UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 1)
(Mark One)
For the Fiscal Year Ended:
OR
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨
Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
Registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ¨ | Accelerated filer ¨ |
| Smaller reporting company Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether
the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of
the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨
The aggregate market value of common stock held
by non-affiliates of the registrant based on the closing price of the registrant’s common stock as reported on the Nasdaq Global
Market on June 30, 2023, was $
As of April 29, 2024, the registrant had shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (the “Amendment” or “Form 10-K/A”) amends the Annual Report on Form 10-K of NRx Pharmaceuticals, Inc. (the “Company,” “our” or “we”) for the year ended December 31, 2023, originally filed with the Securities and Exchange Commission (“SEC”) on March 29, 2024 (the “Original Filing”). We are filing this Amendment to present the information required by Items 10, 11, 12, 13, and 14 of Part III of the Original Filing in reliance on General Instruction G(3) to Form 10-K, which provides that registrants may incorporate by reference certain information from a definitive proxy statement filed with the SEC within 120 days after fiscal year end. In addition, the reference on the cover of the Original Filing to the incorporation by reference to portions of our definitive proxy statement into Part III of the Original Filing is hereby deleted.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (i) Part III, Items 10 through 14 of the Original Filing are hereby amended and restated in their entirety, and (ii) Part IV, Item 15 of the Original Filing is hereby amended and restated in its entirety. In addition, new certifications of our principal executive officer and principal financial officer as required by Section 302 of the Sarbanes-Oxley Act of 2022 are attached, each as of the filing date of this Amendment. Except as described above, no other changes have been made to the Original Filing.
On April 1, 2024, the Company completed a stockholder approved 1-for-10 reverse stock split (the “Reverse Split”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”). All references in this Amendment 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.
Except as stated herein, this Amendment does not reflect events occurring after the filing of the Original Filing and no attempt has been made in this Amendment to modify or update other disclosures as presented in the Original Filing.
INDEX
ANNUAL REPORT ON FORM 10-K
Table of Contents
References in this Annual Report on Form 10-K to “NRx Pharmaceuticals,” “NRx,” the “Company,” “we,” “us,” “our,” or similar references mean NRx Pharmaceuticals, Inc. References to the “SEC” refer to the U.S. Securities and Exchange Commission.
PART III
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE |
The following table sets forth, as of the date of this Form 10-K/A, certain information regarding our executive officers and the members of the board of directors (the “Board”) of the Company who are responsible for overseeing the management of our business:
| Name | Age | Position | ||
| Jonathan Javitt, M.D., M.P.H. | 67 | Chairman and Chief Scientist | ||
| Stephen H. Willard | 64 | Chief Executive Officer and Director | ||
| Riccardo Panicucci | 64 | Chief Manufacturing and Technology Officer | ||
| Matthew Duffy Richard Narido |
61 46 |
Chief Business Officer Chief Financial Officer and Treasurer | ||
| Patrick J. Flynn | 75 | Director, Audit Committee Chair | ||
| Chaim Hurvitz | 63 | Director | ||
| Janet Rehnquist | 66 | Director, Compliance Committee Chair |
Executive Officer and Director Biographies
Jonathan Javitt, M.D., M.P.H. Dr. Javitt, founder of the Company, serves as our Chairman and as Chief Scientist and was re-elected Chairman in December 2023. Dr. Javitt additionally served as the Company’s CEO from May 2021 until March 2022. He was the Co-founder, Chairman, and CEO of NeuroRx, Inc., which merged with the Company in May 2021. He participated in leading drug and medical device development and commercialization projects for Allergan, Alcon, Eyetech, Merck, Novartis, Pfizer, and Pharmacia and has led the Company’s regulatory and clinical development efforts from their inception. He has played leadership roles in seven successful healthcare IT and biopharma start-up companies. He was appointed to healthcare leadership roles under President Ronald Reagan, George H.W. Bush, Clinton and George W. Bush. During the Reagan and Bush ‘41 administrations, he was designated as an Expert Consultant to the Department of Health and Human Services. President Clinton designated him as a Special Government Employee of the White House Executive Office of the President to serve on the 1993 Health Reform Task Force. Under President George W. Bush, he was commissioned to lead the Healthcare Committee of the President’s Information Technology Advisory Committee and to serve as a Special Employee of the Undersecretary of Defense. Dr. Javitt has published more than 200 scientific works in the areas of health outcomes and pharmacoeconomics that have been cited more than 31,000 times. Dr. Javitt holds an A.B. with Honors from Princeton University, an M.D. from Cornell University and a Masters of Public Health from the Harvard Chan School of Public Health which designated him an Alumnus of Merit in. He continues to serve as an adjunct Professor of Ophthalmology at the Johns Hopkins School of Medicine and as a Senior Fellow of the Potomac Institute for Policy Studies.
We re-elected Dr. Javitt to serve as Chairman, based on his substantial practical experience and expertise in drug development and his prior leadership in multiple private and public sector organizations.
Stephen H. Willard, Esq. Mr. Willard serves as our Chief Executive Officer and as a member of the Board since July 2022. He has more than 20 years of experience as the CEO of pharma and biotech companies. From 2012 to March 2021, Mr. Willard served, and since July 2022 has served, as a Director of Nozin, Inc., an infection prevention company and pioneer in nasal decolonization. From November 2013 to March 2021, Mr. Willard served as CEO of Cellphire Inc., (“Cellphire”) a leading company in platelet and cell stabilization, between, during which period he aided in the expansion of Cellphire, managed all aspects of its dynamic growth and oversaw all its operations. Prior to joining Cellphire, from 2000 to 2013, Mr. Willard served in executive roles at Flamel Technologies S.A (FLML), a drug delivery company. From 2000 to 2005, Mr. Willard served as CFO of Flamel and subsequently, from 2006 to 2013, served as CEO of Flamel. From 2000 to 2014, Mr. Willard was also a member of the board of directors for E*TRADE Financial or its bank, a subsidiary of Morgan Stanley, which offers an electronic trading platform to trade financial assets. Mr. Willard has more than 20 years of experience as the CEO of pharma and biotech companies. Since 2018, Mr. Willard has served as a Presidentially-commissioned member of the National Science Board, which governs the National Science Foundation. He received a B.A. from Williams College in 1982 and a J.D. from Yale Law School in 1985, where he edited the Yale Law Journal.
We selected Mr. Willard to serve on our Board not only because he is the Company’s Chief Executive Officer but also due to his substantial practical experience and expertise in senior leadership roles with multiple private and public biotechnology companies, his extensive experience as a practicing securities attorney, his mergers and acquisitions experience, and his connections to the biotechnology community as a member of the National Science Board.
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Riccardo Panicucci, Phd. Dr. Panicucci has served as our Chief Technology and Manufacturing Officer since January 2021 and has served in this role since March 2018. Dr. Panicucci previously served as VP of Pharmaceutical Development Services at WuXi STA from February 2015 to March 2018, where he provided scientific leadership in formulation development and GMP manufacturing. In that capacity, he developed the original formulation for NRX-101. From 2004 to 2015, Dr. Panicucci served as Global Head of Chemical and Pharmaceutical Profiling (CPP) at Novartis. Dr. Panicucci has also led R&D groups at Vertex Pharmaceuticals, Symbollon Pharmaceuticals, Biogen, and Bausch & Lomb. He earned a Ph.D. in Chemistry from the University of Toronto and did a Post-Doctoral Fellowship at the University of California, Santa Barbara.
Matthew Duffy. Mr. Duffy has forty years’ experience as a pharmaceutical executive and licensed Capital Markets professional. He has extensive drug development-to-market experience, including in CNS, beginning at Pfizer, Inc. in Sales Management and Marketing. He subsequently led drug commercialization activities at Medimmune (Synagis) as head of Marketing and Lev Pharmaceuticals (Cinryze) as head of Commercial Operations. Matt has more than 20 years’ experience as a FINRA-licensed investment banker, buy-side and sell-side equity research analyst and Investor Relations professional. He has served as Managing Director at Roberts Mitani, LLC, at LifeSci Partners, LLC, at Laidlaw LTD (current), and co-founded Black Diamond Research, LLC, a sell-side equity research firm specializing in healthcare/biotechnology. He served on the Board of of CorMedix, Inc. (Nasdaq:CRMD) and currently serves on the boards and/or management of Algorithm Sciences, Inc, Lucius Partners, LLC, Voltron Therapeutics, Inc, PD Theranostics, Inc and AerWave Medical, Inc. Matt received his undergraduate degree in Economics from Duke University. He holds Series 7, 63 and 65 securities licenses.
Richard Narido, MS. Mr. Narido has served as our Interim Chief Financial Officer since September 2023. Prior to his appointment as our Interim Chief Financial Officer, Mr. Narido served as the Chief Financial Officer of Lucira Health (“Lucira”) until Pfizer Inc.’s acquisition of Lucira in April 2023. From July 2018 to March 2021, Mr. Narido served in various roles at Assembly Biosciences, Inc., including most recently as Executive Director, Finance, Controllership and Treasury. From June 2014 to June 2018, Mr. Narido served in various roles at Bio-Rad Laboratories, Inc., including as Americas Head of Finance, Global Commercial Operations. Prior to June 2014, Mr. Narido held various finance roles, including Global Head Finance Reporting and Accounting for Novartis Vaccines and Diagnostics and several industry-related positions, including Business Unit Controller for McKesson Corporation. Mr. Narido started his career with PricewaterhouseCoopers’s Financial Audit and Assurance practice. Mr. Narido holds a Bachelor of Science degree from the University of San Francisco and a Master of Science in Business Management and Leadership degree from the Pepperdine Graziadio Business School.
Patrick J. Flynn. Mr. Flynn has served as a member of our Board and Chair of our Audit Committee since May 2021 and previously served on the board of NeuroRx, Inc. Mr. Flynn is an entrepreneur with more than 35 years of senior executive experience. He has provided leadership to numerous successful organizations including start-ups and growth-stage companies and has served in a variety of roles, including Executive Chairman, board member, CEO, COO, CFO and advisor. Additionally, Mr. Flynn currently serves as an advisor to Good Measures where he was previously COO and responsible for the day-to-day operations of the company’s innovative approach to healthcare and nutrition services. Prior to joining Good Measures, Mr. Flynn was the co-founder of Predilytics, Inc. and served as Executive Chairman. Before joining Predilytics, Mr. Flynn contributed his expertise as COO and then as CEO to Health Dialog, where he helped build the business from an early-stage healthcare services organization and led its successful exit to BUPA, a global insurance company. Prior to this role, Flynn was a co-founder of Symmetrix, a management consulting firm specializing in healthcare and financial services. Mr. Flynn began his career with Bank of America where he held several positions over the course of 15 years, including Vice President of World Banking and Vice President of Risk Management. Mr. Flynn earned his B.S. in Finance from the Wharton School at the University of Pennsylvania.
