Item
1.01 Entry into a Material Definitive Agreement.
Securities
Purchase Agreement with Barton Asset Management LLC
On
August 31, 2021 (the “Effective Date”), RespireRx Pharmaceuticals Inc. (the “Company”) and Barton Asset Management
LLC (“Barton”) entered into a Securities Purchase Agreement (the “SPA”) pursuant to which Barton provided a sum
of $103,500 (the “Consideration”) to the Company, in return for a convertible promissory note (the “Note”) with
a face amount of $115,000 (which difference in value as compared to the Consideration is due to an original issue discount of $11,500),
and a common stock purchase warrant (the “Warrant”) exercisable for five years at an exercise price of $0.02 per share on
a cash or cashless basis, to purchase up to 5,750,000 shares of the Company’s common stock, par value $0.001 (“Common Stock”).
In addition, and to induce Barton to enter into the SPA, the Company and Barton entered into a Piggy-Back Registration Rights Agreement
(the “Registration Rights Agreement”) under which the Company has agreed to provide certain piggy-back registration rights
under the Securities Act of 1933, as amended (the “Securities Act”) with respect to the Common Stock issuable pursuant to
the SPA. The net proceeds of the Consideration, which were received by the Company on August 31, 2021, were used for general corporate
purposes, including the payment of accrued obligations.
The
Note obligates the Company to pay by August 31, 2022 (the “Maturity Date”) a principal amount of $115,000 together with interest
at a rate equal to 10% per annum. The first twelve months of interest, equal to $11,500, is guaranteed and earned in full as of the Effective
Date. Any amount of principal or interest that is not paid by the Maturity Date would bear interest at the rate of 24% from the Maturity
Date to the date it is paid.
Barton
has the right, in its discretion, at any time, to convert any outstanding and unpaid amount of the Note into shares of Common Stock,
provided that the conversion would not result in Barton beneficially owning more than 4.99% of the Company’s then outstanding Common
Stock. Barton may convert at a per share conversion price equal to $0.02, subject to equitable adjustments for stock splits, stock dividends,
combinations, recapitalizations, extraordinary distributions and similar events. Upon any conversion, all rights with respect to the
portion of the Note being so converted will terminate, except for the right to receive Common Stock or other securities, cash or other
assets as provided for in the Note.
The
Company may, in the absence of an Event of Default (as defined in the Note), and with prior written notice to Barton, prepay the outstanding
principal amount under the Note during the initial 180 day period after the Effective Date by making a payment to Barton of an amount
in cash equal to 115% of the outstanding principal, interest, default interest and other amounts owed. Under certain circumstances, including
the occurrence of an Event of Default, a sale, merger or other business combination where the Company is not the survivor, or the conveyance
or disposition of all or substantially all of the assets of the Company, the Company may be required to prepay in cash an amount equal
to 125% of the outstanding principal, interest, default interest and other amounts owed. The Company’s wholly owned subsidiary,
Pier Pharmaceuticals, Inc., provided an unlimited guarantee of the Company’s obligations under the Note.
The
Note requires that the Company reserve the greater of (i) 8,625,000 shares of Common Stock or (ii) one and a half times the number of
shares into which the Note may convert. The Warrant requires that the Company reserve three times the number of shares into which the
Warrant is at any time exercisable.
The
SPA includes, among other things: (1) the grant of an option to Barton to incorporate into the Note any terms applicable to a subsequent
issuance of a convertible note or security by the Company that are more beneficial to an investor than the terms of the SPA and Note
are to Barton; and (2) certain registration rights by reference to the Registration Rights Agreement, and the right to have any shares
of Common Stock issued in connection with the conversion of the Note or exercise of the Warrant included in any Regulation A offering
statement that the Company files with the Securities and Exchange Commission.
The
Note, the Warrant, and the shares of Common Stock issuable upon conversion or exercise thereof, as applicable, were offered and sold
to Barton 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 of Regulation D promulgated
thereunder. Pursuant to these exemptions, Barton 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 Registration Rights Agreement, the Note, and the Warrant do not purport to be complete and are qualified
in their entirety by reference to the SPA, the Registration Rights Agreement, the Note, and the Warrant, which are included as Exhibits
99.1, 99.2, 99.3, and 99.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.