10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED December 31, 2003

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM                          TO                         

Commission file number 0-17951

Cortex Pharmaceuticals, Inc.

(Exact name of small business issuer as specified in its charter)

Delaware	33-0303583
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

15241 Barranca Parkway, Irvine, California 92618

(Address of principal executive offices, including zip code)

(949) 727-3157

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year,

if changed since last year)

Indicate by mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. YES x     NO ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). YES ¨    NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

28,034,614 shares of Common Stock as of February 9, 2004

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CORTEX PHARMACEUTICALS, INC.

INDEX

		Page Number
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements and Notes (Unaudited)
	Balance Sheets — December 31, 2003 and June 30, 2003	3
	Statements of Operations — Three months ended December 31, 2003 and 2002 and six months ended December 31, 2003 and 2002	4
	Statements of Cash Flows — Six months ended December 31, 2003 and 2002	5
	Notes to Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures of Market Risk	19
Item 4.	Controls and Procedures	19
PART II.	OTHER INFORMATION
Item 2.	Changes in Securities and Use of Proceeds	20
Item 4.	Submission of Matters to a Vote of Security Holders	21
Item 6.	Exhibits and Reports on Form 8-K	22
SIGNATURES		23

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Cortex Pharmaceuticals, Inc.

Balance Sheets

	(Unaudited)			(Note)
	December 31, 2003			June 30, 2003
Assets
Current assets:
Cash and cash equivalents	$	4,847,275		$	1,125,054
Marketable securities		399,420			—
Restricted cash		2,713			83,411
Accounts receivable		677,840			428,451
Other current assets		318,491			210,539
Total current assets		6,245,739			1,847,455
Furniture, equipment and leasehold improvements, net		248,732			298,268
Other		33,407			33,407
	$	6,527,878		$	2,179,130
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	1,455,703		$	852,016
Accrued wages, salaries and related expenses		158,433			213,037
Unearned licensing revenue		411,844			988,426
Unearned research revenue		—			1,028,752
Advance for MCI project		272,613			270,140
Total current liabilities		2,298,593			3,352,371
Unearned revenue, net of current portion		377,523			247,107
Stockholders’ equity (deficit):
Series B convertible preferred stock, $0.001 par value; $0.6667 per share liquidation preference; shares authorized: 3,200,000; shares issued and outstanding: 37,500; common shares issuable upon conversion: 3,679		21,703			21,703
Common stock, $0.001 par value; shares authorized: 50,000,000; shares issued and outstanding: 20,730,526 (December 31) and 17,153,659 (June 30)		20,730			17,153
Additional paid-in capital		51,704,626			42,629,899
Accumulated deficit		(47,895,297	)		(44,089,103	)
Total stockholders’ equity (deficit)		3,851,762			(1,420,348	)
	$	6,527,878		$	2,179,130

See accompanying notes.

Note: The balance sheet as of June 30, 2003 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

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Cortex Pharmaceuticals, Inc.

Statements of Operations

(Unaudited)

	Three months ended December 31,					Six months ended December 31,
	2003		2002			2003			2002
Revenues:
Research and license revenue	$	3,227,808	$	1,267,531		$	4,503,667		$	2,213,332
Grant revenue		28,320		113,568			89,708			290,210
Total revenues		3,256,128		1,381,099			4,593,375			2,503,542
Operating expenses:
Research and development		1,788,410		839,993			2,929,237			1,955,822
General and administrative		1,309,365		820,671			1,984,429			1,509,326
Total operating expenses		3,097,775		1,660,664			4,913,666			3,465,148
Income (loss) from operations		158,353		(279,565	)		(320,291	)		(961,606	)
Interest income, net		8,942		3,838			13,006			11,474
Change in fair value of common stock warrants		345,173		—			(3,498,909	)		—
Net income (loss)	$	512,468	$	(275,727	)	$	(3,806,194	)	$	(950,132	)
Net income (loss) per share:
Basic and diluted	$	0.02	$	(0.02	)	$	(0.20	)	$	(0.06	)
Shares used in calculating per share amounts:
Basic		20,639,530		16,853,662			19,480,020			16,851,524
Diluted		23,908,870		16,853,662			19,480,020			16,851,524

See accompanying notes.

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Cortex Pharmaceuticals, Inc.

Statements of Cash Flows

(Unaudited)

	Six months ended December 31,
	2003			2002
Cash flows from operating activities:
Net loss	$	(3,806,194	)	$	(950,132	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		59,424			76,744
Stock option compensation expense		889,369			71,708
Amortization of capitalized financing costs		32,241			—
Change in fair value of common stock warrants		3,466,668			—
Changes in operating assets/liabilities:
Restricted cash		80,698			920
Accounts receivable		(249,389	)		83,316
Other current assets		(107,952	)		88,768
Accounts payable and accrued expenses		549,083			405,010
Unearned revenue		(1,474,918	)		(1,184,198	)
Other assets and other liabilities		3,053			2,844
Net cash used in operating activities		(557,917	)		(1,405,020	)
Cash flows from investing activities:
Purchase of marketable securities		(600,000	)		—
Proceeds from maturity of marketable securities		200,000
Purchase of fixed assets		(9,888	)		(2,835	)
Net cash used in investing activities		(409,888	)		(2,835	)
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options		119,117			2,171
Proceeds from issuance of common stock upon exercise of warrants		75,180			—
Proceeds from issuance of common stock in August 2003 private placement, net		4,495,729			—
Net cash provided by financing activities		4,690,026			2,171
Increase (decrease) in cash and cash equivalents		3,722,221			(1,405,684	)
Cash and cash equivalents, beginning of period		1,125,054			1,849,009
Cash and cash equivalents, end of period	$	4,847,275		$	443,325

See accompanying notes.

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Cortex Pharmaceuticals, Inc.

Notes to Financial Statements

(Unaudited)

Note 1 — Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended December 31, 2003 are not necessarily indicative of the results that may be expected for the year ending June 30, 2004. For further information, refer to the financial statements and notes thereto included in the Company’s 2003 Annual Report on Form 10-K.

In January 1999, Cortex Pharmaceuticals, Inc. (“Cortex” or the “Company”) entered into a research collaboration and exclusive worldwide license agreement with NV Organon (“Organon”). The agreement will enable Organon to develop and commercialize the Company’s AMPAKINE^® technology for the treatment of schizophrenia and depression. In October 2000, the Company entered into a research collaboration and exclusive license agreement with Les Laboratoires Servier (“Servier”), in defined territories. The agreement, as amended to date, will enable Servier to develop and commercialize the Company’s AMPAKINE technology for the treatment of anxiety disorders and memory impairment associated with aging and neurodegenerative diseases such as Alzheimer’s disease (Note 2).

The Company is seeking collaborative arrangements with other pharmaceutical companies for other applications of the AMPAKINE compounds, under which such companies would provide additional capital to the Company in exchange for exclusive or non-exclusive license or other rights to the technologies and products that the Company is developing. Competition for corporate partnering with major pharmaceutical companies is intense, with a large number of biopharmaceutical companies attempting to arrive at such arrangements. Accordingly, although the Company is in discussions with candidate companies, there is no assurance that an agreement will arise from these discussions in a timely manner, or at all, or that an agreement that may arise from these discussions will successfully reduce the Company’s longer-term funding requirements.

To supplement its existing resources, in addition to seeking licensing arrangements with other pharmaceutical companies, the Company may seek to raise additional capital through the sale of debt or equity. There can be no assurance that such capital will be available on favorable terms, or at all. If additional funds are raised by issuing equity securities, dilution to existing stockholders is likely to result.

Revenue Recognition

The Company recognizes research revenue from its collaboration with Servier (Note 2) as services are performed under the agreement. The Company records grant revenues as the expenses related to the grant projects are incurred. All amounts received under collaborative research agreements or research grants are nonrefundable, regardless of the success of the underlying research.

Revenues from milestone payments are recognized when earned, as evidenced by written acknowledgement from the collaborator, provided that (i) the milestone event is substantive and its achievement was not reasonably assured at the inception of the agreement, and (ii) the Company’s performance obligations after the milestone achievement will continue to be funded by the collaborator at a comparable level to that before the milestone achievement. If both of these criteria are not met, the

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milestone payment is recognized over the remaining period of the Company’s performance obligations under the arrangement. Royalties, if any, will be recognized as earned.

In November 2002, the Emerging Issues Task Force (“EITF”) of the Financial Accounting Standards Board reached consensus on Issue 00-21. EITF Issue 00-21 addresses the accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. As required, the Company will apply the principles of Issue 00-21 to multiple element research and licensing agreements that it may enter into after July 1, 2003.

In accordance with the Securities and Exchange Commission’s Staff Accounting Bulletin No. 101 (“SAB 101”), amounts received for upfront technology license fees under multiple-element arrangements are deferred and recognized over the period of committed services or performance, if such arrangements require the Company’s on-going services or performance.

Net Income (Loss) Per Share

Basic earnings (loss) per share includes no dilution and is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding for the period.

Diluted earnings per share reflects the effect of additional common shares issuable upon exercise of outstanding stock options and warrants. In the computation of net loss per share, the effect of potentially issuable shares of common stock was not included because the effect would be anti-dilutive. The calculations of basic and diluted weighted average shares outstanding are as follows:

	Three months ended December 31,
	2003		2002
Numerator:
Net income (loss) applicable to common shares	$	512,468	$	(275,727	)
Denominator:
Weighted average common shares — basic		20,639,530		16,853,662
Net effect of dilutive securities:
Stock options		2,137,972		—
Warrants		1,131,368		—
Weighted average common shares — diluted		23,908,870		16,853,662
Earnings (loss) per share:
Basic and diluted	$	0.02	$	(0.02	)

Employee Stock Options and Stock-based Compensation

In December 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS 148”), which is effective for fiscal years ending after December 15, 2002. SFAS 148 provides alternative methods of transition to the fair value method of accounting for stock-based employee compensation under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). SFAS 148 requires disclosure of the effects of stock-based employee compensation on reported net income or loss and earnings or loss per share in annual and interim financial statements.

As permitted under SFAS 123, the Company has elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), in accounting for its employee stock options, given that the alternative fair value accounting provided for under SFAS 123 requires use of option valuation models that were not developed for use in valuing employee stock options. According to

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APB 25, no compensation expense is recognized as the exercise price of the Company’s stock options generally equals the market price of the underlying stock on the date of grant.

Adoption of SFAS 123 for options issued to employees would require recognition of employee compensation expense based on the computed “fair value” of the options on the date of grant. In accordance with SFAS 123 and EITF Issue 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” stock options and warrants issued to consultants and other non-employees as compensation for services to be provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The Company recognizes this expense over the period in which the services are provided.

Pro forma information regarding net loss and net loss per share has been determined as if the Company had accounted for its employee stock plans under the fair value method. The fair value was estimated at the date of grant using the Black-Scholes option pricing model and the following assumptions for the three-month periods ended December 31, 2003 and 2002, respectively: weighted average risk-free interest rates of 2.2% and 2.8%; dividend yields of 0%; volatility factors of the expected market price of the Company’s common stock of 106% and 97%; and a weighted average life of 4.8 years and 4.7 years.

For the six-month periods ended December 31, 2003 and 2002, respectively, the fair value was estimated at the date of grant using the Black-Scholes option pricing model and the following assumptions: weighted average risk-free interest rates of 2.2% and 2.7%; dividend yields of 0%; volatility factors of the expected market price of the Company’s common stock of 106% and 99%; and a weighted average life of 4.7 years and 4.2 years.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not provide a reliable single measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options is amortized as expense over the vesting period of the options, resulting in the following pro forma information for the three-month and six-month periods ended December 31, 2003 and 2002:

	Three months ended December 31,						Six months ended December 31,
	2003			2002			2003			2002
Net income (loss), as reported	$	512,468		$	(275,727	)	$	(3,806,194	)	$	(950,132	)
Stock-based employee compensation included in net income (loss)		(78,536	)		—			4,308			51,900
Fair value of stock-based employee compensation		(153,174	)		(100,989	)		(295,987	)		(250,636	)
Pro forma net income (loss)	$	280,758		$	(376,716	)	$	(4,097,873	)	$	(1,148,868	)
Net income (loss) per share, as reported:
Basic and diluted	$	0.02		$	(0.02	)	$	(0.20	)	$	(0.06	)
Net income (loss) per share, pro forma:
Basic and diluted	$	0.01		$	(0.02	)	$	(0.21	)	$	(0.07	)

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For the six-month period ended December 31, 2002, stock-based employee compensation included in the reported net loss, as detailed above, represents charges recorded for the extended term of exercisability of stock options held by the Company’s former President and Chief Executive Officer, as part of his severance package. This extended term has since lapsed.