We selected Mr. Flynn to serve on our Board because he brings to the Company over 30 years of audit compliance, entrepreneurship, business, and board experience.
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Chaim Hurvitz. Mr. Hurvitz has served as a member of our Board since May 2021. Mr. Hurvitz served as a member of the NeuroRx, Inc., the predecessor to our company, board of directors from May 2015. Mr. Hurvitz has served as the Chief Executive Officer of CH Health, a private venture capital firm, since May 2011. Mr. Hurvitz previously served as a member of the board of directors of Teva Pharmaceuticals Industries Ltd. from October 2010 to July 2014. Previously, he was a member of the senior management of Teva Pharmaceuticals Industries Ltd., serving as the President of Teva International Group from 2002 until 2010, as President and Chief Executive Officer of Teva Pharmaceuticals Europe from 1992 to 1999 and as Vice President — Israeli Pharmaceutical Sales from 1999 until 2002. Mr. Hurvitz is a founding investor and a director of Galmed Pharmaceuticals Ltd. Mr. Hurvitz presently serves as a member of the management of the Manufacturers Association of Israel and head of its pharmaceutical branch. Mr. Hurvitz holds a B.A. from Tel Aviv University.
We selected Mr. Hurvitz to serve as a director because he brings decades of pharmaceutical experience to the Board. In addition, Mr. Hurvitz brings international relationships to the Company that have, and will continue to add value to the execution of the Company’s business plan.
Janet Rehnquist, Esq. Ms. Rehnquist has served as a member of our Board since December 2023. Ms. Rehnquist is an attorney with more than 25 years of experience in highly regulated industries, particularly healthcare. Ms. Rehnquist founded RehnquistLaw PLLC in 2006, where her primary responsibilities include advising clients on regulatory and compliance matters as well as governmental investigations. Notably, Ms. Rehnquist served as an Assistant United States Attorney for the Eastern District of Virginia and served as the Inspector General at the Department of Health and Human Services from 2001-2003. Additionally, she has served as Counsel to the U.S. Senate Permanent Subcommittee on Investigations. Ms. Rehnquist earned a BA with honors from the University of Virginia (1979) and a JD from the University of Virginia School of Law (1985), where she was an editor of the Journal of Law and Politics.
We selected Ms. Rehnquist to serve as a director because she brings over 25 years of legal, governmental, and regulatory compliance expertise and experience to the Board.
Board Composition and Election of Directors
Classified Board of Directors
In accordance with our Second Amended and Restated Certificate of Incorporation (the “Charter”) and our Second Amended and Restated Bylaws (the “Bylaws”), our Board is divided into three classes with staggered, three year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire are elected to serve from the time of election and qualification until the third annual meeting of stockholders following election. Our directors are divided among the three classes as follows:
| · | Class I, comprised of one director, Chaim Hurvitz, with a term expiring at our 2025 annual meeting of stockholders; |
| · | Class II, comprised of one director, Janet Rehnquist, with a term expiring at our 2026 annual meeting of stockholders; and |
| · | Class III, comprised of three directors, Stephen H. Willard, Patrick J. Flynn and Jonathan Javitt, M.D., M.P.H., with terms expiring at our 2024 annual meeting of stockholders. |
Our Certificate of Incorporation provides that the authorized number of directors may be changed only by resolution of the Board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of the Company. Subject to the special rights of the holders of one or more outstanding series of preferred stock to elect directors, our directors may be removed only for cause by the affirmative vote of the holders of at least 75% of our outstanding voting stock entitled to vote in the election of directors.
Director Independence
Our Board has determined that Messrs. Flynn and Hurvitz, and Ms. Rehnquist are “independent directors” as defined in the Nasdaq Stock Market (“Nasdaq”) listing standards and applicable SEC rules.
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Committees of the Board of Directors
Our Board directs the management of our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board and standing committees. Our Board has established the following three standing committees: Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee. In addition, from time to time, special committees may be established under the direction of the Board when necessary to address specific issues. Our Board has adopted written charters for each of these committees, copies of which are available under the Corporate Governance section of our corporate website at www.nrxpharma.com. The information contained in, or accessible through, our website does not constitute a part of this Form 10-K/A. We have included our website address in this Form 10-K/A solely as an inactive textual reference.
The chart below reflects the standing committees of our Board and the composition of each committee as of the date of this Form 10-K/A:
| Committees | ||||||||||
| Director Name | Audit | Compensation | Nominating
and | |||||||
| Stephen H. Willard | ||||||||||
| Jonathan Javitt, M.D., M.P.H. | ||||||||||
| Patrick J. Flynn | CC | CC | ||||||||
| Chaim Hurvitz | X | X | X | |||||||
| Janet Rehnquist | X | X | CC | |||||||
| CC – Committee Chair | ||||||||||
| X – Member |
Audit Committee
Our Audit Committee consists of Messrs. Flynn and Hurvitz, and Ms. Rehnquist, with Mr. Flynn serving as chair. Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Nasdaq rules require that our Audit Committee be composed entirely of independent members. Our Board has affirmatively determined that Messrs. Flynn and Hurvitz, and Ms. Rehnquist each meet the definition of “independent director” for purposes of serving on the Audit Committee under Rule 10A-3 of the Exchange Act and the Nasdaq rules. Each member of our Audit Committee also meets the financial literacy requirements of Nasdaq listing standards. In addition, our Board has determined that each of Messrs. Flynn and Hurvitz, and Ms. Rehnquist qualifies as an “Audit Committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. The Audit Committee met four times during the year ended December 31, 2023. Our Board has adopted a written charter for the Audit Committee. The complete text of the Audit Committee’s current charter is available on our website at www.nrxpharma.com. The information contained in, or accessible through, our website does not constitute a part of this Form 10-K/A. We have included our website address in this Form 10-K/A solely as an inactive textual reference.
Pursuant to its charter, the Audit Committee is primarily responsible for, among other things:
| · | appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; |
| · | discussing with our independent registered public accounting firm their independence from management; |
| · | reviewing, with our independent registered public accounting firm, the scope and results of their audit; |
| · | approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
| · | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the quarterly and annual financial statements that we file with the SEC; |
| · | overseeing our financial and accounting controls and compliance with legal and regulatory requirements; |
| · | reviewing our policies on risk assessment and risk management; |
| · | reviewing related person transactions; and |
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| · | establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters. |
Compensation Committee
Our Compensation Committee consists of Messrs. Flynn and Hurvitz, and Ms. Rehnquist, with Mr. Flynn serving as chair. Our Board has affirmatively determined that Messrs. Flynn and Hurvitz, and Ms. Rehnquist each meet the definition of “independent director” for purposes of serving on the Compensation Committee under the Nasdaq rules, including the heightened independence standards for members of a Compensation Committee, and are “non-employee directors” as defined in Rule 16b-3 of the Exchange Act. The Compensation Committee did not meet during the year ended December 31, 2023. Our Board has adopted a written charter for the Compensation Committee. The complete text of the Compensation Committee’s current charter is available on our website at www.nrxpharma.com.
Pursuant to its charter, the Compensation Committee is primarily responsible for, among other things:
| · | reviewing and approving the corporate goals and objectives, evaluating the performance of and reviewing and approving, (either alone or, if directed by our Board, in conjunction with a majority of the independent members of the Board) the compensation of our Chief Executive Officer; |
| · | overseeing an evaluation of the performance of and reviewing and setting or making recommendations to our Board regarding the compensation of our other executive officers; |
| · | reviewing and approving or making recommendations to our Board regarding our incentive compensation and equity-based plans, policies and programs; |
| · | reviewing and approving all employment agreement and severance arrangements for our executive officers; |
| · | making recommendations to our Board regarding the compensation of our directors; and |
| · | retaining and overseeing any compensation consultants. |
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Mr. Hurvitz and Ms. Rehnquist, with Ms. Rehnquist serving as chair. Our Board has affirmatively determined that Mr. Hurvitz and Ms. Rehnquist each meet the definition of “independent director” under the Nasdaq rules. The Nominating and Corporate Governance Committee met once during the year ended December 31, 2023. Our Board has adopted a written charter for the Nominating and Corporate Governance Committee. The complete text of the Nominating and Corporate Governance Committee’s current charter is available on our website at www.nrxpharma.com.
Pursuant to its charter, the Nominating and Corporate Governance Committee is primarily responsible for, among other things:
| · | identifying individuals qualified to become members of our Board, consistent with criteria approved by our Board; |
| · | overseeing succession planning for our Chief Executive Officer and other executive officers; |
| · | periodically reviewing our Board’s leadership structure and recommending any proposed changes to our Board; |
| · | overseeing an annual evaluation of the effectiveness of our Board and its committees; and |
| · | developing and recommending to our Board a set of corporate governance guidelines. |
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Risk Oversight
Our Board is responsible for overseeing our risk management process. Our Board focuses on our general risk management strategy, the most significant risks facing us, and oversees the implementation of risk mitigation strategies by management. Our Audit Committee is also responsible for discussing our policies with respect to risk assessment and risk management. Our Board believes its administration of its risk oversight function has not negatively affected our Board’s leadership structure.
Compensation Committee Interlocks and Insider Participation
None of our executive officers serve as a member of the Board or Compensation Committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board or Compensation Committee.
Code of Business Conduct and Ethics
We adopted a written code of business conduct and ethics, our Business Code of Conduct and Anti-Corruption Policy (the “Code of Conduct”), that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The complete text of the Code of Conduct is available on our website at www.nrxpharma.com. In addition, we intend to post on our website all disclosures that are required by law or the Nasdaq listing standards concerning any amendments to, or waivers from, any provision of the Code of Conduct.
Director Attendance at Meetings
The Company encourages and expects all of its directors to attend the meetings of the Board. During the fiscal year ended December 31, 2023, the Board met eight times. Each member of our Board attended at least 75% of the aggregate of (i) the total number of meetings of the Board (held during the period for which he or she was a director), and (ii) the total number of meetings held by all committees of the Board on which such director served (held during the period that such director served).
