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 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 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.