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What changed in NRX Pharmaceuticals, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NRX Pharmaceuticals, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+734 added−605 removedSource: 10-K (2025-03-14) vs 10-K (2024-03-29)

Top changes in NRX Pharmaceuticals, Inc.'s 2024 10-K

734 paragraphs added · 605 removed · 395 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

193 edited+173 added−94 removed57 unchanged
Biggest changeCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY (in thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Accumulated Other ​ Total ​ ​ Preferred Stock ​ Series A Preferred Stock ​ Common Stock ​ Paid-in- ​ Accumulated ​ Comprehensive ​ Stockholders’ ​ ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Deficit Income (Loss) Equity (Deficit) Balance - December 31, 2021 ​ — ​ $ — ​ — ​ $ — ​ 58,810,550 ​ $ 59 ​ $ 203,990 ​ $ (183,243) ​ $ — ​ $ 20,806 Common stock and warrants issued in private placement, net of issuance costs of $2,283 ​ — ​ ​ — ​ — ​ ​ — ​ 7,824,727 ​ ​ 8 ​ ​ 22,694 ​ ​ — ​ ​ — ​ ​ 22,702 Common stock issued for consulting services ​ — ​ ​ — ​ — ​ ​ — ​ 6,037 ​ ​ — ​ ​ 17 ​ ​ — ​ ​ — ​ ​ 17 Common stock issued for exercise of stock options ​ — ​ ​ — ​ — ​ ​ — ​ 49,605 ​ ​ — ​ ​ 10 ​ ​ — ​ ​ — ​ ​ 10 Restricted stock awards granted ​ — ​ ​ — ​ — ​ ​ — ​ 1,000,000 ​ ​ 1 ​ ​ (1) ​ ​ — ​ ​ — ​ ​ — Retired Earnout Shares ​ — ​ ​ — ​ — ​ ​ — ​ (1,247,930) ​ ​ (1) ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — Stock-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 3,628 ​ ​ — ​ ​ — ​ ​ 3,628 Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ (39,754) ​ ​ — ​ ​ (39,754) Balance December 31, 2022 ​ — ​ $ — ​ — ​ $ — ​ 66,442,989 ​ $ 67 ​ $ 230,339 ​ $ (222,997) ​ $ — ​ $ 7,409 Common stock and warrants issued, net of issuance costs $2,519 ​ — ​ ​ — ​ — ​ ​ — ​ 13,536,668 ​ ​ 13 ​ ​ 8,109 ​ ​ — ​ ​ — ​ ​ 8,122 Preferred stock and warrants issued, net of issuance costs $27 ​ — ​ ​ — ​ 3,000,000 ​ ​ 3 ​ — ​ ​ — ​ ​ 1,168 ​ ​ — ​ ​ — ​ ​ 1,171 Change in fair value of convertible note attributed to credit risk ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (3) ​ ​ (3) Shares issued as repayment of principal and interest for convertible note ​ — ​ ​ — ​ — ​ ​ — ​ 3,264,221 ​ ​ 3 ​ ​ 979 ​ ​ — ​ ​ — ​ ​ 982 Common stock issued to settle GEM settlement liability ​ — ​ ​ — ​ — ​ ​ — ​ 675,676 ​ ​ 1 ​ ​ 249 ​ ​ — ​ ​ — ​ ​ 250 Adjustment for deferred offering cost settlement ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 99 ​ ​ — ​ ​ — ​ ​ 99 Stock-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 387 ​ ​ — ​ ​ — ​ ​ 387 Net loss ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ (30,150) ​ ​ — ​ ​ (30,150) Balance - December 31, 2023 ​ — ​ $ — ​ 3,000,000 ​ $ 3 ​ 83,919,554 ​ $ 84 ​ $ 241,330 ​ $ (253,147) ​ $ (3) ​ $ (11,733) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 110 Table of Contents NRX PHARMACEUTICALS, INC.
Biggest changeCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ (DEFICIT) EQUITY (in thousands, except share data) Series A Preferred Stock Common Stock Additional Paid-in- Accumulated Accumulated Other Comprehensive Income Total Stockholders’ Equity Shares Amount Shares Amount Capital Deficit (Loss) (Deficit) Balance - December 31, 2022 — $ — 6,644,299 $ 7 $ 230,399 $ (222,997 ) $ — $ 7,409 Common stock and warrants issued, net of issuance costs $ 2,519 — — 1,353,667 1 8,121 — — 8,122 Preferred stock and warrants issued, net of issuance costs $ 27 3,000,000 3 — — 1,168 — — 1,171 Change in fair value of convertible note attributed to credit risk — — — — — — (3 ) (3 ) Shares issued as repayment of principal and interest for convertible note — — 326,423 — 982 — — 982 Common stock issued to settle GEM settlement liability — — 67,568 — 250 — — 250 Adjustment for deferred offering cost settlement — — — — 99 — — 99 Stock-based compensation — — — — 387 — — 387 Net loss — — — — — (30,150 ) — (30,150 ) Balance December 31, 2023 3,000,000 $ 3 8,391,956 $ 8 $ 241,406 $ (253,147 ) $ (3 ) $ (11,733 ) Conversion of Series A preferred stock into common stock (3,000,000 ) (3 ) 300,000 — 3 — — — At-the-market “ATM” offering, net of offering costs of $ 197 — — 385,515 1 1,626 — — 1,627 Common stock and warrants issued, net of issuance costs $ 975 — — 1,273,050 1 3,256 — — 3,257 Common stock and warrants issued in private placement — — 270,000 1 1,026 — — 1,027 Vesting of restricted stock awards — — 57,500 — — — — — Shares issued as repayment of principal and interest for convertible note — — 3,820,444 4 5,859 — — 5,863 Issuance of shares related to reverse stock split — — 73,040 — — — — — Contract cost related to Alvogen termination (see Note 6) — — — — 1,336 — — 1,336 Common stock issued in exchange for services — — 20,000 — 37 — — 37 Reclassification of AOCI upon settlement of Streeterville Note — — — — — — 3 3 Stock-based compensation — — — — 486 — — 486 Net loss — — — — — (25,126 ) — (25,126 ) Balance - December 31, 2024 — $ — 14,591,505 $ 15 $ 255,035 $ (278,273 ) $ — $ (23,223 ) The accompanying notes are an integral part of these consolidated financial statements.
These additional indications have been added as the Company has gained access to clinical trials data funded by governmental entities in France and potentially in the United States which has the potential to afford the Company potential safety and efficacy data on key indications at low cost to shareholders. ​ 2.
These additional indications have been added as the Company has gained access to clinical trials data funded by governmental entities in France and potentially in the United States which has the potential to afford the Company potential safety and efficacy data on key indications at low cost. 2.
On December 28, 2023 the first amendment to the 2021 Omnibus Plan was executed which increased the maximum number of Shares (i) available for issuance under the Plan, by an additional 2,000,000 Shares, and (ii) that may be delivered pursuant to the exercise of Incentive Stock Options granted under the Plan to be equal to 100% of the Share Pool.
On December 28, 2023 the first amendment to the 2021 Omnibus Plan was executed which increased the maximum number of shares (i) available for issuance under the Plan, by an additional 200,000 shares, and (ii) that may be delivered pursuant to the exercise of Incentive Stock Options granted under the Plan to be equal to 100% of the Share Pool.
The time to expiration is based on the contractual maturity date, giving consideration to the mandatory and potential accelerated redemptions beginning six months from the issuance date. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration.
The time to expiration was based on the contractual maturity date, giving consideration to the mandatory and potential accelerated redemptions beginning six months from the issuance date. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration.
The Company estimates the fair value of restricted stock award grants using the closing trading price of the Company’s common stock on the date of issuance. All stock-based compensation costs are recorded in general and administrative or research and development costs in the consolidated statements of operations based upon the underlying individual’s role at the Company.
The Company estimates the fair value of restricted stock award grants using the closing trading price of the Company’s Common Stock on the date of issuance. All stock-based compensation costs are recorded in general and administrative or research and development costs in the consolidated statements of operations and comprehensive loss based upon the underlying individual’s role at the Company.
He served the Company on a full-time basis as CEO under an employment agreement with the Company until March 8, 2022 and currently serves under a Consulting Agreement with the Company as Chief Scientist thereafter and received compensation of $0.9 million and $0.9 million during the years ended December 31, 2023 and 2022, respectively.
He served the Company on a full-time basis as CEO under an employment agreement with the Company until March 8, 2022 and currently serves under a Consulting Agreement with the Company as Chief Scientist thereafter and received compensation of $0.1 million and $0.9 million during the years ended December 31, 2024 and 2023, respectively.
The Company concluded that the Series A Preferred Stock is more akin to an equity-type instrument than a debt-type instrument, therefore the conversion features associated with the convertible preferred stock were deemed to be clearly and closely related to the host instrument and were not bifurcated as a derivative under ASC 815.
The Company concluded that the Series A Preferred Stock was more akin to an equity-type instrument than a debt-type instrument, therefore the conversion features associated with the convertible preferred stock were deemed to be clearly and closely related to the host instrument and were not bifurcated as a derivative under ASC 815.
As these Substitute Warrants meet the definition of a derivative as contemplated in ASC 815, based on provisions in the warrant agreement related to the Earnout Shares Milestone and the Earnout Cash Milestone and the contingent right to receive additional shares for these provisions, the Substitute Warrants were recorded as derivative liabilities on the consolidated balance sheet and measured at fair value at inception (on the date of the Merger) and at each reporting date in accordance with ASC 820, Fair Value Measurement , with changes in fair value recognized in the statements of operations in the period of change.
As these Substitute Warrants meet the definition of a derivative as contemplated in FASB ASC Topic 815, based on provisions in the warrant agreement related to the Earnout Shares Milestone and the Earnout Cash Milestone and the contingent right to receive additional shares for these provisions, the Substitute Warrants were recorded as derivative liabilities on the consolidated balance sheet and measured at fair value at inception (on the date of the Merger) and at each reporting date in accordance with FASB ASC Topic 820, with changes in fair value recognized in the statements of operations in the period of change.
Fair Value Measurements Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended December 31, 2023 and 2022. The carrying amount of accounts payable approximated fair value as they are short term in nature.
Fair Value Measurements Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended December 31, 2024 and 2023. The carrying amount of accounts payable approximated fair value as they are short term in nature.
Beginning May 1, 2023, in the event (a) the daily dollar trading volume of the common stock of the Company on any given trading day is at least fifty percent (50%) greater than the lower of (i) the median daily dollar trading volume over the previous ten (10) trading days or (ii) the daily dollar trading volume on the trading day immediately preceding the date of measurement or (b) if the closing trade price on any given trading day is at least thirty percent (30%) greater than the Nasdaq Minimum Price, then the lender will be entitled to redeem over the following ten (10) trading days an amount of indebtedness then outstanding under the Note equal to twice the monthly redemption amount of $1.0 million solely by payment by stock, if permitted under the agreement, subject to the Maximum Percentage (as defined in the Note) and other ownership limitations.
Beginning May 1, 2023, in the event (a) the daily dollar trading volume of the Common Stock of the Company on any given trading day was at least fifty percent ( 50% ) greater than the lower of (i) the median daily dollar trading volume over the previous ten ( 10 ) trading days or (ii) the daily dollar trading volume on the trading day immediately preceding the date of measurement or (b) if the closing trade price on any given trading day was at least thirty percent ( 30% ) greater than the Nasdaq Minimum Price, then the lender would be entitled to redeem over the following ten ( 10 ) trading days an amount of indebtedness then outstanding under the Streeterville Note equal to twice the monthly redemption amount of $1.0 million solely by payment by stock, if permitted under the agreement, subject to the Maximum Percentage (as defined in the Streeterville Note) and other ownership limitations.
Income Taxes The Company maintains a full valuation allowance on its net deferred tax asset due to the uncertainty of future taxable income. The Company did not recognize an income tax benefit in the years ended December 31, 2023 and 2022 due to the uncertainty of future taxable income.
Income Taxes The Company maintains a full valuation allowance on its net deferred tax asset due to the uncertainty of future taxable income. The Company did not recognize an income tax benefit in the years ended December 31, 2024 and 2023 due to the uncertainty of future taxable income.
The Common Stock was issued in a registered direct offering for a purchase price of $0.65 per share and the June Investor Warrants were offered pursuant to a private placement under Section 4(a)(2) of the Securities Act. The aggregate net cash proceeds to the Company from the June Offering were approximately $5.6 million.
The Common Stock was issued in a registered direct offering for a purchase price of $6.50 per share and the June Investor Warrants were offered pursuant to a private placement under Section 4 (a)( 2 ) of the Securities Act. The aggregate net cash proceeds to the Company from the June Offering were approximately $5.6 million.
Treasury yield curve. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
In the years ended December 31, 2023 and 2022, the difference between the statutory tax rate and the Company’s effective tax rate was due primarily to the valuation allowance recorded to offset any potential tax benefit.
In the years ended December 31, 2024 and 2023, the difference between the statutory tax rate and the Company’s effective tax rate was due primarily to the valuation allowance recorded to offset any potential tax benefit.
The restrictions are performance based, and half of the restricted shares (250,000) shall have the restrictions removed on the New Drug Application Date (as defined below) and the remaining half (250,000) will have the restrictions removed on the New Drug Approval Date (as defined below).
The restrictions are performance based, and half of the restricted shares (25,000) shall have the restrictions removed on the New Drug Application Date (as defined below) and the remaining half (25,000) will have the restrictions removed on the New Drug Approval Date (as defined below).
The portion of total changes in fair value of the convertible note attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income in the accompanying Consolidated Statements of Operations and Comprehensive Loss.
The portion of total changes in fair value of the notes attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income in the accompanying consolidated statements of operations and comprehensive loss.
The Public Warrants became exercisable at the Effective Time of the Merger and expire five years after the Effective Time or earlier upon their redemption or liquidation of the Company. During the years ended December 31, 2023 and 2022 no Public Warrants were exercised. The outstanding balance of these warrants remains in equity.
The Public Warrants became exercisable at the effective time of the Merger and expire five years after the effective time on or earlier upon their redemption or liquidation of the Company. During the years ended December 31, 2024 and 2023 no Public Warrants were exercised. The outstanding balance of these warrants remains in equity.
During 2022, the Company recorded a debt discount of approximately $1.0 million upon issuance of the Note for the original issue discount of $1.0 million. As a result of electing the fair value option, any direct costs and fees related to the Note was expensed as incurred.
During 2022, the Company recorded a debt discount of approximately $1.0 million upon issuance of the Streeterville Note for the original issue discount of $1.0 million. As a result of electing the fair value option, any direct costs and fees related to the Streeterville Note were expensed as incurred.
The measurement of fair value of the June Investor Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $0.53, exercise price of $0.65, term of five and a half years, volatility of 175.1%, risk-free rate of 3.85%, and expected dividend rate of 0%).
The measurement of fair value of the June Investor Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $5.30, exercise price of $6.53, term of five and a half years, volatility of 175.1%, risk-free rate of 3.85%, and expected dividend rate of 0%).
The measurement of fair value of the August Investor Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $0.30 , exercise price of $0.40 , term of five years , volatility of 175.1% , risk-free rate of 4.38% , and expected dividend rate of 0% ).
The measurement of fair value of the August Investor Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $3.00, exercise price of $4.00, term of five years, volatility of 175.1%, risk-free rate of 4.38%, and expected dividend rate of 0%).
The Company plans to pursue additional equity or debt financing or refinancing opportunities in 2024 to fund ongoing clinical activities, to meet obligations under its current debt arrangements and for the general corporate purposes of the Company. Such arrangements may take the form of loans, equity offerings, strategic agreements, licensing agreements, joint ventures or other agreements.
The Company may pursue additional equity or debt financing or refinancing opportunities in 2025 and 2026 to fund ongoing clinical activities, to meet obligations under its current debt arrangements and for general corporate purposes. Such arrangements may take the form of loans, equity offerings, strategic agreements, licensing agreements, joint ventures or other agreements.
The Note carries an original issue discount of $1.0 million which was deducted from the principal balance of the Note. The net proceeds from the issuance of the Note was $10.0 million after transaction costs including the original issue discount, legal and other fees are included.
The Streeterville Note carried an original issue discount of $1.0 million which was deducted from the principal balance of the Streeterville Note. The net proceeds from the issuance of the Streeterville Note was $10.0 million after transaction costs including the original issue discount, legal and other fees are included.
Pursuant to the Settlement Agreement on August 31, 2023, the Company issued 675,676 shares of Common Stock, the fair value of which was approximately $0.3 million based on the quoted trading price on the grant date, to GEM in full satisfaction of the Settlement Agreement which was approximately $0.3 million and was expensed as “Settlement expense” in fiscal 2023.
Pursuant to the Settlement Agreement on August 31, 2023, the Company issued 67,568 shares of Common Stock, the fair value of which was approximately $0.3 million based on the quoted trading price on the grant date, to GEM in full satisfaction of the Settlement Agreement which was approximately $0.3 million and was expensed as “Settlement expense” in fiscal 2023.
The federal and state net operating loss carryforwards generated in the tax years from 2015 to 2018 will begin to expire, if not utilized, by 2035. Certain Net Operating Losses in these jurisdictions are not subject to expiration.
