stock to investors at a price of $3.14 per share of Series A Preferred Stock, generating $700,000 in gross proceeds. In addition, Series A Warrants to purchase an aggregate of 251,798 shares of common stock will be issued to the holders upon the automatic conversion of the Series A Preferred Stock, which occurs upon the closing of the Business Combination. Placement agent fees of $16,000 were recorded as a reduction of additional paid-in-capital.

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 9 – Stockholders’ Deficiency – Continued

Second Amendment of Series A Preferred Stock Designation

On September 22, 2022, the Company filed with the Florida Department of State a second amendment to the Series A Preferred Stock Designation within the Company’s Certificate of Incorporation, which reduced the conversion price of the Series A Preferred Stock from $2.78 per share of common stock to $1.19 per share of common stock. In addition, the Company reduced the exercise price of the contingently issuable Series A Warrants from $3.20 per share to $1.37 per share and the underlying share quantity of common stock into which the aggregate Series A Warrants are exercisable increased from 2,544,817 shares to 5,945,045 shares.

The Company determined that the reduction of the Series A Preferred Stock conversion price, combined with the revised terms associated with the contingent issuance of the Series A Warrants (collectively the “Second Amendment Securities”), represented a significant change requiring the application of extinguishment accounting. Accordingly, it was necessary to record the $9,684,637 incremental value of the Second Amendment Securities (as compared to the value of the Amended Securities) as a deemed dividend for the purpose of calculating loss per share.

Stock Options

On January 28, 2022 and February 3, 2022, the Company granted ten-year stock options to purchase an aggregate of 920,000 shares of common stock to employees and Board members under the 2014 Plan. The stock options vest annually over three years and have an exercise price of $3.25 per share.

On March 8, 2022 and March 31, 2022, the Company granted ten-year stock options to purchase an aggregate of 111,122 shares of common stock to consultants under the 2014 Plan. The stock options vest immediately and have an exercise price of $3.25 per share.

On March 8, 2022, the Company granted an aggregate of 161,667 shares of common stock (of which 36,667 have an exercise price of $2.30 per share and expire in 7.1 years and 125,000 have an exercise price of $3.25 and expire in 8.9 years) to a former Board member under the 2014 Plan. The stock options vest immediately.

On April 15, 2022, and June 30, 2022, the Company granted ten-year stock options to purchase an aggregate of 91,380 shares of common stock to consultants under the 2014 Plan. The stock options vest immediately and 30,000 have exercise prices of $3.25 per share and 61,380 have exercise prices of $2.25 per share.

A summary of the option activity during the nine months ended September 30, 2022 is presented below:

Summary of Stock Options Activity

Number of Options Weighted Average Exercise Price Weighted Average Remaining Life in Years Aggregate Intrinsic Value

Outstanding, January 1, 2022 8,755,179 $ 2.00

Granted 1,284,169 3.18

Outstanding, September 30, 2022 10,039,348 $ 2.15 6.1 $ 3,138,441

Exercisable, September 30, 2022 8,258,023 $ 1.91 5.5 $ 3,138,441

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 9 – Stockholders’ Deficiency – Continued

The following table presents information related to stock options as of September 30, 2022:

Options Outstanding Options Exercisable

Exercise Price Outstanding Number of Options Weighted Average Remaining Life In Years Exercisable Number of Options

$ 1.00 3,338,767 3.3 3,338,767

$ 2.25 61,380 9.7 61,380

$ 2.3 3,668,913 6.5 3,644,468

$ 3.25 2,970,288 8.6 1,213,408

10,039,348 5.5 8,258,023

For the three and nine months ended September 30, 2022, the Company recorded stock-based compensation expense of $494,022 and $3,131,708, respectively, (of which, $67,608 and $619,364, respectively, was included in research and development and $426,414 and $2,512,344, respectively, was included in general and administrative expense) related to options issued to employees, consultants, Board members and former Board members.

For the three and nine months ended September 30, 2021, the Company recorded stock-based compensation expense of $1,398,469 and $3,319,916, respectively, (of which, $240,735 and $711,020, respectively, was included in research and development and $1,157,734 and $2,608,896, respectively, was included in general and administrative expense) related to options issued to employees, consultants and Board members.

As of September 30, 2022, there was $3,451,070 of unrecognized stock-based compensation expense, which the Company expects to recognize over a weighted average period of 1.9 years.

In applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:

	For the Three Months Ended September 30			For the Nine Months Ended September 30
	2022	2021		2022		2021
Fair value of common stock on date of grant	n/a		$3.25		$2.27 - $3.00		$3.25
Risk free interest rate	n/a		0.89% - 0.98%		1.68% - 3.01%		0.66% - 0.98%
Expected term (years)	n/a		5.00		3.53 - 6.00		5.00 - 6.00
Expected volatility	n/a		120% - 124%		111% - 119%		120% - 125 %
Expected dividends	n/a		0.00%		0.00%		0.00%

During the nine months ended September 30, 2022, the fair value of the Company’s common stock was determined using a market approach based on the status of the business combination agreement arm’s length discussions with the acquirer at each valuation date and which agreement was ultimately entered into on July 20, 2022 with a Company valuation of $85 million. The options granted during the nine months ended September 30, 2022 had a contractual term between seven and ten years and a requisite service period of zero to three years.

During the nine months ended September 30, 2021, the fair value of the Company’s common stock was determined by management with the assistance of a third-party valuation specialist using an income approach. The options granted during the nine months ended September 30, 2021 had a contractual term of ten years and a requisite service period of zero to three years.

The weighted average estimated grant date fair value of the stock options granted during the three months ended September 30, 2021 were approximately $2.71 per share. There were no options granted for the three months ended September 30, 2022. The weighted average estimated grant date fair value of the stock options granted during the nine months ended September 30, 2022 and 2021 were approximately $2.48 and $2.82 per share, respectively.

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 11 — Stockholders’ Permanent and Temporary Equity

Stockholders’ Deficiency

Authorized Capital

The Company is authorized to issue 75,000,000 shares of common stock, par value of $0.00001 per share, and 5,000,000 shares of preferred stock, par value of $0.00001 per share. The holders of the Company’s common stock are entitled to one vote per share.

2014 Equity Incentive Plan

The Company is authorized to issue awards under its 2014 Equity Incentive Plan (the “2014 Plan”), as amended on October 9, 2018, February 2, 2019 and February 2, 2021. Under the 2014 Plan, 10,000,000 shares of common stock of the Company are authorized for issuance as of December 31, 2021. The number of shares of common stock available for issuance under the 2014 Plan shall automatically increase on the first trading day of January each calendar year during the term of the 2014 Plan, beginning with calendar year 2019, by an amount equal to five percent (5%) of the total number of shares of common stock outstanding on the last trading day in December of the immediately preceding calendar year, but in no event shall any such annual increase exceed 100,000 shares of common stock. The 2014 Plan provides for the issuance of incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants of the Company and its affiliates. The 2014 Plan requires the exercise price of stock options to be not less than the fair value of the Company’s common stock on the date of grant. As of December 31, 2021, there were 1,068,154 shares available for future issuance under the 2014 Plan.

Common Stock

On February 5, 2020, the Company closed on a private placement of 923,076 shares of its common stock with Incon Co. at a purchase price of $3.25 per share for gross proceeds of $3,000,000.

Put Option

On December 13, 2020 (the “Effective Date”), in connection with the L&F Note Agreement (see Note 4 — Note Receivable for details), the Company and L&F entered into an agreement to provide L&F with a put option to cause the Company to purchase up to 331,331 shares of common stock (“Put Shares”) at a price of $1.00 per share (“Put Option”). The put option expires at the earlier of (A) the date that the L&F Note is repaid in full; or (B) the fifth (5^th) anniversary of the Effective Date. The parties agreed that, in the event of an exercise by L&F, in lieu of paying L&F for the Put Shares, the Company shall reduce the amount of the receivable then owed by L&F to the Company under the L&F Note Agreement. The Put Option was sold to L&F for total consideration of $331, which was recorded within additional paid-in capital.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 11 — Stockholders’ Permanent and Temporary Equity (cont.)

Stock-Based Compensation

For the year ended December 31, 2021, the Company recorded stock-based compensation expense of $4,141,736 (of which, $944,525 was included in research and development and $3,197,211 was included in general and administrative expense) related to options issued to employees and consultants. As of December 31, 2021, there was $3,075,292 of unrecognized stock-based compensation expense, which the Company expects to recognize over a weighted average period of 1.8 years.

For the year ended December 31, 2020, the Company recorded stock-based compensation expense of $3,677,453 (of which, $1,277,273 was included in research and development and $2,400,180 was included in general and administrative expense) related to options issued to employees and consultants and also related to warrants issued to non-employees per the L&F license agreement as further discussed in Note 10 — Commitments and Contingencies.

Stock Options

In applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:

	For the Years Ended December 31,
	2021			2020
Fair value of common stock on date of grant	$	3.25		$	3.25
Risk free interest rate		0.66% – 1.26	%		0.36% – 0.38	%
Expected term (years)		5.00 – 6.00			5.00
Expected volatility		118% – 125	%		122% – 124	%
Expected dividends		0.00	%		0.00	%

During 2021, the fair value of the Company’s common stock was determined by management with the assistance of a third-party valuation specialist using an income approach. During 2020, the fair value of the Company’s common stock was determined using a market approach based on recent sales of the Company’s common stock to third parties. The 2021 options had a contractual term of ten years and requisite service period of zero to three years. The 2020 options had a contractual term of ten years and a requisite service period of zero years. The weighted average estimated grant date fair value of the stock options granted during the years ended December 31, 2021 and 2020 was approximately $2.81 and $2.87 per share, respectively.

A summary of the option activity during the years ended December 31, 2021 and 2020 is presented below:

Summary of Stock Option Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Aggregate Intrinsic Value
Outstanding, January 1, 2020		7,022,680		$	1.68
Granted		188,570			3.25
Exercised		(15,000	)		1.00
Outstanding, January 1, 2021		7,196,250			1.72
Granted		1,720,596			3.25
Forfeited		(161,667	)		3.03
Outstanding, December 31, 2021		8,755,179		$	2.00		6.4	$	10,962,859
Exercisable, December 31, 2021		6,289,107		$	1.69		5.7	$	9,812,645

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 11 — Stockholders’ Permanent and Temporary Equity (cont.)

The following table presents information related to stock options as of December 31, 2021:

Options Outstanding				Options Exercisable
Exercise Price		Outstanding Number of Options		Weighted Average Remaining Life In Years		Exercisable Number of Options
$	1.00		3,338,767		4.1		3,338,767
$	2.30		3,632,246		7.3		2,421,494
$	3.25		1,784,166		9.3		528,846
			8,755,179		5.7		6,289,107

Stock Warrants

On December 13, 2020, L&F exercised a warrant to purchase 351,579 shares of common stock at an exercise price of $1.00 per share (“L&F Warrant Exercise”). In connection with the L&F Warrant Exercise, L&F and the Company entered into the L&F Note Agreement (see Note 4 — Note Receivable for details) in order to facilitate the payment of the aggregate exercise price of $351,579 in connection with the L&F Warrant Exercise.

