What changed in this filing

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Item 1A. Risk Factors

2025-03-14 compared with 2024-03-29 · 86 added, 47 removed, 933 unchanged (12% of the section changed)

8 unchanged sentences

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.

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.

We need to raise additional capital to operate our business and finance our proposed acquisitions.

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.

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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.

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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.

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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.

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.

Both our business and the pharmaceutical industry are changing and evolving rapidly, and our operating results in any given year may not be useful in predicting our future operating results.

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These operations provide a limited basis for you to assess our ability to commercialize our product candidates.

Further, the pro forma condensed combined financial information included in this registration statement may not be a good prediction of our future results of operations and financial condition.

We need to raise additional capital to operate our business.

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For instance, our business or operations may change in a manner that would consume available funds more rapidly than anticipated and substantial additional funding may be required to maintain operations, fund expansion, develop new or enhanced products, acquire complementary products, business or technologies or otherwise respond to competitive pressures and opportunities, such as a change in the regulatory environment or a change in preferred depression treatment.

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.

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.

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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.

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.

4 unchanged sentences

We are in litigation with a former employee of the Company regarding their termination of their employment.

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.

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.

Legal Proceedings” for a full description of such proceedings.

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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 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 .

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.

The NDA process is costly, lengthy and uncertain.

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Additionally, even if cleared or approved, our products may not be approved for the specific indications that are most necessary or desirable for successful commercialization or profitability.

We are subject to certain contractual obligations and limitations on our ability to consummate future financings under the Share Purchase Agreement (as defined below) and the Note issued by us to Streeterville on November 4, 2022, as amended in March 2023, July 2023, and February 2024.

Pursuant to the securities purchase agreement we entered into in connection with the issuance of the Note to Streeterville, dated as of November 14, 2022 (the “Share Purchase Agreement”) by and between us and Streeterville, we are subject to certain restrictions on our ability to issue securities during the term of the Note.

Specifically, we have agreed, among other things, to obtain Streeterville’s consent prior to issuing any debt securities or certain equity securities where the pricing of such equity securities is tied to the public trading price of our common stock and to refrain from entering into any agreement or covenant that locks up, restricts or otherwise prohibits us from entering into a variable rate transaction with Streeterville or any of its affiliates, or from issuing common stock or other equity or debt securities to Streeterville or any of its affiliates.

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.

Furthermore, we also must offer Streeterville the right to purchase up to 10% of future equity and debt securities offerings, subject to certain exceptions and limitations, during the term of the Note (the “Participation Right”).

If we are unable to obtain Streeterville’s consent prior to issuing any debt securities or certain equity securities, we may be obligated to pay to Streeterville in liquidated damages an amount equal to 20% of the amount Streeterville would have been entitled to invest under the Participation Right.

In addition, we have agreed to make certain monthly redemption payments at the request of the Lender.

Our failure to pay such redemptions, when due, may result in defaults under our agreements with the Lender.

If we are in default with respect to our obligations under the Note, the Lender may consider the Note immediately due and payable and may elect to substantially increase the interest rate of the Note.

We may not have the required funds to pay the required note redemptions and such redemptions, or penalties in connection therewith, may have an adverse effect on our cash flows, results of operations, and ability to pay our other debts as they come due.

We are subject to certain contractual obligations and limitations on our ability to consummate future financings under the August SPA (as defined below) and the Notes (as defined below) issued by us to the Investors (as defined below).

Pursuant to a securities purchase agreement we entered into on August 12, 2024 (the “August SPA”) with certain accredited investors (the “Investors”), we issued an aggregate gross total of $16.3 million of Senior Secured Convertible Promissory Notes (the “Notes”), and warrants to purchase shares of common stock equal to 50%.

In connection with the issuance of the Notes, we are subject to certain restrictions on our ability to issue securities during the term of the Note.

Specifically, we have agreed, among other things, to obtain the Investor’s consent prior to issuing any debt securities or certain equity securities where the pricing of such equity securities is tied to the public trading price of our common stock.

