NRX Pharmaceuticals, Inc 10-Q for FY2021 Q2

NRX Pharmaceuticals, Inc. (NRXP)

10-Q 2021-08-16 For: 2021-06-30

Added on April 11, 2026

About this 10-Q

NRX Pharmaceuticals, Inc filed this 10-Q on August 16, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $16.01M; compared with net income of $102.29K a year earlier
Diluted EPS: -$0.38

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Delaware		82-2844431
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Common Stock, par value $0.001 per share	NRXP	The Nasdaq Stock Market LLC
Warrants to purchase one share of Common Stock	NRXPW	The Nasdaq Stock Market LLC


		Page
PART I - FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020	3
	Unaudited Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2021 and 2020	4
	Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the six months ended June 30, 2021 and 2020	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	41
ITEM 4.	Controls and Procedures	41

PART II - OTHER INFORMATION

ITEM 1.	Legal Proceedings	42
ITEM 1A.	Risk Factors	42
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
ITEM 5.	Other Information	42
ITEM 6.	Exhibits	43
SIGNATURES		44


	June 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash	$	13,386,332	$	1,858,513
Account receivable, net of allowance of $5,470,897 and $257,463 as of June 30, 2021 and December 31, 2020, respectively		—		831,390
Prepaid expenses and other current assets		5,147,650		240,352
Total current assets		18,533,982		2,930,255
Other assets		12,730		10,914
Total assets	$	18,546,712	$	2,941,169
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable (includes $44,201 and $149,067 due to related parties)	$	6,268,319	$	3,153,310
Accrued and other current liabilities		1,506,337		1,728,483
Accrued clinical site costs		1,133,312		1,547,432
Earnout Cash liability		25,874,896		—
Warrant liabilities		515,025		—
Notes payable and accrued interest		173,694		248,861
Accrued settlement expense		—		39,486,139
Total current liabilities		35,471,583		46,164,225
Notes payable and accrued interest		512,472		547,827
Total liabilities	$	35,984,055	$	46,712,052
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value, 50,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—		—
Common stock, $0.001 par value, 500,000,000 shares authorized; 48,603,585 and 42,973,462 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		48,604		42,974
Additional paid-in capital		114,190,620		46,365,863
Accumulated deficit		(131,676,567)		(90,179,720)
Total stockholders’ equity (deficit)		(17,437,343)		(43,770,883)
Total liabilities and stockholders' equity	$	18,546,712	$	2,941,169


	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020
Operating expenses:
Research and development	$	4,659,280	$	1,390,376	$	7,567,984	$	1,994,709
General and administrative		12,457,534		525,736		14,558,936		1,141,390
Settlement expense		—		—		21,365,641		—
Reimbursement of expenses from Relief Therapeutics		—		(2,020,931)		(771,244)		(2,020,931)
Total operating expenses		17,116,814		(104,819)		42,721,317		1,115,168
Income (loss) from operations		(17,116,814)		104,819		(42,721,317)		(1,115,168)
Other (income) expenses:
Gain on extinguishment of debt		—		—		(120,810)		—
Interest expense		5,107		2,532		10,288		38,800
Change in fair value of warrant liability		(1,468,649)		—		(1,468,649)		—
Change in fair value of Earnout Cash liability		354,701		—		354,701		—
Change in fair value of embedded put		—		—		—		27,160
Loss on conversion of convertible notes payable		—		—		—		306,641
Total other (income) expenses		(1,108,841)		2,532		(1,224,470)		372,601
Income (loss) before tax		(16,007,973)		102,287		(41,496,847)		(1,487,769)
Provision for income taxes		—		—		—		—
Net income (loss)		(16,007,973)		102,287		(41,496,847)		(1,487,769)
Deemed dividend - warrants		(2,691,799)		—		(2,691,799)		—
Deemed dividend - Earnout Shares		(253,130,272)		—		(253,130,272)		—
Net income (loss) attributable to common stockholders	$	(271,830,043)	$	102,287	$	(297,318,917)	$	(1,487,769)
Net earnings (loss) per share:
Basic	$	(0.38)	$	—	$	(1.07)	$	(0.04)
Diluted	$	(0.38)	$	—	$	(1.07)	$	(0.04)
Net earnings (loss) per share attributable to common stockholders:
Basic	$	(6.51)	$	—	$	(7.68)	$	(0.04)
Diluted	$	(6.51)	$	—	$	(7.68)	$	(0.04)
Weighted average common shares outstanding:
Basic		41,727,480		33,819,205		38,709,614		33,799,503
Diluted		41,727,480		36,656,420		38,709,614		33,799,503


