Note 11 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 11. 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

End of Phase I Clinical Trials of Licensed Product (completed)	$	100,000
End of Phase II Clinical Trials of Licensed Product (completed)	$	250,000
End of Phase III Clinical Trials of Licensed Product	$	250,000
First Commercial Sale of Licensed Product in U.S.	$	500,000
First Commercial Sale of Licensed Product in Europe	$	500,000
Annual Revenues Reach $100,000,000	$	750,000

The milestone payments due above may be reduced by 25% in certain circumstances, and by the application of certain sub-license fees. As of September 30, 2025, the total cumulative payments made under the SHMH License Agreement were $0.5 million, with $0 and $0.2 million in payments made during the three and nine months ended September 30, 2025. There were no payments made during the three and nine months ended September 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 nine months ended September 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 nine months ended September 30, 2025 and 2024, the Company recorded $0 in related annual maintenance fee.

Exclusive License Agreement

The Company has entered into a license agreement with Apkarian Technologies LLC 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 nine months ended September 30, 2025 and 2024, the Company has recorded no expenses relating to the licensure of the patent. 

Kadima Purchase Agreement

On May 9, 2025, in furtherance of the Company’s previously announced plans for its subsidiary, HOPE, to develop a national network of precision psychiatry clinics. HOPE and its wholly-owned subsidiary, HTX, entered into an Asset Purchase and Contribution Agreement (the “Kadima Purchase Agreement”), with Kadima Medical, Kadima Holdings, Inc. (“Kadima Holdings”), and David Feifel, M.D., PH.D (“Feifel”, and collectively with Kadima Medical and Kadima Holdings, “Kadima”), pursuant to which the Company agreed to purchase and Kadima agreed to sell, certain assets of Kadima, subject to the satisfaction of certain closing conditions (the “Acquisition”).

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, and the investment representations of Kadima.

The Kadima 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.

As of the date of this Report, the parties have not closed the Acquisition and the matter has entered arbitration. At this stage of the arbitration, it is too early to determine if the matter would reasonably be expected to have a material adverse effect on our financial condition.

Operating Lease

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

The Company also leases two healthcare clinical facilities located in Naples and Fort Myers, Florida under non-cancelable operating lease agreements. Details regarding lease terms, future minimum lease payments, and right-of-use assets and liabilities are disclosed in Note 7.

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, pursuant to which the Company agreed to purchase, and Kadima agreed to sell, certain assets of Kadima, subject to the satisfaction of certain closing conditions. As of the date of this Report, the parties have not closed the Acquisition, and the matter has entered arbitration. At this stage of the arbitration, it is too early to determine if the matter would reasonably be expected to have a material adverse effect on our financial condition.