RESPIRERX PHARMACEUTICALS INC. (OTCMKTS:RSPI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
RespireRx Pharmaceuticals Inc. (the “Company”) and Power Up Lending Group Ltd. (the “Lender”) entered into a Securities Purchase Agreement (the “SPA”), dated as of April 15, 2020, by which the Lender loaned $53,000 to the Company in return for a convertible promissory note (the “Note”), the Limited Guaranty (as defined below), and the delivery into escrow of a confession of judgment in favor of the Lender for the amount of the Note plus fees and costs to be filed by the Lender upon the occurrence of an Event of Default (as defined in the Note) and other transaction-related documents. The proceeds of the loan, which equal $50,000 after payment of $2,500 in legal fees and $500 in due diligence fees, will be used for general corporate purposes.
The Note will be payable on April 15, 2021 (the “Maturity Date”), and bear interest at a rate equal to 12% per annum, with any amount of principal or interest which is not paid when due bearing interest at the rate of 22% per annum.
The Lender has the right, at any time during the period beginning on the date that is 180 days following the date of the Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in the Note), to convert any outstanding and unpaid amount of the Note into shares of the Company’s common stock or securities convertible into the Company’s common stock (“Conversion Shares”), provided that such conversion would not result in the Lender beneficially owning more than 4.99% of the Company’s common stock. Subject to certain limitations and adjustments as described in the Note, the Lender may convert at a per share conversion price equal to 61% of the lowest trading price of the common stock as reported by the exchange on which the Company’s shares are traded, for the twenty trading days prior to, but excluding, the day upon which a notice of conversion is received by the Company. Upon the conversion of all amounts due under the Note, the Note would be deemed repaid and terminated.
The Company may prepay the outstanding principal amount under the Note by paying a certain percentage of the sum of the outstanding principal, interest, default interest and other amounts owed. Such percentage varies from 120% to 145% depending on the period in which the prepayment occurs, as set forth in the Note. During the period in which the Note is outstanding, subject to certain limited exceptions, the Company must notify the Lender in advance of closing of any financing transactions with third party investors. At the Lender’s discretion, the Company must amend and restate the Note, including its conversion terms, and the Conversion Shares to be identical to the instruments evidencing such financing transaction.
In consideration of and to induce the Lender to consummate the transaction referenced herein, Jeff E. Margolis, the Chief Financial Officer of the Company (the “CFO”), on April 15, 2020 issued a limited guaranty in favor of the Lender (the “Limited Guaranty”) whereby the CFO guaranteed to the Lender the prompt and full performance and observance by the Company of its obligation to promptly cooperate in processing all notices of conversions issued to the Note.
The Note and the shares of common stock issuable upon conversion thereof were offered and sold to the Lender in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws, which include Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 promulgated by the SEC under the 1933 Act. to these exemptions, the Lender represented to the Company under the SPA, among other representations, that it was an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the 1933 Act.
The descriptions of the SPA and the Note do not purport to be complete and are qualified in their entirety by reference to the SPA and the Note, which are included as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| 99.1 | Securities Purchase Agreement, dated April 15, 2020, between RespireRx Pharmaceuticals Inc. and Power Up Lending Group Ltd. |
| 99.2 | Convertible Promissory Note, dated April 15, 2020. |
RespireRx Pharmaceuticals Inc. Exhibit
EX-99.1 2 ex99-1.htm Exhibit 99.1 SECURITIES PURCHASE AGREEMENT This SECURITIES PURCHASE AGREEMENT (the “Agreement”),…
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About RESPIRERX PHARMACEUTICALS INC. (OTCMKTS:RSPI)
RespireRx Pharmaceuticals Inc., formerly Cortex Pharmaceuticals, Inc., is engaged in the discovery, development and commercialization of pharmaceuticals for the treatment of neurological and psychiatric disorders. The Company is focused on the clinical development in the areas of respiratory disorders, including respiratory depression and sleep apnea. It is engaged in research and clinical development of a class of compounds referred to as ampakines, which act to enhance the actions of the excitatory neurotransmitter glutamate at a-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid (AMPA) glutamate receptors. Its ampakines, including CX717, CX1739 and CX1942, were efficacious in treating drug induced respiratory depression caused by opioids or certain anesthetics without offsetting the analgesic effects of the opioids or the anesthetic effects of the anesthetics. Its dronabinol is indicated for the treatment of sleep-related breathing disorders, including sleep apnea.