	Six months ended June 30, 2021
	Series A Convertible			Series B-1A Convertible			Series B-1 Convertible			Series B-2 Convertible						Additional				Total
	Preferred Stock			Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Paid-in-		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
Balance - December 31, 2020 (as previously reported)	1,000,000	$	1,000	316,848	$	317	1,050,695	$	1,050	4,167	$	4	11,227,676	$	11,228	$	46,387,649	$	(90,179,720)	$	(43,778,472)
Retroactive application of reverse recapitalization (Note 4)	(1,000,000)		(1,000)	(316,848)		(317)	(1,050,695)		(1,050)	(4,167)		(4)	31,745,786		31,746		(21,786)		—		7,589
Balance - December 31, 2020, effect of Merger (Note 4)	—	$	—	—	$	—	—	$	—	—	$	—	42,973,462	$	42,974	$	46,365,863	$	(90,179,720)	$	(43,770,883)
Common stock issued	—		—	—		—	—		—	—		—	333,121		333		6,926,753		—		6,927,086
Proceeds from issuance of common stock for exercise of warrant	—		—	—		—	—		—	—		—	1,496,216		1,496		7,498,522		—		7,500,018
Reclassification of settlement liability upon issuance of warrant	—		—	—		—	—		—	—		—	—		—		60,851,779		—		60,851,779
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		371,698		—		371,698
Net loss	—		—	—		—	—		—	—		—	—		—		—		(25,488,874)		(25,488,874)
Balance - March 31, 2021	—	$	—	—	$	—	—	$	—	—	$	—	44,802,799	$	44,803	$	122,014,615	$	(115,668,594)	$	6,390,824
Common stock issued	—		—	—		—	—		—	—		—	71,056		71		1,562,201		—		1,562,272
Effect of Merger and recapitalization, net of redemptions and issuance costs of $1,412,846	—		—	—		—	—		—	—		—	2,529,730		2,530		(26,618,326)		—		(26,615,796)
Common stock issued pursuant to PIPE financing, net of issuance costs of $1,900,000	—		—	—		—	—		—	—		—	1,000,000		1,000		8,099,000		—		8,100,000
Common stock issued for advisor services	—		—	—		—	—		—	—		—	200,000		200		4,849,800		—		4,850,000
Modification of option awards pursuant to Merger	—		—	—		—	—		—	—		—	—		—		1,014,640		—		1,014,640
Modification of warrants pursuant to Merger	—		—	—		—	—		—	—		—	—		—		2,330,572		—		2,330,572
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		938,118		—		938,118
Net loss	—		—	—		—	—		—	—		—	—		—		—		(16,007,973)		(16,007,973)
Balance - June 30, 2021	—	$	—	—	$	—	—	$	—	—	$	—	48,603,585	$	48,604	$	114,190,620	$	(131,676,567)	$	(17,437,343)


	Six months ended June 30, 2020
	Series A Convertible			Series B-1A Convertible			Series B-1 Convertible			Series B-2 Convertible						Additional				Total
	Preferred Stock			Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Paid-in-		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
Balance - December 31, 2019 (as previously reported)	1,000,000	$	1,000	316,848	$	317	1,050,695	$	1,050	—	$	—	10,686,191	$	10,686	$	33,538,813	$	(38,402,816)	$	(4,850,950)
Retroactive application of reverse recapitalization (Note 4)	(1,000,000)		(1,000)	(316,848)		(317)	(1,050,695)		(1,050)	—		—	30,563,009		30,563		(20,651)		—		7,545
Balance - December 31, 2019, effect of Merger (Note 4)	—	$	—	—	$	—	—	$	—	—	$	—	41,249,200	$	41,249	$	33,518,162	$	(38,402,816)	$	(4,843,405)
Common stock issued	—		—	—		—	—		—	—		—	50,844		51		176,974		—		177,025
Series B-2 convertible preferred stock issued	—		—	—		—	—		—	—		—	13,168		13		50,000		—		50,013
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		88,803		—		88,803
Net loss	—		—	—		—	—		—	—		—	—		—		—		(1,590,056)		(1,590,056)
Balance - March 31, 2020	—	$	—	—	$	—	—	$	—	—	$	—	41,313,212	$	41,313	$	33,833,939	$	(39,992,872)	$	(6,117,620)
Stock-based compensation	—		—	—		—	—		—	—		—	—		—		93,466		—		93,466
Net income	—		—	—		—	—		—	—		—	—		—		—	$	102,287		102,287
Balance - June 30, 2020	—	$	—	—	$	—	—	$	—	—	$	—	41,313,212	$	41,313	$	33,927,405	$	(39,890,585)	$	(5,921,867)