A summary of the warrant activity during the years ended December 31, 2021 and 2020 is presented below:

Summary of Warrant Activity

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Aggregate Intrinsic Value
Outstanding, January 1, 2020		2,505,931		$	1.84
Issued		—			—
Exercised		(351,579	)		1.00
Outstanding, January 1, 2021		2,154,352			1.98
Issued		—			—
Outstanding, December 31, 2021		2,154,352		$	1.98		1.5	$	2,732,212
Exercisable, December 31, 2021		1,802,774		$	2.17		1.8	$	1,941,161

The following table presents information related to stock warrants as of December 31, 2021:

Warrants Outstanding				Warrants Exercisable
Exercise Price		Outstanding Number of Warrants		Weighted Average Remaining Life In Years		Exercisable Number of Warrants
$	1.00		527,367		0.0		175,789
$	2.30		1,626,985		2.0		1,626,985
			2,154,352		1.8		1,802,774

Stockholders’ Deficiency

NOTE 7 — STOCKHOLDERS’ DEFICIT

Stockholders’ Deficiency

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. As of September 30, 2022 and December 31, 2021, there were 317,600 shares of Class A common stock issued and outstanding (excluding 7,767,159 and 7,500,000 shares accounted for as temporary equity).

Class B Common Stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of September 30, 2022 and December 31, 2021, there were 1,941,790 and 2,156,250 shares of Class B common stock issued and outstanding. Holders of Class B common stock are entitled to one vote for each share.

Only holders of the Class B common stock will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our shareholders except as otherwise required by law. In connection with our initial business combination, we may enter into a stockholder agreement or other arrangements with the stockholders of the target or other investors to provide for voting or other corporate governance arrangements that differ from those in effect upon completion of this offering.

The shares of Class B common stock will automatically convert into Class A common stock at the time of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the then-outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (net of the number of shares of Class A common stock redeemed in connection with a Business Combination), excluding any shares or equity-linked securities issued or issuable to any seller of an interest in the target to us in a Business Combination.

Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file, and within 60 business days following a Business Combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 7 — STOCKHOLDERS’ DEFICIT (cont.)

Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:

●

in whole and not in part;

●

at a price of $0.01 per Public Warrant;

●

upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period to each warrant holder; and

●

if, and only if, the last reported sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganization, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to warrant holders.

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.

The Private Warrants, which are classified as equity, are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the Class A common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Further, there are no redemption rights or liquidating distributions from the trust account with respect to the private shares or private warrants, which will expire worthless if we do not consummate a business combination within 24 months from the closing of this offering.

NOTE 7 — STOCKHOLDERS’ DEFICIT

Stockholders’ Deficiency

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of December 31, 2021, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. As of December 31, 2021, there were 317,600 shares of Class A common stock issued or outstanding (excluding 7,500,000 shares accounted for as temporary equity).

Class B Common Stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share.

Only holders of the Class B common stock will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our shareholders except as otherwise required by law. In connection with our initial business combination, we may enter into a stockholders agreement or other arrangements with the stockholders of the target or other investors to provide for voting or other corporate governance arrangements that differ from those in effect upon completion of this offering.

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 7 — STOCKHOLDERS’ DEFICIT (cont.)

●

in whole and not in part;

●

at a price of $0.01 per Public Warrant;

●

upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period to each warrant holder; and

●

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 7 — STOCKHOLDERS’ DEFICIT (cont.)

The Private Warrants, which are classified as equity, are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the Class A common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Further, there is no redemption rights or liquidating distributions from the trust account with respect to the private shares or private warrants, which will expire worthless if we do not consummate a business combination within 24 months from the closing of this offering.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Subsequent Events	9 Months Ended		12 Months Ended
Subsequent Events	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2021
Subsequent Events	Note 10 – Subsequent Events The Company has evaluated subsequent events through December 15, 2022, the date the condensed financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as discussed below. Closing of Business Combination On December 8, 2022 (“Closing Date”), the previously announced Business Combination was consummated following a special meeting of stockholders, where the stockholders of Larkspur, considered and approved, among other matters, a proposal to adopt the Business Combination Agreement, dated July 20, 2022, entered into by the Company and Larkspur. The Business Combination became effective December 12, 2022. Further information regarding the Business Combination is set forth in (i) the proxy statement / prospectus included in the registration statement on Form S-4 (File No. 333-266838), as amended and supplemented, originally filed with the SEC on August 12, 2022 and declared effective by the SEC on November 14, 2022; and (ii) the Current Report on Form 8-K filed with the SEC on July 22, 2022. Additional Series A Preferred Stock Financing On December 6, 2022, the Company sold an additional 174,776 shares of Series A Preferred Stock to investors at a price of $3.14 per share of Series A Preferred Stock, generating $548,805 in gross proceeds. In addition, Series A Warrants to purchase an aggregate of 461,179 shares of common stock will be issued to the holders upon the automatic conversion of the Series A Preferred Stock, which occurs upon the closing of the Business Combination. Placement agent fees of $2,000 were recorded as a reduction of additional paid-in capital.		Note 13 — Subsequent Events The Company has evaluated subsequent events through April 8, 2022, the date the financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as discussed below. Unsecured Convertible Promissory Notes During January 2022, the Company and its convertible note holders agreed to extend the maturity of the Notes and the 2021 Notes to December 31, 2022. Stock Options Subsequent to December 31, 2021, the Company granted ten-year stock options to purchase an aggregate of 920,000 shares of common stock to employees and Board members under the 2014 Plan. The stock options vest annually over three years and have an exercise price of $3.25 per share. In March 2022, the Company granted ten-year stock options to purchase an aggregate of 109,142 shares of common stock to consultants under the 2014 Plan. The stock options vest immediately and have an exercise price of $3.25 per share. Preferred Series A Financing On March 31, 2022, the Company sold 133,541 shares of Series A Preferred Stock to investors at a price of $3.14 per share for net proceeds of $392,301, of which $100,000 was from related parties. The Series A Preferred Stock is convertible, at the option of the holder, at any time into shares of common stock on a one-to-one basis, subject to standard antidilution adjustments. In addition, in the event of any non-exempt issuances by the Company for less than the in-force conversion price, the Series A Preferred Stock conversion price shall be reduced on a weighted average basis. Each share of Series A Preferred Stock shall automatically be converted into shares of common stock at the then effective conversion price concurrently with (i) the closing of a Public Transaction or (ii) the date specified by written consent or agreement of the holders of a majority of the then outstanding shares of Series A Preferred stock. A Public Transaction represents either (a) a firm commitment underwritten public offering; or (b) the closing of a transaction with a special purpose acquisition company (“SPAC”) listed on the Nasdaq Stock Market in which the Company would become a wholly owned subsidiary of the SPAC. The Series A Preferred stockholders shall vote together with the common stockholders on an as-converted basis and dividends will only be paid on an as-converted basis when, and if paid to common Stock. In the event of any liquidation, dissolution or winding up of the Company or upon a Deemed Liquidation Event, the Series A Preferred stockholders will be entitled to be paid, out of the assets of the Company available for distribution before any payments are made to common stockholders, one times the original purchase price, plus declared and unpaid dividends on each share of Series A Preferred Stock or, if greater, the amount that the Series A Preferred Stock holders would receive on an as-converted basis. The balance of any proceeds shall be distributed pro rata to the common stockholders. The Series A Preferred Stock is not mandatorily redeemable.
Larkspur Health Acquisition Corp [Member]
Subsequent Events	NOTE 8 — SUBSEQUENT EVENTS Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based upon this review the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.	NOTE 9 — SUBSEQUENT EVENTS Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based upon this review, except as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On January 6, 2022 the underwriters partially exercised the over-allotment option for 267,159 units. As a result 26,716 private place units were issued. The issuance of the units and private placement units resulted in gross proceeds of $2.9 million. The remaining units expired on February 6, 2022, which resulted in the forfeiture of 214,460 founders shares.

Note Receivable

12 Months Ended

Dec. 31, 2021

Note Receivable

Note Receivable

Note 4 — Note Receivable

On December 13, 2020, in connection with the warrant exercise by L&F Research LLC (“L&F”) described in Note 11 — Stockholders’ Permanent and Temporary Equity, the Company and L&F entered into a promissory note agreement (“L&F Note Agreement”) whereby the Company agreed to accept a note receivable in the principal amount of $351,579 from L&F (“L&F Note”). The L&F Note bears interest at a rate of 1.17% per annum, payable annually, and matures on the earliest of (a) the date on which the Company demands payment of all amounts outstanding under the L&F Note following an event of default and (b) December 15, 2025. L&F is required to immediately prepay the L&F Note and all accrued and unpaid interest on the L&F Note with the following: (a) 100% of the proceeds of the second $500,000 of milestone payments paid by ZyVersa to L&F pursuant to the terms of the license agreement (See Note 10- Commitments and Contingencies), (b) 100% of the gross proceeds from the sale of common stock by L&F to ZyVersa pursuant to the terms of the Put Option (See Note 11 — Stockholders’ Permanent and Temporary Equity), (c) 100% of the gross proceeds in excess of $1.00 per share from the sale of ZyVersa common stock by L&F to any party other than ZyVersa and (d) proceeds received in connection with certain liquidation events as defined in the agreement.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 4 — Note Receivable (cont.)

Commencing on December 13, 2021 and, so long as the principal amount of the L&F Note remains outstanding, on each December 13 through December 13, 2025, the Company will pay L&F an annual administrative fee equal to $6,000. The L&F Note was outstanding as of December 31, 2021 as the Company had not received payment from L&F of the amount due, nor had the Company made any required payments to L&F in connection with the license agreement described in Note 10 — Commitments and Contingencies, and such amount was recorded as a contra-liability against the milestone payments due to L&F in connection with the license agreement, which was included in accrued expenses and other current liabilities. In recording the L&F Note receivable as a contra-liability, the Company considered the commercial substance, the intent of the parties and the overall contractual agreements between ZyVersa and L&F Research, which afford both parties the legal right to set-off the milestone liability owed by the Company to L&F Research with the L&F Note receivable to the Company. The Company determined that the amounts could be offset in the balance sheet because i) the amounts owed by and to the Company are determinable, ii) the Company has a legal right to set off the milestone liability owed to L&F Research by the amount of the L&F Note due to the Company, iii) the Company intends to set off the L&F Note receivable against the milestone liability, and iv) the set off right is enforceable by law.

Note Payable

12 Months Ended

Dec. 31, 2021

Note Payable

Note Payable

Note 7 — Note Payable

On April 22, 2020, the Company received cash proceeds of $213,481 pursuant to a loan provided in connection with the Paycheck Protection Program under the CARES Act (the “PPP Loan”). The PPP Loan bears interest at a fixed rate of 1.00% per annum.

Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020, the Company was eligible to apply for and receive forgiveness for all or a portion of its PPP Loan. The Company applied for and received notification on September 10, 2021 that it had received approval for full forgiveness of the PPP loan in the amount of $213,481. The Company has recorded this gain from extinguishment as other income in the statement of operations.

Income Taxes

9 Months Ended

12 Months Ended

Dec. 31, 2021

Note 8 — Income Taxes

The Company is subject to United States federal and state income taxes.

The provision for income taxes consists of the following (benefits) provisions:

Schedule of Provision For Income Taxes

	2021			2020
	For the Years Ended December 31,
	2021			2020
Deferred tax benefit:
Federal	$	(1,480,472	)	$	(2,454,779	)
State		(763,612	)		(388,462	)
Total		(2,244,084	)		(2,843,241	)
Change in valuation allowance		2,244,084			2,843,241
Provision for income taxes	$	—		$	—

The provision for income taxes differs from the Federal statutory rate as follows:

	2021			2020
	For the Years Ended December 31,
	2021			2020
Federal statutory rate		21.0	%		21.0	%
State tax rate, net of federal benefit		3.7	%		2.5	%
Permanent items		(0.9	)%		0.5	%
Nondeductible basis difference		0.1	%		(1.0	)%
Effect of change in state rate		3.9	%		0.0	%
Prior period adjustments and other		0.0	%		(0.6	)%
Change in valuation allowance		(27.8	)%		(22.4	)%
Effective income tax rate		0.0	%		0.0	%

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 8 — Income Taxes (cont.)

