What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-14 compared with 2024-03-29 · 690 added, 523 removed, 555 unchanged (69% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB firm ID.

Report of Independence Registered Public Accounting Firm (PCAOB firm ID.

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of NRX Pharmaceuticals, Inc.

and subsidiary (the “Company”) as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficit) and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of NRX Pharmaceuticals, Inc.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has no revenues, has suffered operating losses since inception and in fiscal 2023 has a net loss of $30.2 million and cash used in operations of $21.7 million.

The Company also had an accumulated deficit, stockholders’ deficit and working capital deficit as of December 31, 2023 of $253.2 million, $11.7 million and $12.2 million, respectively.

As discussed in Note 2 to the consolidated financial statements, the Company has no revenues, has suffered operating losses since inception and has a working capital deficit at December 31, 2024.

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

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These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

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Fair Value of the Convertible Note

As described in Note 3 “Convertible Note Payable” and in Notes 7 and 11 to the consolidated financial statements, the Company uses a Monte Carlo simulation model to estimate the fair value of its convertible note.

As described in Note 3 “Convertible Notes Payable and Fair Value Election” and in Notes 7 and 11 to the consolidated financial statements, the Company uses a Monte Carlo simulation model to estimate the fair value of its convertible notes.

We identified the valuation of fair value of the convertible note as of December 31, 2024 as a critical audit matter.

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March 14, 2025

2295 NW Corporate Blvd., Suite 240 • Boca Raton, FL 33431-7326

(561) 995-8270 • Toll Free:

(866) CPA-8500 • Fax:

(561) 995-1920

www.salbergco.com • info@salbergco.com

Member National Association of Certified Valuation Analysts • Registered with the PCAOB

Member CPAConnect with Affiliated Offices Worldwide • Member AICPA Center for Audit Quality

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

NRX Pharmaceuticals, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of NRX Pharmaceuticals, Inc.

and subsidiaries (the Company) as of December 31, 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

generally accepted accounting principles.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses and net cash outflows from operations that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of the fair value of the convertible note

As discussed in Notes 7 and 11 to the consolidated financial statements, the Company completed a convertible note offering during the year ended December 31, 2022.

The Company received net proceeds of $10.0 million from the offering and elected to account for this convertible note at fair value under the fair value option.

The estimated fair value of the convertible note as of December 31, 2022 is $10.5 million.

The Company used a Monte Carlo simulation model to estimate the fair value of the convertible note.

We identified the assessment of the measurement of fair value of the convertible note as of December 31, 2022 as a critical audit matter.

This matter required the involvement of valuation professionals with specialized skills and knowledge to assess the Company’s model used to value the convertible note.

The following is the primary procedure we performed to address this critical audit matter.

We involved valuation professionals with specialized skills and knowledge who assisted by independently developing a range of fair values of the convertible note using a discounted cash flow model and comparing it to the amount recorded by the Company.

We have served as the Company’s auditor since 2018.

Short Hills, New Jersey

March 31, 2023

PART I FINANCIAL INFORMATION

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Cash and cash equivalents

$ 1,443 $ 4,595

Prepaid expenses and other current assets

Total current assets

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

$ 3,651 $ 7,315

LIABILITIES AND STOCKHOLDERS ’ DEFICIT

Current liabilities:

Accounts payable

$ 4,130 $ 4,632

Accrued and other current liabilities

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Convertible note payable and accrued interest – short term

Insurance loan payable

Warrant liabilities

Total current liabilities

21,863 19,048

Convertible note payable and accrued interest – long term

Total liabilities

$ 26,874 $ 19,048

Commitments and Contingencies (Note 8)

Stockholders’ (deficit) equity:

Stockholders’ deficit:

Preferred stock, $ 0.001 par value, 50,000,000 shares authorized;

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Additional paid-in capital

255,035 241,406

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ (deficit) equity

Total liabilities and stockholders' (deficit) equity

( 278,273 ) ( 253,147 )

Total stockholders’ deficit

( 23,223 ) ( 11,733 )

Total liabilities and stockholders' deficit

$ 3,651 $ 7,315

The accompanying notes are an integral part of these consolidated financial statements.

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Research and development

$ 6,199 $ 13,371

General and administrative

Settlement expense

13,505 14,216

Settlement (income) expense

( 1,202 ) 250

Total operating expenses

18,502 27,837

Loss from operations

( 18,502 ) ( 27,837 )

Other (income) expenses:

Interest income

( 44 ) ( 494 )

Interest expense

Convertible note default penalty

Change in fair value of convertible note payable

Change in fair value of warrant liabilities

Change in fair value of Earnout Cash liability

Total other (income) expenses

Loss on convertible note redemptions

Total other expenses, net

( 25,126 ) ( 30,150 )

Deemed dividend - warrants

Net loss attributable to common stockholders

$ ( 25,126 ) $ ( 30,159 )

Comprehensive loss:

( 25,126 ) ( 30,150 )

Change in fair value of convertible note attributed to credit risk

Comprehensive loss

$ ( 25,126 ) $ ( 30,153 )

Net loss per share:

Basic and diluted

$ ( 2.36 ) $ ( 3.98 )

Weighted average common shares outstanding:

Basic and diluted

10,644,461 7,576,176

The accompanying notes are an integral part of these consolidated financial statements.

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(in thousands, except share data)

Accumulated Other

Preferred Stock

Series A Preferred Stock

Comprehensive

Stockholders’

Income (Loss)

Equity (Deficit)

Balance - December 31, 2021

Common stock and warrants issued in private placement, net of issuance costs of $2,283

Common stock issued for consulting services

Common stock issued for exercise of stock options

Restricted stock awards granted

Retired Earnout Shares

Stock-based compensation

Series A Preferred Stock Common Stock Additional

Accumulated Accumulated Other

Comprehensive Income Total Stockholders’

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

— — — — — ( 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

— — — — — ( 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.

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CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 25,126 ) $ ( 30,150 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Stock-based compensation

Common stock issued in exchange for services

Change in fair value of warrant liabilities

Change in fair value of earnout cash liability

Change in fair value of convertible promissory note

Change in fair value of convertible promissory notes

Loss on convertible notes redemptions

Expense for debt issuance costs due to fair value election on Anson Notes

Warrant issuance costs related to Alvogen termination

Convertible note default penalty

Non-cash settlement expense

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Accounts payable

( 5,217 ) 2,655

Accrued expenses and other liabilities

10,005 ( 531 )

Net cash used in operating activities

( 10,637 ) ( 21,657 )

CASH FLOWS FROM INVESTING ACTIVITIES

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CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from convertible notes payable, net of discount

Proceeds from stock option exercise

Repayment of note payable

Repayment of convertible note

( 7,850 ) ( 3,092 )

Repayment of insurance loan

(725) ( 943 )

Expense for debt issuance costs due to fair value election on Anson Notes

Proceeds from issuance of insurance loan

Proceeds from Anson convertible notes, net of OID

Proceeds from liability classified warrants

Proceeds from issuance of Series A preferred stock and warrants issued in private placement, net of issuance costs

Proceeds from issuance of common stock and warrants, net of issuance costs

Proceeds from issuance of common stock and warrants issued in private placement, net of issuance costs

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Net decrease in cash and cash equivalents

( 3,152 ) ( 15,459 )

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

$ 1,443 $ 4,595

Supplemental disclosure of cash flow information:

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Issuance of common stock as principal and interest repayment for convertible notes

$ 4,585 $ 982

Issuance of common stock warrants as offering costs

Issuance of common stock for consulting services

Issuance of common stock for settlement of accrued liability

Conversion of Series A preferred stock into common stock

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is a clinical-stage pharmaceutical company which applies innovative science to known molecules to develop life-saving medicines through its wholly-owned operating subsidiary, NeuroRx.

The Company's foundation product, NRX-101 (D-cycloserine/Lurasidone), for the treatment of bipolar depression in patients with suicidality, has been awarded Fast Track designation, Breakthrough Therapy designation, a Special Protocol Agreement, and a Biomarker Letter of Support by the U.S.

Food and Drug Administration (the “FDA”).

NRX-101 is covered by multiple U.S.

and foreign patents, including a Composition of Matter patent (U.S.

10,583,138) that was transferred to NRx Pharmaceuticals by Glytech, LLC (see Note 13).

The Company’s drug development activities have expanded from its original focus on development of NRX-101, a fixed dose combination of D-cycloserine (DCS) and lurasidone for the treatment of suicidal bipolar depression to encompass the development of NRX-101 for the treatment of Chronic Pain and Complicated Urinary Tract Infection (cUTI) and the development of intravenous ketamine (NRX-100) for the treatment of suicidal depression.

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.

DECEMBER 31, 2024 AND 2023

NRx Pharmaceuticals, Inc.

NRXP) (“NRX” or the “Company”) is a clinical-stage bio-pharmaceutical company which develops and intends to distribute, through its wholly-owned operating subsidiaries, NeuroRx, Inc., (“NeuroRx”) and HOPE Therapeutics, Inc.

(“HOPE”), and collectively with NRX and NeuroRx, the (“Company”, “we”, “us”, or “our”), novel therapeutics for the treatment of central nervous system disorders including suicidal depression, chronic pain, and post-traumatic stress disorder (“PTSD”) and now schizophrenia.

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.

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 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.

The Company’s drug development activities have expanded from its original focus on development of NRX- 101, a fixed dose combination of D-cycloserine (“DCS”) and lurasidone for the treatment of suicidal bipolar depression to encompass the development of NRX- 101 for the treatment of chronic pain and PTSD and to the development of intravenous ketamine (NRX- 100/HTX - 100 ) for the treatment of suicidal depression.

Going Concern

As of December 31, 2023, the Company had $ 4.6 million in cash.

With the completion of enrollment in its clinical trial of NRX-101 for bipolar depression, the Company anticipates a reduction in its monthly cash expenditure.

These consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business.

Since inception, the Company has experienced net losses and negative cash flows from operations each fiscal year and has a working capital deficit at December 31, 2024.

The Company has no revenues and expects to continue to incur operating losses for the foreseeable future and may never become profitable.

The Company’s ability to support its ongoing capital needs is dependent on its ability to continue to raise equity and/or debt financing, which may not be available on favorable terms, or at all, in order to continue operations.

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 2024 to fund ongoing clinical activities, to meet obligations under its current debt arrangements and for the general corporate purposes of the Company.

The Company has no revenues and expects to continue to incur operating losses into 2025.

Although the Company projects operating revenue to be derived from the operation of clinical facilities through its HOPE subsidiary and sales of its pharmaceutical products in 2025, these projections are subject to completion of anticipated clinical acquisitions in the first case and regulatory approvals in the latter case.

In the absence of these projected developments, the Company’s ability to support its ongoing capital needs is dependent on its ability to continue to raise equity and/or debt financing, which may not be available on favorable terms, or at all, in order to continue operations.

As of December 31, 2024, the Company had $ 1.4 million in cash and cash equivalents.

On August 12, 2024, the Company entered into that certain Securities Purchase Agreement dated August 12, 2024 ( the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company agreed to sell Senior Secured Convertible Promissory Notes (the “Anson Notes”) in the aggregate principal amount of up to approximately $ 16.3 million in three tranches of $ 5.435 million, and warrants to purchase that amount of shares of the Company’s common stock, $ 0.001 par value (“Common Stock”) equal to 50% of the principal amount of the Notes in the respective tranche divided by the volume weighted average price (“VWAP”) of the Company’s Common Stock, as listed on the Nasdaq Capital Market, on the day prior to the closing of each respective tranche under the Purchase Agreement (the “Anson Warrants”).

The Company consummated the sale of the first tranche of $ 5.435 million ($ 4.5 million in net proceeds) in Notes and Warrants (the “First Closing”) on August 14, 2024 ( the “First Closing Date”), and the second tranche of $ 5.435 million in Notes and Warrants (the “Second Closing”) on October 10, 2024 ( the “Second Closing Date”), for aggregate gross proceeds of approximately $ 10.87 million, before deducting fees, costs, and other expenses including the use of proceeds to repay $ 5.55 million of the Streeterville Note.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

The Company has secured operating capital that it anticipates as sufficient to fund its drug development operations through [●] and to finance submission of FDA New Drug Applications for NRX- 100 and NRX- 101.

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.

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The Company cannot make any assurances that additional financing will be available to it and, if available, on acceptable terms, or that it will be able to refinance its existing debt obligations which could negatively impact the Company’s business and operations and could also lead to a reduction in the Company’s operations.

We will continue to carefully monitor the impact of our continuing operations on our working capital needs and debt repayment obligations.

As such, the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least twelve months from the date of issuance of these consolidated financial statements.

The Company may raise substantial additional funds, and if it does so, it may do so through one or more of the following:

issuance of additional debt or equity and/or the completion of a licensing or other commercial transaction for one of the Company’s product candidates.

From February 20, 2024, to March 11, 2024, the Company sold 345,829 shares of common stock under the 2020 At The Market (“ATM”) offering at a range of $0.46 - $0.71 per share, for which the Company received net proceeds of $0.2 million, after deducting commissions, fees and expenses.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On February 27, 2024, NRx Pharmaceuticals, Inc.

entered into an underwriting agreement (the “Underwriting Agreement”) with EF Hutton LLC (the “Representative”), as the representative of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “February 2024 Offering”) of 5,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”).

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 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.

On February 28, 2024, the February 2024 Offering closed with gross proceeds of $1.5 million and net proceeds to the Company of $1.3 million after offering costs.