Board Leadership Structure
The Company does not have a formal policy regarding whether to separate the Chairman and Principal Executive Officer positions. Our Board believes that the decision to combine or separate the Chairman and Principal Executive Officer positions depends on the facts and circumstances facing the Company at a given time and could change over time. Currently, Mr. Willard serves as our current Chief Executive Officer and Principal Executive Officer (the “PEO”) of the Company. The current acting Chairman of our Board is Dr. Javitt.
As the Company evolves, the Board will regularly evaluate the Board leadership structure to ensure it continues to meet the needs of the Company, and to ensure that it provides strong, independent oversight for our stockholders. In particular, as part of this evaluation, the Board will take under consideration the outcomes of the Board and committee self-evaluation process as well as other factors, including the current state of the Company’s strategy and operations, recent performance, market and industry factors and peer company practices.
Policies Governing Director Nominations
Securityholder Recommendations
Our Bylaws provide that nominations of any person for election to the Board at an annual meeting may be made at such meeting by a stockholder present in person virtually (A) who was a record owner of shares of the Company both at the time of giving the notice provided for in the Bylaws and at the time of the meeting, (B) is entitled to vote at the meeting, and (C) has complied with the Bylaws as to such notice and nomination.
All stockholder recommendations for director candidates must be submitted to our Secretary at NRx Pharmaceuticals, Inc., 1201 North Market Street, Suite 111, Wilmington, Delaware 19801, who will forward all recommendations to the Nominating and Corporate Governance Committee. All stockholder recommendations for director candidates for the 2024 annual meeting of stockholders must be submitted to our Secretary on or before August 23, 2024, and must include the following information:
| · | the name and address of the stockholder (including, if applicable, the name and address that appear on the Company’s books and records); |
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| · | the class or series and number of shares of the Company that are, directly or indirectly, owned of record or beneficially owned by the stockholder; |
| · | the full notional amount of any securities that, directly or indirectly, underlie any “derivative security” that constitutes a “call equivalent position” and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class or series of shares of the Company; |
| · | the name and address of the proposed director candidate (including, if applicable, the name and address that appear on the Company’s books and records); |
| · | the class or series and number of shares of the Company that are, directly or indirectly, owned of record or beneficially owned by the proposed director candidate, if applicable; |
| · | all information relating to such proposed director candidate that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such candidate’s written consent to being named in the Proxy Statement as a nominee and to serving as a director if elected); |
| · | a description of any direct or indirect material interest in any material contract or agreement between or among the stockholder, on the one hand, and each proposed director candidate for nomination or his or her respective associates or any other participants in such solicitation, on the other hand; and |
| · | a completed and signed questionnaire, representation and agreement, as specified in the Bylaws. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who own more than 10% of the Company’s Common Stock to file reports of ownership and changes of ownership of such securities with the SEC.
Based solely on a review of the reports received by the SEC, the Company believes that, during the fiscal year ended December 31, 2023, the Company’s officers, directors and greater than 10% owners timely filed all reports they were required to file under Section 16(a), except as set forth below:
| Name | Number of Late Reports | Number of Late Transactions | ||||||
| Chaim Hurvitz | 1 | 1 | ||||||
| Aaron Gorovitz | 1 | 1 | ||||||
Communications with the Board
If you wish to communicate with any of our directors or the Board as a group, you may do so by writing to them at Name(s) of Director(s)/Board of Directors of NRx, Pharmaceuticals, Inc., c/o Secretary, NRx Pharmaceuticals, Inc., 1201 North Market Street, Suite 111, Wilmington, Delaware 19801.
We recommend that all correspondence be sent via certified U.S. Mail, return receipt requested. All correspondence received by the Secretary will be forwarded by the Secretary promptly to the addressee(s).
| ITEM 11. | EXECUTIVE COMPENSATION |
The following summary compensation table and narrative disclosure sets forth information regarding all compensation awarded to, earned by, or paid to our Named Executive Officers, which consist of (a) any persons who served as our principal executive officer during any part of the year ended December 31, 2023; (b) each of our two most highly compensated executive officers other than our principal executive officer who served as executive officers at the end of the year ended December 31, 2023; and (c) up to two additional individuals for whom disclosure would have been provided under clause (b) but for the fact that the person was not serving as an executive officer at the end of the year ended December 31, 2023 (collectively, the “Named Executive Officers”).
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Our “Named Executive Officers” for the year ended December 31, 2023 were (i) Stephen H. Willard, our Chief Executive Officer; (ii) Jonathan Javitt, M.D., M.P.H., our Chief Scientist and Chairman; and (iii) Richard Narido, our Chief Financial Officer.
On April 1, 2024, the Company completed a stockholder approved 1-for-10 reverse stock split (the “Reverse Split”) of the Company’s Common Stock. 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.
2023 Summary Compensation Table
The following table presents information regarding the total compensation of our Named Executive Officers for the years ended December 31, 2023 and 2022.
| Name and Principal Position | Year | Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Option Awards ($)(2) |
All Other Compensation ($) |
Total ($) | |||||||||||||||||||
| Stephen Willard(3) | 2023 | 500,000 | 500,000 | |||||||||||||||||||||||
| Chief Executive Officer | 2022 | 233,871 | — | 566,000 | — | — | 799,871 | |||||||||||||||||||
| Jonathan Javitt(4)(5)(6) | 2023 | 602,755 | (6) | — | — | — | 27,443 | 630,198 | ||||||||||||||||||
| Chairman and Chief Scientist | 2022 | 867,446 | (7) | — | — | — | 6,250 | 873,696 | ||||||||||||||||||
| Richard Narido(8) | 2023 | 255,015 | — | — | 43,000 | — | 298,015 | |||||||||||||||||||
| Chief Financial Officer | 2022 | — | — | — | — | — | — | |||||||||||||||||||
| (1) | Amount reflects the grant date fair value of restricted stock granted as an employment inducement award during fiscal year 2023 or fiscal year 2022 as calculated in accordance with ASC Topic 718,. See Note 10 to the consolidated financial statements contained in the Form 10-K for information regarding the assumptions used in calculating this amount. | |
| (2) | Amount reflects the grant date fair value of stock options granted during fiscal year 2023 or fiscal year 2022 as calculated in accordance with ASC Topic 718,. See Note 10 to the consolidated financial statements contained in the Form 10-K for information regarding the assumptions used in calculating these amounts. | |
| (3) | Mr. Willard was appointed Chief Executive Officer on July 12, 2022. | |
| (4) | For 2023, All Other Compensation reflects reimbursement for legal fees incurred. For 2022, the All Other Compensation column reflects: (i) for Dr. Javitt, $6,250 for his service as Chairman of the Board during the first quarter of 2022. | |
| (5) | Dr. Javitt served as Chief Executive Officer of the Company until his retirement on March 8, 2022, at which time he assumed the role of Chief Scientist and remained as a member of the Board of Directors. Dr. Javitt was appointed as Chairman of the Board on December 19, 2023. | |
| (6) | Amount reported reflects (i) $0 in base salary, and (ii) $602,755 in consulting fees, and (iii) $27,443 in reimbursement for legal expenses. | |
| (7) | Amount reported reflects (i) $51,008 in base salary, and (ii) $816,438 in consulting fees, which included approximately $300,000 in deferred compensation from 2021. | |
| (8) | Mr. Narido was appointed as Interim Chief Financial Officer in September 2023 through a consulting agreement with LifeSci Advisors. .Amount reflected above accounts for total payment to LifeSci Advisors inclusive of their mark up. |
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Narrative to Summary Compensation Table
Base Salaries and Compensation
Our Named Executive Officers receive an annual base salary or annual rate of compensation to compensate them for services rendered. The base salary or annual rate of compensation payable to each Named Executive Officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. For the year ended December 31, 2023: (i) Mr. Willard’s annual base salary was set at $500,000; (ii) Dr. Javitt’s was compensated through an annual consulting agreement that was set at $575,000 and eligible for an annual performance-based bonus with a minimum target of $250,000; and (iii) Mr. Narido’s compensation for 2023 was via a consulting agreement with LifeSci Advisors, LLC.
Cash Bonus Compensation
Pursuant to his employment agreement, Mr. Willard is eligible to receive a discretionary annual performance-based cash bonus with a target equal to 50% of base salary. Pursuant to their employment agreements, Dr. Van Voorhees is were eligible to receive a discretionary annual performance-based cash bonus with a target equal to 50% of base salary. Pursuant to his employment agreement, Dr. Javitt was eligible to receive a discretionary annual performance-based cash bonus with a target equal to $275,000.
Equity Compensation
We typically grant stock options pursuant to the NRx Pharmaceuticals, Inc. 2021 Omnibus Incentive Plan (the “Omnibus Plan”) as the long-term incentive component of our compensation program. Stock options allow employees, including our Named Executive Officers, to purchase shares of Common Stock at a price equal to the fair market value of Common Stock on the date of grant. Our stock options have vesting schedules that are designed to encourage continued employment and typically vest in substantially equal installments on each of the first three anniversaries of the applicable vesting commencement date, subject to the recipient’s continued service through each applicable vesting date. From time to time, our Board may also construct alternate vesting schedules as it determines appropriate to motivate particular employees, as further described below.
Option Awards
In 2023, Richard Narido was granted options to purchase 10,000 shares of Common Stock.
Refer to the “Outstanding Equity Awards at 2023 Fiscal Year End” table below for additional information regarding these options.
Willard Restricted Stock Award
As an inducement to join the Company, Mr. Willard received a grant of 100,000 shares of restricted stock. Such grant of restricted stock was designed to comply with the Nasdaq inducement exemption and was granted outside of the Company’s existing equity compensation plans. However, the restricted stock award is governed in all respects as if issued under the Omnibus Plan. The shares of restricted stock will vest in substantially equal installments on each of the first three anniversaries of the date of grant, subject to Mr. Willard’s continued employment with, appointment as a director of, or engagement to provide services to, the Company through the applicable vesting date.
Mr. Willard’s shares of restricted stock are subject to clawback if Mr. Willard engages in conduct that is in conflict with or adverse to the Company’s interests while employed by the Company, including violating non-competition, non-solicitation, and non-disparagement covenants.
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Refer to the “Outstanding Equity Awards at 2023 Fiscal Year End” table below for additional information regarding these shares of restricted stock.