	Six months ended June 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(41,496,847)	$	(1,487,769)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		967		—
Stock-based compensation		4,655,028		182,269
Gain on extinguishment of debt		(120,810)		—
Change in fair value of warrant liabilities		(1,468,649)		—
Change in fair value of Earnout Cash liability		354,701		—
Change in fair value of embedded put		—		27,160
Amortization of debt discount		—		16,454
Non-cash interest expense		10,288		26,992
Non-cash settlement expense		21,365,641		—
Non-cash consulting expense		4,850,000		—
Loss on conversion of notes payable		—		306,641
Changes in operating assets and liabilities:
Accounts receivable		831,390		(314,222)
Prepaid expenses and other assets		(4,847,806)		(46,760)
Accounts payable		2,562,762		562,409
Accrued expenses and other liabilities		(1,104,791)		(1,446)
Net cash used in operating activities		(14,408,126)		(728,272)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of computer equipment		(2,783)		—
Net cash used in investing activities		(2,783)		—
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		—		619,842
Proceeds from issuance of series B-2 Preferred stock		—		50,004
Proceeds from issuance of common stock, net of transaction costs		8,489,082		176,990
Proceeds from issuance of common stock for exercise of warrant		7,500,018		—
Effect of Merger, net of transaction costs		11,049,628		—
Repayment of notes payable assumed in Merger		(1,100,000)		—
Net cash provided by financing activities		25,938,728		846,836
Net increase in cash		11,527,819		118,564
Cash at beginning of period		1,858,513		877,421
Cash at end of period	$	13,386,332	$	995,985
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities
Reclassification of settlement liability upon issuance of warrant	$	60,851,779	$	—
Extinguishment of Paycheck Protection Program Loan	$	120,810	$	—


		Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Numerator:
Net income (loss) attributable to common stock—basic and diluted	$	(16,007,973)	$	102,287	$	(41,496,847)	$	(1,487,769)
Denominator:
Weighted average shares — basic		41,727,480		33,819,205		38,709,614		33,799,503
Effect of other dilutive securities		—		2,837,215		—		—
Weighted average shares — diluted		41,727,480		36,656,420		38,709,614		33,799,503
Basic earnings (loss) per share	$	(0.38)	$	—	$	(1.07)	$	(0.04)
Diluted earnings (loss) per share	$	(0.38)	$	—	$	(1.07)	$	(0.04)


	Recapitalization
Cash - BRPA trust and cash, net of redemptions	$	4,362,474
Cash - PIPE financing, net of transaction costs		8,100,000
Less: transaction costs and advisory fees allocated to NRXP equity		(1,412,846)
Effect of Merger, net of redemptions and transaction costs	$	11,049,628


		Number of Shares
Common stock, outstanding prior to Merger		552,412
Less: redemption of BRPA shares		(216)
Common stock of BRPA		552,196
BRPA Founder and private shares, net of forfeited shares of 875,216		1,260,284
Shares issued in PIPE Financing		1,000,000
Shares issued for services		200,000
Shares issued pursuant to conversion of Public and Private Rights		717,250
Merger and PIPE financing shares - common stock		3,729,730
NeuroRx shares - common stock (1)		44,873,855
Total shares of common stock immediately after Merger		48,603,585


	June 30,		December 31,
	2021		2020
	(Unaudited)
Accrued and other current liabilities:
Accrued research and development expenses	$	826,442	$	586,426
Accrued employee expenses		77,196		530,500
Professional services		185,170		606,553
Other accrued expenses		417,529		5,004
Total accrued and other current liabilities	$	1,506,337	$	1,728,483


	Original Warrants			Substitute Warrants
Strike price	$	7.58-$15.84		$	1.53-$3.19
Volatility rate		80.0	%		80.0	%
Risk-free rate		0.03%-0.32	%		0.03%-0.32	%
Expected term		0.57-4.42			0.57-4.42
Dividend yield		—			—