The federal and state net operating loss carryforwards generated in the tax years prior to 2018 will begin to expire, if not utilized, by 2035. Certain Net Operating Losses in these jurisdictions are not subject to expiration.
The March Investor Warrants have an exercise price of $0.75 per share, are exercisable beginning on September 8, 2023 and will expire 5 years from the March Initial Exercise Date. The March Investors agreed not to transfer the Common Stock for six months following the date of issuance.
The March Investor Warrants have an exercise price of $7.50 per share, are exercisable beginning on September 8, 2023 and will expire 5 years from the March Initial Exercise Date. The March Investors agreed not to transfer the Common Stock for six months following the date of issuance.
The Restricted Stock will vest in approximately equal installments over three (3) years from the grant date, subject to continued service through the applicable vesting date. On December 28, 2023, the Company granted 575,000 RSAs to a consultant for services provided. The RSAs will vest after six months from the grant date.
The Restricted Stock will vest in approximately equal installments over three (3) years from the grant date, subject to continued service through the applicable vesting date. On December 28, 2023, the Company granted 57,500 RSAs to a consultant for services provided. The RSAs will vest after six months from the grant date.
Zachary Javitt provides services related to website, IT, and marketing support under the supervision of the Company’s CEO who is responsible for assuring that the services are provided on financial terms that are at market. The Company paid this family member a total of $0.2 million and $0.1 million during the years ended December 31, 2023 and 2022, respectively.
Zachary Javitt provides services related to website, IT, and marketing support under the supervision of the Company’s CEO who is responsible for assuring that the services are provided on financial terms that are at market. The Company paid this family member a total of $0.1 million during the years ended December 31, 2024 and 2023, respectively. These services are ongoing.
The measurement of fair value of the March Investor Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $0.72, exercise price of $0.75, term of five and a half years, volatility of 123.6%, risk-free rate of 4.34%, and expected dividend rate of 0%).
The measurement of fair value of the March Investor Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $7.20, exercise price of $7.50, term of five and a half years, volatility of 123.6%, risk-free rate of 4.34%, and expected dividend rate of 0%).
In connection with the Merger, each option of NeuroRx that was outstanding and unexercised immediately prior to the Effective Time (whether vested or unvested) was assumed by BRPA and converted into an option to acquire an adjusted number of shares of Common Stock at an adjusted exercise price per share, based on the Exchange Ratio (of 3.16).
In connection with the Merger, each option of NeuroRx that was outstanding and unexercised immediately prior to the Effective Time (whether vested or unvested) was assumed by BRPA and converted into an option to acquire an adjusted number of shares of Common Stock at an adjusted exercise price per share, based on the Exchange Ratio (of 0.316:1 ).
As of January 1, 2023, 664,430 shares were added to the 2021 Plan under an evergreen feature that automatically increases the reserve with additional shares of Common Stock for future issuance under the Incentive Plan each calendar year, beginning January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) 1% of the shares of Common Stock outstanding on the final day of the immediately preceding calendar year or (B) a smaller number of shares determined by the Board.
As of January 1, 2024, 83,920 shares were added to the 2021 Plan under an evergreen feature that automatically increases the reserve with additional shares of Common Stock for future issuance under the Incentive Plan each calendar year, beginning January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) 1% of the shares of Common Stock outstanding on the final day of the immediately preceding calendar year or (B) a smaller number of shares determined by the Board.
As of December 31, 2023 the Company’s cash and cash equivalents balance within money market accounts was in excess of the U.S. federally insured limits by $4.1 million. The Company has not experienced any losses on its deposits of cash.
As of December 31, 2024 the Company’s cash and cash equivalents balance within money market accounts was in excess of the U.S. federally insured limits by $1.2 million. The Company has not experienced any losses on its deposits of cash.
Pursuant to the Second Amendment, the Company agreed to amend the redemption provisions of the Note to provide that the Company would pay to Streeterville an amount in cash equal to $1,800,000 on or before July 10, 2023, which amount was paid on July 10, 2023.
Pursuant to the Second Amendment, the Company agreed to amend the redemption provisions of the Streeterville Note to provide that the Company would pay to Streeterville an amount in cash equal to $1.8 million on or before July 10, 2023, which amount was paid on July 10, 2023.
The Company used the net proceeds from such offering for working capital and general corporate purposes. ​ In connection with the Note issued to Streeterville, on May 15, 2023 the Company issued 408,673 Common Stock to Streeterville in repayment of interest on the Note.
The Company used the net proceeds from such offering for working capital and general corporate purposes. In connection with the Note issued to Streeterville, on May 15, 2023 the Company issued 40,868 Common Stock to Streeterville in repayment of interest on the Note.
Liquidation Rights Upon any liquidation, dissolution or winding up of the Company (a “Liquidation”), whether voluntary or involuntary, each holder of Series A Preferred Stock shall be entitled to receive the amount of cash, securities or other property to which such holder would be entitled to receive if such shares had been converted to Common Stock immediately prior to such Liquidation, subject to certain rights and limitations. ​ 128 Table of Contents NRX PHARMACEUTICALS, INC.
Liquidation Rights Upon any liquidation, dissolution or winding up of the Company (a “Liquidation”), whether voluntary or involuntary, each holder of Series A Preferred Stock shall be entitled to receive the amount of cash, securities or other property to which such holder would be entitled to receive if such shares had been converted to Common Stock immediately prior to such Liquidation, subject to certain rights and limitations.
Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.
Income Taxes Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes (“ ASC 740 ”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.
Stock-Based Compensation 2016 Omnibus Incentive Plan Prior to the Merger, NeuroRx maintained its 2016 Omnibus Incentive Plan (the “2016 Plan”), under which NeuroRx granted incentive stock options, restricted stock awards, other stock-based awards, or other cash-based awards to employees, directors, and non-employee consultants.
Stock-Based Compensation 2016 Omnibus Incentive Plan Prior to the Merger, NRx maintained its 2016 Omnibus Incentive Plan (the “ 2016 Plan ”), under which NeuroRx granted incentive stock options, restricted stock awards, other stock-based awards, or other cash-based awards to employees, directors, and non-employee consultants.
Preferred Stock In accordance with ASC 480, Distinguishing Liabilities from Equity , the Company’s Series A Preferred Stock is classified as permanent equity as it is not mandatorily redeemable upon an event that is considered outside of the Company’s control.
Preferred Stock In accordance with ASC 480, the Company’s Series A Preferred Stock was classified as permanent equity as it was not mandatorily redeemable upon an event that is considered outside of the Company’s control.
The Company recognized a gain and a loss on the change in fair value of the Substitute Warrants for the years ended December 31, 2023 and 2022 of less than $0.1 million and less than $0.1 million, respectively. Refer to Note 11 for further discussion of fair value measurement of the warrant liabilities.
The Company recognized a gain on the change in fair value of the Substitute Warrants for each of the years ended December 31, 2024 and 2023 of nil and less than $0.1 million, respectively. Refer to Note 11 for further discussion of fair value measurement of the warrant liabilities.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Common Stock Pursuant to the terms of the Company’s Second Amended and Restated Certificate of Incorporation, the Company has authorized 500,000,000 shares of common stock with a par value of $0.001 .
Common Stock Pursuant to the terms of the Company’s Second Amended and Restated Certificate of Incorporation, the Company has authorized 500,000,000 shares of common stock with a par value of $0.001.
Commitments and Contingencies Sarah Herzog Memorial Hospital License Agreement The Company is required to make certain payments in order to maintain the SHMH license agreement, including: Milestone Payments ​ ​ ​ ​ End of Phase I Clinical Trials of Licensed Product $ 100,000 End of Phase II Clinical Trials of Licensed Product ​ $ 250,000 End of Phase III Clinical Trials of Licensed Product ​ $ 250,000 First Commercial Sale of Licensed Product in U.S. ​ $ 500,000 First Commercial Sale of Licensed Product in Europe ​ $ 500,000 Annual Revenues Reach $100,000,000 ​ $ 750,000 ​ The milestone payments due above may be reduced by 25% in certain circumstances, and by the application of certain sub-license fees.
Commitments and Contingencies Sarah Herzog Memorial Hospital License Agreement The Company is required to make certain payments related to the development of NRX- 101 (the " Licensed Product ") in order to maintain the license agreement with the Sarah Herzog Memorial Hospital Ezrat Nashim (“ SHMH ”) (the " SHMH License Agreement "), including: Milestone Payments End of Phase I Clinical Trials of Licensed Product (completed) $ 100,000 End of Phase II Clinical Trials of Licensed Product (completed) $ 250,000 End of Phase III Clinical Trials of Licensed Product $ 250,000 First Commercial Sale of Licensed Product in U.S. $ 500,000 First Commercial Sale of Licensed Product in Europe $ 500,000 Annual Revenues Reach $100,000,000 $ 750,000 The milestone payments due above may be reduced by 25% in certain circumstances, and by the application of certain sub-license fees.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. 118 Table of Contents NRX PHARMACEUTICALS, INC.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.
Voting Rights The holders of Series A Preferred Stock have no voting rights other than for an affirmative vote in order for the Company to (a) disproportionally alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation, (b) amend its certificate of incorporation or other charter documents in any manner that disproportionally adversely affects any rights of the Holders, (c) increase or decrease the number of authorized shares of Series A Preferred Stock or (d) enter into any agreement with respect to any of the foregoing.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Voting Rights The holders of Series A Preferred Stock have no voting rights other than for an affirmative vote in order for the Company to (a) disproportionally alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation, (b) amend its certificate of incorporation or other charter documents in any manner that disproportionally adversely affects any rights of the Holders, (c) increase or decrease the number of authorized shares of Series A Preferred Stock or (d) enter into any agreement with respect to any of the foregoing.
Debt Convertible Note On November 4, 2022, we issued an 9% redeemable promissory note (as amended, the “Note”) to Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), for an aggregate principal amount of $11.0 million. The Note matures 18 months from the date of issuance subject to certain acceleration provisions.
Debt Streeterville Convertible Note On November 4, 2022, the Company issued an 9% redeemable promissory note (as amended, the “ Streeterville Note ”) to Streeterville Capital, LLC, a Utah limited liability company (“ Streeterville ”), for an aggregate principal amount of $11.0 million. The Streeterville Note originally matured 18 months from the date of issuance subject to certain acceleration provisions.
The following table summarizes the Company’s recognition of stock-based compensation for the following periods (in thousands): The following table summarizes the Company’s recognition of stock-based compensation for the following periods (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 Stock-based compensation expense ​ ​ General and administrative ​ $ 572 ​ $ 3,002 Research and development ​ (185) ​ 626 Total stock-based compensation expense ​ $ 387 ​ $ 3,628 ​ Research and development related stock-based compensation expenses carried a negative balance for 2023 due to reversals of unvested stock options related to 2023 terminations in accordance with our policy. ​ 11.
The following table summarizes the Company’s recognition of stock-based compensation for the following periods (in thousands): Years Ended December 31, 2024 2023 Stock-based compensation expense General and administrative $ 387 $ 572 Research and development 100 (185 ) Total stock-based compensation expense $ 486 $ 387 Research and development related stock-based compensation expenses carried a negative balance for 2023 due to reversals of unvested stock options related to 2023 terminations in accordance with our policy. 11.
Included in accounts payable were less than $0.1 million and less than $0.1 million due to the above related parties as of December 31, 2023 and 2022, respectively. 14.
Included in accounts payable were less than $0.1 million and less than $0.1 million due to the above related parties as of December 31, 2024 and 2023, respectively. 15.
As discussed above, on June 6, 2023, in conjunction with the issuance and sale of 9,670,002 shares of the Company’s Common Stock, the Company issued 9,670,002 June Investor Warrants which were classified in stockholder’s equity.
As discussed above, on June 6, 2023, in conjunction with the issuance and sale of 967,000 shares of the Company’s Common Stock, the Company issued 967,000 June Investor Warrants which were classified in stockholder’s equity.
At December 31, 2023, the total unrecognized compensation related to unvested employee and non-employee stock option awards granted, was $0.3 million, which the Company expects to recognize over a weighted-average period of approximately 1.3 years.
At December 31, 2024, the total unrecognized compensation related to unvested employee and non-employee stock option awards granted was less than $0.1 million, which the Company expects to recognize over a weighted-average period of approximately 1.2 years.
Diluted earnings per share excludes, when applicable, the potential impact of stock options, common stock warrant shares, convertible notes, and other dilutive instruments because their effect would be anti-dilutive in the periods in which the Company incurs a net loss.
Diluted earnings per share excludes, when applicable, the potential impact of stock options, Common Stock warrant shares, convertible notes, and other dilutive instruments because their effect would be anti-dilutive in the periods in which the Company incurs a net loss. F- 12 Table of Contents NRX PHARMACEUTICALS, INC.
The grant date fair value of these June Investor Warrants was estimated to be $3.1 million on June 6, 2023, and is reflected within additional paid-in capital. The Company issued 193,400 warrants to the Placement Agent with an exercise price of $0.81 (the “June Placement Agent Warrants”).
The grant date fair value of these June Investor Warrants was estimated to be $3.1 million on June 6, 2023, and is reflected within additional paid-in capital. The Company issued 19,340 warrants to the Placement Agent with an exercise price of $8.13 (the “June Placement Agent Warrants”).
Further, in accordance with ASC 815-40, Derivatives and Hedging – Contracts in an Entity’s Own Equity , the Series A Preferred Stock does not meet any of the criteria that would preclude equity classification.
Further, in accordance with ASC 815 - 40, Derivatives and Hedging – Contracts in an Entity ’ s Own Equity , the Series A Preferred Stock did not meet any of the criteria that would preclude equity classification.
On March 8, 2023, NRx Pharmaceuticals entered into a securities purchase agreement with the March Investors, providing for the issuance and sale of 3,866,666 shares of Common Stock and the March Investor Warrants to purchase up to 3,866,666 shares of Common Stock in a registered direct offering priced at-the-market under Nasdaq rules for a purchase price of $0.75 per share.
On March 8, 2023, NRx Pharmaceuticals entered into a securities purchase agreement with the March Investors, providing for the issuance and sale of 386,667 shares of Common Stock and the March Investor Warrants to purchase up to 386,667 shares of Common Stock in a registered direct offering priced at-the-market under Nasdaq rules for a purchase price of $7.50 per share.
The Company classifies the Private Placement Warrants as derivative liabilities in its Consolidated Balance Sheet as of December 31, 2023 and 2022.
The Company classifies the Private Placement Warrants as derivative liabilities in its consolidated balance sheets as of December 31, 2024 and 2023.
As of December 31, 2023, the Board of Directors has not approved the grant of restricted stock. The term “New Drug Application Date” means the date upon which the Food and Drug Administration (“FDA”) files the Company’s new drug application for the Antidepressant Drug Regimen (as defined below) for review.
As of December 31, 2024, the Board of Directors has not approved the grant of restricted stock. The term “New Drug Application Date” means the date upon which the FDA files the Company’s new drug application for the Antidepressant Drug Regimen (as defined below) for review.
The “Redemption Conversion Price” on any given redemption date equals 85% multiplied by the average of the two lowest daily volume weighted average prices per share of the common stock during the ten trading days immediately preceding the date that the noteholder delivers notice electing to redeem a portion of the Note.
The “ Redemption Conversion Price ” on any given redemption date equaled 85% multiplied by the average of the two lowest daily volume weighted average prices per share of the Common Stock during the ten trading days immediately preceding the date that the noteholder delivered notice electing to redeem a portion of the Streeterville Note.
The February Warrants will have an exercise price of $0.38 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance.
The February Warrants have an exercise price of $3.80 per share, are initially exercisable beginning six months following the date of issuance, and will expire five years from the date of issuance.
During the year ended December 31, 2023, the Company made cash principal repayments on the Note of approximately $2.3 million, and issued shares of Common Stock as principal repayment of $0.7 million.
During the year ended December 31, 2023, the Company made cash principal repayments on the Note of approximately $2.3 million, made cash interest payments on the Note of approximately $0.9 million, including $0.1 million of redemption premiums, issued shares of Common Stock as principal repayment of $0.7 million, and issued shares of Common Stock as interest repayment of $0.2 million.
Notwithstanding the foregoing, after April 30, 2024, and for the remainder of the Minimum Payment Period, Streeterville may redeem any Redemption Amount (as defined in the Note), including an amount in excess of the Minimum Payment, subject to the Maximum Monthly Redemption Amount (as defined in the Note).
After April 30, 2024, and for the remainder of the payment period through July 31, 2024, Streeterville could redeem any Redemption Amount (as defined in the Streeterville Note), including an amount in excess of the Minimum Payment, subject to the Maximum Monthly Redemption Amount.
Moreover, the Redemption Premium (as defined in the Note) will continue to apply to the Redemption Amounts.
Moreover, the Redemption Premium (as defined in the Streeterville Note) would continue to apply to the Redemption Amounts.
This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. F- 11 Table of Contents NRX PHARMACEUTICALS, INC.
Utilization of the net operating loss carryforwards may be subject to an annual limitation according to Section 382 of the Internal Revenue Code of 1986 as amended, and similar provisions.
Utilization of the net operating loss carryforwards may be subject to an annual limitation according to Section 382 of the Internal Revenue Code of 1986 as amended, and similar provisions. F- 34 Table of Contents NRX PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ Revenue Recognition The Company accounts for revenue under ASC 606, Revenue for Contract with Customers (“ASC 606”) or other accounting standards for revenue not derived from customers. Arrangements may include licenses to intellectual property, research services and participation on joint research committees.