Executive Officer Employment Arrangements
Willard Employment Agreement
In connection with his commencement of employment with us in July 2022, we entered into an employment agreement with Mr. Willard (the “Willard Employment Agreement”) pursuant to which he serves as our Chief Executive Officer and as a director on our Board. The Willard Employment Agreement provides for an initial two-year term and extends automatically for additional one-year periods unless either party provides notice of termination. The Willard Employment Agreement provides for an annual base salary of $500,000, a performance-based bonus with a minimum target of 50% of base salary, and an inducement grant of 100,000 shares of restricted stock that vests over a three-year period.
The Willard Employment Agreement includes (i) a confidentiality covenant that applies during the term of employment and for three years following termination, (ii) assignment of intellectual property, (iii) a non-competition covenant that applies during the term of employment and for 12 months following termination, and (iv) non-solicitation of employees and customers covenants that apply during the term of employment and for 12 months following termination.
Javitt Employment Agreement and Javitt Consulting Agreement
In connection with his commencement of employment with us in May 2015, we entered into an employment agreement with Dr. Javitt (the “Javitt Employment Agreement”) pursuant to which he served as our Chief Executive Officer and President. The Javitt Employment Agreement provided for an initial five-year term and extended automatically for additional one-year periods unless either party provided notice of termination. The Javitt Employment Agreement provided for a base salary of $275,000, subject to periodic increase by the Board. The Javitt Employment Agreement was terminated on March 8, 2022 when Dr. Javitt retired and became a consultant to the Company. Upon entering into the Javitt Consulting Agreement (as defined below), Dr. Javitt waived his rights to the bonus, severance and certain other provisions under the Javitt Employment Agreement.
Pursuant to a consulting agreement between the Company and Dr. Javitt, dated as of March 8, 2022 (the “Javitt Consulting Agreement”), Dr. Javitt committed to provide consulting services to the Company as its Director and Chief Scientist. The 2022 Javitt Consulting Agreement provided for an annual consulting fee of $1,000,000, to compensate Dr. Javitt for approximately $400,000 in bonus payments that would otherwise have been granted under his prior employment agreement.
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The Javitt Consulting Agreement was amended on March 29, 2023 (the “Javitt Consulting Agreement Amendment”) to renew the agreement in annual increments, commencing on March 8, 2024, unless either party provides notice of termination. The Javitt Consulting Agreement Amendment provides for: (i) an annual consulting fee of $575,000, payable in monthly installments; (ii) eligibility for an annual performance-based bonus with a minimum target of $250,000 (with the annual bonus, if any, for 2023 pro-rated based on the number of days during the 2023 calendar year following March 8, 2023 that Dr. Javitt is engaged by the Company); and (iii) subject to Board approval, a grant of 50,000 shares of restricted stock that will vest (x) 50% on the date upon which the Food and Drug Administration files the Company’s new drug application for the Antidepressant Drug Regimen (as defined therein) and (y) 50% on the date upon which the Food and Drug Administration has both approved the Company’s Antidepressant Drug Regimen and listed the Company’s Antidepressant Drug Regiment in the Food and Drug Administration’s “Orange Book.”
Narido Consulting Agreement
In connection with his commencement of employment with us in September 2023, we entered into an consulting agreement (the “LifeSci Agreement”) with LS Associates, a division of LifeSci Advisors, LLC (“LifeSci”), pursuant to which LifeSci will provide certain consulting services to the Company, including but not limited to, arranging for the provision of the Company’s the Interim Chief Financial Officer. In connection with the LifeSci Agreement, on September 13, 2023, the Company appointed Richard Narido, 46, to serve as Interim Chief Financial Officer of the Company. As Interim Chief Financial Officer, Mr. Narido will serve as the Company’s principal financial officer and principal accounting officer. The LifeSci Agreement has a term of two years commencing from the date of the LifeSci Agreement. Pursuant to the LifeSci Agreement, the Company may not knowingly solicit work of any kind (including but not limited to paid and unpaid advice, information, or content), or propose or agree to any kind of consulting, advisory, directorship, or employment arrangement, with any professional that LifeSci first introduces to the Company for a period of one year from the Company’s most recent engagement with or including the professional, without paying a placement fee equal to 15% of such professional’s starting annual base salary and target annual bonus, whether discretionary or quarantined. The LifeSci Agreement also contains certain noncompetition, non-solicitation and confidentiality provisions customary to such agreements.
Outstanding Equity Awards at 2023 Fiscal Year End
The following table summarizes the number of shares of Common Stock underlying outstanding equity incentive plan awards for each Named Executive Officer as of December 31, 2023.
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||
| Name | Vesting Commencement Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) | ||||||||||||||||||||||||||||
| Stephen Willard | 7/12/2022(2) | — | — | — | — | 100,000 | 111,000 | — | — | ||||||||||||||||||||||||||||
| Jonathan Javitt | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Richard Narido | 12/28/2023 |
| — | 10,000 | $ | 4.64 | 12/28/2033 | — | — | — | — | ||||||||||||||||||||||||||
| (1) | Market value is based on the closing sale price of our Common Stock on December 31, 2023 of $4.60. | |
| (2) | The shares of restricted stock vest in substantially equal installments on each of the first three anniversaries of the grant date, subject to continued service. |
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Health, Welfare and Retirement Plans
We do not maintain a 401(k) defined contribution plan or any other employee benefit plans or programs.
Clawback
The Board is reviewing the final rule issued by the SEC implementing the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to recoupment of incentive-based compensation and will adopt a compliant clawback policy when the NASDAQ adopts listing standards in accordance with the final rules.
Potential Payments upon Termination or Change in Control
Willard Employment Agreement
In the event Mr. Willard’s employment is terminated due to his death or disability, by the Company for Cause, or by Mr. Willard without Good Reason, the Company will pay to Mr. Willard (or his beneficiary or estate, as applicable): (i) base salary earned but not paid through the date of termination, (ii) pay for any vacation time earned but not used through the date of termination, (iii) any annual bonus earned for the year preceding the year of termination but unpaid on the date of termination and (iv) any business expenses incurred but not reimbursed on the date of termination.
In the event Mr. Willard’s employment is terminated by the Company without Cause, upon a Change of Control (as defined in the Willard Employment Agreement) or upon Mr. Willard’s resignation for Good Reason, subject to Mr. Willard’s execution and non-revocation of a general release of claims, the Company will pay Mr. Willard: (i) continued base salary payments for the period beginning on the termination date and ending on the first anniversary of the termination date; and (ii) all accrued compensation and a prorated target bonus through the date of termination.
“Cause” is defined in the Willard Employment Agreement as: (i) Mr. Willard’s failure to perform (other than by reason of disability), or gross negligence in the performance of, his material duties and responsibilities to the Company (unauthorized absence for a period of five consecutive business days will be considered failure to perform); (ii) material breach of the confidentiality covenant or assignment of rights to intellectual property covenant or breach of any fiduciary duty owed to the Company; (iii) fraud or embezzlement or other dishonesty which is material (monetarily or otherwise) with respect to the Company; (iv) indictment, conviction or plea of nolo contendere to a felony or other crime involving moral turpitude that is material to the Company; (v) Mr. Willard’s material breach of the Willard Employment Agreement or of any Company policy; or (vi) disciplinary proceedings or other events that impair Mr. Willard’s ability to function as Chief Executive Officer of the Company.
“Good Reason” is defined in the Willard Employment Agreement as: (i) material diminution of Mr. Willard’s compensation or benefits; (ii) material diminution of Mr. Willard’s title, duties, authority or responsibilities; (iii) the Company’s material breach of any term of the Willard Employment Agreement; (iv) the failure of the Board to nominate Mr. Willard to fill one of the vacant seats on the Board; or (v) the required relocation of Mr. Willard’s place of employment to a location that is more than 25 miles from his home.
Javitt Consulting Agreement
The Company may terminate the Javitt Consulting Agreement without prior notice immediately upon a termination for Cause. Dr. Javitt may terminate the Javitt Consulting Agreement upon 30 days’ notice at any time and for any reason. Upon termination of Javitt Consulting Agreement, the Company will pay Dr. Javitt any consulting fees and expenses that have been accrued but not yet paid. “Cause” is defined in the Javitt Consulting Agreement as: (i) Dr. Javitt’s gross negligence or willful misconduct, or willful and continued failure to substantially perform his duties (other than due to physical or mental illness or incapacity), which, in either case, causes material injury to the reputation or business of the Company; (ii) Dr. Javitt’s conviction of, or plea of guilty or nolo contendere to, a felony or other crime; (iii) Dr. Javitt’s fraud or embezzlement or other material misuse of funds or property belonging to the Company; or (iv) any material breach by Dr. Javitt under the Javitt Consulting Agreement subject to a 10 day notice and cure period (if reasonably capable of cure).
Equity Incentive Awards
Pursuant to the Omnibus Plan, in the event of a Change in Control (as defined in the Omnibus Plan): (i) if the acquirer or successor company in such Change in Control has agreed to provide for the substitution, assumption, exchange or other continuation of the stock options, then, if the Named Executive Officer’s employment with or service to the Company is terminated by the Company without Cause (as defined in the Omnibus Plan) (and other than due to death or disability) on or within 24 months following a Change in Control, then all of the Named Executive Officer’s options will become immediately exercisable; (ii) if the acquirer or successor company in such Change in Control has not agreed to provide for the substitution, assumption, exchange or other continuation of the options, all options held by the Named Executive Officer will become immediately exercisable; and (iii) the Committee (as defined in the Omnibus Plan) may cancel any outstanding options in exchange for cash, securities or other property equal to the value of such canceled options.
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Willard Restricted Stock Award
If Mr. Willard’s employment with the Company is terminated without Cause (other than for death or disability) or Mr. Willard resigns for Good Reason (each as defined in Mr. Willard’s employment agreement, and such termination, a “Qualifying Termination”), Mr. Willard will vest in a pro rata portion of the restricted stock. In the event of a Qualifying Termination on or within 12 months following a Change in Control (as defined in the Omnibus Plan), all of the shares of restricted stock will vest. If Mr. Willard’s service terminates for any other reason, all unvested shares of restricted stock will be forfeited for no consideration.
