Note 7 – Commitments and Contingencies

Litigations, Claims and Assessments

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

Disputed Vendor Invoices

On June 30, 2024 and July 1, 2024, the Company received two invoices from a vendor in the amounts of $923,880 and $144,300, respectively. The June 30, 2024 invoice represents retroactive interest on invoices going back to September 30, 2022. The July 1, 2024 invoice included miscellaneous unsupported charges performed over the past several years. On August 1, 2024, ZyVersa management sent the vendor a letter disputing the interest and unsupported charges and has requested the vendor to rescind each of them. Although the Company has requested the vendor to rescind the retroactive interest on invoices, the Company believes that in accordance with the agreement, the vendor can legally charge the Company interest from the point they were notified of the vendor’s intent to charge interest. As such, the Company began accruing interest starting on July 1, 2024, and accordingly, has recorded $911,783 and $780,539 within accrued expenses and other current liabilities on the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively. The Company has accounted for the unaccrued interest and unsupported charges of $1,068,180 as a loss contingency and because the liability is not deemed probable, it has not been recorded as a liability in the condensed consolidated balance sheet as of March 31, 2026 or December 31, 2025.

ZYVERSA THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

On April 15, 2026, the Company received four additional invoices from the vendor totaling $117,525. These invoices stated that they represented work completed between 2019 and 2020, but the vendor didn’t provide support for the charges. The Company plans to dispute these charges within thirty days as per the agreement. The Company does not believe these charges are supported and therefore the liability is not deemed probable and has not been recorded as a liability in the condensed consolidated balance sheet as of March 31, 2026.

Operating Leases

On January 18, 2019, the Company entered into a lease agreement for approximately 3,500 square feet of office space in Weston, Florida for a term of five years. Under the lease agreement, the annual base rent, which excludes the Company’s share of taxes and operating costs, was approximately $89,000 for the first year and has increased approximately 3% every year thereafter. On January 15, 2024, the Company extended the lease for an additional year for a total annual base rent lease commitment of $112,064. On January 9, 2025, the Company extended the lease for an additional year for a total base rent lease commitment of approximately $120,819. The Company used the short-term lease practical expedient which permits the Company to not capitalize leases with a term equal to or less than 12 months. The lease agreement ended on January 31, 2026 and it was not extended. The Company is currently operating without any formal designated office space.

The Company recognized rent expense in connection with its operating lease for the three months ended March 31, 2026 and 2025 of $19,845 and $44,196, respectively.