RespireRx Pharmaceuticals Inc. and ResolutionRx Ltd Enter into Bilateral Agreements to Establish ResolutionRx Ltd as an Operating Company
Wednesday, August 09, 2023
RespireRx Pharmaceuticals Inc. (OTC. Pink Market: RSPI) (“RespireRx”), focused on the discovery and development of innovative and revolutionary treatments to combat diseases caused by disruption of neuronal signaling, and ResolutionRx Ltd (“ResolutionRx”), an unlisted public Australian company, (Australian Company Number or ACN: 664 925 651) and a subsidiary of RespireRx (collectively referred to as the “Companies”) are pleased to jointly announce that on August 3, 2023, the Companies have entered into a series of bilateral agreements intended to transfer the RespireRx pharmaceutical cannabinoid program to ResolutionRx and establish it as an operating company.
License Agreement. The Companies entered into a License Agreement (the “License Agreement”) in which RespireRx licensed to ResolutionRx the Intellectual Property (“Licensed IP” as defined in the License Agreement) including Patent Rights as defined in the License Agreement. The License Agreement is an exclusive, worldwide and royalty-free license to use and exploit the Licensed IP associated with new dronabinol formulations initially to be developed for the treatment of obstructive sleep apnea and in connection with ResolutionRx’s business and operations, including commercial and non-commercial purposes, with the exception that RespireRx shall have the exclusive right to use the technology described in the Licensed IP for non-cannabinoid products.
Sublicense Agreement. The Companies entered into a Sublicense Agreement (the “Sublicense Agreement”) in which RespireRx, as sublicensor, sublicensed the rights to its Exclusive License Agreement with The Board of Trustees of the University of Illinois, a body corporate and politic of the State of Illinois (“University” or “Overlicensor”), effective June 27, 2014 (the “Original License”) as amended via a certain letter amendment, effective August 2, 2017 (the “Letter Amendment”) and a certain Second Amendment to RespireRx-University of Illinois Exclusive License Agreement, effective December 15, 2022 (the “Second Amendment,” and collectively with the Original License and Letter Amendment, the “Exclusive License”), pursuant to which University has granted to RespireRx certain rights and licenses. The Exclusive License permits the sublicensor to grant written sublicenses of its rights under the Exclusive License. The Sublicense is essentially a direct pass-through of all of the rights and obligations associated with the Exclusive License to ResolutionRx as sublicensee from RespireRx as sublicensor.
Stock Transfer Agreement. In consideration for the License and Sublicense, ResolutionRx issued 25,000,000 Ordinary Shares of ResolutionRx to RespireRx pursuant to a stock transfer agreement plus the payment of US$1 to RespireRx.
Master Intercompany Services Agreement. The Companies have entered into a Master Intercompany Services Agreement (“MISA”) in which RespireRx agrees to perform certain support activities in the form of both general and administrative and research and development support in the execution of the business operations of ResolutionRx. RespireRx will provide the Services as set forth in the MISA on an ongoing basis as well as such further services as ResolutionRx and RespireRx may specifically agree upon from time to time. The initial term of the MISA is from August 3, 2023 for two years. The MISA automatically renews for successive one-year periods unless ResolutionRx gives written notice to RespireRx of its intent not to renew at least ninety days prior the end of the initial term or any renewal term. RespireRx will invoice ResolutionRx for the services to be performed on a quarterly basis (based on the fiscal year of ResolutionRx) with such invoices to be issued, in advance, for services to be rendered in the quarter following the date of each such invoice.
Pricing of Securities Offering of Series A Preference Shares by ResolutionRx. As previously described in several filings with the Securities and Exchange Commission, ResolutionRx entered into a Letter of Intent (“LOI”) with Cantheon Capital (“Cantheon”) on May 18, 2023 that describes an intended investment of US$3,125,000 in Series A Preference Shares to be issued by ResolutionRx. According to the LOI, the issuance price was designated to be US$0.90 per Series A Share, which assumes 90% of a US$25 million maximum value for the net assets provided by RespireRx to ResolutionRx and is subject to adjustment downward, but not upward, based upon the result of the independent valuation. Similarly, on May 22, 2023, ResolutionRx entered into a non-exclusive mandate agreement with PrimaryMarkets, an Australian financial advisor engaged to undertake a fund raising for ResolutionRx in Australia on substantially the same terms (except in Australian dollars) as the LOI with Cantheon, with final pricing determined after receipt of an independent valuation. Effective May 22, 2023, RespireRx entered into an engagement agreement for an independent valuation. RespireRx received the independent valuation analysis on August 7, 2023 and is now able to establish the initial price for the Cantheon LOI and for the PrimaryMarkets offering and that price is now established to be a per Series A Preference Share equivalent of 90% of a US$25 million value as described above, or US$22.5 million, which is the maximum price permitted pursuant to the Cantheon LOI and the PrimaryMarkets term sheet.
“Since the incorporation of ResolutionRx at the beginning of this year, it has been our intention to restructure RespireRx by creating a fully operational, cannabinoid drug research and development entity in Australia that will have adequate capital to conduct its strategic and operational plans,” said Jeff Margolis, Co-Chief Executive Officer and Senior Financial Officer, ResolutionRx and Chief Financial Officer of RespireRx. Arnold Lippa, Co-CEO and Chief Scientific Officer (“CSO”) of ResolutionRx and CEO, President and CSO of RespireRx added, “Our established relationships with our Australian based law firm, our commercial bank, our Australian based accountants and financial advisory firm as well as the previously announced term sheet and letter of intent for a debt facility to be provided by Radium Capital to finance 80% of ResolutionRx’s anticipated 43.5% of the Australian research and development tax incentive, and the previously disclosed letter of intent with Cantheon Capital have guided us to a pathway. Our service agreements with RespireRx and iNGENu will provide the needed infrastructure for operations that have recently begun. Finally, the receipt of an independent valuation analysis has enabled us to establish the price for the Cantheon letter of intent and for the PrimaryMarkets offering at US$0.90 per Series A Share, equivalent to 90% of a US$25 million maximum negotiated value. We believe that these developments confirm our restructuring strategy to realize the intrinsic worth of our assets and, in turn, increase shareholder value. We look forward to beginning this new path.”
Not a Securities Offering or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sales of securities in any jurisdiction in which such offer, solicitation or sale of securities would be unlawful before registration or qualification under the laws of such jurisdiction.
About RespireRx Group
RespireRx Pharmaceuticals Inc. and its subsidiaries and business units (“RespireRx Group”) are discovering and developing medicines for the treatment of psychiatric and neurological disorders, with a focus on treatments that address conditions affecting millions of people, but for which there are few or poor treatment options, including obstructive sleep apnea (“OSA”), attention deficit hyperactivity disorder (“ADHD”), epilepsy, pain, recovery from spinal cord injury (“SCI”), and certain neurological orphan diseases . The RespireRx Group is developing a pipeline of new and repurposed drug products based on our broad patent portfolios for two drug platforms: (i) pharmaceutical cannabinoids, which include dronabinol, a synthetic form of ∆9-tetrahydrocannabinol (“Δ9-THC”) that acts upon the nervous system’s endogenous cannabinoid receptors and (ii) neuromodulators, which include AMPAkines and GABAkines, proprietary chemical entities that positively modulate (positive allosteric modulators or “PAMs”) AMPA-type glutamate receptors and GABAA receptors, respectively.
The RespireRx Group holds exclusive licenses and owns patents and patent applications or rights thereto for certain families of chemical compounds that claim the chemical structures and their uses in the treatment of a variety of disorders, as well as claims for novel uses of known drugs.
