NRX Pharmaceuticals Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
NRXP$2.38+4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001558370-24-008144
Item 2. Results of operations for the three months ended March 31, 2024 and 2023Current report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001437749-24-026847
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 114 current paragraphs.
34 unchanged; 14 reworded; 58 added; 21 removed; 2 previous and 8 current paragraphs rearranged.
Tables are not compared: 2 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (58)
Current report
Item 2. Management**’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
You should read the following discussion and analysis of NRx Pharmaceuticals’* financial condition and plan of operations together with NRx Pharmaceuticals' condensed consolidated financial statements and the related notes appearing elsewhere herein. In addition to historical information, this discussion and analysis contains forward looking statements that involve risks, uncertainties and assumptions. NRx Pharmaceuticals*’* actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section entitled*“Risk Factors”* included elsewhere herein. All references to*“Note,”* followed by a number reference from 1 to 14 herein, refer to the applicable corresponding numbered footnotes to these condensed consolidated*financial statements.
Current report
Overview
Current report
NRx Pharmaceuticals, Inc. (Nasdaq: NRXP) (“NRX” or the “Company”) is a clinical-stage bio-pharmaceutical company which develops and will distribute, through its wholly-owned operating subsidiaries, NeuroRx, Inc., (“NeuroRx”) and HOPE Therapeutics, Inc. (“HOPE”), novel therapeutics for the treatment of central nervous system disorders including suicidal depression, chronic pain, and post-traumatic stress disorder (“PTSD”) and now schizophrenia. 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. In February 2024, the Company incorporated HOPE as a wholly-owned subsidiary and in August 2024 completed an audit of HOPE's financial statements necessary for the intended Spin-Off (as defined in above) of HOPE to the Company's shareholders at a future date.
Current report
During the second quarter of 2024 and in the subsequent period, the Company has achieved the following:
Current report
Development of NRX-101 for Suicidal Treatment-Resistant Suicidal Bipolar Depression
Current report
On May 5, 2024, the Company announced final data from the recently completed phase 2b/3 trial of NRX-101 in suicidal bipolar depression, with a significantly improved safety profile as demonstrated by a statistically significant reduction in akathisia, an adverse event considered by many experts to be a precursor to suicide. Given the vital need for safer medications in this at-risk population, we plan to submit an NDA to the US FDA for treatment of bipolar depression patients at risk of akathisia, based on these data as well as additional data from our STABIL-B trial.
Current report
Trial participants had identical mean scores on the BARS at baseline with subsequent decrease in the NRX-101 treated group versus an increase in the lurasidone-treated group, yielding a 76% relative mean difference between the groups. The difference was apparent at the first post-randomization visit and continued throughout the trial. (Fig 1) Over the 42 days of observation, an effect size of .37 was identified with a statistically significant P value of 0.025 on the Mixed Model for Repeated Measures methodology agreed to with FDA in the 2018 Special Protocol Agreement. Akathisia as ascertained by a 1 point increase in the BARS was seen in 11% of participants randomized to lurasidone (comparable to previous reports in the literature) and seen in only 2% of those treated with NRX-101, an akathisia level that was previously reported for the placebo arm of the lurasidone registration trial.
Current report
Akathisia was a prespecified key safety endpoint of the Company’s clinical trial. Hence this finding is not a “post-hoc” observation. As previously noted, this clinical trial of 91 participants with suicidal bipolar depression who were not pre-treated with ketamine demonstrated that NRX-101 and lurasidone were comparable in their antidepressant effect. A 33% but statistically non-significant sustained decrease in suicidality was also seen favoring NRX-101. As noted above, improved antidepressant efficacy is not required to seek drug accelerated drug approval based on a statistically-significant safety benefit.
Current report
The results released on May 24 are consistent with and amplify the results of the Company’s previously published STABIL-B trial (Fig 2 below). In both trials a meaningful reduction in Akathisia was seen, which was statistically significant in the current trial (P<.025) and near significant (P=0.11) in the STABIL-B with similar effect sizes The STABIL-B additionally demonstrated a statistically-significant reduction in suicidality on the Columbia Suicide Severity Rating Scale (C-SSRS).
Current report
1 Nierenberg A, Lavin P, Javitt DC, et. al. NRX-101 vs lurasidone for the maintenance of initial stabilization after ketamine in patients with severe bipolar depression with acute suicidal ideation and behavior; a randomized prospective phase 2 trial. Int J Bipolar Dis 2023;11:28-38, doi.org/10.1186/s40345-023-00308-5.