		Weighted
		Average	Weighted
		Remaining	Average		Aggregate
	Total Warrants	Term	Exercise Price		Intrinsic Value
Outstanding as of December 31, 2020 (as previously reported)	620,055	11.08	$	14.61	$	22,127,594
Retroactive application of reverse recapitalization (Note 4)	2,455,415	—		(13.53)		—
Outstanding as of December 31, 2020, effect of Merger (Note 4)	3,075,470	4.34		1.09		150,955,963
Issued	3,329,812	3.00		3.19		111,082,528
Exercised	(1,496,216)			(3.19)		(49,913,766)
Outstanding as of March 31, 2021	4,909,066	3.74	$	1.78	$	244,574,345
Issued	3,586,250	5.00		11.50		45,724,688
Outstanding as of June 30, 2021	8,495,316	4.09	$	24.78	$	42,385,824


	Original Options			Substitute Options
Strike price	$	1.00-$72.30		$	0.20-$14.58
Volatility rate		80.0	%		80.0	%
Risk-free rate		0.07%-0.79	%		0.07%-0.79	%
Expected term		0.18-5.99			0.18-5.99
Dividend yield		—			—


				Weighted
		Weighted		average	Aggregate
	Number of	average		remaining	intrinsic
	shares	exercise price		term (years)	value
Outstanding as of December 31, 2020 (as previously reported)	486,755	$	10.79	8.8	$	19,571,655
Retroactive application of reverse recapitalization	1,927,548		(8.62)
Outstanding as of December 31, 2020, effect of Merger	2,414,303	$	2.17	8.2	$	53,659,966
Options granted	210,800		11.69	9.8		3,825,276
Forfeited	(198,400)		(2.22)	—		(6,587,328)
Outstanding as of March 31, 2021	2,426,703	$	14.58	8.7	$	30,388,510
Options granted	587,030		14.94	9.9		—
Forfeited	(89,280)		(7.86)	—		(339,082)
Exercised	(4,960)		(3.07)	—		(42,385)
Outstanding as of June 30, 2021	2,919,493	$	5.25	9.0	$	20,558,299
Options vested and exercisable as of June 30, 2021	1,095,294	$	1.50	6.1	$	11,106,829


	June 30, 2021			December 31, 2020
Exercise price	$	11.69-$23.41		$	2.22-$3.07
Risk-free rate of interest		0.79%-1.24	%		0.79%-0.79	%
Expected term (years)		5.5-6.5			4.7-5.9
Expected stock price volatility		80	%		80	%
Dividend yield		—			—


Description	Level	June 30, 2021		December 31, 2020
Liabilities:
Warrant liabilities (Note 10)	3	$	515,025	$	—
Earnout Cash liability (Note 4)	3	$	25,874,896	$	—


	June 30, 2021			At Effective Time
Stock price on valuation date	$	11.62		$	24.25
Exercise price per share	$	11.50		$	11.50
Expected life		4.90			5.0
Volatility		35.7	%		39.0	%
Risk-free rate		0.9	%		0.8	%
Dividend yield		—	%		—	%
Fair value of warrants	$	3.78		$	14.56


	Fair Value
Balance as of December 31, 2020	$	—
Additions pursuant to Merger		1,983,674
Gain upon re-measurement		(1,468,649)
Balance as of June 30, 2021	$	515,025


	Three months ended June 30,				Change
	2021		2020		Dollars		Percentage

	(Unaudited)
Operating expenses:
Research and development	$	4,659,280	$	1,390,376	$	3,268,904	235	%
General and administrative		12,457,534		525,736	$	11,931,798	2,270	%
Reimbursement of expenses from Relief Therapeutics		—		(2,020,931)	$	2,020,931	(100)	%
Total operating expenses		17,116,814		(104,819)	$	17,221,633	(16,430)	%
Loss from operations		(17,116,814)		104,819	$	(17,221,633)	(16,430)	%

Other (income) expenses:
Interest expense		5,107		2,532	$	2,575	100	%
Change in fair value of warrant liability		(1,468,649)		—	$	(1,468,649)	100	%
Change in fair value of Earnout Cash liability		354,701		—	$	354,701	100	%
Total other (income) expenses		(1,108,841)		2,532	$	(1,111,373)	(100)	%
Loss before tax		(16,007,973)		102,287	$	(16,110,260)	15,750	%
Net loss	$	(16,007,973)	$	102,287	$	(16,110,260)	15,750	%


Exhibit Number		Description

31.1+		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2+		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1+†		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2+†		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020; (ii) Unaudited Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2021 and 2020 ; (iii) Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the six months ended June 30, 2021 and 2020; (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020; and (v) Notes to Unaudited Financial Statements

	NRX PHARMACEUTICALS INC.


Date: August 16, 2021	By:	/s/ William Fricker
		William Fricker
		Chief Financial Officer
		(Principal Financial and Accounting Officer)