For the three-month and six-month periods ended December 31, 2003, stock-based employee compensation included in reported net income or loss, as detailed above, represents charges for previously re-priced stock options held by employees. The accounting for these re-priced stock options is described more fully immediately below.

In March 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44 (“FIN 44” or “the Interpretation”), “Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB 25.” As required, the Company adopted FIN 44 on July 1, 2000. The Interpretation requires that stock options that have been modified to reduce the exercise price be accounted for as variable. Prior to release of FIN 44, in December 1998 the Company re-priced previously issued stock options to purchase approximately 970,000 shares of common stock to a price of $0.375 per share, which represented the fair market value of the common stock on the date of the re-pricing. The re-priced options were held by employees, directors and consultants to the Company. Of the options re-priced in December 1998, as of December 31, 2003 options to purchase approximately 253,000 shares of the Company’s common stock remained outstanding.

By adopting the Interpretation, the Company applies variable accounting for these options until such options are exercised or forfeited. Consequently, if the market price of the Company’s stock increases above $2.50 per share, the fair market value of the Company’s common stock on the date that it adopted FIN 44, the Company will recognize additional compensation expense that it otherwise would not have incurred.

Due to fluctuations in the market price of the Company’s common stock, for the three months ended December 31, 2003, the effect of applying FIN 44 was an increase in net income of $199,800, or $0.01 per share. For the three months ended December 31, 2002, applying FIN 44 had no impact on the Company’s net loss or the net loss per share.

For the six months ended December 31, 2003, the effect of applying FIN 44 was an increase in the net loss of $35,000, with no impact on net loss per share. For the six months ended December 31, 2002, applying FIN 44 had no impact on the Company’s net loss or the net loss per share.

Note 2 — Research and License Agreement with Les Laboratoires Servier

In October 2000, the Company entered into a research collaboration and exclusive license agreement with Servier. The agreement will enable Servier to develop and commercialize Cortex’s proprietary AMPAKINE technology for the treatment of declines in cognitive performance associated with aging and neurodegenerative diseases. The indications covered include, but are not limited to, Alzheimer’s disease, mild cognitive impairment (“MCI”), sexual dysfunction, and the dementia associated with multiple sclerosis and amyotrophic lateral sclerosis. The territory covered by the exclusive license excludes North America, allowing Cortex to retain commercialization rights in its domestic market. The territory covered by the agreement also excludes South America (except Argentina, Brazil and Venezuela), Australia and New Zealand. The agreement, as amended to date, includes an upfront payment by Servier of $5,000,000 and research support payments of approximately $2,000,000 per year through early December 2005 (subject to Cortex providing agreed-upon levels of research personnel and subject to annual adjustment based upon the increase in the U.S. Department of Labor’s Consumer Price Index). Cortex is eligible to receive milestone payments, based upon successful clinical development, plus royalty payments on sales in licensed territories.

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Under the October 2002 amendment, Servier will provide Cortex with $4,000,000 of additional research support, in exchange for rights to the Company’s AMPAKINE compounds as a potential treatment for anxiety disorders in Servier’s licensed territories. The $4,000,000 will be paid in quarterly installments of $500,000 over a two-year period, beginning in October 2002.

Cortex had been recording revenue from Servier’s earlier $5,000,000 upfront payment over the three-year collaborative research phase included in the October 2000 agreement. With the subsequent amendments to the agreement, Cortex adjusted the period that the Company records the Servier licensing revenue to include the extended research term that ends in early December 2005.

Note 3 — Research and License Agreement with NV Organon

In January 1999, the Company entered into a research collaboration and exclusive worldwide license agreement with Organon. The agreement will enable Organon to develop and commercialize the Company’s proprietary AMPAKINE technology for the treatment of schizophrenia and depression.

In connection with the agreement, the Company received an upfront license payment of $2,000,000, and research support payments approximating $3,000,000 per year for the two years ended in mid-January 2001. The Company also has received $6,000,000 in milestone payments, including $2,000,000 received in December 2003 in order for Organon to retain its rights to the AMPAKINE technology in the depression field. Cortex remains eligible for additional milestone payments based upon further clinical development, and ultimately, royalties on worldwide sales.

Note 4 — Private Placement of Common Stock and Warrants

On August 21, 2003, the Company issued 3,333,334 shares of common stock to accredited investors in a private placement transaction for $1.50 per share, raising gross proceeds of $5,000,000. Net proceeds from the transaction, after issuance costs and placement fees, were approximately $4.5 million. In connection with the transaction, the Company also issued five-year warrants to the investors to purchase up to an additional 3,333,334 shares of the Company’s common stock at an exercise price of $2.55 per share. The Company also issued warrants to two placement agents to purchase 30,000 and 83,061 shares of the Company’s common stock, respectively. The warrant to purchase 30,000 shares of the Company’s common stock has an exercise price of $1.50 per share and a five-year term. The warrant to purchase 83,061 shares of the Company’s common stock has an exercise price of $2.71 per share and a three-year term. All of the warrants issued in the transaction provide a call right in favor to the Company to the extent that the price per share of the Company’s common stock exceeds $6.00 per share for 13 consecutive trading days, subject to certain circumstances. The Company cannot exercise this call right prior to December 8, 2005.

Pursuant to the terms of the registration rights agreement entered into in connection with the transaction, within five calendar days following the date that the Company filed its Annual Report on Form 10-K, the Company was required to file, and did file, with the Securities and Exchange Commission (the “SEC”) a registration statement under the Securities Act of 1933, as amended, covering the resale of all of the common stock purchased and the common stock underlying the warrants, including the common stock underlying the placement agents’ warrants.

The registration rights agreement further provides that if a registration statement is not filed, or does not become effective, within the defined time period, then in addition to any other rights the holders may have, the Company would be required to pay each holder an amount in cash, as liquidated damages, equal to 2% per month of the aggregate purchase price paid by such holder in the private placement for the common stock and warrants then held, prorated daily. The registration statement was filed within the

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allowed time, and was declared effective by the SEC on December 8, 2003. As a result, the Company was not required to pay any liquidated damages in connection with the initial registration.

In accordance with EITF 00-19, “Accounting for Derivative Financial Instruments Indexed To, and Potentially Settled In a Company’s Own Stock,” (EITF 00-19) and the terms of the warrants and the transaction documents, at the closing date, August 21, 2003, the fair value of the warrants was accounted for as a liability, with an offsetting reduction to additional paid-in capital received in the private placement. The warrant liability was reclassified to equity as of December 8, 2003, the effective date of the registration statement, evidencing the non-impact of these adjustments on the Company’s financial position and business operations.

The fair value of the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: no dividends; risk-free interest rate of 3.37%; the contractual life of 5 years and volatility of 100%. The fair value of the warrants was estimated to be $5,000,000 on the closing date of the transaction. The fair value of the warrants was then re-measured at September 30, 2003 and estimated to be $8,833,000 with the increase in fair value due to the increase in the market value of the Company’s common stock. The increase in fair value of $3,833,000 from the transaction date to September 30, 2003 was recorded as a charge to other expense during the quarter ended September 30, 2003. The fair value of the warrants decreased by approximately $367,000 from September 30, 2003 to December 8, 2003, the date of effectiveness of the registration statement, and such decrease was recorded as a decrease to other expense in the Statement of Operations for the quarter ended December 31, 2003.

As stated above, the adjustments required by EITF 00-19 were triggered by the terms of the Company’s agreements for the private placement it completed in August 2003, specifically the potential penalties if the Company did not timely register the common stock underlying the warrants issued in the transaction. The related registration statement was declared effective by the SEC within the contractual deadline and the Company incurred no penalties. The adjustments for EITF 00-19 had no impact on the Company’s working capital, liquidity, or business operations.

Note 5 — Subsequent Event: Private Placement of Common Stock and Warrants

In January 2004, the Company issued 6,909,091 shares of common stock to accredited investors in a private placement transaction for $2.75 per share, raising gross proceeds of $19,000,000. In connection with the transaction, the Company also issued five-year warrants to the investors to purchase up to 4,490,910 shares of the Company’s common stock at an exercise price of $3.25 per share. The Company also issued two additional warrants to purchase 54,750 and 272,959 shares of the Company’s common stock, respectively, to two placement agents. The warrant to purchase 54,750 shares of the Company’s common stock has an exercise price of $2.75 per share and a five-year term. The warrant to purchase 272,959 shares of the Company’s common stock has an exercise price of $3.48 per share and a three-year term. Net proceeds from the transaction, after issuance costs and placement fees, were approximately $17,500,000.

As required by the related agreements, the Company filed a registration statement with the SEC for the purpose of registering under the Securities Act of 1933 all of the shares of the Company’s common stock that were sold to the investors and the common stock underlying the warrants, including common stock underlying the placement agents’ warrants.

If the price per share of the Company’s common stock exceeds $7.50 per share for 13 consecutive trading days, the Company may call for the issued warrants, subject to certain circumstances. This call provision cannot be implemented by the Company prior to the first anniversary of the date that the registration statement referenced above is first declared effective by the SEC.

The Company will apply the accounting requirements of EITF 00-19 to this transaction during the quarter ended March 31, 2004.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Financial Statements and Notes relating thereto appearing elsewhere in this report and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in the Company’s 2003 Annual Report on Form 10-K.

Introductory Note

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Company intends that such forward looking statements be subject to the safe harbors created thereby. These forward-looking statements relate to, among other things, (i) future research plans, expenditures and results, (ii) potential collaborative arrangements, (iii) the potential utility of the Company’s proposed products and (iv) the need for, and availability of, additional financing.

The forward-looking statements included herein are based on current expectations, which involve a number of risks and uncertainties and assumptions regarding the Company’s business and technology. These assumptions involve judgments with respect to, among other things, future scientific, economic and competitive conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized and actual results may differ materially. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events. Readers should carefully review the risk factors described in this and other documents that the Company files from time to time with the Securities and Exchange Commission, including Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and subsequent Current Reports on Form 8-K.

About Cortex Pharmaceuticals

Cortex is engaged in the discovery and development of innovative pharmaceuticals for the treatment of neurodegenerative diseases and other neurological and psychiatric disorders. Since 1993, the Company’s primary efforts have been to develop products that affect the AMPA-type glutamate receptor, a complex of proteins that is involved in communication between nerve cells in the human brain. The Company is developing a family of chemical compounds, known as AMPAKINE^® compounds, which enhance the activity of this receptor. The Company believes that AMPAKINE compounds hold promise for correcting deficits brought on by a variety of diseases and disorders that are known, or thought, to involve depressed functioning of pathways in the brain that use glutamate as a neurotransmitter.

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The AMPAKINE program addresses large potential markets. The Company’s commercial development plan involves partnering with larger pharmaceutical companies for research, development, clinical testing, manufacturing and global marketing of AMPAKINE products for those indications that require sizable, expensive clinical trials and very large sales forces to achieve significant market penetration. At the same time, the Company plans to develop internally a selected set of indications, eligible for Orphan Drug status. These indications typically require more modest investment in the development stages, and involve a more concentrated sales force to reach selected medical centers and a limited number of medical specialists in the United States. If the Company is successful in the pursuit of this operating strategy, the Company may be in a position to contain its costs over the next few years, to maintain its focus on the research and early development of novel pharmaceuticals (where the Company believes that it has the ability to compete) and eventually to participate more fully in the commercial development of AMPAKINE products in the United States.

Critical Accounting Policies and Management Estimates

The Securities and Exchange Commission defines critical accounting policies as those that are, in management’s view, most important to the portrayal of the Company’s financial condition and results of operations and most demanding of its judgment. The Company’s discussion and analysis of its financial condition and results of operations are based upon its financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. This process forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

The Company’s revenue recognition policies are in accordance with the Securities and Exchange Commission’s Staff Accounting Bulletin No. 101, “Revenue Recognition” (“SAB 101”). SAB 101 provides guidance in applying accounting principles generally accepted in the United States to revenue recognition issues, and specifically addresses revenue recognition for upfront, nonrefundable fees received in connection with research collaboration arrangements.

