What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 92 added, 49 removed, 169 unchanged (45% of the section changed)

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(“NRx Pharmaceuticals” or the “Company”).

NRx Pharmaceuticals is a clinical stage pharmaceutical company that is developing, through its wholly-owned operating subsidiary, NeuroRx, NRX-100 and NRX-101, the first oral therapeutic for the treatment of Bipolar Depression in patients with Acute Suicidal Ideation and Behavior (ASIB) and Sub-Acute Suicidal Ideation and Behavior (“SSIB”), and ZYESAMI ® (aviptadil), an intravenous and inhaled drug to treat respiratory failure in COVID-19 and potentially other respiratory disorders.

NRx Pharmaceuticals is a clinical stage pharmaceutical company that is developing, through its wholly owned operating subsidiary, NeuroRx, NRX-100 and NRX-101, the first oral therapeutic for the treatment of Bipolar Depression in patients with Acute Suicidal Ideation and Behavior (ASIB) and Sub-Acute Suicidal Ideation and Behavior (“SSIB”).

NRX-100 and NRX-101 were developed based upon 30 years of basic science and clinical expertise contributed by Dr.

Daniel Javitt, MD, PhD, related to the role of the brain’s N-methyl-D-aspartate (“NMDA”) receptor in regulating human thought processes in general and in regulating depression and suicidality.

The NRX-100 and NRX-101 therapy begins with a single dose of ketamine (NRX-100), a Food & Drug Administration (“FDA”) approved anesthetic, followed by approximately six weeks of daily oral NRX-101.

The NRX-100 and NRX-101 investigational therapy begins with a single dose of ketamine (NRX-100), a Food & Drug Administration (“FDA”) approved anesthetic, followed by approximately six weeks of daily oral NRX-101.

NRX-101 is being developed as a rapid-onset and sustained treatment for bipolar depression with ASIB and SSIB.

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lurasidone (the active ingredient used in the market leading branded bipolar depression agent) in maintaining remission from depression and suicidality following a single stabilizing dose of ketamine.

NRx Pharmaceuticals initiated a Phase II clinical study of Bipolar Depression with Subacute Suicidal Ideation and Behavior (SSIB) in the second quarter of 2022 for which enrollment has begun.

The Company plans to initiate a registrational study for Bipolar Depression in patients with ASIB in the latter part of 2022.

In March 2020, NRx Pharmaceuticals initiated development of RLF-100 (aviptadil acetate) (now reformulated as ZYESAMI by NRx Pharmaceuticals) in partnership with Relief Therapeutics Holding AG.

ZYESAMI is based on 50 years of research, pioneered by Professor Sami Said, on the role of Vasoactive Intestinal Peptide/Aviptadil in preventing and treating acute lung injury.

Development work on ZYESAMI has been suspended following a decision by the National Institute of Health (NIH) in May 2022 to stop its ACTIV-3b Critical Care Study evaluating ZYESAMI due to futility.

The Company is re-evaluating its respiratory franchise but has no plans to invest further resources in ZYESAMI.

In March 2022, NRx Pharmaceuticals announced a primary focus on its psychiatry franchise and the late-stage development of NRX-101 for the treatment of bipolar depression in patients with suicidality.

NRX-101 is a fixed dose combination of D-cycloserine, an NMDA antagonist, and lurasidone, a 5-HT 2A atypical antipsychotic and antidepressant, for the maintenance of remission from severe bipolar depression following initial stabilization with ketamine.

The previously undiscovered synergy between these two drug classes in the treatment of CNS disorders, combined with the efficacy of D-cycloserine in the treatment of depression and PTSD, is the subject of 47 issued patents and more than 43 pending patents owned by or licensed to NRx Pharmaceuticals.

NRX-101 Lead Indication – Severe Bipolar Depression in Patients with Acute Suicidal Ideation and Behavior (ASIB) After Initial Stabilization with ketamine

● In 2017, NRX-101 received an investigational new drug (IND) clearance by the U.S.

Food and Drug Administration (FDA) and a Phase 2b/3 clinical trial commenced for bipolar depression with ASIB.

Later that year, the FDA granted NRX-101 a Fast Track designation for the same indication.