Deferred tax assets and liabilities consist of the following:

	2021			2020
	As of December 31,
	2021			2020
Net operating loss carryforwards	$	4,930,055		$	3,409,822
Stock-based compensation expense		3,220,799			2,096,968
Capitalized research and development costs		2,199,126			2,668,412
Capitalized start-up costs		620,016			644,460
Capitalized licensing costs		735,485			745,555
Derivative liabilities		6,388			55,138
Deferred debt discounts		—			—
Capitalized patents		235,065			143,867
Warrants		239,307			228,297
Contributions carryforward		2,840			2,709
Deferred rent		4,176			4,830
Deferred tax assets		12,193,257			10,000,058
Valuation allowance		(12,180,021	)		(9,935,937	)
Deferred tax assets, total		13,236			64,121

Deferred debt discount		(6,388	)		(55,138	)
Fixed assets		(6,848	)		(8,983	)
Deferred tax liabilities		(13,236	)		(64,121	)
Deferred tax assets, net	$	—		$	—

At December 31, 2021 and 2020, the Company had approximately $20,446,000 and $14,290,000 Federal net operating loss (“NOL”) carryforwards and $14,644,000 and $9,412,000 of State NOLs that may be available to offset future Federal and State taxable income, respectively. Such NOL carryforwards do not expire. However, their use to offset future taxable income may be subject to limitations under Section 382 of the Internal Revenue Code and similar state statutes as a result of ownership changes.

The Company has assessed the likelihood that deferred tax assets will be realized and considers all available positive and negative evidence, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. A valuation allowance is established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. After the performance of such a review as of December 31, 2021 and 2020, management believes that uncertainty exists with respect to future realization of its deferred tax assets and has, therefore, established a full valuation allowances as of that date. Thus, the Company recorded an increase in the valuation allowance of $2,244,084 and $2,843,241 in connection with the tax provisions for the years ended December 31, 2021 and 2020, respectively.

Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements as of December 31, 2021 and 2020. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.

No tax audits were commenced or were in process during the years ended December 31, 2021 and 2020 and no tax related interest or penalties were incurred during those years. The Company’s tax returns beginning with the year ended December 31, 2018 remain subject to examination.

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 8 — TAXES

Income Taxes

The Company’s net deferred tax assets is as follows:

	For the Period From March 17, 2021 (Inception) Through December 31, 2021
Deferred tax assets:
Net operating losses	$	33,255
Start up costs		16,151
Total deferred tax assets		49,406
Deferred tax assets		49,406
Valuation Allowance		(49,406	)
Deferred tax asset, net of allowance	$	—
Deferred tax assets, total	$	—

Below is breakdown of the income tax provision.

Schedule of Provision For Income Taxes

	For the Period From March 17, 2021 (Inception) Through December 31, 2021
Federal
Current	$	—
Deferred		(49,406	)
State and local
Current		—
Deferred		—
Change in valuation allowance		49,406
Income tax provision	$	—

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 8 — TAXES (cont.)

As of December 31, 2021, the Company had $158,358 of U.S. federal net operating loss carryovers that do not expire and are available to offset future taxable income.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2021, the change in the valuation allowance was $49,406.

A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows:

	For the Period From March 17, 2021 (Inception) Through December 31, 2021
U.S. federal statutory rate		21.0	%
Other		0.5	%
Valuation allowance		(20.5	)%
Income tax provision		—

The effective tax rate differs from the statutory tax rate of 21% for the year ended December 31, 2021, due to the valuation allowance recorded on the Company’s net operating losses. The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns since inception remain open to examination by the taxing authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Related Party Transactions	9 Months Ended		12 Months Ended
Related Party Transactions	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2021
Related Party Transactions			Note 12 — Related Party Transactions During the years ended December 31, 2021 and 2020, the Company paid $50,000 and $118,240, respectively, in broker fees to an investment banker who is a part owner of the Company. During the years ended December 31, 2021 and 2020, the Company received $3,150,000 and $25,000, respectively, from members of the Company’s management team, a founder, and significant stockholder for the purchase of the 2021 Notes. See Note 6 — Convertible Notes Payable for further discussion on the 2021 Notes. ZYVERSA THERAPEUTICS, INC. NOTES TO FINANCIAL STATEMENTS
Larkspur Health Acquisition Corp [Member]
Related Party Transactions	NOTE 5 — RELATED PARTIES Related Party Transactions *Founder Shares* During the period ended December 31, 2021, the Sponsor’s investors received a total of 2,156,250 of the Company’s Class B common stock (as adjusted, the “Founder Shares”) for an aggregate purchase price of $25,000. The Founder Shares included an aggregate of up to 281,250 shares subject to forfeiture to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the number of Founder Shares will equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding shares of common stock after the Initial Public Offering. On January 6, 2022 the underwriters partially exercised the over-allotment option for 267,159 units. The issuance of the units resulted in gross proceeds of $2.7 million. The remaining units expired on February 6, 2022, which resulted in the forfeiture of 214,460 founders shares. The holders of the Founder Shares have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property. On November 18, 2021, Larkspur Health LLC transferred 231,423 founder shares to certain additional sponsor investors and the representative transferred 110,723 founder shares to certain additional sponsor investors. The Company accounted for the excess of fair value over the purchase price, which totaled $2,179,470, as an offering cost with an offset to additional paid-in capital or accumulated deficit to the extent additional paid-in capital is fully depleted. *Promissory Note* On May 7, 2021, the Company issued unsecured promissory notes to the Sponsor’s investors, which were amended and restated on October 7, 2021 (the “Promissory Notes”), pursuant to which the Company may borrow up to an aggregate principal amount of $750,000. The Promissory Notes are non-interest bearing and payable on the earlier of (i) December 31, 2021 or (ii) the consummation of the Initial Public Offering. Upon closing the Initial Public Offering in December the Promissory Notes were converted into Class A Common Stock. LARKSPUR HEALTH ACQUISITION CORP. NOTE 5 — RELATED PARTIES (cont.) *Related Party Loans* In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by the Promissory Notes. The notes may be repaid upon completion of a Business Combination, without interest. Such Units would be identical to the Private Placement Units. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of September 30, 2022 and December 31, 2021, there was no amount outstanding under the Working Capital Loans. *Accounting Services* A firm owned by the Company’s Chief Financial Officer has an agreement to provide accounting and financial consulting services $0 and to the Company. The Company did not incur any costs for the period from March 17, 2021 (Inception) through September 30, 2021. The Company incurred $5,250 of costs during the three and nine months ended September 30, 2022. There is no amount outstanding as of September 30, 2022 or December 31, 2021.	NOTE 5 — RELATED PARTIES Related Party Transactions *Founder Shares* During the period ended December 31, 2021, the Sponsor’s investors received a total of 2,156,250 of the Company’s Class B common stock (as adjusted, the “Founder Shares”) for an aggregate purchase price of $25,000. The Founder Shares included an aggregate of up to 281,250 shares subject to forfeiture to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the number of Founder Shares will equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding shares of common stock after the Initial Public Offering. LARKSPUR HEALTH ACQUISITION CORP. NOTES TO THE FINANCIAL STATEMENTS NOTE 5 — RELATED PARTIES (cont.) The holders of the Founder Shares have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property. On November 18, 2021, Larkspur Health LLC transferred 231,423 founder shares to certain additional sponsor investors and the representative transferred 110,723 founder shares to certain additional sponsor investors. The Company accounted for the excess of fair value over the purchase price, which totaled $2,179,470, as an offering cost with an offset to additional paid-in capital or accumulated deficit to the extent additional paid-in capital is fully depleted. *Promissory Note* On May 7, 2021, the Company issued unsecured promissory notes to the Sponsor’s investors, which were amended and restated on October 7, 2021 (see Note 8) (the “Promissory Notes”), pursuant to which the Company may borrow up to an aggregate principal amount of $750,000. The Promissory Notes are non-interest bearing and payable on the earlier of (i) December 31, 2021 or (ii) the consummation of the Initial Public Offering. As of December 31, 2021, there was no amount outstanding under the Promissory Notes. *Related Party Loans* In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by the Promissory Notes. The notes may be repaid upon completion of a Business Combination, without interest. Such Units would be identical to the Private Placement Units. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2021, there was no amount outstanding under the Working Capital Loans. *Accounting Services* A firm owned by the Company’s Chief Financial Officer has an agreement to provide accounting and financial consulting services to the Company. The total cost incurred through December 31, 2021 was $15,000. There is no amount outstanding as of December 31, 2021.

Inital Public Offering

9 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Inital Public Offering

NOTE 3 — INITAL PUBLIC OFFERING

Pursuant to the Initial Public Offering, the Company sold 7,500,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and three-fourths of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7).

NOTE 3 — INITAL PUBLIC OFFERING

Private Placements

9 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Recent Accounting Standards

Private Placements

NOTE 4 — PRIVATE PLACEMENTS

Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale of 317,600 Private Placement Units at a price of $10.00 per Private Placement Unit ($3,176,000) to the Sponsor (the “Private Placement”). Each Private Placement Unit consists of one share of Class A common stock and three-fourths of one redeemable warrant (“Private Warrant”). Each Private Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7). The proceeds from the sale of the Private Placement Units were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Warrants will expire worthless. The Private Warrants (including the Class A common stock issuable upon exercise of the Private Warrants) will not be transferable, assignable or salable until after the completion of an Initial Business Combination, subject to certain exceptions.

NOTE 4 — PRIVATE PLACEMENTS

Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale of 317,600 Private Placement Units at a price of $10.00 per Private Placement Unit ($3,176,000) to the Sponsor. Each Private Placement Unit consists of one share of Class A common stock and three-fourths of one redeemable warrant (“Private Warrant”). Each Private Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7). The proceeds from the sale of the Private Placement Units was added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Warrants will expire worthless. The Private Warrants (including the Class A common stock issuable upon exercise of the Private Warrants) will not be transferable, assignable or salable until after the completion of an Initial Business Combination, subject to certain exceptions.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Restricted Cash

Recently Adopted Accounting Pronouncements

Use of Estimates

Cash and cash equivalents

Cash and Cash Equivalents

Equipment, Net

Financing Costs

Convertible Promissory Notes

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies (cont.)

Fair Value of Financial Instruments

Level 1 — quoted prices in active markets for identical assets or liabilities;

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable; and

Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).

The carrying amounts of the Company’s financial instruments, such as cash, accounts payable and investor deposits approximate fair values due to the short-term nature of these instruments.

See Note 9 — Derivative Liabilities for additional details regarding the valuation technique and assumptions used in valuing Level 3 inputs.

Fair Value of Stock Options and Warrants

The Company utilizes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Research and Development

Research and development expenses are charged to operations as incurred.

Stock-Based Compensation

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies (cont.)

Net Loss per Common Share

Net Loss Per Common Share

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

	2021		2020
	December 31,
	2021		2020
Warrants⁽¹⁾		2,154,352		2,154,352
Options		8,755,179		7,196,250
Convertible notes payable⁽²⁾		3,400,187		1,294,063
Total potentially dilutive shares		14,309,718		10,644,665

(1)	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 10 — Commitments and Contingencies — License Agreements for details.

(2)	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $3.25 per share on December 31, 2021 and 2020.

Reclassifications

Recently Issued Accounting Pronouncements

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies (cont.)

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. The Company does not expect the adoption of this standard to have a material effect on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Companies should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If a Company elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company does not expect the adoption of this standard to have a material effect on its consolidated financial statements.

