RespireRx Transferes Its Pharmaceutical Cannabinoid Program To ResolutionRx

RespireRx Pharmaceuticals Inc. RSPI, focused on the discovery and development of treatments to combat diseases caused by disruption of neuronal signaling, and ResolutionRx Ltd, an unlisted public Australian company, and a subsidiary of RespireRx on August 3, 2023, 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 Agreements

The companies entered into a license agreement in which RespireRx licensed to ResolutionRx the intellectual property 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.

The companies entered into a 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, pursuant to which University has granted to RespireRx certain rights and licenses. The sublicense is essentially a direct pass-through of all of the rights and obligations associated with the exclusive lcense to ResolutionRx as sublicensee from RespireRx as sublicensor. In consideration for the license and sublicense, ResolutionRx issued 25 million ordinary shares of ResolutionRx to RespireRx pursuant to a stock transfer agreement plus the payment of $1 to RespireRx.

Pricing of Securities Offering of Series A Preference Shares by ResolutionRx.

ResolutionRx entered into a letter of intent with Cantheon Capital on May 18, 2023 that describes an intended investment of $3.1 million in series A preference shares to be issued by ResolutionRx. According to the LOI, the issuance price was designated to be $0.90 per series A share, which assumes 90% of a $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, on substantially the same terms (except in Australian dollars) as the LOI with Cantheon, with final pricing determined after receipt of 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 $25 million value as described above, or $22.5 million, which is the maximum price permitted pursuant to the Cantheon LOI and the PrimaryMarkets term sheet.

Price Action

RespireRx shares were trading 16.66% higher at $0.0014 per share at the time of writing Wednesday morning.

Benzinga Cannabis Capital Conference

The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

Photo: Benzinga edit with photos by jarmoluk and lindsayfox on Pixabay