● In 2018, the FDA provided a Letter of Support to the Company encouraging the development of Glutamine+Glutamate (Glx) as a pharmacodynamic biomarker for depression.

The letter referenced published and unpublished data demonstrating a significant association between clinical symptoms of depression and levels of brain Glx.

● In the STABIL-B Phase 2 trial, the Phase 2 portion of the Phase 2b/3 trial, patients with bipolar depression and ASIB received either NRX-101 or lurasidone after an intravenous infusion of NRX-100 (ketamine).

The proof-of-concept data presented at the American Congress of Neuropsychopharmacology in 2018 demonstrated with statistical significance that NRX-101 treated patients experienced lower depression scores and did not relapse.

● Based on STABIL-B findings, the FDA granted NRX-101 Breakthrough Therapy Designation and a Special Protocol Agreement (“SPA”) for bipolar depression in patients with ASIB, which affects ~150K-180K patients per year in the U.S.

The Breakthrough Therapy Designation allows for an expedited rolling submission of a new drug application (“NDA”) for investigational drugs that have demonstrated substantial improvement over existing approved therapies, and the SPA allows for a single registrational trial of NRX-101 in severe bipolar depression in patients with ASIB after stabilization with ketamine, using a protocol similar to the STABIL-B trial with a patient population of less than 100.

● NRx Pharmaceuticals plans to initiate the registrational Phase 3 portion of the Phase 2b/3 clinical trial of bipolar depression in patients with ASIB in 4Q 2022.

The trial is designed as a double-blind, adaptive trial with a 2:1 randomization of NRX-101 vs.

lurasidone alone in 72 patients.

The study is expected to find that following initial stabilization with a single infusion of ketamine (NRX-100), treatment with NRX-101 is superior to lurasidone alone in maintaining remission from symptoms of depression and suicidality as measured by the MADRS-10 depression scale and the CGI suicidality scale.

● NRx Pharmaceuticals announced that it has transferred Phase 3 commercial drug manufacturing processes to the U.S.

and released Phase 3 drug manufactured via the expected commercial-stage processes.

NRx Pharmaceuticals has submitted its manufacturing file to the FDA.

This investigational drug manufactured according to these new processes will be used in the upcoming Phase 3 trial.

● A data readout from the registrational Phase 3 clinical trial is expected in 3Q 2023.

Assuming that efficacy endpoints and safety are met, NRx Pharmaceuticals plans to initiate submission of a NDA to the FDA by year-end 2023, as allowed under Breakthrough Therapy Designation.

● Company has received numerous partnering inquiries for NRX-101

NRX-101 Indication – Bipolar Depression in Patients with Sub-acute Suicidal Ideation and Behavior (SSIB)

● A Phase 2 double-blind study completed in 2018 demonstrated the ability of NRX-101 to improve depression and suicidality over 6 weeks when taken twice daily over lurasidone alone after an initial stabilization with ketamine.

The current study involving patients with bipolar depression and sub-acute suicidality (not requiring hospitalization) does not include the use of ketamine;

all patients are being treated in an outpatient setting.

● Insights from this study will guide NRx Pharmaceuticals in the potential expansion of the indication for NRX-101 to bipolar depression with SSIB, which represents a significantly 2-3x larger patient population than those with bipolar depression and ASIB.

A data readout of this study is expected by 1H 2023.

NRX-101 Indication – Post Traumatic Stress Disorder

● In September 2022, NRx announced plans to investigate PTSD as an additional indication.

The Company expects to commence Phase 2 clinical trial planning of NRX-101 in PTSD in 4Q 2022.

● Depression in PTSD may be driven by pathways that are similar to those that drive depression in other conditions (NMDA and 5-HT2A).

Additionally, approximately 10% of patients with PTSD may experience suicidality, especially those with severe PTSD.

● In a preclinical PTSD study, D-cycloserine, a component of NRX-101, demonstrated the ability to extinguish recurring images of traumatic events, also known as fear memory, in a validated WKY model of PTSD.

Since inception, NRx Pharmaceuticals has incurred significant operating losses.

For the three months ended June 30, 2022 and 2021, NRx Pharmaceuticals’ net loss was $7.0 million and $0.1 million, respectively.

For the six months ended June

30, 2022 and 2021, NRx Pharmaceuticals’ net loss was $20.4 million and $25.6 million, respectively.

