Item 1.01Entry into a Material Definitive Agreement.
On February 2, 2022, NRX Pharmaceuticals, Inc. (the “Company”) consummated the closing of a private placement (the “Private Placement”), pursuant to the terms and conditions of the Securities Purchase Agreement, dated as of January 30, 2022 (the “Purchase Agreement”), by and among the Company and certain purchasers named on the signature pages thereto (the “Purchasers”). At the closing of the Private Placement, the Company issued 7,824,727 shares of common stock and preferred investment options (the “Investment Options”, and, collectively with the shares of common stock issued under the Private Placement, the “Securities”) to purchase up to an aggregate of 7,824,727 shares of common stock, each for a purchase price of $3.195. The aggregate gross proceeds to the Company from the Private Placement were approximately $25.0 million, before deducting placement agent fees and other offering expenses. H.C. Wainwright & Co., LLC (the “Placement Agent”) acted as the exclusive placement agent for the Private Placement.
Securities Purchase Agreement
The Purchase Agreement contains customary representations, warranties, and covenants of the Company and Purchasers and customary closing conditions, indemnification rights, and other obligations of the parties. Under the Purchase Agreement, the Company agreed to use the net proceeds from the sale of the Securities for working capital purposes and to not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any common stock or Common Stock Equivalents (as defined in the Purchase Agreement), (c) for the settlement of any outstanding litigation, or (d) in violation of the Foreign Corrupt Practices Act of 1977, as amended, or the regulations promulgated by the Office of Foreign Assets Control of the U.S. Treasury Department. The Purchase Agreement is governed by the laws of the State of New York.
The foregoing summary of the Purchase Agreement is qualified in its entirety by reference to the form of Purchase Agreement, which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.
Preferred Investment Options
Under the Preferred Investment Option, dated as of February 2, 2022, between the Company and the undersigned holders thereto (the “Preferred Investment Option”), the Investment Options are exercisable at any time on or after August 2, 2022 for an exercise price of $3.07 per share of common stock of the Company, subject to certain adjustments, including with respect to stock dividends, splits, subsequent rights offerings and a Fundamental Transaction (as defined in the Preferred Investment Option). If, at any time at the time of exercise of the Investment Options, there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of the shares issuable pursuant to the exercise of Investment Options, the Investment Options may be exercised by means of a cashless exercise, in which the holder is entitled to receive a number of shares of common stock to be determined by a formula contained in the Preferred Investment Option. No fractional shares or scrip representing fractional shares may be issued upon the exercise of the Investment Options.
The foregoing summary of the Preferred Investment Options is qualified in its entirety by reference to the Preferred Investment Options, which is filed herewith as Exhibit 10.2 and is incorporated by reference herein.
Registration Rights Agreement
In connection with the Private Placement, the Company entered into a Registration Rights Agreement with the Purchasers, dated as of January 30, 2022 (the “Registration Rights Agreement”). The Registration Rights Agreement provides that the Company shall file a registration statement covering the resale of all of the Registrable Securities (as defined in the Registration Rights Agreement) with the Securities and Exchange Commission (the “SEC”) and have the registration statement declared effective by the SEC as promptly as possible after the filing thereof, but in any event no later than the 30th calendar day with following the date of the Registration Rights Agreement.
Upon the occurrence of any Event (as defined in the Registration Rights Agreement), which, among others, prohibits the Purchasers from reselling the Securities for more than ten (10) consecutive calendar days or more than an aggregate of