On March 5, 2024, the underwriters of the previously announced underwritten public offering of NRx Pharmaceuticals, Inc.

exercised their option in accordance with the Underwriting Agreement, dated February 27, 2024, by and between the Company and EF Hutton LLC, as representative of the several underwriters named therein, to purchase up to an additional 750,000 shares of the Company’s common stock, par value $0.001 per share, at a public offering price of $0.30 per share (the “Overallotment Exercise”).

The Overallotment Exercise closed on March 6, 2024.

Aggregate net funds received from the transaction were approximately $0.2 million.

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 .

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 of 1933, as amended (the “Securities Act”).

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.

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.

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.

The Company will continue to carefully monitor the impact of its continuing operations on the Company’s working capital needs and debt repayment obligations.

As such, the Company has concluded that substantial doubt exists regarding the Company’s ability to continue as a going concern for a period of at least twelve months from the date of issuance of these consolidated financial statements.

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.

Summary of Significant Accounting Policies

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The consolidated financial statements include the accounts of NRX Pharmaceuticals, Inc.

and its wholly owned subsidiary.

and its wholly owned subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

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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.

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.

These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

Actual results may differ

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

materially and adversely from these estimates.

Actual results may differ materially and adversely from these estimates.

To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

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(Refer to Note 11 )

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

Concentration of Credit Risk and Off-Balance Sheet Risk

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The objectives of the Company’s cash management policy are to safeguard and preserve funds to maintain liquidity sufficient to meet the Company’s cash flow requirements, and to attain a market rate of return.

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.

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.

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When accounting for an arrangement that contains multiple performance obligations, the Company must develop judgmental assumptions, which may include market conditions, timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract.

The License Agreement with Alvogen as further discussed in Note 6 below is accounted for in accordance with ASC 606.

The License Agreement (the “ License Agreement ”) with Alvogen Pharma US, Inc., Alvogen, Inc.

and Lotus Pharmaceutical Co.

(collectively, “ Alvogen ”) (as further discussed in Note 6 below) was accounted for in accordance with ASC 606.

In accordance with ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services.

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The Company only applies the five -step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation.

5 unchanged sentences

Consideration may be fixed, variable, or a combination of both.

At contract inception for arrangements that include variable consideration, the Company estimates the probability and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

extent of consideration it expects to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received.

At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received.

The Company then considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

4 unchanged sentences

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue.

The Company’s revenue arrangements include the following:

The Company’s revenue arrangements may include the following:

Milestone Payments :

5 unchanged sentences

Research Services :

The Company is incurring research costs in association with the Alvogen agreement.

After the First Milestone Payment (as defined in Note 6 below), the Company will be reimbursed for certain costs incurred related to reasonable and documented out-of-pocket costs for clinical and non-clinical development activities.

The Company will recognize revenue for the reimbursed costs when the First Milestone Payment contingencies have been achieved and the Company has an enforceable claim to the reimbursed costs.

See Note 6, “Alvogen Licensing Agreement”, for further information on the application of ASC 606 to the License Agreement.

Research and Development Costs

The Company’s research and development expenses consist primarily of costs associated with the Company’s clinical trials, salaries, payroll taxes, employee benefits, and stock-based compensation charges for those individuals involved in ongoing research and development efforts.

Research and development costs are expensed as incurred.

Advance payments

The Company incurred research costs in association with the License Agreement.

After the First Milestone Payment (as defined in Note 6 below), the Company would have been reimbursed for certain costs incurred related to reasonable and documented out-of-pocket costs for clinical and non-clinical development activities.

The Company would have recognized revenue for the reimbursed costs when the First Milestone Payment contingencies had been achieved and the Company had an enforceable claim to the reimbursed costs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

DECEMBER 31, 2024 AND

Research and Development Costs

Research and development expense consists primarily of costs associated with the Company’s clinical trials, salaries, payroll taxes, employee benefits, and stock-based compensation charges for those individuals involved in ongoing research and development efforts.

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 recorded as prepaid assets and expensed when the activity has been performed or when the goods have been received.

Non-cancellable Contracts

1 unchanged sentence

If appropriate, the offsetting costs may be recorded as a deferred cost asset.

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 Notes Payable and Fair Value Election

As permitted under FASB ASC Topic 825, Financial Instruments (“ ASC 825 ”), the Company elected to account for its promissory notes, which meet the required criteria, at fair value at inception.

Subsequent changes in fair value are recorded as a component of non-operating loss in the consolidated statements of operations.

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.

As a result of electing the fair value option, direct costs and fees related to the convertible promissory notes are expensed as incurred.

expected term) of the convertible note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.

Therefore, we estimate our expected future equity and volume volatility based on the historical volatility of both our common stock price and common stock trading volume utilizing a lookback period consistent with the time to expiration.

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 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.

As a result of electing the fair value option, direct costs and fees related to the promissory notes are expensed as incurred.

The Company estimates the fair value of its notes payable using a Monte Carlo simulation model, which uses as inputs the fair value of its Common Stock and estimates for the equity volatility of its Common Stock, the time to expiration (i.e., expected term) of the note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.

Therefore, the Company estimates its expected future equity volatility based on the historical volatility of its Common Stock price utilizing a lookback period consistent with the time to expiration.

The time to expiration is based on the contractual maturity date, giving consideration to the redemption features embedded in the notes.

The risk-free interest rate is determined based on 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.

Interest expense is included within the fair value of the convertible note payable.

Unless otherwise specified, the probability of default is estimated using Bloomberg’s Default Risk function which uses its financial information to calculate a default risk specific to the Company.

At September 30, 2024, the Streeterville Note valuation was adjusted to the post settlement amount agreed upon.

Interest expense is included within the change in fair value of the notes payable and accrued interest is included within the fair value of the convertible notes payable on the balance sheet.

See Note 7 for Streeterville and Anson convertible notes.

Management believes those assumptions are reasonable but if these assumptions change, it could materially affect the fair value.

5 unchanged sentences

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 accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

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.

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

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.

1 unchanged sentence

Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

The fair value of the Private Placement Warrants (as defined below) was estimated using a Black Scholes valuation approach and the fair value of the Substitute Warrants (as defined below) was estimated using a modified Black Scholes valuation approach which applies a probability factor based on the probabilities of achieving earnout cash milestone and/or earnout shares milestone at each reporting period (see Notes 9 and 11).

Modification of Warrants

The Company generally determines fair value of the Common Stock Warrants (as defined below) using a Black Scholes valuation methodology.

A change in any of the terms or conditions of warrants is accounted for as a modification.

1 unchanged sentence

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.

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.

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.

Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach.

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.

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.

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.

Segment Information

The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented for purposes of making operating decisions, assessing financial performance, and allocating resources.

The Company operates as a single operating and reportable segment, consistent with the manner in which the CODM evaluates performance and allocates resources, see Note 12 for further information.

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.

5 unchanged sentences

The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

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Loss Per Share

The Company applies the two -class method when computing net income or loss per share attributable to common stockholders.

In determining net income or loss attributable to common stockholders, the two -class method requires income or loss allocable to participating securities for the period to be allocated between common and participating securities based on their respective rights to share in the earnings as if all of the income or loss allocable for the period had been distributed.

In periods of net loss, there is no allocation required under the two -class method as the participating securities do not have an obligation to fund the losses of the Company.

Basic loss per share of Common Stock is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of Common Stock outstanding for the period.

1 unchanged sentence

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

The following outstanding shares of Common Stock equivalents were excluded from the computation of the diluted net loss per share attributable to Common Stock for the periods in which a net loss is presented because their effect would have been anti-dilutive.

Stock options

121,833 264,983

Restricted stock awards

Convertible preferred stock

Common stock warrants

7,173,766 3,321,499

Convertible preferred stock

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date.

For the year ended December 31, 2023, there were no new accounting pronouncements or updates to recently issued accounting pronouncements that management believes materially affect the Company’s present or future results of operations, overall financial condition, liquidity or disclosures.

In November 2023, the FASB issued Accounting Standard Update (ASU) No.

2023‑07, Segment Reporting (Topic 280 )- Improvements to Reportable Segment Disclosures (ASU 2023 - 07 ) , which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023 - 07 should be applied on a retrospective basis.

ASU 2023 - 07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company has adopted the reportable segment disclosure requirements.

In December 2023, the FASB issued ASU 2023 - 09 -Income Taxes (Topic 740 ):

I mprovements to Income Tax Disclosures (ASU 2023 - 09 ) , which is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily by amending disclosure requirements for the effective tax rate reconciliation and income taxes paid.

ASU 2023 - 09 should be applied on a prospective basis, and retrospective application is permitted.

ASU 2023 - 09 is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is in the process of evaluating the impact of this new guidance on its disclosures.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following at the dates indicated (in thousands):

Prepaid expenses and other current assets:

Prepaid expense and other current assets:

Prepaid insurance

Prepaid clinical development expenses

Other prepaid expenses

$ 827 $ 1,078

Prepaid clinical development costs

Other prepaid expense

Other current receivables

Prepaid legal expenses

Total prepaid expenses and other current assets

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total prepaid expense and other current assets

$ 1,859 $ 2,289

Accrued and Other Current Liabilities

1 unchanged sentence

Accrued and other current liabilities:

Refund liability (see Note 6)

Professional services

Accrued research and development expenses

Accrued employee expenses

Other accrued expenses

Employee costs

Accrued research and development expense

Other accrued expense

Total accrued and other current liabilities

Alvogen Licensing Agreement

On June 2, 2023, the Company entered into the License Agreement with Alvogen.

The Company and Alvogen are referred to below individually as a “Party” and collectively as the “Parties.”

License Grant

Under the License Agreement, the Company granted Alvogen an exclusive (even as to the Company and its affiliates) worldwide, transferable and sublicensable license under certain intellectual property (including patents, know-how and trademarks) owned or controlled by the Company to develop (with certain limitations), manufacture, and commercialize the Company’s candidate therapeutic product, NRX-101, for the treatment of bipolar depression with suicidality.

The term of the license is, on a country-by-country basis, 20 years from the first commercial sale of NRX-101 in such country, extendable by Alvogen for a two-year period upon its request made prior to the expiration of such 20-year period.

During the term of the License Agreement, the Parties agree (on behalf of themselves and their affiliates) not to research, develop, seek or obtain any regulatory approval for the manufacturing, marketing, sale, or other commercialization of any product containing a fixed dose combination of D-cycloserine and lurasidone in the treatment of bipolar depression with suicidality, nor to authorize or assist (including by investing in or otherwise providing funding to) any third party to do so.

During the term, the Company is permitted to develop additional products containing D-cycloserine in combination with one or more other active antidepressant or antipsychotic ingredients for use outside of the field of treatment of bipolar depression with suicidality, such as in post-traumatic stress disorder (PTSD) or chronic pain in depression, in which case, if the Company wishes to license rights to develop or commercialize such additional products or indications, Alvogen has a right of first negotiation to obtain such a license.

Term and Termination

The License Agreement will remain in force until the earlier to occur of (i) 20 years following the first commercial sale of NRX-101 on a country-by-country basis (which may be extended for a two-year period at Alvogen’s request), and (ii) the date that the agreement is terminated under its early termination provisions.

Early termination grounds include, subject to applicable cure periods, a material breach of agreement by the other Party, the bankruptcy or insolvency of the other Party, or a party’s reasonable belief that there is an unacceptable risk for harm in humans based upon preclinical safety data or the observation of serious adverse effects in humans.

In addition, Alvogen has the right to early termination if (i) the phase 2 study relating to NRX-101 is not completed and/or a successful read out from the study does not occur by March 31, 2024, or (ii) there is no completion of a Type B meeting with the FDA by March 31, 2024.

Alvogen may also terminate upon sixty (60) days’ prior written notice to the Company at any time after the First Milestone Payment (as defined below) has been made.

The Company also has the right to

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

terminate the License Agreement if the current phase 2 study successfully concludes prior to March 31, 2024 and the Type B meeting with the FDA is completed by March 31, 2024 and Alvogen does not notify the Company within 60 days that it wishes to proceed with the development of NRX-101 or has not paid the First Milestone Payment.

Upon expiration or termination of the License Agreement, the intellectual property rights licensed to Alvogen under the License Agreement will revert to the Company, and all other rights and obligations of each of the parties will immediately cease, except for outstanding amounts owed as of the time of such expiration or termination.

Upon termination, Alvogen will grant to the Company an exclusive irrevocable, perpetual, worldwide, royalty-bearing, sublicensable, transferrable license under the NDA rights to develop, manufacture, have manufactured, or commercialize the product in the field of bipolar depression with suicidality.

Such reversion license would be granted by Alvogen to the Company in exchange for an equitable royalty payable by the Company to Alvogen that would be negotiated and agreed in good faith by the parties within 30 business days of such matter being presented to them.

Milestone Payments

In exchange for the license grant and the participation of the Company in the development, regulatory and commercial activities described below, Alvogen was obligated to pay the Company an initial $ 9 million cash payment upon the later of a positive data read-out from the Company’s ongoing Phase 2b/3 clinical trial and completion of the Type B meeting with the U.S.

FDA (the “First Milestone Payment”).

In February 2024, the parties executed an amendment accelerating payment of $5 million related to the First Milestone Payment, with the remaining $4 million due upon the original agreement’s terms.

Refer to Note 14 for more information regarding the amendment.

A second milestone payment of $ 5 million (the “Approval Payment”) is due upon Alvogen’s receipt of a copy of the FDA’s notice of NDA Approval for Product with the label indication for the treatment of bipolar depression with sub-acute or acute suicidality.