In accordance with SAB 101, revenues from upfront fees from the Company’s collaborators are deferred and recorded over the term that it provides ongoing services. Similarly, research support payments are recorded as revenue as it performs the research under the related agreements. The Company records grant revenues as it incurs expenses related to the grant projects. All amounts received under collaborative research agreements or research grants are nonrefundable, regardless of the success of the underlying research.

Revenues from milestone payments are recognized when earned, as evidenced by written acknowledgment from the Company’s collaborator, provided that (i) the milestone event is substantive and its achievement was not reasonably assured at the inception of the agreement, and (ii) the Company’s performance obligations after the milestone achievement will continue to be funded by its collaborator at a comparable level to that before the milestone achievement. If both of

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these criteria are not met, the milestone payment is recognized over the remaining minimum period of the Company’s performance obligations under the agreement.

In November 2002, the Emerging Issues Task Force (“EITF”) of the Financial Accounting Standards Board reached consensus on Issue 00-21. EITF Issue 00-21 addresses the accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. As required, the Company will apply the principles of Issue 00-21 to multiple element agreements that it may enter into after July 1, 2003.

The Company’s revenue recognition policies, although critical in management’s view, are not the sole accounting policies that it has adopted. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

Results of Operations

General

In January 1999, the Company entered into a research collaboration and exclusive worldwide license agreement with NV Organon (“Organon”). The agreement will allow Organon to develop and commercialize the Company’s proprietary AMPAKINE^® technology for the treatment of schizophrenia and depression. In connection with the agreement, the Company received a $2,000,000 upfront licensing payment and research support payments of approximately $3,000,000 per year for the two years ended in mid-January 2001.

The agreement with Organon also includes milestone payments based upon clinical development, plus royalty payments on worldwide sales. To date, Cortex has received milestone payments from Organon totaling $6,000,000, including a $2,000,000 milestone paid to Cortex in December 2003 in order for Organon to retain its rights to the AMPAKINE technology in the field of depression. For each milestone payment, Cortex recorded the related revenue upon achievement of the milestone.

In October 2000, the Company entered into a research collaboration and exclusive license agreement with Les Laboratoires Servier (“Servier”). The agreement will allow Servier to develop and commercialize the Company’s AMPAKINE technology for the treatment of declines in cognitive performance associated with aging and neurodegenerative diseases. The indications covered include, but are not limited to, Alzheimer’s disease, mild cognitive impairment (“MCI”), sexual dysfunction, and the dementia associated with multiple sclerosis and amyotrophic lateral sclerosis. The agreement, as amended, includes an upfront payment by Servier of $5,000,000 and research support payments of approximately $2,000,000 per year through early December 2005 (subject to Cortex providing agreed-upon levels of research personnel). The agreement also includes milestone payments, plus royalty payments on sales in licensed territories.

In October 2002, in exchange for an additional $4,000,000 of research support, Servier expanded its rights to the AMPAKINE compounds to include the field of anxiety disorders, in its licensed territories. The $4,000,000 will be paid in quarterly installments of $500,000 over a two-year period, beginning in October 2002.

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From inception (February 10, 1987) through December 31, 2003, the Company has sustained losses aggregating $45,863,000. Continuing losses are anticipated over the next several years. During that time, the Company’s ongoing operating expenses will only be offset, if at all, by proceeds from Small Business Innovative Research (“SBIR”) grants, research support payments from the collaboration with Servier and by possible milestone payments from Organon and Servier. Ongoing operating expenses may also be funded by payments under planned strategic alliances that the Company is seeking with other pharmaceutical companies for the clinical development, manufacturing and marketing of its products. The nature and timing of payments to Cortex under the Organon and Servier agreements or other planned strategic alliances, if and when entered into, are likely to significantly affect the Company’s operations and financing activities and to produce substantial period-to-period fluctuations in reported financial results. Over the longer term, the Company will be dependent upon the successful introduction of a new product into the North American market from its internal development, as well as the successful commercial development of its products by Organon, Servier or its other prospective partners to attain profitable operations from royalties or other product-based revenues.

Comparison of the Three Months and Six Months ended December 31, 2003 and 2002

For the three months ended December 31, 2003, net income of $512,000 compares with a net loss of $276,000 for the corresponding prior year period. For the six months ended December 31, 2003, the net loss of $3,806,000 compared to a net loss of $950,000 for the corresponding prior year period.

Research revenues for the three months and six months ended December 31, 2003 include a $2,000,000 milestone received under the agreement with Organon. The related agreement required this payment in order for Organon to retain its rights to the Company’s AMPAKINE technology in the field of depression. Grant revenues for the three months and six months ended December 31, 2003 decreased relative to the corresponding prior year periods due to decreased expenses for the schizophrenia and stroke projects.

Research and development expenses for the three-month period ended December 31, 2003 increased from $840,000 to $1,788,000, or by 113% compared to the corresponding prior year period. For the six-month period ended December 31, 2003, research and development expenses increased from $1,956,000 to $2,929,000, or by 50%, compared to the corresponding prior year period. For both periods, the increase primarily included preclinical expenses to advance the second generation AMPAKINE compound, CX717, along with technology access fees related to the Organon milestone. In 1993, Cortex licensed the AMPAKINE technology from the University of California. Under the related agreement, Cortex is required to remit a portion of certain remuneration received in connection with sublicensing agreements. When Organon paid Cortex the $2,000,000 milestone in December 2003, it triggered a technology access fee to the University of California.

General and administrative expenses for the three-month period ended December 31, 2003 increased from $821,000 to $1,309,000, or by 59% compared to the corresponding prior year period. For the six-month period ended December 31, 2003, general and administrative expenses increased from $1,509,000 to $1,984,000, or by 31%, compared to the corresponding prior year period. For both periods, the increase reflected non-cash stock compensation charges related to the vesting of warrants issued earlier in connection with a professional services agreement. These charges were partially offset by reduced salary-related expenses, representing severance costs in the prior year period to the Company’s former President and Chief Executive Officer.

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Other expenses for the three-month and six-month periods ended December 31, 2003 represent the change in the estimated value of warrants issued in connection with the private equity financing in August 2003, as explained more fully in Note 4 to the Financial Statements. For the three-month period ended December 31, 2003, the change in estimated value of the warrants resulted in other income (non-cash) during the period of $345,000. For the six-month period ended December 31, 2003, the change in estimated value of the warrants resulted in non-cash charges of $3,499,000.

The Company believes that inflation and changing prices have not had a material impact on its ongoing operations to date.

Liquidity and Capital Resources

Sources

From inception (February 10, 1987) through December 31, 2003, Cortex has funded its organizational and research and development activities primarily through the issuance of equity securities, funding related to collaborative agreements and net interest income.

Research and licensing payments received in connection with the January 1999 agreement with Organon totaled $13,880,000 as of December 31, 2003. This amount includes a $2,000,000 milestone payment to Cortex in December 2003 in order for Organon to retain its rights to the Company’s AMPAKINE technology in the field of depression. Under the terms of the agreement, the Company may receive additional milestone payments based on further clinical development of the licensed technology and, ultimately, royalties on worldwide sales.

Under the agreement with Servier signed in October 2000, as amended, Cortex received research and licensing payments of $13,702,000 through December 31, 2003. The agreement, as amended, currently provides research support of approximately $2,000,000 per year through early December 2005. The agreement also includes milestone payments based upon successful clinical development and royalties on sales in licensed territories. Beginning in October 2002, Servier agreed to provide the Company an additional $4,000,000 of research support, to be paid in quarterly installments of $500,000 over a two-year period ending in early October 2004.

In October 2000, the Company received notice of a Phase II SBIR award from the National Institutes of Health. The award, as extended, will provide up to $1,074,000 over a four-year period and will support the Company’s research of its AMPAKINE compounds as a potential new therapy for stroke. As of December 31, 2003, Cortex has received approximately $730,000 related to this grant award.

In October 2001, the Company received notice of a second Phase II SBIR award from the National Institutes of Health. This award, as extended, will provide up to $770,000 over a three-year period. The award will allow Cortex to follow-up on previously reported clinical tests of the AMPAKINE CX516 as a combination therapy for schizophrenia. Earlier tests were encouraging, with AMPAKINE-treated patients showing improvement in a number of clinical and neurocognitive scores. As of December 31, 2003, Cortex has received approximately $500,000 in connection with this grant award.

In August 2003, the Company completed a private placement of an aggregate of 3,333,334 shares of its common stock at $1.50 per share and five-year warrants to purchase up to an additional aggregate of 3,333,334 shares at an exercise price of $2.55 per share. See Note 4 to Financial Statements. The Company received approximately

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$4,500,000 in net proceeds from the private placement. The warrants are subject to a call right in favor of the Company to the extent that the closing price of the Company’s common stock exceeds $6.00 per share for any thirteen consecutive trading day period following December 8, 2005. In January 2004, the Company received proceeds of approximately $870,000 from the exercise of warrants issued in connection with this private placement. If the remaining warrants are fully exercised, of which there can be no assurance, these warrants would provide approximately $7,630,000 of additional capital.

In January 2004, the Company completed a private placement of an aggregate of 6,909,091 shares of its common stock at $2.75 per share and five-year warrants to purchase up to an additional aggregate of 4,490,910 shares at an exercise price of $3.25 per share. See Note 5 to Financial Statements. The Company received approximately $17,500,000 in net proceeds from the private placement. The warrants are subject to a call right in favor of the Company to the extent that the closing price of the Company’s common stock exceeds $7.50 per share for any thirteen consecutive trading day period after the first anniversary of the date that the registration statement filed pursuant to the terms of the private placement is first declared effective by the Securities and Exchange Commission. If the warrants are fully exercised, of which there can be no assurance, these warrants would provide approximately $14,600,000 of additional capital.

Cash Proceeds

As of December 31, 2003, the Company had cash, cash equivalents and marketable securities totaling $5,247,000, accounts receivable of $678,000 and working capital of $3,947,000. In comparison, as of June 30, 2003, the Company had cash and cash equivalents of $1,125,000, accounts receivable of $428,000 and a working capital deficit of $1,505,000. The increases in cash and working capital primarily reflect approximately $4,500,000 of net proceeds from the private placement of the Company’s common stock and warrants in August 2003.

As of December 31, 2003 and June 30, 2003, current liabilities included approximately $412,000 and $988,000, respectively, of deferred revenue relating to the Company’s $5,000,000 non-refundable, upfront payment from Servier in October 2000. In accordance with SAB No. 101, the revenue related to the upfront fee is being amortized over the collaborative research phase that ends, as extended, in early December 2005.

Commitments

The Company leases approximately 32,000 square feet of research laboratory, office and expansion space under an operating lease that expires May 31, 2004. The remaining commitments under the lease agreement for the year ending June 30, 2004 total $125,000. The Company is currently evaluating whether to renew its current lease or to pursue other leasing opportunities.

Additionally, the Company is committed to pay $490,000 for sponsored research and other remuneration to academic institutions, all of which is payable over the next twelve months.

In June 2000, the Company received $247,000 from the Institute for the Study of Aging (the “Institute”), which partially offset the Company’s limited costs for its testing in patients with MCI. Most of the related costs for the testing were paid by the Company’s partner, Servier. Provided that Cortex complies with the conditions of the funding agreement, including the restricted use of the

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amounts received, repayment of the advance shall not be required unless Cortex enters an AMPAKINE compound into Phase III clinical trials for Alzheimer’s disease. Upon such potential clinical trials, repayment would include interest computed at a rate equal to one-half of the prime lending rate. In lieu of cash, in the event of repayment the Institute may elect to receive the balance of outstanding principal and accrued interest as shares of Cortex common stock. The conversion price for such form of repayment shall initially equal $4.50 per share, subject to adjustment under certain circumstances.

Staffing

As of December 31, 2003, Cortex had 20 full-time research and administrative employees. Cortex anticipates a modest increase in the number of its full-time employees within the coming year.

As indicated earlier, the Company is currently evaluating whether to relocate its administrative and research facilities. In the event of such relocation, Cortex may require investments in plant or equipment during the next twelve months.

Outlook

Cortex anticipates that its cash, cash equivalents and marketable securities, the net proceeds from its January 2004 private placement and the scheduled research support payments from its agreements with Servier will be sufficient to satisfy its capital requirements through calendar year 2006. The Company believes that additional funds will be required to continue operations beyond that time. Cortex may receive additional milestone payments from the Organon and Servier agreements. However, there is no assurance that the Company will receive such milestone payments from Organon or Servier within the desired timeframe, or at all.