As of June 30, 2022, NRx Pharmaceuticals had an accumulated deficit of $203.7 million.

For the three months ended September 30, 2022 and 2021, NRx Pharmaceuticals’ net loss was $9.1 million and $37.0 million, respectively.

For the nine months ended September 30, 2022 and 2021, NRx Pharmaceuticals’ net loss was $29.5 million and $62.7 million, respectively.

As of September 30, 2022, NRx Pharmaceuticals had an accumulated deficit of $212.8 million.

Components of Results of Operations

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See Note 8 “Commitments and Contingencies – Relief Therapeutics Collaboration Agreement” of the notes to the Company’s unaudited condensed consolidated financial statements included elsewhere in this report for further information.

Results of operations for the three months ended June 30, 2022 and 2021

Results of operations for the three months ended September 30, 2022 and 2021

The following table sets forth NRx Pharmaceuticals’ selected statements of operations data for the following periods (in thousands):

Three months ended June 30,

Three months ended September 30,

Operating expenses:

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Research and development expenses

For the three months ended June 30, 2022, NRx Pharmaceuticals recorded $3.0 million of research and development expenses compared to $4.7 million for the three months ended June 30, 2021.

The decrease of $1.7 million related primarily to a decrease of $2.1 million in clinical trials and development expenses related to ZYESAMI, partially offset by an increase of less than $0.4 million in other regulatory and process development expenses related principally to ZYESAMI.

The $3.0 million and $4.7 million of research and development expenses for the three months ended June 30, 2022 and 2021, respectively, include $0.2 million and less than $0.2 million, respectively, of non-cash stock-based compensation.

For the three months ended September 30, 2022, NRx Pharmaceuticals recorded $4.1 million of research and development expenses compared to $6.3 million for the three months ended September 30, 2021.

The decrease of $2.1 million related primarily to a decrease of $1.5 million in clinical trials and development expenses related to ZYESAMI, a decrease of $0.6 million related to fees paid to regulatory and process development consultants, a decrease of $0.2 million in stock-based compensation, partially offset by an increase of $0.2 million in other regulatory and process development expenses.

The $4.1 million and $6.3 million of research and development expenses for the three months ended September 30, 2022 and 2021, respectively, include less than $0.1 million and $0.2 million, respectively, of non-cash stock-based compensation.

General and administrative expenses

For the three months ended June 30, 2022, NRx Pharmaceuticals recorded $6.6 million of general and administrative expenses compared to $12.5 million for the three months ended June 30, 2021.

The decrease of $5.8 million was primarily, related to a decrease of $3.3 million in stock-based compensation expense and a decrease of $4.4 million of consultant fees, partially offset by an increase of $1.4 million in insurance expense and $0.2 million in other general and administrative expense.

The $6.6 million and $12.5 million of general and administrative expenses for the three months ended June 30, 2022 and 2021, respectively, include $1.7 million and $4.1 million, respectively, of non-cash stock-based compensation.

For the three months ended September 30, 2022, NRx Pharmaceuticals recorded $5.0 million of general and administrative expenses compared to $13.8 million for the three months ended September 30, 2021.

The decrease of $8.8 million was primarily, related to a decrease of $8.3 million of consultant fees, a decrease of $0.8 million in stock-based compensation expense, a decrease of $0.3 million in other general and administrative expenses, a decrease of less than $0.1 million in legal and professional fees, partially offset by an increase of $0.6 million in payroll and salary expenses.

The $5.0 million and $13.8 million of general and administrative expenses for the three months ended September 30, 2022 and 2021, respectively, include $0.5 million and $1.3 million, respectively, of non-cash stock-based compensation.

Other (income) expenses

Interest income

For the three months ended June 30, 2022, NRx Pharmaceuticals recorded less than $0.1 million of interest income.

The increase of less than $0.1 million related primarily to the earned interest income on the money market account.

For the three months ended September 30, 2022, NRx Pharmaceuticals recorded approximately $0.1 million of interest income.

The increase is primarily related to the earned interest income on the money market account.

Change in fair value of warrant liabilities

For the three months ended June 30, 2022, NRx Pharmaceuticals recorded a gain of $0.1 million related to the change in fair value of the warrant liabilities compared to a gain of $17.4 million for the three months ended June 30, 2021.