Revenue Recognition The Company accounts for revenue under FASB ASC Topic 606, Revenue for Contract with Customers (“ ASC 606 ”) or other accounting standards for revenue not derived from customers. Arrangements may include licenses to intellectual property, research services and participation on joint research committees.
ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
In addition, the Company agreed that, beginning on or before July 31, 2023, and on or before the last day of each month until December 31, 2023 (the “Minimum Payment Period”), we would pay Streeterville an amount equal to $400,000 in cash (a “Minimum Payment”), less any amount satisfied by the delivery of Redemption Conversion Shares (as defined below).
In addition, the Company agreed that, beginning on or before July 31, 2023, and on or before the last day of each month until December 31, 2023, the Company would pay Streeterville an amount equal to $0.4 million in cash, less any amount satisfied by the delivery of Redemption Conversion Shares (as defined below).
The fair value of stock options and warrants issued for services are estimated based on the Black-Scholes model during the years ended December 31, 2023 and 2022. The fair value of the Note was estimated utilizing a Monte Carlo simulation during the years ended December 31, 2023 and 2022.
The fair value of stock options and warrants issued for services, and warrants issued with the Convertible Notes are estimated based on the Black-Scholes model during the years ended December 31, 2024 and 2023. The fair value of the Convertible Notes were estimated utilizing a Monte Carlo simulation during the years ended December 31, 2024 and 2023.
The maximum aggregate shares of common stock that were subject to awards and issuable under the 2016 Plan was 3,472,000.
The maximum aggregate shares of Common Stock that were subject to awards and issuable under the 2016 Plan was 347,200.
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at years ended December 31, 2023 and 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, Description Level 2023 ​ 2022 Assets: ​ ​ ​ ​ ​ ​ ​ Money Market Account ​ 1 ​ $ 3,874 ​ $ 15,249 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Warrant liabilities (Note 9) ​ 3 ​ $ 17 ​ $ 37 Convertible note payable (Note 7) 3 ​ $ 9,161 ​ $ 10,525 ​ 135 Table of Contents NRX PHARMACEUTICALS, INC.
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at the years ended December 31, 2024 and 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands): December 31, Description Level 2024 2023 Assets: Money Market Account 1 $ 487 $ 3,874 Liabilities: Warrant liabilities (Note 9) 3 $ 5,639 $ 17 Convertible notes payable (Note 7) 3 $ 6,257 $ 9,161 F- 30 Table of Contents NRX PHARMACEUTICALS, INC.
Therefore, it estimates its expected stock volatility based on the limited company-specific historical volatility and implied volatility as well as historical volatility of a publicly traded set of peer companies. The expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S.
Therefore, it estimates its expected stock volatility based on the limited company-specific historical volatility and implied volatility. The expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve.
All intercompany transactions and balances have been eliminated in consolidation. ​ Use of Estimates The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in its consolidated financial statements and the reported amounts of expenses during the reporting period.
Use of Estimates The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in its consolidated financial statements and the reported amounts of expenses during the reporting period.
Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. (Refer to Note 11 ) F- 8 Table of Contents NRX PHARMACEUTICALS, INC.
Option Awards ​ The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company is a public company and has limited company-specific historical and implied volatility information.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 Option Awards The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company is a public company and has limited company-specific historical and implied volatility information.
The most significant estimates in the Company’s consolidated financial statements relate to the fair value of the convertible note payable, earnout cash liability, fair value of stock options and warrants, and the utilization of deferred tax assets.
The most significant estimates in the Company’s consolidated financial statements relate to the fair value of convertible notes payable, fair value of warrant liabilities, fair value of stock options and warrants, and the utilization of deferred tax assets.
The amendment also provided for 139 Table of Contents NRX PHARMACEUTICALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS payment at the rate of $0.6 million per year, payable monthly (i.e., less than $0.1 million per month), and a performance-based annual bonus with a minimum target of $0.3 million, at the discretion of the Board and upon satisfactory performance of the services.
The amendment also provided for payment at the rate of $0.6 million per year, payable monthly (i.e., less than $0.1 million per month), and a performance-based annual bonus with a minimum target of $0.3 million, at the discretion of the Board and upon satisfactory performance of the services.
The Company recognized a gain on the change in fair value of the Private Placement Warrants for the years ended December 31, 2023 and 2022 of less than $0.1 million and $0.3 million, respectively. Refer to Note 11 for discussion of the fair value measurement of the Company’s warrant liabilities.
The Company recognized a gain on the change in fair value of the Private Placement Warrants for each of the years ended December 31, 2024 and 2023 of less than $0.1 million, respectively. Refer to Note 11 for discussion of the fair value measurement of the Company’s warrant liabilities. F- 24 Table of Contents NRX PHARMACEUTICALS, INC.
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary if the Company is unable to continue as a going concern. ​ 3.
The accompanying consolidated financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the company be unable to continue as a going concern. 3.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 AND 2023 For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.
Pursuant to the Underwriting Agreement, the Company also granted the Representative a 45-day option to purchase up to an additional 750,000 shares (the “Option Shares”) of the Common Stock on the same terms as the Shares sold in the Offering.
Pursuant to the February Underwriting Agreement, the Company also granted the Representative a 45 -day option to purchase up to an additional 75,000 shares (the “ February Option Shares ”) of the Common Stock on the same terms as the February Shares sold in the February 2024 Public Offering (the “ February Over-Allotment Option ”).
Annual Maintenance Fee A fixed amount of $100,000 was paid on April 16, 2021 and, thereafter, a fixed amount of $150,000 is due on the anniversary of such date during the term of the SHMH License Agreement. The Company paid $150,000 in annual maintenance fees in each of the years ended December 31, 2023 and 2022.
Annual Maintenance Fee A fixed amount of $100,000 was paid on April 16, 2021 and, thereafter, a fixed amount of $150,000 is due on the anniversary of such date during the term of the SHMH License Agreement.
Assumed Private Placement Warrants Prior to the Merger, the Company had outstanding 136,250 Private Placement Warrants (the “Private Placement Warrants”). The Private Placement Warrants are not indexed to the Company’s common shares in the manner contemplated by ASC 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares.
The Private Placement Warrants are not indexed to the Company’s common shares in the manner contemplated by FASB ASC Topic 815 - 40 - 15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares.
On March 30, 2023, the Company entered into an Amendment to the Note (the “First Amendment”), pursuant to which the Maximum Percentage was set at 9.99% of the number of shares of Common Stock outstanding on a given date. On July 7, 2023, the Company entered into Amendment #2 to the Note with Streeterville (the “Second Amendment”).
Streeterville Convertible Note Amendments On March 30, 2023, the Company entered into an Amendment to the Note (the “ First Amendment ”), pursuant to which the Maximum Percentage was set at 9.99% of the number of shares of Common Stock outstanding on a given date.
Assumed Public Warrants Prior to the Merger, the Company had 3,450,000 Public Warrants outstanding (the “Public Warrants”). Each Public Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $11.50 per share.
Assumed Public Warrants Prior to the Merger, the Company had 3,450,000 warrants outstanding (the “ Public Warrants ”) to purchase up to 345,000 shares of Common Stock. Each Public Warrant entitles the holder to purchase one - tenth share of Common Stock at an exercise price of $115 per share.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are faced with rapid technological change and developments by competitors may render our products or technologies obsolete or non-competitive. ​ • Global economic, political and social conditions, armed conflicts and uncertainties in the market that we serve may adversely impact our business. ​ • Our relationships with potential customers and payors will be subject to applicable anti-kickback, fraud and abuse, transparency, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, and administrative burdens. ​ • Managing our growth as we expand operations may strain our resources and we may not successfully manage our growth. ​ • Failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect on our business. ​ • Even if a drug product is approved, the regulators may impose limitations on the use or marketing of such product. ​ • If we are unable to design, conduct and complete clinical trials successfully, our drug candidates will not be able to receive regulatory approval.
Biggest changeWe are faced with rapid technological change and developments by competitors may render our products or technologies obsolete or non-competitive. • Global economic, political and social conditions, armed conflicts and uncertainties in the market that we serve may adversely impact our business. • Our relationships with potential customers and payors will be subject to applicable anti-kickback, fraud and abuse, transparency, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, and administrative burdens. • Managing our growth as we expand operations may strain our resources and we may not successfully manage our growth. • While we have entered into non-binding letters of intent to acquire certain psychiatry clinics and for sources of funding for such acquisitions, we have not entered into definitive agreements, and cannot assure you that such transactions will be consummated on the terms set forth in the letters of intent, if at all. • We will need to acquire additional financing to fund our potential obligations under certain non-binding letters of intent, and we cannot guaranty that the terms of such financings will be favorable and such financings may result in additional dilution, and if such financing cannot be acquired, it could have a material adverse effect on our business. • A significant portion of our growth strategy focuses on our subsidiary, Hope Therapeutics, Inc., and ability to purchase psychiatry clinics, and failure to consummate any such transactions may have a material adverse effect on our ability to increase assets, revenues, and net income, or on our business and the trading price of our common stock. • Failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect on our business. • Even if a drug product is approved, the regulators may impose limitations on the use or marketing of such product. • If we are unable to design, conduct and complete clinical trials successfully, our drug candidates will not be able to receive regulatory approval.
Our operating results and financial condition may fluctuate from period to period. If and when any of product candidates are successfully commercialized, we anticipate that our operating results and financial condition will fluctuate from quarter-to-quarter and year-to-year due to a number of factors, many of which will not be within our control.
Our operating results and financial condition may fluctuate from period to period. If and when any of our product candidates are successfully commercialized, we anticipate that our operating results and financial condition will fluctuate from quarter-to-quarter and year-to-year due to a number of factors, many of which will not be within our control.
If we fail to obtain the capital necessary to fund our operations, we will be unable to continue as a going concern or complete our product development. ​ • NRX-101 is still Phase 2/3 in clinical testing and we cannot predict with any certainty if or when we might submit an NDA for regulatory approval. ​ • We have not yet scaled manufacturing of our drug products to levels that are required for sustained sales. ​ • The outcome of any current or future disputes, claims, arbitration and litigation could have a material adverse effect on our business, financial condition and results of operations. ​ • If we fail to obtain or maintain FDA and other regulatory clearances for our products, or if such clearances are delayed, we will be unable to commercially distribute and market our products in the U.S. ​ • Our products will face significant competition in the markets for such products and future products may never achieve market acceptance.
If we fail to obtain the capital necessary to fund our operations, we will be unable to continue as a going concern, complete our product development or fund our proposed acquisitions. • NRX-101 is still Phase 2/3 in clinical testing and we cannot predict with any certainty if or when we might submit an NDA for regulatory approval. • We have not yet scaled manufacturing of our drug products to levels that are required for sustained sales. • The outcome of any current or future disputes, claims, arbitration and litigation could have a material adverse effect on our business, financial condition and results of operations. • If we fail to obtain or maintain FDA and other regulatory clearances for our products, or if such clearances are delayed, we will be unable to commercially distribute and market our products in the U.S. • Our products will face significant competition in the markets for such products and future products may never achieve market acceptance.
Fluctuations in our future operating results and financial condition may be due to a number of factors, including: • our ability to manufacture our products in sufficient quantities with chemical manufacturing controls (“CMC”) that meet governmental regulatory standards; • the degree of acceptance and differentiation of our products and services in the broader healthcare industry; • our ability to compete with competitors and new entrants into our markets; • the products and services that we are able to sell during any period; • the timing of our sales and distribution of our products to customers; • the geographic distribution of our sales; 48 Table of Contents • changes in our pricing policies on those of our competitors, including our response to price competition; • changes in the amount that we spend to research and develop new products or technologies; • expenses and/or liabilities resulting from litigation; • delays between our expenditures to research and develop new or enhanced products or technologies, the necessary regulatory approvals and the generation of revenue from those products or technologies; • unforeseen liabilities or difficulties in integrating any businesses that we choose to acquire; • disruptions to our information technology systems or our third-party contract manufacturers; • general economic and industry conditions that affect customer demand; • the impact of the COVID-19 pandemic on our customers, suppliers, manufacturers and operations; • changes in accounting rules and tax laws; and • global geopolitical conditions.
Fluctuations in our future operating results and financial condition may be due to a number of factors, including: • our ability to manufacture our products in sufficient quantities with chemical manufacturing controls (“CMC”) that meet governmental regulatory standards; • the degree of acceptance and differentiation of our products and services in the broader healthcare industry; • our ability to compete with competitors and new entrants into our markets; • the products and services that we are able to sell during any period; • the timing of our sales and distribution of our products to customers; • the geographic distribution of our sales; • changes in our pricing policies on those of our competitors, including our response to price competition; • changes in the amount that we spend to research and develop new products or technologies; • expenses and/or liabilities resulting from litigation; • delays between our expenditures to research and develop new or enhanced products or technologies, the necessary regulatory approvals and the generation of revenue from those products or technologies; • unforeseen liabilities or difficulties in integrating any businesses that we choose to acquire; • disruptions to our information technology systems or our third-party contract manufacturers; • general economic and industry conditions that affect customer demand; • the impact of the COVID-19 pandemic on our customers, suppliers, manufacturers and operations; • changes in accounting rules and tax laws; and • global geopolitical conditions.
DEA oversight and regulation can have the following impact on our efforts to develop new drug candidates: • interference with, or limits on, the supply of the drugs used in clinical trials for our product candidates, and, in the future, the ability to produce and distribute our products in the volume needed to meet commercial demand; • the FDA provides recommendations to DEA as to whether a drug should be scheduled as a controlled substance and the appropriate level of control; if DEA scheduling is required, a drug product may not be marketed until the scheduling process is completed, which could delay the launch of the product; 67 Table of Contents • depending on the Schedule, drug products may be subject to registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, inventory, quota and other requirements administered by the DEA, which are directly applicable to product applicants, contract manufacturers, distributors, prescribers and dispensers of controlled substances; and • the DEA regulates the handling of controlled substances through a closed chain of distribution.
DEA oversight and regulation can have the following impact on our efforts to develop new drug candidates: • interference with, or limits on, the supply of the drugs used in clinical trials for our product candidates, and, in the future, the ability to produce and distribute our products in the volume needed to meet commercial demand; • the FDA provides recommendations to DEA as to whether a drug should be scheduled as a controlled substance and the appropriate level of control; if DEA scheduling is required, a drug product may not be marketed until the scheduling process is completed, which could delay the launch of the product; Page 56 Table of Contents • depending on the Schedule, drug products may be subject to registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, inventory, quota and other requirements administered by the DEA, which are directly applicable to product applicants, contract manufacturers, distributors, prescribers and dispensers of controlled substances; and • the DEA regulates the handling of controlled substances through a closed chain of distribution.
This demonstration requires significant research and animal tests, which are referred to as preclinical studies, as well as human tests, which are referred to as clinical trials. Results from Phase I clinical programs may not support moving a drug candidate to Phase 2 or Phase 2 I clinical trials.
This demonstration requires significant research and animal tests, which are referred to as preclinical studies, as well as human tests, which are referred to as clinical trials. Results from Phase I clinical programs may not support moving a drug candidate to Phase 2 or Phase 2I clinical trials.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, Warning Letters or Untitled Letters, holds or termination of post-approval clinical trials or FDA debarment; • delay or refusal of regulators to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; • regulatory authority, including the FDA, issued safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings about such products; 61 Table of Contents • mandated modifications to promotional material or issuance of corrective information; • product seizure or detention, or refusal to permit the import or export of products; and • injunctions or the imposition of civil or criminal penalties, including imprisonment, disgorgement and restitution, as well as consent decrees, corporate integrity agreements, deferred prosecution agreements and exclusion from federal healthcare programs.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, Warning Letters or Untitled Letters, holds or termination of post-approval clinical trials or FDA debarment; • delay or refusal of regulators to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; Page 51 Table of Contents • regulatory authority, including the FDA, issued safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings about such products; • mandated modifications to promotional material or issuance of corrective information; • product seizure or detention, or refusal to permit the import or export of products; and • injunctions or the imposition of civil or criminal penalties, including imprisonment, disgorgement and restitution, as well as consent decrees, corporate integrity agreements, deferred prosecution agreements and exclusion from federal healthcare programs.
For additional information related to the risks and uncertainties of our compliance with the Sarbanes-Oxley Act, see “ Risk Related to an Early-Stage Company — Failure to achieve and maintain effective internal 82 Table of Contents controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect on our business.” If we fail to meet the applicable continued listing requirements of the Nasdaq Capital Market, Nasdaq may delist our Common Stock, in which case the liquidity and market price of our Common Stock could decline.
For additional information related to the risks and uncertainties of our compliance with the Sarbanes-Oxley Act, see “ Risk Related to an Early-Stage Company — Failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect on our business. ” Page 69 Table of Contents If we fail to meet the applicable continued listing requirements of the Nasdaq Capital Market, Nasdaq may delist our common stock, in which case the liquidity and market price of our common stock could decline.