In order to provide for its longer-term capital requirements, the Company is presently seeking additional collaborative or other arrangements with larger pharmaceutical companies. Under these agreements, it is intended that such companies would provide capital to the Company in exchange for an exclusive or non-exclusive license or other rights to certain of the technologies and products that the Company is developing. Competition for such arrangements is intense, however, with a large number of biopharmaceutical companies attempting to secure alliances with more established pharmaceutical companies. Although the Company has been engaged in discussions with candidate companies, there is no assurance that an agreement or agreements will arise from these discussions in a timely manner, or at all, or that revenues that may be generated thereby will offset operating expenses sufficiently to reduce the Company’s longer-term funding requirements.

Because there is no assurance that the Company will secure additional corporate partnerships, the Company may seek to raise additional capital through the sale of debt or equity securities. There is no assurance that funds will be available on favorable terms, or at all. If equity securities are issued to raise additional funds, dilution to existing stockholders is likely to result. Such additional capital would, more importantly, enhance the ability of Cortex to achieve significant milestones in its efforts to develop the AMPAKINE technology.

Additional Risks and Uncertainties

The Company’s proposed products are in the preclinical or early clinical stage of development and will require significant further research, development, clinical testing and regulatory clearances. They are subject to the risks of failure inherent in the development of products based on innovative

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technologies. These risks include, but are not limited to, the possibilities that any or all of the proposed products will be found to be ineffective or unsafe, or otherwise fail to receive necessary regulatory clearances; that the proposed products, although effective, will be uneconomical to market; that third parties may now or in the future hold proprietary rights that preclude the Company from marketing them; or that third parties will market superior or equivalent products. Accordingly, the Company is unable to predict whether its research and development activities will result in any commercially viable products or applications. Further, due to the extended testing and regulatory review process required before marketing clearance can be obtained, the Company does not expect to be able to commercialize any therapeutic drug for at least five years, either directly or through its current or prospective corporate partners or licensees. There can be no assurance that the Company’s proposed products will prove to be safe or effective or receive regulatory approvals that are required for commercial sale.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to certain market risks associated with interest rate fluctuations on its marketable securities and borrowing arrangement. All investments in marketable securities are entered into for purposes other than trading. The Company is not subject to risks from currency rate fluctuations as it does not typically conduct transactions in foreign currencies. In addition, the Company does not utilize hedging contracts or similar instruments.

The Company’s exposure to interest rate risk arises from financial instruments entered into in the normal course of business. Certain of the Company’s financial instruments are fixed rate, short-term investments in government and corporate notes and bonds. Changes in interest rates generally affect the fair value of the investments, however, because these financial instruments are considered “available for sale,” all such changes are reflected in the financial statements in the period affected. The Company manages interest rate risk on its investment portfolio by matching scheduled investment maturities with its cash requirements. As of December 31, 2003, the Company’s investment portfolio had a fair value and carrying amount of approximately $400,000. If market interest rates were to increase immediately and uniformly by 10% from levels as of December 31, 2003, the resulting decline in the fair value of fixed rate bonds held within the portfolio would not be material to the Company’s financial position, results of operations and cash flows.

The Company’s borrowing consists of its advance from the Institute for the Study of Aging, which is subject to potential repayment in the event that Cortex enters an AMPAKINE compound into Phase III clinical testing as a potential treatment for Alzheimer’s disease. Potential repayment would include interest accruing at a rate equal to one-half of the prime lending rate. Changes in interest rates generally affect the fair value of such debt, but, based upon historical activity, such changes are not expected to have a material impact on earnings or cash flows. As of December 31, 2003, the principal and accrued interest of the advance amounted to $273,000.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is

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accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), as appropriate, to allow timely decisions regarding required disclosure.

The Company performed an evaluation, under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report, pursuant to Rules 13a-15(b) and 15d-15(b) under the Exchange Act. Based upon that evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this report, were effective in timely alerting them to material information required to be included in the Company’s periodic filings under the Exchange Act.

There has been no change in the Company’s internal control over financial reporting (as defined in Rules 13(a)-15(f) and 15(d)-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

On January 7, 2004, the Company completed a private placement with 48 accredited investors and raised an aggregate of $17,500,000 in proceeds, after deduction of the placement and other fees related to the sale. Pursuant to the terms of the private placement, the Company issued an aggregate of 6,909,091 shares of the Company’s common stock at $2.75 per share and warrants to purchase up to an additional aggregate of 4,490,910 shares. The warrants have an exercise price of $3.25 per share and a five-year term. In connection with the private placement, the Company also issued two additional warrants to purchase 54,750 and 272,959 shares of the Company’s common stock, respectively, to two placement agents. The warrant to purchase 54,750 shares of the Company’s common stock has an exercise price of $2.75 per share and a five-year term. The warrant to purchase 272,959 shares of the Company’s common stock has an exercise price of $3.48 per share and a three-year term.

The sales and issuances of the foregoing securities were made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, set forth in Section 4(2) thereof as transactions by an issuer not involving any public offering. The agreements executed in connection with the issuance of the securities contain representations to support the Company’s reasonable belief that the purchasers are familiar with or have access to information concerning the operations and financial condition of the Company, and the purchasers are acquiring the securities for investment and not with a view to the distribution thereof. At the time of their issuance, the securities were deemed to be restricted securities for purposes of the Securities Act of 1933, as amended, and the certificates representing the securities bear legends to that effect.

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Item 4. Submission of Matters to a Vote of Security Holders

On December 9, 2003, the Company held its Annual Meeting of Stockholders, with stockholders holding 17,305,353 shares of common stock (representing 83.85% of the total number of shares outstanding and entitled to vote) present in person or by proxy at the meeting. Proxies for the meeting were solicited pursuant to Regulation 14A of the Exchange Act. Robert F. Allnutt, Charles J. Casamento, Carl W. Cotman, Ph.D., Peter F. Drake, Ph.D., M. Ross Johnson, Ph.D. and Roger G. Stoll, Ph.D. were listed as management’s nominees in the proxy statement and were elected as directors at the meeting. The votes for each nominee were as follows:

Name	Number of Affirmative Votes	Number of Votes Withheld
Robert F. Allnutt	17,091,434	213,919
Charles J. Casamento	17,133,084	172,269
Carl W. Cotman, Ph.D.	17,035,143	270,210
Peter F. Drake, Ph.D.	17,228,314	77,039
M. Ross Johnson, Ph.D.	17,129,514	175,839
Roger G. Stoll, Ph.D.	17,139,810	165,543

At the meeting, the Company also sought approval of an amendment to the Company’s Restated Certificate of Incorporation to increase the authorized number of shares of the Company’s common stock from 30,000,000 to 50,000,000. This proposal was approved with 16,890,531 affirmative votes. There were 371,407 negative votes and 43,415 abstentions.

The Company also sought the ratification of Ernst & Young LLP as independent auditors of the Company for the fiscal year ending June 30, 2004. This proposal was approved by 17,222,630 affirmative votes. There were 65,125 negative votes and 17,598 abstentions.

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Item 6. Exhibits and Reports on Form 8-K

(a)	Exhibits
3.1	Restated Certificate of Incorporation dated April 11, 1989, as amended by Certificate of Amendment on June 27, 1989, by Certificate of Designation filed April 29, 1991, by Certificate of Correction filed May 1, 1991, by Certificate of Amendment of Certificate of Designation filed June 13, 1991, by Certificate of Amendment of Certificate of Incorporation filed November 12, 1992, by Certificate of Amendment of Restated Certificate of Incorporation filed January 11, 1995, by Certificate of Designation filed December 8, 1995, by Certificate of Designation filed October 15, 1996, and by Certificate of Designation filed June 4, 1997, by Certificate of Amendment of Restated Certificate of Incorporation filed December 21, 1998, and by Certificate of Designation filed February 11, 2002, incorporated by reference to Exhibit 3.1 of the Amendment No. 1 to Registration Statement on Form 8-A, No. 001-16467, filed February 15, 2002.
3.3	Certificate of Amendment of Restated Certificate of Incorporation filed December 15, 2003.
10.31	License Agreement dated June 25, 1993, as amended May 28, 2003, between the Company and the Regents of the University of California. (Portions of this Exhibit are omitted and were filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934).
10.77	Amendment dated December 16, 2003 to the Collaboration Research Agreement with Les Laboratoires Servier dated October 13, 2000. (Portions of this Exhibit are omitted and were filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934).
31.1	Certification by Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b)	Reports on Form 8-K
	The Company did not file any reports on Form 8-K during the quarter ended December 31, 2003. However, the Company furnished the press release announcing its financial results for the fiscal quarter ended September 30, 2003 to the Securities and Exchange Commission in a report on Form 8-K dated November 12, 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CORTEX PHARMACEUTICALS, INC.
February 12, 2004	By:	/s/    MARIA S. MESSINGER
		Maria S. Messinger Vice President and Chief Financial Officer; Corporate Secretary (Chief Accounting Officer)

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EX-3.3

Exhibit 3.3

CERTIFICATE OF AMENDMENT

OF

RESTATED CERTIFICATE OF INCORPORATION

OF

CORTEX PHARMACEUTICALS, INC.,

a Delaware corporation

(Pursuant to Section 242 of the Delaware General Corporation Law)

CORTEX PHARMACEUTICALS, INC., a corporation organized and existing under the Delaware General Corporation Law (the “Corporation”), does hereby certify:

FIRST: That the Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 11, 1989 and was amended by Certificate of Amendment filed June 27, 1989, by Certificate of Designation filed April 29, 1991, by Certificate of Correction filed May 1, 1991, by Certificate of Amendment of Certificate of Designation filed June 13, 1991, by Certificate of Amendment of Certificate of Incorporation filed November 12, 1992, by Certificate of Amendment of Restated Certificate of Incorporation filed January 11, 1995, by Certificate of Designation filed December 8, 1995, by Certificate of Designation filed October 15, 1996, and by Certificate of Designation filed June 4, 1997, by Certificate of Amendment of Restated Certificate of Incorporation filed December 21, 1998, and by Certificate of Designation filed February 11, 2002.

SECOND: That at a meeting of the Board of Directors of the Corporation resolutions were duly adopted setting forth a proposed amendment of the Restated Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and directing said amendment to be submitted to the stockholders of the Corporation at its Annual Meeting. The resolution setting forth the proposed amendment is as follows:

RESOLVED, that Article Fourth, paragraph (A)(1) of the Corporation’s Restated Certificate of Incorporation be amended to read in its entirety:

“FOURTH: (A)(1) - AUTHORIZED CAPITAL. (a) The total number of shares of capital stock which the Company has the authority to issue is 55,000,000 consisting of 50,000,000 shares of Common Stock, $0.001 par value per share (the ‘Common Stock’), and 5,000,000 shares of Preferred Stock, $0.001 par value per share (the ‘Preferred Stock’).”

THIRD: That thereafter, pursuant to resolution of the Board of Directors, the Annual Meeting of the stockholders of the Corporation was duly called and held, upon notice in accordance with Section 222 of the Delaware General Corporation Law, at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.

FOURTH: Said amendment was duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by Roger G. Stoll, Ph.D., its President and Chief Executive Officer, and attested to by Maria S. Messinger, its Corporate Secretary, this 15th day of December, 2003.

		CORTEX PHARMACEUTICALS, INC.
[SEAL]	By:	/s/ Roger G. Stoll
		Roger G. Stoll, Ph.D.
		President and Chief Executive Officer

ATTEST:

By:	/s/ Maria S. Messinger
	Maria S. Messinger, Corporate Secretary

EX-10.31

Exhibit 10.31

CONFIDENTIAL PORTIONS OMITTED PURSUANT TO RULE 24b-2 OF THE

SECURITIES EXCHANGE ACT OF 1934

EXCLUSIVE LICENSE AGREEMENT

between

CORTEX PHARMACEUTICALS, INC.

and

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

for

UC Case No. 91-207

TABLE OF CONTENTS

Article No.	Title	Page
1	DEFINITIONS	2
2	LIFE OF PATENT EXCLUSIVE GRANT	5
3	SUBLICENSES	5
4	LICENSE ISSUE FEE	6
5	IMPROVEMENT INVENTIONS MADE BY CORTEX	7
6	ROYALTIES	7
7	DUE DILIGENCE	11
8	PROGRESS AND ROYALTY REPORTS	14
9	BOOKS AND RECORDS	16
10	TERM OF THE AGREEMENT	17
11	TERMINATION BY THE REGENTS	18
12	TERMINATION BY CORTEX	18
13	DISPOSITION OF LICENSED PRODUCTS ON HAND	19
14	PATENT PROSECUTION AND MAINTENANCE	19
15	PATENT MARKING	22
16	USE OF NAMES AND TRADEMARKS	22
17	LIMITED WARRANTY	23
18	PATENT INFRINGEMENT	25
19	INDEMNIFICATION	27
20	NOTICES	28
21	ASSIGNABILITY	29
22	LATE PAYMENTS	29
23	WAIVER	29
24	FAILURE TO PERFORM	29
25	GOVERNING LAWS	30
26	PREFERENCE FOR UNITED STATES INDUSTRY	30
27	FOREIGN GOVERNMENT APPROVAL OR REGISTRATION	30
28	EXPORT CONTROL LAWS	30
29	FORCE MAJEURE	31
30	CONFIDENTIALITY OF DATA	31
31	MISCELLANEOUS	32

EXCLUSIVE LICENSE AGREEMENT

THIS LICENSE AGREEMENT is made and is effective this 25^th day of June, 1993, by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation having its statewide administrative offices at 300 Lakeside Drive, 22nd Floor, Oakland, California 94612-3550, hereinafter referred to as “The Regents,” and Cortex Pharmaceuticals, Inc., a Delaware corporation having a principal place of business at 15241 Barranca Parkway, Irvine, California 92718, hereinafter referred to as “Cortex.”