For the three months ended September 30, 2022, NRx Pharmaceuticals recorded a loss of less than $0.1 million related to the change in fair value of the warrant liabilities compared to a loss of $16.5 million for the three months ended September 30, 2021.

The decrease of $16.5 million related to the decrease in the fair value of certain Substitute Warrants and the Placement Warrants assumed pursuant to the Merger Agreement.

Change in fair value of Earnout Cash liability

For the three months ended June 30, 2022, NRx Pharmaceuticals recorded a gain of $2.5 million related to the change in fair value of the Earnout Cash liability compared to a loss of $0.4 million for the three months ended June 30, 2021.

The decrease of $2.8 million is related to the decrease in the fair value of the Earnout Cash liability pursuant to the Merger Agreement.

Results of operations for the six months ended June 30, 2022 and 2021

For the three months ended September 30, 2022, NRx Pharmaceuticals recorded a gain of $0.4 million for the three months ended September 30, 2021.

The gain related to the decrease in the fair value of the Earnout Cash liability pursuant to the Merger Agreement.

Results of operations for the nine months ended September 30, 2022 and 2021

The following table sets forth NRx Pharmaceuticals’ selected statements of operations data for the following periods (in thousands):

Six months ended June 30,

Nine months ended September 30,

Operating expenses:

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Research and development expenses

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded $8.4 million of research and development expenses compared to $7.6 million for the six months ended June 30, 2021.

The increase of $0.9 million related primarily to an increase of $0.7 million in other regulatory and process development expenses, and an increase of $0.2 million in stock-based compensation expense, and an increase of less than $0.1 million in clinical trials and development expenses related to ZYESAMI.

The $8.4 million and $7.6 million of research and development expenses for the six months ended June 30, 2022 and 2021, respectively, include $0.4 million and $0.2 million, respectively, of non-cash stock-based compensation.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded $12.6 million of research and development expenses compared to $13.8 million for the nine months ended September 30, 2021.

The decrease of $1.3 million is related to a decrease of $1.5 million in clinical trials and development expenses related to ZYESAMI, a decrease of $0.5 million in fees paid to regulatory and process development consultants, partially offset by an increase of $0.7 million in other regulatory and process development costs.

The $12.6 million and $13.8 million of research and development expenses for the nine months ended September 30, 2022 and 2021, respectively, include $0.5 million and $0.4 million, respectively, of non-cash stock-based compensation.

General and administrative expenses

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded $16.9 million of general and administrative expenses compared to $14.6 million for the six months ended June 30, 2021.

The increase of $2.3 million was primarily, related to an increase of $4.1 million in legal, professional and accounting fees, an increase of $3.7 million in insurance expense, an increase in $0.7 million in other general and administrative expenses, an increase of $0.3 million for employee expenses, partially offset by a decrease of $3.9 million of consultant fees and a decrease of $2.6 million in stock-based compensation expense.

The $16.9 million and $14.6 million of general and administrative expenses for the six months ended June 30, 2022 and 2021, respectively, include $1.9 million and $4.4 million, respectively, of non-cash stock-based compensation.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded $21.9 million of general and administrative expenses compared to $28.4 million for the nine months ended September 30, 2021.

The decrease of $6.5 million was primarily, related to a decrease of $12.3 million in consultant fees, a decrease of $3.4 million in stock-based compensation expense, partially offset by an increase of $4.1 million in legal, professional and accounting fees, an increase of $3.7 million in insurance expense, an increase of $0.9 million in payroll and salary expenses, and an increase of $0.5 million in other general and administrative expenses.

The $21.9 million and $28.4 million of general and administrative expenses for the nine months ended September 30, 2022 and 2021, respectively, include $2.4 million and $5.8 million, respectively, of non-cash stock-based compensation.

Settlement expense

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded no settlement expense compared to $21.4 million of settlement expense for the six months ended June 30, 2021 related to the GEM Warrant reflecting the incremental value through the date of issuance.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded no settlement expense compared to $21.4 million of settlement expense for the nine months ended September 30, 2021 related to the GEM Warrant reflecting the incremental value through the date of issuance.