The commencement and completion of clinical trials can be disrupted for a variety of reasons, including difficulties in: • finding suitable clinical sites; • recruiting and enrolling patients to participate in a clinical trial; • obtaining regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective clinical research organizations and trial sites; • manufacturing sufficient quantities of a product candidate; • investigator fraud, including data fabrication by clinical trial personnel; • diversion of controlled substances by clinical trial personnel; and • a clinical trial may also be suspended or terminated by us or by regulatory authorities due to a number of factors, including: • failure to conduct the clinical trial in accordance with regulatory requirements or in accordance with our clinical protocols; • inspection of the clinical trial operations or trial site by regulatory authorities resulting in the imposition of a clinical hold; • unforeseen safety issues; or • inadequate patient enrollment or lack of adequate funding to continue the clinical trial.
Page 53 Table of Contents The commencement and completion of clinical trials can be disrupted for a variety of reasons, including difficulties in: • finding suitable clinical sites; • recruiting and enrolling patients to participate in a clinical trial; • obtaining regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective clinical research organizations and trial sites; • manufacturing sufficient quantities of a product candidate; • investigator fraud, including data fabrication by clinical trial personnel; • diversion of controlled substances by clinical trial personnel; and • a clinical trial may also be suspended or terminated by us or by regulatory authorities due to a number of factors, including: • failure to conduct the clinical trial in accordance with regulatory requirements or in accordance with our clinical protocols; • inspection of the clinical trial operations or trial site by regulatory authorities resulting in the imposition of a clinical hold; • unforeseen safety issues; or • inadequate patient enrollment or lack of adequate funding to continue the clinical trial.
Accordingly, we believe that we will need to raise substantial additional capital to fund our continuing operations and the development and potential commercialization of our product candidates during calendar year 2024. We may raise capital through future share offerings, the issuance of debt instruments and grant monies. Our actual capital requirements will depend on many factors.
Accordingly, we believe that we will need to raise substantial additional capital to fund our continuing operations and the development and potential commercialization of our product candidates during calendar year 2025. We may raise capital through future share offerings, the issuance of debt instruments and grant monies. Our actual capital requirements will depend on many factors.
If this statistically-significant advantage is replicated in the current Phase 2I clinical trial, under the terms agreed to with the FDA in our Special Protocol Agreement, we aim to submit a NDA to the FDA on a rolling basis for the regulatory approval and commercialization of NRX-101 in the U.S. in 2024.
If this statistically-significant advantage is replicated in the current Phase 2I clinical trial, under the terms agreed to with the FDA in our Special Protocol Agreement, we aim to submit a NDA to the FDA on a rolling basis for the regulatory approval and commercialization of NRX-101 in the U.S. in 2025.
Restrictions under applicable federal, state and foreign healthcare laws and regulations may affect our ability to operate, including: • the Federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under Federal and state healthcare programs such as Medicare and Medicaid; • the Foreign Corrupt Practices Act (“FCPA”), which prohibits, among other things, any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business; • the Office of Foreign Assets Control, which prohibits, among other things, transactions or dealings with specified countries, their governments, and in certain circumstances, their nationals, and with individuals and entities that are specially designated, including narcotics traffickers and terrorists or terrorist organization; • the Committee on Foreign Investment in the U.S. , which has regulatory oversight over the sources and amounts of investment we may accept from non-US investors; • the federal False Claims Act, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • state and foreign anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers; • the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA and its implementing regulations, which also imposes obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restricting payments that may be made to healthcare providers; and • federal laws requiring drug manufacturers to report information related to payments and other transfers of value made to physicians and other healthcare providers, as well as ownership or investment interests held by physicians and their immediate family members, including under the federal open payments program, as well as other state and foreign laws regulating marketing activities. 58 Table of Contents Managing our growth as we expand operations may strain our resources and we may not successfully manage our growth.
Restrictions under applicable federal, state and foreign healthcare laws and regulations may affect our ability to operate, including: • the Federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under Federal and state healthcare programs such as Medicare and Medicaid; • the Foreign Corrupt Practices Act (“FCPA”), which prohibits, among other things, any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business; • the Office of Foreign Assets Control, which prohibits, among other things, transactions or dealings with specified countries, their governments, and in certain circumstances, their nationals, and with individuals and entities that are specially designated, including narcotics traffickers and terrorists or terrorist organization; • the Committee on Foreign Investment in the U.S., which has regulatory oversight over the sources and amounts of investment we may accept from non-US investors; • the federal False Claims Act, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • state and foreign anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers; • the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; Page 47 Table of Contents • HIPAA and its implementing regulations, which also imposes obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restricting payments that may be made to healthcare providers; and • federal laws requiring drug manufacturers to report information related to payments and other transfers of value made to physicians and other healthcare providers, as well as ownership or investment interests held by physicians and their immediate family members, including under the federal open payments program, as well as other state and foreign laws regulating marketing activities.
The Charter and the Bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
The Charter and the Bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
While the Company will vigorously defended the claims asserted in this matter, the litigation is ongoing and we may be subject to other lawsuits, claims, or proceedings. See “Item 3. Legal Proceedings” for a full description of such proceedings.
While the Company will vigorously defend the claims asserted in this matter, the litigation is ongoing and we may be subject to other lawsuits, claims, or proceedings. See “Item 3. Legal Proceedings” for a full description of such proceedings.
While we cannot predict with any certainty if or when we might submit an NDA for regulatory approval of NRX-101, we aim to submit an NDA to the FDA on a rolling basis for the regulatory approval and commercialization of NRX-101 in the U.S. in 2024.
While we cannot predict with any certainty if or when we might submit an NDA for regulatory approval of NRX-101, we aim to submit an NDA to the FDA on a rolling basis for the regulatory approval and commercialization of NRX-101 in the U.S. in 2025.
Our chief competitors in the psychiatry area include companies such as Johnson & Johnson, Pfizer, Eli Lilly, Sage Therapeutics, Axsome, and Relmada, among others. 53 Table of Contents We are faced with intense competition and rapid technological change, which may make it more difficult for us to achieve significant market penetration.
Our chief competitors in the psychiatry area include companies such as Johnson & Johnson, Pfizer, Eli Lilly, Sage Therapeutics, Axsome, and Relmada, among others. Page 43 Table of Contents We are faced with intense competition and rapid technological change, which may make it more difficult for us to achieve significant market penetration.
We may be a target of a short squeeze, and investors may lose a significant portion or all of their investment if they purchase our shares at a rate that is significantly disconnected from our underlying value. 80 Table of Contents General Risk Factors Our Common Stock price may be volatile or may decline regardless of our operating performance.
We may be a target of a short squeeze, and investors may lose a significant portion or all of their investment if they purchase our shares at a rate that is significantly disconnected from our underlying value. General Risk Factors Our common stock price may be volatile or may decline regardless of our operating performance.
Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements, may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to recall, replace or refund the cost of any product we manufacture or distribute, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects. ​ Future government regulation may affect the commercialization of our product candidate.
Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements, may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to recall, replace or refund the cost of any product we manufacture or distribute, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.
Similarly, drugs we select to commercialize ourselves, or partner for later stage co-development and commercialization, may not generate revenue for several years, or at all. 74 Table of Contents Risks Related to Our Reliance on Third Parties We do not have direct control of third parties performing preclinical and clinical trials.
Similarly, drugs we select to commercialize ourselves, or partner for later stage co-development and commercialization, may not generate revenue for several years, or at all. Risks Related to Our Reliance on Third Parties We do not have direct control of third parties performing preclinical and clinical trials.
We may expand our business through the acquisition of rights to new drug candidates that could disrupt our business, harm our financial condition and may also dilute current stockholders’ ownership interests in our company. Our business strategy includes expanding our products and capabilities, and we may seek acquisitions of drug candidates or technologies to do so.
We may expand our business through the acquisition of rights to new drug candidates that could disrupt our business, harm our financial condition and may also dilute current stockholders ’ ownership interests in our company. Our business strategy includes expanding our products and capabilities, and we may seek acquisitions of drug candidates or technologies to do so.
As a result, we were a “controlled company” for purposes of the Nasdaq corporate governance rules and were exempt from certain governance requirements ot herwise required by Nasdaq, including requirements that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
As a result, we were a “controlled company” for purposes of the Nasdaq corporate governance rules and were exempt from certain governance requirements otherwise required by Nasdaq, including requirements that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
A description of the policy we adopted with respect to the approval or ratification of transactions in which related persons, such as Jonathan Javitt and Daniel Javitt and their 79 Table of Contents respective affiliates, have a direct or indirect material interest is included in this annual report.
A description of the policy we adopted with respect to the approval or ratification of transactions in which related persons, such as Jonathan Javitt and Daniel Javitt and their respective affiliates, have a direct or indirect material interest is included in this annual report.
If our products do not receive such support from these physicians and from long-term data, physicians may not use or continue to use, and hospitals may not purchase or continue to purchase, our products. 54 Table of Contents We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits.
If our products do not receive such support from these physicians and from long-term data, physicians may not use or continue to use, and hospitals may not purchase or continue to purchase, our products. We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits.
As a result of this volatility, our stockholders may not be able to sell their shares of our Common Stock at or above the price at which they purchased their shares of our Common Stock. 83 Table of Contents We do not intend to pay cash dividends on our Common Stock for the foreseeable future.
As a result of this volatility, our stockholders may not be able to sell their shares of our common stock at or above the price at which they purchased their shares of our common stock. We do not intend to pay cash dividends on our common stock for the foreseeable future.
Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, which may result in a breach of the covenants under existing or future financing arrangements.
Page 49 Table of Contents Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, which may result in a breach of the covenants under existing or future financing arrangements.
If the FDA concludes that the clinical trials for any of our products for which we might seek clearance have failed to demonstrate safety and effectiveness, we would not receive 63 Table of Contents regulatory clearance to market that product in the applicable countries for the indications sought.
If the FDA concludes that the clinical trials for any of our products for which we might seek clearance have failed to demonstrate safety and effectiveness, we would not receive regulatory clearance to market that product in the applicable countries for the indications sought.
Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also lead to the denial of regulatory approval of a product candidate. 64 Table of Contents We may require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also lead to the denial of regulatory approval of a product candidate. We may require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
A competitor with a generic version of our products may be able to obtain approval of their product during our product’s period of data exclusivity by submitting a marketing authorization application (“ MAA ”) with a less than full package of nonclinical and clinical data.
A competitor with a generic version of our products may be able to obtain approval of their product during our product’s period of data exclusivity by submitting a marketing authorization application (“MAA”) with a less than full package of nonclinical and clinical data.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. Certain of our stockholders have effective control of NRx, and their interests may conflict with NRx’s or yours in the future.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. Certain of our stockholders have effective control of NRx, and their interests may conflict with NRx ’ s or yours in the future.
Risks Related to Ownership of Our Common Stock 76 Table of Contents Our issuance of additional shares of Common Stock or convertible securities could make it difficult for another company to acquire us, may dilute your ownership of us and could adversely affect our stock price .
Risks Related to Ownership of Our Common Stock Our issuance of additional shares of common stock or convertible securities could make it difficult for another company to acquire us, may dilute your ownership of us and could adversely affect our stock price .
Furthermore, controlled substances risks that are not adequately addressed through proposed REMS for our product candidates may also prevent or delay their approval for commercialization. We are reliant on third party manufacturers to produce controlled substances that conform to our specifications and the FDA’s strict regulatory requirements.
Furthermore, controlled substances risks that are not adequately addressed through proposed REMS for our product candidates may also prevent or delay their approval for commercialization. We are reliant on third party manufacturers to produce controlled substances that conform to our specifications and the FDA ’ s strict regulatory requirements.
Our ability to protect and enforce our patents does not guarantee that we will secure the right to commercialize our patents. A patent is a limited exclusionary right conferred upon an inventor, and his successors in title, in return for the making and disclosing of a new and non-obvious invention.
Page 61 Table of Contents Our ability to protect and enforce our patents does not guarantee that we will secure the right to commercialize our patents. A patent is a limited exclusionary right conferred upon an inventor, and his successors in title, in return for the making and disclosing of a new and non-obvious invention.
If we experience unanticipated 49 Table of Contents cash requirements, we may need to seek additional sources of financing, which may not be available on favorable terms, if at all. ​ We may not be able to secure funding when we need it or on favorable terms.
If we experience unanticipated cash requirements, we may need to seek additional sources of financing, which may not be available on favorable terms, if at all. We may not be able to secure funding when we need it or on favorable terms.
This might require the enrollment of additional subjects, which could result in the extension of the clinical trial and the FDA delaying clearance or approval of a product. There can be no assurance that the data generated using modified protocols will be acceptable to regulators.
This might require the enrollment of additional subjects, which could result in the extension of the clinical trial and the FDA delaying clearance or approval of a product. Page 54 Table of Contents There can be no assurance that the data generated using modified protocols will be acceptable to regulators.
Phase 2I clinical trials may not demonstrate the safety or efficacy of our drug candidates. Success in preclinical studies and early clinical trials does not ensure that later clinical trials will be successful.
Phase 2I clinical trials may not demonstrate the safety or efficacy of our drug candidates. Success in preclinical studies and early clinical trials does not ensure that later clinical trials will be successful. Results of later clinical trials may not replicate the results of prior clinical trials and preclinical studies.
We may not be able to obtain Hatch-Waxman Act marketing exclusivity or equivalent regulatory data exclusivity protection in other jurisdictions for our products. Should we not obtain or fail to maintain patent protection on our products, we intend to rely, in part, on Hatch-Waxman exclusivity for the commercialization of our products in the U.S.
Page 44 Table of Contents We may not be able to obtain Hatch-Waxman Act marketing exclusivity or equivalent regulatory data exclusivity protection in other jurisdictions for our products. Should we not obtain or fail to maintain patent protection on our products, we intend to rely, in part, on Hatch-Waxman exclusivity for the commercialization of our products in the U.S.
Global economic, political and social conditions, armed conflicts and uncertainties in the market that we serve may adversely impact our business. Our performance depends on the financial health and strength of our potential customers, which in turn is dependent on the economic conditions of the markets in which we and our customers operate.
Page 45 Table of Contents Global economic, political and social conditions, armed conflicts and uncertainties in the market that we serve may adversely impact our business. Our performance depends on the financial health and strength of our potential customers, which in turn is dependent on the economic conditions of the markets in which we and our customers operate.
Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Common Stock.
Page 65 Table of Contents Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
We believe we will continue to incur operating losses and negative cash flow in the near-term as we continue to invest significantly in our business, in particular across our research and development efforts, clinical trial programs and future sales and marketing efforts. These investments may not result in revenue or growth in our business.
We believe we will continue to incur operating losses and negative cash flow in the near-term as we continue to invest significantly in our business, in particular across our research and development efforts, clinical trial programs and future sales and marketing efforts. Page 38 Table of Contents These investments may not result in revenue or growth in our business.
There is no guarantee that regulatory authorities will grant NDA approval of our current or future product candidates and failure to obtain necessary clearances or approvals for our current and future product candidates would adversely affect our ability to grow our business.
Page 52 Table of Contents There is no guarantee that regulatory authorities will grant NDA approval of our current or future product candidates and failure to obtain necessary clearances or approvals for our current and future product candidates would adversely affect our ability to grow our business.
Currently, our new clinical trial supplies for NRX-101 are being manufactured in the U.S. , though some supplies are sourced from outside the U.S . Switching or adding manufacturing capability outside the U.S. can involve substantial cost and require extensive management time and focus, additional regulatory filings and compliance with import/ export regulations.
Currently, clinical trial supplies for NRX-101 are being manufactured in the U.S., and no supplies are sourced from outside the U.S. Switching or adding manufacturing capability outside the U.S. can involve substantial cost and require extensive management time and focus, additional regulatory filings and compliance with import/ export regulations.
Our product candidates are newly-formulated and we have not yet scaled manufacturing to levels that will be required for sustained sales. NRX-101 has been formulated under cGMP and long-term stability ( i.e. , five years) has been achieved for our solid dose formulation of NRX-101.
Our product candidates are newly-formulated and we have not yet scaled manufacturing to levels that will be required for sustained sales. NRX-101 has been formulated under Current Good Manufacturing Practices (“cGMP”) and long-term stability ( i.e. , five years) has been achieved for our solid dose formulation of NRX-101.
We have a limited operating history upon which to base an investment decision. Our limited operating history may hinder your ability to evaluate our prospects due to a lack of historical financial data and our unproven potential to generate profits.
Page 39 Table of Contents We have a limited operating history upon which to base an investment decision. Our limited operating history may hinder your ability to evaluate our prospects due to a lack of historical financial data and our unproven potential to generate profits.
We have not been profitable historically and may not achieve or maintain profitability in the future. ​ • We need to raise additional capital to operate our business.
We have not been profitable historically and may not achieve or maintain profitability in the future. • We need to raise additional capital to operate our business and finance our proposed acquisitions.
Our patent position is highly uncertain and involves complex legal and factual questions. Our patent position is highly uncertain and involves complex legal and factual questions. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents.
Page 59 Table of Contents Our patent position is highly uncertain and involves complex legal and factual questions. Our patent position is highly uncertain and involves complex legal and factual questions. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents.
Additionally, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Page 66 Table of Contents Additionally, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
The NDA process is costly, lengthy and uncertain. Any NDA application filed by us will have to be supported by extensive data, including, but not limited to, technical, nonclinical, clinical trial, manufacturing and labelling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the product for its intended use.
