UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
| Filed
by the Registrant |
☒ |
| Filed
by a Party other than the Registrant |
☐ |
Check
the appropriate box:
| ☒ |
Preliminary
Proxy Statement |
| ☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☐ |
Definitive
Proxy Statement |
| ☐ |
Definitive
Additional Materials |
| ☐ |
Soliciting
Material Pursuant to § 240.14a-12 |
ZYVERSA
THERAPEUTICS, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box)
| ☒ |
No
fee required. |
| ☐ |
Fee
paid previously with preliminary materials |
| ☐ |
Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
PRELIMINARY
PROXY STATEMENT, SUBJECT TO COMPLETION, DATED AUGUST 30, 2024
ZYVERSA
THERAPEUTICS, INC.
2200
N. Commerce Parkway, Suite 208
Weston,
Florida 33326
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held on Tuesday, October 29, 2024
Dear
Stockholder:
You
are cordially invited to attend the 2024 Annual Meeting of Stockholders of ZyVersa Therapeutics, Inc., a Delaware corporation. The meeting
will be held in a virtual-only format via live webcast on Tuesday, October 29, 2024, at 9:00 a.m. Eastern Time. To access the webcast,
please visit http://www.virtualshareholdermeeting.com/ZVSA2024 and enter the 16-digit control number included in your Notice of Internet
Availability of Proxy Materials, on your proxy card, or in the instructions that accompanied your proxy materials. The purposes of the
annual meeting are as follows:
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1. |
To
elect one Class II director nominee (Min Chul Park, Ph.D.) to hold office for a term of three years and until the nominee’s
successor is duly elected and qualified. |
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2. |
To
ratify the selection by our audit committee of Marcum LLP as our independent registered public accounting firm for the year ending
December 31, 2024. |
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3. |
To
approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved
for issuance thereunder by 150,000 shares to 181,795 shares. |
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4. |
To
approve the issuance of up to an aggregate of 478,600 shares of the Company’s common stock issuable upon the exercise of certain
warrants to purchase the Company’s common stock, in accordance with Nasdaq Listing Rule 5635(d). |
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5. |
To
conduct any other business properly brought before the meeting. |
Please
monitor the Investor Relations section of our website at http://investors.zyversa.com for updated information regarding the annual meeting.
If you are planning to attend our virtual annual meeting, please check the website one week prior to the annual meeting
date. As always, we encourage you to submit a proxy to vote your shares prior to the annual meeting.
These
items of business are more fully described in the Proxy Statement accompanying this notice.
The
record date for the Annual Meeting is September 4, 2024. Only stockholders of record at the close of business on that date or their proxies
may vote at the meeting or any adjournment thereof.
By
Order of the Board of Directors
Stephen
C. Glover
Chief
Executive Officer, President, and Chairman of the Board of Directors
Weston,
Florida
__________,
2024
We
are primarily providing access to our proxy materials over the internet pursuant to the U.S. Securities and Exchange Commission’s
notice and access rules. On or about September 10, 2024, we expect to mail to our stockholders a Notice of Internet Availability of Proxy
Materials that will indicate how to access our 2024 Proxy Statement and 2023 Annual Report on the internet and will include instructions
on how you can receive a paper copy of the annual meeting materials, including the notice of annual meeting, proxy statement, and proxy
card.
Whether
or not you expect to attend the meeting electronically, please submit a proxy for your shares promptly using the directions on your Notice,
or, if you elected to receive printed proxy materials by mail, your proxy card, by one of the following methods: (1) over the internet
at http://www.proxyvote.com, (2) by telephone by calling the toll-free number 1-800-690-6903, or (3) if you elected to receive printed
proxy materials by mail, by marking, dating, and signing your proxy card and returning it in the accompanying postage-paid envelope.
Even if you have submitted a proxy, you may still vote electronically if you attend the virtual meeting. Please note, however, that if
your shares are held of record by a broker, bank, or other nominee and you wish to vote at the meeting, you must obtain a proxy issued
in your name from that record holder.
TABLE
OF CONTENTS
PRELIMINARY
PROXY STATEMENT, SUBJECT TO COMPLETION, DATED AUGUST 30, 2024
ZYVERSA
THERAPEUTICS, INC.
2200
N. Commerce Parkway, Suite 208
Weston,
Florida 33326
PROXY
STATEMENT
FOR
THE 2024 ANNUAL MEETING OF STOCKHOLDERS
October
29, 2024
QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Who
is ZyVersa Therapeutics, Inc.?
ZyVersa
Therapeutics, Inc. (the “Company,” “ZyVersa,” “we,” “us,” or “our”) is a
clinical stage biopharmaceutical company leveraging proprietary technologies to develop drugs for patients with chronic renal or inflammatory
diseases with high unmet medical needs. Our mission is to develop drugs that optimize health outcomes and improve patients’ quality
of life.
We
have two proprietary globally licensed drug development platforms, each of which was discovered by research scientists at the University
of Miami, Miller School of Medicine (the “University of Miami” or “University”). These development platforms
are:
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Cholesterol
Efflux MediatorTM, VAR 200 (2-hydroxypropyl-beta-cyclodextrin or “2HPβCD”) is an injectable drug in clinical
development for treatment of renal diseases. VAR 200 was licensed from L&F Research LLC on December 15, 2015. L&F Research
was founded by the University of Miami research scientists who discovered the use of VAR 200 for renal diseases. |
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Inflammasome
ASC Inhibitor IC 100 is a humanized monoclonal antibody in preclinical development for treatment of inflammatory conditions. IC 100
was licensed from InflamaCore, LLC on April 18, 2019. InflamaCore, LLC was founded by the University of Miami research scientists
who invented IC 100. |
We
believe that each of our product candidates has the potential to treat numerous indications in their respective therapeutic areas. Our
strategy is to focus on indication expansion to maximize commercial potential.
Our
renal pipeline is initially focused on rare, chronic glomerular diseases. Our lead indication for VAR 200 is focal segmental glomerulosclerosis
(“FSGS”). On January 21, 2020, we filed an Investigational New Drug application (“IND”) for VAR 200, and the
United States Food and Drug Administration (“FDA”) has allowed our development plans to proceed to a Phase 2a trial in patients
with FSGS based on the risk/benefit profile of the active ingredient (2HPβCD). Prior to initiating a Phase 2a trial in patients
with FSGS, we are planning to initiate a small open-label Phase 2a trial in patients with diabetic kidney disease in H2-2024, in which
we expect to obtain patient proof-of-concept data more quickly than in an FSGS trial. This will enable assessment of drug effects
as patients proceed through treatment and will provide insights for developing a lager Phase 2a/b protocol in patients with FSGS. An
IND amendment for evaluation of VAR 200 in a Phase 2a trial in patients with diabetic kidney disease was filed with the FDA on February
16, 2024. VAR 200 has pharmacologic proof-of-concept data in animal models representative of FSGS, Alport Syndrome, and diabetic kidney
disease, providing opportunity for indication expansion.
Our
Inflammasome ASC Inhibitor IC 100, is nearing completion of preclinical development. Our focus is on advancing IC 100 toward a currently
planned IND submission in Q4-2024, followed by initiation of a Phase 1 trial in patients with obesity and certain metabolic complications,
our lead indication. IC 100 has preclinical data in animal models representing five different indications, each demonstrating that IC
100 attenuates pathogenic inflammasome signaling pathways leading to reduced inflammation and improved histopathological and/or functional
outcomes. Those indications are multiple sclerosis (“MS”), retinopathy of prematurity (“ROP”), acute respiratory
distress syndrome (“ARDS”), spinal cord injury, and traumatic brain injury (TBI). Likewise, Preclinical studies are underway
in atherosclerosis, Alzheimer’s disease, and Parkinson’s disease, and preparations are underway to initiate an IND-enabling
preclinical study in obesity with metabolic complications.
Business
Combination
On
December 12, 2022 (the “Closing Date”), we consummated the previously announced Business Combination (as defined below) pursuant
to the terms of that certain Business Combination Agreement (the “Business Combination Agreement”), by and among ZyVersa
Therapeutics, Inc., a Florida corporation (“Old ZyVersa”), the representative of Old ZyVersa’s shareholders named therein
(the “Securityholder Representative”), Larkspur Health Acquisition Corp., a Delaware corporation (“Larkspur”),
and Larkspur Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Larkspur (“Merger Sub”). Pursuant to
the terms of the Business Combination Agreement (and upon all other conditions of the Business Combination Agreement being satisfied
or waived), on the Closing Date of the Business Combination and transactions contemplated thereby (the “Business Combination”),
(i) Larkspur changed its name to “ZyVersa Therapeutics, Inc.”, a Delaware corporation (the “Company”) and (ii)
Merger Sub merged with and into Old ZyVersa (the “Merger”), with Old ZyVersa as the surviving company in the Merger and,
after giving effect to such Merger, Old ZyVersa became a wholly-owned subsidiary of the Company.
Prior
to the completion of the Business Combination, the Company was a shell company. Following the Business Combination, the business of Old
ZyVersa is the business of the Company. The Company was incorporated in the State of Delaware on March 17, 2021 and its subsidiary, Old
ZyVersa, was incorporated on March 11, 2014. Larkspur Merger Sub, Inc. was incorporated in the State of Delaware on July 13, 2022.
Our
principal executive offices are located at 2200 North Commerce Parkway, Suite 208, Weston, Florida 33326, and our telephone number is
(754) 231-1688. Our website address is http://www.zyversa.com. The information contained on or otherwise accessible through our website
is not part of this proxy statement.
Unless
expressly indicated or the context otherwise requires, references in this proxy statement to the “Company,” the “Registrant,”
“ZyVersa,” “we,” “us”, and “our” refer to ZyVersa (and the business of Old ZyVersa which
became the business of ZyVersa after giving effect to the Business Combination).
Reverse
Stock Splits
The
Company effected a 1-for-35 reverse split (the “2023 Reverse Stock Split”) of the Company’s issued and outstanding
common stock on December 4, 2023. As a result of the 2023 Reverse Stock Split, every 35 shares of the Company’s common stock, either
issued or outstanding, immediately prior to the filing and effectiveness of the 2023 Reverse Stock Split, was automatically combined
and converted (without any further act) into one share of fully paid and nonassessable share of common stock. No fractional shares were
issued in connection with the 2023 Reverse Stock Split. In addition, the Company effected a 1-for-10 reverse split (the “2024 Reverse
Stock Split”) of the Company’s issued and outstanding common stock on April 25, 2024. As a result of the 2024 Reverse Stock
Split, every 10 shares of the Company’s common stock, either issued or outstanding, immediately prior to the filing and effectiveness
of the 2024 Reverse Stock Split, was automatically combined and converted (without any further act) into one share of fully paid and
nonassessable share of common stock. No fractional shares were issued in connection with the 2024 Reverse Stock Split. Unless otherwise
indicated, all share numbers herein give effect to both the 2023 Reverse Stock Split and the 2024 Reverse Stock Split.
Why
did I receive a notice regarding the availability of proxy materials on the Internet?
Pursuant
to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy
materials over the Internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (“Notice”),
because the board of directors of the Company is soliciting your proxy to vote at the 2024 Annual Meeting of Stockholders (the “Annual
Meeting”), including at any adjournment or postponement of the Annual Meeting. All stockholders will have the ability to access
the proxy materials on the website referred to in your Notice, or request to receive a printed set of the proxy materials. Instructions
on how to access the proxy materials over the internet or to request a printed copy can be found in your Notice.
We
intend to mail the Notice of Internet Availability of Proxy Materials on or about September 10, 2024, to all stockholders of record entitled
to vote at the Annual Meeting.
Will
I receive any other proxy materials by mail?
No,
you will not receive any other proxy materials by mail unless you request a paper copy of proxy materials. To request that a full set
of the proxy materials be sent to your specified postal address, please go to http://www.proxyvote.com, call +1 (800) 579-1639, or send
an email to sendmaterial@proxyvote.com. Please have your proxy card in hand when you access the website or call, and follow the instructions
provided therein. You will need your unique 16-digit control number from your Notice of Internet Availability of Proxy Materials, your
proxy card, or in the instructions that accompanied your proxy materials. If you are requesting materials by email, please include in
the subject line your unique 16-digit control number from your proxy card.
How
do I attend the Annual Meeting?
The
meeting will be held in a virtual-only format via live webcast on Tuesday, October 29, 2024, at 9:00 a.m. Eastern Time. You will be able
to listen and participate in the Annual Meeting as well as vote and submit your questions during the live webcast of the meeting by visiting
http://www.virtualshareholdermeeting.com/ZVSA2024 and entering the 16-digit control number included in your Notice, on your proxy card,
or in the instructions that accompanied your proxy materials.
Information
on how to vote electronically at the Annual Meeting is discussed below. As always, we encourage you to submit a proxy to vote your shares
prior to the Annual Meeting.
Who
can vote at the Annual Meeting?
Only
stockholders of record at the close of business on September 4, 2024, will be entitled to vote at the Annual Meeting. On this record
date, there were 1,074,196 shares of common stock outstanding and entitled to vote.
Stockholder
of Record: Shares Registered in Your Name
If
on September 4, 2024, your shares were registered directly in your name with our transfer agent, Continental Stock Transfer & Trust
Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote electronically by internet before or at
the virtual Annual Meeting. Before the virtual Annual Meeting, you may also vote by phone or mail. Voting directions are summarized below.
Whether or not you plan to attend the virtual Annual Meeting, we urge you to submit a proxy in advance of the meeting to ensure your
vote is counted. You may still attend the virtual Annual Meeting and vote at the Annual Meeting even if you have already submitted a
proxy to vote.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If
on September 4, 2024, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar
organization, then you are the beneficial owner of shares held in “street name” and your Notice is being forwarded to you
by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the
Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your
account. You may still attend the Annual Meeting by visiting http://www.virtualshareholdermeeting.com/ZVSA2024 and entering the 16-digit
control number included in your Notice. However, since you are not the stockholder of record, you may not vote your shares electronically
at the meeting unless you have requested and obtained a valid proxy from your broker or other agent. If you obtained a valid proxy from
your broker or other agent, you may vote electronically at the virtual Annual Meeting by visiting http://www.virtualshareholdermeeting.com/ZVSA2024
and entering the 16-digit control number included in your Notice.
What
am I voting on?
There
are four matters scheduled for a vote:
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Proposal
No. 1 - To elect one Class II director nominee (Min Chul Park, Ph.D.) to hold office for a term of three years and until the nominee’s
successor is duly elected and qualified. |
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Proposal
No. 2 - To ratify the selection by our audit committee of Marcum LLP as our independent registered public accounting firm for the
year ending December 31, 2024. |
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Proposal
No. 3 - To approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common
stock reserved for issuance thereunder by 150,000 shares to 181,795 shares. |
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Proposal
No. 4 - To approve the issuance of up to an aggregate of 478,600 shares of the Company’s common stock issuable upon the exercise
of certain warrants to purchase the Company’s common stock, in accordance with Nasdaq Listing Rule 5635(d). |
What
if another matter is properly brought before the meeting?
The
board of directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are
properly brought before the meeting, the persons named in the accompanying proxy may vote on those matters in accordance with their best
judgment.
How
do I vote?
Proposal
1: You may either vote “For” the nominee to the board of directors or you may “Withhold” your vote for the
nominee. Proposals 2, 3, and 4: You may vote “For” or “Against” or abstain from voting on the following
proposals: to ratify the selection of Marcum LLP as our independent registered public accounting firm (Proposal 2); to approve an amendment
and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder
by 150,000 shares to 181,795 shares (Proposal 3); and to approve the issuance of up to an aggregate of 478,600 shares of the Company’s
common stock issuable upon the exercise of certain warrants to purchase the Company’s common stock, in accordance with Nasdaq Listing
Rule 5635(d) (Proposal 4).
The
procedures for voting are fairly simple:
Stockholder
of Record: Shares Registered in Your Name
If
you are a stockholder of record, you may vote by internet before or at the virtual Annual Meeting. Before the virtual Annual Meeting,
you may also vote by phone or mail. Voting directions are summarized below. Whether or not you plan to attend the virtual meeting, we
urge you to submit a proxy in advance of the meeting to ensure your vote is counted. You may still attend the virtual Annual Meeting
and vote at the meeting even if you have already submitted a proxy to vote.
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To
Submit a Proxy to Vote by Internet Before the Meeting: Go to http://www.proxyvote.com up until 11:59 p.m. Eastern Time on October
28, 2024 to ensure your vote is counted. Follow the instructions to obtain your records and to create an electronic voting instruction
form. You will be asked to provide your unique 16-digit control number that appears on your Notice, proxy card, or other proxy materials. |
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To
Vote by Internet At the Annual Meeting: Go to http:// www.virtualshareholdermeeting.com/ZVSA2024 and enter the 16-digit control
number that appears on your Notice, proxy card, or other proxy materials and follow the instructions. |
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To
Submit a Proxy to Vote by Phone: Dial 1-800-690-6903 toll-free using a touch-tone phone up until 11:59 p.m. Eastern Time on October
28, 2024 to ensure your vote is counted. Follow the recorded instructions. You will be asked to provide your unique 16-digit control
number that appears on your Notice, proxy card, or other proxy materials. |
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To
Submit a Proxy to Vote by Mail: Mark, sign, and date your proxy card and return it promptly in the postage-paid envelope provided,
or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a Notice containing
voting instructions from that organization rather than from the Company. Simply follow the voting instructions in your Notice to ensure
that your vote is counted.
To
vote electronically at the virtual Annual Meeting, you must request and obtain a valid proxy form from your broker, bank, or other agent.
Follow the instructions from your broker or bank included with these proxy materials. If you obtain a valid proxy from your broker or
other agent, you may vote at the virtual meeting by visiting http://www.virtualshareholdermeeting.com/ZVSA2024 and enter the 16-digit
control number included in your proxy materials.
The
ability to submit a proxy by internet allows you to submit a proxy to vote your shares online, with procedures designed to ensure the
authenticity and correctness of your proxy vote instructions. If you choose to submit a proxy to vote your shares online by internet,
please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers
and telephone companies.
How
many votes do I have?
On
each matter to be voted upon, you have one vote for each share of common stock you hold as of the close of business on September 4, 2024.
What
happens if I do not vote?
Stockholder
of Record: Shares Registered in Your Name
If
you are a stockholder of record and do not submit a proxy to vote in advance of the virtual Annual Meeting by internet, phone, or mail,
and you do not vote electronically at the virtual Annual Meeting, your shares will not be voted.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your
broker or nominee will still be able to vote your shares depends on whether the New York Stock Exchange, or NYSE, deems the particular
proposal to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares
with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under
the rules and interpretations of NYSE, which apply regardless of whether an issuer is listed on the NYSE or Nasdaq, “non-routine”
matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections
of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and
on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported.
Accordingly, your broker or nominee may not vote your shares on Proposal Nos. 1, 3, or 4 without your instructions, but may vote your
shares on Proposal No. 2, even in the absence of your instruction.
What
if I mail a proxy card or otherwise submit a proxy to vote but do not make specific choices?
If
you return a signed and dated proxy card or otherwise submit a proxy to vote without marking voting selections, your shares will be voted,
as applicable:
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“For”
the election of the one Class II director nominee (Min Chul Park, Ph.D.) to hold office for a term of three years and until the nominee’s
successor is duly elected and qualified; |
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“For”
the ratification of the selection of Marcum LLP as our independent registered public accounting firm for the year ending December
31, 2024; and |
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“For”
an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved
for issuance thereunder by 150,000 shares to 181,795 shares. |
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|
|
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● |
“For”
the approval of the issuance of up to an aggregate of 478,600 shares of the Company’s common stock issuable upon the exercise
of certain warrants to purchase the Company’s common stock, in accordance with Nasdaq Listing Rule 5635(d). |
If
any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your
shares using your proxyholder’s best judgment.
Who
is paying for this proxy solicitation?
The
Company will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also
solicit proxies in person or by other means of communication. Directors and employees will not be paid any additional compensation for
soliciting proxies. The Company may also reimburse brokerage firms, banks, and other agents for the cost of forwarding proxy materials
to beneficial owners. We may retain Morrow Sodali LLC to aid in the solicitation of proxies. If retained, we anticipate that Morrow Sodali
LLC will receive a fee of approximately $15,000, as well as reimbursement for certain costs and out-of-pocket expenses incurred by them
in connection with their services, all of which will be paid by the Company.
What
does it mean if I receive more than one Notice?
If
you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting
instructions on each of your Notices to ensure that all of your shares are voted.
Can
I change my vote after submitting my proxy?
Stockholder
of Record: Shares Registered in Your Name
Yes.
You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke
your proxy in any one of the following ways:
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You
may submit another properly completed proxy card with a later date. |
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You
may grant a subsequent proxy by telephone or through the internet. |
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You
may send a timely written notice that you are revoking your proxy to our Secretary at 2200 N. Commerce Parkway, Suite 208, Weston,
Florida 33326. |
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You
may attend the Annual Meeting virtually and vote electronically by visiting http://www.virtualshareholdermeeting.com/ZVSA2024 and
entering the 16-digit control number included in your Notice, on your proxy card, or in the instructions that accompanied your proxy
materials. Simply attending or participating in the Annual Meeting will not, by itself, revoke your proxy. |
Your
latest proxy card or other proxy is the one that is counted.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If
your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank
to revoke your proxy.
When
are stockholder proposals and director nominations due for the 2025 Annual Meeting?
Stockholders
may submit proposals on matters appropriate for stockholder action at annual meetings for inclusion in our proxy statement in
accordance with regulations adopted by the SEC under Rule 14a-8 of the Exchange Act. To be considered for inclusion in the proxy
statement and form of proxy relating to our 2025 annual meeting of stockholders, such proposals must be received by our Secretary at
our executive offices at 2200 N. Commerce Parkway, Suite 208, Weston, Florida, 33326, no later than May 13, 2025. Our Bylaws
set an advance notice procedure for proposals a stockholder wishes to present directly at an annual meeting (rather than submitting
for inclusion in our proxy statement under Rule 14a-8) and for director nominations. To be considered for presentation at the 2025
annual meeting, proposals that are not submitted for inclusion in our proxy statement under Rule 14a-8 and nominations (whether or
not submitted for inclusion in our proxy statement under Rule 14a-19) submitted through our advance notice procedure must be
delivered to, or mailed and received at, the above address not later than July 31, 2025 nor earlier than July 1, 2025. However, if
the date of the 2025 annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered, or mailed and received, not later than the 90th day prior to such annual meeting or,
if later, the 10th day following the day on which public disclosure of the date of such annual meeting was first made by the
Company. You are also advised to review our Bylaws, which contain a description of the information required to be submitted with
notices of any such proposal or nomination as well as additional requirements about advance notice of stockholder proposals and
director nominations.
To
comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than Company
nominees must, in addition to complying with the requirement of our Bylaws, provide notice that sets forth the information required by
Rule 14a-19 under the Securities Exchange Act of 1934, as amended, no later than September 1, 2025. Such notice may be mailed to the
Corporate Secretary at 2200 N. Commerce Parkway, Suite 208, Weston, Florida, 33326, or emailed to pwolfe@zyversa.com.
How
are votes counted?
Votes
will be counted by the inspector of elections appointed for the meeting, who will separately count, (a) for the proposal to elect directors,
votes “For,” “Withhold,” and broker non-votes, and (b) with respect to the other proposals, votes “For”
and “Against,” abstentions, and, if applicable, broker non-votes. Assuming a quorum is present, abstentions and broker non-votes,
if any, will have no effect on the outcome of Proposal Nos. 1, 3, or 4. Because Proposal No. 2 is “routine,” we do not expect
that any broker non-votes will occur with respect to such proposal.
What
are “broker non-votes”?
As
discussed above, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee
holding the shares as to how to vote on matters deemed by the NYSE to be “non-routine,” the broker or nominee does not have
discretionary authority to vote the shares. When there is at least one “routine” matter to be considered at a meeting, and
a broker exercises its discretionary authority on any such “routine matter” with respect to any uninstructed shares, “broker
non-votes” occur with to the “non-routine” matters for which the broker lacks discretionary authority to vote such
uninstructed shares.
How
many votes are needed to approve each proposal?
| ● |
Proposal
No. 1 – For the election of directors, directors are elected by a plurality of the votes cast in favor. Since there is only
one nominee, if the nominee receives one or more votes “FOR,” then he will be elected as a director. Assuming a quorum
is present, abstentions and broker non-votes will have no effect on this proposal. |
| |
|
| ● |
Proposal
No. 2 – To ratify the selection of Marcum LLP as our independent registered public accounting firm for the year ending December
31, 2024, the proposal must be approved by the holders of a majority in voting power of the votes cast (excluding abstentions and
broker non-votes) on such proposal. Abstentions and broker non-votes, if any, will have no effect on this proposal. Because this
proposal is “routine,” we do not expect that any broker non-votes will occur with respect to this proposal. |
| |
|
| ● |
Proposal
No. 3 – To approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares
of common stock reserved for issuance thereunder by 150,000 shares to 181,795 shares, the proposal must be approved by the holders
of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such proposal. Abstentions and broker
non-votes will have no effect on this proposal. |
| |
|
| ● |
Proposal
No. 4 – To approve the issuance of up to an aggregate of 478,600 shares of the Company’s common stock issuable upon the
exercise of certain warrants to purchase the Company’s common stock, in accordance with Nasdaq Listing Rule 5635(d), the proposal
must be approved by the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on such
proposal. Abstentions and broker non-votes will have no effect on this proposal. |
What
is the quorum requirement?
A
quorum of stockholders is generally required to hold a valid meeting of stockholders. A quorum is present if the holders of thirty-three
and one-third percent (33 1/3%) of the voting power of the stock issued and outstanding and entitled to vote at a meeting are present
in person (virtually, in the case of this virtual Annual Meeting) or are represented by proxy.
Any
shares that you hold of record will be counted towards the establishment of a quorum only if you submit a valid proxy or if you or your
proxy attends the meeting virtually. If you are a beneficial holder of shares held through a broker, bank, or other nominee, your shares
will be counted towards the establishment of a quorum if you provide voting instructions with respect to such shares, if you obtain a
proxy to vote such shares and attend the meeting virtually, or if you fail to provide voting instructions with respect to such shares
and your broker, bank, or other nominee exercises its discretionary authority and votes your shares on Proposal No. 2 at the meeting.
Shares
for which abstentions or broker non-votes occur on any proposal will be counted towards the establishment of a quorum.
How
can I find out the results of the voting at the Annual Meeting?
Preliminary
voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form
8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time
to file a current report on Form 8-K within four business days after the meeting, we intend to file a current report on Form 8-K to publish
preliminary results and, within four business days after the final results are known to us, file an additional current report on Form
8-K to publish the final results.
What
can I do if I need technical assistance during the meeting?
If
you encounter any difficulties accessing the virtual meeting during the meeting time, please call the technical support number that will
be posted on the live webcast log-in page.
If
I can’t attend the meeting, how do I vote or listen to it later?
You
do not need to attend the virtual Annual Meeting to vote if you submitted a proxy to vote in advance of the meeting. A replay of the
meeting, including the questions answered during the meeting, will be available at https://investors.zyversa.com for one year following
the meeting date.
What
happens if a change to the Annual Meeting date or time is necessary due to exigent circumstances?
We
intend to hold the Annual Meeting in a virtual-format only via live webcast. Please monitor the Investor Relations section of our website
at https://investors.zyversa.com for updated information. If you are planning to attend our Annual Meeting virtually, please check the
website one week prior to the Annual Meeting date. As always, we encourage you to vote your shares prior to the Annual Meeting.
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This
proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which
are subject to the “safe harbor” created by those sections, concerning our business, operations, and financial performance
and condition as well as our plans, objectives, and expectations for business operations and financial performance and condition. Any
statements contained herein that are not of historical facts may be deemed to be forward-looking statements. You can identify these statements
by words such as “anticipate,” “assume,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “should,” “will,” “would,”
and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are
based on current expectations, estimates, forecasts, and projections about our business and the industry in which we operate and management’s
beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties,
and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this proxy
statement may turn out to be inaccurate. Factors that could materially affect our business operations and financial performance and condition
include, but are not limited to, those risks and uncertainties described herein, under “Item 1A – Risk Factors” in
our Annual Report on Form 10-K for the year ended December 31, 2023, and any risk factors disclosed in subsequent Quarterly Reports on
Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place
undue reliance on the forward-looking statements. The forward-looking statements are based on information available to us as of the filing
date of this proxy statement. Unless required by law, we do not intend to publicly update or revise any forward-looking statements to
reflect new information or future events or otherwise. You should, however, review the factors and risks we describe in the reports we
will file from time to time with the SEC after the date of this proxy statement.
This
proxy statement also contains market data related to our business and industry. These market data include projections that are based
on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these
assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow
at these projected rates may harm on our business, results of operations, financial condition, and the market price of our common stock.
PROPOSALS
| Proposal
No. 1: |
Election
of Directors. |
| What
am I voting on? |
|
Election
of one Class II director nominee (Min Chul Park, Ph.D.) to hold office for a term of three years and until the nominee’s successor
is duly elected and qualified. |
| Vote
recommendation: |
|
“FOR”
the election of the one director nominee. |
| Vote
required: |
|
Directors
are elected by a plurality of the votes cast in favor. Accordingly, since there is only one nominee, if the nominee receives one
or more votes “FOR,” then he will be elected as a director. |
| Effect
of abstentions: |
|
None. |
| Effect
of broker non-votes: |
|
None. |
Our
Second Amended and Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) provides that our
directors are divided into three classes, Class I directors, Class II directors, and Class III directors, each serving staggered three-year
terms. The term of our Class II director (Min Chul Park, Ph.D.) will expire at the Annual Meeting.
Our
board of directors is comprised of five members all of whom were appointed by our board of directors to fill a vacancy. The board of
directors has determined that the director nominee is an independent director, as defined by The Nasdaq Stock Market Rules. The director
nominee is currently a director of the Company. If elected at the Annual Meeting, the nominee would serve until the 2027 annual meeting
of stockholders and until a successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation,
or removal. Our policy is to encourage directors and nominees for director to attend annual meetings of our stockholders. With respect
to our 2023 annual meeting of stockholders, five members of our board of directors attended the meeting.
Biographical
information and the attributes, skills, and experience of each nominee that led our nominating and corporate governance committee and
board of directors to determine that such nominee should serve as a director are discussed in the “Executive Officers and Directors”
section of this proxy statement.
THE
BOARD OF DIRECTORS RECOMMENDS
A VOTE “FOR” THE NAMED NOMINEE.
| Proposal
No. 2: |
Ratification
of Selection of Independent Registered Public Accounting Firm. |
| What
am I voting on? |
|
Ratification
of the selection of Marcum LLP as our independent registered public accounting firm for the year ending December 31, 2024. |
| Vote
recommendation: |
|
“FOR”
the ratification of Marcum LLP. |
| Vote
required: |
|
A
majority in voting power of the of the votes cast on the proposal (excluding abstentions and broker non-votes). |
| Effect
of abstentions: |
|
None. |
| Effect
of broker non-votes: |
|
Because
this is a routine proposal, we do not expect that there will be any broker non-votes. |
The
audit committee of the board of directors has selected Marcum LLP (“Marcum”) as our independent registered public accounting
firm for the year ending December 31, 2024 and has further directed that management submit the selection of its independent registered
public accounting firm for ratification by the stockholders at the Annual Meeting. Our lead audit partner at Marcum serves no more than
five consecutive years in that role. A representative of Marcum is expected to be present at the Annual Meeting. They will have an opportunity
to make a statement if they so desire and will be available to respond to appropriate questions.