Reimbursement of expenses from Relief Therapeutics

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded no reimbursement of expenses from Relief Therapeutics compared to $0.8 million of reimbursement of expenses from Relief Therapeutics for the six months ended June 30, 2021.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded no reimbursement of expenses from Relief Therapeutics compared to $0.8 million of reimbursement of expenses from Relief Therapeutics for the nine months ended September 30, 2021.

Other (income) expenses

Gain on extinguishment of debt

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded no gain on extinguishment of debt compared to $0.1 million for the six months ended June 30, 2021.

The decrease of $0.1 million related to the forgiveness of the PPP Loan which resulted in a gain on extinguishment for the outstanding principal and accrued and unpaid interest for the six months ended June 30, 2021.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded no gain on extinguishment of debt compared to $0.1 million for the nine months ended September 30, 2021.

Interest income

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded less than $0.1 million of interest income.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded $0.1 million of interest income.

The increase of less than $0.1 million related primarily to the earned interest income on the money market account.

Change in fair value of warrant liabilities

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded a gain of $0.3 million related to the change in fair value of the warrant liabilities compared to a gain of $17.4 million for the six months ended June 30, 2021.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded a gain of $0.2 million related to the change in fair value of the warrant liabilities compared to a gain of $0.8 million for the nine months ended September 30, 2021.

The decrease of $0.6 million related to the decrease in the fair value of certain Substitute Warrants and the Placement Warrants assumed pursuant to the Merger Agreement.

Change in fair value of Earnout Cash liability

For the six months ended June 30, 2022, NRx Pharmaceuticals recorded a gain of $4.6 million related to the change in fair value of the Earnout Cash liability compared to a loss of $0.4 million for the six months ended June 30, 2021.

For the nine months ended September 30, 2022, NRx Pharmaceuticals recorded a gain of $4.6 million related to the change in fair value of the Earnout Cash liability compared to a loss of $0.8 million for the nine months ended September 30, 2021.

The decrease of $4.6 million is related to the decrease in the fair value of the Earnout Cash liability pursuant to the Merger Agreement.

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This could negatively affect the Company’s business and operations and could also lead to the reduction of the Company's operations.

On November 4, 2022, the Company issued an 9% redeemable promissory note (the “Note”) to Streeterville Capital, LLC, a Utah limited liability company, for an aggregate principal amount of $11,020,000.

The Company intends to use the proceeds from such issuance for general corporate purposes.

The Note matures 18 months from the date of issuance subject

to certain acceleration provisions.

The Note carries an original issue discount of $1,000,000 which was deducted from the principal balance of the Note.

The net proceeds from the issuance of the Note was $10,000,000 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 $1,000,000 of the outstanding balance of the Note per month starting six months after the issuance date.

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

(i) in cash, (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 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 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 (2x) the monthly redemption amount of $1,000,000 solely by payment by stock, if permitted under the agreement, subject to maximum percentage and other ownership limitations.

Private Placement

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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.

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 September 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.

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If the Earnout Shares Milestone is achieved, the Earnout Shares will be issued within five (5) Business Days after the occurrence of the Earnout Shares Milestone.

If the Earnout Cash Milestone is achieved, the Merger Agreement does not require the Earnout Cash to be delivered to NeuroRx securityholders within any specified period of time, and the board of directors of NRx Pharmaceuticals will use its good faith judgment to determine the date to pay the Earnout Cash.

faith judgment to determine the date to pay the Earnout Cash.

At June 30, 2022, the fair value of the Earnout Cash liability has been estimated to be $0 million.

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The following table presents selected financial information and statistics for each of the periods shown below:

June 30, 2022

September 30, 2022

December 31, 2021

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Total stockholders' equity (deficit)

September 30,

Statement of Cash Flow Data:

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Operating activities

During the six months ended June 30, 2022, operating activities used $25.2 million of cash, primarily resulting from a net loss of $20.4 million, increased by net non-cash gains of $2.5 million, including $4.6 million of gain from the change in fair value of earn out liability and $0.3 million of gain from the change in fair value of warrant liabilities, partially offset by $2.3 million of stock-based compensation expense, and an increase in net operating assets of $2.2 million.

During the six months ended June 30, 2021, operating activities used $14.4 million of cash, primarily resulting from a net loss of $25.6 million, reduced by non-cash charges of $13.8 million, including $21.4 million of non-cash settlement expense related to the GEM Warrant, $4.7 million of stock-based compensation expense, $0.4 million of change in fair value of earnout cash liability, partially offset by a gain on extinguishment of debt of $0.1 million and $17.4 million in gain from the change in fair value of warrant liability and an increase in net operating assets of $2.6 million.

During the nine months ended September 30, 2022, operating activities used $31.4 million of cash, primarily resulting from a net loss of $29.5 million, increased by net non-cash gains of $2.0 million, including $4.6 million of gain from the change in fair value of earn out liability and $0.2 million of gain from the change in fair value of warrant liabilities, partially offset by $2.9 million of stock-based compensation expense, and an increase in net operating assets of less than $0.1 million.

During the nine months ended September 30, 2021, operating activities used $26.4 million of cash, primarily resulting from a net loss of $62.7 million, reduced by non-cash charges of $40.2 million, including $21.4 million of non-cash settlement expense related to the GEM Warrant, $12.8 million in consulting expense, $6.2 million of stock-based compensation expense, $0.8 million of change in fair value of earnout cash liability, partially offset by a gain from the change in fair value of warrant liability of $0.8 million, a gain on extinguishment of debt of $0.1 million, and an increase in net operating assets of $4.0 million.

Financing activities

During the six months ended June 30, 2022, financing activities provided $22.1 million of cash resulting from $22.6 million in net proceeds received by the Company from the issuance of common stock and preferred investment options in a private placement partially offset by $0.5 million of repayment of Relief Therapeutics loan.

During the six months ended June 30, 2021, financing activities provided $25.9 million of cash, primarily resulting from $11.1 million for the effect of the merger, net of transaction costs, $8.5 million of proceeds from the issuance of shares of NeuroRx common stock and $7.5 million of proceeds from the issuance of NeuroRx common stock for the exercise of the GEM Warrants.

During the nine months ended September 30, 2022, financing activities provided $22.1 million of cash resulting from $22.6 million in net proceeds received by the Company from the issuance of common stock and preferred investment options in a private placement partially offset by $0.5 million of repayment of Relief Therapeutics loan.

During the nine months ended September 30, 2021, financing activities provided $63.5 million of cash, primarily resulting from $27.4 million in repayment of notes payable assumed in Merger, $16.7 million in proceeds from issuance of common stock for exercise of warrant, $11.1 million for the effect of the merger, net of transaction costs, $9.6 million in proceeds from issuance of common stock and exercise of stock options, partially offset by $1.1 million in repayment of notes payable assumed in Merger and $0.2 million in repayment of notes payable – related party.

Contractual Obligations and Commitments

See Note 8, Commitments and Contingencies, of the notes to NRx Pharmaceuticals’ unaudited condensed consolidated financial statements as of and for the three months ended months ended and six months ended June 30, 2022 included elsewhere in this report for further discussion of NRx Pharmaceuticals' commitments and contingencies.

See Note 8, Commitments and Contingencies, of the notes to NRx Pharmaceuticals’ unaudited condensed consolidated financial statements as of and for the three months ended months ended and nine months ended September 30, 2022 included elsewhere in this report for further discussion of NRx Pharmaceuticals' commitments and contingencies.

Milestone Payments

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The DCFs incorporate Level 3 inputs including estimated discount rates that we believe market participants would consider relevant in pricing and the projected timing and amount of cash flows, which are estimated and developed in consideration of the uncertainties associated with the obligations.

(i) ZYESAMI NIH Phase III trial was stopped due to futility, and (ii) NRX-101 Phase III trial has not yet started, management estimated the probability as of June 30, 2022 of achieving the required milestones for payment of the Earnout Cash to be de minimis and therefore, the June 30, 2022 Earnout Cash liability was reduced to zero.

NIH Phase III trial was stopped due to futility, and (ii) NRX-101 Phase III trial has not yet started, management estimated the probability as of September 30, 2022 of achieving the required milestones for payment of the Earnout Cash to be de minimis and therefore, the September 30, 2022 Earnout Cash liability is zero.

Changes in the estimated fair value of the Earnout Cash Liability are recognized as a gain or loss in the statements of operations.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis