Complaint filed in San Diego County Superior Court seeks specific performance, alleging NRx warranted it had funds to close while concealing it lacked committed financing for the transaction.

SAN DIEGO--(BUSINESS WIRE)--

Kadima Neuropsychiatry Institute and its founder, Dr. David Feifel, have filed a complaint against NRx Pharmaceuticals, Inc. ( NRXP ) and two of its subsidiaries in San Diego County Superior Court, alleging breach of contract and misrepresentation in connection with an acquisition agreement that the defendants warranted they had the financial capacity to close. The planned transaction represents a significant percentage of NRx’s current market capitalization.

The complaint names NRx, its subsidiary Hope Therapeutics Inc., and Hope’s subsidiary HTX Management Company LLC as defendants. It seeks specific performance in a court order compelling the defendants to close the transaction on the terms set forth in the parties’ executed agreement.

“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,” said Andrew Selesnick, counsel to Kadima and a partner at Buchalter LLP. “Though confidentiality clauses in the agreement prohibit us from disclosing certain transaction details in a public filing, we look forward to presenting the complete set of facts in court.”

Dr. Feifel, an internationally recognized leader in the field of interventional psychiatry and professor emeritus at the University of California, San Diego, left academia to found Kadima in 2017. He has since grown it into one of California’s leading practices and research centers specializing in advanced treatments for mental health conditions.

According to the complaint, NRx Chairman Dr. Jonathan Javitt approached Dr. Feifel in 2024 with a proposal to acquire Kadima and have Dr. Feifel join Hope as Chief Medical Innovation Officer, providing repeated assurances that financing was already secured. When the parties executed an Asset Purchase and Contribution Agreement on May 9, 2025, the contract included an express representation that the purchaser had “sufficient cash on hand or other sources of immediately available funds” to close the transaction.

The complaint further notes that NRx’s January 2, 2025 press release, which announced Kadima as its planned flagship acquisition and did not reference any financing contingency, caused NRx stock to surge more than 40% in a single day. Additional press releases citing Dr. Feifel’s credentials and planned investor conference appearances followed in the months leading up to the purchase agreement execution, repeatedly boosting NRx shares.

According to the complaint, NRx’s representations regarding the availability of financing for the Kadima closing were materially inconsistent across the executed purchase agreements, its public statements, private communications, and SEC filings throughout the period leading up to and following execution of the agreement:

Within days of signing the agreement, on May 13, 2025, Hope issued a press release announcing the signing but stating the transaction was subject to “finalization of financing.” This statement was contrary to the express terms of the agreement.

NRx also included the same false statement in its 8-K filing with the SEC.

After making it known it did not have the funds on hand to close, as expressed in the agreement, Hope issued a press release on May 15, 2025 stating that expected debt financing from Universal Capital would be used to finance the Kadima purchase. This also turned out to be a false statement, as it later used those funds for other acquisitions and represented in its 10-Q filing that it had “not finalized the commitment to finance” the Kadima acquisition.

The complaint also claims that to escape their obligations, Hope and HTX filed a baseless Statement of Claim against Kadima with the American Health Law Association on August 11, 2025. Less than a week later, HTX withdrew the arbitration claim just prior to the filing deadline for NRx’s mandatory 10-Q report to the SEC. This was done, the complaint notes, to avoid disclosure of material litigation to NRx’s investors as the filed 10-Q misrepresented the status of the transaction, suggesting it was proceeding. With the sanitized 10-Q filed, Hope and HTX then refiled the arbitration claim less than 10 days later.

“Kadima and Dr. Feifel performed all of their obligations under this agreement in good faith,” Selesnick said. “The agreement expressly warranted that the defendants had funds available to close. We are asking the court to hold them to that commitment.”

The case is Kadima Neuropsychiatry Institute, Medical Corp., et al. v. NRx Pharmaceuticals, Inc. ( NRXP ), et al., pending in the Superior Court of the State of California, County of San Diego — Central Division. A stamped copy of the complaint is available upon request.

About Kadima Neuropsychiatry Institute

Kadima Neuropsychiatry Institute is a leading interventional psychiatric clinic in La Jolla, California, specializing in advanced treatments and clinical research for mental health conditions. Founded by Dr. David Feifel, a pioneer in advanced psychiatric care and the physician behind the world's first clinical ketamine program for psychiatric illness, Kadima is widely respected for its clinical innovation and patient outcomes. Kadima is represented by Buchalter LLP, with offices in San Diego, Los Angeles, and multiple other cities nationwide.

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Source: Kadima Neuropsychiatry Institute