8. Commitments and Contingencies

Sarah Herzog Memorial Hospital License Agreement

The Company is required to make certain payments related to the development of NRX-101 (the "Licensed Product") in order to maintain the license agreement with the Sarah Herzog Memorial Hospital Ezrat Nashim (“SHMH”) (the "SHMH License Agreement"), including:

Milestone Payments

The milestone payments due above may be reduced by 25% in certain circumstances, and by the application of certain sub-license fees. As of June 30, 2025, the total cumulative payments made under the SHMH License Agreement were $0.5 million, with $0.2 million in payments made during the three and six months ended June 30, 2025. There were no payments made during the three and six months ended June 30, 2024.

Royalties

A royalty in an amount equal to: (a) 1% of revenues from the sale of any product incorporating a Licensed Product when at least one Licensed Patent remains in force, if such product is not covered by a Valid Claim (as defined below) in the country or region in which the sale occurs, or (b) 2.5% of revenues from the sale of any Licensed Product that is covered by at least one Valid Claim in the country or region in which such product is manufactured or sold. A “Valid Claim” means any issued claim in the Licensed Patents that remains in force and that has not been finally invalidated or held to be unenforceable. The royalty rates above may be doubled if we commence a legal challenge to the validity, enforceability or scope of any of the Licensed Patents during the term of the SHMH License Agreement and do not prevail in such proceeding.

Royalties shall also apply to any revenues generated by sub-licensees from sale of Licensed Products subject to a cap of 8.5% of the payments received by us from sub-licensees in connection with such sales. During the three and six months ended June 30, 2025 and 2024, no royalty payments were made.

Annual Maintenance Fee

A fixed amount of $100,000 was paid on April 16, 2021 and, thereafter, a fixed amount of $150,000 is due on the anniversary of such date during the term of the SHMH License Agreement. During the three and six months ended June 30, 2025 and 2024, the company recorded  $150,000 and $0 in related annual maintenance fee, respectively.

Exclusive License Agreement

The Company has entered into a License Agreement with Apkarian Technologies to in-license US Patent 8,653,120 that claims the use of D-cycloserine for the treatment of chronic pain in exchange for a commitment to pay milestones and royalties as development milestones are reached in the field of chronic pain. The patent is supported by extensive nonclinical data and early clinical data that suggest the potential for NMDA antagonist drugs, such as NRX-101 to decrease both chronic pain and neuropathic pain while potentially decreasing craving for opioids. For the three and six months ended June 30, 2025 and 2024, the Company has recorded no expenses relating to the licensure of the patent. 

Kadima and Dura Purchase Agreements

On March 29, 2025, the Company entered into certain Membership Interest Purchase and Contribution Agreement (the “Dura Purchase Agreement”), by and among the Subsidiaries, Dura Medical, LLC, and Stephen Durand, CRNA, APRN.  Under the terms of the Dura Purchase Agreement, the Company agreed to acquire 100% of the membership interests in Dura Medical, LLC. The transaction includes a combination of cash consideration, contingent earn-out payments based on future performance metrics, and post-closing adjustments. The Dura Purchase Agreement also includes customary representations and warranties, indemnification provisions, and restrictive covenants including non-competition and non-solicitation clauses. The closing of the transaction is subject to customary conditions precedent, including regulatory approvals and third-party consents. The Company expects the acquisition to enhance its operational capabilities in the healthcare sector and contribute to long-term strategic growth.

On May 9, 2025, in furtherance of the Company’s previously announced plans for its subsidiary, HOPE Therapeutics, Inc. (“Hope”), to develop a national network of precision psychiatry clinics. Hope and its wholly-owned subsidiary, HTX Management Company, LLC (“HTX”, and collectively with Hope, the “Subsidiaries”), entered into an Asset Purchase and Contribution Agreement (the “Kadima Purchase Agreement”), with Kadima Neuropsychiatry Institute, Medical Corp. (“Kadima Medical”), Kadima Holdings, Inc. (“Kadima Holdings”), and David Feifel, M.D., PH.D (“Feifel”, and collectively with Kadima Medical and Kadima Holdings, “Kadima”). 

The Kadima Purchase Agreement contains representations, warranties and covenants of the Company and Kadima that are customary for a transaction of this nature, including among others, covenants by Kadima regarding the validity of certain material contracts entered into between Kadima and third-parties being assigned to the subsidiaries, title to the assets being sold by Kadima, the condition and sufficiency of the assets being purchased, and Kadima’s rights to its intellectual property, tax liabilities, the investment representations of Kadima, and other open matters in discussions regarding resolution with the intent to close the transaction.

The Purchase Agreement also contains customary indemnification provisions whereby Kadima will indemnify the Company for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of Kadima, pre-closing taxes of Kadima, and certain other matters, subject to certain caps and thresholds.

The foregoing description of the Kadima Purchase Agreement does not purport to be complete and is qualified in its entirety by the full text of the Kadima Purchase Agreement, a copy of which is filed as Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q as of March 31, 2025. The Kadima Purchase Agreement was previously attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Subsidiaries or Kadima. In particular, the assertions embodied in the representations and warranties contained in the Purchase Agreement are qualified by information in the confidential disclosure schedules (the "Disclosure Schedules") provided by Kadima in connection with the consummation of the transactions contemplated by the Kadima Purchase Agreement. These Disclosure Schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties and certain covenants set forth in the Kadima Purchase Agreement. Moreover, certain representations and warranties in the Kadima Purchase Agreement were used for the purposes of allocating risk between the subsidiaries and Kadima, rather than establishing matters of fact. Accordingly, the representations and warranties in the Kadima Purchase Agreement should not be relied on as characterization of the actual state of facts regarding the Subsidiaries and/or Kadima.

As of the date of this Report, the transactions contemplated by each of the Dura Purchase Agreement and the Kadima Purchase Agreement have not yet been consummated, and, as disclosed below, with respect to Kadima the parties are working to close the transaction on terms contemplated by the Kadima Purchase Agreement or pursue an alternative outcome acceptable to the parties.

Operating Lease

The Company leases office space on a month-to-month basis. The rent expense for the three and six months ended June 30, 2025 and 2024 was less than $0.1 million and $0.1 million, respectively.

Legal Proceedings

The Company is, from time to time, involved in various legal proceedings incidental to the conduct of our business. Historically, the outcome of nearly all such legal proceedings has not, in the aggregate, had a material adverse effect on our business, financial condition, results of operations or liquidity. Other than as set forth below, there are no material pending or threatened legal proceedings at this time.

On May 9, 2025, Hope entered into the Kadima Purchase Agreement (the “Agreement”), with HTX Management Company, LLC, Kadima Neuropsychiatry Institute, Medical Corp., Kadima Holdings, Inc., and David Feifel, M.D., PH.D. (collectively, “Kadima”), pursuant to which the Company agreed to purchase, and Kadima agreed to sell, on the Closing Date, as defined in the Agreement, certain assets of Kadima, subject to the satisfaction of certain closing conditions (the “Acquisition”).  As of the date of this Report, the parties have not closed the Acquisition, and, while no assurances can be given, remain in active discussions to either i) close the Acquisition per the terms of the Agreement, or ii) pursue potential alternative outcomes mutually agreeable to all parties.