Additional bonus milestone payments of increasing amounts up to $ 315 million will be payable upon the achievement of net sales targets measured over the trailing four quarters.

Alvogen also will pay royalties (as described below) to the Company based on the net sales of NRX-101, with a reduction in royalties on a country-by-country basis upon expiration or termination of the Company’s patent protection on the NRX-101 composition.

Subject to certain adjustments for sublicensing and other deductions, commencing on the first commercial sale of NRX-101, Alvogen has agreed to pay to the Company tiered royalties calculated on the basis of a percentage, ranging from the low to mid-teens, of annual net sales of NRX-101 measured over the trailing four quarters.

In addition, if Alvogen sublicenses NRX-101 in any country other than the U.S.

(in which the royalty rates described above will apply), Alvogen will pay the Company a percentage of any and all consideration received by Alvogen or its affiliates from sublicensing any of the rights granted.

Development and Regulatory Activities

Prior to payment of the First Milestone Payment by Alvogen to the Company, each Party has agreed to perform, at its own cost, certain development activities using diligent efforts and in accordance with applicable then-current good manufacturing and other applicable practices, laws and regulations, with the goal of supporting the preparation and filing of an NDA and obtaining regulatory approval for NRX-101.

Until the payment of the First Milestone Payment, the Company has the sole right to control and responsibility for all regulatory matters relating to NRX-101, at its sole cost and expense, and the Company shall own all regulatory materials and own all worldwide regulatory approvals for NRX-101.

After the payment of the First Milestone Payment, Alvogen has the sole right and responsibility, at its cost and expense, for all regulatory matters relating to NRX-101, and Alvogen will own all regulatory materials and all regulatory approvals for the product in the licensed territory (and the Company will assign all of its rights in any regulatory materials to Alvogen).

Each party has committed to reasonably cooperate with the other in carrying out the development and regulatory

$ 10,149 $ 4,714

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

activities outlined in the development plan.

In addition, Alvogen has agreed to fund the next registrational study of NRX-101 in the field of treatment of bipolar depression with suicidality.

Upon NDA approval of the product in the U.S., Alvogen has agreed to use diligent efforts to commercialize NRX-101 in the U.S., and, for 24 months following such approval, in other countries in the territory upon regulatory approval in each such country.

If Alvogen does not commercialize NRX-101 in a country outside of the U.S.

in the foregoing 24-month period, then the license may revert back to the Company with respect to such country and the Company would pay Alvogen tiered royalties in the low to mid-teens based on net sales of NRX-101 in such country.

The Parties will also enter into a pharmacovigilance agreement to ensure compliance with safety reporting requirements of all applicable regulatory agencies globally with respect to the commercialization of NRX-101.

Commercial Activities

Under the License Agreement, the Company is responsible for and will control the manufacturing of the NRX-101 commercial product and for qualification and regulatory-related activities necessary for the manufacture of the product.

The Parties intend to enter into a clinical supply agreement (and a related quality agreement) on reasonable and customary terms, in which the Company will supply Alvogen raw materials and/or finished product without any markup to the future supply price from the Company’s current contract manufacturer.

Similarly, prior to initiation of the first Phase 3 study for the commercial product, the Parties will enter into a commercial supply agreement (and a related quality agreement) on reasonable and customary terms, in which the Company will supply Alvogen raw materials and/or finished product without any markup to the future supply price from NRx’s current contract manufacturer.

At any time after NDA approval, Alvogen may elect to manufacture, fill and package the product itself or through a third-party supplier subject to the prior approval of the Company.

In such case, the parties may also work together to establish a written manufacturing technology transfer plan to transfer manufacturing technology from the Company or the Company’s contract manufacturer to Alvogen or Alvogen’s designated third party supplier.

The Company has agreed, as a part of its manufacturing commitments, to make available its qualified technical personnel to consult with Alvogen to complete transfer of the manufacturing technology if required under the License Agreement.

Following NDA approval, Alvogen will control and be responsible for advertising, marketing, promotion and marketing, pricing, and terms of sale for the product, all at Alvogen’s sole expense.

Alvogen has committed to not shift, allocate, price or discount sales of the product for the purpose of reducing or disadvantaging the net sales of the product in order to reduce the payments owed by Alvogen to the Company under the License Agreement.

As of December 31, 2023, the Company has not achieved any milestones nor recognized any revenue associated with the License Agreement (see Note 14).

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.

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 Company has the option to prepay the Note during the term by paying an amount equal to 110 % of the principal, interest, and fees owed as of the prepayment date.

The noteholder has the right to redeem up to $ 1.0 million of the outstanding balance of the Note per month starting six months after the issuance date.

Payments may be made by the Company at their option in:

(i) in cash with a 10 % premium for the amount redeemed, (ii) by paying the redemption

DECEMBER 31, 2024 AND

Alvogen Licensing Agreement

In June 2023, the Company entered into a License Agreement with Alvogen.

Under the License Agreement, the Company granted Alvogen certain license rights to develop, manufacture, and commercialize the Company’s candidate therapeutic product, NRX- 101, for the treatment of bipolar depression with suicidality.

In exchange for the license granted and the participation of the Company in certain development, regulatory and commercial activities, Alvogen was obligated to pay the Company specified regulatory and commercial milestones, the first of which was $ 9 million upon the later of a positive data read-out from the Company’s ongoing Phase 2b/3 clinical trial and completion of the Type B meeting with the FDA (the “ First Milestone Payment ”).

In February 2024, the parties executed an amendment accelerating payment of up to $ 5 million related to the First Milestone Payment, with the remaining $ 4 million due upon the original agreement’s terms (see below for advances received through December 31, 2024).

As compensation for advancing the milestone, Alvogen received warrants to purchase up to 419,598 shares of the Company's Common Stock, at a strike price of $ 4.00 with a three year term (See Note 9 ).

The grant date fair value of the warrants was approximately $ 1.3 million, which the Company planned to account for as consideration paid to a customer (see below).

The second portion of the first milestone was to be $ 4 million and, as before, triggered by a positive response to the Company's planned end of phase 2 meeting with FDA.

If the first milestone was not achieved by September 3, 2024, the Company would have been obligated to repay any amount received against the $ 5 million advance of the First Milestone Payment to Alvogen.

As there was significant uncertainty relative to approval of any drug candidate in development, the Company concluded that it was not probable that a significant reversal of revenue would not occur if the Company were to include the First Milestone Payment, or any advances thereof, in the transaction price prior to receiving FDA approval.

Accordingly, the transaction price was fully constrained and advances from Alvogen were recorded as a refund liability until such time as the refund right expired.

Further, the Company accounted for the warrants issued to Alvogen within additional paid-in capital consistent with the accounting for unfunded stock subscription agreements until such time as the uncertainty around the First Milestone was resolved.

Under the License Agreement, as amended, Alvogen was granted early termination rights.

On June 21, 2024, the Company received a notice of termination from Alvogen effective immediately.

Following the termination of the License Agreement by Alvogen, the amounts advanced pursuant to the amendment became due and payable to Alvogen.

Accordingly, the refund liability has not been reclassified to deferred revenue or recorded as revenue as of December 31, 2024 and will remain permanent as refund liability until settled.

Upon termination of the License Agreement, the intellectual property rights licensed to Alvogen under the License Agreement reverted to the Company, and all other rights and obligations of each of the parties immediately ceased, except for outstanding amounts owed as of the time of such expiration or termination.

As of December 31, 2024, the refund liability due to Alvogen was $ 4.7 million, which represents all payments made by Alvogen through December 31, 2024, and is included as a component of accrued expense and other current liabilities on the consolidated balance sheet (refer to Note 5 ).

Following the early termination by Alvogen, the Company does not anticipate recognizing any revenue under the License Agreement.

Additionally, in June 2024 the Company wrote-off the unfunded stock subscription receivable of $ 1.3 million related to the warrants previously classified in additional paid-in capital to research and development expense following the termination.

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 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.

The initial terms of the Streeterville Note included the following provisions, certain of which were subsequently modified, as described below.

The Company had the option to prepay the Streeterville Note during the term by paying an amount equal to 110 % of the principal, interest, and fees owed as of the prepayment date.

The noteholder had the right to redeem up to $ 1.0 million of the outstanding balance of the Streeterville Note per month starting six months after the issuance date (the “ Maximum Monthly Redemption Amount ”).

Payments could be made by the Company at their option in:

(i) in cash with a 10 % premium (the “ Redemption Premium ”) for the amount redeemed, (ii) by paying the redemption amount in the form of shares of Common Stock with the number of redemption shares being equal to the portion of the applicable redemption amount divided by the Redemption Conversion Price (as defined below), or (iii) a combination of cash and shares of Common Stock.

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.

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.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amount in the form of shares of Common Stock with the number of redemption shares being equal to the portion of the applicable redemption amount divided by the Redemption Conversion Price (as defined below), or (iii) a combination of cash and shares of common stock.

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.

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.

DECEMBER 31, 2024 AND

The Streeterville Note contained certain Trigger Events (as defined in the Streeterville Note) that generally, if uncured within five trading days, could result in an event of default in accordance with the terms of the Streeterville Note (such event, an “ Event of Default ”).

Upon an Event of a Default, the Lender could consider the Streeterville Note immediately due and payable.

Upon an Event of Default, the interest rate could also be increased to the lesser of 18 % per annum or the maximum rate permitted under applicable law (see below).

Due to these embedded features within the Streeterville Note, the Company elected to account for the Streeterville Note at fair value at inception.

Subsequent changes in fair value were recorded as a component of other income (loss) in the consolidated statements of operations.

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.

On July 7, 2023, the Company entered into Amendment #2 to the Note with Streeterville (the “Second Amendment”).

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.

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).

Notwithstanding the foregoing, Streeterville may also submit a request for redemption of up to an aggregate of $ 1,000,000 per month (the “Maximum Monthly Redemption Amount” and, together with the Minimum Payment Amount, the “Redemption Amounts”) in accordance with the terms of the Note.

However, the portion of each Minimum Payment that is not satisfied by the delivery of Redemption Conversion Shares is the maximum amount of cash we will be required to pay in accordance with the Second Amendment during the Minimum Payment Period.

The redemption of the Maximum Monthly Redemption Amount in excess of the Minimum Amount may be satisfied by the delivery of additional Redemption Conversion Shares.

Moreover, the Redemption Premium (as defined in the Note) will continue to apply to the Redemption Amounts.

This amendment was deemed to be a debt modification in accordance with ASC 470, Debt, which will be accounted for prospectively.

The modification does not result in recognition of a gain or loss in the consolidated statement of operations but does impact interest expense recognized in the future.

The Note contains certain Trigger Events (as defined in the Note) that generally, if uncured within five trading days, may result in an event of default in accordance with the terms of the Notes (such event, an “Event of Default”).

Upon an Event of a Default, the Lender may consider the Note immediately due and payable.

Upon an Event of Default, the interest rate may also be increased to the lesser of 18 % per annum or the maximum rate permitted under applicable law.

Due to these embedded features within the Note, the Company elected to account for the Note at fair value at inception.

Subsequent changes in fair value are recorded as a component of other income (loss) in the Consolidated Statements of Operations.

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 of the convertible note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default.

Therefore, we estimate our expected future volatility based on the actual volatility

On July 7, 2023, the Company entered into Amendment #2 to the Streeterville Note with Streeterville (the “ Second Amendment ”).

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.

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).

Notwithstanding the foregoing, Streeterville could also submit a request for redemption of up to an aggregate of $ 1.0 million per month in accordance with the terms of the Second Amendment.

However, the portion of each payment that was not satisfied by the delivery of Redemption Conversion Shares was the maximum amount of cash the Company would have been required to pay in accordance with the Second Amendment during the period from July 31, 2023 and on or before the last day of each month until December 31, 2023.

The redemption of the Maximum Monthly Redemption Amount in excess of the Minimum Amount would be satisfied by the delivery of additional Redemption Conversion Shares.

On February 9, 2024, the Company entered into Amendment #3 to the Streeterville Note (the “ Third Amendment ”), with Streeterville.

In accordance with the Third Amendment, the Company and Streeterville 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 $ 1.1 million on February 12, 2024, which the amount was paid on February 12, 2024.

In addition, beginning on or before February 29, 2024, and on or before the last day of each month until July 31, 2024, the Company was obligated to pay Streeterville an amount equal to $ 0.4 million in cash, less any amount satisfied by the delivery of Redemption Conversion Shares.

During the first three months of this amended payment period, Streeterville could not request to redeem amounts greater than $ 0.4 million per month.

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.

During the period through July 31, 2024, the Company was permitted to pay the Redemption Amounts by delivery of the Redemption Conversion Shares (as defined below) without regard to the existence of any Equity Conditions Failure, to the extent Streeterville submits redemption notices during such month pursuant to the terms of the Streeterville Note, and only for the Redemption Amounts covered by such notices.

Moreover, the Redemption Premium would continue to apply to the Redemption Amounts.

To the extent there was an outstanding balance under the Streeterville Note after July 31, 2024, the Company would be required to pay such outstanding balance in full in cash by August 31, 2024.

As a result of the alleged Event of Default mentioned below, the Company did not pay any Redemption Amounts during the three months ended September 30, 2024, prior to the settlement, also as described below.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of our common stock and historical volatility of our common stock utilizing a lookback period consistent with the time to expiration.

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.

DECEMBER 31, 2024 AND

During the Minimum Payment Period (defined in the Streeterville Note, as amended), the Company was permitted to pay the Redemption Amounts in the form of shares of Common Stock of the Company (the “ Redemption Conversion Shares ”) calculated on the basis of the Redemption Conversion Price (as defined in the Streeterville Note) without regard to the existence of an Equity Conditions Failure.

Moreover, the Redemption Premium (as defined in the Streeterville Note) would continue to apply to the Redemption Amounts.

Both the Second Amendment and the Third Amendment (considered cumulatively with the Second Amendment) were deemed to be debt modifications and did not give rise to a debt extinguishment in accordance with FASB ASC Topic 470, Debt , which was accounted for prospectively.

The modification did not result in recognition of a gain or loss in the consolidated statements of operations as the modifications were not considered debt extinguishments, but impacted interest expense recognized in subsequent periods, prior to the settlement of the Streeterville Note.

Convertible Note Fair Value Measurements

The Company estimated the fair value of the Streeterville Note using a Monte Carlo simulation model, which used as inputs the fair value of its Common Stock and estimated for the equity volatility and volume volatility of its Common Stock, the time to expiration of the Streeterville Note, the risk-free interest rate for a period that approximated the time to expiration, and probability of default.

Therefore, the Company estimated its expected future volatility based on the actual volatility of its Common Stock and historical volatility of its Common Stock utilizing a lookback period consistent with 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.

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 discount to the principal amount is included in the carrying value of the Note.

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.

For the years ended December 31, 2023 and 2022, the Company recorded a change in fair value of the Note of approximately $2.7 and $ 0.5 million, respectively, which was recognized in other (income) expense on the Consolidated Statement of Operations as a result of the Company’s election of the fair value option.

During the year ended December 31, 2023, the Company made cash interest payments on the Note of approximately $0.9 million, including $0.1 million of redemption premiums and issued shares of Common Stock as interest repayment of $ 0.2 million.

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.

As of December 31, 2023, the Note carried a remaining principle balance of $8.3 million.

The following table presents the Convertible Note as of December 31, 2023 and 2022 (in thousands):

Probability of default was estimated using either Bloomberg's Default Risk function, which uses its financial information to calculate a default risk specific to the Company, or management's estimates which included, the Company's current cash runway, current efforts to raise financing, and current economic environment.

The discount to the principal amount was included in the carrying value of the Streeterville Note.

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.

For the years ended December 31, 2024 and 2023, the Company recorded a gain from the change in fair value of the Streeterville Note of $ 1.8 million and $ 2.7 million, respectively, which was recognized in other (income) expense on the consolidated statements of operations as a result of the Company’s election of the fair value option.

During the year ended December 31, 2024, the Company made cash principal repayments on the Note of approximately $ 7.4 million, made cash interest payments on the Note of approximately $ 0.5 million, including $ 0.2 million of redemption premiums, issued shares of Common Stock as principal repayment of $ 0.3 million, and issued shares of Common Stock as interest repayment of $ 0.1 million, and incurred a default penalty of $ 0.8 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.

As of December 31, 2024 and 2023, the Note carried a remaining principle balance of $ 0 and $ 8.3 million, respectively.

Refer to Note 11 for the reconciliation of the fair values for the periods presented.

Alleged Default

On April 24, 2024, the Company received written notice from counsel for Streeterville that an alleged event of default occurred with respect to the Streeterville Note issued by the Company in favor of Streeterville (the “ Notice ”).

The Notice alleged that, among other things, (i) the announcement of the plan to partially spin-off of HOPE (the “ Spin-Off ”), constituted a “Fundamental Transaction” (as defined in the Streeterville Note) for which the Company failed to obtain Streeterville’s prior written consent before undertaking such transaction;

and (ii) the Company failed to pay the Minimum Payment, as defined in the Streeterville Note, by April 8, 2024, following a Redemption Notice issued on April 3, 2024 by Streeterville to the Company, each of which resulted in the failure to cure a Trigger Event and subsequent Event of Default of the Streeterville Note, resulting in the acceleration of all of the outstanding amounts due thereunder.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

Streeterville also filed a complaint (the “ Complaint ”) naming the Company as a defendant in the Third Judicial District Court of Salt Lake County, Utah.

The Complaint was seeking, 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 $ 6.5 million, or the amounts currently outstanding under the Streeterville Note.

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 Spin-Off of 49 % of shares in HOPE to current shareholders of the Company.

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.

Streeterville Settlement

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.

The Company made the $ 2.5 million payment upon the Anson Notes closing on August 15, 2024.

The Company made the final $ 3.05 million payment in October 10, 2024 using proceeds from the Second Closing of Anson Convertible Promissory Note.

The Company evaluated the terms of the Settlement Amendment in accordance with ASC 470 - 50, Debt Modifications and Extinguishments .

Both the Settlement Amendment and the Third Amendment (considered cumulatively with the Settlement Amendment) were deemed to be debt modifications and did not give rise to a debt extinguishment in accordance with ASC Topic 470, Debt , which will be accounted for prospectively.

The modifications did not result in recognition of a gain or loss in the consolidated statements of operations as the modifications were not considered debt extinguishments, but will impact interest expense and the determination of fair value in future periods.

The following table presents the Streeterville Note as of December 31, 2024 and 2023 (in thousands):

Par value of the Note

Unamortized debt discount

$ 11,020 $ 11,020

Unamortized original issue discount

( 497 ) ( 497 )

Default penalty

Conversions and repayments of principal and interest (shares and cash)

( 12,324 ) ( 4,072 )

Carrying value of the Note before current period change in fair value

Fair value adjustment through earnings

Fair value adjustment through accumulated other comprehensive loss

( 952 ) 6,451

Cumulative fair value adjustments through earnings

Cumulative fair value adjustments through accumulated other comprehensive loss

Total carrying value of Note

1 unchanged sentence

Convertible note payable, net of current portion

Anson Convertible Promissory Notes

On August 12, 2024, the Company entered into the Purchase Agreement with Investors.

The Company agreed to sell, in three equal tranches, original issue discount Anson Notes in the aggregate principal amount of up to approximately $ 16.3 million for an aggregate purchase price of up to approximately $ 15.0 million and warrants to purchase that amount of shares equal to 50 % of the principal amount of the Notes divided by the VWAP of the Company’s Common Stock, as listed on the Nasdaq Capital Market, on the day prior to the closing of each respective tranche under the Anson Warrants.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

In connection with the above offering, the Company engaged EF Hutton LLC as placement agent (the “Placement Agent”), Pursuant to the terms of the engagement with the Placement Agent, the Company paid a cash fee of 7 % of the gross proceeds the Company receives in the offering at closing.

2024 Senior Secured Convertible Promissory Notes

On August 14, 2024, the Company entered into the first tranche Senior Secured Convertible Note Agreements (the “First Tranche Notes”) with Anson Investment Master Fund LP and Anson East Master Fund LP (collectively “Anson”) at various amounts for an aggregate of $ 5.435 million subject to an original issuance discount of 8 % or $ 435,000 , less other cash issuance costs of $ 521,000 , resulting in net cash proceeds of $ 4.5 million, prior to any allocation to the Anson Warrants.

The First Tranche Notes bear interest at a rate of 6 % per annum (or 10 % during the occurrence of any Event of Default (as defined in the First Tranche Notes)) and have a term of 15 months from the issuance date, maturing on November 14, 2025 ( the “First Tranche Maturity Date”) (see Note 9 ).

On August 14, 2024, in conjunction with the issuance of the First Tranche Notes, the Company issued warrants to purchase up to 1,349,305 shares of the Company’s Common Stock.

The First Tranche Notes are convertible at the option of the holder at any time after issuance into Common Stock, at a per share conversion price equal to the lower of (a) $ 2.4168 , (the “Fixed Conversion Price”) or (b) a price equal to 92 % of the lowest VWAP during the seven trading day period immediately preceding the effective conversion date (the “Alternate Conversion Price”, and together with the Fixed Conversion Price, the “Conversion Price”).

If the Conversion Price is less than $ 0.38 (the “Floor Price”), then in addition to the issuance of Common Stock upon conversion the Company will pay cash as a true-up which is determined by the product of (i) the difference between (y) the Floor Price less (z) the Conversion Price then in effect, multiplied by (ii) the conversion amount that is being paid in Common Stock.

The terms of the First Tranche Notes do not allow any conversion of the First Tranche Notes if it results in Anson owning more than 4.99% of the outstanding shares of Common Stock (the "Beneficial Ownership Limitation").

This limitation can be adjusted up to 9.99% with prior notice, effective 61 days after such notice.

Anson must ensure compliance with this limitation when submitting a notice of conversion, and the Company will rely on Anson's representation of compliance.

If the Company issues or grants options for Common Stock at a price lower than the current Conversion Price, the Conversion Price will be adjusted to match this lower price, (the “Base Conversion Price”).

The Company must notify Anson of any such issuance, and Anson is entitled to convert shares based on the new Base Conversion Price.

If the Company offers purchase rights to holders of Common Stock, Anson will be entitled to acquire those rights as if they had fully converted the Note, subject to the Beneficial Ownership Limitation.

If exercising these rights would exceed the Beneficial Ownership Limitation, the rights will be held in abeyance until they can be exercised without exceeding the limit.

The First Tranche Notes contain mandatory redemption features, whereby if at any time the First Tranche Notes are outstanding, the Company will be required to:

(A) use up to 30% of the gross proceeds from any Subsequent Financings (as defined in the Purchase Agreement) in cash, to redeem all or a portion of the Note for an amount equal to the outstanding principal, plus all accrued but unpaid interest, plus all liquidated damages (the “Redemption Obligations”), multiplied by 1.05 (the “Mandatory Redemption Amount”); (B) redeem all of the Redemption Obligations at the Mandatory Redemption Amount in the event of a Change of Control Transaction (as defined in the First Tranche Notes); (C) redeem the Redemption Obligations for the Mandatory Redemption Amount in the event a registration statement is not available for each of the offer and resale of the shares issuable upon conversion of the First Tranche Notes (the “Conversion Shares”); and (D) redeem the Redemption Obligations for the Mandatory Redemption Amount if the Shareholder Approval is not obtained within 180 days following the date of issuance of the First Tranche Notes.

The First Tranche Notes contain certain covenants, and events of default and triggering events, respectively, which would require repayment of the obligations outstanding pursuant to such instruments.

The obligations of the Company pursuant to the First Tranche Notes are (i) secured by all assets of the Company and all subsidiaries of the Company pursuant to the Security Agreement and Patent Security Agreement, dated August 14, 2024, by and among the Company, the subsidiaries of the Company, and the Investors, and (ii) guaranteed jointly and severally by the subsidiaries of the Company pursuant to the Subsidiary Guarantee, dated August 14, 2024, by and among the Company, the subsidiaries of the Company, and the Investors.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

Pursuant to the Purchase Agreement, on October 10, 2024 ( the “Second Closing Date”), the Company sold a total of $ 5.435 million in Notes (the “Second Tranche Notes”, and collectively with the First Tranche Notes, the ("Anson Notes")) subject to an original issue discount of 8 % or $ 435,000 less other cash issuance cost of $ 375,000 , with an aggregate purchase price of approximately $ 5.0 million, and Warrants to purchase up to 1,846,128 shares of Common Stock.

The Second Tranche Notes are convertible into Common Stock, at a per share conversion price equal to by the lower of (a) $ 1.7664 or (b) a price equal to 92 % of the lowest VWAP during the seven trading day period immediately preceding the effective date set forth in a Notice of Conversion delivered by an Investor to the Company.

The Conversion Price is subject to, among other customary provisions, downward adjustment in the event of any future issuance by the Company of common stock below the then effective Conversion Price.

$ 3.05 million of the note proceeds were used to repay the Streeterville note.

In connection with the above Second Tranche Notes”, the Company engaged Placement Agent.

Pursuant to the terms of the engagement with the Placement Agent, the Company paid a cash fee of 7 % of the gross proceeds the Company received in the Second Closing and incurred certain additional other issuance costs and reimbursement for legal counsel disbursements and placement agent, for aggregate issuance costs of approximately $ 0.4 million.

Due to these embedded features within the Anson Notes, the Company elected to account for the First and Second Tranche Notes at fair value at inception.

Subsequent changes in fair value are recorded as a component of other income (loss) in the consolidated statements of operations.

Additionally the portion of changes in the fair value related to changes in credit risk are recorded to other comprehensive income in the consolidated statements of operations.

To determine the initial carrying value of the Notes and the warrants issued to Anson under the First and Second Tranche Notes (see Note 9 ), the Company allocated the proceeds using the fair value method.

After allocation, the initial carrying value of the First Tranche Notes and the warrants issued to Anson were $ 2.9 million and $ 2.1 million, respectively, and the initial carrying value of the Second Tranche Notes and the warrants issued to Anson were $ 3.1 million and $ 1.9 million, respectively Refer to Note 11 for the reconciliation of the fair values for the periods presented.

As of December 31, 2024, the principal and accrued interest balance of the Anson Notes was $ 6.75 million and $ 0.1 million, respectively.

During the year ended December 31, 2024, the Company recorded a loss from the change in fair value of the First Tranche Notes of $ 4.4 million, which was recognized in other (income) expense on the consolidated statements of operations as a result of the Company’s election of the fair value option.

At December 31, 2024 the effective interest rate of the First and the Second Tranche Note was 82 % and 53 %, respectively.

From January 2, 2025 to January 3, 2025, the Company received conversion notices from Anson resulting in the conversion of the remaining principal of the First Tranche Note of $ 1.3 million of principal and interest in full from the First Tranche Note into 1,004,055 shares of Common Stock (see Note 15 ).

The following table presents the Anson Notes as of December 31, 2024 ( in thousands):

Par value of the Anson Notes

Initial original issue discount

Conversions and repayments of principal and interest (shares)

Carrying value of the Anson Notes before current period change in fair value

Fair value allocated to Common Stock liability classified warrants ( 3,966 )

Fair value adjustment through earnings

Total carrying value of Anson Notes

Convertible note payable - current portion

Convertible note payable, net of current portion

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

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:

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

End of Phase II Clinical Trials of Licensed Product

End of Phase I Clinical Trials of Licensed Product (completed)

End of Phase II Clinical Trials of Licensed Product (completed)

End of Phase III Clinical Trials of Licensed Product

3 unchanged sentences

The milestone payments due above may be reduced by 25 % in certain circumstances, and by the application of certain sub-license fees.

As of December 31, 2023, $0.4 million in payments have been made.

As of the years ended December 31, 2024 and 2023, the total cumulative payments made under the SHMH License Agreement were $ 0.4 million, with no payments made during the year ended December 31, 2024, and $ 0.2 million and $ 0.2 million payments made during the years ended December 31, 2023 and 2022, respectively.

A royalty in an amount equal to:

3 unchanged sentences

Royalties shall also apply to any revenues generated by sub-licensees from sale of Licensed Products subject to a cap of 8.5 % of the payments received by us from sub-licensees in connection with such sales.

During the years ended December 31, 2024 and 2023, no royalty payments were made.

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.

The Company paid $ 150,000 in annual maintenance fees in each of the years ended December 31, 2024 and 2023, expensed through Research and Development expenses in the accompanying Consolidated Statement of Operations.

Exclusive License Agreement

1 unchanged sentence

The patent is supported by extensive nonclinical data and early clinical data that suggest the potential for NMDA antagonist drugs, such as NRX- 101 to decrease both chronic pain and neuropathic pain while potentially decreasing craving for opioids.

As of December 31, 2023, the Company has recorded $0.2 million worth of expenses relating to the licensure of the patent recorded in Research and development expenses on the Consolidated Statements of Operations and Comprehensive Loss.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2024 and 2023, the Company has recorded no expenses relating to the licensure of the patent.

Operating Lease

1 unchanged sentence

The rent expense for the years ended December 31, 2024 and 2023 was $ 0.1 million and $ 0.1 million, respectively.

Sponsored Research Agreement with National Jewish Health

On February 8, 2021, the Company entered into a Sponsored Research Agreement (“Research Agreement”) with National Jewish Health (“NJ Health”), a Colorado not-for-profit institution.

Under the terms of the Research Agreement, the Company agreed to sponsor a research study at NJ Health relating to the impact of the Company’s' former product candidate Aviptadil on propagation of SARS-CoV-2 in alveolar type II cells in vitro (the “Study”).

In return for performance of the Study under the Research Agreement, the Company has committed to pay NJ Health approximately $ 0.4 million upon finalization of the work.

As of December 31, 2023, the Company has fully paid NJ Health the total committed amount under this agreement.

Relief Therapeutics Collaboration Agreement

On September 18, 2020, the Company entered into a collaboration agreement (the “Collaboration Agreement”) with Relief Therapeutics for the clinical development and, if approved, the sale of Aviptadil.

The Collaboration Agreement provides for funding by Relief Therapeutics of certain clinical trials, formulation and manufacturing of Aviptadil, as well as establishing specified sales territories for each party and share of the profits in those territories for “Product” as defined in the Collaboration Agreement.

On October 6, 2021, Relief Therapeutics filed a lawsuit against the Company and its former CEO claiming that the Company failed to honor its obligations under the Collaboration Agreement, which was followed by a counter claim from the Company for breach and repudiation of the Collaboration Agreement by Relief Therapeutics.

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 Collaboration Agreement.

Under the APA, the Company transferred to the Relief Parties all of the Company’s interest in ZYESAMI (or the “Product” as such term is defined in the Collaboration Agreement), including intellectual property, FDA applications, clinical trial data, drug and API inventory and certain contractual rights.

The Company has agreed to refrain from developing any product for any indication that uses or otherwise exploits the Product without the Relief Parties’ consent.

The Relief Parties have agreed to use commercially reasonable efforts to develop, market, and commercialize the Product, and have sole discretion to select the indications for which they will seek to develop the Product.

Although the Company intends to monitor the progress of the Relief Parties under the APA and enforce the Company’s rights thereunder, there can be no assurances that the Relief Parties will be successful at commercializing the Product.

Upon commercial launch of the Product by the Relief Parties or any of their affiliates, licensees or sublicensees (or upon authorization of use for any indication of the Product other than COVID-19), the Company is entitled to receive milestone payments in stages up to an aggregate amount of $ 13.0 million.

The Relief Parties have also agreed to pay royalties to the Company on aggregate net sales of all Products, subject to a cap on royalty payments of $ 30.0 million in the aggregate.

No royalties have been received under this agreement as of December 31, 2023.

In addition, Relief is obligated to use commercially reasonable efforts to continue the Company’s existing Right to Try Program until December 2024.

Mutual indemnity provisions in the APA will protect each party from any breaches of the settlement arrangements by the other party, provided, that the Company’s indemnity obligations will not start until the Relief Parties have begun making royalty or milestone payments to the Company, subject to certain exceptions.

With respect to the Company, there is an

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

indemnity threshold such that the Company will not be liable for any indemnity claims until such claims are in excess of $ 0.5 million (and then only for the amount above $ 0.5 million).

The Company’s indemnity obligation is capped at $ 2.0 million with respect to breaches of representations and warranties and $ 3.0 million with respects to breaches of covenants or other agreements.

Additionally, subject to certain exceptions, the Company’s indemnity obligations cannot exceed the amount that the Relief Parties actually pay to the Company for milestone and royalty payments.

The parties closed the APA in December 2022 at which time all claims and counterclaims between the Company and the Relief Parties were dismissed with prejudice.

Legal Proceedings

1 unchanged sentence

Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur.

Share Subscription Facility Agreement - GEM

NeuroRx entered into a share subscription facility agreement (the “GEM Agreement”) with GEM Global Yield LLC SCS and GEM Yield Bahamas Limited (collectively, referred to as “GEM”) with a three-year term which expired in October 2022.

The GEM Agreement was never activated because of differences between the Hong Kong law under which the agreement was drafted and US Securities law.

On August 12, 2022, the Company received a demand for arbitration (the “Demand”) from GEM.

The Demand claimed that NeuroRx, failed to satisfy its obligation to pay GEM a commitment fee in the amount of HK$ 15,000,000 (approximately US$ 1,920,885 at the then-current exchange rates) pursuant to the GEM Agreement.

The Company was a defendant in litigation filed by Streeterville in the Third Judicial District Court of Salt Lake County, Utah.

See Note 7, Debt, for additional information.

The Complaint sought, among other things:

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.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

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.

The arbitrator also denied Streeterville’s petition to enjoin the Company from selling additional shares of Common Stock to finance ongoing operations.

On August 12, 2024, the Company signed a settlement agreement with Streeterville to retire its remaining debt for a settlement amount of $ 5.6 million and to settle outstanding litigation.

This settlement amount was substantially less than the amounts claimed by Streeterville in its Compliant (see Note 7 ).

As of September 30, 2024, the fair value of the Streeterville Note was adjusted to the settlement amount which was repaid in October 2024.

Such adjustment is included within the change in fair value of convertible notes payable on the consolidated statement of operations, therefore no gain or loss on the settlement was recorded.

On July 17, 2023, NeuroRx and GEM entered into a settlement and release agreement (the “Settlement Agreement”) pursuant to which the parties agreed to dismiss the arbitration proceeding with prejudice.

1 unchanged sentence

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.

Other Legal Actions:

We are currently involved in and may from time to time become involved in various legal actions incidental to our business.

As of the date of this report, we are not involved in any legal proceedings that we believe could have a material adverse effect on our financial position or results of operations.

However, the outcome of any current or future legal proceeding is inherently difficult to predict and any dispute resolved unfavorably could have a material adverse effect on our business, financial position, and operating results.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is currently involved in and may from time to time become involved in various legal actions incidental to our business.

As of the date of this report, the Company, other than as set forth above, is not involved in any legal proceedings that it believes could have a material adverse effect on its financial position or results of operations.

However, the outcome of any current or future legal proceeding is inherently difficult to predict and any dispute resolved unfavorably could have a material adverse effect on the Company’s business, financial position, and operating results.

Common Stock Reverse Stock Split

On March 21, 2024, the Board approved a reverse stock split ratio of 1 -for- 10 .

On March 28, 2024, the Company filed an amendment to its certificate of incorporation in the State of Delaware (the “ Amendment ”), which provided that every ten shares of its issued and outstanding Common Stock would automatically be combined into one issued and outstanding share of Common Stock, without any change in the par value per share.

Effective April 1, 2024, every 10 issued and outstanding shares of the Company’s Common Stock were converted automatically into one share of the Company’s Common Stock, without any change in the par value per share.

The Reverse Stock Split reduced the number of shares of Common Stock issued and outstanding from approximately 95.7 million to approximately 9.6 million.

No fractional shares were issued in connection with the Reverse Stock Split.

Shareholders who otherwise would have been entitled to receive a fractional share instead became entitled to receive one whole share of Common Stock in lieu of such fractional share.

As a result of the Reverse Stock Split, 73,040 additional shares of common stock were issued in lieu of fractional shares.

All share and per share amounts in the accompanying consolidated financial statements and footnotes have been retrospectively adjusted for the reverse split.

Preferred Stock

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On August 30, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (“Series A Preferred Stock”) with the Delaware Secretary of State (the “Certificate of Designation”) authorizing up to 12,000,000 shares of Series A Preferred Stock.

During the year ended December 31, 2023, the Company sold and issued 3,000,000 shares of Series A Preferred Stock.

In August 2023, the Company sold and issued 3,000,000 shares of Series A Preferred Stock.

Each share of Series A Preferred Stock was sold with one warrant (a “Unit"), see investor warrant section below for terms, for an aggregate cash purchase price of $ 1.2 million or $ 0.40 per Unit.

In March 2024, holders of the Company’s Series A Preferred elected to convert 3,000,000 shares of Series A Preferred into 300,000 shares of Common Stock.

As of December 31, 2024, no shares of Series A Preferred remained issued or outstanding.

Dividend Rights

The holders of Series A Preferred Stock are not entitled to receive any dividends in respect to the Series A Preferred Stock.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

Voting Rights

9 unchanged sentences

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.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 .

24 unchanged sentences

Refer to Note 8 for further details.

The Company sold 7,824,727 shares of common stock during the year ended December 31, 2022 and received gross proceeds of $ 22.7 million.

The Company issued 49,605 shares of common stock resulting from options that were exercised which generated proceeds of less than $0.1 million.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

On January 2, 2024, the Company issued 143,648 shares of Common Stock as payment for the $ 0.4 million minimum payment to Streeterville related to principal and interest payments on the Streeterville Note.

From February 20, 2024 to July 29, 2024, the Company announced that it entered into multiple purchase agreements (the “ ATM Purchase Agreements ”) subject to standard closing conditions where accredited investors purchased 385,515 shares of unregistered Common Stock at a range of $ 2.42 – $ 7.10 per share.

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 Agreemen t”), with H.C.

Wainwright & Co., and filed a prospectus supplement (the “ Current Prospectus Supplement ”) under the Offering Agreement for an aggregate of $ 4.9 million.

Through December 31, 2024, the aggregate net cash proceeds to the Company from the ATM Purchases Agreements were approximately $ 1.6 million.

On February 27, 2024, the Company entered into an underwriting agreement (the “ February Underwriting Agreement ”) with EF Hutton LLC (the “ Representative ”), 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 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 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 ”).

On February 28, 2024, the February 2024 Public Offering closed (the “ February Closing Date ”).

The aggregate net cash proceeds to the Company from the February 2024 Offering proceeds were approximately $ 1.3 million after offering costs of approximately $ 0.4 million.

On March 5, 2024, the February Underwriters of the previously announced underwritten public offering of the Company exercised their option in accordance with the February Underwriting Agreement, dated February 27, 2024, by and between the Company and the Representative, as representative of the several underwriters named therein, to purchase up to an additional 75,000 shares of the Company’s Common Stock, at a public offering price of $ 3.00 per share (the “ February Overallotment Exercise ”).

The February Overallotment Exercise closed on March 6, 2024.

The aggregate net cash proceeds to the Company from the February Overallotment Exercise were approximately $ 0.2 million.

The Company accrued additional offering costs of approximately $ 0.2 million.

On February 29, 2024, the Company 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 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 of 1933, as amended (the “ Securities Act ”).

The aggregate net cash proceeds to the Company from the February 2024 Private Placement were approximately $ 1.0 million.

On April 18, 2024, the Company entered into an underwriting agreement (the “ April Underwriting Agreement ”) with the Representative, as the representative of the several underwriters named therein (the “ April Underwriters ”), relating to an underwritten public offering (the “ April 2024 Public Offerin g”) of 607,000 shares (the “ April Shares ”) of Common Stock.

The public offering price for each share of Common Stock was $ 3.30 .

Pursuant to the April Underwriting Agreement, the Company also granted the Representative a 45 -day option to purchase up to an additional 91,050 shares (the “ April Option Shares ”) of the Common Stock on the same terms as the April Shares sold in the April 2024 Public Offering (the “ April Over-Allotment Option ”).

On April 19, 2024, the Offering closed (the “ April Closing Date ”).

Net proceeds from the April 2024 Public Offering were approximately $ 1.6 million after offering costs of approximately $ 0.4 million.