Equity Compensation Plan Information
The following table provides certain aggregate information with respect to our equity compensation plans in effect as of December 31, 2023.
| Plan Type | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of shares of common stock remaining available for future issuance under equity compensation plans | |||||||||
| Equity compensation plans approved by security holders(1) | 264,977 | (2)(3) | $ | 18.28 | 213,398 | |||||||
| Equity compensation plans not approved by security holders(4) | 100,000 | — | — | |||||||||
| (1) | Includes awards granted pursuant to the Omnibus Plan. | |
| (2) | As of December 31, 2023, there were 213,400 shares of Common Stock authorized for issuance pursuant to awards under the Omnibus Plan. Pursuant to the terms of the Omnibus Plan, the number of shares available for issuance thereunder will automatically increase each fiscal year beginning with the year ended December 31, 2022 and ending with fiscal year 2031 by the lesser of (a) 1% of the total number of shares outstanding on the last day of the immediately preceding fiscal year on a fully diluted basis assuming that all shares available for issuance under the Omnibus Plan are issued and outstanding, or (b) such number of shares determined by the Board. | |
| (3) | Excludes rights outstanding under the 2016 Omnibus Incentive Plan. As of December 31, 2023, there were 70,168 securities to be issued upon exercise of outstanding options, warrants and rights pursuant to our 2016 Omnibus Incentive Plan, with a weighted-average exercise price of $31.22 per share, which were assumed by Big Rock Partners Acquisition Corporation and converted into an option to acquire an adjusted number of shares of Common Stock at an adjusted exercise price per share in connection with the May 2021 merger. No further grants or awards will be made under the 2016 Omnibus Incentive Plan. | |
| (4) | Reflects the grant of an “employment inducement grant” under Nasdaq Listing Rule 5635(c)(4) comprised of restricted stock granted to Mr. Willard. |
Director Compensation
Pursuant to our director compensation program, each member serving on our Board for the year ended December 31, 2023 was eligible to compensation for his or her service as follows:
| · | Independent Board member: $60,000 annual retainer plus an annual equity grant |
| · | Chairman of the Board: $25,000 annual retainer |
| · | Board Committee Chair: $15,000 annual retainer |
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Summary Director Compensation Table
The following table shows for the year ended December 31, 2023, certain information with respect to the compensation of our non-employee directors. As Named Executive Officers for the year ended December 31, 2023, Mr. Willard’s and Dr. Javitt’s compensation is shown in the Summary Compensation Table. Mr. Willard did not receive any additional compensation for his service on the Board.
| Name | Fees Earned or Paid in Cash ($) | Option
Awards ($)(1) | Total ($) | |||||||||
| Patrick J. Flynn | 67,500 | - | 67,500 | |||||||||
| Chaim Hurwitz | 52,500 | - | 52,500 | |||||||||
| Janet Rehnquist | ||||||||||||
| (1) | Amounts reflect the full grant date fair value of stock options awarded under our Omnibus Plan during 2023, computed in accordance with the requirements of FASB ASC 718. As of December 31, 2023, (i) Messrs. Flynn and Hurwitz each held options to purchase up to 16,651 shares of Common Stock; and (ii) Ms. Rehnquist did not own any options to purchase shares of Common Stock. |
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The following table sets forth information with respect to the beneficial ownership of our Common Stock, as of the Record Date by:
| · | each person who is the beneficial owner of more than 5% of the outstanding shares of our Common Stock; |
| · | each of our Named Executive Officers and directors; and |
| · | all of our executive officers and directors as a group. |
Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. A person is a “beneficial owner” of a security if that person has or shares “voting power”, which includes the power to vote or to direct the voting of the security, or “investment power”, which includes the power to dispose of or to direct the disposition of the security or has the right to acquire such powers within 60 days. Accordingly, we have included all shares of Common Stock issuable to such person upon the exercise of warrants or options currently exercisable or exercisable within 60 days of the date hereof. We did not deem such shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
Unless otherwise noted in the footnotes to the following table, and subject to applicable community property laws, the persons and entities named in the table have sole voting and investment power with respect to their beneficially owned Common Stock and preferred stock.
Except as indicated in the footnotes to the table, each of the stockholders listed below has sole voting and investment power with respect to the shares of Common Stock owned by such stockholders. Unless otherwise noted, the address of each beneficial owner is c/o NRx Pharmaceuticals, Inc., 1201 North Market Street, Suite 111, Wilmington, DE 19801.
The beneficial ownership of our Common Stock is based on 10,555,405 shares of Common Stock issued and outstanding as of April 29, 2024.
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| Name and Address of Beneficial Owners | Amount and Nature of Beneficial Ownership | Percent of Class | ||||
Directors and Named Executive Officers | ||||||
| Stephen H. Willard(1) | 105,000 | 1.0 | % | |||
| Richard Narido (2) | 10,000 | * | ||||
| Patrick J. Flynn(3) | 163,940 | 1.6 | % | |||
| Chaim Hurvitz(4) | 238,130 | 2.3 | % | |||
| Jonathan Javitt(5) | 1,476,833 | 14.0 | % | |||
| Janet Rehnquist(6) | - | - | ||||
| All Executive Officers and Directors as a Group (4 persons) | 2,040,910 | 18.9 | % | |||
| 5% Holders | ||||||
| Glytech, LLC(7) | 987,291 | 9.4 | % | |||
* Indicates less than 1%
| (1) | Consists of (i) 5,000 shares of Common Stock held by Stephen H. Willard individually and (ii) 100,000 shares of restricted Common Stock that can be voted but cannot be traded. 33,334 shares will be unrestricted on July 12, 2023, an additional 33,334 shares will be unrestricted on July 12, 2024, and the remaining 33,333 shares will be unrestricted on July 12, 2025. | |
| (2) | Consists of 10,000 shares as a result of his stock option grant on December 28, 2023 of 10,000 shares vesting monthly over twelve months. | |
| (3) | Consists of (i) 36,234 shares of Common Stock held by Nash-Flynn Investments, LLC, (ii) 22,626 shares of Common Stock held by the Whitney Pritchard Nash Flynn 2010 Trust and the Lindsay Pritchard Nash Flynn 2010 Trust, (iii) 88,256 shares of Common Stock issuable upon exercise of fully vested warrants held by the Whitney Pritchard Nash Flynn 2010 Trust and the Lindsay Pritchard Nash Flynn 2010 Trust, (iv) 175 shares of Common Stock held by Patrick J. Flynn, and (v) options to purchase up to 16,651 shares of Common Stock, all of which are vested and exercisable. Patrick J. Flynn is the owner of Nash-Flynn Investments, LLC and trustee of the Whitney Pritchard Nash Flynn 2010 Trust and the Lindsay Pritchard Nash Flynn 2010 Trust. | |
| (4) | Consists of (i) 143,636 shares of Common Stock held by Shirat HaChaim Ltd., (ii) 20,845 shares of Common Stock held by CH Health-Private Venture Capital Ltd, (iii) 570,00 shares of Common Stock held by Chaim Hurvitz individually, and (iv) options to purchase up to 16,651 shares of Common Stock, all of which are fully vested. Chaim Hurwitz is the owner of Shirat HaChaim Ltd. and CH Health-Private Venture Capital Ltd. | |
| (5) | Consists of (i) 1,260,000 shares of Common Stock held by the Jonathan Javitt Living Trust, (ii) 142,200 shares of Common Stock held by The Javitt 2012 Irrevocable Dynasty Trust (the “Javitt Dynasty Trust”), (iii) 44,634 shares of Common Stock held by Jonathan Javitt individually, and (iv) 30,000 shares of Common Stock held by the Jonathan Javitt Donor Advised Fund. Jonathan Javitt, M.D., M.P.H. is the trustee of the Jonathan Javitt Living Trust and the primary advisor of the Jonathan Javitt Donor Advised Fund. Dr. Javitt is not a trustee or beneficiary of the Javitt Dynasty Trust, and no beneficiary of the Javitt Dynasty Trust resides in Dr. Javitt’s household. Dr. Javitt has no beneficial ownership of the securities held by the Javitt Dynasty Trust. | |
| (6) | Janet Rehnquist does not currently own and shares of the Company. | |
| (7) | Based on the Schedule 13D filed jointly by Daniel Javitt and Glytech, LLC with the SEC on September 13, 2022, the holdings consist of an aggregate of 987,291 shares of Common Stock held by Glytech, LLC. Glytech, LLC is owned by Daniel Javitt, who is the inventor of the patents that underline NRX-101 and the brother of Jonathan Javitt, M.D., M.P.H., the Chairman and Chief Scientist of the Company. |
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| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
The following includes a summary of transactions since January 1, 2023 to which we have been a party in which the amount involved exceeded or will exceed $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than transactions that are described under the “Executive Compensation” section of this Form 10-K/A. We also describe below certain other transactions with our directors, executive officers and stockholders.
February 2022 Private Placement Lock-Up Agreement
On February 2, 2022, we consummated a private placement (the “Private Placement”) pursuant to the terms and conditions of that certain Securities Purchase Agreement, dated as of January 30, 2022 (the “Purchase Agreement”), with certain investors. In connection with the closing of the Private Placement, we entered into a lock-up agreement with Jonathan Javitt, M.D., M.P.H., and Daniel Javitt (collectively, the “Javitt Stockholders”), dated as of January 30, 2022 (the “Private Placement Lock-Up Agreement”), pursuant to which the Javitt Stockholders agreed not to transfer, directly or indirectly, any Common Stock owned by them for sixty (60) days following the Effective Date (as defined in the Purchase Agreement) (the “Restriction Period”). Subject to certain conditions, the Javitt Stockholders may transfer shares of Common Stock provided that: (i) we receive a signed lock-up letter agreement for the balance of the Restriction Period from each transferee, prior to such transfer, (ii) the transfer does not involve a disposition for value, (iii) the transfer is not required to be reported with the SEC in accordance with the Exchange Act, as amended, and no report of such transfer is made voluntarily, and (iv) neither the Javitt Stockholders nor any transferee, as the case may be, otherwise voluntarily effects any public filing or report regarding such transfer, with respect to certain specified transfers under the Private Placement Lock-Up Agreement. The Restriction Period has now expired.
Procedures with Respect to Review and Approval of Related Person Transactions
Our Board recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests (or the perception of such conflicts of interest). We have adopted a written policy on transactions with related persons that is in conformity with the requirements for issuers having publicly held Common Stock that is listed on the Nasdaq. Under the policy, our legal department is primarily responsible for developing and implementing processes and procedures to obtain information regarding related persons with respect to potential related person transactions and then determining, based on the facts and circumstances, whether such potential related person transactions do, in fact, constitute related person transactions requiring compliance with the policy. If the legal department determines that a transaction or relationship is a related person transaction requiring compliance with the policy, our general counsel will be required to present to the Audit Committee all relevant facts and circumstances relating to the related person transaction. The Audit Committee will be required to review the relevant facts and circumstances of each related person transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related person’s interest in the transaction, take into account the conflicts of interest and corporate opportunity provisions of the our code of business conduct and ethics, and either approve or disapprove the related person transaction. If advance Audit Committee approval of a related person transaction requiring the Audit Committee’s approval is not feasible, then the transaction may be preliminarily entered into by management upon prior approval of the transaction by the chair of the Audit Committee, subject to ratification of the transaction by the Audit Committee at the Audit Committee’s next regularly scheduled meeting; provided, that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction. If a transaction was not initially recognized as a related person transaction, then, upon such recognition, the transaction will be presented to the Audit Committee for ratification at the Audit Committee’s next regularly scheduled meeting; provided, that if ratification is not forthcoming, management will make all reasonable efforts to cancel or annul the transaction. Our management will update the Audit Committee as to any material changes to any approved or ratified related person transaction and will provide a status report at least annually of all then-current related person transactions. No director will be permitted to participate in approval of a related person transaction for which he or she is a related person.