Any NDA application filed by us will have to be supported by extensive data, including, but not limited to, technical, nonclinical, clinical trial, manufacturing and labelling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the product for its intended use.
If the third parties on which we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory approval for or commercialize our products.
Page 62 Table of Contents If the third parties on which we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory approval for or commercialize our products.
Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of employee fraud or other misconduct.
Page 46 Table of Contents Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of employee fraud or other misconduct.
Jonathan Javitt and Daniel Javitt also may pursue corporate opportunities that may be complementary to our business and, as a result, those corporate opportunities may not be available to us. We are no longer a “controlled company” under the corporate governance rules of Nasdaq.
Jonathan Javitt and Daniel Javitt also may pursue corporate opportunities that may be complementary to our business and, as a result, those corporate opportunities may not be available to us. We are no longer a “ controlled company ” under the corporate governance rules of Nasdaq.
Business interruptions could limit our ability to operate our business. Our operations as well as those of our collaborators on which we depend are vulnerable to damage or interruption from computer viruses, human error, natural disasters, electrical and telecommunication failures, international acts of terror and similar events.
Our operations as well as those of our collaborators on which we depend are vulnerable to damage or interruption from computer viruses, human error, natural disasters, electrical and telecommunication failures, international acts of terror and similar events.
Future sales, or the perception of future sales, of our Common Stock by us or our existing stockholders in the public market could cause the market price for our Common Stock to decline.
Page 64 Table of Contents Future sales, or the perception of future sales, of our common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.
Furthermore, if participating patients in clinical trials suffer drug-related adverse reactions during the course of such clinical trials, or if we or the FDA believe that participating patients are being exposed to unacceptable health risks, such clinical trials will have to be suspended or terminated.
The clinical trial process also consumes a significant amount of time. Furthermore, if participating patients in clinical trials suffer drug-related adverse reactions during the course of such clinical trials, or if we or the FDA believe that participating patients are being exposed to unacceptable health risks, such clinical trials will have to be suspended or terminated.
In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts.
In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
We are no longer a “controlled company” under the corporate governance rules of Nasdaq. Under the Nasdaq listing requirements, a company that ceases to be a “controlled company” must comply with the independent board committee requirements as they relate to the nominating and corporate governance.
Page 67 Table of Contents We are no longer a “ controlled company ” under the corporate governance rules of Nasdaq. Under the Nasdaq listing requirements, a company that ceases to be a “ controlled company ” must comply with the independent board committee requirements as they relate to the nominating and corporate governance .
In addition, adverse clinical trial results in such countries, such as death or injury due to side effects, could jeopardize not only regulatory approval, but if approval is granted, may also lead to marketing restrictions.
In addition, adverse clinical trial results in such countries, such as death or injury due to side effects, could jeopardize not only regulatory approval, but if approval is granted, may also lead to marketing restrictions. Our product candidates may also face foreign regulatory requirements applicable to controlled substances.
For example, we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications and issued patents; we or our licensors might not have been the first to file patent applications for these inventions; others may independently develop similar or alternative technologies or duplicate any of our technologies; it is possible that none of our pending patent applications or the pending patent applications of our licensors will result in issued patents; our issued patents and issued patents of our licensors may not provide a basis for commercially viable technologies, or may not provide us with any competitive advantages, or may be challenged and invalidated by third parties; and, we may not develop additional proprietary technologies that are patentable. 71 Table of Contents As a result, the validity of our owned and licensed patents may be challenged and we may not be able to obtain and enforce patents and to maintain trade secret protection for the full commercial extent of our technology.
For example, we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications and issued patents; we or our licensors might not have been the first to file patent applications for these inventions; others may independently develop similar or alternative technologies or duplicate any of our technologies; it is possible that none of our pending patent applications or the pending patent applications of our licensors will result in issued patents; our issued patents and issued patents of our licensors may not provide a basis for commercially viable technologies, or may not provide us with any competitive advantages, or may be challenged and invalidated by third parties; and, we may not develop additional proprietary technologies that are patentable.
However, we continue to rely on certain exceptions from corporate governance standards. ​ • If we fail to meet the applicable continued listing requirements of the Nasdaq Capital Market, Nasdaq may delist our common stock, in which case the liquidity and market price of our common stock could decline. ​ • We do not intend to pay cash dividends on our Common Stock for the foreseeable future. ​ 47 Table of Contents Risks Related to an Early-Stage Company We are an early-stage company with a history of losses.
However, we continue to rely on certain exceptions from corporate governance standards. • If we fail to meet the applicable continued listing requirements of the Nasdaq Capital Market, Nasdaq may delist our common stock, in which case the liquidity and market price of our common stock could decline. • We do not intend to pay cash dividends on our common stock for the foreseeable future.
If we are unable to obtain Streeterville’s consent prior to issuing any debt or certain equity securities, including as related to this offering of common stock, such issuance may be a breach of the Share Purchase Agreement, and Streeterville may be obligated to indemnify Streeterville for loss or damage arising as a result of any breach or alleged breach by us of the Share Purchase Agreement, which may affect our business operations and financial condition.
If we are unable to obtain the Investor’s consent prior to issuing any debt or certain equity securities, such issuance may be a breach of the August SPA, and we may be obligated to indemnify the Investors for loss or damage arising as a result of any breach or alleged breach by us of the August SPA, which may affect our business operations and financial condition.
Such failure would cause us to abandon a drug candidate and could delay development of other drug candidates. 62 Table of Contents We cannot predict whether regulatory agencies will determine that the data from our clinical trials of our product candidates supports marketing approval.
The clinical trials process may fail to demonstrate that our drug candidates are safe and effective for indicated uses. Such failure would cause us to abandon a drug candidate and could delay development of other drug candidates. We cannot predict whether regulatory agencies will determine that the data from our clinical trials of our product candidates supports marketing approval.
We expect to need to grow rapidly in order to support additional, larger, and potentially international, pivotal clinical trials of our drug candidates, which will place a significant strain on our financial, managerial and operational resources. In order to achieve and manage growth effectively, we must continue to improve and expand our operational and financial management capabilities.
Managing our growth as we expand operations may strain our resources and we may not successfully manage our growth. We expect to need to grow rapidly in order to support additional, larger, and potentially international, pivotal clinical trials of our drug candidates, which will place a significant strain on our financial, managerial and operational resources.
If our ability to work with present or future strategic partners or collaborators is adversely affected as a result of our collaboration agreement, our business prospects may be limited, and our financial condition may be adversely affected. Upon commercialization of our products, we may be dependent on third parties to market, distribute and sell our products.
If our ability to work with present or future strategic partners or collaborators is adversely affected as a result of our collaboration agreement, our business prospects may be limited, and our financial condition may be adversely affected.
The original number of shares reserved for future issuance under the Incentive Plan was 5,373,394.
The original number of shares reserved for future issuance under the Incentive Plan was 380,182.
If we are unable to scale our business appropriately or otherwise adapt to anticipated growth and new product introduction, our business and financial condition will be harmed.
Our future success is heavily dependent upon growth and acceptance of our future products. If we are unable to scale our business appropriately or otherwise adapt to anticipated growth and new product introduction, our business and financial condition will be harmed.
We have not established a formal disaster recovery plan and our back-up operations and our business interruption insurance may not be adequate to compensate us for losses we may suffer.
We have not established a formal disaster recovery plan and our back-up operations and our business interruption insurance may not be adequate to compensate us for losses we may suffer. A significant business interruption could result in losses or damages incurred by us and require us to cease or curtail our operations.
Until, and if, we receive approval from the FDA and other regulatory authorities for our product candidates, we cannot sell our drugs and will not have product revenues. We had cash and cash equivalents of approximately $4.6 million as of December 31, 2023.
We are a company focused on product development and have not generated any product revenues to date. Until, and if, we receive approval from the FDA and other regulatory authorities for our product candidates, we cannot sell our drugs and will not have product revenues. We had cash and cash equivalents of approximately $1.4 million as of December 31, 2024.
Even though an adverse event may not be the result of the failure of our drug candidate, the regulators or an IRB could delay or halt a clinical trial for an indefinite period of time while an adverse event is reviewed, and likely would do so in the event of multiple such events. 65 Table of Contents Any delay or termination of our current or future clinical trials as a result of the risks summarized above, including delays in obtaining or maintaining required approvals from IRBs, delays in patient enrollment, the failure of patients to continue to participate in a clinical trial, and delays or termination of clinical trials as a result of protocol modifications or adverse events during the trials, may cause an increase in costs and delays in the filing of any product submissions with the FDA, delay the approval and commercialization of our products or result in the failure of the clinical trial, which could adversely affect our business, operating results and prospects.
Any delay or termination of our current or future clinical trials as a result of the risks summarized above, including delays in obtaining or maintaining required approvals from IRBs, delays in patient enrollment, the failure of patients to continue to participate in a clinical trial, and delays or termination of clinical trials as a result of protocol modifications or adverse events during the trials, may cause an increase in costs and delays in the filing of any product submissions with the FDA, delay the approval and commercialization of our products or result in the failure of the clinical trial, which could adversely affect our business, operating results and prospects.
Defense of these types of claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. 72 Table of Contents Conversely, we may choose to challenge the patentability of claims in a third party’s U.S. patent by requesting that the USPTO review the patent claims in re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings), or we may choose to challenge a third party’s patent in patent opposition proceedings in the Canadian Intellectual Property Office (“CIPO”) the European Patent Office (“EPO”) or another foreign patent office.
Page 60 Table of Contents Conversely, we may choose to challenge the patentability of claims in a third party’s U.S. patent by requesting that the USPTO review the patent claims in re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings), or we may choose to challenge a third party’s patent in patent opposition proceedings in the Canadian Intellectual Property Office (“CIPO”) the European Patent Office (“EPO”) or another foreign patent office.
Future sales, or the perception of sales, of our Common Stock by us or our existing stockholders could cause the market price for our Common Stock to decline. ​ • We qualify as a “smaller reporting company” within the meaning of the Securities Act, which could make our securities less attractive to investors and may make it more difficult to evaluate our performance. ​ • Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Common Stock. ​ • Certain of our stockholders have effective control of NRx, and their interests may conflict with NRx’s or yours in the future.
Future sales, or the perception of sales, of our common stock by us or our existing stockholders could cause the market price for our common stock to decline. • Our announced spin-off of HOPE into an independent, publicly traded company may not be completed on the previously announced timeline, or if at all, and if completed, may not achieve the intended benefits and expose us to new risks, any of which could have a material adverse impact on our business and results of operations. • We qualify as a “smaller reporting company” within the meaning of the Securities Act, which could make our securities less attractive to investors and may make it more difficult to evaluate our performance. • Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock. • Certain of our stockholders have effective control of NRx, and their interests may conflict with NRx’s or yours in the future.
If we are not successful in obtaining timely clearance or approval of our products from the FDA, we may never be able to generate significant revenue in the U.S. and may be forced to focus on international markets where we currently do not have a presence or an established partnership, which will limit the revenue potential of our products. 51 Table of Contents In the U.S. , the FDA permits commercial distribution of a new drug product only after the product has received approval of an NDA filed with the FDA, seeking permission to market the product in interstate commerce in the U.S .
If we are not successful in obtaining timely clearance or approval of our products from the FDA, we may never be able to generate significant revenue in the U.S. and may be forced to focus on international markets where we currently do not have a presence or an established partnership, which will limit the revenue potential of our products.
The use of controlled substances in our product candidates may generate controversy. Products containing controlled substances may generate public controversy. Opponents of these products may seek restrictions on marketing and withdrawal of any regulatory approvals.
The use of controlled substances in our product candidates may generate controversy. Products containing controlled substances may generate public controversy. Opponents of these products may seek restrictions on marketing and withdrawal of any regulatory approvals. In addition, these opponents may seek to generate negative publicity and media stories in an effort to persuade the medical community to reject these products.
Results of later clinical trials may not replicate the results of prior clinical trials and preclinical studies. ​ Even if the results of Phase 2I clinical trials are positive, we may have to commit substantial time and additional resources to conducting further preclinical studies and clinical trials before obtaining FDA approval for any of our drug candidates.
Even if the results of Phase 2I clinical trials are positive, we may have to commit substantial time and additional resources to conducting further preclinical studies and clinical trials before obtaining FDA approval for any of our drug candidates. Clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous requirements.
Our Common Stock is currently listed on the Nasdaq Capital Market. In order to maintain that listing, we must satisfy certain continued listing requirements. In the past, we have received deficiency letters from Nasdaq for failing to maintain compliance with such listing requirements.
Our common stock is currently listed on the Nasdaq Capital Market. In order to maintain that listing, we must satisfy certain continued listing requirements.
Our product candidates may also face foreign regulatory requirements applicable to controlled substances. 55 Table of Contents If we were to experience any of the difficulties listed above, or any other difficulties, any international development activities and our overall financial condition may suffer and cause us to reduce or discontinue our international development and registration efforts.
If we were to experience any of the difficulties listed above, or any other difficulties, any international development activities and our overall financial condition may suffer and cause us to reduce or discontinue our international development and registration efforts. International commercialization of our product candidates requires successful collaborations.
We have not been profitable historically and may not achieve or maintain profitability in the future. We experienced net losses in each year since inception, including net losses of $30.2 million and $39.8 million for the years ended, December 31, 2023, and 2022, respectively.
Risks Related to an Early-Stage Company We are an early-stage company with a history of losses. We have not been profitable historically and may not achieve or maintain profitability in the future. We experienced net losses in each year since inception, including net losses of $25.1 million and $30.2 million for the years ended, December 31, 2024 and 2023, respectively.
Any of these actions may harm our business, financial condition and results of operations. ​ The amount of capital we may need depends on many factors, including the progress, timing and scope of our product development programs; the progress, timing and scope of our nonclinical studies and clinical trials; the time and cost necessary to obtain regulatory approvals; the time and cost necessary to further develop manufacturing processes and arrange for contract manufacturing; our ability to enter into and maintain collaborative, licensing and other commercial relationships; and our partners’ commitment of time and resources to the development and commercialization of our products. ​ We may be unable to access the capital markets and even if we can raise additional funding, we may be required to do so on terms that are dilutive.
The amount of capital we may need depends on many factors, including the progress, timing and scope of our product development programs; the progress, timing and scope of our nonclinical studies and clinical trials; the time and cost necessary to obtain regulatory approvals; the time and cost necessary to further develop manufacturing processes and arrange for contract manufacturing; our ability to enter into and maintain collaborative, licensing and other commercial relationships; and our partners’ commitment of time and resources to the development and commercialization of our products.
We are using newly-manufactured material that was manufactured using the expected commercial process. In addition, we have initiated a Phase 2 clinical study for bipolar depression with sub-acute suicidal ideation and behavior. This population is significantly larger than the Bipolar Depression population with ASIB, and does not require initial stabilization with NRX-100.
We are conducting a new registrational study of NRX-101 for severe bipolar depression in patients with ASIB after initial stabilization with NRX-100 (ketamine). We are using newly-manufactured material that was manufactured using the expected commercial process. In addition, we have initiated a Phase 2 clinical study for bipolar depression with sub-acute suicidal ideation and behavior.
Our operations will involve the use of hazardous materials, including chemicals and biological materials. Our operations also may produce hazardous waste products. We generally anticipate contracting with third parties for the disposal of these materials and wastes. We will not be able to eliminate the risk of contamination or injury from these materials.
We generally anticipate contracting with third parties for the disposal of these materials and wastes. We will not be able to eliminate the risk of contamination or injury from these materials.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. 73 Table of Contents If we are found to be infringing on patents or trade secrets owned by others, we may be forced to cease or alter our product development efforts, obtain a license to continue the development or sale of our products, and/or pay damages.
If we are found to be infringing on patents or trade secrets owned by others, we may be forced to cease or alter our product development efforts, obtain a license to continue the development or sale of our products, and/or pay damages.
For example, on July 20, 2023, we received a written notification from the Staff indicating that we were not in compliance with Nasdaq Listing Rule 5450(b)(2)(A) because we had not maintained a minimum MVLS of $50,000,000 for the previous 33 consecutive business days.
On August 6, 2024, we received a written notification from the Staff indicating that we were not in compliance with Nasdaq Listing Rule 5550(b)(2) because we had not maintained a minimum market value of listed securities (“MLVS”) of $35,000,000 for the previous 33 consecutive business days.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Item 1C. Cybersecurity NRx Pharmaceuticals, Inc. (“NRx” or “Company”) maintains a cyber risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats. The underlying processes and controls of NRx’s cyber risk management program incorporate recognized best practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”).
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Item 1C. Cybersecurity 71 Item 2. Properties 71 Item 3. Legal Proceedings 71 Item 4. Mine Safety Disclosures 72 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities 73 Item 6. [Reserved] 74 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 75 Item 7A.
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NRx has an annual assessment performed by a third-party specialist of the Company’s cyber risk management program against the NIST CSF. The annual risk assessment identifies, quantifies, and categorizes material cyber risks.
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Quantitative and Qualitative Disclosure about Market Risk 89 Item 8. Financial Statements and Supplementary Data 88
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In addition, the Company, in conjunction with the third-party cyber risk management specialists develop a risk mitigation plan to address such risks and, where necessary, remediate potential vulnerabilities identified through the annual assessment process. ​ In addition, NRx maintains policies over areas such as access and account management to help govern the processes put in place by management designed to protect NRx’s IT assets, data, and services from threats and vulnerabilities.
