Item
1.01 Entry into a Material Definitive Agreement.
Securities
Purchase Agreement
On
July 2, 2020 (the “Effective Date”), RespireRx Pharmaceuticals Inc. (the “Company”) and FirstFire Global
Opportunities Fund LLC (the “Lender”) entered into a Securities Purchase Agreement (the “SPA”) by which
the Lender provided a sum of $125,000 (the “Consideration”) to the Company, in return for a convertible promissory
note (the “Note”) with a face amount of $137,500 (which difference in value as compared to the Consideration is due
to an original issue discount of $12,500), a common stock purchase warrant for 6,875,000 shares of the Company’s common
stock (the “Warrant”), and the Confession of Judgment (as defined below), among other agreements and obligations.
The net proceeds of the Consideration, which were received by the Company on July 6, 2020, equal $121,000 after payment of $4,000
in Lender’s legal fees, and will be used for general corporate purposes.
Under
the terms of the SPA and the Note, the Lender must pay the Consideration at closing. The Note obligates the Company to pay interest
at a rate of 10% per annum on any unpaid principal beginning on July 2, 2020, and to make five monthly amortization payments in
the amount of $30,250 each, with the first such payment due on December 2, 2020, and the final such payment, along with any unpaid
principal and any accrued and unpaid interest and other fees, due April 2, 2021 (the “Maturity Date”). Any amount
of principal or interest that is not paid when due bears interest at the rate of the lesser of 24% and the maximum amount permitted
by law, from the due 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 then outstanding shares of 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 $0.02 (the
“Fixed Conversion Price”), provided that upon any Event of Default (as defined in the Note), the conversion price
will equal the lower of (i) the Fixed Conversion Price, (ii) discount to market based upon subsequent financings with other investors,
or (iii) 60% multiplied by the lowest traded price of the common stock of the Company during the twenty-one consecutive Trading
Day (as defined in the Note) period immediately preceding the date of such conversion. 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, with prior written notice to the Lender, prepay the outstanding principal amount under the Note during the initial
180 day period after the Effective Date by making a payment to the Lender of an amount in cash equal to a certain percentage of
the outstanding principal, interest, default interest and other amounts owed. Such percentage varies from 105% to 115% depending
on the period in which the prepayment occurs, as set forth in the Note.
The
SPA provides the lender with certain participation rights in any subsequent offering of debt or equity. Under the SPA, the Company
may not enter into an offering of its securities with terms that would benefit an investor more than the Lender is benefited under
the SPA and the agreements ancillary thereto, unless the Company offers the Lender those same terms. The SPA also grants the Lender
certain registration rights.
The
Warrant is a common stock purchase warrant to purchase 6,875,000 shares of the Company’s common stock, for value received
in connection with the issuance of the Note, from the date of issuance of the Warrant until September 30, 2023, at an exercise
price of $0.007 (subject to adjustment as provided therein) per share of common stock.
Additionally,
the Company 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 pursuant 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 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(b) promulgated by
the SEC under the 1933 Act. Pursuant 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, 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.
Extension
of Royalty Obligation under 2014 License Agreement with the University of Illinois Chicago
Under
that certain Exclusive License Agreement, by and between the Company and the Board of Trustees of the University of Illinois,
dated as of June 27, 2014, and previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July
1, 2014 (the “License Agreement”), the Company was obligated to make its annual royalty obligation payment of $100,000
to the University of Illinois Chicago (“UIC”) on June 30, 2020 (extended from the original due date of December 31,
2019).
On
June 30, 2020, in response to the Company’s request for a deadline extension with respect to its annual royalty obligation
payment of $100,000, UIC notified the Company that it was extending the deadline for the Company to make its annual royalty obligation
payment of $100,000 under the License Agreement to July 7, 2020.
On
July 7, 2020, the Company fulfilled its obligation to make its annual royalty obligation payment of $100,000 under the License
Agreement.