Current report
Reduced suicidality associated with the administration of D-cycloserine has additionally been demonstrated by Chen and Coworkers.
Current report
Figure 2: Results from published STABIL-B Trial
Current report
Incorporation of HOPE Therapeutics and progress towards an NDA for HTX-100 (IV ketamine) in the treatment of suicidal depression
Current report
In Q1 2024, the Company incorporated HOPE Therapeutics as a wholly-owned subsidiary and engaged its auditors who in August 2024 completed an audit of its financial statements which will be necessary for the intended spin-off of HOPE to the Company’s shareholders. Intravenous ketamine has now become a standard of care for acute treatment of suicidal depression, in the absence of an FDA-labeled product. Intranasal Esketamine is approved by the FDA (SPRAVATO®), but has not demonstrated a benefit on suicidality and is not approved for use in patients with bipolar depression. Attempts to use intranasal racemic ketamine for suicidal depression have failed.
Current report
The Company has formed data-sharing partnerships to license clinical trial data from a French Government-funded trial and two National Institute of Health (NIH)-funded trials all of which demonstrate efficacy of racemic Intravenous ketamine against depression and two of which demonstrate statistically significant benefit vs suicidality. The Company’s role is to reformat these data into the required presentation required for review by the FDA.
Current report
In contrast to nasal ketamine, Intravenous racemic ketamine demonstrates dramatic and immediate reduction of suicidality in patients with both Major Depressive Disorder and Bipolar Depression. Grunebaum and colleagues demonstrated a rapid and statistically significant reduction in Suicidal Ideation at day 1 (p=0.0003) and in depression (P=0.0234), as measured by the Profile of Mood States among patients randomized to IV Ketamine compared to those randomized to midazolam. This trial was published in the American Journal of Psychiatry . Abbar and colleagues similarly published 84% remission from suicidality on the C-SSRS in patients treated with ketamine, vs. 28% in those treated with placebo (P<.0001). This trial was published in the British Medical Journal. Data are expected to be transmitted to FDA by July 2024.
Current report
In November 2023, the Company initiated manufacture of ketamine together with Nephron Pharmaceuticals, Inc. to develop a single patient presentation of ketamine. Nine months of real-time stability is expected in June 2024, the minimum stability time required for a New Drug Application.
Current report
A long-term challenge with ketamine is that the current formulation (KETALAR®) is highly acidic. While it is suitable for intravenous use, it cannot be administered subcutaneously. In March 2024 the Company demonstrated the formulation of a pH neutral patentable form of IV ketamine that it anticipates will have widespread applicability both in treatment of depression and chronic pain.
Current report
Treatment of Urinary Tract Infection (“UTI”) and Urosepsis:
Current report
Although treatment of UTI is quite different from use of NRX-101 to treat Central Nervous System disorders, D-cycloserine was originally developed as an antibiotic because of its role in disrupting the cell wall of certain pathogens. During Q3 2023, NRx tested NRX-101 and its components against resistant pathogens that appear on the Congressionally mandated QIDP list and proved in vitro effectiveness against antibiotic-resistant*E. coli, Pseudomonas, and Acinetobacter.*Accordingly, NRx was granted QIDP designation, Fast Track Designation, and Priority Review by the US FDA in January 2024.
Current report
In recent years, increased antibiotic resistance to common pathogens that cause urinary tract infections and urosepsis (i.e., sepsis originating in the urinary tract) has resulted in a marked increase in cUTI, hospitalization, and death from urosepsis. The US Center for Disease Control and Prevention reports that more than 1.7 million Americans contract sepsis each year, of whom at least 350,000 die during their hospitalization or are discharged to hospice (CDC Sepsis Ref.). There are approximately three million patients per year who contract cUTI in the U.S. annually (Lodise, et. al.). Additionally, should NRX-101 succeed in clinical trials, the Company will consider developing a follow-on product that is anticipated to achieve another 20 years of patent exclusivity.