Recent Accounting Standards

Recent Accounting Standards

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Recent Accounting Standards

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Use of Estimates

Use of Estimates

Cash and cash equivalents

Cash and cash equivalents

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Description	Level		September 30, 2022		December 31, 2021
Assets:
Investments held in Trust Account		1	$	78,911,942	$	75,750,000

Fair Value of Financial Instruments

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Description	Level		December 31, 2021
Assets:
Investments held in Trust Account		1	$	75,750,000

Net Loss per Common Share

Income Taxes

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Income Taxes

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

Net Loss per Common Share

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	Class A			Class B			Class A			Class B
	For the Three Months						For the Nine Months
	Ended September 30, 2022						Ended September 30, 2022
	Class A			Class B			Class A			Class B
Basic and diluted net loss per common share
Numerator:
Allocation of net loss	$	(547,607	)	$	(131,480	)	$	(1,444,749	)	$	(347,983	)
Denominator:
Basic and diluted weighted average common shares outstanding		8,087,431			1,941,790			8,082,471			1,940,562
Basic and diluted net loss per common share	$	(0.07	)	$	(0.07	)	$	(0.18	)	$	(0.18	)

Net Loss per Common Share

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	For the Period from March 17, 2021 (inception) through December 31, 2021
	Class A Common Stock			Class B Common Stock
Basic and diluted net loss per common share
Numerator:
Allocation of net loss, as adjusted	$	(24,906	)	$	(215,794	)
Denominator:
Basic and diluted weighted average shares outstanding		216,404			1,875,000
Basic and diluted net loss per common share	$	(0.12	)	$	(0.12	)

Basis of Presentation

Basis of Presentation

The accompanying unaudited financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K.

Basis of Presentation

Emerging Growth Company

Emerging Growth Company

LARKSPUR HEALTH ACQUISITION CORP.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Emerging Growth Company

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Investments held in Trust Account

Investments held in Trust Account

At December 31, 2021, the Company had $75,750,000 in Investments held in the Trust Account.

Offering Costs Associated with a Public Offering

Offering Costs Associated with a Public Offering

The Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering costs of $593,778 consist principally of costs incurred in connection with formation and preparation for the Public Offering. These costs, together with the underwriter discount of $500,000 and deferred business combination fee payable of $3,375,000, were charged to additional paid-in capital upon completion of the Public Offering.

Concentration of Credit Risk

Concentration of Credit Risk

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Derivative Financial Instruments

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and is accounted for as a liability pursuant to ASC 480. It is recorded as a $76,588 liability at December 31, 2021. The warrants issued in connection with the initial public offering and the private placement are recorded in equity as they qualify for equity treatment under ASC 815-40.

Class A common stock subject to possible redemption

Class A common stock subject to possible redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at December 31, 2021, the shares of Class A common stock subject to possible redemption in the amount of $75,750,000 are presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

LARKSPUR HEALTH ACQUISITION CORP.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Summary of Significant Accounting Policies (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Schedule of Basic and Diluted Net Loss Per Common Share

Schedule of Assets and Liabilities Measured at Fair Value

Schedule Of Anti-dilutive Securities Excluded From Calculation Of Diluted Net Loss Per Share

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

[1]	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are included in the amount currently reported.

[2]	Includes warrants to purchase 5,945,045 shares of common stock which are contingently issuable upon the automatic conversion of the Series A Preferred Stock that was outstanding at September 30, 2022, which occurs upon the closing of the Business Combination. See Note 9 - Stockholders’ Deficiency for additional details on the Series A Preferred Stock financing.

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 4 – Net Loss Per Common Share - Continued

[3]

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

	2021		2020
	December 31,
	2021		2020
Warrants⁽¹⁾		2,154,352		2,154,352
Options		8,755,179		7,196,250
Convertible notes payable⁽²⁾		3,400,187		1,294,063
Total potentially dilutive shares		14,309,718		10,644,665

(1)	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 10 — Commitments and Contingencies — License Agreements for details.

(2)	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $3.25 per share on December 31, 2021 and 2020.

Schedule of Basic and Diluted Net Loss Per Common Share

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	Class A			Class B			Class A			Class B
	For the Three Months						For the Nine Months
	Ended September 30, 2022						Ended September 30, 2022
	Class A			Class B			Class A			Class B
Basic and diluted net loss per common share
Numerator:
Allocation of net loss	$	(547,607	)	$	(131,480	)	$	(1,444,749	)	$	(347,983	)
Denominator:
Basic and diluted weighted average common shares outstanding		8,087,431			1,941,790			8,082,471			1,940,562
Basic and diluted net loss per common share	$	(0.07	)	$	(0.07	)	$	(0.18	)	$	(0.18	)

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

	For the Period from March 17, 2021 (inception) through December 31, 2021
	Class A Common Stock			Class B Common Stock
Basic and diluted net loss per common share
Numerator:
Allocation of net loss, as adjusted	$	(24,906	)	$	(215,794	)
Denominator:
Basic and diluted weighted average shares outstanding		216,404			1,875,000
Basic and diluted net loss per common share	$	(0.12	)	$	(0.12	)

Schedule of Assets and Liabilities Measured at Fair Value

Description	Level		September 30, 2022		December 31, 2021
Assets:
Investments held in Trust Account		1	$	78,911,942	$	75,750,000

Description	Level		December 31, 2021
Assets:
Investments held in Trust Account		1	$	75,750,000

Net Loss Per Common Share (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Outstanding Potentially Dilutive Securities

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

[1]	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are included in the amount currently reported.

[2]	Includes warrants to purchase 5,945,045 shares of common stock which are contingently issuable upon the automatic conversion of the Series A Preferred Stock that was outstanding at September 30, 2022, which occurs upon the closing of the Business Combination. See Note 9 - Stockholders’ Deficiency for additional details on the Series A Preferred Stock financing.

ZYVERSA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 4 – Net Loss Per Common Share - Continued

[3]

The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive:

	2021		2020
	December 31,
	2021		2020
Warrants⁽¹⁾		2,154,352		2,154,352
Options		8,755,179		7,196,250
Convertible notes payable⁽²⁾		3,400,187		1,294,063
Total potentially dilutive shares		14,309,718		10,644,665

(1)	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 10 — Commitments and Contingencies — License Agreements for details.

(2)	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $3.25 per share on December 31, 2021 and 2020.

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

As of September 30, 2022 and December 31, 2021, accrued expenses and other current liabilities consisted of the following:

As of December 31, 2021 and 2020, accrued expenses and other current liabilities consisted of the following:

	2021			2020
	December 31,
	2021			2020
L&F milestone payment liability	$	1,500,000		$	1,500,000
L&F Note (see Note 4)		(351,579	)		(351,579	)
L&F, net		1,148,421			1,148,421
Payroll accrual		—			911,737
Accrued interest		748,767			244,706
Deferred rent		16,913			20,502
Other		—			93
Total accrued expenses and other current liabilities	$	1,914,101		$	2,325,459

Convertible Notes Payable (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of Outstanding Convertible Promissory Notes

A summary of the outstanding convertible promissory notes as of September 30, 2022 and December 31, 2021 is as follows:

A summary of the outstanding convertible promissory notes as of December 31, 2021 and 2020 is as follows:

	2021			2020
	As of December 31,
	2021			2020
Convertible notes payable – current portion	$	6,016,000		$	2,165,500
Deferred debt discount – current portion		(39,492	)		(140,633	)
Total convertible notes payable-current portion, net	$	5,976,508		$	2,024,867
Convertible notes payable – related parties-current portion	$	3,175,000		$	25,000
Convertible notes payable – non-current portion	$	—		$	1,770,500
Deferred debt discount – non-current portion		—			(216,692	)
Total convertible notes payable – non-current portion, net	$	—		$	1,553,808
Total convertible notes payable, net	$	9,151,508		$	3,603,675

Derivative Liabilities (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Changes in Fair Value of Level 3 Derivative Liabilities

The following table sets forth a summary of the changes in the fair value of Level 3 derivative liabilities that are measured at fair value on a recurring basis:

Beginning balance as of January 1, 2020	$	243,483
Issuance of derivative liabilities		211,559
Change in fair value of derivative liabilities		333,658
Ending balance as of December 31, 2020		788,700
Issuance of derivative liabilities		—
Change in fair value of derivative liabilities		(228,100	)
Ending balance as of December 31, 2021	$	560,600

Schedule of Derivative Liabilities Fair Value Assumption

	For the Year Ended December 31, 2020
Fair value of common stock on date of issuance	$	3.25
Risk free interest rate		0.14% – 1.55	%
Expected term (years)		0.11 – 0.91
Expected volatility		130% – 142	%
Expected dividends		0.00	%

	December 31,
	2021			2020
Fair value of common stock on date of issuance	$	3.25		$	3.25
Risk free interest rate		0.06% – 0.19	%		0.09% – 0.10	%
Expected term (years)		0.00 – 0.50			0.16 – 0.67
Expected volatility		75	%		142	%
Expected dividends		0.00	%		0.00	%

ZYVERSA THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS

Stockholders’ Deficiency (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Summary of Stock Option Activity

A summary of the option activity during the nine months ended September 30, 2022 is presented below:

Summary of Stock Options Activity

A summary of the option activity during the years ended December 31, 2021 and 2020 is presented below:

Summary of Stock Option Activity

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Aggregate Intrinsic Value
Outstanding, January 1, 2020		7,022,680		$	1.68
Granted		188,570			3.25
Exercised		(15,000	)		1.00
Outstanding, January 1, 2021		7,196,250			1.72
Granted		1,720,596			3.25
Forfeited		(161,667	)		3.03
Outstanding, December 31, 2021		8,755,179		$	2.00		6.4	$	10,962,859
Exercisable, December 31, 2021		6,289,107		$	1.69		5.7	$	9,812,645

Schedule of Information Related to Stock Options

The following table presents information related to stock options as of September 30, 2022:

Summary of Option Pricing Model to Stock Options Granted

In applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:

	For the Three Months Ended September 30			For the Nine Months Ended September 30
	2022	2021		2022		2021
Fair value of common stock on date of grant	n/a		$3.25		$2.27 - $3.00		$3.25
Risk free interest rate	n/a		0.89% - 0.98%		1.68% - 3.01%		0.66% - 0.98%
Expected term (years)	n/a		5.00		3.53 - 6.00		5.00 - 6.00
Expected volatility	n/a		120% - 124%		111% - 119%		120% - 125 %
Expected dividends	n/a		0.00%		0.00%		0.00%

In applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:

	For the Years Ended December 31,
	2021			2020
Fair value of common stock on date of grant	$	3.25		$	3.25
Risk free interest rate		0.66% – 1.26	%		0.36% – 0.38	%
Expected term (years)		5.00 – 6.00			5.00
Expected volatility		118% – 125	%		122% – 124	%
Expected dividends		0.00	%		0.00	%

Summary of Warrant Activity

A summary of the warrant activity during the years ended December 31, 2021 and 2020 is presented below:

Summary of Warrant Activity

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life In Years		Aggregate Intrinsic Value
Outstanding, January 1, 2020		2,505,931		$	1.84
Issued		—			—
Exercised		(351,579	)		1.00
Outstanding, January 1, 2021		2,154,352			1.98
Issued		—			—
Outstanding, December 31, 2021		2,154,352		$	1.98		1.5	$	2,732,212
Exercisable, December 31, 2021		1,802,774		$	2.17		1.8	$	1,941,161

Summary of Information Related to Stock Warrants

The following table presents information related to stock warrants as of December 31, 2021:

Warrants Outstanding				Warrants Exercisable
Exercise Price		Outstanding Number of Warrants		Weighted Average Remaining Life In Years		Exercisable Number of Warrants
$	1.00		527,367		0.0		175,789
$	2.30		1,626,985		2.0		1,626,985
			2,154,352		1.8		1,802,774

Equity Option [Member]

Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]

Schedule of Information Related to Stock Options

The following table presents information related to stock options as of December 31, 2021:

Options Outstanding				Options Exercisable
Exercise Price		Outstanding Number of Options		Weighted Average Remaining Life In Years		Exercisable Number of Options
$	1.00		3,338,767		4.1		3,338,767
$	2.30		3,632,246		7.3		2,421,494
$	3.25		1,784,166		9.3		528,846
			8,755,179		5.7		6,289,107

Income Taxes (Tables)

9 Months Ended

12 Months Ended

Dec. 31, 2021

Schedule of Provision For Income Taxes

The provision for income taxes consists of the following (benefits) provisions:

Schedule of Provision For Income Taxes

	2021			2020
	For the Years Ended December 31,
	2021			2020
Deferred tax benefit:
Federal	$	(1,480,472	)	$	(2,454,779	)
State		(763,612	)		(388,462	)
Total		(2,244,084	)		(2,843,241	)
Change in valuation allowance		2,244,084			2,843,241
Provision for income taxes	$	—		$	—

Schedule of Provision For Income Taxes Differs From The Federal Statutory Rate

The provision for income taxes differs from the Federal statutory rate as follows:

	2021			2020
	For the Years Ended December 31,
	2021			2020
Federal statutory rate		21.0	%		21.0	%
State tax rate, net of federal benefit		3.7	%		2.5	%
Permanent items		(0.9	)%		0.5	%
Nondeductible basis difference		0.1	%		(1.0	)%
Effect of change in state rate		3.9	%		0.0	%
Prior period adjustments and other		0.0	%		(0.6	)%
Change in valuation allowance		(27.8	)%		(22.4	)%
Effective income tax rate		0.0	%		0.0	%

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities consist of the following:

	2021			2020
	As of December 31,
	2021			2020
Net operating loss carryforwards	$	4,930,055		$	3,409,822
Stock-based compensation expense		3,220,799			2,096,968
Capitalized research and development costs		2,199,126			2,668,412
Capitalized start-up costs		620,016			644,460
Capitalized licensing costs		735,485			745,555
Derivative liabilities		6,388			55,138
Deferred debt discounts		—			—
Capitalized patents		235,065			143,867
Warrants		239,307			228,297
Contributions carryforward		2,840			2,709
Deferred rent		4,176			4,830
Deferred tax assets		12,193,257			10,000,058
Valuation allowance		(12,180,021	)		(9,935,937	)
Deferred tax assets, total		13,236			64,121

Deferred debt discount		(6,388	)		(55,138	)
Fixed assets		(6,848	)		(8,983	)
Deferred tax liabilities		(13,236	)		(64,121	)
Deferred tax assets, net	$	—		$	—

Schedule of Future Minimum Payments Operating Lease Agreement

Future minimum payments under these operating lease agreements are as follows:

For the Year Ended December 31,	Amount
2022	$	101,173
2023		104,211
2024		8,705
Total	$	214,089

Schedule of Provision For Income Taxes

Below is breakdown of the income tax provision.

Schedule of Provision For Income Taxes

	For the Period From March 17, 2021 (Inception) Through December 31, 2021
Federal
Current	$	—
Deferred		(49,406	)
State and local
Current		—
Deferred		—
Change in valuation allowance		49,406
Income tax provision	$	—

Schedule of Provision For Income Taxes Differs From The Federal Statutory Rate

A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows:

	For the Period From March 17, 2021 (Inception) Through December 31, 2021
U.S. federal statutory rate		21.0	%
Other		0.5	%
Valuation allowance		(20.5	)%
Income tax provision		—

Schedule of Deferred Tax Assets and Liabilities

The Company’s net deferred tax assets is as follows:

	For the Period From March 17, 2021 (Inception) Through December 31, 2021
Deferred tax assets:
Net operating losses	$	33,255
Start up costs		16,151
Total deferred tax assets		49,406
Deferred tax assets		49,406
Valuation Allowance		(49,406	)
Deferred tax asset, net of allowance	$	—
Deferred tax assets, total	$	—

Schedule of Outstanding Potentially Dilutive Securities (Details) - shares

9 Months Ended

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Dec. 31, 2021

Dec. 31, 2020

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

27,661,318

14,800,186

14,309,718

10,644,665

Warrant [Member]

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

8,699,397

2,754,352

2,154,352

^[1]

2,154,352

^[1]

Options [Member]

Series A Convertible Preferred Stock [Member]

10,039,348

8,693,024

8,755,179

7,196,250

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Convertible Notes Payable [Member]

5,945,045

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

2,977,528

^[2]

3,352,810

^[2]

3,400,187

^[3]

1,294,063

^[3]

[1]	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 10 — Commitments and Contingencies — License Agreements for details.
[2]	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $1.94 and $3.25 per share as of September 30, 2022 and 2021, respectively.
[3]	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $3.25 per share on December 31, 2021 and 2020.

Schedule of Outstanding Potentially Dilutive Securities (Details) (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Fair value of common stock	$ 1.94	$ 3.25	$ 3.25	$ 3.25
Common Stock [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Warrants to purchase common shares	5,945,045
Inflamacore Llc License Agreement [Member] \| Common Stock [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Warrants to purchase common shares	600,000	600,000

Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
L&F milestone payment liability	$ 1,501,887	$ 1,500,000	$ 1,500,000
L&F Note (see Note 4)	(351,579)	(351,579)	(351,579)
L&F, net	1,510,308	1,148,421	1,148,421
Payroll accrual	879,026		911,737
Accrued interest	660,123	748,767	244,706
Deferred rent	12,077	16,913	20,502
Other			93
Total accrued expenses and other current liabilities	$ 2,701,534	$ 1,914,101	$ 2,325,459

Schedule of Outstanding Convertible Promissory Notes (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
Convertible notes payable – current portion	$ 3,936,000	$ 6,016,000	$ 2,165,500
Deferred debt discount – current portion	0	(39,492)	(140,633)
Total convertible notes payable-current portion, net	3,936,000	5,976,508	2,024,867
Convertible notes payable – related parties-current portion	25,000	3,175,000	25,000
Deferred debt discount - current portion			216,692
Total convertible notes payable – non-current portion, net			1,553,808
Total convertible notes payable, net	3,961,000	9,151,508	3,603,675
Convertible notes payable – non-current portion			1,770,500
Deferred debt discount – non-current portion			$ (216,692)

Convertible Notes Payable (Details Narrative) - USD ($)			3 Months Ended		9 Months Ended		12 Months Ended
Convertible Notes Payable (Details Narrative) - USD ($)	Jul. 08, 2022	Jul. 31, 2020	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Sep. 16, 2022	Jul. 31, 2022	May 10, 2022	Mar. 31, 2021
Short-Term Debt [Line Items]
Interest expenses			$ 69,804	$ 225,887	$ 379,737	$ 617,002
Amortization of debt discount			3,024	$ 86,879	39,492	251,940	$ 317,833	$ 288,366
Proceeds from convertible debt						$ 5,230,000	5,230,000	1,473,000
Convertible notes payable			$ 3,961,000		$ 3,961,000		9,151,508	$ 3,603,675
Series A Preferred Stock [Member]
Short-Term Debt [Line Items]
Convertion of warrants to common stock	106,616								251,798		150,832
2021 Notes [Member]
Short-Term Debt [Line Items]
Principal amount	$ 5,230,000											$ 5,230,000
Due to related parties												3,150,000
Proceeds from convertible debt	500,000
Accrued interest	$ 428,888
2021 Notes [Member] \| Series A Preferred Stock [Member]
Short-Term Debt [Line Items]
Convertion of debt into shares	1,802,193
Debt instrument conversion price	$ 3.14
Convertion of warrants to common stock	2,035,571
Investors and brokers [Member] \| Unsecured convertible promissory notes [Member]
Short-Term Debt [Line Items]
Principal amount		$ 3,961,000					$ 228,236					$ 5,230,000
Due to related parties		$ 25,000
Debt instrument conversion price		$ 3.25										$ 3.25
Debt instrument interest rate		6.00%					8.00%					6.00%
Initial public offering		$ 20,000,000
Debt instrument fair value		373,000
Debt instrument change in fair value		$ 64,342
Debt instrument equity financing												$ 500,000
Convertible notes payable							$ 2,165,500
Investors and brokers [Member] \| Unsecured convertible promissory notes [Member] \| IPO [Member]
Short-Term Debt [Line Items]
Debt instrument interest rate		80.00%
Initial public offering		$ 20,000,000
Investors and brokers [Member] \| Unsecured convertible promissory notes [Member] \| 2020 Issuances [Member ]
Short-Term Debt [Line Items]
Principal amount		1,795,500					$ 141,735
Debt instrument fair value		170,500
Debt instrument change in fair value		$ 41,058
Investors and brokers [Member] \| Unsecured convertible promissory notes [Member] \| 2021 Notes [Member]
Short-Term Debt [Line Items]
Principal amount												$ 3,150,000
Investors and brokers [Member] \| Unsecured convertible promissory notes [Member] \| 2022 [Member]
Short-Term Debt [Line Items]
Convertible notes payable										$ 1,795,500

Schedule of Changes in Fair Value of Level 3 Derivative Liabilities (Details) - USD ($)	3 Months Ended						9 Months Ended		12 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Liability, Beginning	$ 753,100	$ 772,700	$ 560,600	$ 819,307	$ 796,207	$ 788,700	$ 560,600	$ 788,700	$ 788,700	$ 243,483
Change in fair value of derivative liabilities	228,100	(19,600)	212,100	(246,507)	23,100	7,507	420,600	(215,900)	(228,100)	333,658
Derivative Liability, Ending	$ 981,200	$ 753,100	$ 772,700	$ 572,800	$ 819,307	$ 796,207	$ 981,200	$ 572,800	560,600	788,700
Issuance of derivative liabilities										$ 211,559

Schedule of Derivative Liabilities Fair Value Assumption (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Minimum [Member]
Derivative [Line Items]
Expected term (years)	6 days	1 day	0 years	1 month 28 days
Expected term (years)				1 month 9 days
Maximum [Member]
Derivative [Line Items]
Expected term (years)	7 days	1 day	6 months	8 months 1 day
Expected term (years)				10 months 28 days
Measurement Input, Share Price [Member]
Derivative [Line Items]
Expected dividends	1.94	3.25	3.25	3.25
Expected dividends				3.25
Measurement Input, Risk Free Interest Rate [Member]
Derivative [Line Items]
Expected dividends	3.33
Measurement Input, Risk Free Interest Rate [Member] \| Minimum [Member]
Derivative [Line Items]
Expected dividends		0.04	0.06	0.09
Expected dividends				0.14
Measurement Input, Risk Free Interest Rate [Member] \| Maximum [Member]
Derivative [Line Items]
Expected dividends		0.07	0.19	0.10
Expected dividends				1.55
Measurement Input, Price Volatility [Member]
Derivative [Line Items]
Expected dividends	74	85	75	142
Measurement Input, Price Volatility [Member] \| Minimum [Member]
Derivative [Line Items]
Expected dividends				130
Measurement Input, Price Volatility [Member] \| Maximum [Member]
Derivative [Line Items]
Expected dividends				142
Measurement Input, Expected Dividend Rate [Member]
Derivative [Line Items]
Expected dividends	0.00	0.00	0.00	0.00
Expected dividends				0.00

Derivative Liabilities (Details Narrative)	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Percentage of qualified offering occurring	90.00%		85.00%
Percentage of change of control occuring	0.00%		0.00%
Percentage of renegotiation	5.00%		0.00%
Percentage of dissolution	5.00%		15.00%
Minimum [Member]
Derivative [Line Items]
Percentage of qualified offering occurring		85.00%		68.00%
Percentage of change of control occuring		0.00%		1.00%
Maximum [Member]
Derivative [Line Items]
Percentage of qualified offering occurring		75.00%		71.00%
Percentage of change of control occuring		5.00%		5.00%
Measurement Input, Discount Rate [Member]
Derivative [Line Items]
Discount rate	25	25	25	25

