RespireRx Pharmaceuticals (OTC:RSPI) Inc announced that its recently created Australia-based subsidiary ResolutionRx Ltd has signed a letter of intent (LOI) and term sheet with Radium Capital.
The agreements cover a series of planned financing arrangements between the two companies designed to unlock research and development tax credits available in Australia, the company said. Radium, founded in 2017, is in the business of funding secured loans to Australian companies engaged in research and development activities.
The goal for ResolutionRx is to progress toward commercialization of its drug dronabinol for the treatment of obstructive sleep apnea.
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Specifically, ResolutionRx and Radium have agreed to enter into a series of loan agreements which in the United States may be considered to be analogous to a line of credit designed to finance research and development efforts prior to receipt of Research and Development Tax Incentive (R&DTI) funding from the Australian government.
The R&DTI is the sum of the R&D company’s corporate tax rate and an incentive rate, subject to certain limitations. For ResolutionRx, the R&DTI is expected to be comprised of a corporate tax rate of 25% plus the incentive rate of 18.5% for a total of 43.5% and would represent an annual refund after the filing of ResolutionRx’s annual tax return as of June 30 each year.
“The LOI and term sheet announced today creates a means of realizing the R&DTI funds well in advance of the annual cash receipt from the Australian government and, as such, create a very valuable non-dilutive means of supporting our R&D efforts towards the commercialization of dronabinol for the treatment of obstructive sleep apnea (OSA),” said Jeff Margolis, director and senior financial Officer of ResolutionRx and director and chief financial officer of RespireRx.
RespireRX is a leader in the discovery and development of 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, attention deficit hyperactivity disorder, epilepsy, pain, recovery from spinal cord injury, and certain neurological orphan diseases.
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