Current report
A key challenge in the treatment of cUTI is the tendency of advanced antibiotics to cause C. Difficile infection, which is fatal in 10% of those who contract it over the age of 65 and results in prolonged hospitalization in many more. The Company recently announced data demonstrating that NRX-101 does not compromise the intestinal microbiome, unlike common antibiotics including Clindamycin and Ciprofloxacin. Should these findings be documented in human patients, NRX-101 would represent the only treatment for cUTI that does not causeC. Difficileinfection.
Current report
Recent Developments
Current report
Reverse Stock Split
Current report
On March 28, 2024, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company’s Second Amended and Restated Certificate of Incorporation (the “Charter Amendment”) to effect a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), which Reverse Stock Split was effective April 1, 2024. All references in this Report to number of common shares, price per share and weighted average number of shares outstanding have been adjusted to reflect the Reverse Split on a retroactive basis.
Current report
On April 18, 2024, we entered into the April Underwriting Agreement with EF Hutton LLC, as the representative of the April Underwriters, relating to the April Offering of 607,000 shares of the Company’s Common Stock. The public offering price for each share of Common Stock was $3.30. On April 19, 2024, the Offering closed. Aggregated proceeds from the Public Offering were approximately $2.4 million (including April Overallotment Exercise proceeds), before deducting underwriting discounts and commission and estimated expenses payable by the Company
Current report
Pursuant to the April Underwriting Agreement, the Company also granted the Representative a 45-day Over-Allotment Option to purchase up to an additional 91,050 April Option Shares. In connection with the April Overallotment Exercise, we issued an additional April Underwriter's Warrant to purchase up to 4,553 shares of Common Stock. The April Overallotment Exercise was exercised in full and closed.
Current report
Increase in At-The-Market Offering Agreement
Current report
On April 15, 2024, the Company increased the maximum aggregate offering amount of the shares of Common Stock issuable under that certain At the Market Offering Agreement, dated August 14, 2023 (the “Offering Agreement”), with H.C. Wainwright & Co., and filed a prospectus supplement (the “Current Prospectus Supplement”) under the Offering Agreement for an aggregate of $4.9 million. Though June 30, 2024, the Company received aggregate net cash proceeds to the Company from the ATM Purchases Agreements were approximately $1.4 million. Subsequent to June 30, 2024, the Company sold additional shares of Common Stock at an aggregate sales price of $0.3 million.
Current report
Pursuant to the February Underwriting Agreement and the engagement letter, dated as of February 22, 2024, by and between the Company and the Representative, the Company agreed to issue to the Representative in connection with the February 2024 Public Offering, a warrant to purchase up to a number of shares of Common Stock representing 5.0% of the shares of Common Stock and any February Option Shares (as defined below) sold, at an initial exercise price of $3.30 per share, subject to certain adjustments (the “February Underwriter’s Warrant”). On February 28, 2024, the Company issued to the Representative the February Underwriter’s Warrant to purchase up to 25,000 shares of Common Stock. The February Underwriter’s Warrant is exercisable six months following the date of the February Underwriting Agreement and terminates on the five-year anniversary of the date of the February Underwriting Agreement.
Current report
Financial Results
Current report
Since inception, the Company has incurred significant operating losses. For the three months ended June 30, 2024 and 2023, the Company’s net loss was $7.9 million and $8.7 million, respectively. For the six months ended June 30, 2024 and 2023, the Company’s net loss was $14.4 million and $19.8 million, respectively. As of June 30, 2024, the Company had an accumulated deficit of $267.6 million, a stockholders’ deficit of $18.4 million and a working capital deficit of $18.8 million.
Current report
Going Concern
Current report
The Company has now secured operating capital that it anticipates as sufficient to fund its drug development operations through year end and to finance submission of FDA New Drug Applications for NRX-100 and NRX-101 in 2024. The Company may 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. Such arrangements may take the form of loans, equity offerings, strategic agreements, licensing agreements, joint ventures or other agreements. The sale of equity could result in additional dilution to the Company’s existing shareholders. The 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. 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 condensed consolidated financial statements.
Current report
The accompanying condensed 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 condensed 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.
Current report
Nasdaq Listing Compliance
Current report
Following a notice of deficiency on October 17, 2023 and a subsequent Reverse Stock Split on April 17, 2024, as previously disclosed, we received a written notice from Nasdaq informing the Company that it has regained compliance for continued listing on the Nasdaq Capital Market. Subsequent to the end of the period, on August 6, 2024, the Company received a notice of deficiency from the Nasdaq based on current failure to meet the required Market Value of Listed Securities as disclosed in an 8-K filing on August 12, 2024. The Company has a six month period in which to cure this deficiency or to apply for an extension.
Current report
Components of Results of Operations
Current report
The Company’s research and development expense consists primarily of costs associated with the Company’s clinical trials, salaries, payroll taxes, employee benefits, and equity-based compensation charges for those individuals involved in ongoing research and development efforts. Research and development costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Removed paragraphs (21)
Previous report
Research and development expense
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General and administrative expense
Previous report
For the three months ended March 31, 2024, the Company recorded a loss of less than $0.1 million related to the change in fair value of the warrant liabilities compared to a gain of less than $0.1 million for the three months ended March 31, 2023. The decrease of less than $0.1 million related to the change in the fair value of certain Substitute Warrants (as defined in Note 9) and the Placement Warrants (as defined in Note 9) assumed pursuant to the Merger Agreement (as defined in Note 1).
Previous report
Streeterville Note
Previous report
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.
Previous report
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 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. 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.
Previous report
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.
Previous report
On February 9, 2024, the Company entered into Amendment #3 to Convertible Promissory Note (the “Third Amendment”), with 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 to $400,000 in cash (a “Minimum Payment”), less any amount satisfied by the delivery of Redemption Conversion Shares (as defined in the Note).
Previous report
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.
Previous report
Since December 31, 2023 and through March 25, 2024, the Company has made aggregate principal, premium 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.
Previous report
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 an Equity Conditions Failure. Moreover, the Redemption Premium (as defined in the Note) will continue to apply to the Redemption Amounts.
Previous report
The Company has also learned that Streeterville filed a complaint (the “Complaint”) naming the Company as a defendant in the Third Judicial District Court of Salt Lake County, Utah. The Complaint is seeking, among other things: (i) declaratory relief for an order enjoining the Company from undertakingany Fundamental Transaction, including the Spin-Off, or otherwise issuing Common Stockor other equity securities (such as the shares of Hope Therapeutics pursuant to the announced Spin-Off); and (ii) repayment of the Note and other unspecified amounts of damages, costs and fees, but no less than $6.5 million, or the amounts currently outstanding under the Note.
Previous report
Alvogen License Agreement
Previous report
On June 2, 2023, the Company entered into a License Agreement(the “License Agreement”) with Alvogen Pharma US, Inc., Alvogen, Inc. and Lotus Pharmaceutical Co. Ltd. (collectively, “Alvogen”). Under the License Agreement, NRx granted Alvogen an exclusive, worldwide, transferable and sublicensable license under certain intellectual property (including
Previous report
patents, know-how and trademarks) owned or controlled by NRx to develop (with certain limitations), manufacture, and commercialize 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 have agreed (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.
Previous report
During the term of the License Agreement, NRx 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 NRx 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.
Previous report
Under the terms of the License Agreement, we have the right to an aggregate of up to $330 million in cash milestone payments, including an initial $9 million First Milestone Payment, upon the achievement of certain milestones. A second milestone payment of $5 million 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 cash milestone payments will become payable to us upon the achievement of net sales targets measured over the trailing four quarters. Alvogen has also agreed to pay the Company royalties based on the net sales of NRX-101.
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Alvogen advance of milestone
Previous report
In February, 2024, the License Agreement was amended and we became eligible to receive $5 million as an advance of the First Milestone completion within the License Agreement. As compensation for advancing the milestone, Alvogen and Lotus 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. 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.* *
Previous report
Investing activities
Previous report
During the three months ended March 31, 2024 there was $0 of investing activities. During the three months ended March 31, 2023 investing activities used less than $0.1 million of cash related to the purchase of equipment.
Reworded paragraphs (14)
Previous wording
Pursuant to the April Underwriting Agreement, the Company agreed to issue to the Representative the April Underwriter’s Warrant in connection with the April Offering. On the April Closing Date, the Company issued to the Representative the April Underwriter’s Warrant to purchase April Underwriter Warrant Shares. In the event that the April Over-Allotment Option is exercised in full, the Company will issue to the Representative an additional April Underwriter’s Warrant to purchase up to 4,553 shares of Common Stock. The April Underwriter’s Warrant is exercisable six months following the date of the April Underwriting Agreement and terminates on the five-year anniversary of the date of the April Underwriting Agreement.
Current wording
Pursuant to the April Underwriting Agreement and the engagement letter dated April 18, 2024, by and between the Company and Representative, the Company agreed to issue to the Representative in connection with the April Offering, a warrant to purchase up to a number of shares of Common Stock representing 5.0% of the Shares and any April Option Shares (as defined below) sold, at an initial exercise price of $3.63 per share, subject to certain adjustments (the “April Underwriter's Warrant”). 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's Warrants and Over-Allotment Warrants is exercisable six months following the date of the Underwriting Agreement and terminates on the five-year anniversary of the date of the April Underwriting Agreement.
Previous wording
For the three months ended March 31, 2024, the Company recorded $1.7 million of research and development expenses compared to approximately $3.7 million for the three months ended March 31, 2023. The decrease of $2.0 million is related primarily to a decrease of $1.6 million in clinical trials and development expenses, $0.2 million inother regulatory and process development costs, $0.1 million related to stock-based compensation, and less than $0.1 million related to fees paid to regulatory and process development consultants, less than $0.1 million inshipping, freight, and delivery. The research and development expenses for the three months ended March 31, 2024 and 2023, respectively, include less than $0.1 million and $0.1 million, respectively, of non-cash stock-based compensation.
Current wording
For the three months ended June 30, 2024, the Company recorded $2.8 million of research and development expense compared to approximately $3.9 million for the three months ended June 30, 2023. The decrease of $1.1 million is related primarily to a decrease of $2.4 million in clinical trials and development expense, $0.1 million in shipping, freight, and delivery, $0.2 million in other regulatory and process development costs, and less than $0.1 million related to stock-based compensation, partially offset by a increase of $1.3 million related to the Alvogen warrants and $0.4 million related to fees paid to regulatory and process development consultants. The research and development expense for the three months ended June 30, 2024 and 2023, respectively, includes less than $0.1 million and $0.1 million, respectively of non-cash stock-based compensation.
Previous wording
For the three months ended March 31, 2024, the Company recorded less than $0.1 million of interest income compared to $0.2 million of interest income for the three months ended March 31, 2023. The decrease of $0.2 million is due to interest earned in the Company’s money market account.
Current wording
For the three months ended June 30, 2024, the Company recorded less than $0.1 million of interest income compared to $0.1 million of interest income for the three months ended June 30, 2023. The decrease of less than $0.1 million is due to interest earned in the Company’s money market account.
Previous wording
For three months ended March 31, 2024, the Company recorded a loss of approximately $0.3 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option. For the three months ended March 31, 2023, the Company recorded a loss of approximately $1.8 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.
Current wording
For three months ended June 30, 2024, the Company recorded a loss of less than $0.1 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option. For the three months ended June 30, 2023, the Company recorded a loss of approximately $0.7 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.
Previous wording
For the three months ended March 31, 2024, the Company recorded $4.3 million of general and administrative expense compared to approximately $5.8 million for the three months ended March 31, 2023. The decrease of $1.5 million is related primarily to a decrease of $1.2 million in insurance expense, $0.4 million in stock-based compensation expense, $0.4 million in employee expense, and less than $0.1 million in patent expense, partially offset by an increase of $0.4 million in consultant fees, $0.2 million in other general and administrative expense, less than $0.1 million in legal expense. The general and administrative expense for the three months ended March 31, 2024 and 2023, respectively, include $0.2 millionand $0.6 million, respectively, of non-cash stock-based compensation.
Current wording
For the six months ended June 30, 2024, the Company recorded $8.5 million of general and administrative expense compared to approximately $9.9 million for the six months ended June 30, 2023. The decrease of $1.4 million is related primarily to a decrease of $2.0 million in insurance expense, $0.8 million in employee expense, $0.8 million in stock-based compensation expense, and less than $0.1 million in patent expense, partially offset by an increase of $1.3 million in consultant fees, $0.7 million in legal expense, and $0.2 million in other general and administrative expense. The general and administrative expense for the six months ended June 30, 2024 and 2023, respectively, includes $0.3 million and $1.0 million, respectively, of non-cash stock-based compensation.
Previous wording
For the three months ended March 31, 2024, the Company recorded $0.2 million of interest expense, compared to no interest expense for the three months ended March 31, 2023. The increase of $0.2 million is due to premiums for cash payments on the convertible note.
Current wording
For the six months ended June 30, 2024, the Company recorded $0.2 million of interest expense, compared to no interest expense for the six months ended June 30, 2023. The increase of $0.2 million is due to premiums for cash payments on the convertible note.
Previous wording
On April 18, 2024, we entered into the April Underwriting Agreement with the Representative, as the representative of the April Underwriters, relating to the April Offering of the Shares, which April Offering closed on the April Closing Date. The public offering price for each share of Common Stock was $3.30 and the April Underwriters purchased the shares of Common Stock pursuant to the April Underwriting Agreement at a price for each share of Common Stock of $3.003. Pursuant to the April Underwriting Agreement, the Company also granted the Representative the April Over-Allotment Option during the April Over-Allotment Period.
Current wording
On April 18, 2024, we entered into the April Underwriting Agreement with the Representative, as the representative of the April Underwriters, relating to the April Offering of the Shares, which April Offering closed on the April Closing Date. 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 the April Over-Allotment Option. Aggregated gross proceeds from the April Underwriting Agreement were approximately $2.4 million (including April Overallotment Exercise proceeds), before deducting and commissions and estimated expenses payable by the Company. The Company intends to use the net proceeds from the April 2024 Public Offering for working capital and general corporate purposes.
Previous wording
During the three months ended March 31, 2023, operating activities used $6.1 million of cash, primarily resulting from a net loss of $11.0 million, increased by (a) net non-cash gains of $2.5 million, including $1.8 million for the change in fair value of convertible promissory note and $0.7 million of stock-based compensation, and (b) changes in operating assets and liabilities of $2.5 million.
Current wording
During the six months ended June 30, 2024, operating activities used approximately $6.2 million of cash, primarily resulting from a net loss of $14.4 million partially offset by (a) net non-cash losses of $2.9 million, including $0.3 million in change in fair value of convertible promissory note, and $0.3 million of stock-based compensation, $1.3 million of contract costs related to Alvogen termination, $0.8 million of default penalties, and (b) changes in operating assets and liabilities of $5.3 million.
Previous wording
During the three months ended March 31, 2024, operating activities used approximately $3.7 million of cash, primarily resulting from a net loss of $6.5 million partially offset by net non-cash losses of $0.6 million, including $0.3 million in change in fair value of convertible promissory note, and $0.2 million of stock-based compensation, and changes in operating assets and liabilities of $2.3 million.
Current wording
During the six months ended June 30, 2023, operating activities used $13.9 million of cash, primarily resulting from a net loss of $19.8 million, reduced by (a) net non-cash losses of $3.9 million, including $2.4 million in change in fair value of convertible promissory note and $1.2 million of stock-based compensation, and (b) changes in operating assets and liabilities of $1.9 million.
Previous wording
During the three months ended March 31, 2024, financing activities provided $0.4 million of cash resulting from $1.0 million in proceeds from issuance of Common Stockand warrants issued in a private placement, and $1.5 million in proceeds from issuance of Common Stockand warrants offset by $2.2 million in repayments of the convertible note.
Current wording
During the six months ended June 30, 2024, financing activities provided $3.5 million of cash resulting from $1.0 million in proceeds from issuance of Common Stock and warrants issued in a private placement, and $4.7 million in proceeds from issuance of Common Stock and warrants offset by $2.2 million in repayments of the convertible note.
Previous wording
During the three months ended March 31, 2023, financing activities provided $2.5 million of cash resulting from $2.5 million in proceeds from issuance of Common Stockand warrants issued in private placement, net of issuance costs.
Current wording
During the six months ended June 30, 2023, financing activities provided $8.8 million of cash resulting from $8.1 million in proceeds from issuance of common stock and warrants issued in a private placement, net of issuance costs, and $0.8 million in proceeds from proceeds from issuance of insurance loan offset by $0.1 million in repayments of the convertible note.
Previous wording
See Note 7, Debt, and Note 8, Commitments and Contingencies, of the notes to the Company’s condensed consolidated financial statements as of and for the three months ended March 31, 2024 included elsewhere in this report for further discussion of the Company’s commitments and contingencies.
Current wording
See Note 7, Debt, and Note 8, Commitments and Contingencies, of the notes to the Company’s condensed consolidated financial statements as of and for the six months ended June 30, 2024 included elsewhere in this report for further discussion of the Company’s commitments and contingencies.