Commitments and Contingencies (Details Narrative)													1 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended			12 Months Ended
Commitments and Contingencies (Details Narrative)	Sep. 22, 2022 $ / shares	Aug. 26, 2022 USD ($)	Mar. 07, 2022 USD ($)	Jan. 06, 2022 USD ($) shares	Jan. 06, 2022 USD ($) shares	Dec. 15, 2021 USD ($)	Dec. 15, 2020 USD ($)	Dec. 13, 2020 USD ($) $ / shares	Jan. 09, 2020 USD ($)	Apr. 18, 2019 USD ($) $ / shares shares	Jan. 18, 2019 USD ($) ft²	Dec. 15, 2015 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Mar. 31, 2022 USD ($)	Feb. 05, 2020 shares	May 01, 2019 ft²
Loss Contingencies [Line Items]
Operating leases, rent expense														$ 42,225	$ 36,702		$ 118,519		$ 110,979
License agreements up front cash payment										$ 346,321		$ 200,000
Aggregate milestone cash payments						$ 500,000,000,000	$ 1,500,000,000,000		$ 1,000,000	$ 22,500,000		21,500,000
License Agreements milestone earned												$ 2,500,000
Aggregate common stock shares \| shares										400,000			24,167,257	24,167,257			24,167,257	24,167,257		24,167,257	24,167,257
Aggregate common stock of warrant exercise price share \| $ / shares	$ 3.20											$ 1.00
Fair value of grant date excerisable										$ 815,822		$ 766,384
Fair value of excerisable period												period of five years
License agreements payable upon commencement									500,000
License agreements payable									500,000
Cash payment exercise price									$ 351,579
Aggregate milestone cash payments, description										the first milestone payment of $200,000 is triggered by the submission of an investigational new drug application for the first indication of a therapeutic licensed product). ZyVersa is required to pay sales royalties to InflamaCORE between 5% and 10%, which expire upon the latest of: (a) expiration of the last-to-expire of a patent or (b) expiration of regulatory exclusivity, as defined in the agreement. ZyVersa is required to pay sales royalties to the University of Miami between 3% and 6%.
Aggregate common stock exercise price share \| $ / shares													$ 0.00001	$ 0.00001			$ 0.00001	$ 0.00001		$ 0.00001	$ 0.00001
Number of operating lease square feet \| ft²											3,500													3,450
Operating lease expense											$ 89,000
Percentage of operating lease											3.00%
Base rent lease commitment											$ 497,000
Security deposit											58,323		$ 46,659	$ 46,659			$ 46,659	$ 46,659		$ 46,659	$ 58,324
Security deposit refunded																						$ 11,665
Sublease base rent											7,475
Sublease base rent lease commitment											$ 142,025
Operating lease rent expense																				$ 148,125	$ 247,592
Research and Development Expense [Member]
Loss Contingencies [Line Items]
Fair value of grant date excerisable										$ 460,000		$ 306,411
Common stock fair value										$ 200,000
Warrant [Member]
Loss Contingencies [Line Items]
Aggregate common stock shares \| shares										600,000		878,947
Aggregate common stock of warrant exercise price share \| $ / shares								$ 1.00
Fair value of grant date excerisable													153,324
Warrants purchase of common stock							$ 175,789	$ 351,579				$ 351,579	$ 351,578
Aggregate common stock shares \| shares										1,000,000
Aggregate common stock exercise price share \| $ / shares										$ 2.30
Minimum [Member]
Loss Contingencies [Line Items]
Percentage of product sales												5.00%
Maximum [Member]
Loss Contingencies [Line Items]
Percentage of product sales												10.00%
Larkspur Health Acquisition Corp [Member]
Loss Contingencies [Line Items]
Warrant term													5 years	5 years			5 years	5 years		5 years
Percentage of product sales																		20.00%
Liability recorded													$ 76,588					$ 76,588		$ 76,588
Proceeds from stock issuance					$ 2,700,000												$ 2,698,306	$ 75,000,000
Shares of forfeiture (in Shares) \| shares					214,460
Larkspur Health Acquisition Corp [Member] \| Underwriting Agreement [Member]
Loss Contingencies [Line Items]
Number of units additionally purchased (in Shares) \| shares																	1,125,000	1,125,000
Liability recorded													$ 76,588	$ 0			$ 0	$ 76,588		$ 76,588
Underwriting discount																	500,000	500,000
Business combination fee																	$ 3,375,000	$ 3,375,000
Private Placement [Member]
Loss Contingencies [Line Items]
Aggregate common stock shares \| shares																							923,076
Over-Allotment Option [Member] \| Larkspur Health Acquisition Corp [Member]
Loss Contingencies [Line Items]
Over-allotment option exercised \| shares				267,159
Proceeds from stock issuance				$ 2,700,000
Founder Shares [Member] \| Larkspur Health Acquisition Corp [Member]
Loss Contingencies [Line Items]
Shares of forfeiture (in Shares) \| shares																	214,460
Series A Preferred Stock [Member] \| Private Placement [Member]
Loss Contingencies [Line Items]
Investment commitments														$ 10,000,000.0			$ 10,000,000.0
Business Combination Agreement [Member]
Loss Contingencies [Line Items]
Business combination per share \| $ / shares														$ 1.37			$ 1.37
Business Combination Agreement [Member]
Loss Contingencies [Line Items]
Warrant term														5 years			5 years
License Agreement [Member] \| L&F Research LLC [Member]
Loss Contingencies [Line Items]
Milestone payments		$ 1,500,000	$ 1,500,000

Summary of Stock Options Activity (Details)	9 Months Ended
Summary of Stock Options Activity (Details)	Sep. 30, 2022 USD ($) $ / shares shares
Equity [Abstract]
Options Outstanding, Beginning Balance \| shares	8,755,179
Weighted Average Exercise Price, Beginning Balance \| $ / shares	$ 2.00
Options Granted \| shares	1,284,169
Weighted Average Exercise Price, Granted \| $ / shares	$ 3.18
Options Outstanding, Ending Balance \| shares	10,039,348
Weighted Average Exercise Price, Ending Balance \| $ / shares	$ 2.15
Weighted average remaining life in years, outstanding	6 years 1 month 6 days
Aggregate intrinsic value, outstanding \| $	$ 3,138,441
Options Exercisable, Ending Balance \| shares	8,258,023
Weighted Average Exercise Price, Ending Balance \| $ / shares	$ 1.91
Weighted average remaining life in years, exercisable	5 years 6 months
Aggregate intrinsic value, exercisable \| $	$ 3,138,441

Schedule of Information Related to Stock Options (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Offsetting Assets [Line Items]
Weighted Average Exercise Price	$ 2.15	$ 2.00
Number of Options	10,039,348	8,755,179
Options exercisable, weighted average remaining life in years	5 years 6 months
Number of Options, exercisable	8,258,023
Weighted Average Exercise Price, Beginning Balance	$ 2.00
Equity Option [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price		$ 2.00	$ 1.72	$ 1.68
Number of Options		8,755,179	7,196,250	7,022,680
Number of Options, exercisable		6,289,107
Stock option outstanding weighted average remaining contractual life		6 years 4 months 24 days
Weighted Average Exercise Price, Beginning Balance	2.00	$ 1.72
Stock option outstanding weighted average remaining contractual life, Exercisable		5 years 8 months 12 days
Equity Option [Member] \| Exercise Price Range One [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price		$ 1.00
Number of Options		3,338,767
Number of Options, exercisable		3,338,767
Stock option outstanding weighted average remaining contractual life		4 years 1 month 6 days
Weighted Average Exercise Price, Beginning Balance	1.00
Equity Option [Member] \| Exercise Price Range Two [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price		$ 2.30
Number of Options		3,632,246
Number of Options, exercisable		2,421,494
Stock option outstanding weighted average remaining contractual life		7 years 3 months 18 days
Weighted Average Exercise Price, Beginning Balance	2.30
Equity Option [Member] \| Exercise Price Range Three [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price			$ 3.25
Number of Options		1,784,166
Number of Options, exercisable		528,846
Stock option outstanding weighted average remaining contractual life		9 years 3 months 18 days
Weighted Average Exercise Price, Beginning Balance		$ 3.25
Stock Option One [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price	$ 1.00
Number of Options	3,338,767
Options exercisable, weighted average remaining life in years	3 years 3 months 18 days
Number of Options, exercisable	3,338,767
Stock Option Two [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price	$ 2.25
Number of Options	61,380
Options exercisable, weighted average remaining life in years	9 years 8 months 12 days
Number of Options, exercisable	61,380
Stock Option Three [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price	$ 2.3
Number of Options	3,668,913
Options exercisable, weighted average remaining life in years	6 years 6 months
Number of Options, exercisable	3,644,468
Stock Option Four [Member]
Offsetting Assets [Line Items]
Weighted Average Exercise Price	$ 3.25
Number of Options	2,970,288
Options exercisable, weighted average remaining life in years	8 years 7 months 6 days
Number of Options, exercisable	1,213,408
Equity Option [Member]
Offsetting Assets [Line Items]
Number of Options	10,039,348
Options exercisable, weighted average remaining life in years	5 years 6 months
Number of Options, exercisable	8,258,023

Summary of Option Pricing Model to Stock Options Granted (Details) - $ / shares	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Fair value of common stock on date of grant	$ 3.25		$ 3.25	$ 3.25	$ 3.25
Risk free interest rate, minimum	0.89%	1.68%	0.66%	0.66%	0.36%
Risk free interest rate, maximum	0.98%	3.01%	0.98%	1.26%	0.38%
Expected term (years)	5 years				5 years
Expected volatility, minimum	120.00%	111.00%	120.00%	118.00%	122.00%
Expected volatility, maximum	124.00%	119.00%	125.00%	125.00%	124.00%
Expected dividends	0.00%	0.00%	0.00%	0.00%	0.00%
Minimum [Member]
Fair value of common stock on date of grant		$ 2.27
Expected term (years)		3 years 6 months 10 days	5 years	5 years
Maximum [Member]
Fair value of common stock on date of grant		$ 3.00
Expected term (years)		6 years	6 years	6 years

