Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement

As previously reported in the Current Report on Form 8-K filed by NRx Pharmaceuticals, Inc. (the "Company", "we" and "us") on August 14, 2024 (the "August 8-K"), on August 14, 2024 (the "First Closing Date"), the Company closed the sale of the first tranche of certain promissory notes and warrants to purchase the Company's common stock, par value $0.001 per share ("Common Stock") contemplated by that certain Securities Purchase Agreement dated August 12, 2024 (the "Purchase Agreement"), by and between the Company and certain institutional investors (collectively, the "Investors"). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Purchase Agreement.

Pursuant to the Purchase Agreement, the Company agreed to sell Senior Secured Convertible Promissory Notes (the "Notes") in the aggregate principal amount of up to approximately $16.3 million in three tranches of $5.435 million, and warrants to purchase that amount of shares of the Company's Common Stock equal to 50% of the principal amount of the Notes in the respective tranche divided by the volume weighted average price ("VWAP") of the Company's Common Stock, as listed on the Nasdaq Capital Market, on the day prior to the closing of each respective tranche under the Purchase Agreement (the "Warrants"), and entered into a Security Agreement, Patent Security Agreement, Registration Rights Agreement, and Subsidiary Guarantee (the foregoing, collectively with the Purchase Agreement, the Notes, and the Warrants, the "Transaction Documents"). The Company plans to use a portion of the proceeds from the sale of the Second Tranche Notes (as defined below) to repay existing variable priced convertible promissory notes and for general working capital.

On the First Closing Date, the Company sold a total of (a) $5.435 million in Notes, with an aggregate purchase price of approximately $5.0 million, and (b) Warrants to purchase up to 1,349,305 shares of Common Stock (the "First Closing"). On October 10, 2024 (the "Second Closing Date"), the Company sold a total of (y) $5.435 million in Notes (the "Second Tranche Notes"), with an aggregate purchase price of approximately $5.0 million, and (z) Warrants to purchase up to 1,846,128 shares of Common Stock (the "Second Closing"). The Second Tranche Notes are convertible into Common Stock, at a per share conversion price equal to by the lower of (a) $1.7664, (the "Fixed Conversion Price") or (b) a price equal to 92% of the lowest VWAP during the seven trading day period immediately preceding the effective date set forth in a Notice of Conversion (as defined in the Notes) (each, a "Conversion Date") delivered by an Investor to the Company (the "Alternate Conversion Price", and together with the Fixed Conversion Price, the "Conversion Price"). The Conversion Price is subject to, among other customary provisions, downward adjustment in the event of any future issuance by the Company of Common Stock (or Common Stock Equivalents (as defined in the Notes)) below the then effective Conversion Price.

As more fully described in the August 8-K: (i) the Company and each of its subsidiaries provided the Investors a first priority security interest in substantially all of their assets to secure the repayment of the Notes pursuant to the Security Agreement; (ii) the Company provided the Investors with the Patent Security Agreement in order to record the security interest granted to the Investors with the United States Patent and Trademark Office; (iii) each of the Company's subsidiaries jointly and severally guaranteed the obligations under the Notes pursuant to the Subsidiary Guaranty; and (iv) the Company agreed to file a Registration Statement on Form S-3 within 21 days after the Second Closing Date to register (a) except for certain shares of Common Stock previously registered in connection with the First Closing, all the shares of Common Stock then issued and issuable upon conversion in full of the Notes (assuming on such date the Notes are converted in full without regard to any conversion limitations therein), (b) all shares of Common Stock issued and issuable as interest or principal on the Notes assuming all permissible interest and principal payments are made in shares of Common Stock and the Notes are held until maturity, (c) all shares of Common Stock issued and issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), (d) any additional shares of Common Stock issued and issuable in connection with any anti-dilution provisions in the Notes or the Warrants (in each case, without giving effect to any limitations on conversion set forth in the Notes or limitations on exercise set forth in the Warrants) and (e) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.

For more information and greater detail on terms of the Notes, Warrants, Purchase Agreement, Security Agreement, Patent Security Agreement, Registration Rights Agreement, Subsidiary Guarantee, see the August 8-K.

Concurrently with the Second Closing, the Company and the Investor mutually agreed to not proceed with the third tranche of $5.435 million in Notes under the Purchase Agreement.

In connection with the above offering, the Company engaged EF Hutton LLC as placement agent (the "Placement Agent"). Pursuant to the terms of the engagement with the Placement Agent, the Company will pay a cash fee of 7% of the gross proceeds the Company receives in the Second Closing. The Company also agreed to reimburse the Placement Agent at the Second Closing for expenses incurred, including disbursements of legal counsel, in an amount not to exceed of $50,000.

The foregoing descriptions of the Notes, the Warrants, Purchase Agreement, the Security Agreement, the Patent Security Agreement, the Registration Rights Agreement, and Subsidiary Guarantee, do not purport to be complete, and are qualified in their entirety by reference to each such document (or form thereof, as applicable), filed as Exhibits 4.1, 4.2, 10.1, 10.2, 10.3, 10.4, and 10.5, respectively, and incorporated herein by reference.