On May 23, 2024, the April Underwriters of the previously announced underwritten public offering of the Company exercised their option in accordance with the April Underwriting Agreement, dated April 18, 2024, by and between the Company and the Representative, as representative of the several underwriters named therein, to purchase up to an additional 91,050 shares of the Company’s Common Stock, at the public offering price of $ 3.30 per share (the “ April Overallotment Exercise ”).

The April Over-Allotment Exercise was exercised in full and closed on May 23, 2024.

The net cash proceeds to the Company from the April Overallotment Exercise were approximately $ 0.2 million which include offering costs of less than $ 0.1 million.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

On August 28, 2024, the Company issued 20,000 shares of Common Stock in relation to consulting services performed by a third party.

The fair value of the Common Stock on the date of issuance was less than $ 0.1 million.

During the year ended December 31, 2024, Anson converted $ 4.2 million of principal and interest of the First Tranche Note into common stock, resulting in the issuances of 3,676,796 shares of Common Stock valued at $ 5.5 million based on the market price of our common stock at the date of common stock issuance resulting in a loss on redemption of $ 1.3 million (see Note 7 ).

Common Stock Warrants

Substitute Warrants

In connection with the Merger in 2021, each warrant to purchase shares of common stock of NeuroRx that was outstanding and unexercised immediately prior to the Effective Time (whether vested or unvested) was assumed by BRPA and converted into a warrant, based on the Exchange Ratio (of 3.16 ), that will continue to be governed by substantially the same terms and conditions, including vesting, as were applicable to the former warrant (the “Substitute Warrants”).

In connection with the Merger in 2021, each warrant to purchase shares of Common Stock of NRx that was outstanding and unexercised immediately prior to the effective time (whether vested or unvested) was assumed by Big Rock Partners Acquisition Corp.

( "BRPA" ) and converted into a warrant, based on the exchange ratio (of 0.316 ), that will continue to be governed by substantially the same terms and conditions, including vesting, as were applicable to the former warrant (the “ Substitute Warrants ”).

There were 3,792,970 warrants outstanding and unexercised at the effective time.

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.

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.

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.

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.

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.

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.

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.

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.

At December 31, 2024 and 2023, there were 3,448,856 Public Warrants outstanding to purchase up to 344,886 shares of Common Stock.

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 Company classifies the Private Placement Warrants as derivative liabilities in its Consolidated Balance Sheet as of December 31, 2023 and 2022.

Prior to the Merger, the Company had outstanding 136,250 Private Placement Warrants (the “ Private Placement Warrants ”) to purchase up to 13,625 shares of Common Stock.

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.

The Company classifies the Private Placement Warrants as derivative liabilities in its consolidated balance sheets as of December 31, 2024 and 2023.

The Company measures the fair value of the Private Placement Warrants at the end of each reporting period and recognizes changes in the fair value from the prior period in the Company’s statements of operations for the current period.

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.

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.

Investor Warrants

As discussed above, on March 8, 2023, in conjunction with the issuance and sale of 3,866,666 shares of the Company’s Common Stock, the Company issued 3,866,666 March Investor Warrants which were classified in stockholder’s equity.

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 %).

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investor Warrants had an original exercise price of $ 0.75 per share, are initially exercisable beginning six months following the March Initial Exercise Date and will expire five and a half years from the March Initial Exercise Date.

DECEMBER 31, 2024 AND

Investor Warrants

On March 8, 2023, in conjunction with the issuance and sale of 386,667 shares of the Company’s Common Stock, the Company issued 386,667 March Investor Warrants which were classified in stockholder’s equity.

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 %).

The March Investor Warrants had an original exercise price of $ 7.50 per share, are initially exercisable beginning six months following the March Initial Exercise Date and will expire five and a half years from the March Initial Exercise Date.

The grant date fair value of these March Investor Warrants was estimated to be $ 2.4 million on March 8, 2023 and is reflected within additional paid-in capital.

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The Company recorded the incremental change in fair value of such October Amended Warrants of approximately $ 9.0 thousand as a deemed dividend and an adjustment to arrive at net income available to common stockholders on the statement of operations.

As the Company is in an accumulated deficit position, in the absence of retained earnings, the

As the Company is in an accumulated deficit position, in the absence of retained earnings, the Company recorded the reduction to additional paid-in capital (i.e., a net zero impact to additional paid-in capital).

The measurement of fair value for the October Amended Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of amendment (i.e., share price of $ 2.80 , exercise price of $ 6.525 , term of five years, volatility of 159.4 %, risk-free rate of 4.85 %, and expected dividend rate of 0 %).

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company recorded the reduction to additional paid-in capital (i.e., a net zero impact to additional paid-in capital).

The measurement of fair value for the October Amended Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of amendment (i.e., share price of $0.28, exercise price of $0.6525, term of five years, volatility of 159.4%, risk-free rate of 4.85%, and expected dividend rate of 0%).

On February 2, 2022, the Company completed a private placement and issued 7,824,727 shares of common stock and Preferred Investment Options to purchase up to an aggregate of 7,824,727 shares of common stock.

The Preferred Investment Options have an exercise price of $3.07 per share and may be exercised any time on or after August 2, 2022.

The form of the Preferred Investment Option is a warrant.

The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at February 2, 2022, the date of issuance (i.e., share price of $2.94, exercise price of $3.07, term of five years beginning August 2, 2022, volatility of 82.8%, risk-free rate of 1.60%, and expected dividend rate of 0%).

The grant date fair value of these Preferred Investment Options was estimated to be $15.5 million on February 2, 2022 and is reflected within additional paid-in capital as of June 30, 2022.

In addition, on February 2, 2022, the Company issued fully vested Preferred Investment Options to the placement agent with an exercise price of $3.99.

As these Preferred Investment Options were issued for services provided in facilitating the private placement, the Company recorded the fair value of such Preferred Investment Options as a cost of capital on the issuance date.

The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at February 2, 2022, the date of issuance (i.e., share price of $2.94, exercise price of $3.99, term of five years beginning August 2, 2022, volatility of 82.8%, risk-free rate of 1.60%, and expected dividend rate of 0%).

DECEMBER 31, 2024 AND

On February 28, 2024, in conjunction with the sale of 270,000 shares of the Company’s Common Stock, the Company issued February Warrants to purchase up to 270,000 shares of Common Stock which were classified in stockholder’s equity.

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.

The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 3.59 , exercise price of $ 3.80 , term of 5 years, volatility of 178.10 %, risk-free rate of 4.26 %, and expected dividend rate of 0 %).

The allocated fair value of the February Warrants on the grant date was $ 0.5 million and is recorded within additional paid-in capital.

On February 28, 2024, the Company issued to the Representative the Underwriter’s Warrant to purchase up to 25,000 shares of Common Stock (the “ February 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.

The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 3.05 , exercise price of $ 3.30 , term of 5 years, volatility of 178.10 %, risk-free rate of 4.26 %, and expected dividend rate of 0 %).

The allocated fair value of the Underwriter's Warrants on the grant date was $ 0.1 million and is recorded as a charge to additional paid-in capital.

On March 5, 2024 the Company issued Underwriter’s Warrant to purchase up to 3,750 shares of Common Stock in relation to the exercise of the February Over-Allotment Option.

The allocated fair value of the Underwriter's Warrants on the grant date was less than $ 0.1 million and is recorded as a charge to additional paid-in capital.

On April 19, 2024, the Company issued to the Representative the April Underwriter’s Warrant to purchase up to 30,350 shares of Common Stock (the “ April Underwriter Warrant Shares ”).

The April 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.

The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 3.04 , exercise price of $ 3.63 , term of 5 years, volatility of 178.10 %, risk-free rate of 4.66 %, and expected dividend rate of 0 %).

The allocated fair value of the April Underwriter's Warrant on the grant date was less than $ 0.1 million and is recorded as a charge to additional paid-in capital.

On May 23, 2024 the Company issued Underwriter’s Warrant to purchase up to 4,553 shares of Common Stock in relation to the exercise of the April Over-Allotment Option.

The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 3.62 , exercise price of $ 3.63 , term of 5 years, volatility of 178.10 %, risk-free rate of 4.52 %, and expected dividend rate of 0 %).

The allocated fair value of the Underwriter's Warrants on the grant date was less than $ 0.1 million and is recorded as a charge to additional paid-in capital.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

Alvogen Warrants

In conjunction with the amended Alvogen licensing agreement discussed in Note 6, on February 7, 2024, the Company issued warrants to purchase up to 419,598 shares of Common Stock.

The warrants have an exercise price of $ 4.00 per share, are exercisable immediately following the date of issuance, will expire three years from the date of issuance, and may also be exercised on a cashless basis if there is no effective registration statement available for the resale of the shares of Common Stock underlying the warrants.

The warrants are subject to a beneficial ownership limitation of 4.99 % post-exercise, with the exception that the beneficial ownership limitation may be waived up to a maximum of 9.99 % at the election of the holder, with not less than 61 days prior notice.

The measurement of fair value was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 4.10 , exercise price of $ 4.00 , term of 3 years, volatility of 138.0 %, risk-free rate of 4.2 %, and expected dividend rate of 0.0 %).

The fair value of the warrants on the grant date was $ 1.3 million and was recorded within additional paid-in capital as of March 31, 2024.

Upon termination of the Alvogen Agreement on June 21, 2024, the offsetting amount recorded within additional paid-in capital as an unfunded stock subscription receivable was expensed to research and development.

Anson Warrants

The Anson Warrants, originally issued in the Purchase Agreement, are recognized as derivative liabilities in accordance with ASC 815.

The Company concluded liability classification was appropriate as certain settlement features included in the Anson Warrants are not indexed to the Company's own stock, and therefore preclude equity classification.

Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period.

The liabilities are subject to re-measurement at each balance sheet date until exercise or expiration, and any change in fair value is recognized in the Company’s consolidated statements of operations.

The Anson Warrants were initially measured at fair value using a Black-Scholes model and have subsequently been measured based on the listed market price of such warrants.

Warrant liabilities are classified as current liabilities on the Company's consolidated balance sheets.

On August 14, 2024, in conjunction with the issuance of the First Tranche Notes, the Company issued warrants to purchase up to 1,349,305 shares of the Company’s Common Stock which were classified as a liability.

The warrants have an exercise price of $ 2.4168 per share, subject to adjustment or other settlement provisions, and have a contractual term of five years expiring on August 14, 2029.

The measurement of fair value of the Investor Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 1.86 , exercise price of $ 2.42 , term of five years, volatility of 122 %, and risk-free rate of 3.67 %, and expected dividend rate of 0 %).

The grant date fair value of these Investor Warrants was estimated to be $ 2.1 million on August 14, 2024.

On October 10, 2024, in conjunction with the issuance of the Second Tranche Notes, the Company issued warrants to purchase up to 1,846,128 shares of the Company’s Common Stock which were classified as a liability.

The warrants have an exercise price of $ 1.7664 per share, subject to adjustment or other settlement provisions, and have a contractual term of five years expiring on October 10, 2029.

The measurement of fair value of the Investor Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 1.38 , exercise price of $ 1.76 , term of five years, volatility of 105 %, and risk-free rate of 3.91 %, and expected dividend rate of 0 %).

The grant date fair value of these Second Trench Investor Warrants was estimated to be $ 1.9 million on October 10, 2024.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

As of December 31, 2024, the fair value of the Anson Warrants was $ 5.6 million.

The Company recognized a loss on the change in fair value of The Anson Warrant for the year ended December 31, 2024 of approximately $ 1.7 million.

Refer to Note 11 for discussion of the fair value measurement of the Company’s warrant liabilities.

Refer to Note 11 for further discussion of fair value measurement of the warrant liabilities.

The following table provides the activity for all warrants for the respective periods.

Intrinsic Value

Total Warrants

Total Remaining

Exercise Price

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Outstanding as of December 31, 2022

1,648,492 3.59 $ 64.90 $ —

1,673,007 4.38 6.10 180

Outstanding as of December 31, 2023

3,321,499 3.91 $ 23.01 $ 180

3,948,484 4.71 2.04 —

( 96,417 ) — — —

Outstanding as of December 31, 2024

7,173,766 3.77 $ 17.20 $ 80

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.

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.

The maximum aggregate shares of Common Stock that were subject to awards and issuable under the 2016 Plan was 347,200 .

1 unchanged sentence

Upon the closing of the Merger, the outstanding and unexercised NeuroRx stock options became options to purchase an aggregate 289,542 shares of the Company’s Common Stock at an average exercise price of $ 51.00 per share.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2021 Omnibus Incentive Plan

2 unchanged sentences

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.

As of December 31, 2023, 6,579,613 shares have been awarded and 2,133,995 shares remain available for issuance under the 2021 Plan.

As of December 31, 2024, an aggregate 575,099 shares have been awarded net of forfeitures, and 380,182 shares remain available for issuance under the 2021 Plan.

The 2021 Plan permits the granting of incentive stock options, restricted stock awards, other stock-based awards or other cash-based awards to employees, directors, and non-employee consultants.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

Option Awards

1 unchanged sentence

The Company is a public company and has limited company-specific historical and implied volatility information.

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.

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.

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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.

Additionally, certain options granted contain terms that require all unvested options to immediately vest a) upon the approval of a New Drug Application (NDA) by the FDA for NRX-101, or b) immediately preceding a change in control of the Company, whichever occurs first.

The following assumptions were used for the years ended December 31, 2023 and 2022:

Additionally, certain options granted contain terms that require all unvested options to immediately vest a) upon the approval of an NDA by the FDA for NRX‑101, or b) immediately preceding a change in control of the Company, whichever occurs first.

The Company issued 0 and 90,000 stock options during the years ended December 31, 2024 and 2023, respectively.

The following assumptions were used for the year ended December 31, 2023:

Exercise price $ 3.00 - $ 11.80

$0.30 - $1.18

$ 0.51 - $ 3.10

Risk-free rate of interest

3.83 % - 4.79 %

1.8 % - 4.36 %

Expected term (years)

Expected stock price volatility

94.9 % - 147.8 %

Dividend yield

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the Company’s employee and non-employee stock option activity under the 2021 Plan for the following periods:

5 unchanged sentences

Outstanding as of December 31, 2023

264,983 $ 18.30 7.7 $ 75

Options granted

Forfeited/Expire

( 143,150 ) — — —

Outstanding as of December 31, 2024

121,833 22.36 7.0 —

Options vested and exercisable as of December 31, 2024

Stock-based compensation expense related to stock options was approximately $0.1 million during the year ended December 31, 2023.

The weighted average grant date fair value per share for employee stock and non-employee option grants during the years ended December 31, 2023 and 2022 was $0.35 and $ 1.12 , respectively.

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.

113,993 $ 22.84 6.9 $ —

Stock-based compensation expense related to stock options was approximately $ 0.2 and $ 0.1 million during the years ended December 31, 2024 and 2023, respectively.

The weighted average grant date fair value per share for employee stock and non-employee option grants during the year ended December 31, 2023 was $ 3.50 , respectively.

There were no option grants during the year ended December 31, 2024.

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.

Restricted Stock Awards

2 unchanged sentences

Balance as of December 31, 2023 (unvested)

124,166 $ 5.20

( 90,833 ) $ 4.64

( 33,333 ) $ 5.20

Balance as of December 31, 2024 (unvested)

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

On July 12, 2022, the Board granted an award of 100,000 restricted shares of the Company (“Restricted Stock”) as an inducement to the newly appointed CEO, pursuant to a separate Restricted Stock Award Agreement (the “RSA”).

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The shares were valued on the grant date based on the quoted price of $ 4.60 or approximately $ 0.3 million which will be amortized over the vesting term.

As of December 31, 2023, total unrecognized compensation expense related to RSAs was approximately $0.4 million, which is expected to be recognized over a weighted-average period of approximately 0.9 years.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-based compensation expense related to RSAs was approximately $0.3 million during the year ended December 31, 2023.

The following table summarizes the Company’s recognition of stock-based compensation for the following periods (in thousands):

Stock-based compensation expense related to RSAs was approximately $ 0.3 and $ 0.3 million during the years ended December 31, 2024 and 2023, respectively.

In October 2024, the Company's CEO announced his resignation and as a result, all unvested RSAs were forfeited.

Accordingly, the Company does not expect to recognize any further stock-based compensation expense for the balance of unvested RSAs as of December 31, 2024.

The following table summarizes the Company’s recognition of stock-based compensation for the following periods (in thousands):

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The carrying amount of accounts payable approximated fair value as they are short term in nature.

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.

Fair Value on a Recurring Basis

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The estimated fair value of the warrant liabilities and convertible note payable represent Level 3 measurements.

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):

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):

Money Market Account

1 $ 487 $ 3,874

Warrant liabilities (Note 9)

Convertible note payable (Note 7)

3 $ 5,639 $ 17

Convertible notes payable (Note 7)

3 $ 6,257 $ 9,161

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Convertible Note Payable

The significant inputs used in the Monte Carlo simulation to measure the convertible note liability that is categorized within Level 3 of the fair value hierarchy are as follows:

DECEMBER 31, 2024 AND

Convertible Note Payable - Streeterville

The significant inputs used in the Monte Carlo simulation to measure the Streeterville convertible note liability that was categorized within Level 3 of the fair value hierarchy are as follows:

Stock price on valuation date

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Probability of default

During the year ended December 31, 2024, the Streeterville Note was repaid in full and the outstanding balance was $ 0 as of December 31, 2024.

The following table sets forth a summary of the changes in the fair value of the Convertible Note categorized within Level 3 of the fair value hierarchy (in thousands):

Par value of the Note

Unamortized debt discount

Conversions and repayments of principal and interest (shares and cash)

Carrying value of the Note before current period change in fair value

Fair value of the Note as of December 31, 2023

Conversions and repayments of principal and interest (cash)

Conversions and repayments of principal and interest (shares)

Fair value adjustment through earnings

Fair value of the Note as of December 31, 2024

Convertible note payable - current portion

Convertible note payable, net of current portion

Fair value of the Note as of December 31, 2022

Conversions and repayments of principal and interest (cash)

Conversions and repayments of principal and interest (shares)

Fair value adjustment through earnings

Fair value adjustment through accumulated other comprehensive loss

Total carrying value of Note

Fair value of the Note as of December 31, 2023

Convertible note payable - current portion

Convertible note payable, net of current portion

Convertible Notes Payable - Anson

The significant inputs used in the Monte Carlo simulation to measure the Anson Convertible Notes that are categorized within Level 3 of the fair value hierarchy are as follows:

Stock price on valuation date

Time to expiration

Equity volatility

120.7 % - 135.0 %

Risk-free rate

Probability of credit default prior to maturity

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

The following table sets forth a summary of the changes in the fair value of the Anson Notes categorized within Level 3 of the fair value hierarchy (in thousands):

Fair value of the Notes at issuance

Conversions and repayments of principal and interest (shares)

Fair value adjustment through earnings

Fair value of the Note as of December 31, 2024

Convertible note payable - current portion

Convertible note payable, net of current portion

Warrant Liabilities

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Inherent in a Black Scholes options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield.

The Company estimates the volatility of its common stock based on historical and peer company volatility that matches the expected remaining life of the warrants.

The Company estimates the volatility of its common stock based on historical volatility.

For any lookback period which exceeded the trading history, the volatility was weighed between the actual and comparable public companies.

The risk-free interest rate is based on the U.S.

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The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The significant inputs used in the Black-Scholes model to measure the warrant liabilities that are categorized within Level 3 of the fair value hierarchy are as follows:

Stock price on valuation date

$ 2.20 $ 4.60

Exercise price per share

$ 2.08 $ 115.00

Expected life

111 % 150.3 %

Risk-free rate

4.37 % 4.14 %

Dividend yield

0.00 % 0.00 %

Fair value of warrants

$ 1.76 $ 0.13

A reconciliation of warrant liabilities is included below (in thousands):

2 unchanged sentences

Balance as of December 31, 2023

Gain upon re-measurement

Initial recognition of issuance of warrants

Loss upon re-measurement

Balance as of December 31, 2024

Segment Reporting

The Company operates as a single operating and reportable segment, consistent with the manner in which the Chief Executive Officer, designated as the Chief Operating Decision Maker (CODM) of the Company, evaluates the Company’s performance and allocates resources.

The Company’s operations solely consist of the development of novel therapeutics for the treatment of central nervous system disorders including suicidal depression, chronic pain, and post-traumatic stress disorder (“PTSD”) and now schizophrenia.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

The Company did not generate any revenue during the years ended December 31, 2024 and 2023.

The CODM evaluates performance based on operating expenses and monitors key expense categories related to the Company’s research and development activities, as well as general and administrative functions.

As the Company is currently in the pre-revenue phase, the associated expenses above are drivers.

The CODM does not separately evaluate performance by geographic region or product line, as the Company has not yet commenced commercial operations and has limited operations due to the current liquidity and funding of the Company.

The Company’s operations are conducted solely within the United States of America.

Significant Segment Information

All of the Company’s assets relate to this single operating segment, see the accompanying balance sheets.

All of the Company’s operating expenses, which consists of research and development and general and administrative expenses, relate to this single operating segment, see the accompanying statements of operations.

The following table reconciles the loss from operations to total loss:

For the Years Ended

Expense Category

December 31, 2024

December 31, 2023

Loss from operations

$ ( 18,502 ) $ ( 27,837 )

Interest income

Interest expense

( 230 ) ( 120 )

Convertible note default penalty

Change in fair value of convertible notes payable

( 2,654 ) ( 2,707 )

Change in fair value of warrant liabilities

Loss on convertible note redemptions

$ ( 25,126 ) $ ( 30,150 )

Long-lived assets consist of property, plant, and equipment, net which are included in other assets in the balance sheet as they are not material.

Long-lived assets by year are as follows:

Computers, cost

Accumulated depreciation

( 19 ) ( 14 )

Total equipment

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

The Company maintains a full valuation allowance on its net deferred tax asset due to the uncertainty of future taxable income.

5 unchanged sentences

Federal statutory rate

( 21.00 )% ( 21.00 )%

Permanent items

Fair market value earnout

0.05 % 0.18 %

Settlement warrants

1.37 % ( 0.02 )%

Stock compensation

Foreign rate differential

( 2.23 )% 3.21 %

Loss on Conversion of Note

( 0.17 )% 4.74 %

Increase in valuation allowance

18.73 % 9.45 %

Convertible Note

2.19 % 1.89 %

— % ( 0.11 )%

Effective tax rate

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

0.00 % 0.00 %

The components of income tax provision (benefit) are as follows (in thousands):

As of December 31,

( 4,715 ) ( 4,278 )

State and Local

5 unchanged sentences

Net operating loss carryforwards

$ 39,753 $ 35,860

Common stock warrants

1 unchanged sentence

Stock-based compensation

Bonus accrual

Bonus and severance accrual

49,665 44,904

Valuation allowance

( 49,665 ) ( 44,904 )

Deferred tax assets, net of allowance

As of December 31, 2023 and 2022, the Company had federal net operating losses of approximately $168.5M and $152.4M and state net operating loss carryforwards of approximately $10.4M and $30.2M, respectively.

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.

As of December 31, 2024 and 2023, the Company had federal net operating losses of approximately $ 187.1 million and $ 168.5 million, respectively, and state net operating loss carryforwards of approximately $ 10.2 million and $ 10.4 million, respectively.

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.

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.

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.

After consideration of all of the evidence, the Company has recorded a valuation allowance against its deferred tax assets at December 31, 2022 and 2021 because management has determined that it is more likely than not that the Company will not recognize the benefits

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of its federal and state deferred tax assets, primarily due to its history of cumulative net losses incurred since inception and its lack of commercialization of products or generation of revenue from product sales since inception.

DECEMBER 31, 2024 AND

After consideration of all of the evidence, the Company has recorded a valuation allowance of $ 49.665 million against its deferred tax assets at December 31, 2024 because management has determined that it is more likely than not that the Company will not recognize the benefits of its federal and state deferred tax assets, primarily due to its history of cumulative net losses incurred since inception and its lack of commercialization of products or generation of revenue from product sales since inception.

The Company recognizes interest accrued to unrecognized tax benefits and penalties as income tax expense.

2 unchanged sentences

In the normal course of business, the Company is subject to examination by federal and foreign jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction.

As of December 31, 2023, open years related to all jurisdictions are 2022, 2021, 2020, & 2019.

As of December 31, 2024, open years related to all jurisdictions are 2023, 2022, and 2021.

The Company has no open tax audits with any taxing authority as of December 31, 2024.

2 unchanged sentences

The Company licenses patents that are owned by Glytech, LLC (“ Glytech ”), pursuant to a license agreement (the “ Glytech Agreement ”).

Glytech is owned by a co-founder and former director of the Company.

The Glytech Agreement requires that the Company pay Glytech for ongoing scientific support and also reimburse Glytech for expenses of obtaining and maintaining patents that are licensed to NRx Pharmaceuticals.

Glytech is owned by Daniel Javitt, a co-founder and former director of the Company.

During both the three months ended September 30, 2024 and 2023, the Company paid Glytech zero and $ 0.1 million, respectively, for continuing technology support services and reimbursed expenses.

During the years ended December 31, 2024 and 2023, the Company paid Glytech $ 0.3 million and $ 0.3 million, respectively, for continuing technology support services and reimbursed expenses.

12 unchanged sentences

Jonathan Javitt was amended to extend the term of the Agreement until March 8, 2024 with automatic annual renewals thereafter unless one party or the other provides notice of non-renewal.

The amendment also provided for

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 annual discretionary bonus for 2023, if any, may be approved by the board in 2024 and is payable in March 2024, will be pro-rated from the start of the extension period and is subject to Dr.

Javitt’s continued engagement by the Company.

The amendment also provides, subject to the approval of the Board of Directors, for a grant of 500,000 shares of restricted stock of the Company under the Company’s 2021 Omnibus Incentive Plan.

The annual discretionary bonus for 2024, if any, may be approved by the board in 2025 and is payable in March 2025, will be pro-rated from the start of the extension period and is subject to Dr.

Javitt’s continued engagement by the Company.

As of December 31, 2023 and 2024, the annual discretionary bonus of $ 0.3 million and $ 0.2 million is accrued and included within accrued and other current liabilities on the consolidated balance sheets, respectively.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND

The Javitt Amendment also provides, subject to the approval of the Board of Directors, for a grant of 50,000 shares of restricted stock of the Company under the Company’s 2021 Omnibus Incentive Plan.

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).

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 Food and Drug Administration (“FDA”) files the Company’s new drug application for the Antidepressant Drug Regimen (as defined below) for review.

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 term “New Drug Approval Date” means date upon which the FDA has both approved the Company’s Antidepressant Drug Regimen and listed the Company’s Antidepressant Drug Regimen in the FDA’s “Orange Book”.

4 unchanged sentences

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.

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.

Agreements with PillTracker

The Company paid PillTracker for digital health product development required to track the use of Aviptadil in clinical trials.

