RespireRx Pharmaceuticals (OTC:RSPI) Inc subsidiary ResolutionRx Ltd entered into a binding letter of intent last week with Cantheon Capital, in which the latter would help fund the former’s clinical trial research and development.
The letter describes a total investment of $3.125 million by Cantheon in Australian Series A Preference Shares issued by ResolutionRx. The investment would be made in ranches, with each tranche of the investment equal to 25% of the clinical trial costs of the cannabinoid program.
ResolutionRx said that it expects to incur R&D costs of approximately more than $16.5 million over roughly two and a half years. The company said it will also work to ensure that its ordinary shares will be listed for trading on the Australian Securities Exchange within eighteen months of the anniversary date of its previous services agreement with iNGENu.
The Cantheon investment will be exempt from registration under the applicable US federal and state securities laws, rules and regulations, the company noted.
The letter of intent, along with other steps, “completes the major initial components of our plan to create a fully operational cannabinoid drug research and development company in Australia that will have adequate capital to conduct its strategic and operational plans,” said Jeff Margolis, senior financial officer of ResolutionRx and chief financial officer of RespireRx.
“This financing is a crucial next step in the restructuring of RespireRx and the founding and funding of ResolutionRx,” RespireRx interim CEO Arnold Lippa said. “Combined with the previously announced debt facility similar to a line of credit to be provided by Radium Capital to finance ResolutionRx’s anticipated 43.5% tax credit under the Australian Research and Development Tax Incentive, the Cantheon financing will provide a significant amount of the funds needed in order for ResolutionRx to conduct the upcoming research and development activities necessary for the commercialization of its pharmaceutical cannabinoid platform.”
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