Neither
our bylaws nor other governing documents or law require stockholder ratification of the selection of Marcum as our independent registered
public accounting firm. However, the audit committee is submitting the selection of Marcum to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to ratify the selection, the audit committee will reconsider whether or not
to retain that firm. Even if the selection is ratified, the audit committee in its discretion may direct the appointment of different
independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and
its stockholders.
Information
regarding the fees paid to our independent registered public accounting firm in 2023 and 2022 and our pre-approval policies relating
to such fees is discussed in the “Independent Registered Public Accounting Firm” section of this proxy statement.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL NO. 2 TO RATIFY THE
SELECTION OF MARCUM LLP AS OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING
FIRM FOR THE YEAR ENDING DECEMBER 31, 2024.
| Proposal
No. 3: |
To
Approve an Amendment and Restatement of our 2022 Omnibus Equity Incentive Plan to Increase the Number of Shares of Common Stock Reserved
for Issuance Thereunder by 150,000 Shares to 181,795 Shares. |
| What
am I voting on? |
|
Approval
of an amendment and restatement of our 2022 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved
for issuance thereunder by 150,000 shares to 181,795 shares. |
| Vote
recommendation: |
|
“FOR”
the approval of the amendment and restatement of our 2022 Omnibus Equity Incentive Plan. |
| Vote
required: |
|
A
majority in voting power of the of the votes cast on the proposal (excluding abstentions and broker non-votes). |
| Effect
of abstentions: |
|
None. |
| Effect
of broker non-votes: |
|
None. |
Summary
of the Proposal
At
the Annual Meeting, we will request that our stockholders approve an amendment and restatement of our 2022 Omnibus Equity Incentive Plan
(the “2022 Plan”), attached hereto as Annex A. The amendment and restatement of the 2022 Plan was approved by our
board of directors on __________, 2024, subject to approval by our stockholders. If approved, the amendment and restatement will
increase the number of shares of our common stock reserved under the 2022 Plan by 150,000 shares to 181,795 shares and increase the limit
on incentive stock options from 28,572 shares to 5,000,000 shares.
Approval
of the amendment and restatement of the 2022 Plan by our stockholders will allow us to grant stock options, restricted stock unit awards,
and other awards at levels determined appropriate by our board of directors or its compensation committee.
Requested
Shares
The
2022 Plan became effective upon the consummation of the Business Combination on December 12, 2022. At that time, 3,114 shares were reserved
for issuance under the 2022 Plan, which was automatically increased to 4,152 shares reserved for issuance on January 1, 2023, in each
case subject to equitable adjustments in the event of a stock split, stock dividend, extraordinary dividend, or certain other changes
in the Company’s common stock or capital structure.
On
October 31, 2023, we held the 2023 annual meeting of stockholders. At the 2023 annual meeting of stockholders, stockholders approved
an amendment and restatement of the 2022 Plan to increase the number of shares reserved for issuance by 11,429 shares to 16,209 shares,
which was automatically increased to 27,638 shares reserved
for issuance on January 1, 2024, in each case subject to equitable adjustments in the event of a stock split, stock dividend, extraordinary
dividend, or certain other changes in the Company’s common stock or capital structure.
The
board of directors believes that the future success of the Company depends, in large part, on our ability to attract, motivate, and retain
high-caliber employees, consultants, and directors. Equity compensation is a key component of our compensation program because it helps
us attract, motivate, and retain talented employees, consultants, and directors and align their interests with those of our stockholders.
As
of September 4, 2024, and excluding the proposed increase in the number of shares reserved under the 2022 Plan, there were 27,638 shares
available for issuance under the 2022 Plan pursuant to future awards. Based on our historical grant practices, as summarized below, and
our projected recruiting and retention needs, we anticipate that the Company will no longer be able to grant annual equity awards under
our long-term incentive program for employees and our non-employee director compensation program beginning in 2025 unless
we reserve more shares for issuance under the 2022 Plan.
To
maintain the flexibility to keep pace with our competitors and effectively attract, motivate and retain a high-caliber workforce, we
are asking our stockholders to authorize an additional 150,000 shares for issuance under the 2022 Plan, which would increase the aggregate
number of shares available for issuance as future awards under the 2022 Plan to 181,795 shares.
It
is essential that we continue the use of equity compensation to better position us in the market and allow us to retain our skilled employees
while attracting talented new employees to help us achieve our objectives, which include increasing stockholder value by growing the
business. Without the approval of an addition to our share reserve, we will not be able to continue to compete in this highly competitive
market, which would ultimately result in the loss of critical talent and inhibit our ability to meet our future growth objectives.
We
intend to grant future equity awards under the 2022 Plan in amounts that are reasonable and consistent with market data prepared by the
compensation committee’s independent consultant. Based on our projected recruiting and retention needs, we believe that the proposed
share increase would allow us to continue granting equity awards under the 2022 Plan to employees, consultants, and directors for approximately
one more year.
Key
Plan Features
The
2022 Plan includes provisions that are designed to protect our stockholders’ interests and to reflect corporate governance best
practices including:
| |
● |
No
single trigger acceleration. Generally, there is no single-trigger acceleration of vesting upon change in control. The 2022 Plan
does not provide for automatic vesting of awards upon a change in control. |
| |
|
|
| |
● |
Awards
subject to forfeiture/clawback. Certain awards granted under the 2022 Plan are subject to recoupment in accordance with our compensation
recovery policy that we adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law.
In addition, we may impose other clawback, recovery, or recoupment provisions in an award agreement, including a reacquisition right
in respect of previously acquired shares or other cash or property upon the occurrence of cause. |
| |
|
|
| |
● |
No
liberal change in control definition. The change in control definition in the 2022 Plan is not a “liberal” definition.
A change in control transaction must actually occur in order for the change in control provisions in the 2022 Plan to be triggered. |
| |
|
|
| |
● |
No
discounted stock options or stock appreciation rights. All stock options and stock appreciation rights granted under the 2022
Plan must have an exercise or strike price equal to or greater than the fair market value of our common stock on the date the stock
option or stock appreciation right is granted. |
| |
|
|
| |
● |
Administration
by our compensation committee. In general, the 2022 Plan will be administered by the compensation committee of the board of directors. |
| |
|
|
| |
● |
No
re-pricing of stock options or stock appreciation rights. The 2022 Plan does not permit the “repricing” of the exercise
price of stock options or stock appreciation rights that exceeds fair market value of a share of common stock on the date of such
repricing without stockholder approval. |
| |
|
|
| |
● |
Limit
on non-employee director awards and other awards. The maximum number of awards granted during any calendar year to any of our
non-employee directors may not exceed $250,000 in total value (inclusive of any cash awards to a non-employee director for such year
that are not made pursuant to the 2022 Plan), or $500,000 with respect to the initial year of the non-employee director’s term. |
Stockholder
Approval
If
this Proposal No. 3 is approved, the amendment and restatement of the 2022 Plan will become effective as of the date of the Annual Meeting.
Securities
Authorized for Issuance Under Equity Compensation Plans
The
following table provides information with respect to our compensation plans under which equity compensation was authorized as of December
31, 2023.
| | |
Number of securities to be issued upon exercise of outstanding options, warrants and rights | | |
Weighted average exercise price of outstanding options, warrants and rights | | |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |
| Plan category | |
(a) | | |
(b) | | |
(c) | |
| Equity compensation plans approved by security holders (1) | |
| 4,157 | | |
$ | 152.50 | (3) | |
| 11,424 | |
| Equity compensation plans not approved by security holders (2) | |
| 5,762 | | |
$ | 3,791.92 | | |
| - | |
| Total | |
| 9,919 | (4) | |
$ | 2,266.66 | | |
| 11,424 | |
| (1) |
The
amounts shown in this row include securities awarded under the 2022 Omnibus Equity Incentive Plan. |
| |
|
| (2) |
The
amounts shown in this row include securities awarded under the 2014 Equity Incentive Plan. |
| |
|
| (3) |
In
accordance with the “evergreen” provision in our 2022 Omnibus Equity Incentive Plan, an additional 16,209 shares were
automatically made available for issuance on the first day of 2024, which represents 4% of the number of shares outstanding on December
31, 2023; these shares are excluded from this calculation. |
| |
|
| (4) |
The
amount shown does not include 324 securities awarded as inducement grants not included in the 2014 Equity Incentive Plan or the 2022
Omnibus Equity Incentive Plan. |
Burn
Rate
The
following table provides detailed information regarding the activity related to our 2022 Plan for 2022 and 2023:
| | |
2022 | | |
2023 | |
| Total number of shares of common stock subject to stock options granted | |
| 0 | | |
| 4,157 | |
| Total number of shares of common stock subject to stock options inducement grants | |
| 0 | | |
| 324 | |
| Total number of shares of common stock subject to full value awards granted | |
| 0 | | |
| 0 | |
| Total number of shares of common stock outstanding as of December 31 | |
| 25,760 | | |
| 405,205 | |
| Burn Rate | |
| 0.0 | % | |
| 1.1 | % |
Our
burn rate is calculated as the total amount of equity granted in any year, divided by the number of common shares outstanding. Our future
burn rate will depend on a number of factors, including the number of participants in the 2022 Plan, our stock price, changes to our
compensation strategy, changes in business practices or industry standards, changes in our capital structure due to stock splits or similar
events, the compensation practices of our competitors or changes in compensation practices in the market generally, and the methodology
used to establish the equity award mix.
Description
of the 2022 Plan
The
principal terms of the 2022 Plan are described below. The following description of the 2022 Plan is a summary only and is qualified in
its entirety by reference to the complete text of the 2022 Plan, as amended and restated, which is attached as Annex A to this
proxy statement.
Administration.
In general, the 2022 Plan will be administered by the compensation committee of the board of directors. The compensation committee
will determine the persons to whom options to purchase shares of common stock, stock appreciation rights (“SARs”), restricted
stock units, restricted or unrestricted shares of common stock, performance shares, performance units, incentive bonus awards, other
stock-based awards and other cash-based awards may be granted. The compensation committee may also establish rules and regulations for
the administration of the 2022 Plan and amendments or modifications of outstanding awards. The compensation committee may delegate authority
to the Chief Executive Officer and other executive officers to grant options and other awards to employees (other than themselves), subject
to applicable law and the 2022 Plan. No options, stock purchase rights or awards may be made under the 2022 Plan on or after the date
that is 10 years after the effective date of the 2022 Plan, 2032 (or, the expiration date), but the 2022 Plan will continue thereafter
while previously granted options, SARs or other awards remain outstanding.
Eligibility.
Persons eligible to receive options, SARs or other awards under the 2022 Plan are those employees, officers, directors, consultants,
advisors and other individual service providers of our Company and our subsidiaries who, in the opinion of the compensation committee,
are in a position to contribute to our success, or any person who is determined by the compensation committee to be a prospective employee,
officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary. As of September 4, 2024,
the Company and its subsidiaries had a total of seven employees, four non-employee directors, and approximately five consultants. As awards
under the 2022 Plan are within the discretion of the compensation committee, we cannot determine how many individuals in each of the
categories described above will receive awards.
Shares
Subject to the 2022 Plan. Subject to the adjustment provisions of the 2022 Plan, and the automatic increase described below,
the maximum aggregate number of shares of common stock that may be issued under the 2022 Plan, as amended and restated, is 181,795 as
of September 4, 2024.
The
number of shares of common stock available for issuance under the 2022 Plan will automatically increase on January 1st of each year,
commencing with January 1, 2023, and on each January 1 thereafter until the expiration date, in an amount equal to 4% of the total number
of shares of our common stock outstanding on December 31st of the preceding calendar year, unless the board of directors takes action
prior thereto to provide that there will not be an increase in the share reserve for such year or that the increase in the share reserve
for such year will be of a lesser number of shares of common stock than would otherwise occur.
“Incentive
stock options,” or ISOs, that are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”) may be granted under the 2022 Plan, as amended and restated, with respect to up to 5,000,000 shares of common
stock authorized for issuance under the 2022 Plan. None of the additional shares of common stock available for issuance pursuant to the
previous paragraph may be subject to ISOs.
If
any option or SAR granted under the 2022 Plan terminates without having been exercised in full or if any award is forfeited, or if shares
of common stock are withheld to cover withholding taxes on options or other awards or applied to the payment of the exercise price of
an option or purchase price of an award, the number of shares of common stock as to which such option or award was forfeited, withheld
or paid, will be available for future grants under the 2022 Plan. Awards settled in cash will not count against the number of shares
available for issuance under the 2022 Plan.
No
non-employee director may receive awards in any calendar year having an accounting value in excess of $250,000 (inclusive of any cash
awards to the non-employee director for such year that are not made pursuant to the 2022 Plan); provided that in the case of a new non-employee
director, such amount is increased to $500,000 for the initial year of the non-employee director’s term.
The
number of shares authorized for issuance under the 2022 Plan and the foregoing share limitations are subject to customary adjustments
for stock splits, stock dividends, similar transactions or any other change affecting our common stock.
Terms
and Conditions of Options. Options granted under the 2022 Plan may be either ISOs or “nonstatutory stock options”
that do not meet the requirements of Section 422 of the Code. The compensation committee will determine the exercise price of options
granted under the 2022 Plan. The exercise price of stock options may not be less than the fair market value per share of our common stock
on the date of grant (or 110% of fair market value in the case of ISOs granted to a ten-percent stockholder). As of September, 2024,
the closing market price of a share of our common stock as reported on Nasdaq was $____ per share.
No
option may be exercisable for more than ten years (five years in the case of an ISO granted to a ten-percent stockholder) from the date
of grant. Options granted under the 2022 Plan will be exercisable at such time or times as the compensation committee prescribes at the
time of grant. No employee may receive ISOs that first become exercisable in any calendar year in an amount exceeding $100,000.
The
compensation committee may, in its discretion, permit a holder of an option to exercise the option before it has otherwise become exercisable,
in which case the shares of our common stock issued to the recipient will continue to be subject to the vesting requirements that applied
to the option before exercise.
Generally,
the option price may be paid in cash or by certified check, bank draft or money order. The compensation committee may permit other methods
of payment, including (a) through delivery of shares of our common stock having a fair market value equal to the purchase price, (b)
by a full recourse, interest bearing promissory note having such terms as the compensation committee may permit, or (c) a combination
of these methods, as set forth in an award agreement or as otherwise determined by the compensation committee. The compensation committee
is authorized to establish a cashless exercise program and to permit the exercise price (or tax withholding obligations) to be satisfied
by reducing from the shares otherwise issuable upon exercise a number of shares having a fair market value equal to the exercise price.
No
option may be transferred other than by will or by the laws of descent and distribution, and during a recipient’s lifetime an option
may be exercised only by the recipient. However, the compensation committee may permit the holder of an option, SAR or other award to
transfer the option, right or other award to immediate family members, a family trust for estate planning purposes or by gift to charitable
institutions. The compensation committee will determine the extent to which a holder of a stock option may exercise the option following
termination of service with us.
Stock
Appreciation Rights. The compensation committee may grant SARs under the 2022 Plan. The compensation committee will determine
the other terms applicable to SARs. The exercise price per share of a SAR will not be less than 100% of the fair market value of a share
of our common stock on the date of grant, as determined by the compensation committee. The maximum term of any SAR granted under the
2022 Plan is ten years from the date of grant. Generally, each SAR will entitle a participant upon exercise to an amount equal to:
| |
● |
the
excess of the fair market value on the exercise date of one share of our common stock over the exercise price, multiplied by |
| |
|
|
| |
● |
the
number of shares of common stock covered by the SAR. |
Payment
may be made in shares of our common stock, in cash, or partly in common stock and partly in cash, all as determined by the compensation
committee.
Restricted
Stock and Restricted Stock Units. The compensation committee may award restricted common stock and/or restricted stock units
under the 2022 Plan. Restricted stock awards consist of shares of stock that are transferred to a participant subject to restrictions
that may result in forfeiture if specified conditions are not satisfied. Restricted stock units confer the right to receive shares of
our common stock, cash, or a combination of shares and cash, at a future date upon or following the attainment of certain conditions
specified by the compensation committee. The restrictions and conditions applicable to each award of restricted stock or restricted stock
units may include performance-based conditions. Dividends or distributions with respect to restricted stock may be paid to the holder
of the shares as and when dividends are paid to stockholders or at the time that the restricted stock vests, as determined by the compensation
committee. If any dividends or distributions are paid in stock before the restricted stock vests they will be subject to the same restrictions.
Dividend equivalent amounts may be paid with respect to restricted stock units either when cash dividends are paid to stockholders or
when the units vest. Unless the compensation committee determines otherwise, holders of restricted stock will have the right to vote
the shares.
Performance
Shares and Performance Units. The compensation committee may award performance shares and/or performance units under the 2022
Plan. Performance shares and performance units are awards, denominated in either shares or U.S. dollars, which are earned during a specified
performance period subject to the attainment of performance criteria, as established by the compensation committee. The compensation
committee will determine the restrictions and conditions applicable to each award of performance shares and performance units.
Incentive
Bonuses. The compensation committee may grant incentive bonus awards under the 2022 Plan from time to time. The terms of incentive
bonus awards will be set forth in award agreements. Each award agreement will have such terms and conditions as the compensation committee
determines, including performance goals and amount of payment based on achievement of such goals. Incentive bonus awards are payable
in cash and/or shares of our common stock.
Other
Stock-Based and Cash-Based Awards. The compensation committee may award other types of equity-based or cash-based awards under
the 2022 Plan, including the grant or offer for sale of shares of our common stock that do not have vesting requirements and the right
to receive one or more cash payments subject to satisfaction of such conditions as the compensation committee may impose.
Effect
of Certain Corporate Transactions. The compensation committee may, at the time of the grant of an award provide for the effect
of a change in control (as defined in the 2022 Plan) on any award, including (i) accelerating or extending the time periods for exercising,
vesting in, or realizing gain from any award, (ii) eliminating or modifying the performance or other conditions of an award, or (iii)
providing for the cash settlement of an award for an equivalent cash value, as determined by the compensation committee. The compensation
committee may, in its discretion and without the need for the consent of any recipient of an award, also take one or more of the following
actions contingent upon the occurrence of a change in control: (a) cause any or all outstanding options and SARs to become immediately
exercisable, in whole or in part; (b) cause any other awards to become non-forfeitable, in whole or in part; (c) cancel any option or
SAR in exchange for a substitute option; (d) cancel any award of restricted stock, restricted stock units, performance shares or performance
units in exchange for a similar award of the capital stock of any successor corporation; (e) redeem any restricted stock for cash and/or
other substitute consideration; (f) cancel or terminate any award for cash and/or other substitute consideration in exchange for an amount
of cash and/or property equal to the amount, if any, that would have been attained upon the exercise of such award or realization of
the participant’s rights as of the date of the occurrence of the change in control, but if the change in control consideration
with respect to any option or SAR does not exceed its exercise price, the option or SAR may be canceled without payment of any consideration;
or (g) make such other modifications, adjustments or amendments to outstanding awards as the compensation committee deems necessary or
appropriate.
Amendment,
Termination. The board of directors may at any time amend the 2022 Plan for the purpose of satisfying the requirements of the
Code, or other applicable law or regulation or for any other legal purpose, provided that, without the consent of our stockholders, the
board of directors may not (a) increase the number of shares of common stock available under the 2022 Plan, (b) change the group of individuals
eligible to receive options, SARs and/or other awards, or (c) extend the term of the 2022 Plan. No new awards may be granted on or after
November 13, 2032.
U.S.
Federal Income Tax Consequences
Following
is a summary of the U.S. federal income tax consequences of option and other grants under the 2022 Plan. Optionees and recipients of
other rights and awards granted under the 2022 Plan are advised to consult their personal tax advisors before exercising an option or
SAR or disposing of any stock received pursuant to the exercise of an option or SAR or following the vesting and payment of any award.
In addition, the following summary is based upon an analysis of the Code as currently in effect, existing laws, judicial decisions, administrative
rulings, regulations and proposed regulations, all of which are subject to change and does not address state, local, foreign or other
tax laws.
Treatment
of Options
The
Code treats incentive stock options and nonstatutory stock options differently. However, as to both types of options, no income will
be recognized to the optionee at the time of the grant of the options under the 2022 Plan, nor will our Company be entitled to a tax
deduction at that time.
Generally,
upon exercise of a nonstatutory stock option (including an option intended to be an incentive stock option but which has not continued
to so qualify at the time of exercise), an optionee will recognize ordinary income tax on the excess of the fair market value of the
stock on the exercise date over the option price. Our Company will be entitled to a tax deduction in an amount equal to the ordinary
income recognized by the optionee in the fiscal year which includes the end of the optionee’s taxable year. We will be required
to satisfy applicable withholding requirements in order to be entitled to a tax deduction. In general, if an optionee, in exercising
a nonstatutory stock option, tenders shares of our common stock in partial or full payment of the option price, no gain or loss will
be recognized on the tender. However, if the tendered shares were previously acquired upon the exercise of an incentive stock option
and the tender is within two years from the date of grant or one year after the date of exercise of the incentive stock option, the tender
will be a disqualifying disposition of the shares acquired upon exercise of the incentive stock option.
For
incentive stock options, there is no taxable income to an optionee at the time of exercise. However, the excess of the fair market value
of the stock on the date of exercise over the exercise price will be taken into account in determining whether the “alternative
minimum tax” will apply for the year of exercise. If the shares acquired upon exercise are held until at least two years from the
date of grant and more than one year from the date of exercise, any gain or loss upon the sale of such shares, if held as capital assets,
will be long-term capital gain or loss (measured by the difference between the sales price of the stock and the exercise price). Under
current federal income tax law, a long-term capital gain will be taxed at a rate which is less than the maximum rate of tax on ordinary
income. If the two-year and one year holding period requirements are not met (a “disqualifying disposition”), an optionee
will recognize ordinary income in the year of disposition in an amount equal to the lesser of (i) the fair market value of the stock
on the date of exercise minus the exercise price or (ii) the amount realized on disposition minus the exercise price. The remainder of
the gain will be treated as long-term capital gain, depending upon whether the stock has been held for more than a year. If an optionee
makes a disqualifying disposition, our Company will be entitled to a tax deduction equal to the amount of ordinary income recognized
by the optionee.
In
general, if an optionee, in exercising an incentive stock option, tenders shares of common stock in partial or full payment of the option
price, no gain or loss will be recognized on the tender. However, if the tendered shares were previously acquired upon the exercise of
another incentive stock option and the tender is within two years from the date of grant or one year after the date of exercise of the
other option, the tender will be a disqualifying disposition of the shares acquired upon exercise of the other option.
As
noted above, the exercise of an incentive stock option could subject an optionee to the alternative minimum tax. The application of the
alternative minimum tax to any particular optionee depends upon the particular facts and circumstances which exist with respect to the
optionee in the year of exercise. However, as a general rule, the amount by which the fair market value of the common stock on the date
of exercise of an option exceeds the exercise price of the option will constitute an item of “adjustment” for purposes of
determining the alternative minimum taxable income on which the alternative tax may be imposed. As such, this item will enter into the
tax base on which the alternative minimum tax is computed and may therefore cause the alternative minimum tax to become applicable in
any given year.
Treatment
of Stock Appreciation Rights
Generally,
the recipient of a SAR will not recognize any income upon grant of the SAR, nor will our Company be entitled to a deduction at that time.
Upon exercise of a SAR, the holder will recognize ordinary income, and our Company generally will be entitled to a corresponding deduction,
equal to the excess of fair market value of our common stock at that time over the exercise price.
Treatment
of Stock Awards
Generally,
absent an election to be taxed currently under Section 83(b) of the Code (or, a Section 83(b) Election), there will be no federal income
tax consequences to either the recipient or our Company upon the grant of a restricted stock award or award of performance shares. At
the expiration of the restriction period and the satisfaction of any other restrictions applicable to the restricted shares, the recipient
will recognize ordinary income and our Company generally will be entitled to a corresponding deduction equal to the fair market value
of the common stock at that time. If a Section 83(b) Election is made within 30 days after the date the restricted stock award is granted,
the recipient will recognize an amount of ordinary income at the time of the receipt of the restricted shares, and our Company generally
will be entitled to a corresponding deduction, equal to the fair market value (determined without regard to applicable restrictions)
of the shares at such time, less any amount paid by the recipient for the shares. If a Section 83(b) Election is made, no additional
income will be recognized by the recipient upon the lapse of restrictions on the shares (and prior to the sale of such shares), but,
if the shares are subsequently forfeited, the recipient may not deduct the income that was recognized pursuant to the Section 83(b) Election
at the time of the receipt of the shares.
The
recipient of an unrestricted stock award, including a performance unit award, will recognize ordinary income, and our Company generally
will be entitled to a corresponding deduction, equal to the fair market value of our common stock that is the subject of the award when
the Award is made.
The
recipient of a restricted stock unit generally will recognize ordinary income as and when the units vest and are settled. The amount
of the income will be equal to the fair market value of the shares of our common stock issued at that time, and our Company will be entitled
to a corresponding deduction. The recipient of a restricted stock unit will not be permitted to make a Section 83(b) Election with respect
to such award.
Treatment
of Incentive Bonus Awards and Other Stock or Cash Based Awards
Generally,
the recipient of an incentive bonus or other stock or cash based award will not recognize any income upon grant of the award, nor will
our Company be entitled to a deduction at that time. Upon payment with respect to such an award, the recipient will recognize ordinary
income, and our Company generally will be entitled to a corresponding deduction, equal to the amount of cash paid and/or the fair market
value of our common stock issued at that time.
Potential
Limitation on Company Deductions
Section
162(m) of the Code generally disallows a tax deduction for compensation in excess of $1 million paid in a taxable year by a publicly
held corporation to its chief executive officer and certain other “covered employees.” Our board of directors and the compensation
committee intend to consider the potential impact of Section 162(m) on grants made under the 2022 Plan, but reserve the right to approve
grants of options and other awards for an executive officer that exceed the deduction limit of Section 162(m).
Tax
Withholding
As
and when appropriate, we shall have the right to require each optionee purchasing shares of common stock and each grantee receiving an
award of shares of common stock under the 2022 Plan to pay any federal, state or local taxes required by law to be withheld.
New
Plan Benefits
The
compensation committee and the board of directors retain discretion under the 2022 Plan to determine which directors, officers, employees
and consultants will receive awards and the amount and type of awards. Therefore, we are not able to determine the total number of individuals
who will participate in the 2022 Plan or the total amount of awards granted thereunder.
Registration
with the SEC
The
Company intends to file a Registration Statement on Form S-8 relating to the issuance of additional shares under the 2022 Plan with the
SEC pursuant to the Securities Act after approval of the amended and restated 2022 Plan by our stockholders.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 3 TO APPROVE THE AMENDMENT AND RESTATEMENT OF OUR
2022 OMNIBUS EQUITY INCENTIVE PLAN, AND ADOPT THE FOLLOWING RESOLUTION:
“RESOLVED,
that the amended and restated 2022 Omnibus Equity Incentive Plan is hereby APPROVED.”
| Proposal
No. 4: |
Approval
of Issuance of Common Stock Upon Exercise of Certain Warrants in Accordance with Nasdaq Listing Rule 5635(d). |
| What
am I voting on? |
|
Approval
of the issuance of up to an aggregate of 478,600 shares of the Company’s common stock issuable upon the exercise of certain
warrants to purchase the Company’s common stock, in accordance with Nasdaq Listing Rule 5635(d). |
| Vote
recommendation: |
|
“FOR”
the approval of the issuance of up to an aggregate of 478,600 shares of the Company’s common stock issuable upon the exercise
of certain warrants to purchase the Company’s common stock, in accordance with Nasdaq Listing Rule 5635(d). |
| Vote
required: |
|
A
majority in voting power of the of the votes cast on the proposal (excluding abstentions and broker non-votes). |
| Effect
of abstentions: |
|
None. |
| Effect
of broker non-votes: |
|
None. |
General
We
are asking stockholders to approve the issuance of the shares of our common stock underlying the New Warrants (such shares, the “New
Shares”), as discussed below, in accordance with Nasdaq Listing Rule 5635(d), as described in more detail below.
Warrant
Issuance
On
August 1, 2024, we entered into a warrant exercise inducement offer letter agreement (the “Inducement Letter”) with a certain
holder (the “Holder”) of outstanding Series A Common Stock purchase warrants exercisable for up to an aggregate of 196,000
shares of our common stock and Series B Common Stock purchase warrants exercisable for up to an aggregate of 43,300 shares of our common
Stock (collectively, the “Existing Warrants”), which Existing Warrants were issued by us on December 11, 2023, and are exercisable
at an exercise price of $12.50 per share.
Pursuant
to the Inducement Letter, the Holder agreed to exercise the Existing Warrants for cash at a reduced exercise price of $3.46 per share
in consideration of the Company’s agreement to issue each Holder new warrants to purchase up to a number of shares of common stock
equal to 200% of the number of shares of common stock issued pursuant to such Holder’s exercise of Existing Warrants, comprised
of (i) new Series A-1 warrants to purchase up to 392,000 shares of our common stock (the “Series A-1 Warrants”) with an exercise
term of five years from the initial exercise date and (ii) new Series B-1 warrants to purchase up to 86,600 shares of our common stock
with an exercise term of 18 months from the initial exercise date (the “Series B-1 Warrants” and together with the Series
A-1 Warrants, the “New Warrants”). The initial exercise date of the New Warrants is the Stockholder Approval Date (as defined
below), and the exercise price thereof is $3.46 per share. If all of the New Warrants are exercised in full, the Company will receive
aggregate gross proceeds of approximately $1,655,956 (the “Warrant Inducement”).
The
issuance of the New Shares is subject to stockholder approval in accordance with Nasdaq Listing Rule 5635(d) (“Stockholder Approval”
and the date on which Stockholder Approval is received and deemed effective, the “Stockholder Approval Date”). We agreed
to convene a stockholders’ meeting on or before the 90th day following the completion of the Warrant Inducement to approve the
issuance of the New Shares upon exercise of the Inducement Warrants, if required, with the recommendation of our board of directors that
such proposal be approved, and we agreed to solicit proxies from our stockholders in connection therewith in the same manner as all other
management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal.
Consequently, we are including this Proposal No. 4 in this proxy statement.
We
agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) on or before
September 2, 2024, to register the resale of the shares of common stock underlying the Inducement Warrants and to use commercially reasonable
efforts to cause such registration statement to become effective within 90 days of its initial filing.
The
summary of the terms of the New Warrants above is qualified in its entirety by reference to the copy of the form of Series A-1 Warrant
and the form Series B-1 Warrant, which are included herewith as Annex B and Annex C, respectively, and incorporated herein
by reference. You should read this summary together with such forms evidencing the New Warrants.
Stockholder
Approval
As
described above, pursuant to the Inducement Letter, we agreed to hold a meeting of stockholders on or before the 90th day following the
completion of the Warrant Inducement to obtain Stockholder Approval. The recommendation of our board of directors is that such proposal
be approved, we are soliciting proxies from our stockholders in connection therewith. If we do not obtain Stockholder Approval at this
Annual Meeting, we are required to call a meeting of stockholders every 90 days thereafter to seek Stockholder Approval until the earlier
of the date that Stockholder Approval is obtained or the New Warrants are no longer outstanding. As discussed above, one of the purposes
of the Annual Meeting is to satisfy the above requirement of the Inducement Letter.
A
vote in favor of this Proposal No. 4 is a vote “FOR” approval of the issuance of the New Shares upon exercise of the New
Warrants issued under the terms of the Inducement Letter. The exercise of the New Warrants, in their entirety, could result in the issuance
of 20% or more of our common stock outstanding as of August 2, 2024, the date that we issued the New Warrants.
