Replies to post #7924 on RespireRx Pharmaceuticals Inc (fka RSPI)

[neuroinv]

1) I have in the past argued for negotiating from strength, and I do know that licensees look for companies who are fiscally weak, and build that into their strategies (the fact is, when I have consulted to companies, I have noted to them that licensor X only has six months of cash, or something like that--and that this would give them some added leverage. I'm certainly not the only person who can figure that out). But by my calculation, they probably had $8-9 million on hand at the end of 2Q (we'll know soon enough), and the very high costs of the CX717 neurology package are now mainly gone, albeit some IND costs continue. That means that I think they can wait for the ADHD IND to raise money at better terms. If they do a PIPE now, that would mean they are not confident about the ADHD IND. Which I suppose would make a PIPE defensible, but I am not currently going with that premise.
2) I have already two or three times said that the price drop was not only seen with Cortex, but is a more slippery slope for Cortex because of the warrants.
3) Any sane deal with a well-known BP will enhance share value, though Targacept's experience shows that can be a brief honeymoon.


NeuroInvestment

[haysaw]

neuro:

1.) Couldn't Cortex be raising a PIPE now in order to have cash on the balance sheet when they negotiate a potential partnership? (to put them in a position of strength) I would think that they might raise cash now to get it out of the way.

2.) If this price erosion is due to a PIPE, what do you think they would need to raise? What do you think will happen to SP in reaction? I think the current price level inmplies a 15MM pipe..

3.) If the Co. is going to get an inlicensing deal done, they might need $$$ in excess of what is on the BS? What are your thoughts? Is there a candidate that you think would be a good fit? Do you think they could structure a deal that increases Shareholder Value?

4.) Why do you feel that a Pipe woulb be indefensible? I estimate that they have 5MM or so on the BS? (not very much to deliver on a partnership...etc...etc.. and they did say they would work toward an inlicensing.)

5.) Last PIPE was small but done at a terrible time. What do you think is causing this protracted drop if not a PIPE?

Thanks Neuro. I would truly like your opinion on these points.

Iggs

Very accurate (regarding the bold print).

Obviously, there are two very different perspectives regarding negotiating with BP from a point of financial strength; one is from the small/individual investor (on the outside looking in), and the other from the view of the insider. I guess things get more complicated and superficial when running a company. It's an image, smoke and mirrors and so on. I don't envy that position. I am perfectly content in this broken cocoon. Or am I?