Support Services
We license patents owned by Glytech LLC, which is solely owned by Daniel C. Javitt, the brother of Jonathan Javitt, the Chairman and Chief Scientist of the Company. For the years ended December 31, 2023 and 2022, the Company paid Glytech LLC $291,088 and $250,000, respectively, for continuing research and development, technology support services and reimbursed expenses. These support services are ongoing. Glytech LLC’s support includes both non-clinical and clinical research in support of the expansion of our intellectual property portfolio.
In addition, we pay Zachary Javitt, the son Jonathan Javitt, on an hourly basis for services related to the Company’s marketing and brand development and development of the Company’s public communications strategies under the supervision of our Chief Executive Officer, who is responsible for assuring that the services are provided on financial terms that are at market. We paid Zachary Javitt a total of $191,677 and $133,445 during the years ended December 31, 2023 and 2022, respectively.
| 16 |
In 2022, the Company engaged Pilltracker, LLC to manage the procurement and deployment of nebulizer devices associated with a clinical trial of aviptadil for the treatment of COVID-19 because Pilltracker had an audited medical device quality system in place, whereas the Company has no medical device expertise or medical device (as opposed to pharmaceutical) quality infrastructure under ISO 13485. Zachary Javitt is PillTracker’s Chief Executive Officer and Jonathan Javitt, M.D., M.P.H. is the chairman of its board of directors. The Company paid approximately $0 and $170,340 to PillTracker for its services for the years ended December 31, 2023 and 2022, respectively. These funds were primarily used for the purchase and deployment of hospital-based nebulizer devices from third parties at the Company’s request and all purchases were reviewed by the Company’s Chief Financial Officer.
Controlled Company Status
From the consummation of the business combination that formed the Company in March 2021 and through October 2021, the Company qualified as a “controlled company” pursuant to the listing rules of The Nasdaq Stock Market (“Nasdaq”). In accordance with such rules, a company that has ceased to be a “controlled company” within the meaning of the Nasdaq listing rules shall be permitted to phase-in the requirement to have a majority independent board and independent nominations and Compensation Committees on the same schedule as companies listing with their initial public offering. Accordingly, the Company was required to be fully compliant with the requirement to have a majority independent board, Compensation Committee and nominations committee by October 2022.
| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Salberg & Company, P.A (“Salberg”) served as our independent auditor for the year ended December 31, 2023, and KPMG LLP served as our independent auditor for the year ended December 31, 2022. The Company incurred the following fees from Salberg and Company and from KPMG LLP for the audit of the consolidated financial statements and for other services provided during the years ended December 31, 2023 and 2022:
| For the year ended December 31 | ||||||||
| 2023 | 2022 | |||||||
| Audit fees, KPMG LLP(1) | $ | 593,000 | $ | 775,000 | ||||
| Audit fees, Salberg and Company(1) | 151,690 | |||||||
| Audit-related fees(2) | - | - | ||||||
| Tax fees(3) | - | - | ||||||
| All other fees(4) | - | - | ||||||
| Total fees | $ | 744,690 | $ | 775,000 | ||||
| (1) | Audit fees consist of fees for professional services rendered in connection with the audit of our annual consolidated financial statements, the review of the interim consolidated financial statements included in quarterly reports, services rendered in connection with the May 2021 merger and follow-on public offering, and additional public offerings. The annual audit fee for 2024, including quarterly reports is projected at $250,000. | |
| (2) | There were no audit-related fees billed in 2023 and 2022. | |
| (3) | There were no tax-related fees billed in 2023 and 2022. | |
| (4) | There were no other fees billed in 2023 and 2022. |
Audit Committee Pre-Approval Policy and Procedures
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board regarding auditor independence, our Audit Committee is responsible for the appointment, compensation, and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our Audit Committee (or the chair if such approval is needed on a time urgent basis) pre-approves audit and permissible non-audit services provided by the independent registered public accounting firm. These services include audit services, audit-related services, tax services and other services.
PART IV
| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
(a) List of Documents filed.
| 1. | The financial statements of NRx Pharmaceuticals, Inc. are filed as part of the original Form 10-K. |
| 2. | The schedules have been omitted from the Form 10-K because they are not required or because the information is provided elsewhere in the financial statements. The financial statements of unconsolidated subsidiaries are omitted because, considered in the aggregate, they would not constitute a significant subsidiary. |
| 17 |
(b) List of Exhibits.
The following is a list of exhibits filed with this Form 10-K/A.
| 18 |
| 19 |
| 20 |
| 97.1 | NRx Pharmaceuticals, Inc. Compensation Recovery Policy | 10-K | 97.1 | 03/29/2024 | ||||||
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T formatted in Inline XBRL: (i) Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022; (ii) Consolidated Statements of Operations for the years ended December 31, 2023 and 2022; (iii) Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the years ended December 31, 2023 and 2022; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022; and (v) Notes to Financial Statements | |||||||||
| 104 | Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) | |||||||||
| + | Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulations S-K. The Company will furnish supplementally an unredacted copy of such exhibit to the Securities and Exchange Commission or its staff upon request. |
| † | This certification is being furnished solely to accompany this annual report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
| 21 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 29, 2024.
| NRX PHARMACEUTICALS, INC. | ||
| By: | /s/ Richard Narido | |
| Richard Narido | ||
| Chief Financial Officer (Principal Financial Officer) | ||
| 22 |
Exhibit 14.1
NRX PHARMACEUTICALS, INC.
BUSINESS CODE OF CONDUCT AND ANTI-CORRUPTION POLICY
This policy sets forth the statement of policies and procedures regarding NRX Pharmaceuticals, Inc. and its subsidiaries’ (collectively, the “Company”) adherence to the United States Foreign Corrupt Practices Act (the “FCPA”), the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the “Convention”) and other anti-corruption laws (this “Policy”). The Company is committed to maintaining the highest ethical standards and to complying fully with all applicable rules and regulations. Accordingly, the Company has adopted this Policy to govern its business.
The Company requires the highest standards of professional and ethical conduct from its employees, officers, directors and the companies with which it does business. The Company does not conduct its market making or other business based on bribes, kickbacks, illegal side payments or special commissions, or on any basis other than on the merits. It follows that employees and the Company’s representatives may not offer or provide any form of bribe or improper incentive in order to benefit our business or obtain treatment favorable to the Company.
| I. | Policy Overview |
U.S. federal law and the laws of many other countries prohibit bribes and other improper payments to a domestic or foreign government official, political party, or candidate for office, directly or through an intermediary, in order to attract or retain business or to influence any governmental decision or action.
All Company personnel, including but not limited to officers, directors, and employees, are prohibited from offering, promising, making, authorizing or providing (whether directly or indirectly through third parties) anything of value to a government official in any jurisdiction in order to influence or reward any official action, decision or use of influence by such a person for the Company’s benefit or to further our business interests. Neither Company funds nor funds from any other source, including personal funds, may be used to make any such payment or gift on behalf of or for the benefit of the Company. A belief that “that’s the way business is done” in some part of the world does not protect either the Company or the Company’s personnel from severe legal penalties that can apply to such conduct, nor does it protect the Company’s personnel from disciplinary measures resulting from violations of this Policy.
| *** | Important Note: In some countries, local laws make it a crime to give anything of value to a public servant even where nothing is asked or expected in return. Employees must comply with local laws, in addition to complying with this Policy, with respect to giving anything of value to any public servant. When in doubt about any payment to or expense on behalf of a government official, you should consult with the General Counsel. |
May 2021
Furthermore, although this Policy is focused primarily on improper payments and gifts to government officials, it is important to understand that commercial bribery is also illegal in a number of jurisdictions, both within the United States and in other countries. The U.S. Department of Justice can and does bring enforcement actions related to commercial bribery, including commercial bribery in other countries that involves U.S. entities or individuals. Employees are prohibited from providing any bribe or improper incentive to any investor, target, or any other party to induce such an individual or entity to engage in conduct beneficial to the business interests of the Company.
| II. | Violations of This Policy |
This Policy applies to all Company directors, officers, employees, agents, representatives, consultants, and contractors, and anyone else who acts on behalf of the Company. In addition, we expect any joint venture partners to adhere to the principles underlying this Policy. Anyone who violates this Policy can subject both himself or herself and the Company to severe criminal and civil penalties. In a case where money or other things of value are provided or offered to a government official, the consequences can include liability under various anti-corruption laws, potentially leading to substantial fines and even imprisonment. In addition, depending on the circumstances, violations of this Policy can cause substantial collateral harm to the Company in other areas, including our ability to obtain government licenses and permits and to conduct future business with government customers. Accordingly, any violation of this Policy will be taken seriously and will lead to the imposition of appropriate disciplinary measures, up to potential termination of employment.
| III. | Elements of the Policy – Improper Payments to Government Officials |
Bribes and Other Improper Payments
Cash payments to bribe a government official are improper payments for purposes of this Policy. In addition, in most circumstances, any transfer of anything of value, whether tangible or intangible, can be considered an improper payment or bribe. For example, a loan, a gift, entertainment, a generous contribution to a charity sponsored by a government official, the use of a car or office space or a company plane, the promise of future payment or the promise of future employment for the government official or a family member can each constitute a bribe. Moreover, the mere offer or promise of a payment can violate anti-corruption laws, regardless of whether the payment is ever made, and regardless of whether the government official actually takes any action in response to the offer or promise.
This Policy does not contain any exception for “small bribes.” Offering, promising, providing or authorizing the transfer of anything of value to a Government Official for the purpose of obtaining business or any business advantage for the Company is prohibited by this Policy. There is no minimum threshold under the FCPA. “Anything of value” really means anything of value. Even modest gifts can constitute a bribe so long as it is given for an improper purpose. Under appropriate circumstances, a modest promotional gift or a cup of coffee or a modest business meal may be permitted provided (1) it complies with Section VI.1 below, and (2) the government official is permitted to accept it under local law.