Nasdaq
Listing Rule 5635(d) requires stockholder approval in connection with a transaction other than a public offering involving the sale,
issuance, or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock) equal
to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the
lower of (i) the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the
binding agreement, or (ii) the average of the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) for the five
trading days immediately preceding the signing of the binding agreement.
The
New Warrants were issued in connection with the exercise of the Existing Warrants pursuant to the terms of the Inducement Letter (as
further described above) but were not and are not exercisable at all prior to Stockholder Approval. Accordingly, because the New Shares
issuable upon exercise of the New Warrants issued under the Inducement Letter total more than 19.99% of our outstanding shares of common
stock on the date the New Warrants were issued, and because the New Warrants further have anti-dilutive rights, we are seeking stockholder
approval of this proposal in respect of the issuance of the shares of common stock upon the exercise of the New Warrants pursuant to
Nasdaq Listing Rule 5635(d).
Potential
Adverse Effects - Dilution and Impact on Existing Stockholders
The
issuance of shares of common stock upon exercise of the New Warrants will have a dilutive effect on current stockholders in that the
percentage ownership of the Company held by such current stockholders will decline as a result of the issuance of the New Shares. This
means also that our current stockholders will own a smaller interest in us as a result of the exercise of the New Warrants and therefore
have less ability to influence significant corporate decisions requiring stockholder approval. Issuance of the New Shares could also
have a dilutive effect on the book value per share and any future earnings per share. Dilution of equity interests could also cause prevailing
market prices for our common stock to decline.
If
the New Warrants are exercised in full for cash, a total of 478,600 shares of common stock will be issuable to the Holder of the New
Warrants and this dilutive effect may be material to current stockholders of the Company.
Risks
Related to the New Warrants
Provisions
of the New Warrants could discourage an acquisition of us by a third party.
Certain
provisions of the New Warrants could make it more difficult or expensive for a third party to acquire us. The New Warrants prohibit us
from engaging in certain transactions constituting “fundamental transactions” unless, in certain situations and among other
things, the surviving entity assumes our obligations under the New Warrants. Further, the New Warrants provide that, in the event of
certain transactions constituting “fundamental transactions,” with some exceptions, holders of such warrants will have the
right, at their option, to receive from us or a successor entity the same type or form of consideration (and in the same proportion)
that is being offered and paid to the holders of our common stock in the fundamental transaction in the amount of the Black Scholes value
(as described in such warrants) of the unexercised portion of the applicable New Warrants on the date of the consummation of the fundamental
transaction. These and other provisions of the New Warrants could prevent or deter a third party from acquiring us even where the acquisition
could be beneficial to the holders of our common stock.
The
New Warrants may be accounted for as liabilities and the changes in value of such New Warrants may have a material effect on our financial
results.
We
are currently evaluating the terms of the New Warrants. It is possible that we and/or our auditors will conclude that, because of the
terms of such New Warrants, such New Warrants should be accounted for as liability instruments. As a result, we would be required to
classify the New Warrants as liabilities. Under the liability accounting treatment, we would be required to measure the fair value of
these instruments at the end of each reporting period and recognize changes in the fair value from the prior period in our operating
results for the current period. As a result of the recurring fair value measurement, our financial statements and results of operations
may fluctuate quarterly based on factors that are outside our control. In the event the New Warrants are required to be accounted for
under liability accounting treatment, we will recognize noncash gains or losses due to the quarterly fair valuation of these warrants,
which could be material. The impact of changes in fair value on our financial results may have an adverse effect on the market price
of our common stock and/or our stockholders’ equity, which may make it harder for us to, or prevent us from, meeting the continued
listing standards of Nasdaq.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL NO. 4 TO AUTHORIZE
THE ISSUANCE OF THE NEW SHARES UPON EXERCISE OF THE
NEW WARRANTS ISSUED
UNDER THE TERMS OF THE INDUCEMENT LETTER AND PURSUANT TO NASDAQ LISTING
RULE 5635(d).
EXECUTIVE
OFFICERS AND DIRECTORS
The
following table sets forth the names and ages of all of our executive officers and directors as of September 4, 2024.
| Name |
|
Age |
|
Position |
| Stephen
C. Glover |
|
65 |
|
Chief
Executive Officer, President, and Chairman |
| Karen
A. Cashmere |
|
72 |
|
Chief
Commercial Officer |
| Peter
Wolfe |
|
57 |
|
Chief
Financial Officer and Secretary |
| Pablo
A. Guzman, M.D. |
|
75 |
|
Chief
Medical Officer and Senior Vice President of Medical Affairs |
| Robert
G. Finizio |
|
53 |
|
Director |
| Gregory
Freitag |
|
62 |
|
Director |
| Min
Chul Park, Ph.D. |
|
42 |
|
Director |
| James
Sapirstein |
|
63 |
|
Director |
Executive
Officers
Biographical
information regarding our executive officers as of September 4, 2024 is set forth below. Our executive officers are appointed by our
board of directors.
Stephen
C. Glover. Mr. Glover is one of our co-founders and has served as our Chief Executive Officer, President and Chairman since December
2022. Mr. Glover served as Chief Executive Officer and President of Old ZyVersa from March 2014 to December 2022, a member of the board
of directors from March 2014 to September 2021, and Chairman from September 2021 to December 2022. Mr. Glover is formerly the Co-Founder
of Coherus Biosciences where he was focused on business strategy, partnerships, product development efforts, and capitalization of the
company. Prior to Coherus, he was the President of Insmed Therapeutic Proteins (from 2007 to 2010), as well as Chief Business Officer
of Insmed Incorporated (from 2007 to 2010). At Insmed, Mr. Glover was responsible for the creation of the biosimilar business unit and
the divestiture of the business to Merck. As Chief Business Officer he led Insmed’s strategic review process which resulted in
the merger of Insmed and Transave. Mr. Glover received his B.S. in Marketing from Illinois State University. Mr. Glover has multifaceted
experience in Fortune 100, start up, and entrepreneurial environments and he serves on the board of PDS Biotechnology, The Coulter Foundation
(University of Miami) and Asclepius Lifesciences. Mr. Glover was selected to serve on our board of directors based on his extensive experience
in the therapeutics industry, his deep knowledge of ZyVersa and his ongoing experience as a board member of other life sciences companies.
Mr. Glover was appointed to our board of directors by ZyVersa pursuant to the Business Combination Agreement.
Karen
A. Cashmere. Ms. Cashmere has served as our Chief Commercial Officer since December 2022. Ms. Cashmere served in the same capacity
at Old ZyVersa from January 2019 to December 2022, and as Acting Vice President, Development and Marketing from August 2014 to January
2019. Ms. Cashmere has more than 25 years’ experience in business planning and execution for biopharmaceutical and medical device
companies ranging in size from start-up to Fortune 100 companies. She formerly led the Marketing Communications function at Mako Surgical
Corporation, an emerging robotic orthopedics company, where she was responsible for creating awareness and driving sales of Robotic Arm
Systems priced at over $1 million each and their associated implants for partial knee and total hip arthroplasty.
Peter
Wolfe. Mr. Wolfe has served as our Chief Financial Officer and Secretary since December 2022. Mr. Wolfe served as Senior Vice
President, Finance and Administration at Old ZyVersa from 2019 to December 2022, and prior to that had served as Vice President of Finance
from October 2015 to 2019. Mr. Wolfe has spent his career in various financial roles in the financial services, specialty finance, and
the pharmaceutical/healthcare industries. Most recently Mr. Wolfe has spent his time cultivating start-up organizations in various healthcare
entities, often dealing with complicated business models to develop a financial framework for success for many of these first of their
kind businesses. Mr. Wolfe has spent the last 24 years of his career in the healthcare industry with one fourth of that time spent at
Kos Pharmaceuticals, a publicly traded, fully-integrated specialty pharmaceutical company. Mr. Wolfe has his BBA from the University
of Miami and his MBA from the University of Pittsburgh.
Pablo
A. Guzman, M.D. Dr. Guzman has served as our Chief Medical Officer and Senior Vice President of Medical Affairs since January
2023. Prior to that, he we a consultant with us beginning January 2015. Since 2017, Dr. Guzman has served on the Scientific Advisory
Board at Therapeutic Solutions International, Inc., a company focused on immune modulation. He received his Bachelor’s degree in
Biology from St Peter’s University in Jersey City in 1971, his Medical Degree from the University of Puerto Rico School of Medicine
in 1975, and his Interventional Cardiology Fellowship at The Johns Hopkins Hospital in Baltimore in 1980. He is Board certified in Internal
Medicine (1978) and Cardiovascular Diseases (1981). He joined the staff at Johns Hopkins in 1980 and his duties included patient care,
teaching, and both clinical and basic science research in the dog lab. He has over 30 articles in peer reviewed journals and many abstracts,
some of them presented in national meetings including the American Heart Association and the American College of Cardiology. Dr. Guzman
sits on the Board of Trustees at Holy Cross Health, a member of Trinity Health since 2015. He sits on the Scientific Advisory Board of
Campbell Neurosciences Inc. and Therapeutics Solutions International.
Non-Employee
Directors
Biographical
information as of September 4, 2024 and the attributes, skills, and experience of each director that led our nominating and corporate
governance committee and our board of directors to determine that such individual should serve as a director are discussed below.
Robert
G. Finizio. Mr. Finizio has served as a member of our board of directors since December 2022. Mr. Finizio served in the same
capacity at Old ZyVersa from September 2018 to December 2022. Mr. Finizio is currently the Executive Director of PleoPharma a, pharmaceutical
development company focused on finding safe and effective FDA approved treatments for substance use disorders where therapies are lacking.
Mr. Finizio is the Co-Founder of TherapeuticsMD Inc., an innovative women’s health pharmaceutical company, and served as its Chief
Executive Officer and Director from 2008 to November 2021. Mr. Finizio has over 20 years of healthcare experience. Mr. Finizio sits on
the board of directors for two non-profit organizations, BioFlorida and the Boca Raton Police Foundation. Mr. Finizio graduated from
the University of Miami with a Bachelor of Arts degree majoring in Premed and Psychology. Mr. Finizio was selected to serve on our board
of directors based on his extensive experience with early-stage company development in the healthcare industry. Mr. Finizio was appointed
to our board of directors by ZyVersa pursuant to the Business Combination Agreement.
Gregory
Freitag. Mr. Freitag has served as a member of our board of directors since January 2023. Mr. Freitag is currently a member of
the board of directors of PDS Biotechnology Corporation (Nasdaq: PDSB), a clinical-stage immunotherapy company developing a growing pipeline
of targeted cancer and infectious disease immunotherapies based on its proprietary Veramune and Infectimune T cell-activating platforms.
He is also on the board of directors of Axogen, Inc. (Nasdaq: AXGN), a leading regenerative medicine company dedicated to peripheral
nerve repair. Mr. Freitag was Axogen’s Special Counsel from June 2020 until March 2021, General Counsel from September 2011 until
June 2020, Chief Financial Officer from September 2011 until May 2014 and August 2015 until March 2016, and Senior Vice President Business
Development from May 2014 until October 2018. Mr. Freitag holds a J.D. from the University of Chicago and a B.A. in Economics & Business
and Law & Society from Macalester College, Minnesota. Mr. Freitag was selected to serve on our board of directors and as the chair
of the Company’s audit committee because of his proven leadership and experience as a senior-level executive, his particular knowledge
of public companies, including reporting, compliance and financial markets related thereto, his finance management and legal expertise,
his former position as a public company chief financial officer and over 30 years of experience in the life sciences sector.
Min
Chul Park, Ph.D. Dr. Park has served as a member of our board of directors since December 2022. Dr. Park served in the same capacity
at Old ZyVersa from May 2021 to December 2022. Dr. Park is an Assistant Professor at Inje University’s College of Pharmacy. Dr.
Park was formerly the Chief Executive Officer, and Director of Curebio Therapeutics, a biopharmaceutical company in Seoul, Korea, which
develops peptide drugs for cancer, alopecia, and wound care, from October 2020 to April 2022. Dr. Park also served as Executive Vice
President, CTO, and Director of Curebio from August 2017 to March 2022. Dr. Park served as an Adjust Professor at Korea University’s
Department of Pharmacy from March 2019 to February 2022. With 10 years in the pharmaceutical industry, Dr. Park has worked in the field
of drug target discovery, assay development, and drug candidate optimization. He has expertise in basic and applied molecular and cellular
biology. In his former role at Curebio Therapeutics, Dr. Park led financing and business development deals, including co-development
agreements with three pharmaceutical companies, and one in-license deal. Additionally, he developed cosmetic peptides, and he co-developed
antibodies, circulating tumor cell-based diagnostics, and a cancer stem cell assay system. Additionally, Dr. Park is a co-founder of
TME Therapeutics, Co. and is currently on its Scientific Advisory Board. Until 2017, Dr. Park was CEO and Director at Neomics Co. in
Seoul, Korea, where he helped expand the contract experiment and biomaterial business, and he led efforts to merge Neomics with Curebio
and Bumyoung Bio Co., Ltd to form Curebio. Dr. Park developed cosmetic peptides, and a dermatology peptide drug candidate that he out-licensed.
Dr. Park began his career as a Senior Research Associate at Medicinal Bioconvergence Research Center at Seoul National University, where
he developed and led an out-licensing deal for an exosome isolation device, and he was responsible for two out-licensing deals for an
anti-tumorigenic peptide. Dr. Park obtained his Ph.D. in pharmaceutical bioscience at the Seoul National University, Department of Pharmacy.
Dr. Park was selected to serve on our board of directors based on his in-depth knowledge of the pharmaceutical industry and drug development
technology. Dr. Park was appointed to our board of directors by ZyVersa pursuant to the Business Combination Agreement.
James
Sapirstein. Mr. Sapirstein has served as a member of our board of directors since January 2023. Mr. Sapirstein is currently the
Chairman, Chief Executive Officer and President of First Wave BioPharma, Inc. (Nasdaq: FWBI). Mr. Sapirstein served as Chief Executive
Officer of Contravir Pharmaceuticals Inc. from March 2014 until October 2018. All of these are publicly listed companies. Mr. Sapirstein
has raised over $300 Million dollars in venture capital and public capital markets financing in his various engagements as Chief Executive
Officer. He was named as a Finalist for the Ernst & Young Entrepreneur of the Year award in 2015 as well as in 2016. In addition
to being a board member of First Wave Bio Pharma, Mr. Sapirstein currently holds board positions on Renovaro Inc. (Nasdaq: RENB) and
Onconetix, Inc. (Nasdaq: ONCO). He was Chairman of the Board for BioNJ, an association of biopharma industries in New Jersey from February
2017 to February 2019. In addition, he is a member of the Board of Directors for BIO (Biotechnology Innovation Organization), the leading
biotechnology trade organization promoting public policy and networking in the healthcare space, where he sits on the Emerging Companies
Section Governing Board. Mr. Sapirstein was selected to serve as a member of our board of directors because of his extensive experience
as an executive in the biotech and pharmaceutical sectors and as a director for multiple public companies in such sectors.
Board
Diversity Matrix
The
following matrix is provided in accordance with applicable Nasdaq listing requirements:
| Board Diversity Matrix (as of September 4, 2024) |
| Total Number of Directors | |
5 | |
| | |
Female | | |
Male | | |
Non-Binary | | |
Did Not Disclose Gender | |
| Part I: Gender Identity | |
| | | |
| | | |
| | | |
| | |
| Directors | |
| 0 | | |
| 5 | | |
| 0 | | |
| 0 | |
| Part II: Demographic Background | |
| | | |
| | | |
| | | |
| | |
| African American or Black | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| Alaskan Native or Native American | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| Asian | |
| 0 | | |
| 1 | | |
| 0 | | |
| 0 | |
| Hispanic or Latinx | |
| 0 | | |
| 1 | | |
| 0 | | |
| 0 | |
| Native Hawaiian or Pacific Islander | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| White | |
| 0 | | |
| 3 | | |
| 0 | | |
| 0 | |
| Two or More Races or Ethnicities | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| LGBTQ+ | |
| 0 | |
| Did Not Disclose Demographic Background | |
| 0 | |
CORPORATE
GOVERNANCE AND BOARD MATTERS
Family
Relationships
There
are no family relationships among the members of the board of directors and executive officers.
Independence
of the Board of Directors
As
required under The Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s
board of directors must qualify as “independent,” as affirmatively determined by the board of directors. The board of directors
consults with our counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding
the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time
to time.
Consistent
with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his
or her family members, and us, our senior management and our independent auditors, the board of directors has affirmatively determined
that all of our current directors, other than Mr. Glover due to his position as our current Chief Executive Officer and President, are
independent within the meaning of the applicable rules and regulations of the SEC and the listing requirements and rules of Nasdaq. In
making this determination, the board of directors found that none of the independent nominees for director had a material or other disqualifying
relationship with the Company.
Board
Leadership Structure
Stephen
C. Glover serves as the Chairman of our board of directors, as well as our Chief Executive Officer and President. Our board of directors
periodically monitors the potential benefits and consequences of splitting the roles of Chairman and principal executive officer, but
has determined that, at this time, it is appropriate and in our best interest for such roles to remain vested in one person due to our
current size, the size of our board of directors, and the participation of our independent directors in the oversight of our operations
and strategy. Our board of directors does not have a lead independent director, as we believe that the current size of our board of directors
permits all of our independent directors to actively participate in this oversight role. As we grow in size, our board of directors will
continue to evaluate the appropriateness of splitting the roles of Chairman and principal executive officer and creating a lead independent
director position.
As
discussed above, except for our Chief Executive Officer, our board of directors is comprised of independent directors. The active involvement
of these independent directors, combined with the qualifications and significant responsibilities of our Chief Executive Officer, provide
balance in the board of directors and promote strong, independent oversight of our management and affairs.
Role
of the Board of Directors in Risk Oversight
The
board of directors has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks.
The board of directors regularly reviews information regarding our credit, liquidity, and operations, as well as the risks associated
with each. The audit committee’s charter mandates the audit committee to review and discuss with management and our independent
registered public accounting firm, as appropriate, our major financial risk exposures and the steps taken by management to monitor and
control these exposures. The compensation committee is responsible for supervising, administering and evaluating incentive, equity-based
and other compensatory plans of the Company in which executive officers and key employees participate. The nominating and corporate governance
committee manages risks associated with the independence of the board of directors. While each committee is responsible for evaluating
certain risks and overseeing the management of such risks, the entire board of directors is regularly informed through committee reports
about such risks.
In
addition, the Company has embedded environmental, social, and governance (“ESG”) considerations in our governance structures
(including in the charters of the nominating and corporate governance and the audit committees of our board of directors), strategies,
risk management, and reporting. The oversight of the board of directors of ESG matters is integrated into our governance structures,
including the nominating and corporate governance committee responsibility in reviewing the Company’s policies, practices and disclosures
with respect to sustainability and ESG factors; the audit committee responsibility for reviewing management’s use of non-GAAP ESG
measures and metrics; and the compensation committee’s responsibility for reviewing and discussing with management our initiatives,
programs and approach regarding diversity, equity and inclusion. The Company’s management works to identify priority ESG issues
for the Company.
Meetings
of the Board of Directors
Our
board of directors met seven times during 2023. Each member of the board of directors attended 75% or more of the aggregate number of
meetings of the board of directors and of the committees on which the member served, held during the portion of 2023 for which the member
was a director or committee member.
As
required under applicable Nasdaq listing standards, during the fiscal year ended December 31, 2023, the Company’s independent directors
met at least twice in regularly scheduled executive sessions at which only independent directors were present.
Committees
of the Board of Directors
The
board of directors has an audit committee, a compensation committee, and a nominating and corporate governance committee. The board of
directors has adopted a written charter for each committee that is available to stockholders on the Investors Relations section of our
website at http://www.zyversa.com.
The
following table provides membership information for each of the committees of the board of directors as of September 4, 2024:
| Name |
|
Audit |
|
Compensation |
|
Nominating
and
Corporate
Governance |
| Robert
G. Finizio |
|
√ |
|
√* |
|
|
| Gregory
Freitag |
|
√* |
|
|
|
√ |
| Stephen
C. Glover |
|
|
|
|
|
|
| Min
Chul Park, Ph.D. |
|
|
|
√ |
|
√ |
| James
Sapirstein |
|
√ |
|
√ |
|
√* |
Below
is a description of the audit committee, compensation committee, and nominating and corporate governance committee of the board of directors.
Our board of directors may from time to time establish other committees. The Company’s Chief Executive Officer and other executive
officers regularly report to the non-executive directors and the audit committee, the compensation committee, and the nominating and
corporate governance committee to ensure effective and efficient oversight of our activities and to assist in proper risk management
and the ongoing evaluation of management controls. We believe that the leadership structure of our board of directors provides appropriate
risk oversight of the Company’s activities. Each of the committees has authority to engage legal counsel and other advisors, as
each deems necessary or appropriate to carry out such committee’s duties and responsibilities.
Audit
Committee
Our
board of directors has determined that each member of the audit committee qualifies as an independent director under the Nasdaq Listing
Rules and the independence requirements of Rule 10A-3 under the Exchange Act. The audit committee held five meetings and acted through
written consent in lieu of holding a meeting one time during 2023.
The
board of directors determined that Gregory G. Freitag qualifies as an “audit committee financial expert,” as defined in applicable
SEC rules. The board of directors made a qualitative assessment of Mr. Freitag’s level of knowledge and experience based on a number
of factors, including his educational background, past experience including as CFO of numerous companies, and service on other boards
of directors.
The
purpose of the audit committee is to assist the board of directors in fulfilling its responsibility to oversee: (a) the integrity of
the Company’s financial statements, the Company’s accounting and financial reporting processes and financial statement audits,
(b) the Company’s compliance with legal and regulatory requirements, (c) the Company’s systems of internal control over financial
reporting and disclosure controls and procedures, (d) the independent auditor’s engagement, qualifications, performance, compensation
and independence, (e) review and approval of related party transactions in accordance with the Policies and Procedures for Related Party
Transactions, (f) compliance with the Company’s Code of Business Conduct and Ethics and the Audit Committee Procedures for Reporting
Potential Wrongdoing, (g) the communication among the Company’s independent auditors, the Company’s financial and senior
management and the board of directors, and (h) assessment and management of risk, including oversight of information technology and cybersecurity
risk management. Our board of directors has adopted a written charter for the audit committee, which is available free of charge on our
corporate website (http://www.zyversa.com).
Report
of the Audit Committee of the Board of Directors
The
audit committee reviewed and discussed the audited financial statements for the year ended December 31, 2023 with the Company’s
management. The audit committee discussed with the Company’s independent registered public accounting firm the matters required
to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The
audit committee also received the written disclosures and the letter from the Company’s independent registered public accounting
firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit committee
concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence.
Based on the foregoing, the audit committee recommended to the board of directors that the audited financial statements be included in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Gregory
Freitag (Chairperson)
Robert
G. Finizio
James
Sapirstein
The
material in this report is not “soliciting material,” is not deemed “filed” with
the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the “Securities
Act”) or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether made before
or after the date hereof and irrespective of any general incorporation language in any such filing.
Compensation
Committee
Our
board of directors has determined that each member of the compensation committee qualifies as an independent director under the Nasdaq
Listing Rules. The compensation committee held two meetings and acted through written consent in lieu of holding a meeting one time during
2023.
The
purpose of the compensation committee is to evaluate, recommend, approve and review executive officer and director compensation arrangements,
plans and programs of the Company and to administer the Company’s cash-based and equity-based plans for employees and consultants.
The compensation committee’s principal functions are to: (1) review and approve all forms of non-equity and equity-based compensation
of the Company’s executive officers and directors; (2) administer the Company’s equity-based compensation plans; and (3)
produce an annual report on executive compensation for use in the Company’s proxy statement to the extent required under the federal
securities laws. Our board of directors has adopted a written charter for the compensation committee, which is available free of charge
on our corporate website (http://www.zyversa.com).
Compensation
Committee Processes and Procedures
Typically,
the compensation committee will meet at least twice annually and with greater frequency if necessary. The agenda for each meeting is
usually developed by the Chairperson of the compensation committee, in consultation with the Chief Executive Officer. The compensation
committee meets regularly in executive session. However, from time to time, various members of management and other employees as well
as outside advisors or consultants may be invited by the compensation committee to make presentations, to provide financial or other
background information or advice, or to otherwise participate in compensation committee meetings. Our Chief Executive Officer may not
participate in, or be present during, any deliberations or determinations of the compensation committee regarding the Chief Executive
Officer’s compensation.
The
compensation committee may delegate such of its authority and responsibilities as it deems proper to subcommittees of the compensation
committee, subject to all applicable laws and regulations.
Under
its charter, the compensation committee has the sole authority and right, at the expense of the Company, to retain legal and other consultants,
experts and advisers of its choice to assist the compensation committee in connection with its functions, including any studies or investigations,
and has direct oversight of the work performed by such advisers. In connection with the retention of such advisers (other than in-house
legal counsel), the compensation committee must consider the factors related to the independence of such advisers, including with respect
to each such adviser (or the adviser’s employer): (a) the provision of other services to the Company by such adviser (or their
employer); (b) the amount of fees received from the Company, as a percentage of the total revenue of such adviser (or their employer);
(c) the policies and procedures of such adviser (or their employer) that are designed to prevent conflicts of interest; (d) any business
or personal relationship of such adviser (or their employer) with a member of the compensation committee or an executive officer of the
Company; (e) any shares of Company capital stock or other Company securities owned by such adviser (or their employer); and (f) such
other factors as the compensation committee deems relevant or may be required from time to time pursuant to the applicable SEC rules
or the Exchange Act; however, there is no requirement that any adviser be independent. The compensation committee has the sole authority
to approve the fees and other retention terms of such advisers.
Compensation
Committee Interlocks and Insider Participation
No
member of our compensation committee was at any time during fiscal year 2023, or at any other time, one of our officers or employees.
None of our executive officers have served as a director or member of a compensation committee (or other committee serving an equivalent
function) of any entity, one of whose executive officers served as a director of our board of directors or member of our compensation
committee.
Nominating
and Corporate Governance Committee
Our
board of directors has determined that each member of the nominating and corporate governance committee qualifies as an independent director
under the Nasdaq Listing Rules. The nominating and corporate governance committee held one meeting and acted through written consent
in lieu of holding a meeting zero times during 2023.
The
purpose of the nominating and corporate governance committee is to exercise general oversight with respect to the governance of the board
of directors of the Company by (i) identifying, reviewing the qualifications of, and recommending to the board of directors proposed
nominees for election to the board of directors , consistent with criteria approved by the board of directors , (ii) selecting, or recommending
that the board of directors select, the director nominees for the next annual meeting of stockholders, (iii) overseeing the annual evaluation
of the board of directors and management, and (iv) recommending director nominees to the board of directors for each committee of the
board of directors. Our board of directors has adopted a written charter for the nominating and corporate governance committee, which
is available free of charge on our corporate website (http://www.zyversa.com).
The
nominating and corporate governance committee makes recommendations to the full board of directors regarding the size of the board of
directors, the composition of the board of directors, the process for filling vacancies on the board of directors and the tenure of members
of the board of directors. It also makes recommendations to the board of directors regarding the criteria for board of directors and
committee membership, including a description of any specific, minimum qualifications that the nominating and corporate governance committee
believes must be met by a director nominee, and a description of any specific qualities or skills that the nominating and corporate governance
committee believes are necessary for one or more of the Company’s directors to possess, and periodically reassesses the adequacy
of such criteria and submits any proposed changes to the board of directors for approval. In identifying and evaluating proposed director
candidates, the nominating and corporate governance committee considers gender and race/ethnicity diversity of the board of directors
and may consider, in addition to the minimum qualifications and other criteria for board of directors membership approved by the board
of directors from time to time, all facts and circumstances that it deems appropriate or advisable, including, among other things, the
skills of the proposed director candidate, his or her depth and breadth of business experience or other background characteristics, his
or her independence and the needs of the board of directors.
Recently,
in recruiting and nominating candidates for our board of directors, our nominating and corporate governance committee has focused on
increasing diversity overall, considering, among other factors, gender, race, nationality, country of origin, and cultural diversity
of potential director nominees.
The
nominating and corporate governance committee will consider director candidates properly recommended by stockholders. The nominating
and corporate governance committee does not intend to alter the manner in which it evaluates candidates, based on whether or not the
candidate was recommended by a stockholder. However, if the Company is legally required by contract or otherwise to provide third parties
with the ability to nominate individuals for election to the board of directors, the selection and nomination of such director nominees
shall be governed by such contract or other arrangement and shall not be the responsibility of the nominating and corporate governance
committee. Stockholders who wish to recommend individuals for consideration by the nominating and corporate governance committee to become
nominees for election to the board of directors may do so by delivering a written recommendation to the nominating and corporate governance
committee at the following address: 2200 N. Commerce Parkway, Suite 208, Weston, Florida, 33326. Submissions must include the full name
of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete
biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating
stockholder is a beneficial or record holder of the Company’s stock and has been a holder for at least one year. Any such submission
must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.
Code
of Business Conduct and Ethics
The
Company has adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our
principal executive officer, principal financial officer and principal accounting officer, which is available on the Company’s
website. The Company’s Code of Business Conduct and Ethics is a “code of ethics,” as defined in Item 406(b) of Regulation
S-K. The Company will make any legally required disclosures regarding amendments to, or waivers of, provisions of its code of ethics
on its corporate website (http://www.zyversa.com).
Stockholder
Communications with the Board of Directors
Stockholders
and interested parties may communicate with the Company’s board of directors, any committee chairperson, or the non-management
directors as a group by writing to the board of directors or committee chairperson in care of ZyVersa Therapeutics, Inc. at 2200 N. Commerce
Parkway, Suite 208, Weston, FL 33326, Attention: Stephen Glover and Peter Wolfe, with copies to Thompson Hine LLP at 300 Madison Avenue,
27th Floor, New York, New York 10017, Attention: Faith L. Charles. Each communication will be forwarded, depending on the subject matter,
to the board of directors, the appropriate committee chairperson, or all non-management directors.
Hedging
and Pledging Policy
The
Company has an Insider Trading Policy that prohibit directors and employees from engaging in short sales of the Company’s securities;
purchases or sales of puts, calls, or other derivative securities based on the Company’s securities; or purchases of financial
instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset
any decrease in the market value of Company securities.
Our
Insider Trading Policy also prohibits directors and employees from purchasing Company securities on margin, borrowing against Company
securities held in a margin account, or pledging Company securities as collateral for a loan, subject to an exception for pledging Company
securities as collateral for a loan (other than a margin loan) if the director or employee clearly demonstrates the financial capacity
to repay the loan without resort to the pledged securities and upon approval by our Chief Financial Officer.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth beneficial ownership of the Company’s common stock as of September 4, 2024 by:
| |
● |
each
of the Company’s named executive officers, directors, and director nominees; |
| |
|
|
| |
● |
all
of the Company’s executive officers, directors, and director nominees as a group; and |
| |
|
|
| |
● |
each
person known to be the beneficial owner of more than 5% of the outstanding common stock of the Company. |
Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she, or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes
securities that the individual or entity has the right to acquire, such as through the exercise of warrants or stock options or the vesting
of restricted stock units, within 60 days of September 4, 2024. Shares subject to warrants or options that are currently exercisable
or exercisable within 60 days of September 4, 2024 or subject to restricted stock units that vest within 60 days of September 4, 2024
are considered outstanding and beneficially owned by the person holding such warrants, options, or restricted stock units for the purpose
of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership
of any other person.
Certain
beneficial owners of our common stock own warrants to purchase shares of our common stock that contain blockers preventing the holder
from exercising its warrants if as a result of such exercise the holder would beneficially own more than 4.99% or 9.99%, as applicable,
of our common stock. In preparing the table below, we have given affect to those blockers where applicable. Except as noted by footnote,
and subject to community property laws where applicable, based on the information provided to the Company, the persons and entities named
in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. Unless otherwise
indicated, the business address of each beneficial owner listed in the table below is c/o ZyVersa Therapeutics, Inc., 2200 N. Commerce
Parkway, Suite 208, Weston, Florida 33326.
The
beneficial ownership of our common stock is based on 1,074,196 shares of common stock issued and outstanding as of September 4, 2024,
based on our knowledge and publicly available information. Unless otherwise indicated, the business address of each beneficial owner
listed in the table below is c/o ZyVersa Therapeutics, Inc., 2200 N. Commerce Parkway, Suite 208, Weston, Florida 33326.
| Name and Address of Beneficial Owners | |
Number of
Shares
Beneficially
Owned | | |
Percentage of
Shares
Beneficially
Owned | |
| Directors and named executive officers | |
| | | |
| | |
| Stephen C. Glover(1) | |
| 4,347 | | |
| * | |
| Min Chul Park, Ph.D.(2) | |
| 149 | | |
| * | |
| Robert G. Finizio(3) | |
| 206 | | |
| * | |
| Peter Wolfe(4) | |
| 695 | | |
| * | |
| Karen Cashmere(5) | |
| 467 | | |
| * | |
| Pablo A. Guzman, M.D.(6) | |
| 411 | | |
| * | |
| James Sapirstein(7) | |
| 44 | | |
| * | |
| Gregory Freitag(8) | |
| 44 | | |
| * | |
| All executive officers, directors, and director nominees as a group (8 individuals) | |
| 6,363 | | |
| * | |
| Other 5% beneficial owners | |
| | | |
| | |
| Anson Investments Master Fund LP(9) | |
| 117,439 | | |
| 9.99 | % |
| Armistice Capital Master Fund Ltd.(10) | |
| 114,450 | | |
| 9.99 | % |
| (1) |
Includes
1,821 shares of common stock held by Stephen C. Glover and affiliates, consisting of (i) 1,308 shares of common stock held of record
by Stephen C. Glover; (ii) 126 shares of common stock held of record by MedicaRx Inc.; (iii) 245 shares of common stock held of record
by Asclepius Life Sciences Fund, LP; (iv) 142 shares of common stock held of record by Asclepius Master Fund, LTD. The amount also
includes options and warrants that are exercisable as of or within 60 days of September 4, 2024 for 2,294 and 232, respectively,
shares of common stock. Mr. Glover is the managing director of MedicaRx Inc., the managing director of Asclepius Master Fund, LTD,
and the managing member of Asclepius Life Sciences Fund, LP. |
| |
|
| (2) |
Represents
options that are exercisable as of or within 60 days of September 4, 2024 for 149 shares of common stock. |
| |
|
| (3) |
Represents
options that are exercisable as of or within 60 days of September 4, 2024 for 206 shares of common stock. |
| |
|
| (4) |
Represents:
(i) 128 shares of common stock; and (ii) options and warrants that are exercisable as of or within 60 days of September 4, 2024 for
515 and 52, respectively, shares of common stock. |
| |
|
| (5) |
Represents
options that are exercisable as of or within 60 days of September 4, 2024 for 467 shares of common stock. |
| |
|
| (6) |
Represents:
(i) 76 shares of common stock; and (ii) options and warrants that are exercisable as of or within 60 days of September 4, 2024 for
309 and 26, respectively, shares of common stock. |
| |
|
| (7) |
Represents
options that are exercisable as of or within 60 days of September 4, 2024 2023 for 44 shares of common stock. |
| |
|
| (8) |
Represents
options that are exercisable as of or within 60 days of September 4, 2024 2023 for 44 shares of common stock. |
| |
|
| (9) |
Consists
of (i) 16,068 shares of common stock as disclosed in a Schedule 13G filed on February 14, 2024 and (ii) warrants to purchase 101,371
shares of common stock, but excludes warrants to purchase 230,629 shares of common stock that are not currently exercisable as a
result of the 9.99% beneficial ownership limitation blocker contained in such warrants but given the increase in outstanding shares
of the Company since such filing, all warrants held are disclosed here. The securities are held of record by Anson Investments Master
Fund LP. Amin Nathoo and Moez Kassam are directors of Anson Advisors, Inc., and Tony Moore is principal of Anson Fund Management
LP, each has voting and dispositive power over the securities held by Anson Investments Master Fund LP. The business address for
Anson Investments Master Fund LP is 181 Bay Street, Suite 4200, Toronto, ON, M5J 2T3. |
| |
|
| (10) |
Consists
of (i) 43,000 shares of common stock and (ii) warrants to purchase 71, 450 shares of common stock but excludes warrants
to purchase 407,150 shares of common stock that are not currently exercisable as a result of the 9.99% beneficial ownership
limitation blocker contained in such warrants but given the increase in outstanding shares of the Company since such filing, all
warrants held are disclosed here. The securities are held of record by Armistice Capital Master Fund Ltd. Steve Boyd is the CIO of
Armistice Capital, LLC and has sole voting and dispositive power over the securities held by Armistice Capital Master Fund Ltd. The
business address for Armistice Capital Master Fund Ltd.is 510 Madison Avenue, 7th Floor, New York NY 10022. |
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Related
Person Transaction Policy
Our
board of directors has adopted a written Policy and Procedures for Related Person Transactions (the “Related Person Transaction
Policy”) that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.
A
“Related Person Transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements
or relationships) in which the Company (including any of its subsidiaries) was, is or will be a participant and the aggregate amount
involved will or may be expected to exceed $100,000, and in which any related person had, has or will have a direct or indirect material
interest.
A
“Related Person” means:
| |
● |
any
person who is, or at any time since the beginning of the Company’s last fiscal year was, a director or executive officer of
the Company or a nominee to become a director of the Company; |
| |
|
|
| |
● |
any
person who is known to be the beneficial owner of more than 5% of any class of the Company’s voting securities; |
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|
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any
immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director, executive officer, nominee or more
than 5% beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer,
nominee or more than 5% beneficial owner; and |
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firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar
position or in which such person has a 5% or greater beneficial ownership interest. |
The
Company has policies and procedures designed to minimize potential conflicts of interest arising from any dealings it may have with its
affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from
time to time. Specifically, pursuant to its charter, the audit committee has the responsibility to review related party transactions.
Pursuant
to the Related Person Transactions Policy, each director and executive officer of the Company, each person nominated to stand for election
as a director and each person who beneficially owns more than 5% of any class of the Company’s voting securities must provide the
Company’s Principal Financial Officer with prior written notice of any proposed Related Person Transaction and such Related Person
Transaction must be approved in accordance with the Related Person Transactions Policy. Such approval must be granted by the audit committee
or, in certain circumstances, the Chairperson of the audit committee. In approving or rejecting any such proposal, the audit committee,
or the Chairperson of the audit committee, is to consider all of the relevant facts and circumstances available to them, including, but
not limited to: the benefits to the Company; the impact on a director’s independence in the event the Related Person is a director,
an immediately family member of a director or an entity in which a director is a partner, shareholder or executive officer; (c) the availability
of other sources for comparable products or services; (d) the terms of the transaction; and (e) the terms available to unrelated third
parties.
If
a Related Party Transaction is pending or ongoing, it must be submitted to the audit committee or the Chairperson of the audit committee
promptly, and the audit committee or the Chairperson of the audit committee must consider all of the relevant facts and circumstances
available to them, including, but not limited to: (a) the benefits to the Company; (b) the impact on a director’s independence
in the event the Related Person is a director, an immediately family member of a director or an entity in which a director is a partner,
shareholder or executive officer; (c) the availability of other sources for comparable products or services; (d) the terms of the transaction;
and (e) the terms available to unrelated third parties or to employees generally. Based on the conclusions reached, the audit committee
(or the Chairperson) shall consider whether to ratify the Related Person Transaction or recommend that the Related Person Transaction
be amended, terminated or otherwise modified.
In
addition, if the Related Person Transaction is completed, the audit committee must evaluate the transaction, taking into account the
same factors described above, to determine if rescission of the transaction and/or any disciplinary action is appropriate, and shall
request that the Principal Financial Officer evaluate the Company’s controls and procedures to ascertain the reason the transaction
was not submitted to the audit committee (or the Chairperson) for prior approval and whether any changes to these procedures are recommended.
Compensation
Arrangements of Officers and Directors
See
the “Executive Compensation” section of this proxy statement for information regarding compensation arrangements with the
executive officers and directors of the Company, which include, among other things, employment, termination of employment and change
in control arrangements, stock awards, and certain other benefits.
Indemnification
of Officers and Directors
The
Company has entered into indemnification agreements with each of its directors and named executive officers. These agreements require
the Company to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason
of their service to the Company, and to advance expenses incurred as a result of any proceeding against them as to which they could be
indemnified. The Company also intends to enter into indemnification agreements with its future directors and executive officers. For
a more fulsome description of the indemnification agreements refer to the disclosure in “Executive Compensation.”
Certain
Related Person Transactions
In
addition to the compensation arrangements with directors and executive officers described under the sections titled “Director Compensation”
and “Executive Compensation” in this proxy statement, the following is a description of each transaction since January 1,
2022 and each currently proposed transaction in which:
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have been or are to be a participant; |
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amount involved exceeds or will exceed $120,000; and |
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any
of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of,
or person sharing the household with, any of these individuals (other than tenants or employees), had or will have a direct or indirect
material interest. |
Certain
of the transactions described in this section were entered into prior to the adoption of the Related Person Transaction Policy. Certain
of the foregoing and following disclosures are summaries of certain provisions of our related party agreements, and are qualified in
their entirety by reference to all of the provisions of such agreements. Because these descriptions are only summaries of the applicable
agreements, they do not necessarily contain all of the information that you may find useful. Copies of certain of the agreements (or
forms of the agreements) have been filed as exhibits to our filings with the SEC, and are available electronically on the website of
the SEC at http://www.sec.gov.
Post
Business Combination Related Party Transactions
Private
Placement
On
June 5, 2023, we issued an aggregate of 8,698 shares of common stock (the “Lockup Extension Shares”) to certain investors
in a private placement (including to certain members of Larkspur Health LLC, a Delaware limited liability company (the “Sponsor”))
in exchange for increasing the duration of their lockup period until July 31, 2023 with respect to an aggregate of 5,651 shares of common
stock underlying all securities of the Company held by such investors. The Lockup Extension Shares are not subject to the lockup extension
but are subject to Securities Act restrictions.
Engagement
Letter(s)
On
January 19, 2023, in connection with our recently completed best efforts offering pursuant to our registration statement on Form S-1
filed with the SEC on January 27, 2023, as amended (File No. 333-269442), we entered into an engagement letter with A.G.P/Alliance Global
Partners (“A.G.P.”), which at the time beneficially owned over 5% of our common stock, pursuant to which we paid A.G.P.,
as placement agent, a cash fee equal to 4.0% of the aggregate purchase price paid by each purchaser of securities sold in such offering
and reimbursed A.G.P. $100,000 for certain expenses incurred in connection with such offering. A.G.P. also previously served as the underwriter
of our IPO and the placement agent for the PIPE, as further described below under “Pre-Business Combination Related Party Transactions
of Larkspur.”
Consulting
Agreement
On
January 22, 2015, we entered into a consulting agreement, as amended, with Dr. Pablo Guzman, our Chief Medical Officer and Senior Vice
President of Medical Affairs, to provide us services in his capacity as our acting chief medical officer. Pursuant to the consulting
arrangement, since December 12, 2020 we (i) made cash payments to Dr. Guzman in an aggregate amount equal to $207,984; and (ii) granted
to Dr. Guzman options to purchase 87 shares of our common stock, at exercise prices ranging from $3,965.50 to $5,726.00 per share. The
consulting arrangement with Dr. Guzman was terminated effective as of his employment with the Company on January 26, 2023.
PIPE
Transactions and PIPE Related Agreements
PIPE
Subscription Agreement
In
connection with the Business Combination, we entered into the PIPE Subscription Agreement, as amended with certain investors (the “PIPE
Investors”) (including Daniel J. O’Connor, a director of Larkspur since its inception who remained a director of the Company upon
completion of the Business Combination, and Steven Glover, the Company’s Chief Executive Officer and former Chief Executive Officer
and President of Old ZyVersa), pursuant to which, among other things, we sold to the PIPE Investors,
in a private placement that closed immediately prior to the closing of the Business Combination, an aggregate of (i) 8,636 shares of
Series A Convertible Preferred Stock, par value $0.0001 per share (the “PIPE Shares”) for an aggregate purchase price of
$8,635,000, convertible into shares of common stock at a conversion price initially equal to $3,500.00 per share (subject to a downward
adjustment to no lower than the floor price of $700.00 per share based on the public trading price of the shares of our common stock
calculated at 90 days and 150 days following the effective date of the registration statement with respect to registration of such securities)
issuable upon the conversion of the PIPE Shares in accordance with the terms of the Series A Certificate of Designation, subject to certain
adjustments; and (ii) common stock purchase warrants (each, a “PIPE Warrant”) to purchase up to a number of shares of common
stock initially equal to 100% of the shares of common stock issued and issuable upon conversion of the PIPE Shares in accordance with
the terms of the Series A Certificate of Designation and the Warrant, with an exercise price initially equal to $4,025.00 per share,
subject to certain adjustments. The exercise price of the PIPE Warrants will be subject to certain adjustments including those resulting
from (i) stock dividends and splits, (ii) subsequent rights offerings, (iii) pro-rata distributions, (iv) fundamental transactions, (v)
certain voluntary adjustments and (vi) issuances of other securities at a price at or below the exercise price then in effect, in each
case, in accordance with the terms of the PIPE Warrant. The Series A Certificate of Designation includes the right for the issuer to
redeem such shares at 120% of the issue price of the PIPE Shares then outstanding. Additionally, the PIPE Subscription Agreement contains
customary representations and warranties, and certain transfer restrictions. The closing of the sale of the PIPE Shares and the PIPE
Warrants was conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated
by the Business Combination Agreement. The issuance of the securities pursuant to the PIPE Subscription Agreement was consummated substantially
concurrently with the closing of the Business Combination.
As
of September 4, 2024, (i) only 50 PIPE Shares were outstanding, and (ii) 13,944 PIPE Warrants were outstanding, all of which are exercisable
at $700.00 per share.
PIPE
Warrant Agreement
In
connection with the PIPE Subscription Agreement, we and the other PIPE Investors entered into a warrant agreement, pursuant to which
we issued PIPE Warrants to purchase up to a number of shares of our common stock equal to 100% of the shares of common stock issuable
upon conversion of the PIPE Shares, with an exercise price initially equal to $4,025.00 per share, subject to certain adjustments. The
exercise price of the PIPE Warrants will be subject to certain adjustments including those resulting from (i) stock dividends and splits,
(ii) subsequent rights offerings, (iii) pro-rata distributions, (iv) fundamental transactions, (v) certain voluntary adjustments and
(vi) issuances of other securities at a price at or below the exercise price then in effect, in each case, in accordance with the terms
of the PIPE Warrant.
PIPE
Registration Rights Agreement
In
connection with the consummation of the Business Combination, we and the PIPE Investors entered into a registration rights agreement
(the “PIPE Registration Rights Agreement”), pursuant to which we agreed to prepare and file with the SEC, no later than five
business days after the closing date of the Business Combination, a registration statement on Form S-1 under the Securities Act, covering
the resale of all of the shares of common stock issuable upon conversion or exercise of the PIPE Shares and the PIPE Warrants issued
pursuant to the PIPE Subscription Agreement and the PIPE Warrants. We are further required to use our best efforts to cause such initial
registration statement (and additional registration statements required to be filed under the PIPE Registration Rights Agreement), to
be declared effective by the SEC as soon as practicable after filing, but in no event later than 20 calendar days thereafter (or, 45
calendar days thereafter in the event of a “full review” by the SEC). In addition, pursuant to the terms of the PIPE Registration
Rights Agreement and subject to certain requirements and customary conditions, including with regard to certain demand rights that may
be exercised, the PIPE Investors shall also have certain “piggy-back” registration rights, subject to certain requirements
and customary conditions. We will bear the expenses incurred in connection with the filing of any such registration statement.
Shareholder
Support Agreement
On
July 20, 2022, in connection with the Business Combination Agreement, Larkspur, Old ZyVersa (including all members of Old ZyVersa’s management and board of directors), and certain stockholders of Old
ZyVersa (such stockholders, the “Key ZyVersa Shareholders”) entered into a Shareholder Support Agreement (the “Shareholder
Support Agreement”), providing that, among other things, the Key ZyVersa Shareholders, whose ownership interests collectively represented
the outstanding Old ZyVersa common stock and Old ZyVersa preferred stock (voting on an as-converted basis) sufficient to approve the
Business Combination on behalf of Old ZyVersa, supported the approval and adoption of the Business Combination Agreement and the transactions
contemplated thereby, and executed and delivered the Written Consent, within 48 hours of the Registration Statement on Form S-4 filed
with the SEC in connection with the Business Combination becoming effective. The Shareholder Support Agreement terminated upon the closing
of the Business Combination (the “Expiration Time”). The Key ZyVersa Shareholders also agreed, until the Expiration Time,
to certain transfer restrictions (excluding the Conversion).
Lock-Up
Agreement
In
connection with the Shareholder Support Agreement, we and the Key ZyVersa Shareholders entered into a lock-up agreement, which we refer
to as the “Lock-Up Agreement.” Pursuant to the Lock-Up Agreement, approximately 75% of the aggregate issued and outstanding
securities issued to ZyVersa in connection with the Business Combination were subject to the restrictions described below from the closing
until the termination of applicable lock-up periods. The Lock-Up Agreements are no longer in effect and this disclosure is made for historical
purposes.
We
and the Key ZyVersa Shareholders agreed not to, without the prior written consent of the audit committee of the Company’s board
of directors and subject to certain exceptions, during the applicable lock-up period:
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sell,
offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer,
dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of the Exchange Act, and the rules and regulations of the SEC promulgated
thereunder, any shares of the Combined Entity’s common stock held by it immediately after the Acquisition Merger Effective
Time or issued or issuable to it in connection with the Business Combination (including the Company’s common stock acquired
as part of the PIPE Investment or issued in exchange for, or on conversion or exercise of, any securities issued as part of the PIPE
Investment), any shares of the Company’s common stock issuable upon the exercise of options to purchase shares of the Company’s
common stock held by it immediately after the Acquisition Merger Effective Time, or any securities convertible into or exercisable
or exchangeable for the Company’s common stock held by it immediately after the Acquisition Merger Effective Time (the “Lock-Up
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enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of any of the Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise;
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Pursuant
to the Lock-Up Agreement, we and the Key ZyVersa Shareholders agreed to the foregoing transfer restrictions during the period beginning
on the Closing Date and ending on the date that is the earlier of (x) 180 days after the Closing Date and (y) the date on which the Company
completes a liquidation, merger, capital stock exchange, reorganization or other similar transactions that result in all of the Company’s
stockholders having the right to exchange their shares for cash, securities or other property. The Lock-Up Agreements are no longer in
effect.
Amended
and Restated Registration Rights Agreement
In
connection with the Business Combination, that certain Registration Rights Agreement, dated December 10, 2021, by and among Larkspur
and certain persons and entities holding securities of Larkspur (the “IPO Registration Rights Agreement”), was amended and
restated, and the Company, the Sponsor, certain persons and entities holding securities of Larkspur prior to the Closing (together with
the Sponsor, the “Larkspur Holders”) and certain persons and entities holding securities of Old ZyVersa prior to the Closing
(the “ZyVersa Holders,” together with the Larkspur Holders, the “Registration Rights Holders”) entered into the
Amended and Restated Registration Rights Agreement, dated December 12, 2022. Pursuant to the Amended and Restated Registration Rights
Agreement, the Company agreed that, (i) the Registration Rights Holders will be allowed certain demand registration rights six months
after the consummation of the Business Combination, (ii) the Company will use its commercially reasonable efforts to file with the SEC
(at the Company’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable
to the Registration Rights Holders (the “Resale Registration Statement”), and (iii) the Company will use its commercially
reasonable efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof.
In certain circumstances, the Registration Rights Holders can demand up to two underwritten offerings and such holders will be entitled
to customary piggyback registration rights. The Amended and Restated Registration Rights Agreement does not provide for the payment of
any cash penalties by the Company if it fails to satisfy any of its obligations under the Amended and Restated Registration Rights Agreement.
Series
B Purchase Agreement
In
connection with the Business Combination, we agreed to issue to certain purchasers that provided services to us (including A.G.P.), in a private
placement that closed immediately prior to the Closing of the Business Combination (“Series B Purchase Agreement”), an aggregate
of 5,062 shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Shares”) for an aggregate
purchase price of $5,062,000, convertible into shares of our common stock at a conversion price initially equal to $3,500.00 per share
(subject to a downward adjustment to no lower than the floor price of $2,450.00 per share based on the public trading price of the shares
of our common stock, calculated at 150 days following the effective date of the registration statement with respect to registration of
such securities) issuable upon conversion of the Series B Shares in accordance with the terms of the Series B Certificate of Designation,
subject to certain adjustments. The Series B Certificate of Designation includes the right for the issuer to redeem such shares at 120%
of the issue price of the Series B Shares then outstanding. Additionally, the Series B Purchase Agreement contains customary representations
and warranties, and certain transfer restrictions. The closing of the sale of the Series B Shares was conditioned upon, among other things,
customary closing conditions and the consummation of the transactions contemplated by the Business Combination Agreement. The issuance
of the securities was consummated substantially concurrently with the closing of the Business Combination.
Series
B Registration Rights Agreement
In
connection with the Series B Purchase Agreement, we and the other the Purchasers (including A.G.P.) entered into a registration rights agreement
(the “Series B Registration Rights Agreement”), pursuant to which we filed with the SEC a registration statement on Form
S-1 (or other applicable registration statement) under the Securities Act, which covers the resale of all of the shares of common stock
issuable upon conversion or exercise of the Series B Shares issued pursuant to the Series B Purchase Agreement. We are further required
to use our best efforts to cause such initial registration statement (and additional registration statements required to be filed under
the Registration Rights Agreement), to be declared effective by the SEC as soon as practicable after filing. In addition, pursuant to
the terms of the Series B Registration Rights Agreement and subject to certain requirements and customary conditions, including with
regard to certain demand rights that may be exercised, the Purchasers shall also have certain “piggy-back” registration rights,
subject to certain requirements and customary conditions. We will bear the expenses incurred in connection with the filing of any such
registration statement.
Bridge
Financing
From
March 2022 to December 2022, Old ZyVersa conducted a private placement offering of shares of its Series A Convertible Preferred Stock
and warrants (the “Bridge Warrants”) to purchase shares of Old ZyVersa’s common stock (the “Bridge Financing”).
The shares of Series A Convertible Preferred Stock converted automatically immediately prior to the consummation of the Business Combination
into shares of Old ZyVersa common stock. Such shares of Old ZyVersa common stock were exchanged (at the exchange ratio) for 3,634 shares
of our common stock (of which 936 shares were related to the Bridge Financing and the remainder were from the conversion of the 2021
Promissory Note Financing conversion into the Bridge Financing) upon consummation of the Business Combination. Also, upon consummation
of the Business Combination, the outstanding Bridge Warrants were assumed and converted (based on the merger exchange ratio) into a warrant
to purchase shares of our common stock. The replacement Warrants are exercisable for 3,634 shares of our common stock (of which 936 of
the warrants were from the Bridge Financing and the remainder were from the conversion of the 2021 Promissory Note Financing conversion
into the Bridge Financing) with an initial exercise price equal to $2,415.00 per share (as adjusted to give effect to the Business Combination),
subject to certain adjustments. Certain affiliates of the Company participated as investors in the Bridge Financing.
Pre-Business
Combination Related Party Transactions of Old ZyVersa
2021
Promissory Note Financing
Between
February and March 2021, Old ZyVersa issued an aggregate of $5.23 million in principal amount of convertible promissory notes (the “2021
Notes”). Incon Co., Ltd., a more than 5% shareholder of Old ZyVersa, purchased an aggregate principal amount of $2,500,000 of 2021
Notes, Stephen Glover, Old ZyVersa’s Chief Executive Officer, purchased an aggregate principal amount of $300,000 of 2021 Notes, and Peter Wolfe, the Company’s Chief Financial Officer and previously Senior Vice President, Finance and
Administration at Old ZyVersa, purchased an aggregate principal amount of $100,000 of 2021 Notes.
The 2021 Notes bear interest at the rate of 6% per annum, compounded daily, and were due on December 31, 2021. In the event ZyVersa
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. On July 8, 2022, as a result of the 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 were issued to the former 2021 Note holders
upon the automatic conversion of the Series A Preferred Stock, which occurred upon the closing of the Business Combination. These securities
were ultimately converted into and on the same terms as the securities issued in the Bridge Financing.
Registration
Rights Agreement
In
November 2016, in connection with a private placement of Old ZyVersa’s common stock (the “2016 Old ZyVersa Financing”),
Old ZyVersa entered into a Registration Rights Agreement (the “2016 Registration Rights Agreement”) with each investor that
participated in the 2016 Financing. Pursuant to the 2016 Registration Rights Agreement, each investor in the 2016 Financing was granted
piggyback registration rights whereby if Old ZyVersa proposes to register any shares of capital stock for sale by Old ZyVersa under the
Securities Act on a form that would allow for the registration of the investors’ shares of common stock, each investor in the 2016
Financing would have the right to include their shares of Old ZyVersa’s common stock in such registration statement. The 2016 Registration
Rights Agreement terminated automatically upon the closing of the Business Combination.
In
the 2016 Old ZyVersa Offering, Stephen Glover, Old ZyVersa’s Chief Executive Officer, along with entities associated with Mr. Glover,
purchased an aggregate of $550,000 worth of Old ZyVersa’s common stock, and an entity associated with Shawn Titcomb, a 5% shareholder
of Old ZyVersa, purchased $200,000 worth of Old ZyVersa’s common stock.
2014
Old ZyVersa Shareholders Agreement
On
April 11, 2014, Old ZyVersa and three 5% shareholders, Shawn Titcomb, Nico Pronk and Nathan Cali, as well as Stephen Glover, Old ZyVersa’s
Chief Executive Officer, entered into a Shareholders Agreement (the “2014 Old ZyVersa Shareholder Agreement”), whereby each
shareholder-party thereto agreed to vote all of their respective voting securities in such a way to ensure that (i) the number of directors
of Old ZyVersa remains at all times at three directors, and (ii) Shawn Titcomb, Nico Pronk and Stephen Glover are elected and continue
to serve as Old ZyVersa directors.
The
2014 Old ZyVersa Shareholders Agreement also contains certain transfer restrictions on the securities owned by the shareholder-parties
thereto, subject to certain customary exceptions. Pursuant to the 2014 Old ZyVersa Shareholders Agreement, each shareholder-party thereto
has a right of first refusal if any other shareholder-party thereto receives a bona fide offer to sell its securities from a third party.
On October 28, 2016, Nobel International Investments, Inc., a more than 5% shareholder of Old ZyVersa’s common stock and an entity
affiliated with Mr. Pronk, executed a Joinder Agreement and was made party to the 2014 Old ZyVersa Shareholders Agreement, pursuant to
the same terms as the other parties thereto. The 2014 Old ZyVersa Shareholders Agreement terminated automatically upon the closing of
the Business Combination.
Pre-Business
Combination Related Party Transactions of Larkspur
On
April 4, 2021, Larkspur entered into an agreement (the “Brio Agreement”) with Brio Financial Group (“Brio Financial”),
pursuant to which Brio Financial provided certain financial and accounting services to Larkspur, including, but not limited to, assisting
Larkspur with developing and documenting a monthly and quarterly accounting closing process, preparing financial statements, maintaining
Larkspur’s accounting system and its internal debt and equity ledgers, preparing the MD&A portion of quarterly and annual reports,
and evaluating its internal controls over financial reporting. Under the Brio Agreement, Larkspur agreed to pay Brio Financial a fixed
price of $15,000 for initial services and a fixed monthly rate of $1,750 for recurring services, which commenced in June 2021. Larkspur
also agreed to reimburse Brio Financial for travel and other out-of-pocket costs. The term of the Brio Agreement commenced on April 4,
2021 and continued in effect until its termination on December 31, 2022. David S. Briones, Larkspur’s former Chief Financial Officer,
Treasurer, Secretary and Director, was the managing member of Brio Financial and owned 100% of Brio Financial’s equity interest.
The approximately value of the Brio Agreement was $48,250 and the approximate value of Mr. Briones’s interest in the Brio Agreement
was $48,250.
In
connection with the consummation of the Business Combination, Larkspur entered into a Series B Purchase Agreement with A.G.P., covering
the issuance of 4,026 Series B Shares to A.G.P., in consideration of A.G.P.’s activities on our behalf, including identifying potential
target businesses and performing due diligence on suitable business combinations, for an aggregate purchase price of approximately $4,026,000,
including, (i) placement agent fees of 6.0% in connection with the PIPE in an amount equal to approximately $506,000, (ii) deferred underwriting
discount of 4.5% in connection with our IPO in an amount equal to $3,495,000, and (iii) non-accountable expenses in an amount equal to
$25,000.
Prior
to the closing of Larkspur’s initial public offering, Larkspur Health LLC’s investors agreed to loan Larkspur up to an aggregate
of $750,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and were due at
the earlier of December 31, 2021 or the closing of Larkspur’s initial public offering out of the estimated $1,176,000 of offering
proceeds that was allocated to the payment of related offering expenses (other than underwriting commissions).
After
Larkspur’s initial business combination, members of its management team who remain with the combined company may be paid consulting,
management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent
then known, in the tender offer or proxy solicitation materials, as applicable, furnished to its stockholders. It is unlikely the amount
of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting
held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business
to determine executive and director compensation.
Larkspur
entered into customary agreements with our officers and directors to provide contractual indemnification in addition to the indemnification
provided for in its Amended and Restated Certificate of Incorporation. Larkspur’s bylaws also will permit them to secure insurance
on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law
would permit such indemnification. Larkspur will purchase a policy of directors’ and officers’ liability insurance that insures
its officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures it against
its obligations to indemnify its officers and directors.
On
May 7, 2021, the Sponsor purchased, pursuant to a written agreement, an aggregate of 915 private placement units from Larkspur for a
purchase price of $3,500.00 per whole warrant in a private placement that occurred concurrently with the closing of the IPO and the underwriter’s
exercise of their over-allotment option. Each private placement unit consists of three-thousandths of a share of Class A common stock
and two-thousandths of one redeemable private placement warrant. Each private placement warrant entitles the holder to purchase three-thousandths
of a share of class A common stock at a price of $4,025.00 per share, subject to adjustment. The underlying shares of common stock and
private placement warrants (including the shares of common stock issuable upon exercise thereof) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of an initial business combination.
On
May 7, 2021, Larkspur issued unsecured promissory notes (the “Promissory Notes”) to the Sponsor’s investors, which
were amended and restated on October 7, 2021, pursuant to which Larkspur could borrow up to an aggregate principal amount of $750,000.
The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2021 and (ii) the completion of Larkspur’s
initial public offering.
No
compensation of any kind, including finder’s and consulting fees, will be paid to the Sponsor, officers and directors, or their
respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However,
these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on Larkspur’s behalf
such as identifying potential target businesses and performing due diligence on suitable business combinations. Larkspur’s audit
committee reviewed on a quarterly basis all payments that were made by Larkspur to the Sponsor, officers, directors or their affiliates
and determined which expenses and the amount of expenses would be reimbursed. There was no cap or ceiling on the reimbursement of out-of-pocket
expenses incurred by such persons in connection with activities on Larkspur’s behalf.
In
addition, in order to finance transaction costs in connection with an intended initial business combination, the Sponsor or an affiliate
of the Sponsor or certain of Larkspur’s officers and directors may, but are not obligated to, loan Larkspur funds as may be required
(the “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, there
were no amounts outstanding under the Working Capital Loans. Larkspur does not expect to seek loans from parties other than the Sponsor,
its affiliates or its management team as it does not believe third parties will be willing to loan such funds and provide a waiver against
any and all rights to seek access to funds in the Trust Account.
EXECUTIVE
COMPENSATION
As
we are an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to emerging growth
companies. The scaled down disclosure rules are those applicable to “smaller reporting companies,” as such term is defined
in the rules promulgated under the Securities Act.
Our
“named executive officers” (“NEOs”) for the year ended December 31, 2023 were:
| |
● |
Stephen
C. Glover, our Chief Executive Officer, President, and Chairman; |
| |
|
|
| |
● |
Peter
Wolfe, our Chief Financial Officer and Secretary; and |
| |
|
|
| |
● |
Karen
A. Cashmere, our Chief Commercial Officer. |
Summary
Compensation Table
The
following Summary Compensation Table sets forth information regarding the compensation paid to, awarded to, or earned by our NEOs in
2023 and 2022 for services rendered in all capacities to us and our subsidiaries during 2023 and 2022.
| Name and Principal Position | |
Year | | |
Salary ($) | | |
Bonus ($) | | |
Option Awards(1) ($) | | |
Total Compensation ($) | |
| | |
| | |
| | |
| | |
| | |
| |
| Stephen C. Glover | |
| 2023 | | |
| 550,000 | | |
| 225,000 | | |
| 218,217 | | |
| 993,217 | |
| Co-Founder, Chief Executive Officer | |
| 2022 | | |
| 450,500 | | |
| - | | |
| 1,027,948 | | |
| 1,478,448 | |
| President and Chairman | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Karen A. Cashmere | |
| 2023 | | |
| 320,000 | | |
| 90,000 | | |
| 76,687 | | |
| 486,687 | |
| Chief Commercial Officer | |
| 2022 | | |
| 300,000 | | |
| - | | |
| 282,622 | | |
| 582,622 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Peter Wolfe | |
| 2023 | | |
| 395,000 | | |
| 82,500 | | |
| 95,859 | | |
| 573,359 | |
| Chief Financial Officer and Secretary | |
| 2022 | | |
| 275,000 | | |
| - | | |
| 282,622 | | |
| 557,622 | |
| (1) |
The
amounts reported represent the aggregate grant date fair value of the stock options awarded to our named executive officers under
our 2022 Omnibus Equity Incentive Plan and 2014 Equity Incentive Plan in the years ended December 31, 2023 and December 31, 2022,
respectively, calculated in accordance with FASB ASC Topic 718. See Note 9 to our financial statements contained in our Annual Report
on Form 10-K for the 2023 fiscal year for the assumptions used in calculating the grant date fair value. |
Narrative
Disclosure to Summary Compensation Table
Executive
Employment Agreements
Stephen
C. Glover
On
January 1, 2019, we entered into an employment agreement with Stephen C. Glover (the “Glover Employment Agreement”). Under
the terms of the Glover Employment Agreement, he holds the position of Chief Executive Officer and receives a base salary of $450,000
annually, which base salary amount is subject to periodic adjustment by the board of directors or the compensation committee. In addition,
Mr. Glover is eligible to receive an annual bonus, with a target amount equal to fifty percent (50%) of Mr. Glover’s base salary.
The actual amount of each annual bonus will be based upon the level of achievement of our corporate objectives and Mr. Glover’s
individual objectives, in each case, as established by us and Mr. Glover for the calendar year with respect to which the annual bonus
relates. The determination of the level of achievement of the corporate objectives and the Mr. Glover’s individual performance
objectives for a year shall be made by us in our reasonable discretion. In addition, pursuant to the terms of the Glover Employment Agreement,
Mr. Glover is eligible to receive, from time to time, equity awards under our existing equity incentive plan, or any other equity incentive
plan we may adopt in the future, and the terms and conditions of such awards, if any, will be determined by our board of directors or
Compensation Committee, in their discretion. Mr. Glover is also eligible to participate in any executive benefit plan or program we adopt.
Pursuant
to the Glover Employment Agreement, we may terminate Mr. Glover’s employment at any time without Cause (as that term is defined
in the Glover Employment Agreement) upon 60 days prior written notice to Mr. Glover. Mr. Glover may terminate his employment for Good
Reason (as that term is defined in Mr. Glover’s employment agreement) upon 90 days written notice to us, upon which notice we have
30 days to cure the conditions that Mr. Glover considers to be Good Reason, subject to certain conditions set forth in the Glover Employment
Agreement.
If
Mr. Glover’s employment is terminated without Cause or for Good Reason other than during a Post-Change in Control Period (as defined
in the Glover Employment Agreement), Mr. Glover will be entitled to receive (i) the Accrued Obligations (as defined in the Glover Employment
Agreement), (ii) severance payments equal to 15 months of Mr. Glover’s base salary (to be paid in a lump sum on the next regular
payroll date within 60 days of Mr. Glover’s termination), and (iii) if elected, the Company will reimburse Mr. Glover for certain
COBRA health benefits for 15 months.
Notwithstanding
the above, if Mr. Glover’s employment is terminated without Cause or he resigns for Good Reason within 12 months after a Change
of Control (as defined in the Glover Employment Agreement), Mr. Glover will receive (i) the Accrued Obligations, (ii) severance payments
equal to 36 months of Mr. Glover’s base salary (to be paid in bimonthly payments commencing on the next regular payroll date within
60 days of Mr. Glover’s termination), (iii) any deferred compensation due to Mr. Glover, (iv) if elected, the Company will reimburse
Mr. Glover for certain COBRA health benefits for 24 months, (v) a payment equal to Mr. Glover’s target annual bonus amount for
the calendar year in which the termination occurs, (vi) in lieu of shares of common stock issuable upon exercise of outstanding options
granted to Mr. Glover, Mr. Glover shall receive an amount in cash equal to the product of (A) the excess of the closing price of our
common stock as reported on Nasdaq (if not so reported, on the basis of the average of the lowest asked and highest bid prices on or
nearest the date of termination), over the per share exercise price of each option held by Mr. Glover (whether or not then fully exercisable)
plus the amount of any applicable cash appreciation rights, times (B) the number of shares of common stock covered by each such option,
and (vii) a payment equal to the amount of any and all legal fees incurred by Mr. Glover as a result of such termination.
Pursuant
to the Glover Employment Agreement, we may terminate Mr. Glover’s employment at any time for Cause upon written notice to Mr. Glover.
Mr. Glover may voluntarily terminate his employment at any time without Good Reason upon ninety (90) days prior written notice to the
Company; provided, however, that we reserve the right, upon written notice to Mr. Glover, to accept Mr. Glover’s notice of resignation
and to accelerate such notice and make Mr. Glover’s resignation effective immediately, or on such other date prior to Mr. Glover’s
intended last day of work as we deem appropriate. If Mr. Glover’s employment is terminated with Cause or without Good Reason, he
is entitled to receive (i) his earned but unpaid base salary through the final day of his employment, (ii) his accrued, but unused, vacation,
(iii) expenses reimbursable under the employment agreement incurred on or prior to the last day of his employment, and (iv) any amounts
or benefits that are vested amounts or benefits that Mr. Glover is entitled to receive under any of our equity compensation plans.
Pursuant
to the Glover Employment Agreement, we may terminate Mr. Glover’s employment at any time for Cause upon written notice to Mr. Glover.
Mr. Glover may voluntarily terminate his employment at any time without Good Reason upon two weeks prior written notice to us.
On
July 20, 2022, we entered into a new executive employment agreement with Stephen C. Glover (the “New Glover Agreement”) that
became effective upon consummation of the Business Combination, pursuant to which we agreed to continue to retain Mr. Glover as our Chief
Executive Officer following the closing of the Business Combination, subject to the terms and conditions of the New Glover Agreement.
The New Glover Agreement has superseded the Glover Employment Agreement. Under the New Glover Agreement, the conditions of Mr. Glover’s
employment include, among other things, his agreement and execution of a Proprietary Information & Restrictive Covenant Agreement.
Under
the terms of the New Glover Agreement, Mr. Glover will continue to hold the position of Chief Executive Officer and receive a base salary
of $550,000 annually, subject to our standard payroll practices. Mr. Glover’s base salary and future increases in compensation
are subject to periodic review and approval by the board of directors. In addition, Mr. Glover is eligible to receive an annual performance-based
cash bonus, with a target amount equal to fifty-five percent (55%) of Mr. Glover’s base salary, subject to review and adjustment
by the board of directors based upon Mr. Glover’s achievement of certain performance goals. Mr. Glover’s receipt of an annual
bonus is also contingent upon Mr. Glover’s continued employment with us at the time such bonus is to be paid, otherwise the annual
bonus is forfeited. In addition, pursuant to the terms of the New Glover Agreement, Mr. Glover may be eligible for certain grants of
equity awards of our common stock, subject to vesting and other terms and conditions of our equity plan to which the award is granted
and an agreement to be provided by us and entered into with Mr. Glover. Mr. Glover is also eligible to participate on the same basis
as similarly situated employees in our benefit plans in effect from time during his employment.
Pursuant
to the New Glover Agreement, we may terminate Mr. Glover’s employment at any time without Cause (as that term is defined in the
New Glover Agreement) upon written notice to Mr. Glover. Provided Mr. Glover has not previously been notified of our intention to terminate
his employment, Mr. Glover may resign from his employment with us for Good Reason (as that term is defined in the New Glover Agreement)
upon 60 days written notice to us, upon which notice we have 30 days to cure the conditions that Mr. Glover considers to be Good Reason,
subject to certain conditions set forth in the New Glover Agreement. In the event Mr. Glover resigns for Good Reason, and provided that
such termination constitutes a Separation from Service (as that term is defined in the New Glover Agreement), then subject to Mr. Glover’s
compliance with his obligations under the New Glover Agreement, Mr. Glover shall be eligible to receive the Severance Benefits (as that
term is defined in the New Glover Agreement) on the same terms and conditions as he would be entitled for our termination of his employment
without Cause.
In
the event we terminate Mr. Glover’s employment at any time without Cause, or if Mr. Glover resigns for Good Reason, provided that
such termination constitutes a Separation from Service, then Mr. Glover shall be entitled to receive the Accrued Obligations (as that
term is defined in the New Glover Agreement) and, subject to Mr. Glover’s compliance with his obligations under the New Glover
Agreement, Mr. Glover shall also be entitled to receive the following Severance Benefits: (i) an amount equal to Mr. Glover’s then
current base salary for 24 months, paid in equal instalments on our regularly scheduled payroll dates following the Release Effective
Date (as that term is defined in the New Glover Agreement); (ii) an amount equal to any unpaid bonus earned for the preceding year in
which Mr. Glover’s termination occurs, paid in a single lump sum payment within 60 days following Mr. Glover’s termination;
(iii) an amount equal to the greater of (a) the bonus paid for the performance year ending prior to Mr. Glover’s termination, and
(b) the bonus that Mr. Glover would have earned for the performance year in which such termination occurs, in each case prorated for
the period of Mr. Glover’s employment through the date of his termination, paid as a single lump sum payment within 60 days following
Mr. Glover’s termination; (iv) any equity awards issued to Mr. Glover that are outstanding as of the date of Mr. Glover’s
termination will become 100% vested and any stock options outstanding will remain exercisable until the earliest of (A) 18 months following
Mr. Glover’s termination, or (B) the original expiration date for such vested options as provided in the applicable award agreement;
and (iv) if elected, we will reimburse Mr. Glover for certain COBRA health benefits for up to 18 months, subject in each case to the
terms and conditions of the New Glover Agreement and applicable laws and regulations.
Notwithstanding
the above, if we (or any surviving or acquiring corporation) terminate Mr. Glover’s employment without Cause or Mr. Glover resigns
for Good Reason within 90 days before and 24 months following the effective date of a Change of Control (as defined in the Glover Employment
Agreement), then Mr. Glover will be entitled to receive the Accrued Obligations and, subject to Mr. Glover’s compliance with his
obligations under the New Glover Agreement, Mr. Glover shall be eligible to receive the Severance Benefits on the same conditions as
he would be entitled for our termination of his employment without Cause; provided, however, that Mr. Glover shall receive a bonus for
the year in which his termination occurs equal to fifty-five percent (55%) of Mr. Glover’s base salary; and provided further, that
if the Change in Control is a change in ownership of a corporation, a change in the effective control of a corporation, or a change in
ownership of a substantial portion of a corporation’s assets, the cumulative amount of the severance payments payable (or remaining
payable) for such termination shall be paid in a single lump sum on or within 30 days following such Change in Control.
Pursuant
to the New Glover Agreement, we may terminate Mr. Glover’s employment at any time for Cause upon written notice to Mr. Glover.
In the event Mr. Glover’s employment is terminated at any time for Cause, Mr. Glover will not receive Severance Benefits or any
other severance compensation or benefits, except that, pursuant to our standard payroll policies, we shall pay to Mr. Glover the Accrued
Obligations. Mr. Glover may resign from his employment with us at any time upon not less than 30 days’ advance written notice to
us of such resignation. In the event Mr. Glover resigns from employment with us for any reason (other than a resignation for Good Reason),
Mr. Glover will not receive Severance Benefits or any other severance compensation or benefits, except that we shall pay and provide
the Accrued Obligations.
Mr.
Glover’s entitlement to receive certain Severance Benefits is conditioned upon, among other things, his obligation to sign and
deliver an effective Release (as that term is defined in the New Glover Agreement) in a form acceptable to us by the 60th
day following such termination or such earlier date as set forth in the Release.
Peter
Wolfe
On
July 20, 2022, we entered into an executive employment agreement with Peter Wolfe (the “Wolfe Employment Agreement”) that
became effective upon consummation of the Business Combination, pursuant to which we agreed to continue to retain Mr. Wolfe as our Chief
Financial Officer following the closing of the Business Combination, subject to the terms and conditions of the Wolfe Employment Agreement.
Under the Wolfe Employment Agreement, the conditions of Mr. Wolfe’s employment include, among other things, his agreement and execution
of a Proprietary Information & Restrictive Covenant Agreement.
Under
the terms of the Wolfe Employment Agreement, Mr. Wolfe will hold the position of Chief Financial Officer and receive a base salary of
$395,000 annually, subject to our standard payroll practices. Mr. Wolfe’s base salary and future increases in compensation are
subject to periodic review and approval by the board of directors. In addition, Mr. Wolfe is eligible to receive an annual performance-based
cash bonus, with a target amount equal to forty percent (40%) of Mr. Wolfe’s base salary, subject to review and adjustment by the
board of directors based upon Mr. Wolfe’s achievement of certain performance goals. Mr. Wolfe’s receipt of an annual bonus
is also contingent upon Mr. Wolfe’s continued employment with us at the time such bonus is to be paid, otherwise the annual bonus
is forfeited. In addition, pursuant to the terms of the Wolfe Employment Agreement, Mr. Wolfe may be eligible for certain grants of equity
awards of our common stock, subject to vesting and other terms and conditions of our equity plan to which the award is granted and an
agreement to be provided by us and entered into with Mr. Wolfe. Mr. Wolfe is also eligible to participate on the same basis as similarly
situated employees in our benefit plans in effect from time during his employment.
Pursuant
to the Wolfe Employment Agreement, we may terminate Mr. Wolfe’s employment at any time without Cause (as that term is defined in
the Wolfe Employment Agreement) upon written notice to Mr. Wolfe. Provided Mr. Wolfe has not previously been notified of our intention
to terminate his employment, Mr. Wolfe may resign from his employment with us for Good Reason (as that term is defined in the Wolfe Employment
Agreement) upon 30 days written notice to us, upon which notice we have 30 days to cure the conditions that Mr. Wolfe considers to be
Good Reason, subject to certain conditions set forth in the Wolfe Employment Agreement. In the event Mr. Wolfe resigns for Good Reason,
and provided that such termination constitutes a Separation from Service (as that term is defined in the Wolfe Employment Agreement),
then subject to Mr. Wolfe’s compliance with his obligations under the Wolfe Employment Agreement, Mr. Wolfe shall be eligible to
receive the Severance Benefits (as that term is defined in the Wolfe Employment Agreement) on the same terms and conditions as he would
be entitled for our termination of his employment without Cause.
In
the event we terminate Mr. Wolfe’s employment at any time without Cause, or if Mr. Wolfe resigns for Good Reason, provided that
such termination constitutes a Separation from Service, then Mr. Wolfe shall be entitled to receive the Accrued Obligations (as that
term is defined in the Wolfe Employment Agreement) and, subject to Mr. Wolfe’s compliance with his obligations under the Wolfe
Employment Agreement, Mr. Wolfe shall also be entitled to receive the following Severance Benefits: (i) an amount equal to Mr. Wolfe’s
then current base salary for 12 months, paid in equal instalments on our regularly scheduled payroll dates following the Release Effective
Date (as that term is defined in the Wolfe Employment Agreement); (ii) an amount equal to any unpaid bonus earned for the preceding year
in which Mr. Wolfe’s termination occurs, paid in a single lump sum payment within 60 days following Mr. Wolfe’s termination;
and (iv) if elected, we will reimburse Mr. Wolfe for certain COBRA health benefits for up to 12 months, subject in each case to the terms
and conditions of the Wolfe Employment Agreement and applicable laws and regulations.
Notwithstanding
the above, if we (or any surviving or acquiring corporation) terminate Mr. Wolfe’s employment without Cause or Mr. Wolfe resigns
for Good Reason within 90 days before and 24 months following the effective date of a Change of Control (as defined in the Wolfe Employment
Agreement), then Mr. Wolfe will be entitled to receive the Accrued Obligations and, subject to Mr. Wolfe’s compliance with his
obligations under the Wolfe Employment Agreement, Mr. Wolfe shall be eligible to receive the Severance Benefits on the same conditions
as he would be entitled for our termination of his employment without Cause and each of the following, provided, however, that if the
Change in Control is a change in ownership of a corporation, a change in the effective control of a corporation, or a change in ownership
of a substantial portion of a corporation’s assets, the cumulative amount of the severance payments payable (or remaining payable)
for such termination shall be paid in a single lump sum on or within 30 days following such Change in Control: (i) Mr. Wolfe shall receive
a bonus for the year in which his termination occurs equal to forty percent (40%) of Mr. Wolfe’s base salary, paid as a single
lump sum payment within 60 days following Mr. Wolfe’s termination; and (ii) in the event that any equity awards issued by us to
Mr. Wolfe are outstanding as of the closing of such Change in Control are assumed or continued (in accordance with their terms) by the
surviving entity in such Change In Control, then 100% of the unvested portion of such equity awards shall become vested as of Mr. Wolfe’s
termination.
Pursuant
to the Wolfe Employment Agreement, we may terminate Mr. Wolfe’s employment at any time for Cause upon written notice to Mr. Wolfe.
In the event Mr. Wolfe’s employment is terminated at any time for Cause, Mr. Wolfe will not receive Severance Benefits or any other
severance compensation or benefits, except that, pursuant to our standard payroll policies, we shall pay to Mr. Wolfe the Accrued Obligations.
Mr. Wolfe may resign from his employment with us at any time upon not less than 30 days’ advance written notice to us of such resignation.
In the event Mr. Wolfe resigns from employment with us for any reason (other than a resignation for Good Reason), Mr. Wolfe will not
receive Severance Benefits or any other severance compensation or benefits, except that we shall pay and provide the Accrued Obligations.
Mr.
Wolfe’s entitlement to receive certain Severance Benefits is conditioned upon, among other things, his obligation to sign and deliver
an effective Release (as that term is defined in the Wolfe Employment Agreement) in a form acceptable to us by the 60th day
following such termination or such earlier date as set forth in the Release.
Karen
Cashmere
On
July 20, 2022, we entered into an executive employment agreement with Karen Cashmere (the “Cashmere Employment Agreement”)
that became effective upon consummation of the Business Combination, pursuant to which we agreed to continue to retain Ms. Cashmere as
our Chief Commercial Officer following the closing of the Business Combination, subject to the terms and conditions of the Cashmere Employment
Agreement. Under the Cashmere Employment Agreement, the conditions of Ms. Cashmere’s employment include, among other things, her
agreement and execution of a Proprietary Information & Restrictive Covenant Agreement.
Under
the terms of the Cashmere Employment Agreement, Ms. Cashmere will hold the position of Chief Commercial Officer and receive a base salary
of $320,000 annually, subject to our standard payroll practices. Ms. Cashmere’s base salary and future increases in compensation
are subject to periodic review and approval by the board of directors. In addition, Ms. Cashmere is eligible to receive an annual performance-based
cash bonus, with a target amount equal to thirty percent (30%) of Ms. Cashmere’s base salary, subject to review and adjustment
by the board of directors based upon Ms. Cashmere’s achievement of certain performance goals. Ms. Cashmere’s receipt of an
annual bonus is also contingent upon Ms. Cashmere’s continued employment with us at the time such bonus is to be paid, otherwise
the annual bonus is forfeited. In addition, pursuant to the terms of the Cashmere Employment Agreement, Ms. Cashmere may be eligible
for certain grants of equity awards of our common stock, subject to vesting and other terms and conditions of our equity plan to which
the award is granted and an agreement to be provided by us and entered into with Ms. Cashmere. Ms. Cashmere is also eligible to participate
on the same basis as similarly situated employees in our benefit plans in effect from time during her employment.
Pursuant
to the Cashmere Employment Agreement, we may terminate Ms. Cashmere’s employment at any time without Cause (as that term is defined
in the Cashmere Employment Agreement) upon written notice to Ms. Cashmere. Provided Ms. Cashmere has not previously been notified of
our intention to terminate her employment, Ms. Cashmere may resign from her employment with us for Good Reason (as that term is defined
in the Cashmere Employment Agreement) upon 30 days written notice to us, upon which notice we have 30 days to cure the conditions that
Ms. Cashmere considers to be Good Reason, subject to certain conditions set forth in the Cashmere Employment Agreement. In the event
Ms. Cashmere resigns for Good Reason, and provided that such termination constitutes a Separation from Service (as that term is defined
in the Cashmere Employment Agreement), then subject to Ms. Cashmere’s compliance with her obligations under the Cashmere Employment
Agreement, Ms. Cashmere shall be eligible to receive the Severance Benefits (as that term is defined in the Cashmere Employment Agreement)
on the same terms and conditions as she would be entitled for our termination of her employment without Cause.
In
the event we terminate Ms. Cashmere’s employment at any time without Cause, or if Ms. Cashmere resigns for Good Reason, provided
that such termination constitutes a Separation from Service, then Ms. Cashmere shall be entitled to receive the Accrued Obligations (as
that term is defined in the Cashmere Employment Agreement) and, subject to Ms. Cashmere’s compliance with her obligations under
the Cashmere Employment Agreement, Ms. Cashmere shall also be entitled to receive the following Severance Benefits: (i) an amount equal
to Ms. Cashmere’s then current base salary for 12 months, paid in equal instalments on our regularly scheduled payroll dates following
the Release Effective Date (as that term is defined in the Cashmere Employment Agreement); (ii) an amount equal to any unpaid bonus earned
for the preceding year in which Ms. Cashmere’s termination occurs, paid in a single lump sum payment within 60 days following Ms.
Cashmere’s termination; and (iv) if elected, we will reimburse Ms. Cashmere for certain COBRA health benefits for up to 12 months,
subject in each case to the terms and conditions of the Cashmere Employment Agreement and applicable laws and regulations.
Notwithstanding
the above, if we (or any surviving or acquiring corporation) terminate Ms. Cashmere’s employment without Cause or Ms. Cashmere
resigns for Good Reason within 90 days before and 24 months following the effective date of a Change of Control (as defined in the Cashmere
Employment Agreement), then Ms. Cashmere will be entitled to receive the Accrued Obligations and, subject to Ms. Cashmere’s compliance
with her obligations under the Cashmere Employment Agreement, Ms. Cashmere shall be eligible to receive the Severance Benefits on the
same conditions as she would be entitled for our termination of her employment without Cause and each of the following, provided, however,
that if the Change in Control is a change in ownership of a corporation, a change in the effective control of a corporation, or a change
in ownership of a substantial portion of a corporation’s assets, the cumulative amount of the severance payments payable (or remaining
payable) for such termination shall be paid in a single lump sum on or within 30 days following such Change in Control: (i) Ms. Cashmere
shall receive a bonus for the year in which her termination occurs equal to thirty percent (30%) of Ms. Cashmere’s base salary,
paid as a single lump sum payment within 60 days following Ms. Cashmere’s termination; and (ii) in the event that any equity awards
issued by us to Ms. Cashmere are outstanding as of the closing of such Change in Control are assumed or continued (in accordance with
their terms) by the surviving entity in such Change in Control, then 100% of the unvested portion of such equity awards shall become
vested as of Ms. Cashmere’s termination.
Pursuant
to the Cashmere Employment Agreement, we may terminate Ms. Cashmere’s employment at any time for Cause upon written notice to Ms.
Cashmere. In the event Ms. Cashmere’s employment is terminated at any time for Cause, Ms. Cashmere will not receive Severance Benefits
or any other severance compensation or benefits, except that, pursuant to our standard payroll policies, we shall pay to Ms. Cashmere
the Accrued Obligations. Ms. Cashmere may resign from her employment with us at any time upon not less than 30 days’ advance written
notice to us of such resignation. In the event Ms. Cashmere resigns from employment with us for any reason (other than a resignation
for Good Reason), Ms. Cashmere will not receive Severance Benefits or any other severance compensation or benefits, except that we shall
pay and provide the Accrued Obligations.
Ms.
Cashmere’s entitlement to receive certain Severance Benefits is conditioned upon, among other things, her obligation to sign and
deliver an effective Release (as that term is defined in the Cashmere Employment Agreement) in a form acceptable to us by the 60th day
following such termination or such earlier date as set forth in the Release.
Annual
Cash Bonuses
Pursuant
to their employment agreements, each NEO is eligible to earn a cash incentive bonus based on company and individual achievement of performance
targets established by the board of directors. The board of directors also has the authority to grant additional discretionary bonuses
to our NEOs on a case-by-case basis. Any discretionary bonuses awarded to an NEO for the fiscal year ended December 31, 2023, are set
forth above in the section titled, “Executive Employment Agreements.”
Employee
Benefit Plans
In
addition to any individual benefits set forth in each Named Executive Officer’s employment agreement (described above), the Named
Executive Officers are generally eligible to participate in our executive and employee health and other employee benefit programs on
the same basis as other employees of the Company subject to applicable law.
Our
employee benefit plans include our medical, dental, vision, group life and accidental death and dismemberment insurance plans, in each
case, on the same basis as all of our other employees.
Incentive
Arrangements
2014
Equity Incentive Plan
Our
predecessor, or the Old ZyVersa, was authorized to issue awards under its 2014 Equity Incentive Plan, as amended (the “2014 Plan”).
The 2014 Plan provided 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, consultants, and affiliates. On December 12,
2022, upon consummation of the Business Combination, we amended the 2014 Plan to freeze further increases to the plan’s share reserve
and discontinue granting any new awards under the 2014 Plan. No shares remain available for future issuance under the 2014 Plan as of
December 31, 2023.
2022
Omnibus Equity Incentive Plan
The
ZyVersa Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) became effective upon the consummation of
the Business Combination on December 12, 2022. The purpose of the 2022 Plan is to provide a means whereby eligible employees, officers,
non-employee directors and other individual service providers develop a sense of proprietorship and personal involvement in the development
and financial success and to encourage them to devote their best efforts to our business, thereby advancing our interests and the interests
of our stockholders. By means of the 2022 Plan, seeks to retain the services of such eligible persons and to provide incentives for such
persons to exert maximum efforts for our success and the success of our subsidiaries. On October 31, 2023, the Company approved an amendment
and restatement of the 2022 Plan to increase the number of shares of common stock reserved for issuance thereunder by 11,429 shares.
Pursuant to Proposal No. 3, at the Annual Meeting, stockholders will vote on whether to approve the amendment and restatement of the
2022 Plan which, if approved, would increase the number of shares of our common stock reserved under the 2022 Plan by 150,000 shares
to 181,795 shares.
Outstanding
Equity Awards at Fiscal Year-End 2023
| |
|
Option
Awards(1) |
| Name |
|
Grant
Date |
|
Securities
underlying
unexercised
options
exercisable (#) |
|
|
Securities
underlying
unexercised
options
unexercisable (#) |
|
|
Options
exercise
price ($) |
|
|
Options
expiration
date |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stephen
C. Glover |
|
4/11/2014 |
|
|
398 |
(2) |
|
|
- |
|
|
|
1,760.50 |
|
|
4/11/2024 |
| Co-Founder,
Chief Executive Officer and Chairman |
|
10/28/2016 |
|
|
483 |
(5) |
|
|
- |
|
|
|
1,760.50 |
|
|
10/28/2026 |
| |
|
4/2/2019 |
|
|
757 |
(8) |
|
|
- |
|
|
|
4,053.00 |
|
|
4/2/2029 |
| |
|
2/8/2021 |
|
|
240 |
(9) |
|
|
121 |
(9) |
|
|
5,726.00 |
|
|
2/8/2031 |
| |
|
2/3/2022 |
|
|
76 |
(11) |
|
|
151 |
(11) |
|
|
5,726.00 |
|
|
2/3/2032 |
| |
|
5/24/2023 |
|
|
|
|
|
|
1,627 |
(12) |
|
|
152.46 |
|
|
5/24/2033 |
| Karen
A. Cashmere |
|
9/10/2014 |
|
|
29 |
(3) |
|
|
- |
|
|
|
1,760.50 |
|
|
9/10/2024 |
| Chief
Commercial Officer |
|
10/30/2017 |
|
|
57 |
(6) |
|
|
- |
|
|
|
1,760.50 |
|
|
10/30/2027 |
| |
|
4/2/2019 |
|
|
86 |
(8) |
|
|
- |
|
|
|
4,053.00 |
|
|
4/2/2029 |
| |
|
2/8/2021 |
|
|
42 |
(9) |
|
|
21 |
(9) |
|
|
5,726.00 |
|
|
2/8/2031 |
| |
|
1/28/2022 |
|
|
21 |
(10) |
|
|
42 |
(10) |
|
|
5,726.00 |
|
|
1/28/2032 |
| |
|
5/24/2023 |
|
|
|
|
|
|
572 |
(12) |
|
|
152.46 |
|
|
5/24/2033 |
| Peter
Wolfe |
|
10/21/2015 |
|
|
29 |
(4) |
|
|
- |
|
|
|
1,760.50 |
|
|
10/21/2025 |
| Chief
Financial Officer and Secretary |
|
10/30/2017 |
|
|
29 |
(7) |
|
|
- |
|
|
|
1,760.50 |
|
|
10/30/2027 |
| |
|
4/2/2019 |
|
|
114 |
(8) |
|
|
- |
|
|
|
4,053.00 |
|
|
4/2/2029 |
| |
|
2/8/2021 |
|
|
42 |
(9) |
|
|
21 |
(9) |
|
|
5,726.00 |
|
|
2/8/2031 |
| |
|
1/28/2022 |
|
|
21 |
(10) |
|
|
42 |
(10) |
|
|
5,726.00 |
|
|
1/28/2032 |
| |
|
5/24/2023 |
|
|
|
|
|
|
715 |
(12) |
|
|
152.46 |
|
|
5/24/2033 |
| (1) |
All
of the outstanding stock option awards described in this table (the “ZyVersa Options”) were granted under the ZyVersa
2014 Stock Plan (the “2014 Plan”), for all awards issued prior to January 1, 2023 and under the ZyVersa 2022 Stock Plan
(the “2022 Plan”) for all awards issued after January 1, 2023, and are exercisable for shares of ZyVersa common stock.
Certain of the options are subject to acceleration upon certain events including, but not limited to, a change of control. |
| |
|
| (2) |
On
April 11, 2014, we granted ten-year stock options to purchase an aggregate of 398 shares of common stock, which vest in equal annual
installments over three years and have an exercise price of $1,760.50 per share, which represents the market price of our common
stock on the date of grant. |
| |
|
| (3) |
On
September 10, 2014, we granted ten-year stock options to purchase an aggregate of 29 shares of common stock, which vest in equal
annual installments over three years and have an exercise price of $1,760.50 per share, which represents the market price of our
common stock on the date of grant. |
| |
|
| (4) |
On
October 21, 2015, we granted ten-year stock options to purchase 29 shares of common stock, which vest in equal annual installments
over three years and have an exercise price of $1,760.50 per share, which represents the market price of our common stock on the
date of grant. |
| |
|
| (5) |
On
October 28, 2016, we granted ten-year stock options to purchase 483 shares of common stock, which vest immediately and have an exercise
price of $1,760.50 per share, which represents the market price of our common stock on the date of grant. |
| |
|
| (6) |
On
October 30, 2017, we granted ten-year stock options to purchase an aggregate of 57 shares of common stock, of which one-third vests
immediately and the remaining vest in equal annual installments over two years and have an exercise price of $1,760.50 per share,
which represents the market price of our common stock on the date of grant. |
| |
|
| (7) |
On
October 30, 2017, we granted ten-year stock options to purchase an aggregate of 29 shares of common stock, of which 25% vest immediately
and the remaining vest in equal annual installments over three years and have an exercise price of $1,760.50 per share, which represents
the market price of our common stock on the date of grant. |
| |
|
| (8) |
On
April 2, 2019, we granted ten-year stock options to purchase an aggregate of 957 shares of common stock, which vest in equal annual
installments over three years and have an exercise price of $4,053.00 per share, which represents the market price of our common
stock on the date of grant. |
| |
|
| (9) |
On
February 8, 2021, we granted ten-year stock options to purchase an aggregate of 487 shares of common stock, which vest in equal annual
installments over three years and have an exercise price of $5,726.00 per share, which represents the market price of our common
stock on the date of grant. |
| |
|
| (10) |
On
January 28, 2022, the Company granted ten-year stock options to purchase an aggregate of 126 shares of common stock, which vest in
equal annual installments over three years and have an exercise price of $5,726.00 per share, which represents the market price of
our common stock on the date of grant. |
| |
|
| (11) |
On
February 3, 2022, the Company granted ten-year stock options to purchase an aggregate of 227 shares of common stock, which vest in
equal annual installments over three years and have an exercise price of $5,726.00 per share, which represents the market price of
our common stock on the date of grant. |
| |
|
| (12) |
On
May 24, 2023, the Company granted ten-year stock options to purchase an aggregate of 2,914 shares of Common stock, which vest in
equal annual installments over three years and have an exercise price of $152.46 per share, which represents the market price of
our common stock on the date of grant. |
DIRECTOR
COMPENSATION
2023
Non-Employee Director Compensation Table
The
board of directors sets non-employee director compensation which is designed to provide competitive compensation necessary to attract
and retain high quality non-employee directors and to encourage ownership of our common stock to further align their interests with those
of our stockholders. In 2023, each non-employee director of the Company was eligible to receive an annual fee of $40,000 as a member
of the board of directors and an additional fee of (a) $7,500 for Compensation Committee members, (b) $15,000 for the Chairman of the
Compensation Committee, (c) $4,000 for Corporate Governance Committee members, (d) $8,000 for the Chairman of the Corporate Governance
Committee, (e) $8,000 for Audit Committee members, and (f) $18,500 for the Chairman of the Audit Committee. On May 24, 2023, the Company
also granted 528 shares of ten-year stock options to non-employee directors under the 2022 Plan, which vest in equal annual installments
over three years and have an exercise price of $152.46 per share.
The
following table sets forth the compensation earned by all non-employee directors during the fiscal year ended December 31, 2023:
| Name | |
Fees Earned
or Paid in Cash(2) | | |
Option Awards(1) | | |
Total | |
| Daniel J. O’Connor | |
$ | 18,323 | | |
$ | 0 | | |
$ | 18,323 | |
| Gregory Freitag | |
$ | 62,500 | | |
$ | 17,638 | | |
$ | 80,138 | |
| James Sapirstein | |
$ | 55,266 | | |
$ | 17,638 | | |
$ | 72,904 | |
| Katrin Rupalla, Ph D. | |
$ | 18,323 | | |
$ | 0 | | |
$ | 18,323 | |
| Robert Finizio | |
$ | 63,000 | | |
$ | 17,638 | | |
$ | 80,638 | |
| Min Chul Park, Ph D. | |
$ | 48,756 | | |
$ | 17,638 | | |
$ | 66,394 | |
| (1) |
The
options granted to our non-employee directors vest over three years with 33 1/3% of the options vesting and becoming exercisable
on the one-year anniversary of the option grant date, 33 1/3% vest and become exercisable on the two-year anniversary of the option
grant date and 33 1/3% vest and become exercisable on the three-year anniversary of the option grant date, subject to the non-employee
directors remaining on our board of directors through the applicable vesting dates. The amounts reported represent the aggregate
grant date fair value of the stock options awarded to our directors under our 2022 Omnibus Equity Incentive Plan calculated in accordance
with FASB ASC Topic 718. See Note 9 to our financial statements contained in our Annual Report on Form 10-K for the 2023 fiscal year
for the assumptions used in calculating the grant date fair value. |
| |
|
| (2) |
All
fees earned or paid in cash are included in accounts payable on the balance sheet of the consolidated financial statements included
herein. |
Actual
fees earned or paid in cash, which are prorated for the amount of days on each of the committees in 2023, are as follows:
| |
● |
Mr.
O’Connor earned $15,269 as a member of the board of directors and $3,054 as a member of the audit committee. Mr. O’Connor
resigned as board member on May 17, 2023. |
| |
|
|
| |
● |
Mr.
Freitag earned $40,000 as a member of the board of directors, $18,500 as the Chairman of the audit committee, and $4,000 as a member
of the nominating and corporate governance committee. Mr. Freitag also received an initial and annual option grant pursuant to the
Company’s 2022 Plan. |
| |
|
|
| |
● |
Mr.
Sapirstein earned $40,000 as a member of the board of directors, $7,500 as a member of the compensation committee, $2,744 as a member
of the nominating and corporate governance committee, $2,511 as the Chairman of the nominating and corporate governance committee,
and $2,511 as a member of the audit committee. Mr. Sapirstein also received an initial and annual option grant pursuant to the 2022
Plan. |
| |
|
|
| |
● |
Dr.
Rupalla earned $15,269 as a member of the board of directors and $3,054 as the Chairman of the nominating and corporate governance
committee. Dr. Rupalla resigned as board member on May 17, 2023. |
| |
|
|
| |
● |
Mr.
Finizio earned $40,000 as a member of the board of directors, $15,000 as the Chairman of the compensation committee, and $8,000 as
a member of the audit committee. Mr. Finizio also received an initial and annual option grant pursuant to the Company’s 2022
Plan. |
| |
|
|
| |
● |
Dr.
Park earned $40,000 as a member of the board of directors, $7,500 as a member of the compensation committee, and $1,256 as a member
of the nominating and corporate governance committee. Dr. Park also received an initial and annual option grant pursuant to the 2022
Plan. |
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The
following is a summary of the fees and services provided by Ernst & Young LLP (“EY”) and Marcum LLP (“Marcum”)
to the Company and its predecessor, Old ZyVersa, for fiscal years 2023 and 2022:
| | |
For
the Fiscal Year Ended December 31,
| |
| | |
2023 | | |
2022-Successor | | |
2022-Predecessor | |
| Audit Fees(1)(2) | |
$ | 848,160 | | |
$ | 228,000 | | |
$ | 810,353 | |
| Audit-Related Fees(3) | |
$ | | | |
| | | |
$ | | |
| Tax Fees(4) | |
$ | | | |
| | | |
$ | 19,054 | |
| | |
| | | |
| | | |
| | |
| Total Fees | |
$ | 848,160 | | |
$ | 228,000 | | |
$ | 829,587 | |
| (1) |
Audit
fees are fees for professional services rendered in connection with the audit of our consolidated financial statements, statutory
filings and registration statements, review of interim financial statements, the review of documents filed with the Securities and
Exchange Commission, comfort letters, consents and certain accounting and consultations in connect with the audits. |
| |
|
| (2) |
Audit
fees for the year ended December 31, 2023 include professional fees incurred by Ernst and Young of $663,160 and Marcum of $185,000. |
| |
|
| (3) |
Audit-related
fees are fees for services related to accounting consultation and compliance with regulatory requirements and are not reported under
“Audit Fees”. |
| |
|
| (4) |
Tax
fees are for services related to tax compliance, tax planning and tax advice. These services included annual U.S. federal and state
compliance and preparation of related tax returns and reports. |
Pre-Approval
Policies and Procedures
The
audit committee has the authority and responsibility to pre-approve all audit, review, and non-audit services (including any internal
control-related services) to be provided to us or our subsidiaries by the independent auditor. The audit committee may also establish
pre-approval policies and procedures in compliance with applicable SEC rules. The pre-approval of services may be delegated to subcommittees
of the audit committee consisting of one or more of the audit committee’s members, but the decision must be reported to the full
audit committee at its next scheduled meeting.
The
audit committee has determined that the rendering of services other than audit services by Marcum is compatible with maintaining the
principal accountant’s independence.
All
services rendered by Marcum and Marcum for the year ended December 31, 2023 were pre-approved in accordance with the procedures set forth
above.
Changes
in Accountants
2023
Dismissal of Independent Registered Public Accountant
On
December 22, 2023, the audit committee of the Company’s board of directors dismissed EY as the Company’s independent registered
public accounting firm. EY had served as the Company’s independent registered public accounting firm from 2019 through the period
ended September 30, 2023, and subsequent interim period through December 22, 2023.
EY’s
audit reports on the Company’s consolidated financial statements as of December 31, 2022 and 2021 and for the years then ended
did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting
principles, except that each of EY’s reports for the years ended December 31, 2022 and December 31, 2021 contained an explanatory
paragraph regarding the substantial doubt about the Company’s ability to continue as a going concern.
During
the fiscal years ended December 31, 2022 and 2021 and the subsequent interim period through December 22, 2023, there were (1) no disagreements
with EY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of EY, would have caused EY to make reference to the subject matter of such disagreements in connection
with in their report on the Company’s consolidated financial statements for such year or for any reporting period since the Company’s
last fiscal year end, and (2) no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K, except as set
forth below. As previously disclosed in Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022,
the Company’s management identified material weaknesses related to maintaining effective controls because the Company did not design
and implement effective controls over the accounting for significant and complex non-routine transactions. This reportable event was
discussed among the Company’s management, the audit committee, and EY. EY has been authorized by the Company to respond fully to
the inquiries of Marcum, the successor accountant, including concerning this reportable event.
The
Company provided EY with a copy of the foregoing statements. Attached as Exhibit 16.1 to the Company’s Current Report on Form 8-K
filed with the SEC on December 22, 2023 is EY’s letter to the SEC, dated December 22, 2023, regarding these statements.
2023
Newly Appointed Independent Registered Public Accountant
On
December 22, 2023, the Audit Committee appointed Marcum as the Company’s new independent registered public accounting firm commencing
with the Company’s fiscal year ending December 31, 2023.
2022
Dismissal of Independent Registered Public Accountant
On
December 12, 2022, the Company’s audit committee approved the dismissal of Marcum, Larkspur’s independent registered public
accounting firm prior to the Business Combination, in connection with the closing of the Business Combination.
The
report of Marcum on the audited financial statements of Larkspur for the period from March 17, 2021 (inception) through December 31,
2021, contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting
principles, except for an explanatory paragraph as to the Company’s ability to continue as a going concern.
In
connection with Marcum’s audit for the period from March 17, 2021 (inception) through December 31, 2021, and their reviews of Larkspur’s
financial statements, there were no disagreements with Marcum on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused them
to make reference thereto in their reports on the financial statements.
The
Company has furnished to Marcum a copy of the foregoing statements. Attached as Exhibit 16.1 to the Company’s Current Report on
Form 8-K filed with the SEC on December 13, 2022 is Marcum’s letter to the SEC, dated December 12, 2022, regarding these statements.
DELINQUENT
SECTION 16(a) REPORTS
Section
16(a) of the Exchange Act requires that our directors and executive officers, and persons who own more than ten percent of a registered
class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation
to furnish us with copies of all Section 16(a) forms they file.
To
our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports
were required, during the year ended December 31, 2023, all Section 16(a) filing requirements applicable to our officers, directors and
greater than ten percent beneficial owners were complied with except for a Form 3 filed by Gregory Freitag on January 17, 2023, a Form
3 filed by Katrin Rupalla on January 17, 2023, a Form 3 filed by James Sapirstein on January 17, 2023, a Form 4 filed by Robert Finizio
on July 18, 2024, a Form 4 filed by Mr. Sapirstein on July 18, 2024, a Form 4 filed by Mr. Freitag on July 18, 2024, a Form 4 filed by
Min Chul Park on July 18, 2024, a Form 4 filed by Stephen Glover on July 18, 2024, a Form 4 filed by Peter Wolfe on July 18, 2024, and
a Form 4 filed by Karen Cashmere on July 18, 2024. The delinquent filings were inadvertent and due to an administrative oversight.
HOUSEHOLDING
OF PROXY MATERIALS
The
SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet
Availability of Proxy Materials or other Annual Meeting materials with respect to two or more stockholders sharing the same address by
delivering a single Notice of Internet Availability of Proxy Materials or other Annual Meeting materials addressed to those stockholders.
This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost
savings for companies.
This
year, a number of brokers with account holders who are Company stockholders will be “householding” our proxy materials. A
single Notice of Internet Availability of Proxy Materials will be delivered to multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding”
communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent.
If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice of Internet
Availability of Proxy Materials, please notify your broker. Stockholders who currently receive multiple copies of the Notices of Internet
Availability of Proxy Materials at their addresses and would like to request “householding” of their communications should
contact their brokers.
FORM
10-K INFORMATION; OTHER SEC FILINGS
We
file annual and quarterly reports and other reports and information with the SEC. These reports and other information can be read over
the Internet at the SEC’s website at http://www.sec.gov or at our website at http://www.zyversa.com. The information contained
on, or that can be accessed through, our website is not a part of this proxy statement. We have included our website address in this
proxy statement solely as an inactive textual reference.
A
copy of the Company’s Annual Report to the U.S. Securities and Exchange Commission on Form 10-K for the year ended December 31,
2023, is available without charge upon written request to: Secretary, ZyVersa Therapeutics, Inc., 2200 N. Commerce Parkway, Suite 208,
Weston, Florida, 33326.
OTHER
MATTERS
The
board of directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are
properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance
with their best judgment.
We
are planning for the possibility that the meeting may be held completely virtually over the Internet. If we take this step, we will announce
the decision to do so via a press release and posting details on our website that will also be filed with the SEC as proxy material.
As always, we encourage you to submit a proxy to vote your shares prior to the Annual Meeting.
By
Order of the Board of Directors
Stephen
C. Glover
Chief
Executive Officer, President, and Chairman of the Board of Directors
__________,
2024
Annex
A
ZYVERSA
THERAPEUTICS, INC.
2022 OMNIBUS EQUITY INCENTIVE PLAN
(as amended and restated on __________, 2024)
1.
Establishment and Purpose
1.1
The purpose of the ZyVersa Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan (the “Plan”) is to provide a means
whereby eligible employees, officers, non-employee directors and other individual service providers develop a sense of proprietorship
and personal involvement in the development and financial success of the Company (as defined herein) and to encourage them to devote
their best efforts to the business of the Company, thereby advancing the interests of the Company and its stockholders. The Company,
by means of the Plan, seeks to retain the services of such eligible persons and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Subsidiaries.
1.2
The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Performance Shares, Performance Units, Incentive Bonus Awards, Other Cash-Based Awards and Other Stock-Based Awards. This
Plan shall become effective upon the date set forth in Section 17.1 hereof.
1.3
The Plan is hereby amended and restated in its entirety, as set forth herein, effective on the date that the amendment and restatement
is approved by the stockholders of the Company at the 2024 annual meeting.
2.
Definitions
Wherever
the following capitalized terms are used in the Plan, they shall have the meanings specified below:
2.1
“Affiliate” means, with respect to a Person, a Person that directly or indirectly Controls, or is Controlled by, or
is under common Control with, such Person.
2.2
“Applicable Law” means the requirements relating to the administration of equity-based awards or equity compensation
plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which
the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction that applies to Awards.
2.3
“Award” means an award of a Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance
Share, Performance Unit, Incentive Bonus Award, Other Cash-Based Award and/or Other Stock-Based Award granted under the Plan.
2.4
“Award Agreement” means either (i) a written or electronic agreement entered into between the Company and a Participant
setting forth the terms and conditions of an Award, including any amendment or modification thereof, or (ii) a written or electronic
statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification
thereof. The Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic,
internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant. Each Award Agreement shall be subject
to the terms and conditions of the Plan and need not be identical.
2.5
“Board” means the Board of Directors of the Company.
2.6
“Cause” means a Participant’s (i) conviction of, or the entry of a plea of guilty or no contest to, a felony
or any other crime that causes the Company or its Affiliates disgrace or disrepute, or materially and adversely affects the Company’s
or its Affiliates’ operations or financial performance, (ii) gross negligence or willful misconduct with respect to the Company
or any of its Affiliates, including, without limitation fraud, embezzlement, theft or proven dishonesty in the course of Awardee’s
employment or other service; (iii) use of controlled drugs other than in accordance with a physician’s prescription; (iv) refusal
to perform any lawful, material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (vi)
below) to the Company or its Affiliates (other than due to a disability), which refusal, if curable, is not cured within fifteen (15)
days after delivery of written notice thereof; (v) material breach of any agreement with or duty owed to the Company or any of its Affiliates,
which breach, if curable, is not cured within fifteen (15) days after the delivery of written notice thereof; (vi) any breach of any
obligation or duty to the Company or any of its Affiliates (whether arising by statute, common law or agreement) relating to confidentiality,
noncompetition, nonsolicitation or proprietary rights; or (vii) any material breach of any policy of the Company or its Affiliates or
any action that the Board, in its sole discretion, determines is reasonably likely to cause the Company or its Affiliates disgrace or
disrepute. Notwithstanding the foregoing, if a Participant and the Company (or any of its Affiliates) have entered into an employment
agreement, consulting agreement or other similar agreement that specifically defines “cause,” then with respect to such Participant,
“Cause” shall have the meaning defined in that employment agreement, consulting agreement or other agreement.
2.7
“Change in Control” shall be deemed to have occurred if any one of the following events shall occur:
(i)
Any Person becomes the beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act) of shares of Common Stock representing more
than 50% of the total number of votes that may be cast for the election of directors of the Company; or
(ii)
The consummation of any (a) merger or other business combination of the Company, (b) sale of all or substantially all of the Company’s
assets or (c) combination of the foregoing transactions (a “Transaction”), other than a Transaction involving only
the Company and one or more of its subsidiaries, or a Transaction immediately following which the shareholders of the Company immediately
prior to the Transaction continue to have a majority of the voting power in the resulting entity or a parent entity; or
(iii)
Within any twelve (12)-month period beginning on or after the Effective Date, the persons who were directors of the Company immediately
before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute
at least a majority of the Board (or the board of directors of any successor to the Company); provided that any director who was not
a director as of the date hereof shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the
recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually
or by prior operation of the foregoing unless such election, recommendation or approval was the result of an actual or threatened election
contest of the type contemplated by Rule 14a-11 promulgated under the Exchange Act or any successor provision; or
(iv)
The shareholders of the Company approve a plan of complete liquidation or dissolution of the Company.
Notwithstanding
the foregoing, (1) no event or condition shall constitute a Change in Control to the extent that, if it were, a penalty tax would be
imposed under Section 409A of the Code; provided that, in such a case, the event or condition shall continue to constitute a Change in
Control to the maximum extent possible (e.g., if applicable, in respect of vesting without an acceleration of distribution) without
causing the imposition of such penalty tax and (2) no Change in Control shall be deemed to have occurred, and no rights arising upon
a Change in Control as provided in the Plan or any Award Agreement shall exist, to the extent that the Board so determines by resolution
adopted and not rescinded prior to the Change in Control; provided, however, that no such determination by the Board shall be effective
if it would cause a Participant to be subject to a penalty tax under Section 409A of the Code.
2.8
“Code” means the Internal Revenue Code of 1986, as amended. For purposes of this Plan, references to sections of the
Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.
2.9
“Committee” means the committee of the Board delegated with the authority to administer the Plan, or the full Board,
as provided in Section 3 of the Plan. With respect to any decision relating to a Reporting Person, the Committee shall consist solely
of two or more directors who are disinterested within the meaning of Rule 16b-3 promulgated under the Exchange Act, as amended from time
to time, or any successor provision. The fact that a Committee member shall fail to qualify under any of these requirements shall not
invalidate an Award if the Award is otherwise validly made under the Plan. The Board may at any time appoint additional members to the
Committee, remove and replace members of the Committee with or without cause, and fill vacancies on the Committee however caused.
2.10
“Common Stock” means the Company’s Common Stock, par value $0.0001 per share.
2.11
“Company” means ZyVersa Therapeutics, Inc., a Delaware corporation, and any successor thereto as provided in Section
15.8.
2.12
“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an employee,
director or consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company
or an Affiliate as an employee, director or consultant or a change in the entity for which the Participant renders such service, provided
that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate
a Participant’s Continuous Service; provided, however, that if the entity for which a Participant is rendering services ceases
to qualify as an Affiliate, as determined by the Committee in its sole discretion, such Participant’s Continuous Service will be
considered to have terminated on the date such entity ceases to qualify as an Affiliate. For example, a change in status from an employee
of the Company to a consultant of an Affiliate or to a director will not constitute an interruption of Continuous Service. To the extent
permitted by Applicable Law, the Committee or the chief executive officer of the Company, in that party’s sole discretion, may
determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Company or
chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an
Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes
of vesting in an Award only to such extent as may be provided in the Company’s (or an Affiliate’s) leave of absence policy,
in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by Applicable
Law or permitted by the Committee. Unless the Committee provides otherwise, in its sole discretion, or as otherwise required by Applicable
Law, vesting of Awards shall be tolled during any unpaid leave of absence by a Participant.
2.13
“Control” means, as to any Person, the power to direct or cause the direction of the management and policies of such
Person, or the power to appoint directors of the Company, whether through the ownership of voting securities, by contract or otherwise
(the terms “Controlled by” and “under common Control with” shall have correlative meanings).
2.14
“Date of Grant” means the date on which an Award under the Plan is granted by the Committee, or such later date as
the Committee may specify to be the effective date of an Award.
2.15
“Disability” means a Participant being considered “disabled” within the meaning of Section 409A of the
Code and Treasury Regulation 1.409A-3(i)(4), as well as any successor regulation or interpretation.
2.16
“Effective Date” means the date set forth in Section 17.1 hereof.
2.17
“Eligible Person” means any person who is an employee, officer, director, consultant, advisor or other individual
service provider of the Company or any Subsidiary, or any person who is determined by the Committee to be a prospective employee, officer,
director, consultant, advisor or other individual service provider of the Company or any Subsidiary.
2.18
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
2.19
“Fair Market Value” of a share of Common Stock shall be, as applied to a specific date (i) the closing price of a
share of Common Stock as of such date on the principal established stock exchange or national market system on which the Common Stock
is then traded (or, if there is no trading in the Common Stock as of such date, the closing price of a share of Common Stock on the most
recent date preceding such date on which trades of the Common Stock were recorded), or (ii) if the shares of Common Stock are not then
traded on an established stock exchange or national market system but are then traded in an over-the-counter market, the average of the
closing bid and asked prices for the shares of Common Stock in such over-the-counter market as of such date (or, if there are no closing
bid and asked prices for the shares of Common Stock as of such date, the average of the closing bid and the asked prices for the shares
of Common Stock on the most recent date preceding such date on which such closing bid and asked prices are available on such over-the-counter
market), or (iii) if the shares of Common Stock are not then listed on a national securities exchange or national market system or traded
in an over-the-counter market, the price of a share of Common Stock as determined by the Committee in its discretion in a manner consistent
with Section 409A of the Code and Treasury Regulation 1.409A-1(b)(5)(iv), as well as any successor regulation or interpretation.
2.20
“Incentive Bonus Award” means an Award granted under Section 12 of the Plan.
2.21
“Incentive Stock Option” means a Stock Option granted under Section 6 hereof that is intended to meet the requirements
of Section 422 of the Code and the regulations promulgated thereunder.
2.22
“Nonqualified Stock Option” means a Stock Option granted under Section 6 hereof that is not an Incentive Stock Option.
2.23
“Other Cash-Based Award” means a contractual right granted to an Eligible Person under Section 13 hereof entitling
such Eligible Person to receive a cash payment at such times, and subject to such conditions, as are set forth in the Plan and the applicable
Award Agreement.
2.24
“Other Stock-Based Award” means a contractual right granted to an Eligible Person under Section 13 representing a
notional unit interest equal in value to a share of Common Stock to be paid and distributed at such times, and subject to such conditions
as are set forth in the Plan and the applicable Award Agreement.
2.25
“Outside Director” means a director of the Board who is not an employee of the Company or a Subsidiary.
2.26
“Participant” means any Eligible Person who holds an outstanding Award under the Plan.
2.27
“Person” shall mean, unless otherwise provided, any individual, partnership, firm, trust, corporation, limited liability
company or other similar entity. When two or more Persons act as a partnership, limited partnership, syndicate or other group for the
purpose of acquiring, holding or disposing of Common Stock, such partnership, limited partnership, syndicate or group shall be deemed
a “Person”.
2.28
“Performance Goals” shall mean performance goals established by the Committee as contingencies for the grant, exercise,
vesting, distribution, payment and/or settlement, as applicable, of Awards.
2.29
“Performance Shares” means a contractual right granted to an Eligible Person under Section 10 hereof representing
a notional unit interest equal in value to a share of Common Stock to be paid and distributed at such times, and subject to such conditions,
as are set forth in the Plan and the applicable Award Agreement.
2.30
“Performance Unit” means a contractual right granted to an Eligible Person under Section 11 hereof representing a
notional dollar interest as determined by the Committee to be paid and distributed at such times, and subject to such conditions, as
are set forth in the Plan and the applicable Award Agreement.
2.31
“Plan” means this ZyVersa Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan, as it may be amended from time to
time.
2.32
“Reporting Person” means an officer, director or greater than ten (10) percent stockholder of the Company within the
meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.
2.33
“Restricted Stock Award” means a grant of shares of Common Stock to an Eligible Person under Section 8 hereof that
are issued subject to such vesting and transfer restrictions and such other conditions as are set forth in the Plan and the applicable
Award Agreement.
2.34
“Restricted Stock Unit Award” means a contractual right granted to an Eligible Person under Section 9 hereof representing
notional unit interests equal in value to a share of Common Stock to be paid and distributed at such times, and subject to such conditions,
as are set forth in the Plan and the applicable Award Agreement.
2.35
“Securities Act” means the Securities Act of 1933, as amended.
2.36
“Stock Appreciation Right” or “SAR” means a contractual right granted to an Eligible Person under
Section 7 hereof entitling such Eligible Person to receive a payment, upon the exercise of such right, in such amount and at such time,
and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
2.37
“Stock Option” means a contractual right granted to an Eligible Person under Section 6 hereof to purchase shares of
Common Stock at such time and price, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
2.38
“Subsidiary” means an entity (whether or not a corporation) that is wholly or majority owned or controlled, directly
or indirectly, by the Company; provided, however, that with respect to Incentive Stock Options, the term “Subsidiary” shall
include only an entity that qualifies under section 424(f) of the Code as a “subsidiary corporation” with respect to the
Company.
3.
Administration
3.1
Committee Members. The Plan shall be administered by the Committee; provided that the entire Board may act in lieu of the Committee
on any matter, subject to Section 16b-3 Award requirements referred to in Section 2.9 of the Plan. If and to the extent permitted by
Applicable Law, the Committee may authorize one or more Reporting Persons (or other officers) to make Awards to Eligible Persons who
are not Reporting Persons (or other officers whom the Committee has specifically authorized to make Awards). Subject to Applicable Law
and the restrictions set forth in the Plan, the Committee may delegate administrative functions to individuals who are Reporting Persons,
officers, or employees of the Company or its Subsidiaries.
3.2
Committee Authority. The Committee shall have such powers and authority as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan. Subject to the express limitations of the Plan, the Committee shall have authority
in its discretion to determine the Eligible Persons to whom, and the time or times at which, Awards may be granted, the number of shares,
units or other rights subject to each Award, the exercise, base or purchase price of an Award (if any), the time or times at which an
Award will become vested, exercisable or payable, the performance criteria, performance goals and other conditions of an Award, the duration
of the Award, and all other terms of the Award. Subject to the terms of the Plan, the Committee shall have authority to amend the terms
of an Award in any manner that is not inconsistent with the Plan (including without limitation to determine, add, cancel, waive, amend
or otherwise alter any restrictions, terms or conditions of any Award, or extend the post-termination exercisability period of any Stock
Option and/or Stock Appreciation Right); provided that neither the Board nor the Committee may, without shareholder approval, reduce
or reprice the exercise price of any Stock Option and/or Stock Appreciation Right that exceeds the Fair Market Value of a share of Common
Stock on the date of such repricing; and provided further that no such action shall adversely affect the rights of a Participant with
respect to an outstanding Award without the Participant’s consent (for purposes of the foregoing, any action that causes an Incentive
Stock Option to be treated as a Nonqualified Stock Option shall not be considered to have adversely affected a Participant’s rights).
The Committee shall also have discretionary authority to interpret the Plan, to make all factual determinations under the Plan, and to
make all other determinations necessary or advisable for Plan administration, including, without limitation, to correct any defect, to
supply any omission or to reconcile any inconsistency in the Plan or any Award Agreement. The Committee may prescribe, amend, and rescind
rules and regulations relating to the Plan. The Committee’s determinations under the Plan need not be uniform and may be made by
the Committee selectively among Participants and Eligible Persons, whether or not such persons are similarly situated. The Committee
shall, in its discretion, consider such factors as it deems relevant in making its interpretations, determinations and actions under
the Plan including, without limitation, the recommendations or advice of any officer or employee of the Company or such attorneys, consultants,
accountants or other advisors as it may select. All interpretations, determinations, and actions by the Committee shall be final, conclusive,
and binding upon all parties.
3.3
No Liability; Indemnification. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board
or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with respect
to the Plan or any Award or Award Agreement. The Company and its Subsidiaries shall pay or reimburse any member of the Committee, as
well as any other Person who takes action on behalf of the Plan, for all reasonable expenses incurred with respect to the Plan, and to
the full extent allowable under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including
reasonable attorney’s fees) arising out of their good faith performance of duties on behalf of the Company with respect to the
Plan. The Company and its Subsidiaries may, but shall not be required to, obtain liability insurance for this purpose.
4.
Shares Subject to the Plan
4.1
Plan Share Limitation.
(a)
Subject to adjustment pursuant to Section 4.3 and any other applicable provisions hereof, the maximum aggregate number of shares of Common
Stock which may be issued under all Awards granted to Participants under the Plan shall be 181,795 shares (which consists of 3,119 shares
that were initially approved by stockholders on December 8, 2022, plus an additional 1,038 shares on January 1, 2023 pursuant to Section
4.1(b) of the Plan, plus an additional 11,429 shares that were approved by stockholders on October 31, 2023, plus an additional 16,209
shares on January 1, 2024 pursuant to Section 4.1(b) of the Plan, all as adjusted for the 1-for-35 reverse stock split in December 2023
and the 1-for-10 reverse stock split in April 2024, plus the additional 150,000 shares to be approved by stockholders on October 29,
2024).
(b)
The number of shares of Common Stock available for issuance under the Plan shall automatically increase on January 1st of each year commencing
with the January 1 following the Effective Date and on each January 1 thereafter until the Expiration Date (as defined in Section 17.2
of the Plan), in an amount equal to four percent (4%) of the total number of shares of Common Stock outstanding on December 31st of the
preceding calendar year. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year, to provide that
there shall be no increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year
shall be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For avoidance of doubt,
none of the additional shares of Common Stock available for issuance pursuant to this Section 4.1(b) shall be issued in respect of Incentive
Stock Options.
(c)
Shares of Common Stock issued under the Plan may be either authorized but unissued shares or shares held in the Company’s treasury.
To the extent that any Award payable in shares of Common Stock is forfeited, canceled, returned to the Company for failure to satisfy
vesting requirements or upon the occurrence of other forfeiture events, or otherwise terminates without payment being made thereunder,
the shares of Common Stock covered thereby will no longer be counted against the foregoing maximum share limitations and may again be
made subject to Awards under the Plan pursuant to such limitations. Awards settled in cash shall not count against the foregoing maximum
share limitation. Shares of Common Stock that otherwise would have been issued upon the exercise of a Stock Option or SAR or in payment
with respect to any other form of Award, but are surrendered in payment or partial payment of the exercise price thereof and/or taxes
withheld with respect to the exercise thereof or the making of such payment, will no longer be counted against the foregoing maximum
share limitations and may again be made subject to Awards under the Plan pursuant to such limitations.
(d)
Notwithstanding anything to the contrary herein, and subject to adjustment pursuant to Section 4.3 and any other applicable provisions
hereof, the maximum aggregate number of shares of Common Stock which may be issued under all Incentive Stock Options granted to Participants
under the Plan shall be 5,000,000 shares.
4.2
Outside Director Limitation. Subject to adjustment as provided in Section 4.3, the accounting value of Awards granted under the
Plan to any Outside Director during any calendar year shall not exceed $250,000 (inclusive of any cash awards to an Outside Director
for such year that are not made pursuant to the Plan); provided that in the case of a new Outside Director, such amount shall be increased
to $500,000 for the initial year of the Outside Director’s term.
4.3
Adjustments. If there shall occur any change with respect to the outstanding shares of Common Stock by reason of any recapitalization,
reclassification, stock dividend, extraordinary dividend, stock split, reverse stock split, or other distribution with respect to the
shares of Common Stock, or any merger, reorganization, consolidation, combination, spin-off or other similar corporate change, or any
other change affecting the Common Stock, the Committee shall, in the manner and to the extent that it deems appropriate and equitable
to the Participants and consistent with the terms of the Plan, cause an adjustment to be made in (i) the maximum numbers and kind of
shares provided in Section 4.1 hereof, (ii) the numbers and kind of shares of Common Stock, units, or other rights subject to then outstanding
Awards, (iii) the price for each share or unit or other right subject to then outstanding Awards, (iv) the performance measures or goals
relating to the vesting of an Award, and (v) any other terms of an Award that are affected by the event to prevent dilution or enlargement
of a Participant’s rights under an Award. Notwithstanding the foregoing, in the case of Incentive Stock Options, any such adjustments
shall, to the extent practicable, be made in a manner consistent with the requirements of Section 424(a) of the Code.
5.
Participation and Awards
5.1
Designation of Participants. All Eligible Persons are eligible to be designated by the Committee to receive Awards and become
Participants under the Plan. The Committee has the authority, in its discretion, to determine and designate from time to time those Eligible
Persons who are to be granted Awards, the types of Awards to be granted and the number of shares of Common Stock or units subject to
Awards granted under the Plan. In selecting Eligible Persons to be Participants and in determining the type and amount of Awards to be
granted under the Plan, the Committee shall consider any and all factors that it deems relevant or appropriate.
5.2
Determination of Awards. The Committee shall determine the terms and conditions of all Awards granted to Participants in accordance
with its authority under Section 3.2 hereof. An Award may consist of one type of right or benefit hereunder or of two or more such rights
or benefits granted in tandem or in the alternative. To the extent deemed appropriate by the Committee, an Award shall be evidenced by
an Award Agreement as described in Section 15.1 hereof.
6.
Stock Options
6.1
Grant of Stock Option. A Stock Option may be granted to any Eligible Person selected by the Committee. Subject to the provisions
of Section 6.6 hereof and Section 422 of the Code, each Stock Option shall be designated, in the sole discretion of the Committee, as
an Incentive Stock Option or as a Nonqualified Stock Option.
6.2
Exercise Price. The exercise price per share of a Stock Option shall not be less than 100% of the Fair Market Value of a share
of Common Stock on the Date of Grant, subject to adjustments as provided for under Section 4.3.
6.3
Vesting of Stock Options. The Committee shall in its sole discretion prescribe the time or times at which, or the conditions upon
which, a Stock Option or portion thereof shall become vested and/or exercisable. Unless otherwise provided by the Committee, no Stock
Option shall provide for vesting or exercise earlier than one year after the Date of Grant. The requirements for vesting and exercisability
of a Stock Option may be based on the Continuous Service of the Participant for a specified time period (or periods) and/or on the attainment
of a specified performance goal (or goals) established by the Committee in its discretion. The Committee may, in its sole discretion,
accelerate the vesting or exercisability of any Stock Option at any time. The Committee, in its sole discretion, may allow a Participant
to exercise unvested Nonqualified Stock Options, in which case the shares of Common Stock then issued shall be Restricted Stock having
analogous vesting restrictions to the unvested Nonqualified Stock Options.
6.4
Term of Stock Options. The Committee shall in its discretion prescribe in an Award Agreement the period during which a vested
Stock Option may be exercised, provided that the maximum term of a Stock Option shall be ten (10) years from the Date of Grant. A Stock
Option may be earlier terminated as specified by the Committee and set forth in an Award Agreement upon or following the termination
of a Participant’s Continuous Service for any reason, including by reason of voluntary resignation, death, Disability, termination
for Cause or any other reason. Except as otherwise provided in this Section 6 or in an Award Agreement as such agreement may be amended
from time to time upon authorization of the Committee, no Stock Option may be exercised at any time during the term thereof unless the
Participant is then in Continuous Service. Notwithstanding the foregoing, unless an Award Agreement provides otherwise:
(a)
If a Participant’s Continuous Service terminates by reason of his or her death, any Stock Option held by such Participant may,
to the extent then exercisable, be exercised by such Participant’s estate or any Person who acquires the right to exercise such
Stock Option by bequest or inheritance at any time in accordance with its terms for up to one (1) year after the date of such Participant’s
death (but in no event after the earlier of the expiration of the term of such Stock Option or such time as the Stock Option is otherwise
canceled or terminated in accordance with its terms). Upon expiration of such one-year period, no portion of the Stock Option held by
such Participant shall be exercisable and the Stock Option shall be deemed to be canceled, forfeited and of no further force or effect.
(b)
If a Participant’s Continuous Service terminates by reason of his or her Disability, any Stock Option held by such Participant
may, to the extent then exercisable, be exercised by the Participant or his or her personal representative at any time in accordance
with its terms for up to one (1) year after the date of such Participant’s termination of Continuous Service (but in no event after
the earlier of the expiration of the term of such Stock Option or such time as the Stock Option is otherwise canceled or terminated in
accordance with its terms). Upon expiration of such one-year period, no portion of the Stock Option held by such Participant shall be
exercisable and the Stock Option shall be deemed to be canceled, forfeited and of no further force or effect.
(c)
If a Participant’s Continuous Service terminates for any reason other than death, Disability or Cause, any Stock Option held by
such Participant may, to the extent then exercisable, be exercised by the Participant up until ninety (90) days following such termination
of Continuous Service (but in no event after the earlier of the expiration of the term of such Stock Option or such time as the Stock
Option is otherwise canceled or terminated in accordance with its terms). Upon expiration of such 90-day period, no portion of the Stock
Option held by such Participant shall be exercisable and the Stock Option shall be deemed to be canceled, forfeited and of no further
force or effect.
(d)
To the extent that a Stock Option of a Participant whose Continuous Service terminates is not exercisable, such Stock Option shall be
deemed forfeited and canceled on the ninetieth (90th) day after such termination of Continuous Service or at such earlier time as the
Committee may determine.
6.5
Stock Option Exercise. Subject to such terms and conditions as shall be specified in an Award Agreement, a Stock Option may be
exercised in whole or in part at any time during the term thereof by notice in the form required by the Company, and payment of the aggregate
exercise price by certified or bank check, or such other means as the Committee may accept. As set forth in an Award Agreement or otherwise
determined by the Committee, in its sole discretion, at or after grant, payment in full or in part of the exercise price of an Option
may be made: (i) in the form of shares of Common Stock that have been held by the Participant for such period as the Committee may deem
appropriate for accounting purposes or otherwise, valued at the Fair Market Value of such shares on the date of exercise; (ii) by surrendering
to the Company shares of Common Stock otherwise receivable on exercise of the Option; (iii) by a cashless exercise program implemented
by the Committee in connection with the Plan; (iv) subject to the approval of the Committee, by a full recourse, interest bearing promissory
note having such terms as the Committee may, in its sole discretion, permit and/or (v) by such other method as may be approved by the
Committee and set forth in an Award Agreement. Subject to any governing rules or regulations, as soon as practicable after receipt of
written notification of exercise and full payment of the exercise price and satisfaction of any applicable tax withholding pursuant to
Section 16.5, the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s
request, Common Stock certificates in an appropriate amount based upon the number of shares of Common Stock purchased under the Option.
Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars
or shares of Common Stock, as applicable.
6.6
Additional Rules for Incentive Stock Options.
(a)
Eligibility. An Incentive Stock Option may only be granted to an Eligible Person who is considered an employee under Treasury
Regulation §1.421-1(h) of the Company or any Subsidiary.
(b)
Annual Limits. No Incentive Stock Option shall be granted to an Eligible Person as a result of which the aggregate Fair Market
Value (determined as of the Date of Grant) of the stock with respect to which Incentive Stock Options are exercisable for the first time
in any calendar year under the Plan and any other stock option plans of the Company or any Subsidiary would exceed $100,000, determined
in accordance with Section 422(d) of the Code. This limitation shall be applied by taking Incentive Stock Options into account in the
order in which granted.
(c)
Ten Percent Stockholders. If a Stock Option granted under the Plan is intended to be an Incentive Stock Option, and if the Participant,
at the time of grant, owns stock possessing ten percent (10%) or more of the total combined voting power of all classes of Common Stock
of the Company or any Subsidiary, then (i) the Stock Option exercise price per share shall in no event be less than 110% of the Fair
Market Value of the Common Stock on the date of such grant and (ii) such Stock Option shall not be exercisable after the expiration of
five (5) years following the date such Stock Option is granted.
(d)
Termination of Employment. An Award of an Incentive Stock Option shall provide that such Stock Option may be exercised not later
than three (3) months following termination of employment of the Participant with the Company and all Subsidiaries, or not later than
one (1) year following death or a permanent and total disability within the meaning of Section 22(e)(3) of the Code, as and to the extent
determined by the Committee to be necessary to comply with the requirements of Section 422 of the Code.
(e)
Disqualifying Dispositions. If shares of Common Stock acquired by exercise of an Incentive Stock Option are disposed of within
two (2) years following the Date of Grant or one (1) year following the transfer of such shares to the Participant upon exercise, the
Participant shall, promptly following such disposition, notify the Company in writing of the date and terms of such disposition and provide
such other information regarding the disposition as the Company may reasonably require.
7.
Stock Appreciation Rights
7.1
Grant of Stock Appreciation Rights. A Stock Appreciation Right may be granted to any Eligible Person selected by the Committee.
Stock Appreciation Rights may be granted on a basis that allows for the exercise of the right by the Participant or that provides for
the automatic payment of the right upon a specified date or event.
7.2
Base Price. The base price of a Stock Appreciation Right shall be determined by the Committee in its sole discretion; provided,
however, that the base price for any grant of a Stock Appreciation Right shall not be less than 100% of the Fair Market Value of a share
of Common Stock on the Date of Grant, subject to adjustments as provided for under Section 4.3.
7.3
Vesting Stock Appreciation Rights. The Committee shall in its discretion prescribe the time or times at which, or the conditions
upon which, a Stock Appreciation Right or portion thereof shall become vested and/or exercisable. Unless otherwise provided by the Committee,
no Stock Appreciation Right shall provide for vesting or exercise earlier than one (1) year after the Date of Grant. The requirements
for vesting and exercisability of a Stock Appreciation Right may be based on the Continuous Service of a Participant for a specified
time period (or periods) or on the attainment of a specified performance goal (or goals) established by the Committee in its discretion.
The Committee may, in its sole discretion, accelerate the vesting or exercisability of any Stock Appreciation Right at any time.
7.4
Term of Stock Appreciation Rights. The Committee shall in its discretion prescribe in an Award Agreement the period during which
a vested Stock Appreciation Right may be exercised, provided that the maximum term of a Stock Appreciation Right shall be ten (10) years
from the Date of Grant. A Stock Appreciation Right may be earlier terminated as specified by the Committee and set forth in an Award
Agreement upon or following the termination of a Participant’s Continuous Service for any reason, including by reason of voluntary
resignation, death, Disability, termination for Cause or any other reason. Except as otherwise provided in this Section 7 or in an Award
Agreement, as such agreement may be amended from time to time upon authorization of the Committee, no Stock Appreciation Right may be
exercised at any time during the term thereof unless the Participant is then in Continuous Service.
7.5
Payment of Stock Appreciation Rights. Subject to such terms and conditions as shall be specified in an Award Agreement, a vested
Stock Appreciation Right may be exercised in whole or in part at any time during the term thereof by notice in the form required by the
Company and payment of any exercise price. Upon the exercise of a Stock Appreciation Right and payment of any applicable exercise price,
a Participant shall be entitled to receive an amount determined by multiplying: (i) the excess of the Fair Market Value of a share of
Common Stock on the date of exercise of the Stock Appreciation Right over the base price of such Stock Appreciation Right, by (ii) the
number of shares as to which such Stock Appreciation Right is exercised. Payment of the amount determined under the immediately preceding
sentence may be made, as approved by the Committee and set forth in the Award Agreement, in shares of Common Stock valued at their Fair
Market Value on the date of exercise, in cash, or in a combination of shares of Common Stock and cash, subject to applicable tax withholding
requirements set forth in Section 16.5. If Stock Appreciation Rights are settled in shares of Common Stock, then as soon as practicable
following the date of settlement the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon
the Participant’s request, Common Stock certificates in an appropriate amount.
8.
Restricted Stock Awards
8.1
Grant of Restricted Stock Awards. A Restricted Stock Award may be granted to any Eligible Person selected by the Committee. The
Committee may require the payment by the Participant of a specified purchase price in connection with any Restricted Stock Award. The
Committee may provide in an Award Agreement for the payment of dividends and distributions to the Participant such times as paid to stockholders
generally or at the times of vesting or other payment of the Restricted Stock Award. If any dividends or distributions are paid in stock
while a Restricted Stock Award is subject to restrictions under Section 8.3 of the Plan, the dividends or other distributions shares
shall be subject to the same restrictions on transferability as the shares of Common Stock to which they were paid unless otherwise set
forth in the Award Agreement. The Committee may also subject the grant of any Restricted Stock Award to the execution of a voting agreement
with the Company or with any Affiliate of the Company.
8.2
Vesting Requirements. The restrictions imposed on shares of Common Stock granted under a Restricted Stock Award shall lapse in
accordance with the vesting requirements specified by the Committee in the Award Agreement. Upon vesting of a Restricted Stock Award,
such Award shall be subject to the tax withholding requirement set forth in Section 16.5. The requirements for vesting of a Restricted
Stock Award may be based on the Continuous Service of the Participant for a specified time period (or periods) or on the attainment of
a specified performance goal (or goals) established by the Committee in its discretion. The Committee may, in its sole discretion, accelerate
the vesting of a Restricted Stock Award at any time. If the vesting requirements of a Restricted Stock Award shall not be satisfied,
the Award shall be forfeited and the shares of Common Stock subject to the Award shall be returned to the Company. In the event that
the Participant paid any purchase price with respect to such forfeited shares, unless otherwise provided by the Committee in an Award
Agreement, the Company will refund to the Participant the lesser of (i) such purchase price and (ii) the Fair Market Value of such shares
on the date of forfeiture.
8.3
Restrictions. Shares granted under any Restricted Stock Award may not be transferred, assigned or subject to any encumbrance,
pledge, or charge until all applicable restrictions are removed or have expired, unless otherwise allowed by the Committee. The Committee
may require in an Award Agreement that certificates representing the shares granted under a Restricted Stock Award bear a legend making
appropriate reference to the restrictions imposed, and that certificates representing the shares granted or sold under a Restricted Stock
Award will remain in the physical custody of an escrow holder until all restrictions are removed or have expired.
8.4
Rights as Stockholder. Subject to the foregoing provisions of this Section 8 and the applicable Award Agreement, the Participant
to whom a Restricted Stock Award is made shall have all rights of a stockholder with respect to the shares granted to the Participant
under the Restricted Stock Award, including the right to vote the shares and receive all dividends and other distributions paid or made
with respect thereto, unless the Committee determines otherwise at the time the Restricted Stock Award is granted.
8.5
Section 83(b) Election. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a Restricted
Stock Award, the Participant shall file, within thirty (30) days following the Date of Grant, a copy of such election with the Company
(directed to the Secretary thereof) and with the Internal Revenue Service, in accordance with the regulations under Section 83 of the
Code. The Committee may provide in an Award Agreement that the Restricted Stock Award is conditioned upon the Participant’s making
or refraining from making an election with respect to the Award under Section 83(b) of the Code.
9.
Restricted Stock Unit Awards
9.1
Grant of Restricted Stock Unit Awards. A Restricted Stock Unit Award may be granted to any Eligible Person selected by the Committee.
The value of each stock unit under a Restricted Stock Unit Award is equal to the Fair Market Value of the Common Stock on the applicable
date or time period of determination, as specified by the Committee. A Restricted Stock Unit Award shall be subject to such restrictions
and conditions as the Committee shall determine. A Restricted Stock Unit Award may be granted together with a dividend equivalent right
with respect to the shares of Common Stock subject to the Award, which may be accumulated and may be deemed reinvested in additional
stock units, as determined by the Committee in its sole discretion. If any dividend equivalents are paid while a Restricted Stock Unit
Award is subject to restrictions under Section 9 of the Plan, the Committee may, in its sole discretion, provide in the Award Agreement
for such dividend equivalents to immediately be paid to the Participant holding such Restricted Stock Unit Award or pay such dividend
equivalents subject to the same restrictions on transferability as the Restricted Stock Units to which they relate.
9.2
Vesting of Restricted Stock Unit Awards. On the Date of Grant, the Committee shall, in its discretion, determine any vesting requirements
with respect to a Restricted Stock Unit Award, which shall be set forth in the Award Agreement. The requirements for vesting of a Restricted
Stock Unit Award may be based on the Continuous Service of the Participant for a specified time period (or periods) or on the attainment
of a specified performance goal (or goals) established by the Committee in its discretion. The Committee may, in its sole discretion,
accelerate the vesting of a Restricted Stock Unit Award at any time. A Restricted Stock Unit Award may also be granted on a fully vested
basis, with a deferred payment date as may be determined by the Committee or elected by the Participant in accordance with rules established
by the Committee.
9.3
Payment of Restricted Stock Unit Awards. A Restricted Stock Unit Award shall become payable to a Participant at the time or times
determined by the Committee and set forth in the Award Agreement, which may be upon or following the vesting of the Award. Payment of
a Restricted Stock Unit Award may be made, at the discretion of the Committee, in cash or in shares of Common Stock, or in a combination
thereof as described in the Award Agreement, subject to applicable tax withholding requirements set forth in Section 16.5. Any cash payment
of a Restricted Stock Unit Award shall be made based upon the Fair Market Value of the Common Stock, determined on such date or over
such time period as determined by the Committee. Notwithstanding the foregoing, unless specified otherwise in the Award Agreement, any
Restricted Stock Unit, whether settled in Common Stock or cash, shall be paid no later than two-and-a-half (2 ½) months after
the later of the calendar year or fiscal year in which the Restricted Stock Units vest. If Restricted Stock Unit Awards are settled in
shares of Common Stock, then as soon as practicable following the date of settlement, the Company shall deliver to the Participant evidence
of book entry shares of Common Stock, or upon the Participant’s request, Common Stock certificates in an appropriate amount.
10.
Performance Shares
10.1
Grant of Performance Shares. Performance Shares may be granted to any Eligible Person selected by the Committee. A Performance
Share Award shall be subject to such restrictions and condition as the Committee shall specify. A Performance Share Award may be granted
with a dividend equivalent right with respect to the shares of Common Stock subject to the Award, which may be accumulated and may be
deemed reinvested in additional stock units, as determined by the Committee in its sole discretion.
10.2
Value of Performance Shares. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the
Date of Grant. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over a
specified time period, shall determine the number of Performance Shares that shall be paid to a Participant.
10.3
Earning of Performance Shares. After the applicable time period has ended, the number of Performance Shares earned by the Participant
over such time period shall be determined as a function of the extent to which the applicable corresponding performance goals have been
achieved. This determination shall be made solely by the Committee. The Committee may, in its sole discretion, waive any performance
or vesting conditions relating to a Performance Share Award.
10.4
Form and Timing of Payment of Performance Shares. The Committee shall pay at the close of the applicable Performance Period, or
as soon as practicable thereafter, any earned Performance Shares in the form of cash or in shares of Common Stock or in a combination
thereof, as specified in a Participant’s Award Agreement, subject to applicable tax withholding requirements set forth in Section
16.5. Notwithstanding the foregoing, unless specified otherwise in the Award Agreement, all Performance Shares shall be paid no later
than two-and-a-half (2 ½) months following the later of the calendar year or fiscal year in which such Performance Shares vest.
Any shares of Common Stock paid to a Participant under this Section 10.4 may be subject to any restrictions deemed appropriate by the
Committee. If Performance Shares are settled in shares of Common Stock, then as soon as practicable following the date of settlement
the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s request,
Common Stock certificates in an appropriate amount.
11.
Performance Units
11.1
Grant of Performance Units. Performance Units may be granted to any Eligible Person selected by the Committee. A Performance Unit
Award shall be subject to such restrictions and condition as the Committee shall specify in a Participant’s Award Agreement.
11.2
Value of Performance Units. Each Performance Unit shall have an initial notional value equal to a dollar amount determined by
the Committee, in its sole discretion. The Committee shall set performance goals in its discretion that, depending on the extent to which
they are met over a specified time period, will determine the number of Performance Units that shall be settled and paid to the Participant.
11.3
Earning of Performance Units. After the applicable time period has ended, the number of Performance Units earned by the Participant,
and the amount payable in cash, in shares or in a combination thereof, over such time period shall be determined as a function of the
extent to which the applicable corresponding performance goals have been achieved. This determination shall be made solely by the Committee.
The Committee may, in its sole discretion, waive any performance or vesting conditions relating to a Performance Unit Award.
11.4
Form and Timing of Payment of Performance Units. The Committee shall pay at the close of the applicable Performance Period, or
as soon as practicable thereafter, any earned Performance Units in the form of cash or in shares of Common Stock or in a combination
thereof, as specified in a Participant’s Award Agreement, subject to applicable tax withholding requirements set forth in Section
16.5. Notwithstanding the foregoing, unless specified otherwise in the Award Agreement, all Performance Units shall be paid no later
than two-and-a-half (2 ½) months following the later of the calendar year or fiscal year in which such Performance Units vest.
Any shares of Common Stock paid to a Participant under this Section 11.4 may be subject to any restrictions deemed appropriate by the
Committee. If Performance Units are settled in shares of Common Stock, then as soon as practicable following the date of settlement the
Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s request, Common
Stock certificates in an appropriate amount.
12.
Incentive Bonus Awards
12.1
Incentive Bonus Awards. The Committee, at its discretion, may grant Incentive Bonus Awards to such Participants as it may designate
from time to time. The terms of a Participant’s Incentive Bonus Award shall be set forth in the Participant’s Award Agreement.
Each Award Agreement shall specify such general terms and conditions as the Committee shall determine.
12.2
Incentive Bonus Award Performance Criteria. The determination of Incentive Bonus Awards for a given year or years may be based
upon the attainment of specified levels of Company or Subsidiary performance as measured by pre-established, objective performance criteria
determined at the discretion of the Committee. The Committee shall (i) select those Participants who shall be eligible to receive an
Incentive Bonus Award, (ii) determine the performance period, (iii) determine target levels of performance, and (iv) determine the level
of Incentive Bonus Award to be paid to each selected Participant upon the achievement of each performance level. The Committee generally
shall make the foregoing determinations prior to the commencement of services to which an Incentive Bonus Award relates, to the extent
applicable, and while the outcome of the performance goals and targets is uncertain.
12.3
Payment of Incentive Bonus Awards.
(a)
Incentive Bonus Awards shall be paid in cash or Common Stock, as set forth in a Participant’s Award Agreement. Payments shall be
made following a determination by the Committee that the performance targets were attained and shall be made within two and one-half
months after the later of the end of the fiscal or calendar year in which the Incentive Award is no longer subject to a substantial risk
of forfeiture.
(b)
The amount of an Incentive Bonus Award to be paid upon the attainment of each targeted level of performance shall equal a percentage
of a Participant’s base salary for the fiscal year, a fixed dollar amount, or such other formula, as determined by the Committee.
13.
Other Cash-Based Awards and Other Stock-Based Awards
13.1
Other Cash-Based and Stock-Based Awards. The Committee may grant other types of equity-based or equity-related Awards not otherwise
described by the terms of this Plan (including the grant or offer for sale of unrestricted Shares) in such amounts and subject to such
terms and conditions, as the Committee shall determine. Such Awards may involve the transfer of actual shares of Common Stock to a Participant,
or payment in cash or otherwise of amounts based on the value of shares of Common Stock. In addition, the Committee, at any time and
from time to time, may grant Other Cash-Based Awards to a Participant in such amounts and upon such terms as the Committee shall determine,
in its sole discretion.
13.2
Value of Cash-Based Awards and Other Stock-Based Awards. Each Other Stock-Based Award shall be expressed in terms of shares of
Common Stock or units based on shares of Common Stock, as determined by the Committee, in its sole discretion. Each Other Cash-Based
Award shall specify a payment amount or payment range as determined by the Committee, in its sole discretion. If the Committee exercises
its discretion to establish performance goals, the value of Other Cash-Based Awards that shall be paid to the Participant will depend
on the extent to which such performance goals are met.
13.3
Payment of Cash-Based Awards and Other Stock-Based Awards. Payment, if any, with respect to Other Cash-Based Awards and Other
Stock-Based Award shall be made in accordance with the terms of the Award, in cash or shares of Common Stock as the Committee determines.
14.
Change in Control
14.1
Effect of a Change in Control.
(a)
The Committee may, at the time of the grant of an Award and as set forth in an Award Agreement, provide for the effect of a “Change
in Control” on an Award. Such provisions may include any one or more of the following: (i) the acceleration or extension of time
periods for purposes of exercising, vesting in, or realizing gain from any Award, (ii) the elimination or modification of performance
or other conditions related to the payment or other rights under an Award, (iii) provision for the cash settlement of an Award for an
equivalent cash value, as determined by the Committee, or (iv) such other modification or adjustment to an Award as the Committee deems
appropriate to maintain and protect the rights and interests of Participants upon or following a Change in Control. To the extent necessary
for compliance with Section 409A of the Code, an Award Agreement shall provide that an Award subject to the requirements of Section 409A
that would otherwise become payable upon a Change in Control shall only become payable to the extent that the requirements for a “change
in control” for purposes of Section 409A have been satisfied.
(b)
Notwithstanding anything to the contrary set forth in the Plan, unless otherwise provided by an Award Agreement, upon or in anticipation
of any Change in Control, the Committee may, in its sole and absolute discretion and without the need for the consent of any Participant,
take one or more of the following actions contingent upon the occurrence of that Change in Control: (i) cause any or all outstanding
Stock Options and Stock Appreciation Rights held by Participants affected by the Change in Control to become vested and immediately exercisable,
in whole or in part; (ii) cause any or all outstanding Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
Incentive Bonus Award and any other Award held by Participants affected by the Change in Control to become non-forfeitable, in whole
or in part; (iii) cancel any Stock Option or Stock Appreciation Right in exchange for a substitute option in a manner consistent with
the requirements of Treasury Regulation. §1.424-1(a) or §1.409A-1(b)(5)(v)(D), as applicable (notwithstanding the fact that
the original Stock Option may never have been intended to satisfy the requirements for treatment as an Incentive Stock Option); (iv)
cancel any Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units held by a Participant in exchange for restricted
stock or performance shares of or stock or performance units in respect of the capital stock of any successor corporation; (v) redeem
any Restricted Stock held by a Participant affected by the Change in Control for cash and/or other substitute consideration with a value
equal to the Fair Market Value of an unrestricted share of Common Stock on the date of the Change in Control; (vi) terminate any Award
in exchange for an amount of cash and/or property equal to the amount, if any, that would have been attained upon the exercise of such
Award or realization of the Participant’s rights as of the date of the occurrence of the Change in Control (the “Change
in Control Consideration”); provided, however that if the Change in Control Consideration with respect to any Option or Stock
Appreciation Right does not exceed the exercise price of such Option or Stock Appreciation Right, the Committee may cancel the Option
or Stock Appreciation Right without payment of any consideration therefor; and/or (vii) take any other action necessary or appropriate
to carry out the terms of any definitive agreement controlling the terms and conditions of the Change in Control. Any such Change in
Control Consideration may be subject to any escrow, indemnification and similar obligations, contingencies and encumbrances applicable
in connection with the Change in Control to holders of Common Stock. Without limitation of the foregoing, if as of the date of the occurrence
of the Change in Control the Committee determines that no amount would have been attained upon the realization of the Participant’s
rights, then such Award may be terminated by the Company without payment. The Committee may cause the Change in Control Consideration
to be subject to vesting conditions (whether or not the same as the vesting conditions applicable to the Award prior to the Change in
Control) and/or make such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary
or appropriate.
(c)
The Committee may require a Participant to (i) represent and warrant as to the unencumbered title to the Participant’s Awards,
(ii) bear such Participant’s pro rata share of any post-closing indemnity obligations, and be subject to the same or similar post-closing
purchase price adjustments, escrow terms, offset rights, holdback terms and similar conditions as the other holders of Common Stock,
and (iii) execute and deliver such documents and instruments as the Committee may reasonably require for the Participant to be bound
by such obligations. The Committee will endeavor to take action under this Section 14 in a manner that does not cause a violation of
Section 409A of the Code with respect to an Award.
15.
General Provisions
15.1
Award Agreement. To the extent deemed necessary by the Committee, an Award under the Plan shall be evidenced by an Award Agreement
in a written or electronic form approved by the Committee setting forth the number of shares of Common Stock or units subject to the
Award, the exercise price, base price, or purchase price of the Award, the time or times at which an Award will become vested, exercisable
or payable and the term of the Award. The Award Agreement may also set forth the effect on an Award of termination of Continuous Service
under certain circumstances. The Award Agreement shall be subject to and incorporate, by reference or otherwise, all of the applicable
terms and conditions of the Plan, and may also set forth other terms and conditions applicable to the Award as determined by the Committee
consistent with the limitations of the Plan. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions
as may be necessary to meet the applicable provisions of Section 422 of the Code. The grant of an Award under the Plan shall not confer
any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan
as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the Award Agreement.
15.2
Forfeiture Events/Representations. The Committee may specify in an Award Agreement at the time of the Award that the Participant’s
rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events
shall include, but shall not be limited to, termination of Continuous Service for Cause, violation of material Company policies, breach
of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant
that is detrimental to the business or reputation of the Company. The Committee may also specify in an Award Agreement that the Participant’s
rights, payments and benefits with respect to an Award shall be conditioned upon the Participant making a representation regarding compliance
with noncompetition, confidentiality or other restrictive covenants that may apply to the Participant and providing that the Participant’s
rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment on account
of a breach of such representation. Notwithstanding the foregoing, the confidentiality restrictions set forth in an Award Agreement shall
not, and shall not be interpreted to, impair a Participant from exercising any legally protected whistleblower rights (including under
Rule 21 of the Exchange Act). In addition and without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment
in accordance with The Dodd-Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any “clawback”
policy adopted by the Company or as is otherwise required by applicable law or stock exchange listing condition.
15.3
No Assignment or Transfer; Beneficiaries.
(a)
Awards under the Plan shall not be assignable or transferable by the Participant, except by will or by the laws of descent and distribution,
and shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge. Notwithstanding the foregoing, the Committee
may provide in an Award Agreement that the Participant shall have the right to designate a beneficiary or beneficiaries who shall be
entitled to any rights, payments or other benefits specified under an Award following the Participant’s death. During the lifetime
of a Participant, an Award shall be exercised only by such Participant or such Participant’s guardian or legal representative.
In the event of a Participant’s death, an Award may, to the extent permitted by the Award Agreement, be exercised by the Participant’s
beneficiary as designated by the Participant in the manner prescribed by the Committee or, in the absence of an authorized beneficiary
designation, by the legatee of such Award under the Participant’s will or by the Participant’s estate in accordance with
the Participant’s will or the laws of descent and distribution, in each case in the same manner and to the same extent that such
Award was exercisable by the Participant on the date of the Participant’s death.
(b)
Limited Transferability Rights. Notwithstanding anything else in this Section 15.3 to the contrary, the Committee may in its discretion
provide in an Award Agreement that an Award in the form of a Nonqualified Stock Option, share-settled Stock Appreciation Right, Restricted
Stock, Performance Share or share-settled Other Stock-Based Award may be transferred, on such terms and conditions as the Committee deems
appropriate, either (i) by instrument to the Participant’s “Immediate Family” (as defined below), (ii) by instrument
to an inter vivos or testamentary trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries,
or (iii) by gift to charitable institutions. Any transferee of the Participant’s rights shall succeed and be subject to all of
the terms of the applicable Award Agreement and the Plan. “Immediate Family” means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive relationships.
15.4
Rights as Stockholder. A Participant shall have no rights as a holder of shares of Common Stock with respect to any unissued shares
of Common Stock covered by an Award until the date the Participant becomes the holder of record of such securities. Except as provided
in Section 4.3 hereof, no adjustment or other provision shall be made for dividends or other stockholder rights, except to the extent
that the Award Agreement provides for dividend payments or dividend equivalent rights.
15.5
Employment or Continuous Service. Nothing in the Plan, in the grant of any Award or in any Award Agreement shall confer upon any
Eligible Person or Participant any right to continue in Continuous Service, or interfere in any way with the right of the Company or
any of its Subsidiaries to terminate the employment or other service relationship of an Eligible Person or Participant for any reason
at any time.
15.6
Fractional Shares. In the case of any fractional share or unit resulting from the grant, vesting, payment or crediting of dividends
or dividend equivalents under an Award, the Committee shall have the discretionary authority to (i) disregard such fractional share or
unit, (ii) round such fractional share or unit to the nearest lower or higher whole share or unit, or (iii) convert such fractional share
or unit into a right to receive a cash payment.
15.7
Other Compensation and Benefit Plans. The amount of any compensation deemed to be received by a Participant pursuant to an Award
shall not constitute includable compensation for purposes of determining the amount of benefits to which a Participant is entitled under
any other compensation or benefit plan or program of the Company or any Subsidiary, including, without limitation, under any bonus, pension,
profit-sharing, life insurance, salary continuation or severance benefits plan, except to the extent specifically provided by the terms
of any such plan.
15.8
Plan Binding on Transferees. The Plan shall be binding upon the Company, its transferees and assigns, and the Participant, the
Participant’s executor, administrator and permitted transferees and beneficiaries. In addition, all obligations of the Company
under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
15.9
Foreign Jurisdictions. The Committee may adopt, amend and terminate such arrangements and grant such Awards, not inconsistent
with the intent of the Plan, as it may deem necessary or desirable to comply with any tax, securities, regulatory or other laws of other
jurisdictions with respect to Awards that may be subject to such laws. The terms and conditions of such Awards may vary from the terms
and conditions that would otherwise be required by the Plan solely to the extent the Committee deems necessary for such purpose. Moreover,
the Board may approve such supplements to or amendments, restatements or alternative versions of the Plan, not inconsistent with the
intent of the Plan, as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of the Plan as
in effect for any other purpose.
15.10
No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder
as to the time or manner of exercising an Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise
such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company
has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.
15.11
Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant
will be deemed completed as of the date of such corporate action, unless otherwise determined by the Committee or the Board, regardless
of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant.
In the event that the corporate records (e.g., Board or Committee consents, resolutions or minutes) documenting the corporate
action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent
with those in the Award Agreement as a result of a clerical error in the papering of the Award Agreement, the corporate records will
control and the Participant will have no legally binding right to the incorrect term in the Award Agreement.
15.12
Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of the Participant’s
services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an employee of the
Company and the employee has a change in status from a full-time employee to a part-time employee) after the date of grant of any Award
to the Participant, the Committee has the right in its sole discretion to (i) make a corresponding reduction in the number of shares
subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment and
(ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event
of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
15.13
Substitute Awards in Corporate Transactions. Nothing contained in the Plan shall be construed to limit the right of the Committee
to grant Awards under the Plan in connection with the acquisition, whether by purchase, merger, consolidation or other corporate transaction,
of the business or assets of any corporation or other entity. Without limiting the foregoing, the Committee may grant Awards under the
Plan to an employee or director of another corporation who becomes an Eligible Person by reason of any such corporate transaction in
substitution for awards previously granted by such corporation or entity to such person. The terms and conditions of the substitute Awards
may vary from the terms and conditions that would otherwise be required by the Plan solely to the extent the Committee deems necessary
for such purpose. Any shares of Common Stock subject to these substitute Awards shall not be counted against any of the maximum share
limitations set forth in the Plan.
16.
Legal Compliance
16.1
Securities Laws. No shares of Common Stock will be issued or transferred pursuant to an Award unless and until all then applicable
requirements imposed by Federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction,
and by any exchanges upon which the shares of Common Stock may be listed, have been fully met. As a condition precedent to the issuance
of shares pursuant to the grant or exercise of an Award, the Company may require the Participant to take any reasonable action to meet
such requirements. The Committee may impose such conditions on any shares of Common Stock issuable under the Plan as it may deem advisable,
including, without limitation, restrictions under the Securities Act, as amended, under the requirements of any exchange upon which such
shares of the same class are then listed, and under any blue sky or other securities laws applicable to such shares. The Committee may
also require the Participant to represent and warrant at the time of issuance or transfer that the shares of Common Stock are being acquired
only for investment purposes and without any current intention to sell or distribute such shares. All Common Stock issued pursuant to
the terms of this Plan shall constitute “restricted securities,” as that term is defined in Rule 144 promulgated pursuant
to the Securities Act, and may not be transferred except in compliance herewith and with the registration requirements of the Securities
Act or an exemption therefrom. Certificates representing Common Stock acquired pursuant to an Award may bear such legend as the Company
may consider appropriate under the circumstances.
16.2
Incentive Arrangement. The Plan is designed to provide an on-going, pecuniary incentive for Participants to produce their best
efforts to increase the value of the Company. The Plan is not intended to provide retirement income or to defer the receipt of payments
hereunder to the termination of a Participant’s employment or beyond. The Plan is thus intended not to be a pension or welfare
benefit plan that is subject to Employee Retirement Income Security Act of 1974 (“ERISA”), and shall be construed
accordingly. All interpretations and determinations hereunder shall be made on a basis consistent with the Plan’s status as not
an employee benefit plan subject to ERISA.
16.3
Unfunded Plan. The adoption of the Plan and any reservation of shares of Common Stock or cash amounts by the Company to discharge
its obligations hereunder shall not be deemed to create a trust or other funded arrangement. Except upon the issuance of Common Stock
pursuant to an Award, any rights of a Participant under the Plan shall be those of a general unsecured creditor of the Company, and neither
a Participant nor the Participant’s permitted transferees or estate shall have any other interest in any assets of the Company
by virtue of the Plan. Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust,
subject to the claims of the Company’s creditors or otherwise, to discharge its obligations under the Plan.
16.4
Section 409A Compliance. To the extent applicable, it is intended that the Plan and all Awards hereunder comply with the requirements
of Section 409A of the Code or an exemption thereto, and the Plan and all Award Agreements shall be interpreted and applied by the Committee
in a manner consistent with this intent in order to avoid the imposition of any additional tax under Section 409A of the Code. Notwithstanding
anything in the Plan or an Award Agreement to the contrary, in the event that any provision of the Plan or an Award Agreement is determined
by the Committee, in its sole discretion, to not comply with the requirements of Section 409A of the Code or an exemption thereto, the
Committee shall, in its sole discretion, have the authority to take such actions and to make such interpretations or changes to the Plan
or an Award Agreement as the Committee deems necessary, regardless of whether such actions, interpretations, or changes shall adversely
affect a Participant, subject to the limitations, if any, of applicable law. If an Award is subject to Section 409A of the Code, any
payment made to a Participant who is a “specified employee” of the Company or any Subsidiary shall not be made before the
date that is six (6) months after the Participant’s “separation from service” to the extent required to avoid the adverse
consequences of Section 409A of the Code. For purposes of this Section 16.4, the terms “separation from service” and “specified
employee” shall have the meanings set forth in Section 409A of the Code. In no event whatsoever shall the Company be liable for
any additional tax, interest or penalties that may be imposed on any Participant by Section 409A of the Code or any damages for failing
to comply with Section 409A of the Code.
16.5
Tax Withholding.
(a)
The Company shall have the power and the right to deduct or withhold, or require a participant to remit to the Company, the minimum statutory
amount to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to
any taxable event arising as a result of this Plan, but in no event shall such deduction or withholding or remittance exceed the minimum
statutory withholding requirements unless permitted by the Company and such additional withholding amount will not cause adverse accounting
consequences and is permitted under Applicable Law.
(b)
Subject to such terms and conditions as shall be specified in an Award Agreement, a Participant may, in order to fulfill the withholding
obligation, (i) tender previously-acquired shares of Common Stock or have shares of stock withheld from the exercise, provided that the
shares have an aggregate value sufficient to satisfy in whole or in part the applicable withholding taxes; and/or (ii) utilize the broker-assisted
exercise procedure described in Section 6.5 to satisfy the withholding requirements related to the exercise of a Stock Option.
(c)
Notwithstanding the foregoing, a Participant may not use shares of Common Stock to satisfy the withholding requirements to the extent
that (i) there is a substantial likelihood that the use of such form of payment or the timing of such form of payment would subject the
Participant to a substantial risk of liability under Section 16 of the Exchange Act; (ii) such withholding would constitute a violation
of the provisions of any law or regulation, or (iii) such withholding would cause adverse accounting consequences for the Company.
16.6
No Guarantee of Tax Consequences. Neither the Company, the Board, the Committee nor any other Person make any commitment or guarantee
that any federal, state, local or foreign tax treatment will apply or be available to any Participant or any other Person hereunder.
16.7
Severability. If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court
of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms,
and all provisions shall remain enforceable in any other jurisdiction.
16.8
Stock Certificates; Book Entry Form. Notwithstanding any provision of the Plan to the contrary, unless otherwise determined by
the Committee or required by any applicable law, rule or regulation, any obligation set forth in the Plan pertaining to the delivery
or issuance of stock certificates evidencing shares of Common Stock may be satisfied by having issuance and/or ownership of such shares
recorded on the books and records of the Company (or, as applicable, its transfer agent or stock plan administrator).
16.9
Governing Law. The Plan and all rights hereunder shall be subject to and interpreted in accordance with the laws of the State
of Delaware, without reference to the principles of conflicts of laws, and to applicable Federal securities laws.
17.
Effective Date, Amendment and Termination
17.1
Effective Date. The effective date of the Plan shall be the date on which the Plan is approved by the requisite percentage of
the holders of the Common Stock of the Company; provided, however, that Awards granted under the Plan subsequent to the approval of the
Plan by the Board shall be valid if such stockholder approval occurs within one (1) year of the date on which such Board approval occurs.
17.2
Amendment; Termination. The Board may suspend or terminate the Plan (or any portion thereof) at any time and may amend the Plan
at any time and from time to time in such respects as the Board may deem advisable or in the best interests of the Company or any Subsidiary;
provided, however, that (a) no such amendment, suspension or termination shall materially and adversely affect the rights of any Participant
under any outstanding Awards, without the consent of such Participant, provided that no modification or amendment of any Incentive Stock
Option shall require a Participant’s consent as a result of such modification or amendment causing such Incentive Stock Option
(i) to become a Nonqualified Stock Option or (ii) to be considered granted as of the date of such modification or amendment pursuant
to Section 424 of the Code and Treasury Regulations Section 1.424-1(e), (b) to the extent necessary and desirable to comply with any
applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner
and to such a degree as required, and (c) stockholder approval is required for any amendment to the Plan that (i) increases the number
of shares of Common Stock available for issuance under the Plan, or (ii) changes the persons or class of persons eligible to receive
Awards. The Plan will continue in effect until terminated in accordance with this Section 17.2; provided, however, that no Award will
be granted hereunder on or after the 10th anniversary of the date of the Plan’s initial adoption by the Board (the “Expiration
Date”); but provided further, that Awards granted prior to such Expiration Date may extend beyond that date.
INITIAL
BOARD APPROVAL: November 13, 2022
SUBSEQUENT
BOARD APPROVAL: September 6, 2023
SUBSEQUENT
BOARD APPROVAL: __________, 2024
INITIAL
STOCKHOLDER APPROVAL: December 8, 2022
SUBSEQUENT
STOCKHOLDER APPROVAL: October 31, 2023
SUBSEQUENT
STOCKHOLDER APPROVAL: [October 29, 2024]
Annex
B
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.
Series
A COMMON STOCK PURCHASE WARRANT
ZYVERSA
THERAPEUTICS, INC.
| Warrant
Shares: _____ |
Issue
Date: _______, 2024 |
| |
|
| Stockholder
Approval Warrants: ____ |
Initial
Exercise Date: _______, 2024
(other
than the Stockholder Approval Warrants) |
THIS
Series A COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations
on exercise and the conditions hereinafter set forth, at any time or times on or after _______, 2024 (the “Initial Exercise
Date”) (except that ____ shares of common stock shall be exercisable for a period of five (5) years commencing on or after
the Stockholder Approval Date) (the “Stockholder Approval Warrants”) and on or prior to 5:00 p.m. (New York City time)
on the five-year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe
for and purchase from ZyVersa Therapeutics, Inc., a Delaware corporation (the “Company”), up to [●] shares
of common stock, par value $0.0001 per share (the “Common Stock”) (as subject to adjustment hereunder, the “Warrant
Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).
Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “Purchase Agreement”), dated December 6, 2023, among the Company and the purchasers
signatory thereto and that certain Inducement Offer Letter (the “Inducement Offer”), dated _______, 2024, among the
Company and the purchasers signatory thereto, as applicable.
“Stockholder
Approval” refers to when the Company has received approval to issue the Stockholder Approval Warrants.
“Stockholder
Approval Date” means the date on which Stockholder Approval is received and deemed effective.
Section
2. Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date (or the Stockholder Approval Date for the Stockholder Approval Warrants) and on or before
the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment)
of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Notice of Exercise”). Within
the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the number
of Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank
unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, at which time, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares purchasable hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder by the number of Warrant Shares equal to the applicable number of Warrant Shares purchased in connection
with such partial exercise. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the
date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such
notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at
any given time may be less than the amount stated on the face hereof.
(b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $____1, subject to adjustment
hereunder (the “Exercise Price”).
(c)
Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective
registration statement registering, or the prospectus contained therein is not available for the issuance of, the Warrant Shares to the
Holder, then this Warrant may only be exercised, in whole or in part, at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
1
NTD: the lower of: (i) the most recent Nasdaq Official Closing Price (as reflected on Nasdaq.com) preceding the day
of an exercise of Existing Common Warrants; or (ii) the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com)
for the five (5) Trading Days immediately preceding the day of an exercise of Existing Common Warrants.
(A)
= as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the Bid Price of the
Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a
Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading
hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise
if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section
2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B)
= the Exercise Price of this Warrant, as adjusted hereunder; and
(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the VWAP of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“Trading
Day” means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for
trading for a period of time less than the customary time.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to
the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either
(A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by
Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule
144 (assuming cashless exercise of the Warrant), and otherwise by physical delivery of the Warrant Shares, registered in the Company’s
share register in the name of the Holder or its designee, for the number of Warrant Shares set forth in the Notice of Exercise to the
address specified by the Holder in such Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery
to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company, and
(iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise
(such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other
than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days
comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver
to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of
the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth
Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares
are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent (the “Transfer Agent”)
that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 9:00 a.m. (New York City time) on the Initial Exercise Date, which
may be delivered at any time after the time of execution of the Inducement Offer, the Company agrees to deliver, or cause to be delivered,
the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date, and the Initial Exercise
Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date. The Holder and any assignee, by acceptance
of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the
Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time will be less than the amount
stated on the face hereof.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the Warrant Shares so purchased exceeds (y)
the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
of Warrants with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence satisfactory to the Company with respect to
the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election and in lieu of the issuance of such fractional Warrant Share, either (i) pay cash in an amount equal
to such fraction multiplied by the Exercise Price or (ii) round up to the next whole Warrant Share.
vi.
Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall
be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other
than the name of the Holder, the Notice of Exercise shall be accompanied by the Assignment Form, attached hereto as Exhibit B,
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for
any transfer tax incidental thereto and this Warrant shall be surrendered to the Company and, if any portion of this Warrant remains
unexercised, a new Warrant in the form hereof shall be delivered to the assignee. The Company shall pay all Transfer Agent fees required
for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise all or any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect
to such issuance upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates,
(ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons
whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section
13(d) (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and
its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of the Warrant Shares which would be issuable upon (i)
exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution
Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including,
without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding
sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable,
in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in
determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as
reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more
recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be [4.99%/9.99%] of the number of shares of Common
Stock outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder,
upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided
that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st)
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock
any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification.
(b)
[RESERVED]
(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however,
that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the
Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such
extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation).
(e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary),
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to
sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of
the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of shares of Common Stock or any compulsory share exchange pursuant to which
the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the voting power of the common equity of the Company (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of
shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any
limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise
Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor
Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within thirty (30) days
after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental
Transaction), purchase this Warrant from the Holder by paying to the Holder, as described below, an amount of consideration equal to
the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such
Fundamental Transaction, provided, however, that, if the Fundamental Transaction is not within the Company’s
control, including not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company
or any Successor Entity, as of the date of the consummation of such Fundamental Transaction the same type or form of consideration (and
in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid
to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form
of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative
forms of consideration in connection with the Fundamental Transaction; provided further, that if holders of Common Stock
of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed
to have received shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in
such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation
of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg (determined
utilizing a 365-day annualization factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental
Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option
time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date
and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within
five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall
cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with
the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder
prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in
form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.
(f)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share
of Common Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued
and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued
and outstanding.
(g)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company declares a dividend (or any other distribution in whatever form) on the
shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on or a redemption of the shares of Common Stock,
(C) the Company authorizes the granting to all holders of the shares of Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company is required in connection
with a Fundamental Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last
facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y)
the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close,
and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such notice and provided, further that no notice shall be
required if the information is disseminated in a press release or document filed with the Commission. To the extent that any notice provided
in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.
(h)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time while
this Warrant is outstanding, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the
board of directors of the Company in its sole discretion.
Section
4. Transfer of Warrant.
(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto as Exhibit B duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance
date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
(d)
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public
information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or
transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
(e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section
5. Miscellaneous.
(a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in
no event shall the Company be required to net cash settle an exercise of this Warrant.
(b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
(c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
(d)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued, and the Warrant Shares, delivered, as provided
herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock
may be listed. The Company covenants that all Warrant Shares underlying this Warrant, which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges
created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with
such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii)
use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
(e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Purchase Agreement.
(f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement.
(i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any share of Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
(j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
(k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
(l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder.
(m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
| |
ZYVERSA
THERAPEUTICS, INC. |
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|
|
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By: |
|
| |
Name: |
Stephen
C. Glover |
| |
Title: |
Chief
Executive Officer |
[Signature
Page to ZyVersa Common Stock Warrant]
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
ZYVERSA THERAPEUTICS, INC.
| (3) | The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to
the terms of the attached Warrant (only if exercised in full), and tenders herewith payment
of the exercise price in full, together with all applicable transfer taxes, if any. |
| | | |
| | (2) | Payment shall take the form of (check applicable box): |
| |
☐ |
in
lawful money of the United States; or |
| |
|
|
| |
☐ |
if
permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c). |
| |
(3) |
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below: |
| |
|
| |
|
| The
Warrant Shares shall be delivered to the following DWAC Account Number: |
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|
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|
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|
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|
| [SIGNATURE
OF HOLDER] |
|
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| Name
of Investing Entity: |
|
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|
| Signature
of Authorized Signatory of Investing Entity: |
|
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| Name
of Authorized Signatory |
|
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|
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|
| Title
of Authorized Signature: |
|
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|
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|
| Date |
|
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
| |
(Please
Print) |
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|
| Address: |
|
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(Please
Print) |
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|
| Phone
Number |
|
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|
| Email
Address: |
|
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|
| Dated:
_______________ ____, _______ |
|
| Holder’s
Signature |
|
|
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|
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| Holder’s
Address |
|
|
Annex
C
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.
Series
B COMMON STOCK PURCHASE WARRANT
ZYVERSA
THERAPEUTICS, INC.
| Warrant
Shares: ____ |
Issue
Date: _______, 2024 |
| |
|
| Stockholder
Approval Warrants: ____ |
Initial
Exercise Date: _______, 2024 |
| |
(other
than the Stockholder Approval Warrants) |
THIS
Series B COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations
on exercise and the conditions hereinafter set forth, at any time or times on or after ________, 2024 (the “Initial Exercise
Date”) (except that ____ shares of common stock shall be exercisable for a period of eighteen (18) months commencing on or
after the Stockholder Approval Date) (the “Stockholder Approval Warrants”) and on or prior to 5:00 p.m. (New York
City time) on the eighteen-month anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from ZyVersa Therapeutics, Inc., a Delaware corporation (the “Company”), up to
____ shares of common stock, par value $0.0001 per share (the “Common Stock”) (as subject to adjustment hereunder,
the “Warrant Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “Purchase Agreement”), dated December 6, 2023, among the Company and the purchasers
signatory thereto and that certain Inducement Offer Letter (the “Inducement Offer”), dated _______, 2024, among the
Company and the purchasers signatory thereto, as applicable.
“Stockholder
Approval” refers to when the Company has received approval to issue the Stockholder Approval Warrants.
“Stockholder
Approval Date” means the date on which Stockholder Approval is received and deemed effective.
Section
2. Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date (or the Stockholder Approval Date for the Stockholder Approval Warrants) and on or before
the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment)
of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Notice of Exercise”). Within
the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section
2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the number
of Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank
unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, at which time, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the
date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares purchasable hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder by the number of Warrant Shares equal to the applicable number of Warrant Shares purchased in connection
with such partial exercise. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the
date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such
notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at
any given time may be less than the amount stated on the face hereof.
(b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $____1, subject to adjustment hereunder
(the “Exercise Price”).
1
NTD: the lower of: (i) the most recent Nasdaq Official Closing Price (as reflected on Nasdaq.com) preceding the day of
an exercise of Existing Common Warrants; or (ii) the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com)
for the five (5) Trading Days immediately preceding the day of an exercise of Existing Common Warrants.
(c)
Cashless Exercise. Notwithstanding anything to the contrary set forth herein, if at the time of exercise hereof there is no effective
registration statement registering, or the prospectus contained therein is not available for the issuance of, the Warrant Shares to the
Holder, then this Warrant may only be exercised, in whole or in part, at such time by means of a “cashless exercise” in which
the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A)
= as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of
Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the Bid Price of the
Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a
Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading
hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise
if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section
2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B)
= the Exercise Price of this Warrant, as adjusted hereunder; and
(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not
to take any position contrary to this Section 2(c).
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the VWAP of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“Trading
Day” means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for
trading for a period of time less than the customary time.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees
and expenses of which shall be paid by the Company.
(d)
Mechanics of Exercise.
i.
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to
the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either
(A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by
Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule
144 (assuming cashless exercise of the Warrant), and otherwise by physical delivery of the Warrant Shares, registered in the Company’s
share register in the name of the Holder or its designee, for the number of Warrant Shares set forth in the Notice of Exercise to the
address specified by the Holder in such Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery
to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company, and
(iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise
(such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other
than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days
comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver
to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of
the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth
Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares
are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent (the “Transfer Agent”)
that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 9:00 a.m. (New York City time) on the Initial Exercise Date, which
may be delivered at any time after the time of execution of the Inducement Offer, the Company agrees to deliver, or cause to be delivered,
the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date, and the Initial Exercise
Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date. The Holder and any assignee, by acceptance
of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the
Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time will be less than the amount
stated on the face hereof.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii.
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the Warrant Shares so purchased exceeds (y)
the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection
with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the
Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
of Warrants with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence satisfactory to the Company with respect to
the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.
v.
No Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election and in lieu of the issuance of such fractional Warrant Share, either (i) pay cash in an amount equal
to such fraction multiplied by the Exercise Price or (ii) round up to the next whole Warrant Share.
vi.
Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall
be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other
than the name of the Holder, the Notice of Exercise shall be accompanied by the Assignment Form, attached hereto as Exhibit B,
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for
any transfer tax incidental thereto and this Warrant shall be surrendered to the Company and, if any portion of this Warrant remains
unexercised, a new Warrant in the form hereof shall be delivered to the assignee. The Company shall pay all Transfer Agent fees required
for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii.
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise all or any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect
to such issuance upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates,
(ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons
whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s for the purposes of Section
13(d) (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and
its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of the Warrant Shares which would be issuable upon (i)
exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution
Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including,
without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding
sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable,
in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in
determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as
reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more
recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day
confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be [4.99%/9.99%] of the number of shares of Common
Stock outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder,
upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided
that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st)
day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section
3. Certain Adjustments.
(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock
any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged.
Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification.
(b)
[RESERVED]
(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however,
that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the
Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such
extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation).
(e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary),
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to
sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of
the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of shares of Common Stock or any compulsory share exchange pursuant to which
the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons
whereby such other Person or group acquires more than 50% of the voting power of the common equity of the Company (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of
shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any
limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise
Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor
Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within thirty (30) days
after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental
Transaction), purchase this Warrant from the Holder by paying to the Holder, as described below, an amount of consideration equal to
the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such
Fundamental Transaction, provided, however, that, if the Fundamental Transaction is not within the Company’s
control, including not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company
or any Successor Entity, as of the date of the consummation of such Fundamental Transaction the same type or form of consideration (and
in the same proportion), valued at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid
to the holders of Common Stock of the Company in connection with the Fundamental Transaction, whether that consideration be in the form
of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative
forms of consideration in connection with the Fundamental Transaction; provided further, that if holders of Common Stock
of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed
to have received shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction) in
such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation
of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg (determined
utilizing a 365-day annualization factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental
Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option
time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date
and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within
five Business Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company shall
cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with
the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder
prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in
form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein.
(f)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share
of Common Stock, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued
and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued
and outstanding.
(g)
Notice to Holder.
i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company declares a dividend (or any other distribution in whatever form) on the
shares of Common Stock, (B) the Company declares a special nonrecurring cash dividend on or a redemption of the shares of Common Stock,
(C) the Company authorizes the granting to all holders of the shares of Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company is required in connection
with a Fundamental Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last
facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y)
the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close,
and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such notice and provided, further that no notice shall be
required if the information is disseminated in a press release or document filed with the Commission. To the extent that any notice provided
in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.
(h)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time while
this Warrant is outstanding, reduce the then-current Exercise Price to any amount and for any period of time deemed appropriate by the
board of directors of the Company in its sole discretion.
Section
4. Transfer of Warrant.
(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto as Exhibit B duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance
date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
(d)
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public
information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or
transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
(e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
Section
5. Miscellaneous.
(a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except
as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise”
pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in
no event shall the Company be required to net cash settle an exercise of this Warrant.
(b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
(c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
(d)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares underlying this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued, and the Warrant Shares, delivered, as provided
herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock
may be listed. The Company covenants that all Warrant Shares underlying this Warrant, which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges
created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with
such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii)
use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
(e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Purchase Agreement.
(f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
if the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement.
(i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any share of Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
(j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
(k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
(l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and
the Holder.
(m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
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ZYVERSA
THERAPEUTICS, INC. |
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By: |
|
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Name: |
Stephen
C. Glover |
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Title: |
Chief
Executive Officer |
[Signature
Page to ZyVersa Common Stock Warrant]
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
ZYVERSA THERAPEUTICS, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
| |
[
] |
in
lawful money of the United States; or |
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|
|
| |
[
] |
if
permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c). |
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
| |
|
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|
| The
Warrant Shares shall be delivered to the following DWAC Account Number: |
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|
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|
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|
| [SIGNATURE
OF HOLDER] |
|
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| Name
of Investing Entity: |
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| Signature
of Authorized Signatory of Investing Entity: |
|
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| Name
of Authorized Signatory |
|
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|
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| Title
of Authorized Signature: |
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| Date |
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EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: |
|
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(Please
Print) |
| Address: |
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(Please
Print) |
| Phone
Number |
|
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| Email
Address: |
|
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| Dated:
_______________ ____, _______ |
|
| Holder’s
Signature |
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| Holder’s
Address |
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PRELIMINARY
PROXY STATEMENT, SUBJECT TO COMPLETION, DATED AUGUST 30, 2024
ZyVersa Therapeutics (NASDAQ:ZVSA)
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