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.

Furthermore, from August 12, 2024 until the 12-month anniversary of the date on which the Notes or Warrants are no longer outstanding, we also must offer the Investors the right to purchase up to 50% of future equity and debt securities offerings, subject to certain exceptions and limitations (the “Participation Right”).

If we are unable to obtain the Investor’s consent prior to issuing any debt securities or certain equity securities, we may be obligated to pay to the Investors certain damages.

We have granted a first priority security interest in substantially all of our assets, which could materially and adversely affect our business, financial condition, and ability to operate.

In connection with the August SPA, we entered into a Security Agreement, Patent Security Agreement, and Subsidiary Guaranty, pursuant to which we granted the Investors a security interest in substantially all of our assets to secure the Company’s obligations under the August SPA and the Notes.

As a result, if we fail to meet our obligations under the August SPA or the Notes, our secured creditors may exercise their rights to foreclose upon or seize our assets, which could materially and adversely affect our ability to continue as a going concern.

The existence of liens on our assets may also limit our ability to obtain additional financing, as potential lenders may be unwilling to provide additional credit that is subordinate to the secured interests of the Investors.

Furthermore, restrictive covenants in the August SPA and the Notes may limit our operational flexibility, including our ability to incur additional debt, make investments, pay dividends, or dispose of assets, which could negatively impact our ability to execute our business strategy.

Additionally, the conversion of the principal and interest due under the Notes into shares of our common stock could lead to significant dilution for our existing stockholders.

The Notes are convertible into shares of the Company’s common stock, and the issuance of such shares could result in downward pressure on our stock price and reduce the ownership percentage of existing investors.

The potential for such conversions, or market anticipation of conversions, could increase the volatility of our stock price.

If we are unable to generate sufficient cash flow from operations or otherwise obtain funds necessary to meet our debt obligations, we may be forced to seek alternative financing, which may not be available on favorable terms, or at all.

In the event of default, the Investors could accelerate our repayment obligations and exercise remedies against our pledged assets, which could force us into bankruptcy or liquidation and result in a loss of value for our shareholders.

Our revenue stream will depend upon third-party reimbursement.

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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 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;

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We may also seek to raise funds by selling shares of our preferred or common stock, which could dilute each current stockholder’s ownership interest in NRx.

Developments by competitors may render our products or technologies obsolete or non-competitive.

Alternative technologies and products are being developed to treat depression and some may target suicidal bipolar depression and post-traumatic stress disorder (“PTSD”).

Many of the organizations competing with us have substantially greater capital resources, larger research and development staffs and facilities, greater experience in drug development and in obtaining regulatory approvals and greater manufacturing and marketing capabilities than we do.

Our competitors may market less expensive or more effective drugs that would compete with our drug candidates or reach market with competing drugs before we are able to reach market with our drug candidates.

These organizations also compete with us to attract qualified personnel and partners for acquisitions, joint ventures or other collaborations.

Business interruptions could limit our ability to operate our business.

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This could materially adversely affect us and lead to a decline in the market price of our common stock.

Risks Related to Hope Therapeutics

Our plans to partially spin-off Hope as an independent, publicly traded company may not be completed on the currently contemplated timeline or at all and, if completed, may not achieve the intended benefits and expose us to new risks.

We have previously announced our plan partially spin-off Hope as a separately traded company.

A spin off would be through a partial pro rata distribution of shares to our common stockholders resulting in two distinct, publicly traded companies.

The proposed spin-off is subject to various conditions, is complex in nature, and may be affected by unanticipated developments, credit and equity markets, or changes in market conditions.

As independent, publicly traded companies, each of the resulting companies will be smaller and less diversified than the existing company, with a narrower business focus, and they may be more vulnerable to changing market conditions.

We may not be able to achieve the full strategic and financial benefits that we anticipate to result from the spin-off, or such benefits may be delayed or not occur at all.

