RespireRx's Risky $45M Raise: Can Innovative Treatments Overcome Financial Concerns?

NEW YORK, NY – November 18, 2025 – RespireRx Pharmaceuticals Inc. is embarking on a high-stakes $45 million funding round, aiming to propel its pipeline of treatments for neurological and psychiatric disorders. However, a review of the company’s financial standing and regulatory compliance reveals a precarious situation that casts a shadow over its ambitious goals. The company is pursuing a Regulation D, Rule 506(c) private placement, with Castle Placement, LLC acting as placement agent, allocating funds across its subsidiaries – ResolutionRx Ltd, EndeavourRx LLC, and RespireRx Pharmaceuticals Inc. – for research, development, and clinical programs.

Financial Red Flags and Regulatory Scrutiny

RespireRx’s financial health is a significant concern. The company has faced substantial difficulties in maintaining compliance with regulatory reporting requirements. Its stock registration was revoked by the Securities and Exchange Commission (SEC), highlighting a serious lapse in financial transparency. This has resulted in a lack of current, publicly available financial data, making a comprehensive assessment of its financial standing challenging. One source familiar with the situation stated, “The lack of financial filings is a major red flag. Investors need to understand the full extent of the company’s liabilities and cash burn rate before committing capital.” The company’s market capitalization currently sits at a modest $365,000, a reflection of investor skepticism.

Innovative Programs Targeting Unmet Medical Needs

Despite the financial concerns, RespireRx is focused on developing treatments for areas with significant unmet medical needs. ResolutionRx, the Australian subsidiary, is leading the charge with dronabinol for obstructive sleep apnea (OSA). Current treatments for OSA, such as CPAP machines, have limited adherence rates, creating a substantial market opportunity for a pharmaceutical solution. Clinical trials funded by a $5 million National Heart, Lung, and Blood Institute grant have demonstrated promising results, showing a statistically significant reduction in the apnea-hypopnea index (AHI) with dronabinol treatment.

EndeavourRx is pursuing multiple programs, including ampakines for spinal cord injury (SCI) and attention-deficit/hyperactivity disorder (ADHD), as well as GABAkines for epilepsy and chronic pain. Preclinical studies on ampakines have shown potential in stimulating respiratory function in SCI models, while clinical trials have demonstrated rapid improvement in ADHD symptoms. The company's KRM-II-81 GABAkine program is also showing promise in animal models for pharmacoresistant epilepsy and chronic pain. A source involved with the KRM-II-81 program notes, “We are seeing encouraging preclinical results, but translating that success into clinical efficacy will require significant investment and rigorous testing.”

Funding Allocation and Strategic Partnerships

The proposed $45 million funding round is allocated as follows: $15 million to ResolutionRx for continued development of dronabinol for OSA, $25 million to EndeavourRx for its neuromodulator programs, and $5 million to RespireRx Pharmaceuticals Inc. for corporate operations. The decision to establish ResolutionRx in Australia was strategic, leveraging the country's generous research and development (R&D) tax credit program, offering a potential refund of 43.5% of qualified R&D expenditures. Furthermore, the company plans to list ResolutionRx on the Australian Stock Exchange (ASX) and potentially other exchanges, seeking to unlock additional capital and expand its investor base.

Castle Placement, LLC, the placement agent for the offering, specializes in raising capital for middle-market companies. The firm has a network of over 64,500 institutional investors and 600,000 accredited investors, potentially providing RespireRx with access to a broad range of funding sources. However, the firm’s recent deal activity has been limited, raising questions about its ability to successfully complete the offering.

Navigating a Competitive Landscape

The markets for OSA, SCI, ADHD, and epilepsy are highly competitive, with established pharmaceutical companies and emerging biotechnology firms vying for market share. ResolutionRx faces competition from companies developing alternative treatments for OSA, including oral medications and neuromodulation devices. EndeavourRx’s ampakine and GABAkine programs face competition from existing and emerging therapies for SCI, ADHD, epilepsy, and chronic pain. Success will depend on demonstrating superior efficacy, safety, and tolerability compared to existing treatments, as well as securing regulatory approval and establishing effective commercialization strategies. “The competition is fierce, and demonstrating a clear clinical advantage will be crucial,” said one industry analyst. “RespireRx needs to execute flawlessly to gain traction in these crowded markets.”