RECITALS

WHEREAS, certain inventions, as defined in Article 1.1, hereinafter collectively referred to as “the Invention,” were made in the course of research by Dr. Gary Lynch at the University of California, Irvine, and by Dr. Gary A. Rogers independent of the University of California, and are covered by Regents’ Patent Rights as defined below;

WHEREAS, the development of the Invention was sponsored in part by the U.S. Air Force Office of Sponsored Research and the National Institutes of Health, and as a consequence this license agreement is subject to overriding obligations to the federal government as set forth in 35 U.S.C. sections 200-212 including a royalty-free license;

WHEREAS, Cortex is a “small business firm” as defined at section 2 of Public Law 85-536 (15 U.S.C. 632);

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WHEREAS, Cortex intends to expend substantial monies and effort on the development of products based on Regents’ Patent Rights, and The Regents gives due weight to the contributions of Cortex and its commitment of resources to that end;

WHEREAS, both parties recognize and agree that royalties due hereunder will be paid on both pending patent applications and issued patents and that income will be due to The Regents based on direct sales of Licensed Products by Cortex and its Affiliates and on consideration Cortex receives from its Corporate Partners in respect of the Invention;

WHEREAS, The Regents is desirous that the Invention be developed and utilized to the fullest extent so that the benefits can be enjoyed by the general public; and

WHEREAS, Cortex is desirous of obtaining certain rights from The Regents for the commercial development, use, and sale of the Invention, and The Regents is willing to grant such rights;

NOW THEREFORE, the parties agree as follows:

1. DEFINITIONS

1.1 “Regents’ Patent Rights” means patent rights to any subject matter claimed in or covered by any of the following:

(a) Pending U.S. Patent Application serial no. 919,512, filed on July 24, 1992 and entitled, “Drugs that Enhance Synaptic Responses Mediated by AMPA Receptors,” by Dr. Gary Lynch and Dr. Gary Rogers and assigned to The Regents;

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(b) patent applications added to this definition in accordance with Article 5;

(c) continuing applications of the patent application of subparagraphs (a) and (b), including divisions and substitutions and continuation-in-part applications to the extent they are supported by the patent applications in paragraphs (a) and (b) or to the extent they are owned by Cortex and then assigned to The Regents and invented wholly or in part by employees and/or consultants of Cortex who do not have an obligation to assign such inventions to The Regents;

(d) any patents issuing on patent applications of subparagraphs (a), (b), or (c), or continuing applications thereof including reissues and reexaminations; and

(e) any foreign patents or applications filed at Cortex’s request that correspond to patent applications of subparagraphs (a), (b), and (c).

1.2 “Licensed Product” means any material either that is covered by Regents’ Patent Rights or whose manufacture, use or sale would constitute an infringement of any pending or issued claim within Regents’ Patent Rights.

1.3 “Licensed Method” means any method that is covered by Regents’ Patent Rights or whose use or practice would constitute an infringement of any pending or issued claim within Regent’s Patent Rights.

1.4 “Affiliate” means any corporation or other business entity in which Cortex shall own or control, directly or

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indirectly, at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors; provided, however, that in any country where the local law shall not permit foreign equity participation of at least fifty percent (50%), then “Affiliate” shall include any company in which Cortex shall own or control, directly or indirectly, the maximum percentage of such outstanding stock or voting rights permitted by local law.

1.5 “Net Sales” as used herein means the total of the gross invoice prices at arms-length prices of Licensed Products less the sum of the following deductions where applicable and actually taken: cash, trade, or quantity discounts; bad debts directly related to the sale of Licensed Products, but not to exceed nine-tenths of one percent (0.9%) of Net Sales; government rebates (credit to customers); sales, use, tariff, import/export duties or other excise taxes imposed upon particular sales; transportation charges, and allowances or credits to customers because of rejections or returns.

1.6 “Corporate Partner” means any party other than an Affiliate entering into an agreement with Cortex or its Affiliates for the continued development and/or future commercialization of Licensed Products, including but not limited to sublicensees under Article 3.

1.7 “Territory” means every country in which Cortex elects to obtain patents in accordance with Article 14.5.

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2. LIFE OF PATENT EXCLUSIVE GRANT

2.1 Subject to the limitations set forth in this Agreement, The Regents hereby grants to Cortex a license under Regents’ Patent Rights to make, have made, use, and sell Licensed Products and to practice Licensed Method in the Territory.

2.3 Except as otherwise provided herein, the license granted in section 2.1 shall be exclusive for the life of this Agreement.

2.4 The Regents expressly reserves the right to use the Invention and associated technology for educational and noncommercial research purposes.

3. SUBLICENSES

3.1 The Regents also grants to Cortex the right to issue sublicenses to third parties to make, have made, use, perform research on, and sell Licensed Products and to practice Licensed Method, provided Cortex has current exclusive rights thereto under this Agreement. To the extent applicable, such sublicenses shall include all of the rights of and obligations due to The Regents that are contained in this Agreement.

3.2 Cortex shall provide The Regents with a copy of all agreements with each Corporate Partner hereunder; collect and guarantee payment of all amounts due The Regents in accordance with Article 6.4 in respect of such Corporate Partners; and summarize and deliver all reports due The Regents from Corporate Partners. The Regents acknowledges the confidential nature of this information.

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3.3 Upon termination of this Agreement for any reason, The Regents shall offer to enter into separate license agreements with any Corporate Partners of Cortex hereunder and will allow such Corporate Partners to continue to develop, make, have made, use, and sell Licensed Products and to practice Licensed Method under terms and conditions limited essentially to and consistent with this Agreement and, taking as a whole the then-existing sublicense terms, at least as favorable to the Corporate Partners as those then existing between Cortex and the Corporate Partners in their respective sublicense agreements.

3.4 Subject to Cortex’s obligations to The Regents under Article 6, The Regents also grants to Cortex the right to enter into agreements with Corporate Partners for the research, development, regulatory approval, production, use, sale, and/or marketing and distribution of Licensed Products and the practice of Licensed Method.

4. LICENSE ISSUE FEE

4.1 Cortex agrees to pay to The Regents a License Issue Fee of [        *        ] [    *    ] payable in the following installments:

•	Upon execution of this Agreement	$[    *    ]
•	Upon approval date of an Investigational New Drug Application (IND) from the FDA or equivalent foreign regulatory approval	$[    *    ]
•	Upon entering Phase III clinical studies or equivalent foreign regulatory benchmark	$[    *    ]

* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

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•	Upon filing a New Drug Application (NDA) with the FDA or upon submission of equivalent foreign regulatory application	$[    *    ]
•	Upon receiving market approval of NDA from the FDA or equivalent foreign regulatory market approval	$[    *    ]

This License Issue Fee is non-refundable and not an advance against royalties.

5. IMPROVEMENT INVENTIONS MADE BY CORTEX

5.1 Cortex shall assign to The Regents, and shall cause its employees and/or consultants (whether individual or corporate) to assign to The Regents any rights they may have in any invention that is an improvement on any invention included within Regents’ Patent Rights and upon which patent protection is sought as a new patent application or a continuation-in-part to an existing patent application within Regents’ Patent Rights. This obligation shall cease for inventions conceived five years or more from the date of this Agreement.

5.2 The obligation of Cortex under Article 5.1 shall cease upon the expiration of the last-to-expire patent and abandonment of the last-to-be-abandoned patent application covered by Regents’ Patent Rights that is attributable to other than Cortex’s employees and/or consultants.

6. ROYALTIES

6.1 cortex shall also pay to The Regents an earned royalty of [    *    ] on Net Sales by Cortex and its

* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

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Affiliates of Licensed Products and Licensed Methods to any third parties other than Affiliates, including but not limited to final users, wholesalers, distributors, Corporate Partners and others, and without regard to whether such sales relate to finished Licensed Products, bulk intermediates, raw materials, or other biologically active components.

6.2 Paragraphs 1.1, 1.2, and 1.3 define Regents’ Patent Rights, Licensed Products and Licensed Methods so that royalties shall be payable on products and methods covered by both pending patent applications and issued patents. Earned royalties shall accrue in each country for the duration of Regents’ Patent Rights in that country and shall be payable to The Regents when Licensed Products are invoiced, or if not invoiced, when delivered to a third party.

6.3 In the event Licensed Products are sold in combination with other biologically active components, Net Sales, for purposes of royalty payments on the combination product, shall be calculated by multiplying the Net Sales of that combination by the fraction A/B, where A is the gross selling price at arms-length prices to unaffiliated third parties of the Licensed Product sold separately and B is the gross selling price at arms-length prices to unaffiliated third parties of the combination product. In the event that no such separate sales are made by Licensee, Net Sales for purposes of royalty determination shall be calculated by multiplying Net Sales of the combination by the fraction C/(C+D) where C is the fully

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allocated cost of the Licensed Product and D is the fully allocated cost of such other biologically active components, such costs being determined using standard accounting procedures, which shall comply with generally accepted accounting practices.

6.4 Cortex shall pay to The Regents a share of remuneration received by Cortex from its Corporate Partners in connection with the granting by Cortex of sublicenses under Article 3.1, including all license fees (whether up-front or payable in the future) and royalties (whether prepaid, advance or running) on sales by such Corporate Partners of Licensed Products. For the purposes of this Section, such remuneration will exclude (a) equity purchases of Cortex securities and (b) equity and amounts paid by Corporate Partners to Cortex for contract research and development activities, provided such amounts and purchases are not in exchange for sublicenses. In the event Cortex accepts any form of consideration other than monies in lieu of such payments from Corporate Partners, such consideration will be converted into an equivalent monetary value, and such monetary value will be considered remuneration under this Article 6.4 and shall be considered paid to Cortex for that semi-annual period in which the non-monetary form of consideration was received by Cortex. The Regents’ share of such remuneration shall be as follows:

(a) [    *    ] of royalties due under Article 6 herein, but in no event shall the royalty be less than [    *    ] [    *    ] on Net Sales by Corporate Partners, and

* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

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(b) [    *    ] of any upfront fees or remuneration received from Corporate Partners, but in no event less than the amounts of the payments due under Section 4.1 herein.

6.5 Payments under Articles 6.1, 6.2, 6.3, and 6.4 accruing to The Regents shall be paid to The Regents semi-annually on or before the following dates of each year:

February 28 August 31

Each such payment will be for royalties that accrued within Cortex’s most recently completed relevant semi-annual period ending June 30 and December 31.

6.6 Cortex shall pay to The Regents a minimum annual royalty of [        *        ] for the life of Regents’ Patent Rights, beginning in 1996. This minimum annual royalty shall be paid to The Regents by February 28 of each year and shall be credited against the earned royalty due and owing for the calendar year in which the minimum payment was made.

6.7 All monies due The Regents shall be payable in United States funds. When Licensed Products are sold for monies other than United States dollars, the earned royalties will first be determined in the foreign currency of the country in which such Licensed Products were sold and then converted into equivalent United States funds. The exchange rate will be that established by the U.S. Edition of the Wall Street Journal, on the last day of the reporting period.

6.8 Earned royalties with respect to sales occurring in any country outside the United States shall not be reduced by

* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

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more than ten percent (10%) by any taxes, fees, or other charges imposed upon The Regents by the government of such country on the remittance of royalty income. Cortex shall also be responsible for all bank transfer charges.

6.9 In the event that (1) any patent or any claim thereof included within the Regents’ Patent Rights shall be held invalid in a final decision by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, or (2) any application is abandoned without a continuation being filed, or the subject matter is found to be unpatentable by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, all obligation to make payments to The Regents based on such patent or patent application or claim or any claim patentably indistinct therefrom shall cease as of the date of such final decision or abandonment. Cortex shall not, however, be relieved from making payments to The Regents that accrued before such decision or that are based on another patent or claim not involved in such decision.

7. DUE DILIGENCE

7.1 Cortex, upon execution of this Agreement, shall diligently proceed with the development, manufacture and sale of Licensed Products in all countries of the Territory and shall earnestly and diligently endeavor to market the same within a reasonable time after execution of this Agreement and in quantities sufficient to meet the market demands therefor.

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7.2 Cortex shall be entitled to exercise prudent and reasonable business judgment in meeting its due diligence obligations hereunder.

7.3 Cortex shall endeavor to obtain all necessary governmental approvals for the manufacture, use and sale of Licensed Products.

7.4 If Cortex is unable to perform any of the following:

(7.4a) file an Investigational New Drug Application (IND), or its equivalent in a foreign country, on Licensed Product within four (4) years of the effective date of this Agreement; or

(7.4b) file a New Drug Application (NDA), or its equivalent in a foreign country, on a Licensed Product within nine (9) years of the effective date of this Agreement; or

(7.4c) file an Investigational New Drug Application (IND) in the United States on a Licensed Product within five (5) years of the effective date of this Agreement; or

(7.4d) once approval is received for marketing in the U.S., market Licensed Products within six (6) months of such approval; or

(7.4e) reasonably fill the market demand for Licensed Products following commencement of marketing at any time during the exclusive period of this Agreement; or

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(7.4f) spend an aggregate of not less than Seven Hundred Fifty Thousand Dollars ($750,000) during the first three years following execution of this Agreement and Two Hundred and Fifty Thousand Dollars ($250,000) for each year thereafter for the development of Licensed Products during the term of this Agreement, until the commencement of marketing of a Licensed Product;

then The Regents shall have the right, at The Regents’ option, to terminate this Agreement or to reduce the exclusive license granted hereunder to a nonexclusive license. This right, if exercised by The Regents, supersedes the rights granted in Article 2 (GRANT).

7.5 At the request of either party, any controversy or claim arising out of or relating to the diligence provisions of this Agreement shall be settled by arbitration conducted in San Francisco, California in accordance with the then current Licensing Agreement Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the Arbitrator(s) shall be binding on the parties and may be entered by either party in the court or forum, state or federal, having jurisdiction.

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7.6 To exercise the right to terminate this Agreement or to reduce the exclusive license granted hereunder to a nonexclusive license for lack of diligence, The Regents must give Cortex written notice of the deficiency. Cortex thereafter has ninety (90) days to cure the deficiency or to request arbitration. If The Regents has not received a written request for arbitration or satisfactory tangible evidence that the deficiency has been cured by the end of the ninety- (90-) day period, then The Regents may terminate this Agreement or reduce the exclusive license to a nonexclusive license by giving written notice to Cortex. These notices shall be subject to Article 20 (Notices).

7.7 The rights of both parties under this Agreement shall continue during the settlement of any controversy or claim under section 7.5.

8. PROGRESS AND ROYALTY REPORTS

8.1 Beginning August 31, 1993, and semi-annually thereafter, Cortex shall submit to The Regents a progress report covering Cortex’s activities and resources expended under Article 7.4 herein related to the development and testing of all Licensed Products and the obtaining of the governmental approvals necessary for marketing. These progress reports shall be made for each Licensed Product in each country in the Territory until the first commercial sale of that Licensed Product occurs in that country.

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8.2 The progress reports summarizing activities and tendered under section 8.1 shall include the following topics:

• key scientific discoveries or improvements

• summary of work completed

• summary of work in progress

• revised schedule of anticipated events or milestones, e.g., regulatory submission, beginning and end of clinical trials, regulatory approvals (if necessary)

• summary of general market plans and introduction of products

• summary of resources spent in the reporting period

• summary of activities of marketing and development Corporate Partners, if any

and such additional information as may reasonably be requested by The Regents. The Regents acknowledges the confidential nature of this information.

8.3 Cortex shall have a continuing responsibility to keep The Regents informed of the large/small entity status (as defined by the United States Patent and Trademark Office) of itself and its sublicensees.

8.4 Cortex also agrees to report to The Regents in its immediately subsequent progress and royalty report the date of first commercial sale of a Licensed Product in each country.

8.5 After the first receipt of remuneration from a Corporate Partner or the first commercial sale of a Licensed Product anywhere in the world, whichever is earlier, Cortex will

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make semi-annual royalty reports to The Regents on or before each February 28 and August 31 of each year. Each such royalty report will cover Cortex’s most recently completed calendar period and will show, for earned royalties under Article 6.1, (a) the number of each type of Licensed Product sold; (b) the royalties, in U.S. dollars, payable hereunder with respect to such sales; and (c) the exchange rates used. Each such royalty report will also show remuneration received by Cortex from Corporate Partners in accordance with the commercial terms of agreements with such Corporate Partners as provided to The Regents under Article 3.2, and the computation of payments due to The Regents in connection with such remuneration in accordance with Article 6.4.

8.6 If no sales of Licensed Products have been made or no remuneration from Corporate Partners has been received during any reporting period, a statement to this effect shall be required.

9. BOOKS AND RECORDS

9.1 Cortex or its Affiliate shall keep, and shall cause its Affiliates and Corporate Partners to keep, books and records sufficiently accurate and complete to enable the amount of payments due The Regents hereunder to be determined. Such books and records shall be preserved for at least five (5) years following the period to which they pertain and shall be open to inspection by representatives or agents of The Regents at reasonable times.

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9.2 The fees and expenses of The Regents’ representatives performing such an examination shall be borne by The Regents. However, if an underpayment in royalties of more than five percent (5%) of the total payments due for any year is discovered, then the reasonable fees and expenses of these representatives shall be borne by Cortex.

10. TERM OF THE AGREEMENT

10.1 Unless otherwise terminated by operation of law or by acts of the parties in accordance with the terms of this Agreement, this Agreement shall be in force from the effective date recited on page one and shall remain in effect for the life of the last-to-expire patent licensed under this Agreement or until the last patent application licensed under this Agreement is abandoned or no patent in Regents’ Patent Rights ever issues, whichever is later. Royalty payments will be due where Cortex is making, using, or selling Licensed Products or practicing Licensed Method in countries where Regents’ Patents Rights exist.

10.2 Any termination of this Agreement shall not affect the rights and obligations set forth in the following Articles:

Article 9	Books and Records
Article 13	Disposition of Licensed Products on Hand Upon Termination
Article 16	Use of Names and Trademarks
Article 19	Indemnification
Article 24	Failure to Perform
Article 30	Confidentiality of Data

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11. TERMINATION BY REGENTS

11.1 If Cortex should violate or fail to perform any term or covenant of this Agreement, then The Regents may give written notice of such default (Notice of Default) to Cortex. If Cortex should fail to repair such default within ninety (90) days of the effective date of such notice (unless restricted by federal or state authorities), The Regents shall have the right to terminate this Agreement and the licenses herein by a second written notice (Notice of Termination) to Cortex. If a Notice of Termination is sent to Cortex, this Agreement shall automatically terminate on the effective date of such notice. Such termination shall not relieve Cortex of its obligation to make any payments owing at the time of such termination and shall not impair any accrued right of The Regents. These notices shall be subject to Article 20 (Notices).

12. TERMINATION BY CORTEX

12.1 Cortex shall have the right at any time to terminate this Agreement in whole or as to any portion of Regents’ Patent Rights by giving notice in writing to The Regents. Such notice of termination shall be subject to Article 20 (Notices) and termination of this Agreement shall be effective ninety (90) days from the effective date of such notice.

12.2 Any termination pursuant to the above paragraph shall not relieve Cortex of any obligation or liability accrued hereunder prior to such termination or rescind anything done by Cortex or any payments made to The Regents hereunder prior to the

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time such termination becomes effective, and such termination shall not affect in any manner any rights of The Regents arising under this Agreement prior to such termination.

13. DISPOSITION OF LICENSED PRODUCTS

ON HAND UPON TERMINATION

13.1 Upon termination of this Agreement Cortex and its Corporate Partners shall have the privilege of disposing of all previously made or partially made Licensed Products, but no more, within a period of one hundred and twenty (120) days, provided, however, that the sale of such Licensed Products shall be subject to the terms of this Agreement including, but not limited to, the payment of royalties and other payments to The Regents at the rate and at the time provided herein and the rendering of reports thereon.

14. PATENT PROSECUTION

AND MAINTENANCE

14.1 The Regents shall diligently prosecute and maintain the United States and foreign applications and patents comprising Regents’ Patent Rights using counsel of The Regents’ choice, subject to Cortex’s approval. Cortex will not withhold approval of counsel unreasonably. If Cortex disapproves of three different choices of The Regents’ counsel, then The Regents will select a fourth counsel without Cortex approval.

14.2 The Regents shall use all reasonable efforts to amend any patent application to include claims reasonably requested by Cortex to protect the products contemplated to be sold under this Agreement.

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14.3 The Regents shall cooperate with Cortex in applying for an extension of the term of any patent included within Regents’ Patent Rights, if appropriate under the Drug Price Competition and Patent Term Restoration Act of 1984. Cortex shall prepare all such documents, and The Regents agrees to execute such documents and to take such additional action as Cortex may reasonably request in connection therewith.

14.4 The cost of preparing, filing, prosecuting and maintaining all past and future patent applications and patents contemplated by this Agreement shall be borne by Cortex.

14.5 Cortex shall have the right to obtain patent protection on the Invention in foreign countries if available and if it so desires. With respect to Regents’ Patent Rights under Section 1.1(a) herein, Cortex must notify The Regents within eleven (11) months of the filing of the corresponding United States application of its decision to obtain foreign patents. With respect to Regents’ Patent Rights under Section 1.1(b)-(c), Cortex must notify The Regents within nine (9) months of the filing of the corresponding United States application of its decision to obtain foreign patents. This notice concerning foreign filing shall be in writing, must identify the countries desired, and reaffirm Cortex’s obligation to underwrite the costs thereof. The absence of such a notice from Cortex to The Regents shall be considered an election not to secure foreign rights.

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14.6 The preparation, filing and prosecuting of all foreign patent applications filed at Cortex’s request, as well as the maintenance of all resulting patents, shall be at the sole expense of Cortex. Such patents shall be held in the name of The Regents and shall be obtained using counsel of The Regents’ choice.

14.7 Cortex’s obligation to underwrite and to pay patent prosecution costs shall continue for so long as this Agreement remains in effect, provided, however, that Cortex may terminate its obligations with respect to any given patent application or patent upon three (3) months written notice to The Regents. The Regents will use its best efforts to curtail patent costs when such a notice is received from Cortex. The Regents may continue prosecution and/or maintenance of such application(s) or patent(s) at its sole discretion and expense, provided, however, that Cortex shall have no further right or licenses thereunder.

14.8 The Regents shall have the right to file patent applications at its own expense in any country in which Cortex has not elected to secure patent rights. If The Regents wishes to file a patent application in a country in which Cortex has not elected to secure patents rights, The Regents shall give Cortex notice of its desire to file such application, and Cortex shall have thirty (30) days to elect in writing that the application be added to the definition of Regents’ Patent Rights, Section 1.1 herein, and shall pay the costs of preparing, filing,

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prosecuting, and maintaining that application in accordance with Section 14.6 herein. If Cortex does not so elect to add the application to this Agreement, then Cortex shall have no right or licenses for that application.

14.9 Pursuant to this Article 14 Cortex shall be rebilled by The Regents for all past and future patent prosecution and maintenance costs under Regents’ Patent Rights. As of January 1, 1993, these costs amounted to approximately Ten Thousand Dollars ($10,000).

15. PATENT MARKING

15.1 Cortex agrees to mark all Licensed Products made, used or sold under the terms of this Agreement, or their containers, in accordance with the applicable patent marking laws.

16. USE OF NAMES AND TRADEMARKS

16.1 Nothing contained in this Agreement shall be construed as conferring any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of either party hereto (including contraction, abbreviation or simulation of any of the foregoing) . Unless required by law or relevant regulations, the use by Cortex of the name, “The Regents of the University of California” or the name of any campus of the University of California is expressly prohibited without prior written approval of The Regents.

16.2 It is understood that The Regents shall be free to release to the inventors and senior administrative officials

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employed by The Regents the terms and conditions of this Agreement upon their request. If such release is made, The Regents shall notify each recipient that the information is confidential and proprietary and request that it not be disclosed to others. It is further understood that should a third party inquire whether a license to Regents’ Patent Rights is available, The Regents may disclose the existence of this Agreement and the extent of the grant in Article 2 to such third party, but shall not disclose the name of Cortex, except where The Regents is required to release such information under either the California Public Records Act or other applicable law.

17. LIMITED WARRANTY

17.1 The Regents warrants to Cortex that it has the lawful right to grant this license.

17.2 This license and the associated Invention are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.

17.3 IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION OR LICENSED PRODUCTS.

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17.4 Nothing in this Agreement shall be construed as:

(17.4a) a warranty or representation by The Regents as to the validity or scope of any Regents’ Patent Rights; or

(17.4b) a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of patents of third parties; or

(17.4c) an obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Article 18; or

(I7.4d) conferring by implication, estoppel or otherwise any license or rights under any patents of The Regents other than Regents’ Patent Rights as defined herein, regardless of whether such patents are dominant or subordinate to Regents’ Patent Rights. For a period of five (5) years from the effective date of this Agreement, to the extent that the Manager of Health Care Licensing in the Office of Technology Transfer has knowledge of this Agreement and of the patent that is dominant or subordinant to Regents’ Patent Rights, and to the extent that The Regents is legally able, The Regents agrees to negotiate in good faith with Cortex for a license of any such dominant or subordinant patent; or

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(17.4e) an obligation to furnish any know-how not provided in Regents’ Patent Rights.

18. PATENT INFRINGEMENT

18.1 In the event that Cortex shall learn of the substantial infringement of any patent licensed under this Agreement, Cortex shall call The Regents’ attention thereto in writing and shall provide The Regents with reasonable evidence of such infringement. Both parties to this Agreement agree that during the period and in a jurisdiction where Cortex has exclusive rights under this Agreement, neither will notify a third party of the infringement of any of Regents’ Patent Rights without first obtaining consent of the other Party, which consent shall not be unreasonably denied. Both parties shall use their best efforts in cooperation with each other promptly to terminate such infringement without litigation.

18.2 Cortex may request that The Regents take legal action against the infringement of Regents’ Patent Rights. Such request shall be made in writing and shall include reasonable evidence of such infringement and damages to Cortex. If the infringing activity has not been abated within ninety (90) days following the effective date of such request, The Regents shall have the right to

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(18.2a) commence suit alone; or

(18.2b) commence suit jointly with Cortex if Cortex has stated in writing that it would be willing to sue jointly with The Regents; or

(18.2c) refuse to participate in such suit;

and The Regents shall give notice of its election in writing to Cortex by the end of the one-hundredth (100th) day after receiving notice of such request from Cortex. Cortex may thereafter bring suit for patent infringement if and only if The Regents elects not to commence suit and if the infringement occurred during the period and in a jurisdiction where Cortex had exclusive rights under this Agreement. However, in the event Cortex elects to bring suit in accordance with this paragraph, The Regents may thereafter join such suit at its own expense.

18.3 Such legal action as is decided upon shall be at the expense of the party on account of whom suit is brought and all recoveries recovered thereby shall belong to such party, provided, however, that legal action brought jointly by The Regents and Cortex and fully participated in by both shall be at the joint expense of the parties, eighty percent (80%) by Cortex and twenty percent (20%) by The Regents, and all recoveries shall be shared jointly by them in proportion to the share of expense paid by each party.

18.4 Each party agrees to cooperate with the other in litigation proceedings instituted hereunder but at the expense of

26

the party on account of whom suit is brought. Such litigation shall be controlled by the party bringing the suit, except that The Regents may be represented by counsel of its choice pursuant to The Regents’ determination in any suit brought by Cortex.

19. INDEMNIFICATION

19.1 Cortex agrees to indemnify, hold harmless and defend The Regents, its officers, employees, and agents; the sponsors of the research that led to the Invention; and the inventors of the patents and patent applications in Regents’ Patent Rights against any and all claims, suits, losses, damage, costs, fees, and expenses resulting from or arising out of exercise of this license or any sublicense.

19.2 Cortex further represents that it shall maintain, or cause to be maintained, a financial posture consistent with sound business and accounting practice, including but not limited to establishing a program of self insurance for liabilities up to Three Million Dollars ($3,000,000) upon entering Phase I clinical trials, Four Million Dollars ($4,000,000) upon entering Phase II clinical trials, and Five Million Dollars ($5,000,000) upon entering Phase III clinical trials for all exposures, and thereafter securing product liability insurance to satisfy product liability claims that may arise in marketing a Licensed Product. Such insurance policy will name The Regents as an additional insured and provide for prior notice to The Regents before cancellation. The policy shall be obtained prior to the first clinical trial involving a Licensed Product and is not

27

supplementary to The Regents’ insurance. Cortex will provide evidence of its self insurance program. Cortex’s liability under paragraph 19.1 is not limited by this paragraph 19.2.

19.3 The Regents shall promptly notify Cortex in writing of any claim or suit brought against The Regents in respect of which The Regents intends to invoke the provisions of this Article 19. Cortex will keep The Regents informed on a current basis of its defense of any claims pursuant to this Article 19.

20. NOTICES

20.1 Any notice or payment required to be given to either party shall be deemed to have been properly given and to be effective (a) on the date of delivery if delivered in person or (b) five (5) days after mailing if mailed by first-class certified mail, postage paid, to the respective addresses given below, or to such other address as it shall designate by written notice given to the other party.

In the case of Cortex:	CORTEX PHARMACEUTICALS, INC. 15241 Barranca Parkway Irvine, CA 92718 Attention: Corporate Secretary
In the case of The Regents:	THE REGENTS OF THE UNIVERSITY OF CALIFORNIA (C/N #91-207) Office of Technology Transfer 1320 Harbor Bay Parkway Suite 150 Alameda, California 94501 Attention: Director

28

21. ASSIGNABILITY

21.1 This Agreement is binding upon and shall inure to the benefit of the successors and assigns of both parties, but in the case of Cortex, assignability shall be restricted to any future parent, Affiliate, subsidiary, or successor corporation resulting from merger, acquisition, sale of substantially all its assets, or any other comparable form of business combination or reorganization, unless otherwise authorized in writing by The Regents, which authorization shall not be unreasonably withheld. Such assignment by Cortex shall not relieve Cortex of its obligations hereunder.

22. LATE PAYMENTS

22.1 In the event payments or fees are not received by The Regents when due, Cortex shall pay to The Regents interest charges at a rate per annum of ten (10) percent. Such interest shall be calculated from the date payment was due until actually received by The Regents.

23. WAIVER

23.1 It is agreed that no waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

24. FAILURE TO PERFORM

24.1 In the event of a failure of performance due under the terms of this Agreement and if it becomes necessary for either party to undertake legal action against the other on

29

account thereof, then the prevailing party shall be entitled to reasonable attorney’s fees in addition to costs and necessary disbursements.

25. GOVERNING LAWS

25.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent or patent application shall be governed by the applicable laws of the country of such patent or patent application.

26. PREFERENCE FOR UNITED STATES INDUSTRY

26.1 Because this Agreement grants the exclusive right to use or sell the Invention in the United States, Cortex agrees that any products sold in the United States embodying this Invention or produced through the use thereof will be manufactured substantially in the United States.

27. FOREIGN GOVERNMENT APPROVAL

OR REGISTRATION

27.1 If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, Cortex shall assume all legal obligations to do so.

28. EXPORT CONTROL LAWS

28.1 Cortex shall observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.

30

29. FORCE MAJEURE

29.1 The parties to this Agreement shall be excused from any performance required hereunder if such performance is rendered impossible or unfeasible due to any catastrophes or other major events beyond their reasonable control, including, without limitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances or regulations; strikes, lock-outs or other serious labor disputes; and floods, fires, explosions, or other natural disasters. When such events have abated, the parties’ respective obligations hereunder shall resume.

30. CONFIDENTIALITY OF DATA

30.1 Cortex agrees to safeguard confidential data supplied by The Regents and relating to Regents’ Patent Rights against disclosure to others with the same degree of care as it exercises with its own data of a similar nature. Cortex may not disclose such data to others (except to its employees, agents or consultants, or others who are bound to Cortex by a like obligation of confidentiality) without the express written permission of The Regents, except that Cortex shall not be prevented from using or disclosing any of the data:

(a) which Cortex can demonstrate by written records was previously known to it;

31

(b) which is now, or becomes in the future, public knowledge other than through acts or omissions of Cortex; or

(c) which is lawfully obtained by Cortex from sources independent of The Regents.

The secrecy obligations of Cortex under the terms of this Agreement shall remain in effect for five (5) years from the date of termination of this License Agreement.

30.2 This Agreement requires that, during the term of this Agreement, Cortex furnish The Regents with information under Section 3.2 and Article 8. The Regents understands that the information so furnished is confidential.

31. MISCELLANEOUS

31.1 The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

31.2 This Agreement will not be binding upon the parties until it has been signed below on behalf of each party, in which event, it shall be effective as of the date recited on page one.

31.3 No amendment or modification hereof shall be valid or binding upon the parties unless made in writing and signed on behalf of each party.

31.4 This Agreement embodies the entire understanding of the parties and shall supersede all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter hereof.

32

31.5 The rights of either party to terminate this Agreement under Articles 7, 11, or 12 are without prejudice to any right of such party to sue for and recover any obligations, monetary or otherwise, when due, and to the rights of such party in respect of any previous breach by the other party of any of the provisions of this Agreement.

31.6 In case any of the provisions contained in this Agreement shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, but this Agreement shall be construed as if such invalid or illegal or unenforceable provisions had never been contained herein.

33

IN WITNESS WHEREOF, both The Regents and Cortex have executed this Agreement, in duplicate originals, by their respective officers hereunto duly authorized, on the day and year hereinafter written.

CORTEX PHARMACEUTICALS, INC.		THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
By	/s/ Alan A. Steigrod	By	/s/ William T. Davis
	(Signature)		(Signature)
	Alan A. Steigrod		William T. Davis
	President and CEO		Associate Director, Office of Technology Transfer
Date	June 25, 1993	Date	25 June ‘93

By	/s/ D. Scott Hagen
	(Signature)	Approved as to legal form:	/s/ Edwin H. Baker	6/23/93
	D. Scott Hagen Vice President and CFO		Edwin H. Baker, Associate Resident Counsel Office of Technology Transfer University of California	Date
Date	June 25, 1993

34

CONFIDENTIAL PORTIONS OMITTED PURSUANT TO RULE 24b-2 OF THE

SECURITIES EXCHANGE ACT OF 1934

EXECUTION COPY

5/28/03

AMENDMENT TO EXCLUSIVE LICENSE AGREEMENT

BETWEEN

CORTEX PHARMACEUTICALS, INC.

AND

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

U.C. CASE NO. 91-207 - DRUGS THAT ENHANCE SYNAPTIC RESPONSES

MEDIATED BY AMPA RECEPTORS.

This Amendment to Exclusive License Agreement (the “Amendment”) is entered into this 28^th day of May, 2003.

RECITALS

A. Cortex Pharmaceuticals, Inc. (“Cortex”) and The Regents of the University of California (“The Regents”) are parties to that certain Exclusive License Agreement, dated June 25, 1993, U.C. Case No. 91-207, relating to drugs that enhance synaptic responses mediated by AMPA Receptors (the “License Agreement”), as supplemented by that certain letter agreement, dated December 15, 1997 (“1997 Letter Agreement”), as further supplemented by that certain letter agreement, dated October 11, 2002 (“2002 Letter Agreement”).

B. As contemplated by the 1997 Letter Agreement and the 2002 Letter Agreement, the parties desire to further document certain changes to the License Agreement to modify certain definitions, modify the royalty rates and the minimum royalty payment obligations, and modify and establish certain milestones.

C. The Parties also desire to clarify certain other language of the License Agreement.

AGREEMENT

NOW, THEREFORE, the parties hereto agree as follows:

1. All capitalized terms not defined herein shall have the meaning set forth in the License Agreement.

2. Article 5.1 is amended to read as follows:

“5.1 Cortex shall assign to The Regents, and shall cause its employees and/or consultants (whether individual or corporate) to assign to The Regents any rights they may have in any invention that is an improvement on any invention included within Regents’ Patent Rights and upon which patent protection is sought as a new patent application or a continuation-in-part to an existing patent application within Regents’ Patent Rights. This obligation shall cease for inventions conceived seven years or more from the date of this Agreement (i.e. June 25, 2000). Notwithstanding the foregoing, nothing in this Article 5 shall require the assignment of any such improvement by a Corporate Partner, to the extent of its interest in such invention as opposed to Cortex’s interest.”

35

3. Article 6.1 is amended to read as follows:

“6.1 Cortex shall also pay to the Regents an earned royalty of [ * ] percent ([ * ]%) on Net Sales by Cortex and its Affiliates of Licensed Products and Licensed Methods to any third parties other than Affiliates, including but not limited to final users, wholesalers, distributors, Corporate Partners and others, and without regard to whether such sales relate to finished Licensed Products, bulk intermediates, raw materials, or other biologically active components. If more than one royalty rate is applicable to the sale or transfer of Licensed Product, under both this Article 6.1 and Article 6.4(a) with respect to the same unit of Licensed Product (or ingredient thereof), or under other license agreements with The Regents, Cortex shall pay only a single royalty computed at the highest applicable royalty rate. If Cortex has paid The Regents royalties with respect to sales of bulk intermediates, raw materials or other biologically active components to a third party, for use by that third party in the preparation of finished Licensed Products, then any such royalties paid by Cortex to The Regents shall be credited against any further royalties due to The Regents with respect to sales of such finished Licensed Product.”

4. Article 6.4 is amended, effective for remuneration received by Cortex from its Corporate Partners from agreements or modifications to existing agreements entered into after October 11, 2002, to read as follows:

“6.4 Cortex shall pay to the Regents a share of the remuneration received by Cortex from its Corporate Partners in connection with the granting by Cortex of sublicenses under Article 3.1 and other rights under Article 3.4, including all license fees (whether up-front or payable in the future), royalties (whether prepaid, advance or running), and any and all other payments made to Cortex by such Corporate Partners with respect to Regents’ Patent Rights, Licensed Products and Licensed Methods under agreements, or modifications to existing agreements, entered into after October 11, 2002. For the purposes of this Section, such remuneration will exclude (a) consideration received for purchase of Cortex securities so long as such purchase: (i) is not in exchange for sublicenses or other rights with respect to Regents’ Patent Rights, Licensed Products and Licensed Methods, or (ii) is not at a premium over the fair market value of the Cortex securities as indirect consideration for such rights (in which case, the amount of the premium shall be considered as remuneration for rights) and (b) consideration received for bona fide research, development and other activities which may relate to commercialization of Licensed Products, so long as such consideration reasonably reflects the cost to Cortex of providing such services. In the event Cortex accepts any form of consideration other than monies in lieu of such payments from Corporate Partners, such consideration will be converted into an equivalent monetary value, and such monetary value will be considered remuneration under this Article 6.4 and shall be considered paid to Cortex for that semi-annual period in which the non-monetary form of consideration was received by Cortex. The Regents’ share of such remuneration shall be as follows:”

* Confidential provisions omitted and filed separately with the Commission.

36

5. Article 6.4(a) is amended to read as follows

“(a) [ * ] percent ([ * ]%) of royalties received from Corporate Partners, but in no event shall the royalty be less than [ * ] percent ([ * ]%) on Net Sales by Corporate Partners, and”

6. Article 6.4(b) is amended to read as follows:

“(b) [ * ] percent ([ * ]%) of any upfront fees or remuneration received from Corporate Partners, but in no event less than the amounts of the payments due under Section 4.1 herein.”

7. Article 7.4 is amended to read as follows:

“7.4 If Cortex (or one or more of its Corporate Partners) is unable to perform any of the following:

(7.4a) by January 13, 2004, Cortex’s Corporate Partner for depression, N.V. Organon, either (1) pays to Cortex the $2,000,000 required under Section 4.2.2(i) of the Research Collaboration and License Agreement dated January 13, 1999 between Cortex and N.V. Organon, or (2) terminates such agreement with respect to depression, allowing Cortex the opportunity to sublicense rights to depression to another Corporate Partner or to develop products for depression itself; or

(7.4b) by July 1, 2005, commence human clinical trials of a compound covered by the Regents’ Patent Rights, other than CX-516, or

(7.4c) by October 11, 2007, file a New Drug Application (NDA) in the U.S., or its equivalent in a foreign country, for a Licensed Product; or

(7.4d) once final product marketing and labeling approval is received in the U.S., market Licensed Products within six (6) months of such approval; or

(7.4e) reasonably fill the market demand for Licensed Products following commencement of marketing at any time during the exclusive period of this Agreement; or

(7.4f) spend an aggregate of not less than Seven Hundred Fifty Thousand Dollars ($750,000) during the first three years following execution of this Agreement and Two Hundred and Fifty Thousand Dollars ($250,000) for each year thereafter for the development of Licensed Products during the term of this Agreement, until the commencement of marketing of a Licensed Product;

then The Regents shall have the right, (subject to obligations under any then existing agreements between Cortex and its Corporate Partners) at The Regents’ option, to

* Confidential provisions omitted and filed separately with the Commission.

37

terminate this Agreement or to reduce the exclusive license granted hereunder to a nonexclusive license. This right, if exercised by The Regents, supersedes the rights granted in Article 2 (GRANT).”

8. The Regents acknowledge that Cortex has paid the $[ * ] payment due under the First Letter Agreement.

9. Nothing in this Amendment shall be deemed to (i) modify or restrict the rights of Cortex under any other agreements it may have with The Regents, (ii) modify or restrict the rights of Cortex, Adir et Compagnie and/or Institut de Recherches Internationales Servier under the Collaboration Research Agreement, Joint Clinical Research Agreement and the Licensing Agreement, all dated October 13, 2000, or of Cortex and N.V. Organon under the Research Collaboration and License Agreement dated January 13, 1999 between Cortex and N.V. Organon, or (iii) grant to The Regents any rights in any technology or intellectual property of Cortex.

10. The Regents and Cortex hereby acknowledge that all parties have complied with all terms and provisions of the License Agreement to be performed prior to the date of this Amendment. In all other respects, the License Agreement is hereby ratified and confirmed and shall continue in full force and effect in accordance with its terms. In the case of direct conflict or conflict by reason of interpretation, the Amendment shall control and supersede the terms of the License Agreement, the 1997 Letter Agreement and the 2002 Letter Agreement.

IN WITNESS WHEREOF, the parties hereto, through their authorized officers, have executed this Amendment as of the date first written above.

CORTEX PHARMACEUTICALS, INC.	THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
/s/ Roger G. Stoll	By:	/s/ David Schetter
Roger Stoll, Ph.D.	Name:
President and Chief Executive Officer	Title:
Date:  May 28, 2003	Date:  May 28, 2003

* Confidential provisions omitted and filed separately with the Commission.

38

EX-10.77

Exhibit 10.77

CONFIDENTIAL PORTIONS OMITTED PURSUANT TO RULE 24b-2 OF THE

SECURITIES EXCHANGE ACT OF 1934

RESTATED AMENDMENT N°2 TO THE

COLLABORATION RESEARCH

AGREEMENT REFERENCED

N°001009/MCM/FP

This Amendment entered into as of December 16^th, 2003 (the “Effective Date”) is made between :

CORTEX PHARMACEUTICALS Inc

Having its principal office at

15241 Barranca Parkway

Irvine, California

USA

(hereinafter “Cortex”)

                                                                                            on one part,

AND

INSTITUT DE RECHERCHES INTERNATIONALES SERVIER

A corporation duly organized and registered under the laws of France

Having its principal office at

6 Place des Pléiades

92415 Courbevoie cedex

France

(hereinafter “IRIS”)

and

LES LABORATOIRES SERVIER

A corporation duly organized and registered under the laws of France

Having its principal office at

22 Rue Garnier

92200 Neuilly Sur Seine

France

(hereinafter “LLS”)

IRIS et LLS are hereinafter collectively referred to as “Servier”.

                                                                                            on the other part,

1

R E C I T A L S

A. CORTEX, IRIS and ADIR ET COMPAGNIE have entered into as October 13th, 2000 a Collaboration Research Agreement referenced 001009/MCM/FP (hereinafter the “Agreement”).

B. ADIR ET COMPAGNIE has been merged into LLS.

C. By a letter dated October 3^rd, 2002 the Parties have amended the Agreement in order to provide further research funding and extend the definition of the Field of Article 1.10 to the use of Ampakines for the treatment of anxiety disorder.

D. The initial term of the Research Phase was for a period of three years from its commencement as stated in article 3.1 of the Agreement. The parties acknowledge that such commencement was December 7, 2000.

E. The Parties hereto wish to extend the duration of the Agreement and further amend the Agreement.

NOW, THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS :

1. The term of the Research Phase is extended from December 7, 2003 for a new period of two (2) years and shall thereafter continue on annual basis unless either Party gives notice or termination of the Research Phase at least six (6) months prior to the expiration of the above two (2) year period or any one (1) year extension term.

Notwithstanding the above either party shall be entitled to terminate this Agreement by giving notice of termination to the other party six (6) months prior to the end of the first year of reconduction.

2. For reminder since October 3^rd, 2002 Article 1.10 is amended as follows :

“Field shall mean the use of AMPAKINES for the treatment of (i) declines in cognitive or performance associated with aging, and (ii) neurodegenerative diseases, including such as but not limited to Alzheimer’s disease, Parkinson’s disease, multiple sclerosis and Amyotrophic Lateral Sclerosis, and (iii) anxiety disorders. Without limitation, the Field specifically excludes the treatment of traumatic brain injury, stroke, spinal cord injury, ischemic conditions or injuries and all other psychiatric conditions other than specified herein.”

2

3. The new Research Plan is attached hereto as appendix I.

4. The reconduction period is subject to the payment by SERVIER of 528,750 USD (five hundred and twenty eight thousand seven hundred and fifty USD) per quarter during such period of reconduction, such amount to be adjusted at the beginning of each year, commencing January 2004, in accordance with article 6.2 of the Agreement.

5. Each party recognizes that ownership of any and all results patentable or not arising out of or in connection with the studies defined in Appendix II hereto are in accordance with article 2.3 and 7.1.1 of the Agreement.

6. Any and all other terms and conditions defined in the Agreement non amended or modified hereby shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

CORTEX PHARMACEUTICALS Inc.	INSTITUT DE RECHERCHES
	INTERNATIONALES SERVIER
By :     /s/ Roger Stoll	By : /s/ Laurent Perret
Name : Roger STOLL, Ph. D.	Name : Dr. Laurent PERRET
Title : Chief Executive Officer	Title : President R&D

 LES LABORATOIRES SERVIER

 /s/ Marc Milward

 By : Marc MILWARD

 Title : Proxy

3

APPENDIX I

RESEARCH PLAN

* [PAGES 1 THROUGH 4 OMITTED AND FILED SEPARATELY WITH THE COMMISSION]

APPENDIX II

SERVIER’S STUDIES

* [PAGES 1 THROUGH 4 OMITTED AND FILED SEPARATELY WITH THE COMMISSION]

EX-31.1

EXHIBIT 31.1

CEO CERTIFICATION

I, Roger G. Stoll, Ph.D., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cortex Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    February 12, 2004

               /s/ Roger G. Stoll

Roger G. Stoll, Ph.D.

Chairman, President and

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CFO CERTIFICATION

I, Maria S. Messinger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cortex Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986]

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    February 12, 2004

               /s/ Maria S. Messinger

Maria S. Messinger

Vice President, Chief Financial Officer and

Secretary

EX-32

EXHIBIT 32

Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of

the Sarbanes-Oxley Act of 2002

Roger G. Stoll, Ph.D., President and Chief Executive Officer of Cortex Pharmaceuticals, Inc. (the “Company”), and Maria S. Messinger, Chief Financial Officer of the Company, each certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the three months ended December 31, 2003 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	February 12, 2004	/s/ Roger G. Stoll
		Roger G. Stoll, Ph.D.
		Chairman, President and
		Chief Executive Officer

Dated:	February 12, 2004	/s/ Maria S. Messinger
		Maria S. Messinger
		Vice President, Chief Financial Officer and
		Secretary