Removed
NRx employs additional key practices within the cybersecurity risk management program including, but not limited to maintenance of an IT assets inventory, identity access management controls including restricted access of privileged accounts, and critical data backups to reduce cybersecurity risk . Cybersecurity partners to the Company, including consultants, are a key part of NRx’s cybersecurity risk management strategy and infrastructure.
Removed
The cybersecurity partners provide services including, but not limited to cybersecurity strategy, cyber risk advisory, assessment, and remediation. NRx’s management team, in conjunction with cybersecurity service providers are responsible for oversight and administration of NRx’s cyber risk management program, and for informing senior management and other relevant stakeholders regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents.
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The Company’s management team has prior experience selecting, deploying, and overseeing cybersecurity technologies, initiatives, and processes via engagement of strategic third-party partners. The Company also relies on threat intelligence as well as other information obtained from governmental, public, or private sources, including external consultants engaged by NRx for strategic cyber risk management, advisory and decision making.
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The Audit Committee of the Board of Directors oversees NRx’s cybersecurity risk exposures and the steps taken by management to monitor and mitigate cybersecurity risks.
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The cybersecurity stakeholders, including member(s) of management assigned with cybersecurity oversight responsibility and/or third-party consultants providing cyber risk services, brief the Audit Committee on cyber vulnerabilities identified through the risk management process, the effectiveness of NRx’s cyber risk management program, and the emerging threat landscape and new cyber risks on at least an annual basis.
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This includes updates on NRx's processes to prevent, detect, and mitigate cybersecurity incidents. NRx faces risks from cybersecurity threats that could have a material adverse effect on its business, financial condition, results of operations, cash flows or reputation.
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NRx acknowledges that the risk of cyber incident is prevalent in the current threat landscape and that a future cyber incident may occur in the normal course of its business. However, prior cybersecurity incidents have not had a material adverse effect on NRx’s business, financial condition, results of operations, or cash flows.
Removed
Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, investors, and additional stakeholders, which could subject the Company to additional liability and reputational harm. In response to such risks, the Company has implemented initiatives such as a cybersecurity risk assessment process and development of an incident response plan. See Item 1A.
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"Risk Factors" for more information on cybersecurity risks. ​

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our principal executive office is located at 1201 Orange Street, Suite 600 Wilmington, DE 19801. ​ We believe that our current facilities are suitable and adequate to meet our current needs. We believe that suitable additional space or substitute space will be available in the future to accommodate our operations as needed. ​ 85 Table of Contents
Biggest changeItem 2. Properties Our principal executive office is located at 1201 Orange Street, Suite 600 Wilmington, DE 19801. We believe that our current facilities are suitable and adequate to meet our current needs. We believe that suitable additional space or substitute space will be available in the future to accommodate our operations as needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn addition to the matters described above, we may become involved in various legal actions incidental to our business.
Biggest changeThe Company made the $2.5 million payment upon the Anson Notes closing on August 15, 2024. The Company made the $3.05 million payment in October 2024 in satisfaction of the Streeterville Note. In addition to the matters described above, we may become involved in various legal actions incidental to our business.
As of the date of this annual report, we are not involved in any other legal proceedings that we believe could have a material adverse effect on our financial position or results of operations, but regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, and diversion of management resources. ​ Item 4.
As of the date of this annual report, we are not involved in any other legal proceedings that we believe could have a material adverse effect on our financial position or results of operations, but regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, and diversion of management resources.
Pursuant to the Settlement Agreement on August 31, 2023, the Company issued 675,676 shares of Common Stock to GEM in full satisfaction of the Settlement Agreement for the approximately $0.3 million which was previously accrued and expensed as “Settlement expense.” The shares are registered under a prospectus supplement to the Company’s registration statement on Form S-3 and are subject to a restriction that they cannot be sold or traded for a period of six months from the effective date of the Settlement Agreement.
Pursuant to the Settlement Agreement on August 31, 2023, the Company issued 67,568 shares of common stock to GEM in full satisfaction of the Settlement Agreement for the approximately $0.3 million which was previously accrued and expensed as “Settlement expense.” The shares are registered under a prospectus supplement to the Company’s registration statement on Form S-3 and are subject to a restriction that they cannot be sold or traded for a period of six months from the effective date of the Settlement Agreement.
The closing under the APA occurred on December 17, 2022 and the parties dismissed their respective claims against each other. On August 12, 2022, the Company received a demand for arbitration (the “Demand”) from GEM Yield Bahamas Limited and GEM Global Yield LLC SCS (collectively, “GEM”). The Demand claims that the Company’s subsidiary, NeuroRx, Inc.
The closing under the APA occurred on December 17, 2022 and the parties dismissed their respective claims against each other. Page 71 Table of Contents On August 12, 2022, the Company received a demand for arbitration (the “Demand”) from GEM Yield Bahamas Limited and GEM Global Yield LLC SCS (collectively, “GEM”). The Demand claims that the Company’s subsidiary, NeuroRx, Inc.
(“NRx” or the “Company”) entered into a Settlement Agreement and Asset Purchase Agreement (“APA”) with Relief Therapeutics Holding AG and Relief Therapeutics International (the “Relief Parties”) to settle the outstanding lawsuit with respect to the Binding Collaboration Agreement dated September 18, 2020 between the Company and the Relief Parties (the “Collaboration Agreement”).
Item 3. Legal Proceedings. On November 12, 2022, the Company entered into a Settlement Agreement and Asset Purchase Agreement (“APA”) with Relief Therapeutics Holding AG and Relief Therapeutics International (the “Relief Parties”) to settle the outstanding lawsuit with respect to the Binding Collaboration Agreement dated September 18, 2020 between the Company and the Relief Parties (the “Collaboration Agreement”).
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Item 3. Legal Proceedings. On November 12, 2022, NRx Pharmaceuticals, Inc.
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The Company was a defendant in litigation filed by Streeterville in the Third Judicial District Court of Salt Lake County, Utah.
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Mine Safety Disclosures Not applicable. ​ 86 Table of Contents PART II
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The Complaint sought, among other things: (i) declaratory relief for an order enjoining the Company from undertaking any Fundamental Transaction, including the Spin-Off, or otherwise issuing common stock or other equity securities (such as the shares of HOPE pursuant to the announced Spin-Off); and (ii) repayment of the Streeterville Note and other unspecified amounts of damages, costs and fees, but no less than $6,537,027, or the amounts currently outstanding under the Streeterville Note.
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On July 29, 2024, in connection with the alleged Event of Default that Streeterville claimed occurred with respect to the Streeterville Note, the Company announced an order of the Utah arbitrator denying the petition of Streeterville to enjoin the planned Spin-Off of 49% of shares in HOPE to current shareholders of the Company.
Added
The purpose of the proposed Spin-Off was to provide the Company’s shareholders with valuable consideration and to provide HOPE (currently a wholly-owned subsidiary) with a sufficient shareholder base to enable future listing on a national exchange. The arbitrator also denied Streeterville’s petition to enjoin the Company from selling additional shares of common stock to finance ongoing operations.
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On August 12, 2024, the Company and Streeterville entered into a Settlement and Release of Claims (the “Settlement Agreement”), whereby the Company and Streeterville agreed to settle all disputes between the parties and release the Company from all obligations arising from the Notes at certain Securities Purchase Agreement, dated November 4, 2022 (“Streeterville Notes”), between the Company and Streeterville, and that certain Convertible Promissory Note, dated November 4, 2022, issued to Streeterville by the Company, in exchange for a payment of $2.5 million upon the initial closing of the sale of the Anson Notes, and within 60 days thereafter, a second payment of $3.05 million.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Alvogen Warrants were issues pursuant to an exemption to registration requirement of the Securities Act in reliance on Section 4(a)(2) of the Securities Act. 87 Table of Contents On February 29, 2024, we entered into a securities purchase agreement with an investor providing for the issuance and sale of 2,700,000 shares of Common Stock and warrants to purchase up to 2,700,000 shares of Common Stock (the “February Warrants”) at a price of $0.38 per share of Common Stock and accompanying warrant, which represents a 26.7% premium to the offering price in February 2024 Public Offering.
Biggest changeOn February 29, 2024, we entered into a securities purchase agreement with an investor providing for the issuance and sale of 270,000 shares of common stock and warrants to purchase up to 270,000 shares of common stock (the “February Warrants”) at a price of $3.80 per share of common stock and accompanying warrant, which represents a 26.7% premium to the offering price in February 2024 Public Offering.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market or Markets Our shares of common stock are currently quoted on the Nasdaq Capital Market under the symbol “NRXP.” Our common stock commenced trading on the Nasdaq Capital Market on May 25, 2021.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market or Markets Our shares of common stock are currently quoted on the Nasdaq Capital Market under the symbol “NRXP.” Our common stock commenced trading on the Nasdaq Capital Market on May 25, 2021.
The shares of Series A Preferred Stock and the August Investor Warrants were offered pursuant to a private placement under Section 4(a)(2) of the Securities Act. Each August Investor Warrant entitles the holder to purchase one (1) share of Common Stock at a purchase price of $0.40 per share.
The shares of Series A Preferred Stock and the August Investor Warrants were offered pursuant to a private placement under Section 4(a)(2) of the Securities Act. Each August Investor Warrant entitles the holder to purchase one (1) share of common stock at a purchase price of $4.00 per share.
Recent Sales by the Company of Unregistered Securities We entered into a Confidential Settlement Agreement and Release, dated July 17, 2023 (the “Settlement Agreement”), with NeuroRx, Inc., GEM Yield Bahamas Limited and GEM Global Yield LLC SCS, pursuant to which we agreed to issue an aggregate of 675,676 shares (the “Settlement Shares”) of Common Stock to GEM Global Yield LLC SCS.
Recent Sales by the Company of Unregistered Securities We entered into a Confidential Settlement Agreement and Release, dated July 17, 2023 (the “Settlement Agreement”), with NeuroRx, Inc., GEM Yield Bahamas Limited and GEM Global Yield LLC SCS, pursuant to which we agreed to issue an aggregate of 67,568 shares (the “Settlement Shares”) of common stock to GEM Global Yield LLC SCS.
The aggregate purchase price for each share of Series A Preferred Stock and associated August Investor Warrant was $0.40. The August Investor Warrants are exercisable starting on the six month anniversary of the date of issuance and will have a term of five years from the date of issuance.
The aggregate purchase price for each share of Series A Preferred Stock and associated August Investor Warrant was $4.00. The August Investor Warrants are exercisable starting on the six-month anniversary of the date of issuance and will have a term of five years from the date of issuance.
Prior to such date, our shares of common stock were traded on the Nasdaq Capital Market under the symbol “BRPA.” Approximate Number of Holders of Common Stock As of December 31, 2023 there were approximately 56 record holders of the Company’s common stock.
Prior to such date, our shares of common stock were traded on the Nasdaq Capital Market under the symbol “BRPA.” Approximate Number of Holders of Common Stock As of December 31, 2024, there were approximately 59 record holders of the Company’s common stock.
The February Warrants will have an exercise price of $0.38 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance. The aggregate net cash proceeds to the Company from the February 2024 Private Placement were approximately $1.0 million. ​ Repurchases of Securities None.
The February Warrants will have an exercise price of $3.80 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance. The aggregate net cash proceeds to the Company from the February 2024 Private Placement were approximately $1.0 million.
Use of Proceeds The Company intends to use the net proceeds from the offerings detailed above for working capital and general corporate purposes. ​
Repurchases of Securities None. Use of Proceeds The Company intends to use the net proceeds from the offerings detailed above for working capital and general corporate purposes.
Pursuant to the terms of the Amendment, we issued to Alvogen 4,195,978 warrants to purchase the Company’s common stock, at a strike price of $0.40 per share with three (3) year term (“Alvogen Warrants”).
Pursuant to the terms of the Amendment, we issued to Alvogen 419,598 warrants to purchase the Company’s common stock, at a strike price of $4.00 per share with three (3) year term (“Alvogen Warrants”). The Alvogen Warrants were issues pursuant to an exemption to registration requirement of the Securities Act in reliance on Section 4(a)(2) of the Securities Act.
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Page 73 Table of Contents On August 12, 2024, the Company executed a Securities Purchase Agreement (the “August SPA”) and related agreements, under which the Company agreed to sell and issue, and certain purchasers agreed to purchase, an aggregate of $16.3 million of securities.
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The consideration payable by the purchasers under the August SPA will be comprised of three equal closings of $5.435 million, each subject to certain closing conditions. The securities to be issued and sold by the Company include up to $16.3 million of senior secured convertible notes (the “Notes”) and warrants to purchase shares of the Company’s common stock (the “Warrants”).
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On each of August, 14, 2024, October 10, 2024, and January 28, 2025, the consummated the first tranche, second tranche, and third tranche, respectively, under the August SPA, with gross proceeds to the Company of $16.3 million. The Notes and Warrants were offered pursuant to a private placement under Section 4(a)(2) of the Securities Act.
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The Notes bear interest at the rate of 6% per annum and mature in 15 months following their date of issuance. The Notes may be settled in cash or in shares of the Company’s common stock, at the sole discretion of the holder, at the applicable conversion price.
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The Notes may not be prepaid by the Company however, the holders of the Notes may elect to convert the Notes, in whole or in part, into shares of the Company’s common stock at any time after the original issuance date.
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The conversion price: (A) for the Notes issued in the first tranche will equal the lower of (i) $2.4168, or (ii) a price equal to 92% of the lowest volume-weighted average price during the seven-trading day period immediately preceding the applicable conversion date (the “Alternative Conversion Price”); (B) for the Notes issued in the second tranche will equal the lower of (i) $1.766, or (ii) the Alternative Conversion Price; and (C) for the Notes issued in the third tranche will equal the lower of (i) $3.78, or (ii) the Alternative Conversion Price.
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The Notes include certain redemption, protection features and default interest and penalties.
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The Warrants have a term of 5 years, an exercise price of $2.4168 per share for the Warrants issued in the first tranche, $1.766 per share for the Warrants issued in the second tranche, and $3.78 per share for the Warrants issued in the third tranche, each subject to adjustment as more specifically set forth in the Warrants, and are exercisable immediately upon issuance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee Note 8 “Commitment and Contingencies” of the notes to the Company’s consolidated financial statements included elsewhere in this report for further information. 93 Table of Contents Results of operations for the years ended December 31, 2023 and 2022 The following table sets forth NRx Pharmaceuticals’ selected statements of operations data for the following periods (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ 2023 2022 Dollars ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ $ 13,371 ​ $ 17,027 ​ $ (3,656) General and administrative ​ 14,216 ​ 27,308 ​ ​ (13,092) Settlement expense ​ 250 ​ — ​ ​ 250 Total operating expenses ​ 27,837 ​ 44,335 ​ ​ (16,498) Loss from operations ​ $ (27,837) ​ $ (44,335) ​ $ 16,498 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (income) expenses: ​ ​ ​ Interest income ​ $ (494) ​ $ (249) ​ $ (245) Interest expense ​ 120 ​ — ​ ​ 120 Change in fair value of convertible note payable ​ ​ 2,707 ​ 505 ​ ​ 2,202 Change in fair value of warrant liabilities ​ ​ (20) ​ ​ (255) ​ ​ 235 Change in fair value of Earnout Cash liability ​ ​ — ​ ​ (4,582) ​ ​ 4,582 Total other (income) expenses ​ 2,313 ​ (4,581) ​ ​ 6,894 Net loss ​ $ (30,150) ​ $ (39,754) ​ $ 9,604 ​ Operating expenses Research and development expenses For the year ended December 31, 2023, NRx Pharmaceuticals recorded $13.4 million of research and development expenses compared to approximately $17.0 million for the year ended December 31, 2022.
Biggest changeResults of operations for the years ended December 31, 2024 and 2023 The following table sets forth the Company’s selected statements of operations data for the following periods (in thousands): Year Ended December 31, Change 2024 2023 Dollars Operating expense: Research and development $ 6,199 $ 13,371 $ (7,172 ) General and administrative 13,505 14,216 (711 ) Settlement (income) expense (1,202 ) 250 (1,452 ) Total operating expenses 18,502 27,837 (9,335 ) Loss from operations $ (18,502 ) $ (27,837 ) $ 9,335 Other (income) expense: Interest income $ (44 ) $ (494 ) $ 450 Interest expense 230 120 110 Convertible note default penalty 849 — 849 Change in fair value of convertible note payable and accrued interest 2,654 2,707 (53 ) Change in fair value of warrant liabilities 1,657 (20 ) 1,677 Loss on convertible note redemptions 1,278 — 1,277 Total other (income) expense 6,624 2,313 4,311 Net loss $ (25,126 ) $ (30,150 ) $ 5,024 Operating Expense Research and development expense For the year ended December 31, 2024, the Company recorded $6.2 million of research and development expense compared to approximately $13.4 million for the year ended December 31, 2023.
Convertible note payable As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“ASC 825”), the Company elects to account for its convertible promissory note, which meets the required criteria, at fair value at inception and at each subsequent reporting date.
Convertible note payable As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“ASC 825”), the Company elects to account for its convertible promissory notes, which meets the required criteria, at fair value at inception and at each subsequent reporting date.
Contractual Obligations and Commitments See Note 7, Debt, and Note 8, Commitments and Contingencies, of the notes to the Company’s consolidated financial statements as of and for the year ended December 31, 2023 included elsewhere in this report for further discussion of the Company’s commitments and contingencies.
Contractual Obligations and Commitments See Note 7, Debt, and Note 8, Commitments and Contingencies, of the notes to the Company’s consolidated financial statements as of and for the year ended December 31, 2024 included elsewhere in this report for further discussion of the Company’s commitments and contingencies.
The risk-free interest rate is determined 101 Table of Contents by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using Bloomberg's Default Risk function which uses our financial information to calculate a default risk specific to the Company.
The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. Probability of default is estimated using Bloomberg's Default Risk function which uses our financial information to calculate a default risk specific to the Company.
NRx Pharmaceuticals defines its critical accounting policies as those accounting principles that require it to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on its financial condition and results of operations, as well as the specific manner in which NRx Pharmaceuticals applies those principles.
The Company defines its critical accounting policies as those accounting principles that require it to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on its financial condition and results of operations, as well as the specific manner in which the Company applies those principles.
For restricted stock awards, the grant date fair value is the fair market value per share as of 100 Table of Contents the grant date based on the closing trading price for the Company’s stock. The straight-line method of expense recognition is applied to awards with service-only conditions. We account for forfeitures as they occur.
For restricted stock awards, the grant date fair value is the fair market value per share as of the grant date based on the closing trading price for the Company’s stock. The straight-line method of expense recognition is applied to awards with service-only conditions. We account for forfeitures as they occur.
February 2024 Offerings ​ On February 27, 2024, the Company entered into an Underwriting Agreement with EF Hutton LLC, as the Representative of the Underwriters, relating to the February 2024 Public Offering.
February 2024 Offerings On February 27, 2024, the Company entered into a February Underwriting Agreement with EF Hutton LLC, as the Representative of the February Underwriters, relating to the February 2024 Public Offering.
Until such time as the Company is able to establish a revenue stream from the sale of its therapeutic products, NRx Pharmaceuticals is dependent upon obtaining necessary equity and/or debt financing to continue operations.
Until such time as the Company is able to establish a revenue stream from the sale of its therapeutic products, it is dependent upon obtaining necessary equity and/or debt financing to continue operations.
Change in fair value of convertible note payable For the year ended December 31, 2023, NRx Pharmaceuticals recorded a loss of approximately $2.7 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.
For the year ended December 31, 2023, the Company recorded a loss of approximately $2.7 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.
NRx Pharmaceuticals cannot make any assurances that sales of NRX-101 will commence in the near term or that additional financings will be available to it on acceptable terms or at all. This could negatively impact NRx Pharmaceuticals' business and operations and could also lead to the reduction of NRx Pharmaceuticals' operations.
The Company cannot make any assurances that sales of NRX-101 will commence in the near term or that additional financings will be available to it on acceptable terms or at all. This could negatively impact our business and operations and could also lead to the reduction of our operations.
Critical Accounting Policies and Significant Judgments and Estimates The Company's management’s discussion and analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
Page 87 Table of Contents Critical Accounting Policies and Significant Judgments and Estimates The Company's management’s discussion and analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
While its significant accounting policies are more fully described in Note 3 to its financial statements, NRx Pharmaceuticals believes the following are the critical accounting policies used in the preparation of its financial statements that require significant estimates and judgments.
While its significant accounting policies are more fully described in Note 3 to its financial statements, the Company believes the following are the critical accounting policies used in the preparation of its financial statements that require significant estimates and judgments.
On February 28, 2024, the Company issued to the Representative the Underwriter’s Warrant to purchase up to 250,000 shares of Common Stock (the “Underwriter Warrant Shares”). The Underwriter’s Warrant is exercisable six months following the date of the Underwriting Agreement and terminates on the five-year anniversary of the date of the Underwriting Agreement.
On February 28, 2024, the Company issued to the Representative the February Underwriter’s Warrant to purchase up to 25,000 shares of common stock. The February Underwriter’s Warrant is exercisable six months following the date of the February Underwriting Agreement and terminates on the five-year anniversary of the date of the February Underwriting Agreement.
The Company may also use the proceeds from February 2024 Public Offering to repay the Convertible Promissory Note initially issued to Streeterville Capital, LLC in November 2022. ​ On March 5, 2024, the Underwriters in the February 2024 Public Offering exercised their Over-Allotment Option to purchase an additional 750,000 Option Shares.
The Company also used the proceeds from February 2024 Public Offering to repay the Convertible Promissory Note initially issued to Streeterville Capital, LLC in November 2022. On March 5, 2024, the Underwriters in the February 2024 Public Offering exercised their February Over-Allotment Option to purchase an additional 75,000 February Option Shares.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.
Page 88 Table of Contents For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.
On February 29, 2024, we entered into a securities purchase agreement with an investor providing for the issuance and sale of 2,700,000 shares of Common Stock and warrants to purchase up to 2,700,000 shares of Common Stock (the “February Warrants”) at a price of $0.38 per share of Common Stock and accompanying warrant, which represents a 26.7% premium to the offering price in February 2024 Public Offering.
On February 29, 2024, we entered into a securities purchase agreement with an investor providing for the issuance and sale of 270,000 shares of common stock and warrants to purchase up to 270,000 shares of common stock (the “February Warrants”) at a price of $3.80 per share of common stock and accompanying warrant, which represents a 26.7% premium to the offering price in February 2024 Public Offering.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
Page 81 Table of Contents The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
Aggregate gross proceeds from the Offering were approximately $1.5 million, before deducting underwriting discounts and commissions and estimated expenses payable by the Company. The Company intends to use the net proceeds from the February 2024 Public Offering for working capital and general corporate purposes.
Aggregate gross proceeds from the February Underwriting Agreement were approximately $1.7 million (including February Overallotment Exercise proceeds), before deducting underwriting discounts and commissions and estimated expenses payable by the Company. The Company intends to use the net proceeds from the February 2024 Public Offering for working capital and general corporate purposes.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of NRx Pharmaceuticals’ financial condition and plan of operations together with NRx Pharmaceuticals' consolidated financial statements and the related notes appearing elsewhere herein.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of NRx Pharmaceuticals ’ financial condition and plan of operations together with NRx Pharmaceuticals' consolidated financial statements and the related notes appearing elsewhere herein.
As a result of electing the fair value option, direct costs and fees related to the convertible promissory notes are expensed as incurred. ​ The Company estimates the fair value of the convertible note payable using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration(i.e. expected termination date) of the convertible note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.
The Company estimates the fair value of the convertible notes payable using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and volume volatility of our common stock, the time to expiration (i.e. expected termination date) of the convertible note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.
The research and development expenses for the years ended December 31, 2023 and 2022, respectively, include ($0.2) million and $0.6 million, respectively, of non-cash stock-based compensation. ​ General and administrative expenses For the year ended December 31, 2023, NRx Pharmaceuticals recorded $14.2 million of general and administrative expenses compared to approximately $27.3 million for the year ended December 31, 2022.
The research and development expenses for the years ended December 31, 2024 and 2023, respectively, include $0.1 million and ($0.2) million, respectively, of non-cash stock-based compensation. General and administrative expense For the year ended December 31, 2024, NRx Pharmaceuticals recorded $13.5 million of general and administrative expenses compared to approximately $14.2 million for the year ended December 31, 2023.
The public offering price for each share of Common Stock was $0.30 and the Underwriters purchased the shares of Common Stock pursuant to the Underwriting Agreement at a price for each share of Common Stock of $0.276. Pursuant to the Underwriting Agreement, the Company also granted the Representative the Over-Allotment Option.
The public offering price for each share of common stock was $3.00 and the February Underwriters purchased the shares of common stock pursuant to the February Underwriting Agreement at a price for each share of common stock of $2.76. Pursuant to the February Underwriting Agreement, the Company also granted the Representative the February Over-Allotment Option.
Change in fair value of warrant liabilities For the year ended December 31, 2023, NRx Pharmaceuticals recorded a gain of less than $0.1 million related to the change in fair value of the warrant liabilities compared to a gain of $0.3 million for the year ended December 31, 2022.
Change in fair value of warrant liabilities For the year ended December 31, 2024, the Company recorded a loss of $1.7 million related to the change in fair value of the warrant liabilities compared to a gain of less than $0.1 million for the year ended December 31, 2023.
The public offering price for each share of Common Stock was $0.30, and the Underwriters purchased the shares of Common Stock pursuant to the Underwriting Agreement at a price for each share of Common Stock of $0.276. On February 28, 2024, the February 2024 Public Offering closed (the “Closing Date”).
The public offering price for each share of common stock was $3.00, and the February Underwriters purchased the shares of common stock pursuant to the February Underwriting Agreement at a price for each share of common stock of $2.76. On February 28, 2024, the February 2024 Public offering closed.
The gain for the year ended December 31, 2022 related to the expiration of the Company’s obligation. Liquidity and Capital Resources The Company has generated no revenues, has incurred operating losses since inception, expects to continue to incur significant operating losses for the foreseeable future and may never become profitable.
Liquidity and Capital Resources The Company has generated no revenues, has incurred operating losses since inception, expects to continue to incur significant operating losses for the foreseeable future and may never become profitable.
Investing activities During the years ended December 31, 2023 and 2022 investing activities used less than $0.1 million, in each period, of cash related to the purchase of equipment. 99 Table of Contents Financing activities During the year ended December 31, 2023, financing activities provided $6.2 million of cash resulting from $8.1 million in proceeds from issuance of common stock and warrants issued in a private placement, $1.2 million in proceeds from issuance of Series A preferred stock and warrants, partially offset by $3.1 million of repayments of convertible notes.
During the year ended December 31, 2023, financing activities provided $6.2 million of cash resulting from $8.1 million in proceeds from issuance of common stock and warrants issued in a private placement, $1.2 million in proceeds from issuance of Series A preferred stock and warrants, partially offset by $3.1 million of repayments of convertible notes.
In connection with the Overallotment Exercise, we issued an additional Underwriter’s Warrant to purchase up to 37,500 shares of Common Stock. The Overallotment Exercise closed on March 6, 2024.
In connection with the February Overallotment Exercise, we issued an additional February Underwriter’s Warrant to purchase up to 3,750 shares of common stock. The February Overallotment Exercise closed on March 6, 2024. On February 29, 2024, the Company completed the February 2024 Private Placement.
Aggregate gross proceeds from the February 2024 Public Offering were approximately $1.5 million, before deducting underwriting discounts and commissions and estimated expenses payable by the Company. 91 Table of Contents Pursuant to the Underwriting Agreement and the engagement letter, dated as of February 22, 2024, by and between the Company and the Representative, the Company agreed to issue to the Representative in connection with the February 2024 Public Offering, a warrant to purchase up to a number of shares of Common Stock representing 5.0% of the shares of Common Stock and any Option Shares (as defined below) sold, at an initial exercise price of $0.33 per share, subject to certain adjustments (the “Underwriter’s Warrant”).
Page 79 Table of Contents Pursuant to the February Underwriting Agreement and the engagement letter, dated as of February 22, 2024, by and between the Company and the Representative, the Company agreed to issue to the Representative in connection with the February 2024 Public Offering, a warrant to purchase up to a number of shares of common stock representing 5.0% of the shares of common stock and any February Option Shares (as defined below) sold, at an initial exercise price of $3.30 per share, subject to certain adjustments (the “February Underwriter’s Warrant”).
In connection with the Overallotment Exercise, we issued an additional Underwriter’s Warrant to purchase up to 37,500 shares of Common Stock.
In connection with the April Overallotment Exercise, we issued an additional April Underwriter's Warrant to purchase up to 4,553 shares of common stock. The April Overallotment Exercise was exercised in full and closed.
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary if the Company is unable to continue as a going concern. ​ 92 Table of Contents Nasdaq Listing Requirements On July 20, 2023, we received a written notification (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) indicating that NRx Pharmaceuticals is not in compliance with Nasdaq Listing Rule 5450(b)(2)(A) – Market Value of Listed Securities (“MVLS”) because the Company had not maintained a minimum MVLS of $50,000,000 for the last thirty-three (33) consecutive business days.
Nasdaq Listing Requirements On July 20, 2023, we received a written notification (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) indicating that NRx Pharmaceuticals is not in compliance with Nasdaq Listing Rule 5450(b)(2)(A) – Market Value of Listed Securities (“MVLS”) because the Company had not maintained a minimum MVLS of $50,000,000 for the last thirty-three (33) consecutive business days.
Management has taken action to restore Nasdaq listing compliance and seeking to combat illegal naked shorting of NRx securities. ​ The Company has two lead compounds today, NRX-100, a proprietary presentation of ketamine and NRX-101, a patented fixed-dose combination of D-cycloserine and lurasidone. Both products have Fast Track designation from the US FDA for the treatment of suicidal bipolar depression.
Page 76 Table of Contents Company Overview The Company has two lead compounds today, NRX-100, a proprietary presentation of ketamine and NRX-101, a patented fixed-dose combination of D-cycloserine and lurasidone. Both products have Fast Track designation from the FDA for the treatment of suicidal bipolar depression.
During the year ended December 31, 2022, operating activities used $39.8 million of cash, primarily resulting from a net loss of $39.8 million, increased by (a) net non-cash gains of $0.7 million, including $4.6 million for the change in fair value of earnout cash liability, (ii) $0.3 million for the change in fair value of warrant liabilities, partially offset by (i) $3.6 million of stock-based compensation expense, (ii) $0.5 million for the change in fair value of convertible promissory note, and (b) changes in operating assets and liabilities of $0.7 million.
During the year ended December 31, 2023, operating activities used approximately $21.7 million of cash, primarily resulting from a net loss of $30.2 million, reduced by (a) net non-cash losses of $3.3 million, including $2.7 million in change in fair value of convertible promissory note, $0.4 million of stock-based compensation, and $0.3 million of non-cash settlement expenses, and (b) changes in operating assets and liabilities of $5.2 million.
NeuroRx is organized as a traditional Research and Development (“R&D”) company, whereas HOPE is organized as a Specialty Pharmaceutical (SpecPharma) company intended to distribute ketamine and other therapeutic options to clinics that serve patients with suicidal depression and PTSD. The 2023 fiscal year was one of extraordinary growth and transition for NRx.
NeuroRx is organized as a traditional research and development (" R&D ") company, whereas HOPE is organized as a specialty pharmaceutical company intended to distribute ketamine and other therapeutic options to clinics that serve patients with suicidal depression and PTSD.
The aggregate gross proceeds to the Company from the private placement was approximately $1.0 million before expenses. ​ Cash Flows The following table presents selected financial information and statistics for each of the periods shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Balance Sheet Data: ​ ​ ​ ​ ​ ​ Cash ​ $ 4,595 ​ $ 20,054 Total assets ​ ​ 7,315 ​ ​ 25,816 Convertible note payable ​ ​ 9,161 ​ ​ 10,525 Total liabilities ​ ​ 19,048 ​ ​ 18,407 Total stockholders' (deficit) equity ​ ​ (11,733) ​ ​ 7,409 ​ ​ ​ ​ ​ ​ ​ Statement of Cash Flow Data: ​ ​ ​ ​ ​ ​ Net cash used in operating activities ​ ​ (21,657) ​ ​ (39,755) Net cash used in investing activities ​ (3) ​ (10) Net cash provided by financing activities ​ ​ 6,201 ​ ​ 32,214 Net (decrease) increase in cash ​ $ (15,459) ​ $ (7,551) ​ Operating activities During the year ended December 31, 2023, operating activities used approximately $21.7 million of cash, primarily resulting from a net loss of $30.2 million, reduced by (a) net non-cash losses of $3.3 million, including $2.7 million in change in fair value of convertible promissory note, $0.4 million of stock-based compensation, and $0.3 million of non-cash settlement expenses, and (b) changes in operating assets and liabilities of $5.2 million.
Page 86 Table of Contents Cash Flows The following table presents selected financial information and statistics for each of the periods shown below: December 31, 2024 2023 Balance Sheet Data: Cash $ 1,443 $ 4,595 Total assets 3,651 7,315 Convertible note payable 6,257 9,161 Total liabilities 26,874 19,048 Total stockholders' (deficit) equity (23,223 ) (11,733 ) Statement of Cash Flow Data: Net cash used in operating activities (10,637 ) (21,657 ) Net cash used in investing activities — (3 ) Net cash provided by financing activities 7,485 6,201 Net (decrease) increase in cash $ (3,152 ) $ (15,459 ) During the year ended December 31, 2024, operating activities used approximately $10.6 million of cash, primarily resulting from a net loss of $25.1 million, partially offset by (a) net non-cash losses of $9.2 million, including a loss of $2.7 million in change in fair value of convertible promissory notes, and loss of $1.7 million in change in fair value of warrants, $0.5 million of stock-based compensation, $1.3 million loss in convertible note redemptions, $1.3 million of warrant issuance costs related to Alvogen termination, $0.8 million of default penalties, $0.9 million in debt issuance costs, and (b) changes in operating assets and liabilities of $5.3 million.