Stockholders’ Deficiency (Details Narrative) - USD ($)																1 Months Ended	3 Months Ended			6 Months Ended	9 Months Ended			12 Months Ended
Stockholders’ Deficiency (Details Narrative) - USD ($)	Sep. 22, 2022	Sep. 16, 2022	Jul. 08, 2022	Jun. 30, 2022	May 10, 2022	Apr. 15, 2022	Mar. 31, 2022	Mar. 08, 2022	Feb. 03, 2022	Jan. 28, 2022	Dec. 23, 2021	Dec. 15, 2020	Dec. 13, 2020	Feb. 05, 2020	Dec. 15, 2015	Dec. 31, 2021	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Apr. 18, 2019
Class of Stock [Line Items]
Escrow							$ 26,019											$ 26,019
Placement agent fees		$ 16,000	$ 21,200				$ 26,019											$ 26,019
Aggregate common stock of warrant exercise price share	$ 3.20														$ 1.00
Warrant exercise price, decrease	1.37
Stock options vesting period									three years	three years
Stock option exercise price per share							$ 3.25	$ 3.25	$ 3.25	$ 3.25
Share based compensation expenses																	$ 494,022		$ 1,398,469		$ 3,131,708		$ 3,319,916	$ 4,141,736	$ 3,677,453
Unrecognized stock-based compensation expense																	$ 3,451,070				$ 3,451,070
weighted average period																					1 year 10 months 24 days
Contractual term description																					$ 85,000,000
Contractual term description																					The options granted during the nine months ended September 30, 2022 had a contractual term between seven and ten years and a requisite service period of zero to three years.		The options granted during the nine months ended September 30, 2021 had a contractual term of ten years and a requisite service period of zero to three years.
Weighted average estimated grant date fair value of the stock options granted																			$ 2.71		$ 2.48		$ 2.82
Common stock, shares authorized																75,000,000	75,000,000				75,000,000	75,000,000		75,000,000	75,000,000
Common stock, par value (in Dollars per share)																$ 0.00001	$ 0.00001				$ 0.00001	$ 0.00001		$ 0.00001	$ 0.00001
Preferred stock, shares authorized																5,000,000	5,000,000				5,000,000	5,000,000		5,000,000	5,000,000
Preferred stock, par value (in Dollars per share)																$ 0.00001	$ 0.00001				$ 0.00001	$ 0.00001		$ 0.00001	$ 0.00001
Common stock, shares issued																24,167,257	24,167,257				24,167,257	24,167,257		24,167,257	24,167,257	400,000
Common stock purchase price per share														$ 3.25
Common stock gross proceeds														$ 3,000,000
Additional paid in capital																$ 40,065,109	$ 50,208,183				$ 50,208,183	$ 40,065,109		$ 40,065,109	$ 35,923,373
Unrecognized share based compensation expenses																								$ 3,075,292
Unrecognized share based compensation weighted average period																								1 year 9 months 18 days
Preferred stock, shares issued																0	2,253,056				2,253,056	0		0	0
Preferred stock, shares outstanding																0	2,253,056				2,253,056	0		0	0
Common stock, shares outstanding																24,167,257	24,167,257				24,167,257	24,167,257		24,167,257	24,167,257
Larkspur Health Acquisition Corp [Member]
Class of Stock [Line Items]
Proceeds from related party debt																				$ 9,410
Public warrants price																$ 0.01	$ 0.01				$ 0.01	$ 0.01		$ 0.01
Preferred stock, shares authorized																1,000,000	1,000,000				1,000,000	1,000,000		1,000,000
Preferred stock, par value (in Dollars per share)																$ 0.0001	$ 0.0001				$ 0.0001	$ 0.0001		$ 0.0001
Share price, per share																$ 10.00						$ 10.00		$ 10.00
Additional paid in capital																	$ 22				$ 22
Preferred stock, shares issued																0	0				0	0		0
Preferred stock, shares outstanding																0	0				0	0		0
Common stock shares outstanding in percentage																20.00%	20.00%				20.00%	20.00%		20.00%
Public warrants expire term																5 years	5 years				5 years	5 years		5 years
Common share threshold price for redemption of warrants																$ 18.00	$ 18.00				$ 18.00	$ 18.00		$ 18.00
Equity Option [Member]
Class of Stock [Line Items]
Stock option to purchase																									15,000
Weighted average estimated grant date fair value of the stock options granted																								2.81	$ 2.87
Put Option [Member]
Class of Stock [Line Items]
Warrants purchase of common stock													$ 331,331
Share price, per share													$ 1.00
Additional paid in capital													$ 331
Private Placement [Member]
Class of Stock [Line Items]
Common stock, shares issued														923,076
Private Placement [Member] \| Larkspur Health Acquisition Corp [Member]
Class of Stock [Line Items]
Preferred stock sold											317,600										317,600	317,600
Share price, per share																$ 10.00	$ 10.00				$ 10.00	$ 10.00		$ 10.00
Two Thousand Fourteen Equity Incentive Plan [Member]
Class of Stock [Line Items]
Common stock, shares authorized																10,000,000						10,000,000		10,000,000
Equity incentive plan, description																								The number of shares of common stock available for issuance under the 2014 Plan shall automatically increase on the first trading day of January each calendar year during the term of the 2014 Plan, beginning with calendar year 2019, by an amount equal to five percent (5%) of the total number of shares of common stock outstanding on the last trading day in December of the immediately preceding calendar year, but in no event shall any such annual increase exceed 100,000 shares of common stock.
Common stock future issuance																1,068,154						1,068,154		1,068,154
Research and Development Expense [Member]
Class of Stock [Line Items]
Share based compensation expenses																	$ 67,608		$ 240,735		$ 619,364		$ 711,020	$ 944,525	$ 1,277,273
General and Administrative Expense [Member]
Class of Stock [Line Items]
Share based compensation expenses																	$ 426,414		$ 1,157,734		$ 2,512,344		$ 2,608,896	$ 3,197,211	$ 2,400,180
2014 Plan [Member] \| Employees And Board [Member]
Class of Stock [Line Items]
Stock option to purchase									920,000	920,000
2014 Plan [Member] \| Consultants [Member]
Class of Stock [Line Items]
Stock option to purchase				91,380		91,380	111,122	111,122
2014 Plan [Member] \| Former Board Member [Member]
Class of Stock [Line Items]
Stock option to purchase								161,667
Warrant [Member]
Class of Stock [Line Items]
Public warrants price					$ 3.20
Warrants expiration description					expire in five years (the “Series A Warrants”) or upon an earlier change of control that doesn’t meet the definition of a Public Transaction
Aggregate common stock of warrant exercise price share													$ 1.00
Common stock, par value (in Dollars per share)																										$ 2.30
Common stock, shares issued															878,947											600,000
Warrants purchase of common stock												$ 175,789	$ 351,579		$ 351,579	$ 351,578
Aggregate exercise price of warrants													$ 351,579
Common Stock One [Member] \| 2014 Plan [Member] \| Consultants [Member]
Class of Stock [Line Items]
Stock option to purchase				30,000		30,000
Stock option exercise price per share				$ 3.25		$ 3.25
Common Stock One [Member] \| 2014 Plan [Member] \| Former Board Member [Member]
Class of Stock [Line Items]
Stock option to purchase								36,667
Stock option exercise price per share								$ 2.30
Stock option to purchase								7 years 1 month 6 days
Common Stock Two [Member] \| 2014 Plan [Member] \| Consultants [Member]
Class of Stock [Line Items]
Stock option to purchase				61,380		61,380
Stock option exercise price per share				$ 2.25		$ 2.25
Common Stock Two [Member] \| 2014 Plan [Member] \| Former Board Member [Member]
Class of Stock [Line Items]
Stock option to purchase								125,000
Stock option exercise price per share								$ 3.25
Stock option to purchase								8 years 10 months 24 days
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Gross proceeds		$ 700,000	$ 296,400				$ 419,320
Net proceeds							393,301
Proceeds from related party debt							$ 100,000
Stock conversion price per share																	$ 3.14				$ 3.14
Preferred stock conversion price per share	2.78				$ 3.14
Preferred stock conversion price per share	$ 1.19				$ 2.78
Warrants exercisable share		251,798	106,616		150,832
Incremental value of deemed dividend	$ 9,684,637				$ 331,200
Series A Preferred Stock [Member] \| Investor [Member]
Class of Stock [Line Items]
Preferred stock sold		222,929	94,393				133,541											133,541
Preferred stock price per share		$ 3.14	$ 3.14				$ 3.14											$ 3.14
Net proceeds																		$ 392,301
Series A Warrants [Member] \| Minimum [Member]
Class of Stock [Line Items]
Warrants exercisable share	2,544,817
Series A Warrants [Member] \| Maximum [Member]
Class of Stock [Line Items]
Warrants exercisable share	5,945,045
Common Class A [Member] \| Larkspur Health Acquisition Corp [Member]
Class of Stock [Line Items]
Common stock, shares authorized																200,000,000	200,000,000				200,000,000	200,000,000		200,000,000
Common stock, par value (in Dollars per share)																$ 0.0001	$ 0.0001				$ 0.0001	$ 0.0001		$ 0.0001
Common stock, shares issued																317,600	320,272				320,272	317,600		317,600
Share price, per share																$ 11.50	$ 11.50				$ 11.50	$ 11.50		$ 11.50
Voting rights, description																					Holders of Class A common stock are entitled to one vote for each share	Holders of Class A common stock are entitled to one vote for each share.
Common stock, shares outstanding																317,600	320,272				320,272	317,600		317,600
Common stock subject to possible redemption																7,500,000	7,767,159				7,767,159	7,500,000		7,500,000
Common Class B [Member] \| Larkspur Health Acquisition Corp [Member]
Class of Stock [Line Items]
Common stock, shares authorized																20,000,000	20,000,000				20,000,000	20,000,000		20,000,000
Common stock, par value (in Dollars per share)																$ 0.0001	$ 0.0001				$ 0.0001	$ 0.0001		$ 0.0001
Common stock, shares issued																2,156,250	1,941,790				1,941,790	2,156,250		2,156,250
Voting rights, description																					Holders of Class B common stock are entitled to one vote for each share	Holders of Class B common stock are entitled to one vote for each share.
Common stock, shares outstanding																2,156,250	1,941,790				1,941,790	2,156,250		2,156,250

Schedule Of Anti-dilutive Securities Excluded From Calculation Of Diluted Net Loss Per Share (Details) - shares

9 Months Ended

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Dec. 31, 2021

Dec. 31, 2020

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

27,661,318

14,800,186

14,309,718

10,644,665

Warrant [Member]

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

8,699,397

2,754,352

2,154,352

^[1]

2,154,352

^[1]

Options [Member]

Convertible Notes Payable [Member]

10,039,348

8,693,024

8,755,179

7,196,250

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Basic and diluted weighted average shares outstanding

2,977,528

^[2]

3,352,810

^[2]

3,400,187

^[3]

1,294,063

^[3]

[1]	As part of the InflamaCORE, LLC license agreement, warrants to purchase 600,000 shares of common stock are to be issued upon the satisfaction of certain milestones and, accordingly, are not included in the amount currently reported. See Note 10 — Commitments and Contingencies — License Agreements for details.
[2]	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $1.94 and $3.25 per share as of September 30, 2022 and 2021, respectively.
[3]	The Company’s convertible notes payable have embedded conversion options that result in the automatic issuance of common stock upon the consummation of certain qualifying transactions. The conversion price is a function of the implied common stock price associated with the qualifying transaction. For the purpose of disclosing the potentially dilutive securities in the table above, we used the number of shares of common stock issuable if a qualifying transaction occurred with an implied common stock price equal to the fair value of the common stock of $3.25 per share on December 31, 2021 and 2020.