Previous wording
The Company's management’s discussion and analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of these financial statements requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of expenses during the reporting period. In accordance with GAAP, the Company evaluates its estimates and judgments on an ongoing basis. The most significant estimates relate to the earnout cash liability, stock-based compensation, and the valuation of warrants. The Company bases its estimates and assumptions on current facts, historical experiences, and various other factors that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and
Current wording
The Company's management’s discussion and analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of these financial statements requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of expenses during the reporting period. In accordance with GAAP, the Company evaluates its estimates and judgments on an ongoing basis. The most significant estimates relate to the stock-based compensation, the valuation of warrants, and the fair value of a note payable. The Company bases its estimates and assumptions on current facts, historical experiences, and various other factors that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Previous wording
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 its Common Stock, the time to expiration(i.e. expected termination date) of the convertible note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, the Company estimates its expected future equity and volume volatility based on the historical volatility of both its 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. 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 the Company’s financial information to calculate a default risk specific to the Company.
Current wording
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 its Common Stock, the time to expiration(i.e. expected termination date) of the convertible note, the risk-free interest rate for a period that approximates the time to expiration, and probability of default. Therefore, the Company estimates its expected future equity and volume volatility based on the historical volatility of both its 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. Treasury yield curve in effect at the time of measurement for time periods approximately equal to the time to expiration. For the year ended December 31, 2023, the probability of default was estimated using Bloomberg’s Default Risk function which uses its financial information to calculate a default risk specific to the Company. For the six months ended June 30, 2024, the probability of default was estimated based on discussions with management, the Company's current cash balance, and the Company's current efforts to receive financing to repay the Note or amend the agreement.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
On February 27, 2024, we entered into the February Underwriting Agreement with the Representative (as defined above), as the representative of the February Underwriters (as defined above), relating to the February 2024 Public Offering (as defined above) of 500,000 shares of the 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. On February 28, 2024, the Offering closed. Aggregate gross proceeds from the February 2024 Public Offering were approximately $1.7 million (including Overallotment Exercise proceeds), before deducting underwriting discounts and commissions and estimated expenses payable by the Company.
Current report — wording carried from elsewhere
Pursuant to the February Underwriting Agreement, the Company also granted the Representative a 45-day Over-Allotment Option to purchase up to an additional 75,000 February Option Shares. On March 5, 2024, the February Underwriters exercised the February Over-Allotment Option to purchase an additional 75,000 February Option Shares. In connection with the February Overallotment Exercise, we issued an additional February Underwriter’s Warrant to purchase up to 3,750 shares of Common Stock. The February Overallotment Exercise closed on March 6, 2024.
Current report — wording carried from elsewhere
On February 29, 2024, we entered into a securities purchase agreement with an investor providing for the issuance and sale of 270,000 shares of Common Stock and warrants to purchase up to 270,000 shares of Common Stock 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 the February 2024 Public Offering. The Common Stock and the February Warrants were offered pursuant to a 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 $3.80 per share, are initially exercisable beginning six months following the date of issuance, and will expire 5 years from the date of issuance. The aggregate net cash proceeds to the Company from the February 2024 Private Placement (as defined above) were approximately $1.0 million.
Current report — wording carried from elsewhere
The following table sets forth the Company’s selected statements of operations data for the following periods (in thousands):
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, the Company recorded less than $0.1 million of interest income compared to $0.3 million of interest income for the six months ended June 30, 2023. The decrease of $0.2 million is due to interest earned in the Company’s money market account.
Current report — wording carried from elsewhere
Change in fair value of convertible note payable
Current report — wording carried from elsewhere
For six months ended June 30, 2024, the Company recorded a loss of $0.3 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option. For the six months ended June 30, 2023, the Company recorded a loss of approximately $2.4 million related to the change in fair value of the convertible note payable which is accounted for under the fair value option.
Current report — wording carried from elsewhere
Change in fair value of warrant liabilities
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Aggregate gross proceeds from the April Offering were approximately $2.0 million, before deducting underwriting discounts and commissions and estimated expenses payable by the Company. The Company intends to use the net proceeds from the April Offering for working capital and general corporate purposes, including its plan to initiate a national treatment protocol and safety database. The Company may also use the proceeds from this offering to repay the Convertible Promissory Note initially issued to Streeterville Capital, LLC in November 2022.
Previous report — wording carried elsewhere
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.