The general and administrative expenses for the years ended December 31, 2023 and 2022, respectively, include $0.6 million and $3.0 million, respectively, of non-cash stock-based compensation. Other (income) expenses Interest income For the year ended December 31, 2023, NRx Pharmaceuticals recorded $0.5 million of interest income compared $0.2 of interest income for the year ended December 31, 2022.
The general and administrative expenses for the years ended December 31, 2024 and 2023, respectively, include $0.4 million and $0.6 million, respectively, of non-cash stock-based compensation.
For the year ended December 31, 2022, NRx Pharmaceuticals recorded $0.5 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.
Change in fair value of convertible note payable For the year ended December 31, 2024, the Company recorded a loss of approximately $2.7 million related to the change in fair value of the convertible notes payable which are accounted for under the fair value option.
Research and development costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received.
Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received. General and administrative expense General and administrative expense consists primarily of salaries, stock-based compensation, consultant fees, and professional fees for legal and accounting services.
The decrease of $13.1 million is related primarily to a decrease of $5.0 million in legal, professional and accounting fees, $4.1 million in insurance expenses, $2.4 million in stock-based compensation expenses, $1.0 million in employee expenses, and $0.5 million in consultant fees.
The decrease of $0.7 million is related primarily to a decrease of $2.2 million in insurance expense, $1.3 million in employee expense, $0.2 million in stock-based compensation expense, and $0.2 million in patent expense, partially offset by an increase of $1.6 million in consultant fees, and $1.3 million in legal expense.
The increase of $0.1 million is due to premiums for cash payments on the convertible note.
Interest expense For the year ended December 31, 2024, the Company recorded $0.2 million of interest expense, compared to $0.1 million of interest expense for the year ended December 31, 2023. The increase of $0.1 million is due to premiums for cash payments on the convertible note.
The February Warrants will have an exercise price of $0.38 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance.
The common stock and the February Warrants were offered pursuant to a private placement under Section 4(a)(2) of the Securities Act. The February Warrants will have an exercise price of $3.80 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance.
Subsequent changes in fair value are recorded as a component of non-operating loss in the consolidated statements of operations.
Subsequent changes in fair value are recorded as a component of non-operating loss in the consolidated statements of operations. As a result of electing the fair value option, direct costs and fees related to the convertible promissory notes are expensed as incurred.
The decrease of $3.6 million is related primarily to a decrease of $2.1 million in clinical trials and development expenses related to ZYESAMI, $1.0 million related to fees paid to regulatory and process development consultants, $0.8 million related to stock-based compensation, $0.1 million in other regulatory and process development costs, partially offset by an increase of $0.2 related to licensure of a US Patent with Apkarian Technologies, and less than $0.1 million in shipping, freight, and delivery costs.
The decrease of $7.2 million is related primarily to a decrease of $7.6 million in clinical trials and development expense due to the conclusion of the phase 2 study related to NRX-101 and the Company's cash conservation efforts, $0.3 million in shipping, freight, and delivery, $0.1 million in other regulatory and process development costs, and $0.4 million in payroll and payroll related expenses, partially offset by an increase in $1.3 million related to Alvogen warrants and $0.3 million related to stock based compensation.
Recent Events February 2024 Offerings On February 27, 2024, we entered into the Underwriting Agreement with EF Hutton LLC, as the Representative of the Underwriters, relating to the February 2024 Public Offering of 5,000,000 shares of the Common Stock.
February 2024 Offerings On February 27, 2024, we entered into an underwriting agreement (the “February Underwriting Agreement”) with the Representative (as defined above), as the representative of the several underwriters named therein (the “February Underwriters”), relating to an underwritten public offering (the “February 2024 Public Offering”) of 500,000 shares (the “February Shares”) of the Company’s common stock.
The Company subsequently established compliance with the Nasdaq Market Value of Listed Securities requirement and was notified of this by the Nasdaq. ​ Components of Results of Operations ​ Operating expenses Research and development expenses NRx Pharmaceuticals’ research and development expenses consist primarily of costs associated with NRx Pharmaceuticals’ clinical trials, salaries, payroll taxes, employee benefits, and equity-based compensation charges for those individuals involved in ongoing research and development efforts.
Components of Results of Operations Operating Expense Research and development expense The Company’s research and development expense consists primarily of costs associated with its clinical trials, salaries, payroll taxes, employee benefits, and equity-based compensation charges for those individuals involved in ongoing research and development efforts. Research and development costs are expensed as incurred.
In addition to historical information, this discussion and analysis contains forward looking statements that involve risks, uncertainties and assumptions. NRx Pharmaceuticals’ actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section entitled “Risk Factors” included elsewhere herein.
In addition to historical information, this discussion and analysis contains forward looking statements that involve risks, uncertainties and assumptions. NRx Pharmaceuticals ’ actual results may differ materially from those discussed below.
The Company plans to pursue additional equity or debt financing or refinancing opportunities in 2024 to fund ongoing clinical activities, to meet obligations under its current debt arrangements and for the general corporate purposes of the Company. Such arrangements may take the form of loans, equity offerings, strategic agreements, licensing agreements, joint ventures or other agreements.
Going Concern The Company’s ongoing clinical activities continue to generate losses and net cash outflows from operations. The Company plans to pursue additional equity or debt financing or refinancing opportunities in 2025 to fund ongoing clinical activities, to meet obligations under its current debt arrangements and for the general corporate purposes of the Company.
Pursuant to the Underwriting Agreement, the Company also granted the Representative a 45-day Over-Allotment Option to purchase up to an additional 750,000 Option Shares. On March 5, 2024, the Underwriters exercised the Over-Allotment Option to purchase an additional 750,000 Option Shares.
Pursuant to the February Underwriting Agreement, the Company also granted the Representative a 45-day option to purchase up to an additional 75,000 shares (the “February Option Shares”) of the common stock on the same terms as the February Shares sold in the February 2024 Public Offering (the “February Over-Allotment Option”).
The February Warrants will have an exercise price of $0.38 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance.
The common stock and the February Warrants were offered pursuant to a private placement (the “February 2024 Private Placement”) under Section 4(a)(2) of the Securities Act. The February Warrants will have an exercise price of $3.80 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance.
For mechanistic reasons unrelated to its CNS NMDA-antagonist properties, NRX-101 interferes with cell wall formation in certain bacteria, rendering it a potent antibiotic and is demonstrated to kill certain treatment-resistant urinary tract bacteria. Accordingly, NRX-101 has been awarded Qualified Infectious Disease Product Designation and Fast Track Designation by the FDA to treat Complicated Urinary Tract Infection and Pyelonephritis.
For mechanistic reasons unrelated to its central nervous system N-methyl-D-aspartate (“CNS NMDA”) antagonist properties, NRX-101 interferes with cell wall formation in certain bacteria, rendering it a potent antibiotic and is demonstrated to kill certain treatment-resistant urinary tract bacteria.
The aggregate net cash proceeds to the Company from the February 2024 Private Placement were approximately $1.0 million. ​ Financial Results Since inception, NRx Pharmaceuticals has incurred significant operating losses. For the years ended December 31, 2023 and 2022, NRx Pharmaceuticals’ net loss was $30.2 million and $39.8 million, respectively.
Financial Results Since inception, NRx has incurred significant operating losses. For the years ended December 31, 2024 and 2023, NRx Pharmaceuticals’ net loss was $25.1 million and $30.2 million, respectively. As of December 31, 2024, NRx Pharmaceuticals had an accumulated deficit of $278.3 million, a stockholders’ deficit of $23.5 million and a working capital deficit of $18.8 million.
During the year ended December 31, 2022, financing activities provided $32.2 million of cash resulting from $22.7 million in proceeds from issuance of common stock and warrants issued in private placement, net of issuance costs, $10.0 million in proceeds from convertible notes payable, net of discount and issuance costs, partially offset by $0.5 million of repayment of Relief Therapeutics loan notes payable.
Financing activities During the year ended December 31, 2024, financing activities provided $7.4 million of cash resulting from $1.0 million in proceeds from issuance of common stock and warrants issued in a private placement, $4.9 million in proceeds from issuance of common stock and warrants, $6.0 million in proceeds from the Anson Notes, and $4.0 million from warrant proceeds attributes to the Anson Notes offset by $7.9 million in repayments of the convertible notes and $0.9 million in debt issuance costs due to the fair value election on Anson Notes.
Overview NRx is a clinical-stage bio-pharmaceutical company which develops and plans to distribute, through its wholly-owned operating subsidiaries, NeuroRx, Inc., (“NeuroRx”) and HOPE Therapeutics, Inc. (“HOPE”), novel therapeutics for the treatment of central nervous system disorders including suicidal depression, chronic pain, and PTSD.
(Nasdaq: NRXP) (“ NRX ” or the “ Company ”) is a clinical-stage bio-pharmaceutical company which develops and will distribute, through its wholly-owned operating subsidiaries, NeuroRx, Inc. (“ NeuroRx ”), and HOPE Therapeutics, Inc.
The sale of equity could result in additional dilution to the Company’s existing shareholders.
Such arrangements may take the form of loans, equity offerings, strategic agreements, licensing agreements, joint ventures or other agreements. The sale of equity could result in additional dilution to the Company’s existing shareholders.
The Overallotment Exercise closed on March 6, 2024. ​ 95 Table of Contents On February 29, 2024, we entered into a securities purchase agreement with an investor providing for the issuance and sale of 2,700,000 shares of Common Stock and warrants to purchase up to 2,700,000 shares of Common Stock (the “February Warrants”) at a price of $0.38 per share of Common Stock and accompanying warrant, which represents a 26.7% premium to the offering price in February 2024 Public Offering.
Pursuant to the securities purchase agreement, the Company issued and sold 270,000 shares of common stock and warrants to purchase up to 270,000 shares of common stock at a price of $3.80 per share of common stock and accompanying warrant, which represents a 26.7% premium to the offering price in February 2024 Public Offering.
The aggregate net cash proceeds to the Company from the June Offering were approximately $5.6 million. ​ At The Market Offering ​ On August 14, 2023, we entered into an At The Market Offering Agreement (the “Sales Agreement”) with H.C.
The aggregate net cash proceeds to the Company from the February 2024 Private Placement were approximately $1.0 million. At-The Market Offering Agreement On April 15, 2024, the Company increased the maximum aggregate offering amount of the shares of common stock issuable under that certain At the Market Offering Agreement, dated August 14, 2023 (the “Offering Agreement”), with H.C.
The increase of $0.3 million is due to interest earned in the Company’s money market account. 94 Table of Contents Interest expense For the year ended December 31, 2023, NRx Pharmaceuticals recorded $0.1 million of interest expense, compared to no interest expense for the year ended December 31, 2022.
Page 83 Table of Contents Other (income) expense Interest income For the year ended December 31, 2024, the Company recorded less than $0.1 million of interest income compared to approximately $0.5 million of interest income for the year ended December 31, 2023.
March Offering On March 8, 2023, NRx Pharmaceuticals entered into a securities purchase agreement with certain accredited investors (the “March Investors”), providing for the issuance and sale of 3,866,666 shares of the Company’s common stock (“Common Stock”) and warrants to purchase up to 3,866,666 shares of Common Stock (the “March Investor Warrants”) in a registered direct offering priced at-the-market under Nasdaq rules for a purchase price of $0.75 per share (the “March Offering”).
January 2025 Securities Purchase Agreement On or about January 27, 2025, the Company entered into a securities purchase agreement (the “RD Purchase Agreement”) with certain accredited investors (the “Investors”) for the sale by the Company of 1,215,278 shares (the “RD Shares”) of common stock to the Investors, at a purchase price of $2.88 per share, in a registered direct offering (the “Registered Direct Offering”).
The Company has announced plans to spin off HOPE to a freestanding company, half of which will be owned by NRx and half by individual shareholders. NRX-101 has been awarded Fast Track designation, Breakthrough Therapy designation, a Biomarker Letter of Support, and a Special Protocol Agreement by the FDA.
The Company has announced plans to spin off HOPE to a freestanding company, to be owned by the Company, current investors in the Company, and future investors.
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During the year the Company restructured its management to overcome challenges in capital formation, clinical trial enrollment, and corporate growth, in a manner that resulted in demonstrable milestones for 2023 and a company that we believe to be poised for growth in 2024. Those milestones achieved in 2023 and through the date of this filing include: 1.
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Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section entitled “ Risk Factors ” included elsewhere herein. NRx Pharmaceuticals, Inc.
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Recruitment of a new management team under the leadership of Jonathan Javitt, MD, MPH (the Company’s Founder and Chairman) and Stephen Willard, JD, (CEO and Director), comprised of individuals with demonstrated success in the design, recruitment, and analysis of clinical-stage drug development, together with demonstrated commercial success in the marketing and sales of commercial stage pharmaceuticals.
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(“ HOPE ”), novel therapeutics for the treatment of central nervous system disorders including suicidal depression, chronic pain, and post-traumatic stress disorder (“ PTSD ”) and now schizophrenia.
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This management team includes a new Chief Financial Officer, Chief Business Officer, Director of Clinical Research, Head of Regulatory Affairs, Head of Scientific Affairs, and a new Chief Medical Lead for urology. 2.
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All of our current drug development activities are focused drugs that modulate on the N-methyl-D-aspartate (“ NMDA ”) receptor in the brain and nervous system, a neurochemical pathway that has been disclosed in detail in our annual filings.
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Establishment of a drug development partnership with Alvogen, Inc., a $4 billion US-based pharmaceutical company and Lotus Pharmaceutical Company, LTD (1975.TW), an Asia Pacific-based pharmaceutical company to jointly develop NRX-101 for the treatment of suicidal bipolar depression, while leaving NRx in a position to continue innovative drug development of its pharmaceutical assets for other indications.
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The Company has two lead drug candidates that are expected to be submitted by year end for Food and Drug Administration (" FDA ") approval with anticipated FDA decision dates under the Prescription Drug User Fee Act (“ PDUFA ”) by the end of June 2025: NRX-101, an oral fixed dose combination of D-cycloserine and lurasidone and NRX-100, a preservative-free formulation of ketamine for intravenous infusion.
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The partnership provides for up to an aggregate of $330 million in commercial stage milestone payments together with a double-digit royalty on net sales worldwide. 3.
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The 2024 fiscal year marked a period of both expansion and change for NRx. During the year the Company implemented a restructuring of its leadership to address challenges related to capital formation, clinical trial enrollment, and corporate development.
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Publication of the world’s first clinical trial (the STABIL-B trial) to demonstrate sustained remission from acute suicidality and depression in patients with Bipolar Disorder, using NRX-100 (ketamine) for induction of remission and NRX-101 (D-cycloserine/lurasidone) for maintenance of that remission. Results of this trial were the basis for FDA’s award of Breakthrough Therapy Designation. 4.
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These efforts led to measurable achievements in 2024 and positioned the Company for growth and the achievement of our development objectives in 2025.
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Completion of patient data collection and data lock in the first clinical trial to study patients with suicidal bipolar depression treated in the outpatient setting under the leadership of Prof. Andrew Nierenberg of Harvard/Mass General Hospital with no unexpected Serious Adverse Events.
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During 2024 and through the date of this Annual Report, the Company has achieved the following: Financing We consummated a series of financing agreements with an institutional investor for up to $16.3 million in debt capital, for which we closed on $10.87 million in 2024 and subsequently closed $8.5 million in a combination of convertible debt and an above-market common stock and warrant offering in January 2025.
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The category of suicidal patients recruited in this trial have previously been excluded from the clinical trials of all known oral antidepressants. Top line data are expected in April 2024. 5. Replacement of the Company’s traditional study site-based approaches to clinical trial recruitment with an internet/AI-based nationally-focused clinical trial recruitment strategy, in partnership with 1-N-Nealth, Inc., a digital marketing organization.
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We were presented with and are currently negotiating a term sheet with a publicly-traded strategic investor to provide additional capital to support the expansion of HOPE clinics. In addition, management is negotiating with several commercial lenders to provide additional financing to support the acquisition of additional clinics on standard commercial loan terms.
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This approach resulted in a 300% increase in successful clinical trial enrollment in 2023 compared to 2022. 6. Achievement of >94% rater concordance through conclusion of the trial, a measure that substantially exceeds current industry standards. 7.
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Although no assurances can be given, and assuming we’re able to consummate the proposed financings, management believes that we will have sufficient financing to consummate our previously announced acquisitions, execute our business plan and achieve our projected revenue objectives.
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Removal of the Company’s solid dose (for oral medications) manufacturing platform from Shanghai with re-establishment of solid dose manufacturing in partnership with Alcami, Inc. (North Carolina, USA). Submission 89 Table of Contents and successful review of the NRX-101 FDA manufacturing file (i.e.
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Drug Development ● We initiated the filing of a New Drug Application (“NDA”) in the fourth quarter of 2024 for Accelerated Approval under Breakthrough and Priority Review of NRX-101 in treatment of bipolar depression in people at risk of akathisia, based on the Phase 2b/3 and STABIL-B data.
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“Module 3” of a New Drug Application) and completion of a Type C Chemical Manufacturing Controls (“CMC”) meeting with FDA for NRX-101. The Company now has more than 1 million oral doses manufactured to commercial standards in its warehouse and is expecting five years of room temperature shelf stability. 8.
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Three manufacturing lots are now completed with more than 12 months of room temperature shelf-stability. The anticipated PDUFA date for this application is prior to June 30, 2025.

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