We may experience negative reactions from financial markets if we do not complete the separation in a reasonable time period, or at all.

Following the proposed spin-off, the combined value of the shares of the two publicly traded companies may not be equal to or greater than what the value of our common stock would have been had the proposed separation not occurred.

In addition, the cost and resources required to effectuate the separation may be significantly higher than what we currently anticipate, and we will likely incur one-time costs in connection with the proposed spin-off that may negate some of the benefits we expect to achieve.

Moreover, we may determine to change our strategy, including to pursue, modify or abandon such spin-off at any time, and, in any event, there can be no assurance we will be successful in executing on our current strategy or any changed strategy.

Any of these factors could have a material adverse effect on our business, financial condition, results of operations, cash flows or the price of our common stock.

While we have entered into non-binding letters of intent with Kadima Neuropsychiatry Institute and Dura Medical, we have not entered definitive agreements, and we cannot assure you that the transactions will be consummated or, if consummated, that they will be consummated on the terms set forth in such letters of intent or that they will be accretive to stockholder value.

As previously reported by the Company, we entered into non-binding letters of intent with each of Kadima Neuropsychiatry Institute and Dura Medical pursuant to which we agreed to explore an acquisition of each of the clinics.

We are also negotiating a letter of intent with a strategic investor (the “LOI’s”), to partially fund our planned acquisitions of Kadima Neuropsychiatry Institute and Dura Medical, the first step in creating our planned international network of interventional psychiatry clinics.

We currently do not have binding commitments to fully finance the proposed acquisitions, and the LOI’s do not include many of the material terms to any potential transaction with each individual party, and there is no guarantee that we will agree to terms or definitive agreements with such parties in order to affect the proposed transactions.

Further, even if we are able to agree to terms with each of the counterparties for a transaction, no assurances can be given that the terms will be favorable to our stockholders, that the transaction will be completed in the time frame or in the manner currently anticipated, that we will recognize the anticipated benefits of the transactions, or that we will be able to obtain adequate financing to fund the acquisitions.

We may engage in future acquisitions or strategic transactions, which may require us to seek additional financing or financial commitments, increase our expenses and/or present significant distractions to our management.

We will need to acquire additional financing to fund our potential obligations under the LOI’s, or to fund other potential acquisitions or strategic transactions (particularly, if the acquired entity is not cash flow positive or does not have significant cash on hand).

Obtaining financing through the issuance or sale of additional equity and/or debt securities, if possible, may not be at favorable terms and may result in additional dilution to our current stockholders.

Additionally, any such transaction may require us to incur non-recurring or other charges, may increase our near and long-term expenses and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations and financial results.

For example, an acquisition or strategic transaction may entail numerous operational and financial risks, including the risks outlined above and additionally:

exposure to unknown liabilities;

disruption of our business and diversion of our management’s time and attention in order to develop acquired products or technologies;

higher than expected acquisition and integration costs;

write-downs of assets or goodwill or impairment charges;

increased amortization expenses;

difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;

impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

inability to retain key employees of any acquired businesses.

Although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, and any transactions that we do complete could have a material adverse effect on our business, results of operations, financial condition and prospects.

We may not be able to identify, audit, negotiate, finance or close future acquisitions

A significant component of our growth strategy for HOPE focuses on acquiring majority equity ownership interests in interventional psychiatry clinics.

However, we may not be able to identify, audit, or acquire such equity ownership interests on acceptable terms, if at all.

No guarantee or assurance whatsoever can be given that discussions/negotiations with any potential acquisition candidates will result in any letter of intent or definitive agreements.

If we do enter any letter of intent or definitive agreements, we may need to finance all or a portion of the purchase price for an acquisition by incurring indebtedness or by selling shares of our common or convertible preferred stock.

There can be no assurance that we will be able to obtain financing on terms that are favorable, if at all, which will limit our ability to acquire such equity ownership interests in the future.

Target companies may not decide to proceed forward with mergers that are the subject of letters of intent.

