Wednesday, February 01, 2023 4:43:51 PM
ResolutionRx Ltd, a wholly owned subsidiary of RespireRx Pharmaceuticals Inc. Enters into LOI and Term Sheet with Radium Capital for the financing of anticipated Research and Development Credits
Glen Rock, N.J., February 1, 2023 /Globe Newswire - RespireRx Pharmaceuticals Inc. (OTC Markets: RSPI) (“RespireRx” or the “Company”), a leader in the discovery and development of innovative and revolutionary treatments to combat diseases caused by disruption of neuronal signaling, is pleased to announce that, on January 27, 2023, ResolutionRx Ltd (“ResolutionRx”), a newly formed Australian unlisted public company, and initially, a wholly-owned subsidiary of RespireRx, entered into a Letter of Intent (“LOI”) and Term Sheet (“Term Sheet”) with Radium Capital (“Radium”). The LOI and Term Sheet summarize the background and principal terms of a series of planned financing arrangements between Radium Capital (“Radium”) and ResolutionRx Ltd, in order to unlock research and development tax credits available in Australia to companies like ResolutionRx.
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 (R&D) efforts prior to receipt of The Research and Development Tax Incentive (“R&DTI”) funding from the Australian government. According to the Australia government website https://business.gov.au/grants-and-programs/research-and-development-tax-incentive, “The Research and Development Tax Incentive (R&D Tax Incentive or R&DTI) helps companies innovate and grow by offsetting some of the costs of eligible research and development (R&D).”
The R&DTI is the sum of the R&D company’s corporate tax rate and an incentive rate, subject to certain limitations. In the case of 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 30th June of each year. Subject to an Overseas Finding, certain R&D expenditures outside Australia will be eligible.
“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.”
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