Kadima sues NRx Pharmaceuticals over failed acquisition deal

Kadima Neuropsychiatry Institute and its founder, Dr. David Feifel, have filed a lawsuit against NRx Pharmaceuticals (NASDAQ: NRXP) and two of its subsidiaries in San Diego County Superior Court, alleging breach of contract and misrepresentation related to a planned acquisition.

The complaint names NRx, its subsidiary Hope Therapeutics Inc., and Hope's subsidiary HTX Management Company LLC as defendants. Kadima is seeking specific performance, asking the court to compel the defendants to close the transaction under the terms of an Asset Purchase and Contribution Agreement signed on May 9, 2025.

According to the complaint, the agreement included an express representation that the purchaser had "sufficient cash on hand or other sources of immediately available funds" to close. Days after signing, Hope issued a press release stating the transaction was subject to "finalization of financing," a statement Kadima alleges was contrary to the agreement's terms. NRx also included the same language in an 8-K filing with the SEC.

The complaint further alleges that a January 2, 2025 NRx press release announcing the planned acquisition caused NRx stock to surge more than 40% in a single trading day, with no reference to any financing contingency.

Kadima's counsel, Andrew Selesnick of Buchalter LLP, said in a statement: "We are confident that the evidence will demonstrate a clear pattern of intentional deceit by NRx, as it used Kadima's and Dr. Feifel's reputations to boost its share price through press releases and joint investor presentations, but then refused to fulfill its commitment to close the transaction."

The complaint also alleges that Hope and HTX filed an arbitration claim against Kadima on August 11, 2025, then withdrew it days later before NRx's 10-Q filing deadline, only to refile it less than 10 days after the quarterly report was submitted to the SEC.

The case, Kadima Neuropsychiatry Institute, Medical Corp., et al. v. NRx Pharmaceuticals, Inc., et al., is pending in the Superior Court of California, County of San Diego. This article is based on a press release issued by Kadima Neuropsychiatry Institute.

You May Also Be Interested In

• Eos Energy rights offering raises $37.7M, falls short of full subscription
• Mistras Group expands Los Angeles aerospace lab with new equipment
• Shutterstock launches unlimited download plans globally