Subsequent Events (Details Narrative) - USD ($)							3 Months Ended			6 Months Ended	9 Months Ended			12 Months Ended
Subsequent Events (Details Narrative) - USD ($)	Dec. 06, 2022	Sep. 16, 2022	Jul. 08, 2022	Mar. 31, 2022	Jan. 06, 2022	Jan. 06, 2022	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Aug. 16, 2022	May 10, 2022	Dec. 23, 2021
Subsequent Event [Line Items]
Placement agent fees		$ 16,000	$ 21,200	$ 26,019				$ 26,019
Stock option exercise price per share								$ 3.25						$ 3.25
Gross proceeds (in Dollars)											$ 1,415,720				$ 3,000,000
Estimated useful life														5 years
Equipment												$ 52,000		$ 52,000	52,000
Accumulated depreciation														24,267	13,867
Depreciation											7,800		$ 7,800	$ 10,400	$ 10,400
Statutory tax rate														21.00%	21.00%
Larkspur Health Acquisition Corp [Member]
Subsequent Event [Line Items]
Gross proceeds (in Dollars)												3,176,000
Forfeiture of shares						214,460
Investments held in the Trust Account							$ 78,911,942				78,911,942	75,750,000		$ 75,750,000
Offering costs							593,778				593,778	593,778		593,778
Underwriter discount											500,000	500,000
Deferred fee payable							$ 3,375,000				$ 3,375,000	$ 3,375,000		3,375,000				$ 3,375,000
Income tax rate reconciliation							7.50%		0.00%	0.00%	2.70%
Statutory tax rate							0.00%		0.00%	0.00%	0.00%	21.00%
Excise tax rate																1.00%
Corporate alternative minimum tax																15.00%
Federal depository insurance coverage											$ 250,000	$ 250,000
Common stock subject to possible redemption							$ 78,556,033				78,556,033	75,750,000		75,750,000
Remeasurement adjustment to redemption value											107,727
Liability												$ 76,588		$ 76,588
Larkspur Health Acquisition Corp [Member] \| Over-Allotment Option [Member]
Subsequent Event [Line Items]
Issuance of shares upon partial exercise of over allotment option, shares					267,159
Proceeds from the partial exercise											2,698,306
Two Thousand Fourteen Equity Incentive Plan [Member]
Subsequent Event [Line Items]
Aggregate common stock shares				109,142				109,142				920,000		920,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Placement agent fees	$ 2,000
Subsequent Event [Member] \| Larkspur Health Acquisition Corp [Member]
Subsequent Event [Line Items]
Issuance of shares upon partial exercise of over allotment option, shares					267,159
Private place units issued					26,716
Gross proceeds (in Dollars)					$ 2,900,000
Forfeiture of shares					214,460
Series A Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock sold		$ 700,000	$ 296,400	$ 419,320
Warrants to purchase common shares		251,798	106,616														150,832
Net proceeds from related party				$ 393,301
Series A Preferred Stock [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Warrants to purchase common shares	461,179
Series A Preferred Stock [Member] \| Investor [Member]
Subsequent Event [Line Items]
Shares sold		222,929	94,393	133,541				133,541
Share price		$ 3.14	$ 3.14	$ 3.14				$ 3.14
Net proceeds from related party								$ 392,301
Series A Preferred Stock [Member] \| Investor [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Shares sold	174,776
Share price	$ 3.14
Preferred stock sold	$ 548,805
Series A Preferred Stock [Member] \| Related Party [Member]
Subsequent Event [Line Items]
Net proceeds from related party								$ 100,000
Common Class A [Member] \| Larkspur Health Acquisition Corp [Member]
Subsequent Event [Line Items]
Common stock subject to possible redemption							$ 2,806,033				$ 2,806,033

Note Receivable (Details Narrative) - USD ($)	Dec. 15, 2025	Dec. 13, 2025	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 13, 2020
Short-Term Debt [Line Items]
Common stock par value (in Dollars per share)			$ 0.00001	$ 0.00001	$ 0.00001
L&F Research LLC [Member]
Short-Term Debt [Line Items]
Debt instrument face amount						$ 351,579
Debt instrument interest rate	100.00%					1.17%
Debt instrument milestone payment	$ 500,000
Common stock par value (in Dollars per share)	$ 1.00
Administrative fee		$ 6,000

Note Payable (Details Narrative)	Apr. 22, 2020 USD ($)
Note Payable
Cash proceeds for loan amount	$ 213,481
Ppp loan percentage	1.00%

Schedule of Provision For Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Deferred						$ (1,480,472)	$ (2,454,779)
Deferred						(763,612)	(388,462)
Total						(2,244,084)	(2,843,241)
Change in valuation allowance						2,244,084	2,843,241
Income tax provision
Larkspur Health Acquisition Corp [Member]
Deferred					$ (49,406)
Deferred
Income tax provision	$ 47,551			$ 47,551
Federal
Current
State and local
Current
Change in valuation allowance					$ 49,406

Schedule of Provision For Income Taxes Differs From The Federal Statutory Rate (Details)	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
U.S. federal statutory rate						21.00%	21.00%
State tax rate, net of federal benefit						3.70%	2.50%
Permanent items						(0.90%)	0.50%
Nondeductible basis difference						0.10%	(1.00%)
Effect of change in state rate						3.90%	0.00%
Prior period adjustments and other						0.00%	(0.60%)
Valuation allowance						(27.80%)	(22.40%)
Income tax provision						0.00%	0.00%
Larkspur Health Acquisition Corp [Member]
U.S. federal statutory rate	0.00%	0.00%	0.00%	0.00%	21.00%
Valuation allowance					(20.50%)
Income tax provision
Other					0.50%

Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Net operating losses	$ 4,930,055	$ 3,409,822
Stock-based compensation expense	3,220,799	2,096,968
Capitalized research and development costs	2,199,126	2,668,412
Start up costs	620,016	644,460
Capitalized licensing costs	735,485	745,555
Derivative liabilities	6,388	55,138
Deferred debt discounts
Capitalized patents	235,065	143,867
Warrants	239,307	228,297
Contributions carryforward	2,840	2,709
Deferred rent	4,176	4,830
Deferred tax assets	12,193,257	10,000,058
Valuation Allowance	(12,180,021)	(9,935,937)
Deferred tax assets, total	13,236	64,121
Deferred debt discount	(6,388)	(55,138)
Fixed assets	(6,848)	(8,983)
Deferred tax liabilities	(13,236)	(64,121)
Deferred tax assets, net
Larkspur Health Acquisition Corp [Member]
Net operating losses	33,255
Start up costs	16,151
Deferred tax assets	49,406
Valuation Allowance	(49,406)
Deferred tax assets, total

Schedule of Future Minimum Payments Operating Lease Agreement (Details)	Dec. 31, 2021 USD ($)
Income Tax Disclosure [Abstract]
2022	$ 101,173
2023	104,211
2024	8,705
Total	$ 214,089

Summary of Stock Option Activity (Details) - USD ($)	9 Months Ended	12 Months Ended
Summary of Stock Option Activity (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Options Outstanding, Beginning Balance	8,755,179
Weighted Average Exercise Price, Beginning Balance	$ 2.00
Number of Options, Granted	1,284,169
Weighted Average Exercise Price, Granted	$ 3.18
Options Outstanding, Ending Balance	10,039,348	8,755,179
Weighted Average Exercise Price, Ending Balance	$ 2.15	$ 2.00
Number of Options, exercisable at end of period	8,258,023
Weighted Average Exercise Price, Options exercisable at end of period	$ 1.91
Equity Option [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Options Outstanding, Beginning Balance	8,755,179	7,196,250	7,022,680
Weighted Average Exercise Price, Beginning Balance	$ 2.00	$ 1.72	$ 1.68
Number of Options, Granted		1,720,596	188,570
Weighted Average Exercise Price, Granted		$ 3.25	$ 3.25
Number of Options, Exercised			(15,000)
Weighted Average Exercise Price, Exercised			$ 1.00
Number of Options, Forfeited		(161,667)
Weighted Average Exercise Price, Forfeited		$ 3.03
Options Outstanding, Ending Balance		8,755,179	7,196,250
Weighted Average Exercise Price, Ending Balance		$ 2.00	$ 1.72
Stock option outstanding weighted average remaining contractual life		6 years 4 months 24 days
Aggregate intrinsic value, outstanding		$ 10,962,859
Number of Options, exercisable at end of period		6,289,107
Weighted Average Exercise Price, Options exercisable at end of period		$ 1.69
Stock option outstanding weighted average remaining contractual life, Exercisable		5 years 8 months 12 days
Aggregate intrinsic value. exercisable		$ 9,812,645

Summary of Warrant Activity (Details) - USD ($)	12 Months Ended
Summary of Warrant Activity (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Number of common warrants outstanding beginning balance	2,154,352	2,505,931
Number of common warrants issued
Number of common warrants exercised		(351,579)
Number of common warrants outstanding ending balance	2,154,352	2,154,352
Number of common warrants exercisable	1,802,774
Warrant [Member]
Weighted average exercise price outstanding beginning balance	$ 1.98	$ 1.84
Weighted average exercise price warrants issued
Weighted average exercise price warrants exercised		1.00
Number of common warrants outstanding ending balance	2,154,352
Weighted average exercise price outstanding ending balance	$ 1.98	$ 1.98
Stock option outstanding weighted average remaining contractual life	1 year 6 months
Aggregate intrinsic value, outstanding	$ 2,732,212
Number of common warrants exercisable	1,802,774
Weighted average exercise price warrants exercisable	$ 2.17
Stock option outstanding weighted average remaining contractual life, Exercisable	1 year 9 months 18 days
Aggregate intrinsic value. exercisable	$ 1,941,161

Summary of Information Related to Stock Warrants (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Number of common warrants outstanding	2,154,352	2,154,352	2,505,931
Number of common warrants exercisable	1,802,774
Warrant [Member]
Weighted average exercise price outstanding	$ 1.98	$ 1.98	$ 1.84
Number of common warrants outstanding	2,154,352
Stock option outstanding weighted average remaining contractual life, Exercisable	1 year 9 months 18 days
Number of common warrants exercisable	1,802,774
Warrant [Member] \| Exercise Price Range One [Member]
Weighted average exercise price outstanding	$ 1.00
Number of common warrants outstanding	527,367
Stock option outstanding weighted average remaining contractual life, Exercisable	0 years
Number of common warrants exercisable	175,789
Warrant [Member] \| Exercise Price Range Two [Member]
Weighted average exercise price outstanding	$ 2.30
Number of common warrants outstanding	1,626,985
Stock option outstanding weighted average remaining contractual life, Exercisable	2 years
Number of common warrants exercisable	1,626,985

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
Income Taxes (Details Narrative) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Net operating loss carry forwards, federal					$ 20,446,000	$ 20,446,000	$ 14,290,000
Net operating loss carry forwards, state					14,644,000	14,644,000	9,412,000
Valuation allowance						$ 2,244,084	$ 2,843,241
Statutory tax rate						21.00%	21.00%
Larkspur Health Acquisition Corp [Member]
Federal and state operating loss carryovers					158,358	$ 158,358
Change in the valuation allowance					$ 49,406
Statutory tax rate	0.00%	0.00%	0.00%	0.00%	21.00%

Schedule of Basic and Diluted Net Loss Per Common Share (Details) - USD ($)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Dec. 31, 2021

Sep. 30, 2021

Dec. 31, 2021

Dec. 31, 2020

Denominator:

24,167,257

23,636,577

Larkspur Health Acquisition Corp [Member] | Common Class A [Member]

$ (0.55)

$ (0.08)

$ (0.81)

$ (0.25)

$ (0.33)

$ (0.54)

Numerator:

Allocation of net loss

$ (547,607)

$ (1,444,749)

Denominator:

Basic and diluted weighted average shares outstanding

8,087,431

8,082,471

216,404

Allocation of net loss, as adjusted

$ (0.07)

$ (0.18)

$ (0.12)

$ (24,906)

Larkspur Health Acquisition Corp [Member] | Common Class B [Member]

$ (0.12)

Numerator:

Allocation of net loss

$ (131,480)

$ (347,983)

Denominator:

Basic and diluted weighted average shares outstanding

1,941,790

1,875,000

1,940,562

1,875,000

^[1]

Allocation of net loss, as adjusted

$ (0.07)

$ (0.00)

$ (0.18)

$ (0.12)

$ (215,794)

Share price per unit (in Dollars per share)

$ (0.12)

[1]	Excludes an aggregate of up to 281,250 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Notes 5 and 7).

Schedule of Assets and Liabilities Measured at Fair Value (Details) - Larkspur Health Acquisition Corp [Member] - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Assets:
Investments held in Trust Account	$ 78,911,942	$ 75,750,000
Fair Value, Inputs, Level 1 [Member]
Assets:
Investments held in Trust Account	$ 78,911,942	$ 75,750,000

Related Party Transactions (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Jan. 06, 2022

Dec. 23, 2021

Mar. 31, 2021

^[1]

Dec. 15, 2015

Dec. 23, 2021

Nov. 18, 2021

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Dec. 31, 2021

Dec. 31, 2020

Jul. 20, 2022

May 07, 2021

Broker fees

$ 50,000

$ 118,240

Management fees

$ 3,150,000

$ 25,000

$ 1.94

$ 3.25

$ 1.94

$ 3.25

Tangible assets net

$ 19,933

$ 27,733

$ 38,133

Maximum [Member]

Issued and outstanding percentage of common stock

10.00%