Zachary Javitt and Dr.

Jonathan Javitt are the chief executive officer and board chairman, respectively, of PillTracker.

PillTracker agreements and transactions are submitted to the General Counsel of the Company and the Chair of the Audit Committee for approval in accordance with the terms of the Company’s Related Person Transactions Policy.

The Master Service Agreement dated April 1, 2020, and all work orders thereunder, have been suspended by mutual agreement pending the Company’s re-evaluation of its respiratory franchise.

NRx Pharmaceuticals paid PillTracker $ 0.2 million during the year ended December 31, 2022.

No Pilltracker-related expenses have been recognized in 2023.

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.

Subsequent Events

Reverse Stock-split

On March 21, 2024, the Company’s stockholders approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation to effect, at the discretion of the Board of Directors of the Company (the “Board”), a reverse stock split of all of the outstanding shares of the Company’s Common Stock, $0.001 par value per share, at a ratio in the range of 1-for-2 to 1-for-15, with such ratio to be determined by the Board in its discretion.

On March 21, 2024, the Board approved a reverse stock split ratio of 1-for-10 (the “Reverse Stock Split”).

Proportional adjustments for the Reverse

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Split will be made to the Company’s outstanding stock options, restricted stock, warrants and equity incentive plans upon effectiveness.

Though the necessary approvals have been made, the Reverse Stock Split is not yet effective.

The following is the unaudited pro-forma effect of the 1:10 Reverse Stock Split on the basic and diluted net loss per share:

Historical per share data – (Pre- Split basis)

December 31, 2023

December 31, 2022

Net loss attributable to Common Stockholders

Basic and diluted weighted average shares outstanding

Basic and diluted net loss per share

Historical per share data – (Post- Split basis) (UNAUDITED)

December 31, 2023

December 31, 2022

Net loss attributable to Common Stockholders

Basic and diluted weighted average shares outstanding

Basic and diluted net loss per share

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is the unaudited pro-forma effect of the 1:10 Reverse Stock Split on the consolidated balance sheets (in thousands, except share and per share data):

December 31, 2023

1:10 adjustment

Pro-Forma Effect

December 31, 2023

Total liabilities

Stockholders’ (deficit) equity:

Series A convertible preferred stock

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ (deficit) equity

Total liabilities and stockholders' (deficit) equity

December 31, 2022

1:10 adjustment

Pro-Forma Effect

December 31, 2022

Total liabilities

Stockholders’ (deficit) equity:

Series A convertible preferred stock

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ (deficit) equity

Total liabilities and stockholders' (deficit) equity

Conversion of Preferred Shares

In March 2024, holders of the Company’s Series A convertible preferred stock elected to convert 3,000,000 shares of Series A convertible preferred stock into 3,000,000 shares of Common Stock.

Following the conversion, no shares of Series A convertible preferred stock remained issued or outstanding.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

From February 20, 2024 to March 11, 2024, the Company announced that it entered into multiple purchase agreements (the “ATM Purchase Agreements”) subject to standard closing conditions where accredited investors purchased 345,829 shares of unregistered common stock at a range of $0.4643 – $0.71 per share.

The final ATM Purchase Agreement closed on March 11, 2024.

The aggregate net cash proceeds to the Company from the ATM Purchases Agreements were approximately $0.2 million.

February 2024 Purchase Agreement

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.

February 2024 Offerings

On February 27, 2024, NRx Pharmaceuticals, Inc.

(the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with EF Hutton LLC (the “Representative”), as the representative of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “Offering”) of 5,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”).

On February 28, 2024, the Offering closed (the “Closing Date”).

The aggregate net cash proceeds to the Company from the Offering proceeds were were approximately $1.3 million.

On March 5, 2024, the underwriters of the previously announced underwritten public offering of NRx Pharmaceuticals, Inc.

(the “Company”) exercised their option in accordance with the Underwriting Agreement, dated February 27, 2024, by and between the Company and EF Hutton LLC, as representative of the several underwriters named therein, to purchase up to an additional 750,000 shares of the Company’s common stock, par value $0.001 per share, at a public offering price of $0.30 per share (the “Overallotment Exercise”).

The Overallotment Exercise closed on March 6, 2024.

The aggregate net cash proceeds to the Company from the Overallotment Exercise were approximately $0.2 million.

Streeterville Amendment

On February 9, 2024, the Company entered into Amendment #3 to Convertible Promissory Note (the “Third Amendment”), with Streeterville Capital, LLC (“Streeterville”).

Pursuant to the Third Amendment, the Company and Streeterville agreed to further amend the terms of that certain Convertible Promissory Note dated November 4, 2022, in the original principal amount of $11,020,000, as amended by the amendments to the Convertible Promissory Note dated March 30, 2023 and July 7, 2023 (as amended, the “Note”).

In accordance with the Third Amendment, the Company and Streeterville agreed to amend the redemption provisions of the Note.

In particular, the Company agreed to pay Streeterville an amount in cash equal to $1,100,000 on February 12, 2024.

In addition, beginning on or before February 29, 2024, on or before the last day of each month until July 31, 2024 (the “Minimum Payment Period”), the Company shall pay Streeterville an amount equal

Terminated January 2025 Financing

The Company was a party to definitive stock purchase agreements with an Arizona-based investment firm, Smith and Sauer, through their affiliate, JGS Holdings, LLC (“JGS Holdings”) whereby JGS Holdings committed to invest $ 2.0 million in NRx’s common stock, with an additional commitment of $ 25.0 million to be invested directly in HOPE.

JGS Holdings defaulted under the terms of the agreements, despite several extensions of the closing date.

The Company formally terminated the stock purchase agreement on March 13, 2025.

Although no assurances can be given, management is currently negotiating with an alternative strategic investor to replace the investment contemplated with JGS Holdings, and, together with alternative sources of equity and debt capital, management believes it will able to fund its previously announced acquisitions on terms more favorable to our shareholders.

NRX PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to $400,000 in cash (a “Minimum Payment”), less any amount satisfied by the delivery of Redemption Conversion Shares (as defined in the Note).

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).

During the Minimum Payment Period, the Company is permitted to pay the Redemption Amounts in the form of shares of common stock of the Company (the “Redemption Conversion Shares”) calculated on the basis of the Redemption Conversion Price (as defined in the Note) without regard to the existence of any Equity Conditions Failure to the extent Streeterville submits redemption notices during such month pursuant to the terms of the Note, and only for the Redemption Amounts covered by such notices.

Moreover, the Redemption Premium (as defined in the Note) will continue to apply to the Redemption Amounts.

To the extent there is an outstanding balance under the Note after the expiration of the Minimum Payment Period, the Company will be required to pay such outstanding balance in full in cash by August 31, 2024.

Streeterville Note Payment

Since December 31, 2023 and through March 25, 2024, the Company has made aggregate principal and interest payments of $2.9 million to Streeterville, consisting of cash payments of $2.5 million and the issuance of 1,436,472 shares of common stock with a value of $0.4 million.

Alvogen Agreement Amendment

As of February 7, 2024, the Alvogen agreement was amended and the company became eligible to receive $5 million as an advance of the first Milestone completion within the Alvogen Agreement.

As compensation for advancing the milestone, Alvogen and Lotus will receive 4.1 million warrants to purchase the Company's common stock, at a strike price of $0.40 with a three year term.

The second portion of the first milestone will be $4 million and, as before, be triggered by a positive response to the Company's planned end of phase 2 meeting with FDA.

A second milestone payment of $5 million (the “Approval Payment”) is due upon Alvogen’s receipt of a copy of the FDA’s notice of NDA Approval for Product with the label indication for the treatment of bipolar depression with sub-acute or acute suicidality.

NRx then remains eligible to receive up to $315 million in future development and sales milestones, as well as royalty payments escalating to mid-teen percentages on Net Sales, subject to achievement of certain sales volumes.

Hope Therapeutics

The Company announced on February 5, 2024 that the incorporation of HOPE Therapeutics™ (HOPE), a biotechnology company dedicated to bring NRX-100 (IV Ketamine), will be re-designated HTX-100, a potentially lifesaving treatment option for patients with Suicidal Depression.

The company will initially be owned by NRx and its current shareholders, who will receive their shares in the form of a dividend with an accompanying royalty coupon tied to future sales of HTX-100, subject to Board approval.

HOPE is dedicated to providing an FDA-approved presentation of IV Ketamine, manufactured to current federal standards, in a diversion- and abuse-deterrent presentation.

A New Drug Application (NDA) is planned for the first half of 2024, based on more than 1,000 patients treated in well-controlled trials of ketamine in Suicidal Depression together with HOPE's expertise in sterile products formulation.

Compliance with Nasdaq Listing Requirements

On February 3, 2024, the Company announced that it has been granted an exception by the Nasdaq Hearing Panel to meet compliance requirements by April 16, 2024.

This is conditional upon the Company completing a transfer of its listing from The Nasdaq Global Market to the Nasdaq Capital Market, which was approved and took effect at the opening of business on January 19, 2024.

DECEMBER 31, 2024 AND

January Financings

Issuance of Senior Secured Promissory Notes and Common Stock Purchase Warrants

On or about January 28, 2025, the Company sold certain institutional investors (the “Investors”) a total of (a) $ 5.435 million in Notes (the “ Third Tranche Notes ”), with an aggregate purchase price of approximately $ 5.0 million, and (b) Warrants to purchase up to 862,699 shares of Common Stock (the “ Third Closing ”).

The Third Tranche Notes are convertible into Common Stock, at a per share conversion price equal to by the lower of (a) $ 3.78 (the “ Fixed Conversion Price ”) or (b) a price equal to 92 % of the lowest VWAP during the seven trading day period immediately preceding the effective date set forth in a Notice of Conversion (as defined in the Notes) (each, a “ Conversion Date ”) delivered by an Investor to the Company (the “ Alternate Conversion Price ”, and together with the Fixed Conversion Price, the “ Conversion Price ”).

The Conversion Price is subject to, among other customary provisions, downward adjustment in the event of any future issuance by the Company of Common Stock (or Common Stock Equivalents) below the then effective Conversion Price.

The Company plans to use a portion of the proceeds from the sale of the Third Tranche Notes for general working capital.

Entry into Securities Purchase Agreement for Registered Direct Offering

On January 27, 2025, the Company entered into a securities purchase agreement (the “ RD Purchase Agreement ”) with 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 ”).

Concurrently with the sale of the RD Shares, pursuant to the RD Purchase Agreement the Company also sold to the investors unregistered Common Stock purchase warrants (the “ RD Warrants ”) to purchase up to an aggregate of 1,215,278 shares of Common Stock (the “ RD Warrant Shares ”), in a private placement.

Subject to certain beneficial ownership limitations, the RD Warrants are immediately exercisable upon issuance at an exercise price equal to $ 2.88 per share of Common Stock, subject to adjustments as provided under the terms of the RD Warrants.

The closing of the sales of these securities under the RD Purchase Agreement occurred on or about January 29, 2025 ( the “ RD Closing Date ”).

The RD Warrants are exercisable for five years from the RD Closing Date.

The gross proceeds to the Company from the offerings were approximately $ 3,500,000 , before deducting offering expenses, and excluding the proceeds, if any, from the exercise of the RD Warrants.

The Company intends to use the net proceeds from the transactions for general corporate purposes, including the funding of certain capital expenditures.

Entry into Waiver and Consent Agreement

On or about January 27, 2025, the Company and the Investors entered into a Consent and Waiver Agreement (the “CWA”), relating to certain rights and prohibitions arising under the Purchase Agreement and the Notes.

In the CWA, each of the Investors provided its consent under certain restrictive provisions, and waived certain rights, including, among other things, a right to participate in certain Qualified Financings (as defined in the CWA) made by us under the Purchase Agreement and the Notes, the prohibition on issuance of certain equity securities, and waiver of any potential liquidated damages arising under that certain Registration Rights Agreement by and between the Company and the Investors dated August 14, 2024, until March 31, 2025.

As consideration for entering into the CWA, in the event that the VWAP of the Common Stock is less than the per share purchase price of the Common Stock sold to the Investors in the Registered Direct Offering on the Trading Day (as defined in the RD Purchase Agreement) immediately prior to the date that the Investors submit their first conversion notice to convert any portion of the Notes issued or to be issued in the Second Closing (as defined in the Purchase Agreement) or the Third Closing (as defined in the Purchase Agreement), respectively, into shares of Common Stock, the Company agreed to issue to the Investors:

(i) that number of shares of Common Stock equal to (a) the quotient of (I) aggregate purchase price to be paid for all securities in the Registered Direct Offering, divided by (II) the price per share of Common Stock after giving effect to the VWAP-Based Adjustment (as defined below), minus (b) the number of shares of Common Stock issued, or to be issued, to the Investors at or upon the consummation of the Registered Direct Offering (the “Consideration Shares”), and (ii) Common Stock purchase warrants to purchase shares of Common Stock equal to 100 % of the aggregate number of Consideration Shares to be issued, with an exercise price equal to the dollar value of the VWAP-Based Adjustment (the “Consideration Warrants”).

For purposes of the CWA, the “VWAP Based-Adjustment” means that amount, in dollars, equal to the greater of either (a) the VWAP of the Common Stock on the Trading Day immediately prior to the date that the Investors submit their first conversion notice to convert any portion of the Notes issued and to be issued in the Second Closing or Third Closing into shares of the Company’s Common Stock, or (b) 80 % of the closing price of the Common Stock on the Trading Day immediately prior to the closing of the Registered Direct Offering.

Anson Conversion Notices

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data