May 2021
In addition, although the FCPA permits small “grease” payments or “facilitating payments” to expedite routine government activities (for example, customs and visa processing, police protection and phone and water service), these payments are prohibited under the U.K. Bribery Act and many other local laws, and recent FCPA enforcement cases have made the dividing line between prohibited bribes and permissible grease payments unclear. Therefore, the Company does not support making such payments, no matter how small and no matter how common they may be in some places. This Policy prohibits all “facilitating payments” or “grease payments.”
| *** | Without diminishing the importance of the “grease” payment restriction, you should be aware that the Company distinguishes situations where public officials demand petty payments against a threat of injury, death, unjust incarceration or other acts of violence. In these situations, the public official is acting outside the scope of his authority and the employee should take such steps as are necessary to ensure his or her safety. Any “grease” payments made in such situations should be reported to the General Counsel immediately. |
Indirect Payments
Payments that cannot be made directly to a government official also cannot be made indirectly through a third party. Consequently, the Company and its employees cannot pay a third party knowing or believing that a portion of the payment will be passed on to a government official. Reasonable due diligence must be undertaken by employees to ensure that the Company’s business partners and intermediaries are reputable.
Government Official
For purposes of this Policy, the definition of “government official” is broad and includes individuals that you might not normally consider to be within the scope of the term. The rank, level or title of these individuals is irrelevant. The term “government official” includes three general categories of people:
| · | officers, officeholders, full or part-time employees and representatives of (1) national, state, regional, provincial, and city, county or other local governments, (2) independent agencies of any government, (3) state-owned or state-controlled businesses, (4) the military or (5) public educational, scientific or research institutions; |
| · | political parties, party officials, and candidates for public office; and |
| · | employees of public international organizations, such as the World Bank, the African and Asian Development Banks, the European Union, the International Monetary Fund, the United Nations and the Organization of American States. |
May 2021
In many instances, providing a payment or thing of value to a family member of a government official is the equivalent of providing a payment or a thing of value directly to the official.
Payments and benefits made to government entities themselves are not prohibited by this Policy, unless it is known or suspected that the payment or thing of value is really for the benefit of a government official.
Furthering the Company’s Business Interests
Improper payments are those made to a government official to further the Company’s business interests. This can include payments offered to influence virtually anything that a government official does in his or her official capacity.
Please thoroughly read and review Appendix A for examples of common situations where improper payments could occur.
| IV. | Elements of the Policy – Commercial Bribery |
The Company adheres to the utmost integrity and professionalism in its market making and other business activities. The Company will not provide any form of bribe or improper incentive in order to benefit its business or otherwise obtain treatment favorable to the Company, even where the intended recipient is not a government official. This prohibition specifically includes kickbacks in any form, offers to split or share any commissions, or any other improper or hidden compensation.
| V. | Special Rules & Procedures for Third Parties |
Occasionally, a representative or other intermediary’s assistance will be required or helpful for obtaining a license, completing a transaction or otherwise assisting the Company in its business activities. Keep the following guidelines in mind in connection with engaging a representative or intermediary.
Engagement by the Company of representatives, brokers, agents, consultants, lobbyists or other intermediaries who in turn deal with government officials (“Covered Third Parties”) raise special concerns and are closely scrutinized by regulators. The majority of anti- corruption law violations involve the participation of third-party facilitators. Because of the risk that such third parties may seek to advance our business interests through violations of anti-corruption laws and that the Company may be subject to liability as a result, a Covered Third Party who may deal with government officials on the Company’s behalf should not be retained to perform services on behalf of the Company unless the following requirements are satisfied.
May 2021
Due Diligence
Appropriate due diligence should be conducted regarding the Covered Third Party’s business and reputation for integrity, as well as its implementation of anti-corruption policies and practices if it is likely that the Covered Third Party may deal with government officials in connection with the engagement. Due diligence is often advisable in other situations as well. The extent of appropriate due diligence will vary depending on the circumstances:
| · | Specific due diligence is not generally required for the use of a regulated Wall Street or internationally recognized investment bank, or an internationally recognized law firm or accounting firm. These organizations can generally be presumed to meet rigorous compliance standards. Prior approval from the General Counsel is not necessary to engage one of these firms, unless a “red flag,” examples of which are included in Appendix B, is found in connection with using one of these firms and that red flag cannot be resolved through due diligence. |
| · | If any suspicious factors indicate that an individual representative of such a well regarded organization may be acting contrary to the compliance and ethical standards of his or her organization, extra inquiry and due diligence should be conducted. |
| · | Careful due diligence is required for all third parties that are not well known and not subject to rigorous regulatory oversight. |
| · | More intensive due diligence is required if the Covered Third Party exhibits any red flags. |
Agreements
The engagement of all representatives, brokers, agents, consultants, lobbyists or other intermediaries should be pursuant to written agreements. When engaging Covered Third Parties that are likely to interact with government officials on behalf of the Company (excluding regulated counterparties like international investment banks and major law firms), the agreements must include contractual representations and covenants to the effect that the Covered Third Party has not and will not offer or make improper payments to government officials or otherwise violate anti-corruption laws and with other appropriate anti-corruption contractual provisions.
The specific contractual representations and covenants that are appropriate for the engagement of a Covered Third Party will vary based on the circumstances, and may include a right to audit the anti-corruption policies and practices, and the books, records and accounts, of the Covered Third Party. If efforts to obtain suitable anti-corruption representations and covenants or audit rights are rejected by the Covered Third Party, you must consult with the General Counsel before engaging the Covered Third Party.
May 2021
All of the Company’s Covered Third Parties must be willing to conduct business on the basis of the principles set forth within this Policy, and will be requested to sign an annual certification as to compliance with the principles underlying this Policy and the Company’s Code of Conduct and Ethics.
Copies of all executed agreements with Covered Third Parties and annual certifications should be forwarded to the General Counsel for record retention purposes.
Assistance with Engaging Covered Third Parties
For the engagement of a Covered Third Party that is likely to deal with government officials in connection with the engagement, contact the General Counsel or a member of the legal department to obtain suitable anti-corruption representations and covenants, to obtain advice concerning the advisability of audit rights and to confirm that sufficient due diligence has been conducted to provide comfort regarding bribery related issues.
Monitoring Compliance
Once the Company has engaged a Covered Third Party monitoring that party’s anti- corruption compliance is required. The scope of this monitoring should be adjusted based on the same factors that impacted the level of due diligence used (reputation of the Covered Third Party, whether any red flags were raised during due diligence, etc.). Assuming the Covered Third Party is not a major regulated financial institution, or an internationally recognized law firm or accounting firm, monitoring activities often include a combination of the following:
| · | evidence of anti-corruption training by the Covered Third Party; |
| · | periodic reporting to Company personnel regarding the Covered Third Party’s activities in connection with the agreement; |
| · | if circumstances so warrant, audits conducted pursuant to any audit rights included in the engagement agreement; and |
| · | annual certifications of compliance with the anti-corruption representations and covenants in the engagement agreement. See Appendix C for a copy of the Foreign Corrupt Practices Act and Anti-Corruption Compliance Certification Form. |
| VI. | Interactions with Government Officials |
| 1. | Meals, Entertainment, Travel, Lodging and Gifts |
Meals, entertainment, travel, lodging or gifts for government officials should be approached cautiously. Such items may be provided where permitted under local law (including U.S. federal, state and local law regarding domestic government officials) and relevant government agency policy, where such items do not exceed a value of $100 (USD) per person per event, and where such expenditures are reasonable, bona fide, and directly related to promoting, demonstrating or explaining the business of the Company. You must seek pre-approval from the General Counsel for any gift, meal, entertainment, travel or lodging expense for a government official that will exceed $100 per person per event. Gifts or hospitality should never be offered secretly and money should never be offered as a gift.
May 2021
You should not engage in any pattern of repeated gifts, meals, entertainment, travel or lodging (or any combination of these types of expenses) for a single government official over any 12-month period, even where expenses may fall below $100 per event. Prior to incurring any of these types of expenses on behalf of a government official for the fourth time in any 12-month period or in excess of $250 annually (whichever threshold is met first), an employee must first seek the written approval of the General Counsel. Any employee who anticipates a need to engage in any such pattern for legitimate business purposes must obtain pre-approval from the General Counsel.
| 2. | Charitable Contributions |
Charitable donations may be given only for legitimate philanthropic reasons such as to serve humanitarian purposes and to support cultural or educational institutions. It can be appropriate to make a donation to a local community with the hope of generating generalized goodwill in that community. It is never permitted to make a donation in exchange for specific favorable treatment of the Company by a government official.
Donations made to charitable organizations in which a government official or a family member of a government official has a role (for example, as a board member or trustee), or made at the behest of a government official, or where the organization is known or believed to be closely associated with a government official can raise issues under anti-corruption laws and this Policy. U.S. enforcement authorities have taken the position that making a donation to a charity associated with a government official can in certain circumstances confer a benefit on the government official for purposes of the FCPA. The involvement of a government official does not necessarily mean that a donation cannot be made, but the appropriate compliance review and approval must be obtained in advance from the General Counsel.
| 3. | Political Contributions |
No political contribution may be made in the name of or on behalf of the Company, or where the contribution will be associated with the Company, without the advance approval of the General Counsel. In addition, no personal political contribution may be made under any circumstances where it might be perceived as constituting a bribe or as otherwise influencing or intended to influence specific governmental, political party or political candidate decisions or actions related to the Company’s business interests.
May 2021
| 4. | Documentation and Records |
All payments by Company personnel to or for the benefit of any government official or his or her family members (including meals, entertainment, travel, lodging, certain gifts, charitable contributions and any other such payments addressed by this Policy) must be accurately and clearly documented and recorded in the Company’s accounting and other records.
| VII. | Warning Signs or “Red Flags” |
To assure compliance with the FCPA and anti-corruption laws, employees must be attentive to the existence of warning signs or “red flags” that could suggest that improper payments are taking place or are contemplated. Knowledge of an improper payment can be imputed from an awareness of red flags (i.e., actual knowledge is not required). Employees should view with particular suspicion any warning signs in connection with any transaction or activity in which a payment or benefit might be received by a government official or his or her family member. The existence of any red flags typically requires additional diligence and, if they cannot be resolved, should halt a transaction or activity pending review by the General Counsel.