Failure to acquire such equity ownership interests on acceptable terms, if at all, may have a material adverse effect on our ability to increase assets, revenues and net income.

The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock.

Developments by competitors may render our products or technologies obsolete or non-competitive.

Alternative technologies and products are being developed to treat depression and some may target suicidal bipolar depression and post-traumatic stress disorder (“PTSD”).

These organizations also compete with us to attract qualified personnel and partners for acquisitions, joint ventures or other collaborations.

Risks Related to Clinical and Regulatory Matters

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Accordingly, the clinical trial process may fail to demonstrate that our drug candidates are safe and effective for the proposed indicated uses.

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.

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.

In addition, such an outcome could cause us to abandon the product candidate and might delay development of others.

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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.

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.

Political pressures and adverse publicity could lead to additional regulatory hurdles, delays in, increased expenses for, and limit or restrict the introduction and marketing of, our product candidates.

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Some of our products for clinical trials may be manufactured outside the U.S.

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 .

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.

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We are dependent on the continued adherence of third-party manufacturers to cGMP manufacturing.

If our manufacturers cannot successfully produce material that conforms to our specifications and the FDA’s

strict regulatory requirements, they will not be able to secure FDA approval for their manufacturing facilities.

If our manufacturers cannot successfully produce material that conforms to our specifications and the FDA’s strict regulatory requirements, they will not be able to secure FDA approval for their manufacturing facilities.

If the FDA does not approve these facilities for the commercial manufacture, we will need to find alternative suppliers, which would result in significant delays in obtaining FDA approvals.

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We have adopted a formal written policy for the review and approval of transactions with related persons.

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.

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.

For more information, see “ Certain Relationships and Related Party Transactions ” section of this annual report.

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Previously, Jonathan Javitt and Daniel Javitt controlled the votes of the majority of our common stock.

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.

We are no longer a “controlled company” under the corporate governance rules of Nasdaq.

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In addition, as a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting.

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.”

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.

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.

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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.

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.

We were provided an initial compliance period of 180 calendar days, or until January 22, 2024, to regain compliance with the minimum MVLS requirement.

Additionally, on April 18, 2023, we received a written notification from the Staff indicating we were not in compliance with Nasdaq Listing Rule 5450(a)(1), and were provided an initial compliance period of 180 calendar days, or until October 16, 2023, to regain compliance.

On October 17, 2023, we received a written notification from the Staff indicating that based upon our non-compliance with Nasdaq Listing Rule 5450(a)(1), our securities were subject to delisting unless we timely requested a hearing before the Panel, which such hearing was timely requested and subsequently held on January 4, 2024.

On January 16, 2024, the Panel granted our request for an exception to the Nasdaq Listing Rules until April 16, 2024, to demonstrate compliance with the Minimum Bid Price Requirement, subject to our filing all necessary documentation required to transfer our listing from the Nasdaq Global Market to the Nasdaq Capital Market on or before January 19, 2024, and our demonstrating compliance with the Minimum Bid Price Requirement on or before April 16, 2024.

On February 1, 2024, the Nasdaq Stock Market informed us that it had approved our application to transfer our listing to the Nasdaq Capital Market.

Our securities were transferred from the Nasdaq Global Market to the Nasdaq Capital Market at the opening of business on January 19, 2024.

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.

We were provided an initial compliance period of 180 calendar days, or until February 3, 2025, to regain compliance with the minimum MVLS requirement.

If the Company did not regain compliance by the Compliance Date, Nasdaq was to provide written notice to the Company that its securities are subject to delisting.

On January 17, 2025, the Company received a written notice from Nasdaq that the Company had regained compliance with the minimum market value of listed securities requirement under Nasdaq Listing Rule 5550(b)(2).

There is no guaranty that we will continue to meet the continued listing requirements to be traded on Nasdaq.

If our Common Stock is delisted, an active trading market for our common stock may not be sustained and the market price of our common stock could decline.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors