RESPIRERX PHARMACEUTICALS INC. (OTCMKTS:RSPI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On May 17, 2019, RespireRx Pharmaceuticals Inc. (the “Company”) and Crown Bridge Partners, LLC (the “Lender”) entered into a Securities Purchase Agreement (the “SPA”) by which the Lender committed to provide net proceeds of one or more loans of up to $135,000 (the “Consideration”) to the Company in return for a convertible promissory note (the “Note”) with a face amount of up to $150,000, a common stock purchase warrant (the “Warrant”), the Share Reservation Increase Agreement (as defined below), and the Confession of Judgment (as defined below), among other agreements and obligations. The net proceeds of the First Tranche (as defined below) of the Consideration, which equal $43,000 after payment of $2,000 in Lender’s legal fees, will be used for general corporate purposes.
Under the terms of the SPA and the Note, the Lender must pay $45,000 of the Consideration (the “First Tranche”) within a reasonable amount of time after the full execution of the transaction documents related to the Note, and the Lender may pay, in its sole discretion, such additional amounts of the Consideration and at such dates as the Lender may choose (each such payment, including the First Tranche, a “Tranche”). The Note obligates the Company to pay a principal amount of up to $150,000 together with interest at a rate equal to 10% per annum, which principal exceeds the Consideration by the amount of an original issue discount (the “OID”). The principal amount due to the Lender is prorated based on the amount of the Consideration actually paid by the Lender, the OID, and applicable fees and interest. Each Tranche, together with fees and interest, is payable 12 months from the effective date of each payment by Lender (each such date, a “Maturity Date”). Any amount of principal or interest which is not paid by its Maturity Date bears interest at the rate of the lesser of 15% or the maximum amount permitted by law, from the Maturity Date to the date such amount is paid.
The Lender has the right, at any time, 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, provided that such conversion would not result in the Lender beneficially owning more than 4.99% of the Company’s common stock. Upon such conversion, all rights with respect to the portion of the Note being so converted terminate, except for the right to receive the Company’s common stock or other securities, cash or other assets as provided in the Note due upon such conversion.
The Company may prepay any amount outstanding under each Tranche of the Note, during the initial 60 calendar day period after the issuance of the respective Tranche of the Note, by making a payment to the Lender of an amount in cash equal to 120% multiplied by the amount that the Company is prepaying, subject to the Lender’s prior written acceptance in Lender’s sole discretion. The Company may prepay any amount outstanding under each Tranche of the Note, during the period from the 61st through the 120th calendar day after the issuance of the respective Tranche of the Note, by making a payment to the Lender of an amount in cash equal to 135% multiplied by the amount that the Company is prepaying, subject to the Lender’s prior written acceptance in Lender’s sole discretion. The Company may prepay any amount outstanding under each Tranche of the Note, during the period from the 121st through the 180th calendar day after the issuance of the respective Tranche of the Note, by making a payment to the Lender of an amount in cash equal to 145% multiplied by the amount that the Company is prepaying, subject to the Lender’s prior written acceptance in Lender’s sole discretion. The Company may not prepay any amount outstanding under each Tranche of the Note after the 180th calendar day after the issuance of the respective Tranche of the Note.
The Warrant is a common stock purchase warrant to purchase 42,372 shares of the Company’s common stock, for value received in connection with the First Tranche, from the date of issuance of the Warrant until the three-year anniversary thereof, at an exercise price of $1.18 (subject to adjustment as provided therein) per share of common stock.
Additionally, the Company agreed to consult with the Lender to increase the number of shares reserved for the conversion of the Note (the “Share Reservation Increase Agreement”), such that the number of shares reserved at all times is equal to ten times the number of shares into which the Note is convertible. The Company also provided a confession of judgment (the “Confession of Judgment”) in favor of the Lender for the amount of the Note plus fees and costs, to be filed to the terms and conditions of the SPA and the Note.
The Note and the shares of the Company’s common stock issuable upon conversion thereof are being offered and sold to the Lender in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws.
The descriptions of the SPA, the Note, the Warrant and the additional associated documents do not purport to be complete. The descriptions of the SPA, the Note, and the Warrant are qualified in their entirety by reference to the SPA, the Note, and the Warrant, which are included as Exhibit 99.1, Exhibit 99.2, and Exhibit 99.3, 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.
A list of exhibits that are filed as part of this report is set forth in the Exhibit Index, which is presented elsewhere in this document, and is incorporated herein by reference.
EXHIBIT INDEX
| Exhibit Description | |
| 99.1 | Securities Purchase Agreement, dated May 17, 2019, between RespireRx Pharmaceuticals Inc. and Crown Bridge Partners, LLC. |
| 99.2 | Convertible Promissory Note, dated May 17, 2019. |
| 99.3 | Common Stock Purchase Warrant, dated May 17, 2019. |
RespireRx Pharmaceuticals Inc. Exhibit
EX-99.1 2 ex99-1.htm 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.