Please thoroughly read and review Appendix B for examples of red flags.
| VIII. | Enforcement of Policy, Reporting Violations and Asking Questions |
Failing to abide by this Policy can result in (i) serious criminal penalties and serious collateral harm for the Company; (ii) criminal liability for individual employees involved in making corrupt payments or with prior knowledge of such payments and (iii) disciplinary action by the Company, including possible termination of employment and forfeiture of benefits. It is therefore imperative that all employees comply with this Policy and consult with the General Counsel if there is any doubt about whether an activity is permitted. Employees are responsible for planning transactions and activities in a manner that permits the General Counsel adequate time to review and, as necessary, inquire into a matter or situation before relevant deadlines expire.
If an employee becomes aware of or reasonably suspects a violation of anti-corruption laws or this Policy by an employee or representative of the Company, he or she must promptly report the matter to the General Counsel. You are also encouraged to discuss questions and concerns with your management. The Company has a strict prohibition on retaliation against employees who either make good faith reports or who participate in the investigation of a report of suspected misconduct. Any employee who engages in retaliation is subject to disciplinary action by the Company, including potential termination of employment. The Company will take measures to protect the confidentiality of any reporting person, subject to applicable law, regulation or legal proceedings and the Company’s need to investigate the allegations that have been raised. Please see our Code of Conduct for further discussion on this matter.
May 2021
The Company’s FCPA, Convention and Anti-Corruption Compliance Program
| 1. | Responsible Parties |
The General Counsel will be responsible for implementing and enforcing this Policy and is the point of contact for any questions or concerns that Employees may have. The General Counsel’s contact information is as follows:
Alessandra Daigneault, Esq.
Email: adaigneault@nrxpharma.com
| 2. | Periodic Review |
The Company will periodically review the effectiveness of this Policy with appropriate assistance from outside counsel.
| 3. | Training |
Anti-corruption and anti-bribery training will be provided on a periodic basis to all Company directors, officers, employees, agents, representatives, consultants, and contractors, anyone else who acts on behalf of the Company, and Covered Third Parties.
| 4. | Annual Certification |
Employees must annually certify as to their knowledge of this Policy and their compliance with it by executing the Foreign Corrupt Practices Act and Anti- Corruption Compliance Certification Form, attached as Appendix C.
May 2021
Appendix A
Examples of Common Situations Where Prohibited Payments Could Occur
You should be alert to areas of our business in which improper payments to government officials might be solicited and could occur. Prohibited payments could occur when government officials are:
| · | granting or renewing a license to administer Medicare Advantage or other programs in a given jurisdiction; |
| · | granting a permit needed to operate one of our facilities; |
| · | providing us with utilities, bandwidth or other services necessary to operate our business; |
| · | allowing us to import or export equipment or supplies (e.g., in connection with our facilities); |
| · | partnering with us to expand the infrastructure that is critical to our business (e.g., in connection with our healthcare services and facilities); |
| · | considering legislation or regulations that will impact our business (e.g., related to healthcare and/or Medicare Advantage programs, anti-money laundering, handling of non-public information, safeguarding personal data, securities credit, capital adequacy, reporting, record retention, market access and the conduct of officers, employees and other associated persons); |
| · | threatening action against us (e.g., related to improper healthcare practices); |
| · | asking us to provide charitable contributions or other community support; or |
| · | addressing our tax returns or tax status. |
May 2021
Appendix B
Examples of Red Flags
| · | transactions or activities in high-risk jurisdictions involving interaction with government officials; |
| · | third party has a reputation for bribery; |
| · | third party has refused to promise to abide by anti-corruption laws or to warrant that it has not paid and will not pay bribes; |
| · | third party has sought a commission that is excessive, paid in cash or otherwise irregular; |
| · | third party seeks payment to an account outside the country where such person does business; |
| · | third party is owned in part by a government official or his or her family member or has other close ties to a government official; |
| · | government official suggests hiring a particular adviser to help obtain a government contract that is within the domain of such government official; |
| · | third party has requested that the Company prepare false invoices or any other type of false documentation; |
| · | third party is related to a government official who is in a position to grant a business advantage or is involved in a business in which such official owns an interest; |
| · | third party insists that his or her identity not be disclosed to a government agency; |
| · | refusal by a third party to identify its owners, partners or principals; |
| · | information suggesting that a donation to a specific charity at the request of a government official, or where the charity is linked to a government official, is needed to generate or facilitate governmental action; |
| · | diversion of cash payments to a special account or “off the books” account; |
| · | lack of documentation for particular transactions, such as a failure to provide itemized receipts or invoices for services rendered; |
| · | expenses that cannot be explained; |
| · | poor financial controls over disbursements and/or poor bookkeeping; |
May 2021
| · | justification for hiring new third party or intermediary is that he/she can obtain preferential treatment from a government official; |
| · | hiring of third party is suggested to perform tasks that require no special knowledge or skills and could have been performed directly by company employees; |
| · | substantial or extravagant “wining and dining” of government officials; |
| · | sponsored travel for government officials and/or family members where there is no clear and legitimate business purpose; and |
| · | relatives of government officials are on the payroll of the third party. |
May 2021
Appendix C
Foreign Corrupt Practices Act and Anti-Corruption Compliance Certification Form
I, , confirm that I have received a copy of the Foreign Corrupt Practices Act and Anti-Corruption Policy (the “Policy”) of NRX Pharmaceuticals, Inc. and its subsidiaries (collectively, the “Company”), that I understand the requirements and prohibitions of the Policy, that I will comply with the Policy and that I will not take any action that could cause the Company to be in violation of the Foreign Corrupt Practices Act or any other applicable anti-corruption or anti-bribery law (“Anti-Corruption Law”) or the Policy.
I have promptly brought any known or suspected violations of the Policy or any Anti-Corruption Law to the attention of the Company’s legal department, or reported the incident through the channels specified in the Policy and/or the Company’s Code of Conduct and Ethics, and will do so in the future should I learn of such circumstances.
I confirm that, except as disclosed prior to or concurrently with my submission of this certification statement, I have no personal knowledge, and no reason to believe, that any of the following has occurred in connection with the Company’s business in the past year:
(a) any bribes or kickbacks, or offers to pay bribes or kickbacks, to any government official or private party;
(b) any political or charitable contributions that appear to be illegal or otherwise suspicious;
(c) any use of entertainment, meals, sponsored travel or gifts the size or nature of which could be perceived as a bribe or otherwise appear excessive and designed to influence decisions by business counterparties or government officials;
(d) any use of “off the books” accounts or pools of funds;
(e) any intentional failure to record, or intentional inaccurate recording of, receipts or expenses;
(f) any submission or maintenance of false documentation, including contracts, receipts, and invoices; or
(g) any fees paid to consultants, contractors, advisors, agents or other representatives or intermediaries that appear to be excessive or otherwise suspicious.
May 2021
Exhibit 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Stephen H. Willard, Chief Executive Officer of NRx Pharmaceuticals, Inc., certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of NRx Pharmaceuticals, Inc. (the “Registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this Annual Report; |
| 4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s board of directors (or persons performing equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: April 29, 2024 | /s/ Stephen H. Willard |
| Stephen H. Willard | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard Narido, Chief Financial Officer of NRx Pharmaceuticals, Inc., certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of NRx Pharmaceuticals, Inc. (the “Registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this Annual Report; |
| 4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s board of directors (or persons performing equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: April 29, 2024 | /s/ Richard Narido |
| Richard Narido | |
| Chief Financial Officer (Principal Financial Officer) |
Cover - USD ($) $ in Millions |
Dec. 31, 2023 |
Apr. 29, 2024 |
Jun. 30, 2023 |
|---|---|---|---|
| Document Type | 10-K/A | ||
| Amendment Flag | true | ||
| Amendment Description | This Amendment No. 1 on Form 10-K/A (the "Amendment" or "Form 10-K/A") amends the Annual Report on Form 10-K of NRx Pharmaceuticals, Inc. (the "Company," "our" or "we") for the year ended December 31, 2023, originally filed with the Securities and Exchange Commission ("SEC") on March 29, 2024 (the "Original Filing"). We are filing this Amendment to present the information required by Items 10, 11, 12, 13, and 14 of Part III of the Original Filing in reliance on General Instruction G(3) to Form 10-K, which provides that registrants may incorporate by reference certain information from a definitive proxy statement filed with the SEC within 120 days after fiscal year end. In addition, the reference on the cover of the Original Filing to the incorporation by reference to portions of our definitive proxy statement into Part III of the Original Filing is hereby deleted. | ||
| Document Annual Report | true | ||
| Document Transition Report | false | ||
| Document Period End Date | Dec. 31, 2023 | ||
| Document Fiscal Period Focus | FY | ||
| Document Fiscal Year Focus | 2023 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity File Number | 001-38302 | ||
| Entity Registrant Name | NRX PHARMACEUTICALS, INC. | ||
| Entity Central Index Key | 0001719406 | ||
| Entity Tax Identification Number | 82-2844431 | ||
| Entity Incorporation, State or Country Code | DE | ||
| Entity Address, Address Line One | 1201 Orange Street | ||
| Entity Address, Address Line Two | Suite 600 | ||
| Entity Address, City or Town | Wilmington | ||
| Entity Address, State or Province | DE | ||
| Entity Address, Postal Zip Code | 19801 | ||
| City Area Code | 484 | ||
| Local Phone Number | 254-6134 | ||
| Entity Well-known Seasoned Issuer | No | ||
| Entity Voluntary Filers | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Interactive Data Current | Yes | ||
| Entity Filer Category | Non-accelerated Filer | ||
| Entity Small Business | true | ||
| Entity Emerging Growth Company | false | ||
| Entity Shell Company | false | ||
| Entity Public Float | $ 29.7 | ||
| Entity Common Stock, Shares Outstanding | 10,555,405 | ||
| ICFR Auditor Attestation Flag | false | ||
| Document Financial Statement Error Correction [Flag] | false | ||
| Auditor Firm ID | 185 | ||
| Auditor Name | Salberg & Company, P.A | ||
| Auditor Location | Boca Raton, Florida | ||
| Common Stock [Member] | |||
| Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
| Trading Symbol | NRXP | ||
| Security Exchange Name | NASDAQ | ||
| Warrant [Member] | |||
| Title of 12(b) Security | Warrants to purchase one share of Common Stock | ||
| Trading Symbol | NRXPW | ||
| Security Exchange Name | NASDAQ |